99 Va. 680 | Va. | 1901
delivered the opinion of the court.
This is the sequel to the case of Alsop, Mosby & Co. v. Catlett & Jenkins, reported in 97 Va., 364.
That suit was brought to set aside an assignment made by the firm of Catlett <& Jenkins, and to subject the property embraced in it, other property acquired in lieu of the property conveyed, ¡and the profits derived therefrom, to the payment of certain .judgments due the complainants, upon the ground that the as•signment was made for the purpose of hindering, delaying, and ■defrauding the creditors of the grantors. It was decided in that case that the charges of fraud were not made out against the trustee or the only beneficiary in the deed of .assignment, who ■was charged with being a party to. the fraud, and the bill dismissed without prejudice, however, to the right, if any, of the creditors to proceed against Catlett & Jenkins and their wives to subject the property acquired and the profits made by the latter through the services of their husbands.
Bor the purpose of subjecting the property and profits alleged to have been thus acquired, this suit was instituted by some of ■the creditors.
The bill, after giving a history of the proceedings in the former • case and the amount and character of the eomplain
The facts out of which this controversy grows are sufficiently stated in the opinion of this court in the case of Alsop v. Catlett, 97 Va., 364, to render unnecessary any further statement of' what occurred prior to the date of Mrs. Coleman’s purchase of the said remnant of a stock of‘goods conveyed by Catlett & Jenkins for the benefit of their creditors.
It appears from the record that after Mrs. Coleman purchased!
There was clearly nothing illegal or improper in the action of Mrs. Oatlett and Mrs. Jenkins in purchasing the stock of goods, and in conducting the business, wholly or in part, through their husbands as their agents, unless it was done with a fraudulent intent.
A married woman, under the provisions of section 2281 of the Code, has the right to engage in trade and carry on business on her own account for her separate use and benefit in the same manner as if she were unmarried, except that she cannot become a partner of her husband. She has the right to buy on credit. Williams v. Lord and Robinson, 15 Va., 390, 403.
The section further declares that the products and earnings of such trade and business shall be her separate estate, and •governed by the provisions of the two preceding sections. One of these sections, 2285, provides that such separate estate shall not be subject to the use 'and control or disposal of her husband, or to his debts or liabilities.
The only limitation which the statute imposes upon her right to engage in trade is that she cannot do so in partnership with her husband. She clearly would have the right to avail herself •of the agency of her husband in such trade or business as if they
Having the right to employ her husband as her agent in the management of such trade or business, it must follow as a necessary consequence that where the legal title to the capital upon which she is carrying on the trade or business of a merchant is-in the wife, as against the husband, it cannot be subjected to the claims of the husband’s creditors without proof that her title is merely colorable and fraudulent as against them. Voorhees v. Bonesteel, 16 Wall., 16.
Where the husband is indebted and insolvent, as was the case here, there is generally more or less reason to suspect that such arrangements are adopted as a cover to disguise the real owner.ship, and to defraud the husband’s creditors. Whether in a given case the arrangement or transaction is bona fide or a colorable device to cheat the husbands’ creditors is a question of fact to be determined upon all the facts and circumstances in point. Knapp v. Smith, 27 N. Y., 277, 280.
In purchasing the goods, and in continuing the business in the name of Catlett & Jenkins, agents, Mrs. Coleman, who was the mother of Catlett and the aunt of Jenkins, was doubtless influenced by a desire to furnish them employment, so that they could support their families as well as to save the residue of the debt which they owed her. By making a conditional sale of the business to their wives, she no doubt wished to put them in a position in which they could continue the business and thus aid in supporting their families. The record does not show that Mrs. Coleman in doing this was actuated by any illegal or fraudulent purpose. The husbands were indebted and insolvent. The contention that they broke full-handed is not proved. On the contrary, Jenkins, who was called as a witness by the complainants, testified that they turned over all their assets to the trus
The fact that the wives had neither experience in the mercantile business nor separate estates when they entered into the .agreement with Mrs. Coleman for the purchase of the stock of goods are circumstances to be considered in determining the • question of fraud, but are alone or in connection with the other circumstances relied on insufficient to make good the charge that the agreement was merely colorable, that the goods and .business were really the husbands’ and not the wives’, and that-the arrangement was merely a fraudulent device, to defeat the .rights of creditors.
"What rights had the creditors? It was the duty of the husbands to make use of their skill and energy to support their families and pay their debts. They could not conduct business, as we have seen, for themselves. They were not only indebted, but insolvent and without credit. If they had worked for strangers, all that their creditors could have reasonably expected from that source would have been their earnings or wages in excess of a reasonable support for themselves and families. .If they worked for their wives, the creditors would be entitled to no more, for surely a wife, who under the law has the right to engage in trade and to employ her husband as an agent, as if she were a feme sole, is under no greater legal obligations to his -creditors, and the latter have no greater legal rights against 'her than if he were some other woman’s husband or not married .at all.
It may be that such a construction will increase the temptation ■of the husband and wife to defraud their creditors. But "the legislature has deemed it right and proper to change the legal status of husband and wife from w'hat it was under the1 common law. If their changed relations furnishes increased facilities for the commission of fraud, the remedy is with the legislature. Clearly the courts ought not to disregard the plain
There does not seem to have been an express agreement between the husbands and wives as to the compensation the former should receive for their services. In the absence of such an agreement, the law would imply, as in case of a stranger, that they were to receive a reasonable compensation for the services rendered. This the creditors would have the right to subject to the payment of their claims, less the amount necessary for the reasonable support of the husbands and their families.
We are of opinion, therefore, that the Circuit Court erred in holding that the transaction by which the wives acquired the legal title to the stocks of goods and the real estate mentioned in its decree were fraudulent, and that the same was liable to the appellees’ debts.
"We are further of opinion that if the services rendered by the husbands for their wives in the management of -their business was more than sufficient to support and maintain their families, including themselves, that excess is a debt due from their wives, .and liable to their husbands’ creditors; that the amount of such indebtedness, if any, may be ascertained in this cause- by proper accounts and proved in the court of bankruptcy as one of the debts due from the estate of their wives.
The decree appealed from must be reversed and annulled, and the cause remanded to the Circuit Court for further proceedings not in conflict with the views expressed in this opinion.
Reversed.