125 Mass. 11 | Mass. | 1878
Under our statute, a creditor may maintain a bill in equity to reach and apply in payment of his debt any property, right, title or interest, legal or equitable, of a debtor which cannot be come at to be attached or taken on execution. Gen. Sts. c. 113, § 2, cl. 11. A creditor may thus reach the equitable assets of his debtor, without having exhausted his remedies at law or reduced his claim to a judgment. Tucker v. McDonald, 105 Mass. 423. He may enforce in his own name and for his own benefit, to the extent of his interest as creditor, the equitable
This bill is brought against husband and wife by a creditor of the husband. The plaintiff alleges that the husband deposited all his wages with the wife for safe keeping; that the latter, without the husband’s knowledge, deposited the same in a savings bank, from time to time, and, without his knowledge or assent, used the amount so deposited, together with some money she had borrowed on her sole credit, in payment for certain real estate, the title to which she took and still holds in her own name. It is not alleged that this was done by the wife with any purpose on her part of aiding her husband to delay or defraud his creditors.
The prayer of the bill is that the property of the husband, thus appropriated by the wife, may be applied to the payment of the plaintiff’s debt, and, to that end, that the land may be conveyed to a receiver to sell the same or so much of the same as may be necessary. •
In support of the demurrer, it is contended that the plaintiff has no remedy against the land in question, either at law or in equity. It is clear that the land cannot at law be attached, or taken on execution, as the property of the husband. It has been recently decided that when land was conveyed to the wife, which was paid for in part by the husband and in part by the wife, without any participation by the latter in the fraudulent intent of the husband to defraud his creditors, the same could not be reached under the Gen. Sts. c. 103, § 1, which authorize a creditor to levy on land fraudulently conveyed or paid for by the debtor the record title to which is in another. In the ease referred to, the debtor, with a purpose to defraud his creditors, paid part of the purchase money, and his wife innocently paid the rest and took the title in her own name. It was held that the equitable interest of the debtor, if any, which arose from his part payment of the purchase money, could not be reached by the levy of an execution. Snow v. Paine, 114 Mass. 520.
Nor, upon the facts alleged, does this land come within the other description named in the statute last cited, namely, that of land purchased, or directly or indirectly paid for, by the debtor, the title to which is conveyed to a third person, on a trust for
The plaintiff’s claim is that the husband has an equitable interest which may be reached and applied, under the statute first cited, by a decree in his favor. The money of the husband was deposited with the wife for safe keeping; she held it as bailee in trust for him. It was a breach of that trust, and a fraud upon him, for her to use it without his knowledge in the purchase of real estate, and he has a right, at his election, by proper proceeding in equity, to charge the land so purchased and held by her, to the extent of the money so wrongfully appropriated. The practical difficulty, in cases where a misappropriation of money is charged, arises from the difficulty of identifying and following it in its changed conditions into other property. But, in the language of Lord Ellenborough, in a well considered case, “ the difficulty which arises in such case is a difficulty of fact and not of law, and the dictum, that money has no ear-mark, must be understood as predicated only of an undivided and undistinguishable mass of current money,” and not of “ money in a bag, or otherwise kept apart from other money.” Taylor v. Plumer, 3 M. & S. 562, 575. And it was declared by Gibson, J., in Wallace v. Duffield, 2 S. & R. 521, that it was certainly law, that money, although it had no ear-mark, might be followed into the land where it had been invested, in cases where the purchaser stood as trustee in relation to the fund. The trustee in such case ought not to be permitted to defeat the claim upon the land, so long as he continues to hold the title, by proving only that he contributed to the purchase money and mingled his own money with the money of the plaintiff. Deg v. D2 P. Wms. 412.
These doctrines have been recognized in many American cases. In Day v. Roth, 18 N. Y. 448, the plaintiff’s money
In McLarren v. Brewer, 51 Maine, 402, it was declared to be the settled doctrine, both in law and equity, that a mere change of property from one form to another cannot divest the owner of his property in it so long as it is capable of identification ; and that money itself may be so followed.
In Wallace v. Duffield, above cited, it was said by Gibson, J., that when a trustee purchases with the trust fund and takes the conveyance in his own name, there is properly speaking no resulting trust, though it is usually called so; for there is in equity a very substantial difference between them, both in the quality and extent of the relief that can be called for. In the former, the trustee will be compelled to execute the trust by a conveyance of the land. In the latter, chancery will raise the money out of the land by a sale of the whole, or such part of it as may be necessary to produce the sum withdrawn; and this mode - is peculiarly convenient where only part of the consideration has been taken from the trust fund. See also Cheney v. Gleason, 117 Mass. 557; Oliver v. Piatt, 3 How. 333; Kirkpatrick v. M’ Donald, 11 Penn. St. 387; Adams Eq. 33, note; 2 Story Eq. Jur. §§ 1258, 1259.
In the law of agency, the doctrine is more frequently applied, and, when the money of the principal has been wrongfully invested by the agent in land, equity will follow it into the land, and hold the legal owner, charged with notice, trustee for the benefit of him whose money has been so invested. Story Agency § 229.