Nix & Storey v. James H. Dukes et al., 58 Tex. 96

Gould, Chief Justice. This suit was brought by A. W. Lay, a judgment creditor of Robert Dorn, deceased, to have certain land,alleged to have passed by various fraudulent conveyances from Dorn through Robert NT. Reed to Martha A. Duke, decreed to be the property of the estate of said Dorn, and assets in the hands of the administrators of his estate, for the benefit of plaintiff and other creditors of the estate.

Lay died, and his surviving wife and other heirs became parties plaintiff in his stead. ¡Nix & Storey, administrators of the estate of Dorn, also became parties by intervention, as also did Reed and Mullins, who, on January 4, 1875, by leave of court, filed their petition, claiming to be creditors of the estate holding claims duly established, adopting the pleadings and the prayer of the plaintiff.

Previous to this, viz., in September, 1874, plaintiffs and defendants had entered into a written agreement compromising the case, the terms agreed on being that defendants would pay sixty-six and two-thirds cents on the dollar on the Lay judgment, with interest, upon which payment being made the suit was to be dismissed. The payment was completed during the month of September, but no order of dismissal had been asked or made at the time Reed and Mullins intervened.

The order allowing that intervention, and the filing of their petition as intervenors, were both of date January 4, 1875, and on the same day defendants moved to set aside the order and dismiss the intervention, their motion being filed April 15, 1875, as of January 4,1875. The grounds of the motion were the settlement of the litigation between plaintiffs and defendants, the payment and agreement to dismiss, and the fact that the order allowing the intervention had been made ex parte, without notice.

The court sustained the motion, set aside the order allowing the intervention, dismissed the petition of intervenors, and dismissed the case according to the agreement of compromise. From this judgment the intervenors, Reed and Mullins, and ¡Nix & Storey, have appealed. If this were a suit in which the plaintiffs sought a judgment for their own exclusive benefit, we might hesitate to say that the intervenors could complain because the court allowed the case to be disposed of in accordance with the already partially consummated agreement of the parties.

But it is needless to inquire what would have been the proper ruling in such a case. This suit was avowedly brought for the benefit of other creditors of the estate, as well as of plaintiffs. The prayer was that the land be adjudged to be assets in the hands of the administrators of Dorn’s estate for the bene-, fit of creditors of said estate.

Manifestly the petition was framed like a creditor’s bill, and it was so framed because the plaintiffs could only maintain their suit by bringing it for the benefit of all the creditors of the estate, and so as to allow any such creditor to become a party for the protection of his rights. In such a suit it was but a matter of right for a creditor to be made a party. It was not competent for the plaintiffs to bind other creditors by their compro- ' mise.

Having compromised regardless of the acknowledged rights of other creditors, to whose benefit, as well as the benefit of plaintiffs, the suit, if successful, would necessarily .have inured, equity would not enforce that compromise agreement as against those creditors to whose detriment it might operate. [Opinion delivered November 22, 1882.] The nature of the lights of other creditors in such suits is illustrated in the following extract from Story’s Equity Pleadings: “ In the case of a bill brought by a creditor in behalf of himself and all other creditors, if he dies, the suit maybe revived by his personal representative.

If the latter does not choose to revive it, then any other creditor, at least, any one who has proved his debt under a decree before the master, may by supplemental bill continue the cause, and proceed therein for the benefit of all the creditors.” Sec. 365. See also the note to this section, where it is questioned whether the suit in such a case is technically abated. See also 3 Dan. Ch. Pr., p. (1699), 1759, and Mitford’s Ch. PL, p. (79), 95.

Eeed and Mullins, having established their claims, and belonging to the class of creditors for whose benefit the suit was brought, should have been allowed to come in and prosecute the suit as plaintiffs, when that step became necessary to secure them the benefit of the suit. Because they were improperly denied this right, the judgment is reversed and the cause remanded. Beveksed and remanded.