Floyd v. Rust

Delany, J. Com. App. The sixth clause of the judge’s charge was, that if FT. B. Floyd was indebted to the estate of Stith when he bought the De Graffenried claim, then he could not make a valid transfer to the defendant 0. A. Floyd, but was required to hold the claim subject to the settlement of his own account. There is no evidence in the record that FT. B. Floyd was indebted to the estate, and therefore we think this charge should not have been given. Dodd v. Arnold, 28 Tex., 97, and cases cited. The same objection may be made to a part of the first clause, in which the jury are told to find for the plaintiff if they believed that 0. A. Floyd had not bought this claim with his own money. The second clause of the charge is as follows: “Before you can come to the conclusion that FT. B. Floyd became the purchaser or holder of the De Graffenried claim, it must clearly ... appear . . . that the transaction on the part of FT. B. Floyd was a strictly honest one, and made with no purpose to defraud the estate of Stith, which he then represented.” The only objection which can be made to this clause is that the last four words represent N. B. Floyd as the administrator of the estate when he bought the claim, of which there was no evidence except negative evidence, to which we will allude hereafter. [507] The third clause is as follows: ‘‘If you believe, from the evidence, that O. A. Floyd became the purchaser of said claim, and paid therefor out of his own money or the proceeds of his own property, you will find for the plaintiff; nevertheless, unless you believe that the plaintiff, before the sale, deliberately represented to the defendant C. A. Floyd, upon inquiry being made in relation thereto, that said claim was good, and would be received in payment for land to the amount of as much or more than the amount of the note herein sued on, and that thereby said 0. A. Floyd, in ignorance of the condition of the estate, . . . was induced to buy the land, and execute the note upon which this suit is brought, you will find for defendants, provided said FT. B. Floyd had a right to buy and transfer said claim.” The jury were further charged that although Fust may have made ever so many representations, still if Floyd knew the condition of the estate he would not be protected. He must have acted solely upon the representations of Fust; must have been misled and deceived by them, and his own conduct must have been free from suspicion. We do not think that these latter clauses of the charge can be objected to by plaintiffs in error. The charges lay down the rule that if the defendant Floyd, being entirely free from fault, in ignorance of the condition of the estate, and relying solely upon the deliberate representations of plaintiff that he could purchase with the De Graffenried claim a certain amount of land belonging to the estate, was thus induced to complete his purchase of that claim, when he would not otherwise have done so, in that case plaintiff could not refuse to receive the claim when tendered in payment of the note. This was as favorable to the defendants as could well have been asked, and it raises the difficult question, how far the estate is bound by the acts and representations of the administrator. The authorities to which- we are referred by defendant in error (Atchison v. Smith, 25 Tex., 228, and Guthrie v. Guthrie, 17 Tex., 541) do not meet the case. They simply decide that a party who has purchased property of an estate and given his note, cannot, when sued by the administrator, offset against the note a claim which he may hold against the estate. To allow this, the court hold, would virtually vest the probate jurisdiction and transfer the settlement of estates to the district court. For has counsel for plaintiffs in error referred us to any case which is in all respects like the one before us. They do not pro [508] pose to rescind the contract and restore the land to the plaintiff, as was proposed in the case of Crayton v. Munger, 9 Tex., 285, but they insist on keeping the land and compelling the plaintiff to take the De Graffenried claim. They cite among other cases, Swenson v. Walker, 3 Tex., 93, and Dickinson v. McDermott, 13 Tex., 248. In the first of those cases, an account of McKinney & Williams against the estate of Walker had been allowed and approved. McKinney & Williams being indebted to Swenson, offered him their claim in payment of their debt. Swenson applied to the administrators to know if the claim was valid. They assured him that it was; that it would be paid; and that they would as soon pay it to him as to anyone else. He accordingly took the claim, and after-wards commenced proceedings in the county court for its collection. One of the administrators sought to enjoin the collection upon the ground that the claim was not valid. The court held that, as against Swenson, the administrator could not be heard to allege the invalidity of the claim. The court say: “ If permitted to contradict statements so made, on which the party to whom they were made had acted, such permission might operate to the serious injury of the party who was misled by them. It is clear . . . that in the case under consideration Swenson was induced to take the assignment on the statements made by the administrators.” In the other case, Dickinson held a claim against the estate of McDermott which had been allowed and approved. The estate held a larger claim against him. The executors brought suit against him upon the claim held by the estate. He then surrendered to one of the executors his claim against the estate as a payment fro tanto, and the executor promised in writing to dismiss the suit. The suit, however, was not dismissed, but judgment was taken against Dickinson for the whole amount of the claims against him, without regard to his claim against the estate. He applied for an injunction, setting up the above facts, and further, that he had paid to the executors the difference between the two claims. The supreme court held that he was entitled to the injunction. The chief justice remarks that ordinarily an administrator will not be forced to receive a claim against the estate in set-off to a debt contracted after the death of the testator or intestate, “ as this might lead to embarrassing investigations in relation to the solvency of the estate, and the sufficiency of the assets to pay claims.” The rule, however, is for the benefit of the executor or administrator. It exempts them from compulsion, but does not interfere with their voluntary action. They act upon their own judgment, [509] and at the peril of being held accountable upon a deficiency of assets. 13 Tex., 352. In the two cases last cited, it will be noticed that there is no dispute about the facts. Dickinson and Swenson had acted in perfect good faith. They had relied upon the acts and representations of the administrators, and it would have been a fraud upon them if those acts and representations were repudiated. In the case before us, the administrator does not question the validity of the claim, as was done in the case of Swenson v. Walker, but he denies that he made the representations and entered into the engagements imputed to him. It may then be said that this issue should have been submitted to the jury, unembarrassed by the objectionable charges which the court connected with it. Ho doubt this would have been the better course. But still the question recurs, whether this supposed error of the court will necessitate a reversal of the judgment. Upon one part of the case the several members of the commission are not in perfect accord. One member holds that even if Bust had made the representations imputed to him, still the defendants could not avoid the payment of the note without tendering back the deed and proposing to rescind the contract; and further, that if the defendant Floyd was injured by the representations or acts of Bust, his remedy would be against him individually, and not in his representative character. I am not willing to deny the correctness of this proposition as a general rule. But it seems to me that if an administrator can voluntarily receive a claim in discharge of such a debt to the estate (as was done in the case of Dickinson v. McDermott), he might, in favor of a perfectly innocent party acting in good faith and with "proper caution, make such representations as would bind him to receive it. This, I think, would perhaps be so if a party, acting solely upon these representations, should purchase a claim which would be worthless in his hands unless so received. This is the theory of the case presented by the plaintiffs in error. But as the case appears in the record, we do not think that the defendant Floyd is entitled to the full measure of this equitable defense. He was acquainted with the condition of the estate — knew it perhaps as well as the administrator himself. The latter had qualified some time in the year 1873, and the sale was made in May of that year. On the day of the sale he approaches the administrator, and producing from his pocket a claim which the latter had never before seen, asks him how much land it would buy. The administrator, makes a hasty calculation, and tells him “twenty-five [510] hundred dollars’ worth.” This answer, made at such a time and place, looks rather like an expression of opinion than a deliberate and binding engagement. The defendant was a near relative of FT. B. Floyd, who was the son-in-law of the intestate Stith, and had been administrator of the estate from the year 1806 until 1873, when the plaintiff was appointed. The plaintiff charged that FT. B. Floyd had.obtained this claim while administrator, and with funds of the estate. It had been transferred by him to the defendant. The latter does not pretend to have been ignorant of FI". B. Floyd’s connection with the estate. He merely says that H. B. Floyd told him he owned the claim. [Opinion approved February 9, 1883.] In this state of the case, the defendants evidently felt that some explanation of the manner in which FT. B. Floyd had obtained and transferred the claim ought to be given. They propounded interrogatories to him, in which they urged him in every variety of form to give a full, complete and explicit account of the whole matter, ■with the details of time, place and circumstances. Counsel on the other side propounded a number of searching cross-interrogatories. But neither the persuasive tone of his friends nor the pointed questions of the other side could elicit anything that savors of explanation. There is apparently a studied secretiveness in his whole manner. His answers are shy, evasive and in monosyllables. It is difficult to read them without a strong suspicion that there'was something connected with the history of the claim which he did not care to reveal. Flow it must be borne in mind that the defense which was set up was a purely equitable one. The possession of that claim by C. A. Floyd, even though he had paid value for it, did not give him the legal right to plead it in set-off against the note. FTothing short of the clearest evidence and the most perfect good faith could sustain such a defense. The sureties claim that they signed the note under the impression that it was to be paid with the claim which was held by Floyd, but they do not show that they received that impression from the acts or representations of the plaintiff. Our opinion is that the case made by the defendants does not entitle them to the relief which they seek. We think, therefore, that the judgment should be affirmed. Affirmed.