* Writ of error granted. *Page 167
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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 170 This suit was originally filed in the district court of Hutchinson county, but by agreement was finally transferred to, and tried in, the district court of Potter county. At a former trial, the district court sustained the defendants' general demurrer to the plaintiffs' petition. Plaintiffs appealed, and this court, finding that there was a fatal defect of parties defendant, reversed the judgment and remanded the cause to permit plaintiffs to make necessary parties. 8 S.W.2d 241.
Thereafter, Lloyd Fletcher, as guardian ad litem of Elizabeth Dial and David Dial, minors, filed a third amended original petition, making numerous additional parties. Prior to the trial, several of these defendants filed disclaimers, and were dismissed from the action, and the trial proceeded with Lloyd Fletcher, guardian ad litem for Elizabeth and David Dial, minors, and Gertrude A. Dial, in her individual right and executrix of the estate of her deceased husband and guardian of said minors, as plaintiffs. After both sides closed in the introduction of the testimony, the trial judge directed the jury to return a verdict against plaintiffs in favor of N. H. Martin, J. J. Perkins, George E. Martin, W. B. Hamilton of Wichita county, W. B. Hamilton of Dallas county, G. R. Pate, Continental Oil Company, Gulf Production Company, W. D. Cline, Panhandle Refining Company, Phillips Petroleum Company, Goldelline Oil Corporation, Buttram Petroleum Company, and Errett R. Newby. From a judgment entered in accordance with the verdict, this appeal is prosecuted.
It appears that in 1914 Johns. C. Dial and his brother C. L. Dial entered into a partnership for the purpose of dealing in and raising cattle. This partnership acquired the lands involved in this controversy, on which C. L. Dial, as manager, was conducting the partnership business and was in charge of and managing the partnership property which, in addition to said land, consisted of about 300 cattle. It is conceded that on April 8, 1918, when J. C. Dial died, the lands in controversy were a part of the assets of the partnership; that said lands were incumbered to the extent of about $50,000, which represented part of the purchase price. At the time of J. C. Dial's death, the partnership owned 2,250 head of cattle, which were being grazed on the lands in controversy and certain other lands which the partnership had leased for grazing purposes. The partnership owed other debts amounting to about $100,000 secured by chattel mortgages on the cattle. J. C. Dial was an attorney, and took no active part in the management of the ranch. He was survived by his widow, Gertrude A. Dial, and the two minor children above mentioned, plaintiffs herein. He left a will, which will be hereinafter discussed, and which was probated on May 11, 1918, and his surviving wife, Gertrude A. Dial, appointed executrix. Four days thereafter the probate court entered an order appointing W. H. Dial, the father of J. C. Dial, deceased, as joint executor with Gertrude A. Dial. In December, 1918, C. L. Dial, the surviving member of the partnership, joined by his father, W. H. Dial, as executor, and Gertrude A. Dial, as executrix of the estate of J. C. Dial, deceased, executed and delivered to T. E. Durham an oil and gas lease conveying the mineral estate of the lands in controversy. On March 11, 1922, C. L. Dial, the surviving partner, sold the lands in controversy to N. H. Martin and J. J. Perkins, and was joined in the conveyance by his wife and by Gertrude A. Dial, who executed the conveyance for herself individually and as executrix. The deed was also executed by W. H. Dial as executor.
On March 26, 1926, Gertrude A. Dial, individually and as executrix, as well as guardian of the minor plaintiffs herein, and as next friend of said minors, filed suit numbered 639 upon the docket of the district court of Hutchinson county and entitled Gertrude A. Dial et al. v. N. H. Martin et al. In that suit Mrs. Gertrude A. Dial sought to recover of the defendants the lands involved in this controversy and to set aside and annul the oil and gas lease and the deed above referred to. After that suit was filed, and prior to the 16th of June, 1926, negotiations for the compromise and settlement of the controversy were opened, and on said date Mrs. Dial, as guardian of the minor plaintiffs, made a report to the probate court of Roberts county, where the guardianship proceedings were pending, stating that she had an opportunity to settle the litigation for $212,500, one-half of which would be paid to the minor plaintiffs, and praying for authority to make said compromise. The court heard the application, and on the same day entered an order authorizing the guardian to consummate the settlement in accordance with the terms stated in the application. She then compromised the said suit numbered 639, and, in addition to the money paid, she obtained an oil and gas lease, fully paid up for ten years, upon twenty acres of the land involved herein one-half of said lease being vested in her and the other half in her minor children. On the 19th of June, 1926, an agreed judgment was entered in the district court of Hutchinson county in said cause numbered 639, which confirmed and approved the settlement and adjudicated the issues in accordance with the terms of the compromise agreement. According to the terms of this judgment, the defendants were *Page 172 directed to pay to Gertrude A. Dial $106,250, and to deliver to the bank designated therein as depository the sum of $106,250 for the benefit of the minors Elizabeth and David Dial, and also to deliver the oil and gas lease above referred to. The terms of this judgment were complied with by the appellees herein On June 19, 1926, Mrs. Dial, as guardian of the minor plaintiffs herein, reported to the probate court of Roberts county that the agreed settlement had been consummated in accordance with the orders of the court, and prayed for a confirmation and approval of her action. The court entered an order of that date which recites that evidence was heard as to the fairness and reasonableness of the settlement, and ordering that said settlement be confirmed.
Later, about December 16, 1926, Mrs. Gertrude A. Dial, as executrix of the estate of J. C. Dial, deceased, and as guardian and next friend of her minor children, Elizabeth and David Dial, filed this suit against N. II. Martin and the other defendants in the original suit and their assignees to recover the lands in controversy. In this action, the minor plaintiffs, represented by their guardian ad litem, seek cancellation of the oil lease and the deed hereinbefore referred to, in so far as it affects their interest in the property involved. They attack the agreed judgment entered in cause No. 639, and pray that it be vacated and annulled, and that they recover title and possession of all of their estate inherited from their father, which they allege to be one-fourth undivided interest in the lands constituting the ranch belonging to the partnership, of which their deceased father was a member.
Since the effect of the agreed judgment is to confirm and validate both the oil and as lease and the deed, the first question to be considered is whether the appellants, under the record, were entitled to have said judgment vacated. This issue is presented by several propositions and counter-propositions discussed in the briefs of the respective parties.
As preliminary to the determination of that question, it is proper for us to construe the will of J. C. Dial in order to ascertain the nature of the estate taken by Mrs. Gertrude A. Dial and her children under it and the limitation, if any, on the devise to her. And, because the validity of the judgment depends also upon the authority of Mrs. Dial as executrix and guardian, it is necessary to take into consideration the orders and proceedings in the probate court as they relate to her power and authority to bind the children by an agreed judgment.
Omitting the formal and immaterial clauses, the Will of J. C. Dial provided, as follows:
"Second. I desire and direct that all of my just debts be paid upon proof of the existence of the same, without delay, and that such proof shall be made of the existence and justness of said debts by the sworn statements of those holding the same and that they be paid by my executrix hereinafter mentioned.
"Third. It is my will and desire and I so direct that all the property of which I may die seized and possessed of, both real and personal, pass to my beloved wife Gertrude A. Dial, after the payment of all just debts and the expenses incident to the probation of this will, subject, however, to the following conditions:
"(a) That the same shall be held by her for the support and maintenance of my children and the support and maintenance of my wife during widowhood.
"(b) That at the end of her widowhood, that all of such property, both real and personal, pass to and be vested in fee simple share and share alike, to my children who may be living at such time, or their issues, if any there be.
"Fourth. I hereby appoint and constitute my beloved wife, Mrs. Gertrude A. Dial, the, sole executrix of this my last will and testament during her widowhood and that during such widowhood no bond or other security be required of her as such executrix, but upon the termination of such widowhood, I direct that my brother C. L. Dial be appointed executor of said estate, both real and personal, and that no bond be required of him as such, it being the intention of this will and of the testator herein that the wife of the testator have full control and management of all of the testator's estate, both real and personal, for the use and benefit of herself and the children of herself and the testator, during her widowhood, but that at the end of said widowhood, that all of said property, both real and personal, pass and be vested in the testator's children and that the control and management of the same be divested from the said wife of the testator at the end of such widowhood and be placed beyond her control and management in the brother named herein of the testator, if he be living, and if not living, then in the nearest of male kin to said testator; that at the end of said widowhood the executrix named herein be required to render an account, stating the amount of property on hand at the time, both real and personal, and that the same be filed as a part of the record in the probation of this will and that upon the devisees herein becoming of age, that the executrix or executor as the case may be, likewise file a statement showing the amount of property both real and personal on hand at such time but that no bond be required of either party; the testator herein relying upon the honesty and integrity of the parties herein named.
"Fifth. It is my desire that no other action, and I so direct, shall be had in the *Page 173 County Court in the administration of my estate than to approve and record this will and to return an inventory and appraisement of my estate and list of claims.
"Sixth. I also direct and desire that such insurance policies that are payable to my children be paid over by the insurance companies direct to the executrix herein named immediately upon proof of death and that such executrix hold the same for the use and benefit of the beneficiary or beneficiaries named in such policy, using the same for the support, maintenance and education, according to their station in life, of such beneficiary or beneficiaries therein named, that the insurance company require no bond for the delivery of such money. Should, however, at the end of the executrix widowhood, she should elect to keep the children of the testator herein, then it is directed by this will and testament that she be required to support and maintain said children at her own proper expense, excepting that after said children have passed through the high school, that the moneys herein devised shall be used for their education in some approved educational institution in the event she of her own means may not be able to do so."
There is nothing in the will which indicates that the testator intended to dispose of any property other than his interest in the community property. There is no description of any specific property other than the insurance policies, which, it appears, were made payable to the children. The rule is that a will should not be given construction so as to hold that the testator intended to dispose of property not owned by him, unless the language of the will is fairly susceptible of no other construction. Sailer v. Furche et al. (Tex.Com.App.) 22 S.W.2d 1065, and authorities therein cited. Our construction of the will, construed as a whole, is that it creates a life estate in Mrs. Gertrude A. Dial in the testator's interest in the community property, except as to the proceeds of the insurance policies, but that this life estate is subject to divestiture upon her second marriage. Haring v. Shelton (Tex.Civ.App.)114 S.W. 389, Id., 103 Tex. 10. 122 S.W. 13; Thompson on Construction of Wills, §§ 369, 434. Since she held only a life estate determinable upon her second marriage, her power and authority under the will to dispose of or in any way affect the interest of her children, who are remaindermen under the will, is limited by the rules relating to the authority of life tenants under wills creating contingent remainders. It will be noted further that she is given no power of disposition in so far as the corpus of the children's interest in the estate is affected. Subdivision (a) of the third clause says that the property shall be held by her for the support and maintenance of herself and the children, and in the fourth clause we find this recitation:
"It being the intention of this will and of the testator herein that the wife of the testator have full control and management of all of the testator's estate, both real and personal, for the use and benefit of herself and the children of herself and the testator, during her widowhood."
Immediately following this expression, the testator declares that, at the end of her widowhood, all of the property shall pass and be vested in the children, who are thus designated as remaindermen, and further provides that the control and management of the wife immediately cease when she shall marry again.
The appellees contend that, under the provisions of the will, Mrs. Dial is an independent executrix. We cannot assent to this proposition. The fifth clause, quoted above, under R.S. art. 3436, if considered alone, would have the effect of making Mrs. Dial independent executrix, but the will imposes upon her the duty of requiring verified accounts against his estate before she is authorized to pay them, and further provides that, should she marry again, she shall render an account stating the amount of the property on hand at the time, both real and personal, and directs that the account be filed as a part of the record in the probate court. The will further provides that such account shall be filed by her when the children become of age. The effect of these provisions is to require the supervision of the probate court and to deprive her of that degree of absolute control and discretion peculiar to an independent executrix. Hughes v. Mulanax, 105 Tex. 576, 153 S.W. 299, 303: McMahan v. McMahan (Tex.Civ.App.) 175 S.W. 157; Bain v. Coats (Tex.Com.App.) 244 S.W. 130; Parker v. Allison (Tex.Civ.App.) 22 S.W.2d 333.
In the Hughes v. Mulanax Case, supra, the Supreme Court said:
"If we were to hold, in effect, that a testator, without observing substantially the restrictions which are imposed upon him by said article 1995 [3496] may, according to his own desires or caprices, practically prescribe in his will the extent of the jurisdiction and control which the probate court may exercise over his estate, such holding would, in many instances, we fear, tend to derange our probate system, to create confusion as to rights and remedies of persons interested in such estate, and to render and leave uncertain both jurisdiction and procedure in the courts."
In the McMahan Case, supra, it appears that the executors were to take charge of the property and hold it together and maintain the testator's minor children, and this *Page 174 provision, it was held, prevented the construction of the will so as to declare the executors to be independent. It will be observed that the will under consideration requires Mrs. Dial to hold the corpus of the estate and out of the proceeds thereof to maintain the children, as well as herself. Such wills are usually designated "non-intervention wills," and the statutes which permit the execution of wills of this character contemplate that there shall be no supervision and that no necessity shall arise for supervision by the probate court.
R.S. art. 3295, requires the clerk to enter upon the judge's probate docket a minute of all orders, judgments, decrees, and proceedings had in the estate, with the date thereof, and each paper filed in an estate must be numbered with the proper docket number. Article 3296 requires county clerks to keep a docket styled probate minutes and to enter therein in full all the orders, judgments, decrees, and proceedings of the court, and record therein all papers of estates required by law to be recorded. One of the papers to be recorded in the probate minutes is, according to article 3301(7), all exhibits and accounts, and another is all reports of hiring, renting, or sale. These requirements, under the decisions cited, impose upon the probate court duties not contemplated by article 3436, or at least they create a doubt as to the intention of the testator and such a conflict which, according to the case of Hughes v. Mulanax, supra, must be resolved in favor of the jurisdiction of the probate court. We therefore conclude that Mrs. Dial, under the will, is not an independent executrix.
On the 12th day of December, 1918, an oil and gas lease, conveying the mineral estate of the lands involved to Thomas Durham, was executed, which recites: "This agreement made and entered into the 30th day of November, 1918, by and between Dial Brothers, a firm composed of C. L. Dial and J. C. Dial, by C. L. Dial, W. H. Dial, Executor, and Gertrude A. Dial, Executrix for the estate of J. C. Dial, deceased, of Hutchinson County, Texas." This instrument purports to convey to Durham, as lessee, the oil and gas in and under the real estate therein described, with authority in Durham to assign in whole or in part such interest, and which contains a general warranty of title, the grantors therein signing as follows: "C. L. Dial," "W. H. Dial, Executor of the Estate of J. C. Dial, deceased," "Gertrude A. Dial, Executrix of the Estate of J. C. Dial, Deceased." It will be noted that Mrs. Gertrude A. Dial does not by this instrument dispose of her individual interest, and that the instrument purports, through C. L. Dial as surviving partner, to dispose of all of the partnership interest in the mineral estate.
In our opinion, the fact that W. H. Dial, the father of C. L. and J. C. Dial, has executed this lease, and also the deed hereinafter mentioned, is of no consequence. He was not named as executor in the will of J. C. Dial, but the record shows that he was appointed three or four days after the appointment of Mrs. Gertrude A. Dial, upon representations made to the probate judge that J. C. Dial, before his death, had said that he wanted his father to act as executor with his wife. This, of course, is not a sufficient basis for the appointment of W. H. Dial as executor, and his acts in such capacity are void, and in no event do they affect the right of the minor plaintiffs herein.
On the 11th day of March, 1922, C. L. Dial, joined by his wife, Lelia Dial, and Mrs. Gertrude A. Dial, "for herself and as independent executrix of the estate of J. C. Dial, deceased," executed a general warranty deed, in which W. H. Dial, "executor of the estate of J. C. Dial, deceased," also joined as grantor, conveying the lands herein involved for a recited consideration of $96,000, "paid and to be paid as hereinafter specified and for the further consideration of the payment of certain community debts against the estate of J. C. Dial deceased and wife," to the grantees therein named, N. H. Martin and J. J. Perkins. Certain notes aggregating approximately $96,000 are described in the deed, which the instrument recites were to be assumed and paid by the grantees. Some of these notes were executed by C. L. Dial and Gertrude A. Dial long after the death of J. C. Dial. A surviving partner cannot sell partnership assets for the purpose of paying the individual or community debts of the deceased partner, at least until all of the firm's debts have been paid. 2 Rowley on Part. § 631. Nor can he sell to pay debts illegally incurred after the dissolution. Cock v. Carson, 45 Tex. 429.
Since Mrs. Gertrude A. Dial was not appointed independent executrix, and because no orders of the probate court were ever obtained, authorizing her as executrix under the general laws to sell the lands conveyed, the deed is inoperative and void as a conveyance of her children's interest inherited from their father, J. C. Dial, deceased. R.S. art. 3553, is: "No sale of any property of an estate shall be made by an executor or administrator without an order of the court authorizing the same." Matula v. Freytag, 101 Tex. 357, 107 S.W. 536; Ferguson v. Mounts (Tex.Civ.App.) 281 S.W. 616; Ball v. Collins (Tex.Sup.) 5 S.W. 622; Moore v. Wooten (Tex.Com.App.) 280 S.W. 742. The instrument may be held effective as a transfer of her individual interest, in the absence of fraud, but in no degree does it affect the existing interest of her minor children. *Page 175
On June 19, 1926, the consent judgment hereinabove referred to was rendered in the district court of Hutchinson county in cause No. 639, entitled Gertrude A. Dial et al. v. N. H. Martin et al. This judgment recites, in part: "This day court is in session by consent of all the parties," and that Gertrude A. Dial, individually and as executrix of the estate of J. C. Dial, deceased, and as guardian and next friend of the minor plaintiffs, Elizabeth Dial and David Dial, appeared, and "also came the said minor plaintiffs Elizabeth Dial and David Dial. Also came the said minors Elizabeth Dial and David Dial by and through their next friend and guardian, Gertrude A. Dial, in person and by their attorneys, and announced ready for trial." The appearance of the numerous defendants is also noted in the judgment. The judgment further recites that the parties announced to the court that a settlement had been agreed upon, subject to the approval of the court, whereby the defendants agreed to pay plaintiffs $212,500 in cash, and to deliver to plaintiffs a five-year paid-up oil and gas lease of twenty acres out of the lands involved herein, and that by the terms of the agreement defendants were to have judgment for the lands described in the plaintiffs' petition, including the mineral rights, and that the cloud on their title be removed, that the plaintiffs would take nothing except the twenty-acre lease and the cash payment, and that the deed and lease theretofore executed should be adjudged as valid and in all things confirmed. The judgment recites that the court heard evidence as to the fairness and reasonableness of the compromise, and that, it appearing that it was to the best interest of the minor plaintiffs that the settlement should be consummated, and it further appearing that Mrs. Gertrude A. Dial has a one-half interest in the asserted cause of action therein, and that the said minors have a one-half interest jointly, each being entitled to a one-fourth interest, the judgment decrees that $106.250 be deposited in the bank designated therein for the benefit of the two minor children; that the remaining $106.250 be paid to Mrs. Gertrude A. Dial as her individual property; and that the paid-up oil and gas lease of twenty acres be owned jointly by Mrs. Dial and her minor children.
The judgment further decrees the validity of the lease and the deed as against all parties, including the minor plaintiffs, and quiets the defendants' title to the lands involved. A conveyance which is void for want of capacity in the grantor to make it cannot be confirmed. "Confirmation may make good a voidable or defeasible estate, but cannot operate upon or aid an estate which is void in law, but only `confirms its infirmity.'" Branham v. Mayor, etc., of San Jose, 24 Cal. 605. Mrs. Gertrude Dial testified that the court heard no evidence before rendering the judgment. The conflict between the recital in the judgment and Mrs. Dial's testimony that no evidence was heard, is upon a material issue. The courts hold that, when a minor is a party to a suit, he is in a sense a ward of the court. The court is required to appoint a competent and reliable attorney to represent the minor, and in entering a consent judgment the court should require sufficient and satisfactory proof before entering a judgment against one who is not sui juris. The fact that the opposing parties make admissions or confessions in favor of the minor is not sufficient. The rules which govern in such matters are aptly stated as follows:
31 C.J. 1115, § 254: "It is the right and duty of the court to protect the interests of an infant party to litigation, on its own motion, whether he be a plaintiff or defendant, whether the proper relief is asked in the pleadings or not and whether the claim or defense be properly pleaded or not. In order to protect fully the infant's interest, the court should exercise a general supervision over the conduct of the next friend or guardian ad litem, and advise such representative as to what steps to take or what pleadings to file, so that the infant's rights are in no way sacrificed or prejudiced or abandoned, and all proper defenses made for him before judgment is rendered against him."
31 C.J. 1119, § 263: "Although an infant is capable of suing or being sued, his incapacity requires that he be protected, and to that end it is generally necessary that an infant litigant should be properly represented by some one who may adequately enforce and protect his rights, throughout the whole litigation, although there are adults joined as litigants with the infant."
31 C.J. 1163, § 345: "Ordinarily no presumption against an infant can be permitted, but, on the contrary, every presumption is indulged in his favor. Hence, in actions against infants all the facts entitling plaintiff to judgment must be sustained by proof, and the necessity of establishing the case as against an infant party cannot be obviated by making him a plaintiff."
It appears that Mrs. Dial and her children brought the action in which the consent judgment was entered in trespass to try title to recover their interest as heirs and devisees under the will of J. C. Dial in the land involved and to cancel the lease and deed under general allegations that such instruments were obtained through fraud and misrepresentations. It does not appear that a guardian ad litem had been appointed to represent the children in the suit. While the general rule is that a guardian is authorized to represent the ward in litigation, and that a judgment entered for or against the ward in an action where the guardian as such is *Page 176 a party is valid, the rule does not apply where the guardian has an interest which is adverse to that of the ward. Stillwell v. Standard Say. L. Ass'n (Tex.Civ.App.) 30 S.W.2d 690; R.S. art. 2159.
The appellants attack the guardianship proceedings as being insufficient to authorize Mrs. Gertrude Dial to act as guardian and to represent the children in cause No. 639. It is unnecessary to discuss this matter in detail. The orders of a probate court made within the scope of its powers are presumptively valid, and cannot be collaterally attacked, unless the record affirmatively shows unauthorized exercise of jurisdiction in the particular case. Sloan v. Woods (Tex.Com.App.)25 S.W.2d 309.
The appellants attack this judgment upon the ground that Mrs. Gertrude A. Dial was not authorized to enter into the agreed judgment because her interest conflicted with that of the minors and because no guardian ad litem was appointed. We think this contention must be sustained. By the mineral lease she had not conveyed her interest in the mineral estate, but by the deed for the considerations recited therein, that is, the assumption and payment of certain notes which she had executed, she had divested herself of all interest in the lands, including her life estate under the will, and yet by her pleadings she insists upon recovering an interest as against all parties, including her children — and did recover one-half. Unless she was induced to execute the deed through fraud, she was not entitled to any part of the $212.500 nor any interest in the twenty-acre lease which was disposed of by the judgment. The issue of fraud was not expressly adjudicated, and, unless she had executed these instruments as a result of fraudulent representations on the part of the defendants, she had been paid $106,250, which the court could have decreed only to the children, together with the entire lease of twenty acres of land, even if the minors had been parties to the suit.
A consent judgment is in the nature of a contract, and will bind only those parties capable of contracting or who are represented by some one legally authorized to contract for them. Freeman on Judgments, pp. 1399, 2774. In attempting to dispose of the children's interest in the land, she exceeded the powers given her by the will of her husband. By its terms she was to manage and control the children's interest for the support and maintenance of herself and the children during her life or until her marriage. She was not authorized to sell as executrix under the will. She was not independent executrix, and as life tenant only she could not sell the interest of the remaindermen. Power to manage and control does not authorize the executor to sell and convey. Blanton v. Mayes, 58 Tex. 422; Id., 67 Tex. 345, 3 S.W. 40. It follows that any effort by her to dispose of the children's interest in the land through a consent judgment is as ineffective as an attempt to convey it by any other form of contract. Whether she could sell as executrix under orders of the probate court is a matter not before us, since it is not shown that any condition has existed requiring her to make application for such sale or that any application as executrix had ever been made.
So the right to this money and the lease was an issue in the case between Mrs. Dial and her children, injected into it by her pleadings, and in regard to which their interest directly conflicted, and a consent judgment which gave her any amount is void, unless the children were properly represented by a guardian ad litem. This was not done. Sandoval v. Rosser, 86 Tex. 682, 26 S.W. 933; Fortune v. Killebrew, 86 Tex. 172,23 S.W. 976; Williams v. Patterson (Tex.Com.App.) 288 S.W. 132; Brown v. Brown (Tex.Civ.App.) 230 S.W. 1058, 1059; Kromer v. Friday, 10 Wash. 621,39 P. 329, 32 L.R.A. 671; Messner v. Giddings, 65 Tex. 301; 31 C.J. pp. 1115, 1119, 1163; Pearce v. Heyman (Tex.Civ.App.) 158 S.W. 242.
It is not enough for the appellees to say that the children's right of action is against their mother for the recovery of the money and properties she received under the judgment. In entering into the consent judgment, the appellees acted at their peril. They knew they were acquiring property in which the children had an interest, and, if through the instrumentality of the judgment they have acquired that property from some one who was not authorized to convey it, they are responsible primarily to the children for its value.
We think the judgment is void upon the further ground that it was brought to cancel the lease and the deed which had been executed by C. L. Dial and his wife, and they had not been made parties to the suit. This case was reversed before because all of the parties to the two instruments and the judgment now under consideration had not been made parties to the action. We held that an action to cancel a written instrument required that all of the parties to the instrument should be made parties to the suit, and that this requirement was jurisdictional. In addition to the authorities therein cited, we add 7 Tex.Jur. 972, § 54; 1 Freeman on Judgments (6th Ed.) § 322; Runck v. Gates (Tex.Civ. App) 14 S.W.2d 885; Christian v. Hood (Tex.Civ.App.)19 S.W.2d 621; Cox v. Sinclair Gulf Oil Co. (Tex.Civ.App.) 265 S.W. 196.
It is true that C. L. Dial is not claiming an interest in any of the property devised to Mrs. Gertrude Dial and her children, but the *Page 177 partnership property has never been partitioned. In fact, the record does not show that the partnership affairs of Dial Bros. have ever been finally adjusted and settled. Moreover, there has been no partition between Mrs. Gertrude A. Dial and her children, and, since C. L. Dial and his wife are joint warrantors with Mrs. Gertrude A. Dial in the lease and in the deed, the court was without jurisdiction in said cause No. 639 to decree the validity or invalidity of either the deed or the lease when neither C. L. Dial nor his wife had been made a party.
The appellants further attack the judgment as being invalid because it shows to have been rendered at a term held by agreement of all the parties to the suit and in vacation. We think this contention is sound.
R.S. art. 1915, provides that, by consent of all the parties, the court may try any civil case except divorce cases. But the children could not consent, and their guardian, because of her adverse interest, could not consent for them.
Appellants attack the judgment, asserting that it is invalid because it was rendered by a judge who had an approved claim against the estate of J. C. Dial. This stipulation of counsel with reference to this issue is as follows:
"That said judge, who presided at said trial and who entered said judgment, at the time of the rendition of the same, was the owner and holder of a claim, a money demand, against the estate of J. C. Dial, deceased, amounting to about the sum of $400.00; that such claim was filed with said Gertrude A. Dial, executrix of said estate, and had been by her approved, filed and listed as a valid claim, and had been listed in the inventory and list of claims, and duly filed in the County Court of Hemphill County, Texas, in the matter of the estate of J. C. Dial, deceased, which said claim had not been paid at the time of the rendition of said judgment; and that said claim was paid by said Gertrude A. Dial on or about the first day of August, 1926, out of the proceeds derived from said judgment."
The facts recited here do not sustain the contention. Merely because the trial judge is a creditor of one of the parties to the suit does not disqualify him, as judge, unless he is directly interested in the result of the litigation. He must have a direct interest in the cause of action or matter being litigated, so that the result of the suit will necessarily affect him to his personal or pecuniary loss or gain. City of Oak Cliff v. State, 97 Tex. 391, 79 S.W. 1; City of Dallas v. Peacock,89 Tex. 58, 33 S.W. 220; Kemp v. Wharton County Bank, 4 Tex. Civ. App. 648,23 S.W. 916; Nicholson v. Showalter, 83 Tex. 99, 18 S.W. 326.
By numerous propositions, the appellants assert that it was the duty of C. L. Dial, as the surviving partner, to use reasonable diligence to wind up the affairs of the partnership; that he had no right, either alone or in co-operation with W. H. Dial and Mrs. Gertrude A. Dial, to continue the partnership business of ranching and raising cattle for four years after the death of J. C. Dial; that he had no power and no authority as such survivor to renew notes of the partnership, mortgage its assets to secure such notes and conduct the affairs of the firm after the death of J. C. Dial just as they had previously been conducted, and that such renewal notes for increased amounts and unauthorized transactions resulting in additional liability, in no way affected the rights of these minor plaintiffs.
The pleadings and the evidence in which they attack these numerous transactions are voluminous, and no good purpose can be served in discussing them in detail. Suffice it to say that they raised such issues of fact which required the trial court to submit that part of the case to the jury. There are several bills of exception taken by appellants to the exclusion of testimony which, if admitted, would have tended to show that C. L. Dial, as surviving partner and trustee, had not faithfully discharged the trust, and others which might have shown mismanagement and losses as the result of his failure to use reasonable diligence in winding up the partnership affairs and his continuing to carry on the business for four years after the death of J. C. Dial. The evidence introduced, as well as the testimony of the witnesses excluded, all tended to charge him with negligence and mismanagement of the partnership affairs, and, in the event of a finding against him on such issues, the children's interest in the property could not be charged with losses sustained by him under such circumstances. 47 C.J. pp. 1048, 1052.
Where a partnership is dissolved by the death of one of the partners, the surviving partner or partners have the right, and, moreover, it is their duty, to wind up the firm's business, and he is, in the eyes of the law, a trustee of the firm assets for that purpose, and as such trustee is entitled to the exclusive possession of all firm assets. Gaut v. Reed Bros. Co., 24 Tex. 46, 76 Am.Dec. 94; Crescent Ins. Co. v. Camp,64 Tex. 521; Shivel Stewart v. Greer Bros., 58 Tex. Civ. App. 115,123 S.W. 207; Amarillo National Bank v. Harrell (Tex.Civ.App.)159 S.W. 858; Roberts v. Nunn (Tex.Civ.App.) 169 S.W. 1086.
Unless the articles of partnership provide otherwise, the surviving partner must proceed at once to wind up the partnership affairs, because there can be only a limited continuance of the business and that for the *Page 178 sole purpose of winding it up. He must wind it up within a reasonable time and account to the heirs and personal representatives of his business associate for any surplus remaining in his hands after the payment of the partnership debts, and, to enable him to effectively wind up the affairs of the partnership, he is entitled to quiet and exclusive possession of all of the firm assets. There seems to be no fixed rule in Texas requiring him to first dispose of personal property for the purpose of paying partnership debts before he can resort to the real estate, if any, of the partnership for that purpose. We have not been able to find any case which announces that the rule of equitable conversion and re-conversion applies in Texas, though we find an intimation to that effect in the case of Baldwin v. Richardson Co., 33 Tex. 16, the opinion being rendered by the reconstruction court. We doubt whether it is necessary to determine, in the decision of this case, the question of whether the personal property should have first been sold. The general rule seems to be that the surviving partner takes the equitable title to the firm real estate, if necessary, in order to pay firm debts and settle partnership accounts, and he may sell it for that purpose, his deed conveying only an equity to the purchaser, who has the power to compel the holder of the legal title, which would be the minor plaintiffs in this case, to convey such title to them, though it is held that the surviving partner cannot sell real estate unless necessary to pay debts or settle partnership affairs, and a purchaser of land from a surviving partner, with notice that it was partnership property, is bound to know the authority of such partner as to its sale. 2 Modern Law of Partnership (Rowley) § 626; Western Securities Co. v. Atlee, 168 Iowa 650. 1511 N.W. 56; Armor v. Frey, 253 Mo. 447, 161 S.W. 829; 1 Bates on Part. §§ 293, 300: Foster's Appeal, 74 Pa. 391, 15 Am.Rep. 553.
The appellants charged that the partnership property could have been sold advantageously within eight months after the death of J. C. Dial and the affairs of the partnership wound up by the surviving partner, C. L. Dial, within that time; that, instead of winding up the affairs as he was legally bound to do, he continued to carry on the firm business, and formed a new partnership, taking in his father, W. H. Dial, and Mrs. Gertrude Dial as members of the new firm; that in such capacity they incurred additional indebtedness, applying the profits arising from the business to the payment of their debts; that they renewed some of the old obligations evidenced by promissory notes which had been secured by chattel mortgages upon the firm cattle, and had thereby attempted to subject the assets of the old firm and incumber such assets to the payment of the expenses and debts of the new firm. The general rule is that a surviving partner cannot carry on the business after the partnership has been dissolved by the death of one of the firm, nor can he renew existing notes or execute new notes or liens binding and incumbering the firm property, and that all such obligations are his individual debts. Cock v. Carson, 45 Tex. 429; Crawford v. Austin (Tex.Civ.App.) 293 S.W. 275, 279; Kendall v. Riley, 45 Tex. 20; Brown v. Chancellor, 61 Tex. 437: Tootle v. Jenkins, 82 Tex. 29, 17 S.W. 519; Altgelt v. Alamo National Bank, 98 Tex. 252, 83 S.W. 6; 47 C.J. 1046, 1075.
There is testimony which might be considered by a jury as sustaining the appellants' contention that C. L. Dial did not exercise reasonable diligence in winding up the business of the firm. If he did not, then appellants contend he could not convey their interest in the property for any purpose. In other words, the contention is that the surviving partner cannot rightfully convey real estate or even personal property, unless he is in good faith making such conveyances for sufficient consideration in a bona fide effort to wind up the affairs of the firm and to pay partnership obligations. We think this contention is sound. The appellants further insist that the appellees herein, knowing that the land involved was partnership property, acquired no interest, either under the lease or the deed, unless C. L. Dial executed such instrument in a bona fide effort to settle partnership affairs. In this connection, they further insist that the lease was made without adequate consideration; that its execution was not necessary toward winding up partnership affairs; that it was executed after a reasonable time — for all of which reasons it did not divest the minors of their interest in the estate. We think the evidence bearing upon these contentions is sufficient to have required the trial court to submit the issues to the jury. They insist that the deed to Martin and Perkins could not be made by C. L. Dial as surviving partner because he had failed and refused to wind up the affairs of the partnership, and had formed another partnership, which had taken over the assets of the firm of Dial Bros., and therefore he was not possessed of the power and authority vested in a surviving partner; that the deed shows that Mrs. Gertrude Dial and W. H. Dial were without authority to join in, and in so doing they conveyed no interest to which the minors were entitled; that the deed was not made for the purpose of winding up the affairs of the old partnership, but, as recited in the consideration, was executed for the purpose, in part, of paying the community debts of J. C. Dial and his wife; that it was further ineffective as against the children's interest because many of the notes recited in there as part of the consideration represent the indebtedness of the new firm or C. L. Dial *Page 179 individually, and were not binding against the estate of J. C. Dial or the interest of the minors. They further insist that C. L. Dial could not convey the property even as surviving partner to Martin and Perkins in consideration of the grantees' assumption to pay any indebtedness existing against the old firm of Dial Bros.; and that such assumption is not a valuable consideration where minors' interests are involved. The lease purports to be the act of Dial Bros., and was executed about eight months after the death of J. C. Dial. The consent judgment hereinbefore mentioned attempts to validate this lease and the deed. This could only be done where the children were properly represented. The testimony tends strongly to show that the children's interest in the land has not been properly safeguarded in the various transactions which it is claimed have resulted in divesting them of title.
It is clear that the appellees could not acquire property belonging to the partnership of Dial Bros., in which the heirs of the deceased partner had an interest, by assuming, or even paying, as a consideration for the conveyance, debts for which the surviving partner personally or the members of a new firm, if any, which he had organized to carry on the business, were solely responsible. If the testimony should show that all or any part of the $96,000 which Martin and Perkins had assumed to pay was not legitimately chargeable to the estate of Dial Bros., then the consideration for the transfer, in so far as the children's interest is concerned, has failed.
The appellants contend that Mrs. Gertrude Dial refused to qualify as independent executrix. The record shows that she executed the deed referred to as independent executrix. Having held that she was not independent executrix, and that she did not secure the orders of the probate court entitling her to make the deed, in so far as the rights of the children are concerned, it is immaterial whether she repudiated the trust or accepted under the will.
The appellees insist appellants cannot successfully maintain this suit without tendering the amount received and which was decreed to them in the district court judgment. Restoration has been held to be unnecessary where the petitioner is a minor who has wasted the consideration. Wisdom v. Peek (Tex.Civ.App.) 220 S.W. 210. We incline to the opinion that the offer by plaintiffs in their pleadings is a sufficient tender under the facts of this case. The plaintiffs alleged in this connection that the defendants have heretofore paid their guardian under the pretended consent judgment the sum of $106,250; that said defendants now have in their possession large sums of money in excess of the amount paid said guardian, which defendants have derived from the oil and gas obtained from the land and which they have received as rents, revenues and royalties, all of which sums rightfully belong to plaintiffs. "That plaintiffs here and now tender into this court the said sum of money so paid and any and all sums of money actually paid or received by and from them to plaintiffs and hereby offer to do equity with and to said defendants and ask the court to take into consideration said payments by said defendants to said minor plaintiffs and others for said minors, in making an accounting and equitable adjustment between plaintiffs and defendants and to pay the said defendants as their interest may appear, any and all sums of money that may be due them and to make such payments out of the money now held by said defendants and belonging to plaintiffs." They further offer to reconvey their interest in the twenty-acre lease by relinquishment or assignment as may be sufficient to divest them of title.
The rule, as stated in Graves v. Hickman, 59 Tex. 381, is that, when the petition avers a willingness to repay all sums of money expended for the plaintiff, averring ignorance of the true amount and asks an accounting between plaintiffs and defendants, it is a sufficient tender by a minor without the necessity of making a formal tender of a specific sum. The judgment orders the children's interest paid into the bank selected by the court as depository, and, so far as we are informed, none of the money has ever passed into the possession of either the children or their guardian ad litem Fletcher, and the children could not be required to restore as a condition precedent to recover, unless it was shown that they had actually received the money or a part of it, and that it had not been dissipated by them. Vogelsang v. Null, 67 Tex. 465,3 S.W. 451; Salser v. Barron (Tex.Civ.App.) 146 S.W. 1039; Hunt on Tender, p. 39, § 49. There is a further rule that, where the transaction is absolutely void, the minors are not required to restore the consideration as a condition to having the relief prayed for. Lee v. Hibernia Savings Loan Soc., 177 Cal. 656, 171 P. 677.
We entertain serious doubts whether the plaintiffs should be required to even plead a tender, for the reason that this is a suit in the form of trespass to try title, filed by their guardian ad litem to recover for them their interest in the lands described in the petition and to recover damages. It is true that they ask for the cancellation of the mineral lease, the deed, and the judgment as incidental relief, because these instruments are alleged to be clouds upon their title. As we understand the suit, it is not technically one for cancellation and rescission, but, whatever may be the nature of the case, we think the offer to do equity is all that should be required.
The court did not err in admitting in evidence the mineral lease, the deed, and the *Page 180 judgment, but, if the issues had been submitted to the jury, there should have been an instruction to the effect that they were not binding as against the plaintiffs. The admission in evidence of the inventory and appraisement filed in the estate of J. C. Dial seems to have been harmless.
We think the court erred, however, in refusing to permit plaintiffs' counsel to call C. L. Dial to the witness stand and propound leading questions to him concerning his management and conduct of the firm's business since the death of J. C. Dial. It appears without contradiction that he was the managing member of the firm of Dial Bros., having charge of the ranch and all the property of the partnership. He testified that he kept no books showing how he had conducted the business, but depended upon his memory. It is the duty of the managing partner to keep an accurate account of his transactions with or for the partnership, and, if he fails to keep such account, all doubts respecting particular items will ordinarily be resolved against him on an accounting. Where he has failed to keep accurate accounts, the burden rests upon him, as managing partner, to show that he has performed his duty fairly, impartially, and honestly, and all doubts respecting particular items will ordinarily be resolved against him. 47 C.J. 1245. Under the circumstances, C. L. Dial has the burden of showing the application of firm assets to the payment of firm debts, Marcum's Administrator v. Marcum, 154 Ky. 401,157 S.W. 1101, and every reasonable presumption must be indulged against him, McKleroy v. Musgrove, 203 Ala. 603, 84 So. 280. Doubt as to the validity of credits which he claims must be resolved against him. Kirwan v. Henry (Ky.) 16 S.W. 828; Navarro v. Lamana (Tex.Civ.App.) 179 S.W. 922. The duty of a partner in control of such a business is analogous to that of a trustee. Raymond v. Vaughan, 128 Ill. 256, 21 N.E. 566,4 L.R.A. 440, 15 Am. St. Rep. 112.
"It is the duty of the survivor to make a full and fair disclosure as to the firm assets to the representative of the deceased partner, to account to such representative in respect of assets which come into the survivor's hands and to pay over to the representative the estate's share of the net partnership assets. The duty to disclose, to account and to pay over are sometimes referred to, or regarder as, the survivor's duty as trustee." 47 C.J. 1060, § 639; Id., 1078, § 674.
"If the surviving partner assumes to carry on the partnership business without authority, he is liable for debts incurred during such continuance and if he executes firm notes without authority in the course of continuing the partnership business, he, and not the firm, is liable for their payment." 47 C.J. 1075 § 669; Altgelt v. D. Sullivan Co. (Tex.Civ.App.) 79 S.W. 333.
Under the rules announced, the plaintiffs were entitled to go into the transactions of C. L. Dial and his dealings with the partnership property, both before and after the death of J. C. Dial, and to lead the witness concerning such matters without restriction.
The record does not show that C. L. Dial had qualified as an expert witness, and therefore he should not have been permitted to testify as to the market value of the cattle in the fall of 1918. The testimony of C. L. Dial, in which he details conversations he had with third parties, was clearly inadmissible upon the ground of hearsay. It appeared that some of the notes evidencing obligations of the firm of Dial Bros., and which had been executed prior to the death of J. C. Dial, were shown to have been marked "paid." The court did not err in permitting C. L. Dial to testify with reference to these notes and as to how and when they were paid.
Permitting Mrs. Gertrude Dial to testify that she refused to accept as sole executrix under the will, if error, is harmless. As a matter of law, she could only qualify as executrix under the general statute, and her subsequent conduct established the fact that she did act as executrix, although she signed the deed as independent executrix. There was no error in permitting her to testify that she executed the oil and gas lease because Mr. Dial, her father-in-law, wanted her to execute it. Her motive in doing so is immaterial; the effect of her act in executing it being the only material inquiry in so far as the children's interest is concerned. The testimony, however, may have been admissible in connection with the circumstances under which she executed the deed in her attorney's office at Canadian, upon the issue of fraud raised by her pleadings.
The probate proceedings in the guardianship of David and Elizabeth Dial, in Roberts county, were admitted in evidence over the objection of appellants' counsel, the objection being mainly because proceedings had been instituted to set the orders aside and were still pending on appeal in the district court. This objection would not exclude the orders, for the reason that they are presumed to be valid as against a collateral attack, though they might have afforded grounds for postponing the trial of this case until their validity had been finally determined, but no effort was made by the appellants to postpone upon that ground, and this court cannot presume that they will be held invalid.
The court did not err in excluding the testimony of Paul J. McIntyre as to the value of the lease, because he was not shown to be qualified to testify upon that issue, but *Page 181 the court did err in excluding the testimony of Grover Bishop with reference to the market value of the mineral leasehold interest in the land. The appellants are contending that the amount paid for the lease and the land is so grossly inadequate as to amount to fraud upon the minors, who were not represented in those transactions.
The appellees contend that appellants cannot maintain this suit, for the reason that there has been no partnership accounting of the business of Dial Bros. The general rule is that heirs cannot maintain an action for an accounting, and that this can be done only by the representatives of the deceased partner. Gilmore on Partnership, 499, note; 2 Bates on Partnership, § 924; 2 Rowley's Modern Law of Partnership, § 657; 47 C.J. 1158, 1159. An accounting will not be ordered unless it appears that there is necessity for such action, nor should the court order an accounting where it would be futile. The record shows that twelve years have passed since the death of J. C. Dial, that the assets of the firm, both real and personal, have long since been disposed of, and that the only property which the court in this case could effectively dispose of is the plaintiffs' interest in the lands. C. L. Dial testified that the debts of the original firm had all been paid, that he kept no books showing any of the transactions and had no accounts, either for or against the firm of Dial Brothers, but that he trusted entirely to his memory, which, according to the record in this case, seems to have failed him with reference to some important matters. Mrs. Gertrude Dial, under the general rule, might have required an accounting, but even she could not resort to that remedy after so long a time. The children are not chargeable with her failure to have an accounting, since her interest is adverse to theirs, and because, according to some testimony, she may have entered into a new firm, which wrongfully took into possesion the property of the old firm of Dial Bros. The appellees do not state any reason why an accounting is necessary, and, since the children are only suing for their interest in the real estate devised to them by their father's will and the revenues and royalties realized by the appellees, we see no necessity for an accounting. What is here said, however, is without regard to the right of appellants to examine fully into the transactions of C. L. Dial and his management of partnership affairs after the dissolution of the partnership by the death of J. C. Dial, for the purpose of throwing light upon the necessity and propriety of the lease and sale of the lands to appellees. It is conceded that, if C. L. Dial was justified in disposing of partnership real estate for the purpose of paying partnership debts, then appellees have acquired a good title, and all other inquiries become immaterial.
For the reasons hereinabove discussed, we think the court erred in directing a verdict for appellees. The judgment is therefore reversed and the cause remanded.
JACKSON, J., not sitting.