39 W. Va. 567 | W. Va. | 1894
la the Circuit Court of Harrison county, at April rules, 1890, plaintiff filed, his hill in chancery against the defendants, alleging, among other things, that on the 80th day of May, 1887, he obtained a judgment against the defendant 'Wilbur F. Richardsfor the sum of four hundred and twenty dollars with interest from date, and twenty two dollars and seventy cents costs, because of a libel published on the 12th day of July, 1884, which judgment was in full force and wholly unpaid; — that said Richards at the time of such libellous publication was the owner of a large amount of property, but that on the 17th day of Uovember, 1885, with intent to delay, hinder and defraud the plaintiff ho entered into a protended marriage contract with defendant, at that time Melissa McCleary now Richards, by which in consideration of marriage he transferred and conveyed all his known property to her, she participating iu his fraudulent intent; this contract was not admitted to record until May 26, 1886 ; — that after the marriage said Richards retained possession of all said property, amounting to about seven thousand dollars, and used and managed the same as though it were his own ; — that he was a practical printer and with part of the money realized from said property, or rather with part of the property itself, he purchased the fully equipped plant of the paper known as the “Clarksburg Telegram” and printed and edited a paper, and so used and managed the property conveyed by said marriage settlement, that from about seven thousand dollars in 1885 it amounted to upward of fourteen thousand dollars in 1890, all due to the skill, labor, and management of said Richards; —that with a part of the proceeds of said property he purchased in his wife’s name a certain lot and erected a valuable house thereon — all which he alleges was in fraud of his rights as'a creditor of said Richards, and was fully participated in by his said wife; and he prays for a sale of said property and the payment of his debt, interest and costs thereof. Numerous interrogatories are propounded for the defendants to answer.
The defendants file their separate answers under oath to the bill and interrogatories, in which they virtually
At the September term, 1893, the court entered a final decree dismissing plaintiff’s bill, from which this appeal is taken.
The first question presented is : Did the court err in allowing the defendants to file a supplemental answer pleading the statute of limitations? Section 14, c. 104, of the Code, on which defendants rely, is in these words: “No gift, conveyance, assignment, transfer or charge not on consideration deemed valuable in law shall be avoided either in whole or in part for that cause only, unless within five years after it is made suit be brought for that purpose,” etc. This section does not apply to contracts, which are upon consideration deemed valuable iu law, but is expressly limited to voluntary contracts. The contract in this case was not only ou consideration deemed valuable in law, but on the highest consideration known to the law, to wit: marriage. As has been said, though the common-law abhors every sort of cheating, it loves matrimony. The law regarding such contracts is laid down in these words, to wit: “ However much a man may be indebted, an ante-nuptial settlement, made by him in consideration of marriage, is good against his creditors, unless it appears that the intended wife was cognizant of the fraud. And, even though it conveys his whole estate, it is not simply, on that account, void; and, when a settlement is made iu contemplation of marriage, the law presumes it was au inducement- to it, and the courts can not assume the contrary to be the fact.” Herring v. Wickham, 29 Gratt. 628; Coutts v. Greenhow, 2 Munf. 363.
Such being the nature of. this contract, it could not be avoided under section 2, c. 74, of the Code, but only under
The plaiutiff objects that this contract not being identified by date in the certificate of acknowledgment was improperly admitted to record. In the case of Adams v. Medsker, 25 W. Va. 127, this Court has completely answered this objection.
The plaintiff' further insists that, the property in controversy being the property of a married woman, notwithstanding the fact that the bill propounds interrogatories under oath, and the answer responds to the interrogatories under oath because there is a general replication — under the holdings of this court the female respondent must prove that the property was purchased with funds not derived from her husband. Row, the bill alleges, and the respondent admits, that the funds were derived from her husband and states the manner of the derivation directly in accord with the discovery sought. If the answer admits the facts stated in the bill, what is left for the defendant to prove? The defendant admits that she received the property through the very transactions, which the plaintiff alleges she had with her husband; but she denies that these transactions were fraudulent either in fact or law. The facts being undisputed, it devolves upon the court to say whether they arc such, that fraudulent intent on the part of the husband with fraudulent knowledge on
Taking the whole history of the transactions of the husband as set out in this case, it clearly appears, that it was the intention of the defendant husband to place his property in such condition that the plaintiff could not possibly succeed in making his judgment; and nowhere is this more apparent than in the duplicate answers which he has had prepared — one, no doubt, as agent, and the other as principal— for himself and wife, and filed herein. It is plain from these answers, that the husband either through information from his legal advisors, or through his own study of the subjects, believed that lie had all the property in controversy thoroughly armor-plated against the assaults of the plaintiff", and therefere he appears to take special delight in showing how skillfully he has managed to increase the value of his wife’s separate estate magnificently, and yet secured it beyond the reach of the clutches of his own creditors. The exultation at the success of his scheme and the fraudulent intent of the husband are nowhere more apparent than when he gives utterance to the following false profession: “Respondent regrets that his financial circumstances are so poor, but he hopes that with the blessing of good health, industry and economy he will yet be able, not only to pay his legal debts, or to have property of his own out of which tho same may be made or paid, for it is disagreeable and annoying to respondent to owe any debt to any person.” This, coming from a man who in the same answer apparently prides himself ou the fact that b.y his ingenuity, skill, and good management he has succeeded in getting over fourteen thousand dollars in his wife’s name in less than five years, besides supporting his family, and who owes less than one thousand and five hundred dollars, evidences a lack of sincerity on his part that amounts to almost positive proof, that he considers himself under no obligation to pay the plaintiff’s claim but justified in evading it in any available manner. It is true, this debt was not one of his own contracting; but the law has made him liable for it, and therefore it is just as binding ou him as a law-abiding citizen as any other obligation.
Having reached the conclusion, that the marriage-settlement was good and valid from at least the day of its recordation, May 26,1886, against all creditors of the husband both existing and subsequent, it becomes unnecessary to investigate any of the transactions of the husband except such as were subsequent to that date. The property, which became the sole and separate property of the defendant wife by virtue of said contract was as follows, to wit: Three notes known as the “Hustead notes,” amounting' to three thousand two hundred and fifty dollars ; three notes known as the “Thompson notes,” amounting to one thousand and seven hundred dollars; a judgment against E*. T. Baldwin, six hundred dollars; one note on Joseph Murray, one thous- and dollars; one note on Stewart Webster, one thousand dollars; also, a rental interest in a two-story brick block on Main street, Clarksburg, W. Va. This property the husband took possession of, as he had a right to do under the law, and continued to manage for her use and benefit, and realized therefrom the sum of six thousand five hundred and twenty dollars. The amount, that was never collected, does not appear; but it was certainly something which under the marriage agreement he would be in duty bound to make good to her, as it is .to be presumed, that, when he made the transfer in consideration of marriage, he represented that all said claims were as good as gold, after the usual manner of men in similar circumstances. He made several investments in real estate and gas and electric-light stock, which were all legitimate, and from none of which she received much more in return than the principal invested. It is therefore unnecessary to consider any of these, as there is no pretence that any of them could be treated as fraudulent with the single exception of the transaction in relation to the newspaper-plant.
In the answer of the wife, repeated in the answer of the husband, is the following statement: “ Respondent had confidence in the honor and integrity of her said husband as her agent', and committed to him, as her agent, the conduct and management of said newspaper, its presses, etc., to a very great extent, depending upon his honesty and integrity and skill in the correct and proper management of said newspaper, presses, etc., in her interests and as her property and business;” and “respondent, in answer to the ninth interrogatory of plaintiff’, says that the amount of profits made from the Telegram newspaper property, including job work connected with said newspaper office, from the 1st day of April, 1886, until December 1, 1890, was at the average rate of from one thousand two hundred dollars to one thousand-five hundred dollars per annum. Respondent is satisfied that the amount of said profits per annum during the time last aforesaid was upon an average not less than one thousand two hundred dollars nor more than one thousand five hundred dollars; so that the aggregate amount of said profits made from the said Telegram newspaper, including the job work connected with said newspaper office, was, as respondent verily believes, during said last-mentioned time, not less than five thousand and six hundred dollars, nor more than seven thousand dollars.”
In another part of their separate answers it is stated that part of this amount was used in support of the family, leaving a net balance, however, of not less than five thou
A court of law affording no remedy, what will a court of equity do ? In Bump on Fraudulent Conveyances (page 250) the law is stated to be : “An arrangement by which the husband acts as his wife’s agent without any compensation, or for a compensation that is insufficient, is in effect an attempt to make a voluntary conveyance of the products of his skill and labor in her favor, and is void against his creditors ;” and on page 251: “A debtor may, therefore, bestow his skill and labor upon his wife’s estate, so far as may be reasonably necessary, without rendering the products liable to his creditors. He may do even more than that. As his first obligation is to support his family, the products of the land will not be liable for his debts, until that obligation is discharged, and even then they will not be liable, unless the portion not needed for the support of the family is the result of his labor; but, if there is any such surplus that is the result of his skill, there is no reason why it may not be reached in equity and appropriated towards the payment of his debts.” Shackleford v. Collier, 6 Bush. 150; Murphin v. Taylor, 16 Ohio St. 509. In the latter case it is said :
“The arrangement between the husband and wife, whereby he undertook to carry on business in her name and for her exclusive benefit, was in effect an attempt to make a voluntary settlement of the products of his skill and industry in favor of his wife.”
In the case of Trapnell v. Conklyn, 37 W. Va. 242 (16 S. E. Rep. 570) this'Court stated the law as follows-. “(4) The fact that an insolvent husband voluntarily bestows his labor and skill in the business of, farming carried
Rrom these and other numerous authorities examined there can be no other conclusion reached than that if a man skilled in any employment- does business in his wife’s name with the capital furnished by her, and large profits over and above the necessary expenses of the business including the support of himself, wife and family accrue therefrom, owing -to his skill and experience, and he turn such profits over to his wife or invest them in property for her, a court of equity will treat such arrangement as fraudulent, and will make an equitable distribution of such profits between the wife and existing creditors of the husband. Hot that the wife is guilty of any actual fraud, but her hand be it ever so chaste is polluted by receiving as a gift from her husbaud the funds which he is endeavoring to fraudulently conceal under the cloak of her separate property from the searching eyes of his creditors.
According to the admission of both of the defendants in this case the' husband doing business with his wife’s capital, and in her name and for her benefit by his skill, labor and management during a period of four years and nine months succeeded in making a net profit of not less than five thousand dollars above all necessary expenses including the support of himself, wife and family, partly supplemented by the revenues of the husbaud from other sources. The ouly way that the law furnishes for the ascertainment of how much of this handsome profit is due to the skill and labor of the husband is to deduct therefrom the legal interest on the amount of the capital invested. The plant, which was worth much more, was purchased for the wife at the price of one thousand four hundred dollars; but as she lost the balance of the Hustead notes of three thousand two hundred and fifty dollars, and the plant was afterwards sold for her at the pariee of three
The maxim of the moral law is tooth for tooth, eye for eye, reputation for reputation, property for property, and life for life, or what is called “ restitution in kind.” Human ingenuity and wisdom could not devise a practical plan for carrying out .this maxim without the infliction of the greatest cruelties, and often times the greatest injustice. So, leaving the equality which this law demands to the final arbitrament of Him who can weigh the motives and intentions, and from whom no secret is hidden, and’on whom no deception can be successfully practiced, the common-law, in cases of injury to property, person, or reputation provides a pecuniary reparation in the way of compensation to the injured party, and also furnishes the means of ascertaining the damage inflicted; and when that is once fixed and determined by its judgment, it regards the duty of payment just as sacred and binding as any voluntary obligation assumed by the party, nor will it lend its aid in any manner whatever to him who is endeavoring to hinder, delay and defeat the collection of such a judgment. Owing to its feeble administration, it may sometimes appear impotent; but inconsistency and duplicity areno
Since the institution of these proceedings death has summoned the husband defendant before a higher tribunal, where we can expect equal retributive justice mercifully meted out; but the property which resulted from his skill anddabor, and with which he should have satisfied his legal obligations, is still in the hands of his widow and commingled with her estate, and the plain though painful duty devolves on the Court of requiring her to surrender a sufficient amount thereof to pay the plaintiff’s judgment. Her coverture being removed, there is no legal barrier to a personal decree against her; but, if she prefers the proceedings to continue against the property in controversy, it will be proper and necessary for the plaintiff to amend his bill and bring James M. Lyon, who appears to be a purchaser not pendente lite of said property, before the court, that he may defend his interest therein.
The decree of the Circuit Court is therefore reversed, and this cause is remanded for further proceedings in accordance with this opinion and the rules of law and equity.