Montgomery v. Culton

| Tex. | Jul 1, 1857

Hemphill, Ch. J.

This suit was brought by the appellee, to recover from the appellants, as heirs at law of B. F. Stockton, dec’d, for the services of Richard H. Stockton, as overseer, on a contract made by him with Henry Terrill, the executor, and which, being allowed by the executor and approved by the Chief Justice, was transferred to the appellee. The demurrer of defendants to the petition, and which may be regarded as extending to the amended petition, was overruled ; and this has been assigned for error. This assignment raises the question whether the action on this demand against the estate, can be maintained against the defendants as heirs in right of the wife, who is the only child of the testator. The allegations disclose the facts that that the testator left but one heir at law, viz : the defendant, Anne E. Montgomery, having named Henry Terrill as his executor, whose office was to cease on the marriage or full age of the said Ann E.; that shortly after her marriage with the co-defendant, the said executor was removed : and that all the property of the estate (with the exception of a portion specifically bequeathed to the children of the executor,) passed some time previously, viz : in the early part of the same year, 1853, into the hands of the defendants, where it has ever since remained ; that some time after the removal of the executor, viz : in December, 1853, he, repre- . scnting himself and his children, entered into a compromise with the defendants, for the purpose of settling the affairs of the estate, distributing the same and adjusting the matters in controversy between them ; and that the defendants then expressly released to the children of the said Henry Terrill the property bequeathed to them, and released them and the said Terrill from all responsibility on account of said estate, and bound themselves to hold the said Terrill and his children harmless on account of any or all claim for which the estate was then justly or legally bound.

It appears, then, that the defendant not only procured the removal of the executor, his office in fact ceasing at the pleasure of the said Anne E., under the will; that they not only took entire possession and control of the whole property, with all its fruits and profits, but expressly stipulated, in effect, that they would pay the just demands against the estate ; for this is the substantial effect of their agreement to hold the executor and the specific legatees harmless against such claims. Can it be doubted that they hold the property charged with the liabilities to which it had been subject in the hands of the executor ? The effect of an ordinary transfer of property from one person to another, with an agreement on the part of the one who receives, that he will pay the just demands against the one who makes the transfer, is to raise a trust for the creditors of the assignor, though the transfer was made without their knowledge ; and they may maintain their actions against the assignee. (Wallis v. Beauchamp, 15 Tex. R. 305, and cases cited.) There is no difference in principle between the transfer, in the case supposed, and the one in the case under review. The obligation on the part of the heirs, who have taken the property out of the hands of the executor, who have elected to consider the administration as closed, would in itself be sufficient to authorize creditors of the estate to enforce their claims by suit; but when to this is added their voluntary obligation to pay these demands, or in other words, to save the executor harmless, a case is presented of obligation on the part of the heirs, as strong as could be raised against the holder of property charged with a trust in favor of third persons.

If it were not required by law, that the property of a decedent should, for the special benefitjof creditors, pass into the hands of an executor or administrator, the heir receiving the property would, on general principles, be bound to discharge its liabilities. Such was the rule of our former jurisprudence, on the acceptance of a succession by the heirs ; and such is the rule of the Common Law, as to real property, this passing to the heir without administration, but responsible for a certain class of the debts of the deceased ; and this must be the rule, under our present laws, in cases where, after partial administration, the heir assumes control of the property, and especially where he stipulates for the payment of the liabilities of the estate. This obligation on the part of the heirs is, in substance recognized in Art. 1197, Hart. Dig. The Section contemplates the receipt of the estate by the heir under an order of the Court. But the effect is the same, if he voluntarily take possession. The supposition of the previous Section, Art. 1196, is that the executor or administrator would retain in his hands a sufficient amount to pay the debts which had been established or may be established by suit, the heir, devisee or legatee being liable only, by Art. 1197, for demands not presented to. the administrator. But where the heir takes possession of the whole estate, his obligation must be commensurate with the amount received, and extend as well to debts allowed and approved, as to those which have not been recognized as debts of the succession.

We conclude that the petition, original and amended, set forth a good cause of action against the defendants, and that their demurrer was properly overruled.

Nor was there any error in overruling their plea in abatement for the non-joinder, as defendants, of the children of Henry Terrill, the executor, who were devisees under the will. They had been expressly released by the defendants from responsibility for the demands against the estate, and creditors are not bound to join them in an action to enforce such demands.

The evidence shows that after the defendants took the property into possession, no further action has been had on the estate in the Probate Court; that the plantation is worth from fifteen to twenty thousand dollars, independent of the negroes and other personal property ; that the proceeds from the crops are very considerable, amply and more than sufficient to.discharge the few debts that were due at the removal of the executor; and the plaintiffs were clearly entitled to their judgment, unless the claims be false and fraudulent or barred by the Statute of Limitations as alleged by the defendants.

In relation to the charge of fraud in the claims, the defendants averred, in substance, that the estate was not indebted to R H. Stockton for any amount whatever ; that Henry Terrill, the executor of B. E. Stockton, had wasted the estate ; that the claim of R H. Stockton was presented for allowance after proceedings had been instituted for the removal of Terrill from the executorship to prevent the further waste of the estate ; that the said Terrill and Richard H. Stockton, well knowing the fact, but combining to defraud the estate, got up the pretended claim now sued upon, when in truth and in fact the estate was not in any manner indebted to the said Stockton, and the acts of the said Terrill and Stockton were mere fraudulent contrivances to defraud the estate to that amount, and convert the same to their own use. If the facts, as alleged, be true, they furnish a substantial defence against the claims of the plaintiff. The facts of fraud and collusion between an executor and creditors, in establishing claims against an estate, can be set up to defeat such claims by other creditors, by heirs or persons interested in the estate. This would be allowed as against a judgment in the District Court, where the presumption is that the matter had been litigated and the debt finally proven before judgment; much more would such defence be available to the heirs, as against those quasi judgments, which rest alone upon the acknowledgment of the executor or administrator and the approval of the Chief Justice, and especially where these acts, are done during the progress of proceedings for the removal of the executor from office. In the case of Neill v. Hodge, 5 Tex. R. 487, and in other cases, we have held that an administrator may have claims set aside which were acknowledged by him in ignorance of the facts, or from fraudulent representations of the holder ; much more may an heir have such acknowledgments set aside, and especially where the executor or administrator has colluded with the creditor, acknowledging claims, for his own benefit or to the injury of the estate, which he knew were groundless, or where he acts with a degree of ignorance which in effect amounts to a fraud upon the estate. We are of opinion that there was error in excluding the evidence of Montgomery and Thatcher, which was offered to show that Stockton had never been the overseer of the estate, and that both Stockton and Terrill had admitted such fact to one of the witnesses. This evidence was admissible under the plea impeaching the valid, ity of the claims, and there was error in its exclusion.

There was no error in refusing to give the instruction that the claim was barred by the Statute of Limitations. The claim was in the form of a judgment and subject, as against the executor, to limitations affecting judgments.

The property is in the hands of the heirs, but with the incumbrances affecting it when received from the executor. Among these is the one which prevents the estate from claiming the benefit of the short terms of limitation.

There was no necessity, under the law, that the plaintiff should prove the assignment, as insisted by the defendants.

For the error in excluding the evidence of Montgomery and Thatcher, the judgment is reversed and the cause remanded.

Reversed and remanded.