I must respectfully enter my dissent to the majority opinion, holding generally that (1) a sale, exchange, or disposition of the estate by a community survivor, other than for the payment of debts, is a maladministration which the heirs can treat as a conversion, with a resultant right to sue the sureties for the value of their one-half interest. (2) I further dissent from the majority findings that the petition alleged the community survivor, Mrs. McFarland, had "lost all of said community estate in a manner not authorized by law"; that she "converted the entire community property in a manner not essentially necessary in the administration of the estate"; "wasted the entire community"; "that the entire estate and the proceeds of sale had been dissipated and lost" and "used for purposes not sanctioned by law"; nor do I find any pleadings that charge the survivor as having converted any proceeds of sale to uses not provided for by law.
A careful reading of the petition discloses no allegations whatsoever that their mother Mrs. McFarland, sua sponte breached the obligations of her bond, i. e., that she unfaithfully administered the community estate, or failed to fully account for the disposition of the property in her hands as statutory survivor. On the other hand, plaintiffs (the heirs) themselves, in their petition, render a full and complete accounting of the mother's administration under the terms of Art. 3670, R.S., revealing every transaction involved in the care and disposition of all property that might now be available for delivery to such heirs, had it not been for "unavoidable losses".
The two points above referred to can be made clearer by further examination of the petition, which, in allegations, is neither lengthy nor difficult of construction. It states that the purchase of the Beaton property was for a recited consideration of $1,500 cash, the balance of the purchase price being the realty and other avails of the original community estate; together with the assumption by Mrs. McFarland, as survivor, of a first lien indebtedness owned by a building and loan association. The petition then alleged that simultaneously with said sale or exchange, the mother, as survivor, made a written agreement with defendant Beaton, granting a lien upon the newly acquired real estate and premises, conditioned that she would indemnify defendants against loss by reason of their suretyship on her bond as survivor; that the statute contemplated a survivor's bond to be free of lien or hypothecation, being additional security to plaintiffs as heirs; that the sureties violated the law by requiring this indemnity, encumbering, as it did, the community estate, and "as a direct and proximate result thereof theplaintiffs were injured as hereinafter set forth". (Italics mine) The petition continued by stating that in the year 1930, there was a balance due of about $3,900 on the property previously purchased from defendant Beaton in 1921, and it became necessary to dispose of same; that after listing it for sale, a deal was closed for other property of equal equity; that the indemnity lien of defendants appeared in the title to the property owned by the community estate, and defendants refused to release it, whereupon such deal was lost to plaintiffs. A later deal similarly failed of consummation, as plaintiffs allege, and the mother — community survivor — thereafter, to avoid a foreclosure, was compelled to convey the property for a second lien note of $2,000, which was placed with defendants in lieu of the indemnity lien on the estate (the former Beaton realty), but said last-acquired equity was, in turn, lost through foreclosure; plaintiffs and their said mother, as survivor, finally losing everything of value, growing out of the initial transaction with defendant Beaton. The final averments of plaintiff's petition were that, by reason of the aforesaid indemnity lien and the acts of the defendants in refusing a release, it was impossible *Page 725 to trade the property, to their damage in the sum of $8,500; that defendants further prevented said Mrs. McFarland from faithfully performing her duties as survivor, resulting in her failure to pay over to plaintiffs the one-half value of the property owned by them, in the sum of $10,750.
It should here be noted that there was no pleading whatever that the Beaton property was not of equal value to the original community realty given in exchange; or that such deal was not for the best interest of the estate; or was for the personal benefit of the mother — no charges of a want of discretion or a failure of ordinary care and prudence in the transaction. On the other hand, I find from the petition a state of rest and acquiescence in the estate's affairs for nine years when the final dispositions by the survivor occurred; and under what circumstances? In 1930, the first year of the depression, conditions were faced by Mrs. McFarland apparently beyond her control in being unable to pay the mortgage balance after threat of foreclosure by third parties; and her every effort to save the property during such times proving fruitless, the same was lost through foreclosure as already described. The pleadings in their entirety, reciting, as they do, the complete history of Mrs. McFarland's stewardship, charge her with no bad faith, fraud, or maladministration; on the other hand, the allegations therein simply lead, step by step, up to the refusal of the defendants to release the indemnity bond, whereby the mother was prevented (nine years after the original exchange) in making further advantageous exchanges of the estate. It is on this last alleged tort action — refusal of defendants to release the indemnity bond — that plaintiffs' attorneys have pitched their battle, and they attack such agreement of indemnity as being against public policy, unlawful, and void. The majority opinion correctly holds that the execution by Mrs. McFarland of the lien to defendants, just mentioned, was a lawful act, and in no sense a devastavit, or wrongful. It is uniformly held that the power of absolute management and disposition, under Articles 3667-3669, R.S., includes the lesser right to mortgage or encumber. See McGraw et al. v. Merchants' Planters' Nat. Bank, Tex. Civ. App. 34 S.W.2d 633, and authorities there cited. So, in my judgment, the majority opinion entirely disposed of plaintiffs' appeal, when, referring to the community survivor, it holds: "* * * she had the right to bind her interest in the property by the indemnity agreement entered into with her sureties. The giving of such indemnity security was in no way a devastavit, nor is it alleged culpable".
But the majority have further held that the petition was sufficient against general demurrer, on the ground that it alleged a conversion by Mrs. McFarland. I repeat, there is lacking in this petition any allegation or inference that, outside of her signing the indemnity agreement, which was lawful but which prevented later sales, the community survivor in anywise breached either of the two obligations of her bond, (1) to faithfully administer the estate; and (2) to account for and pay over one-half of the surplus of the estate, after payment of debts with which the whole of the property was properly chargeable. Arts. 3667-3670, R.S. If I be correct in this, the only remaining allegations on which plaintiffs could have pitched liability was in their assertion of the aforesaid tort action, which the majority holds is untenable; as I find no issuable facts alleged on which to base a breach by the principal (the survivor) of above elements of statutory liability on her bond.
Just what acts of the community survivor are actually plead that are thus held to be conversions? The only transfers by her were for the Beaton property in 1921, and the sale of the latter premises in 1930, after threat of foreclosure, for a second lien note, which, in turn, succumbed to previous liens. The sale to Beaton was a lawful transaction, there being no hint of bad faith or fraud; the conclusive inference obtaining that Mrs. McFarland was exercising her discretion in the matter and for the best interest of the estate. Her judgment in making the purchase seems to have had the entire approval of plaintiffs during the ensuing nine years. But, aside from this, certainly, since Brunson et al. v. Yount-Lee Oil Co., 122 Tex. 237, 56 S.W.2d 1073, a community survivor may dispose of the estate, regardless of the existence of debts. No conversion could have possibly resulted from a fair exchange of the community, as a conversion cannot spring from the exercise of a legal right. 65 C.J. p. 11; Ashbrook v. Hammer, 106 S.W.2d 776. As to the 1930 sale of the Beaton property and loss of the proceeds therefrom through foreclosure, the statute (art. 3670) plainly credits *Page 726 the survivor with unavoidable losses. That losses through foreclosure during the course of the late depression are not matters for which a survivor is legally chargeable, is pointedly emphasized and held in Moreman v. Roberson, Tex. Civ. App. 76 S.W.2d 223.
It is therefore my conclusion, as a matter of law, that neither plaintiffs' allegations nor do the actual facts disclose any waste, dissipation, or use of property not sanctioned by law, such as would result in a conversion and a consequent liability against defendant bondsmen. Certainly there was no culpability in exchanging the property other than for the payment of debts. The case of Hand v. Errington, Tex.Com.App., 242 S.W. 722, cited in the majority opinion, did not involve a statutory proceeding at all, but was a community survivorship without bond, the suit being against the surviving father under a preceding article of the statutes. None of the other cases cited in the majority opinion are authority for the conclusions of law there reached under the facts of this record. The principle announced in the prevailing opinion would make the survivor's bond a financial guarantee against all losses in proceedings of this sort, regardless of statutory limitations.
The judgment of the trial court on the general demurrer was correct, and, therefore, this cause should be affirmed.