Duvall v. Farmers Bank

| Md. | Jun 15, 1832

Archer, J.,

delivered the opinion of the court.

The funds which in this cause, furnish the subject matter of contest, consisted of the personal estate of Benjamin Harwood, of whom the appellant, the widow of Lewis Duvall, was one of the representatives, and as such entitled to a distributive share. The appellant claims the fund yet remaining in court, by survivorship, or that a wife’s equity may be decreed to her out of the fund.

The rule in equity appears to be, that where the aid of a court of equity is necessary to enable the husband to obtain possession ¡of the wife’s personal property, he must do what is equitable, by making a suitable provision out of it, for her maintenance and that of her children. This principle which regulates the Court of Chancery of England, is founded on those principles of natural justice and equity, which would seem to make it of universal application. For what could be more equitable than that a suitable provision should be secured to the wife and children, out of her dioses in action, and what could be more inequitable than to permit the husband to take her whole estate, without allowing to her, out of her own funds, a suitable maintenance? Accordingly, the doctrine of the English Court of Chancery upon this subject, appears to have been adopted to the full extent in New York. Howard vs. Moffatt, 2 Johns. Ch. R. 207. Schuyler vs. Hoyle, 5 Johns, Ib. 207. Kenny vs. Udall, Ib. 464. Glenn vs. Fisher, 6 Johns. Ib. 33. Haviland vs. Myers, Ib. 25. 2 Kent. Com. 116.

That the laws of this State secure to the wife, one-third of the personal estate of the husband after his death, and after the payment of his debts, against the husband’s alienation by last will and testament, cannot deprive her of this equity. In England it is not founded, as has been supposed in argument, upon the power of the husband to bequeath to others than his wife, his whole personal property, but upon the principle, that the husband seeking the intervention of a court of equity to gain possession of his wife’s estate, must do equity. The wife’s equity was by the practice of the English Chancery allowed her, at a period, when according to the decision of our own courts, in Griffith vs. Griffith, 4 Harr, and Me Hen. 101, and Coomes vs. Clements, 4 Harr, and Johns, 480, the common law of England forbade the husband to alienate the whole of his estate, as against her, and secured to her, as does ours, a third, part of his personal estate after the payment of his debts. Lord Hardwicke, in Jewson vs. Moulson says, that in the 14th year of the reign of Chas. I. Lord Keeper Coventry, took notice of the rule, establishing the wife’s equity, as existing at that day; at which period of time, according to Sir Wm. Blackstone, it was declared by Sir Henry Finch, that the husband had no power to devise away the whole of his property from the wife. That this was the common law of England, at that day, has been decided by the courts of this State. This equitable provision could not therefore have been founded, on any supposed power of the husband over the whole of his personal estate, but has been found to exist in England, under all the modifications which have existed in the rights, and powers of the husband over his property. It is true that this allowance to the wife, is the creature of the English Court of Chancery, and is considered as a part of its practice. But it is a wise provision.growing out of salutary maxims governing courts of equity; and deserves to be considered, rather as a principle governing and controlling the court, in its dispensation of equitable jurisprudence, than as being merely practical in its character. We are not aware that a different practice has existed in. the equity courts of this State. It is possible that but a few applications of this kind have been made, and if this were the first ease, it would be proper to apply to it a long and well established rule.

The wife’s equity exists, although there has been an assignment for a valuable consideration, and the assignee standing in the place of the husband, and seeking to withdraw the funds, will be compelled to make the provision. He takes the assignment subject to the wife’s equity, for he takes it with the knowledge, that it is property derived from her, and knows at the time of the assignment, or is bound to know, all the equity to which it is subject. It is an equity which attaches itself to the fund, and follows it in the hands of the assignee, whether with, or without a valuable consideration, or whether the assignment passes by the act of the party, or by operation of law. Howard vs. Moffatt, 2 Johns. Ch. Rep. 206. 1 Eden, 307, 371. 2 Atk. 420. Wright vs. Morlay, 11 Ves. 17. 1 Mad. Ch. 362. It has been supposed, that as a purchaser for a valuable consideration was looked upon by a court of equity with a favorable eye, that the provision for a wife, ought not to be enforced against such an assignee. Wright vs. Morlay, 11 Ves. 17. But the doctrine as above stated, notwithstanding this doubt, appears to be settled by a numerous succession of authorities. 2 Atk. 417. Pryor vs. Hill, 4 Bro. Ch. C. 138. Pope vs. Crashaw, 4 Bro. Ch. C. 326. Lake vs. Beresford, 3 Ves. 506. 4 Ib. 19. Wright vs. Morlay, 11 Ves. 17. Wall vs. Bright, 1 Jacob and Walk. 477. Purdew vs. Jackson, 1 Russel, 53. And in this country, the same judgment has been pronounced in several cases determined by chancellor Kent, in which all the authorities underwent an able and learned investigation. Kenny vs. Udall,5 Johns. Ch. R. 318. Haviland vs. Bloom, 61b. 178.

That there exists matter in the petition which would properly form the subject of an original bill, cannot, we think, furnish any serious obstacle to the appellant. It is sufficient that a portion of what she seeks, is demandable in the form of a petition. Now, if the fund in court, which is sought to be drawn out by the assignee, is liable to the appellant’s equity, the prayer that a suitable provision be made out of her share, is properly cognizable by the court in this form; and the application of the appellant, that the administrators ■of Benjamin Harioood should not be permitted to pay over to the Farmers Bank, the funds in their hands for distribution, according to the order of 23d July, 1830, and that out of said funds, this provision should be assigned, made at the same term at which the order was passed, and before the money was paid over, brought properly before the chancellor, the whole subject matter of the order referred to, for his revision and review. It could not be necessary that a subpoena should be prayed against the parties. This was repudiated in the case of McCubbin vs. Cromwell. An order nisi, such as was passed in this case, was all that was necessary, and was according to the accustomed practice of the Chancery Court.

The parties interested in the fund were all in court. The administrators were parties to the suit, and the assignees were in court, seeking to draw from it, the funds in controversy. Nor could it be necessary in any possible view, which we can take of the case, to make Richard and Grafton B. Duvall, the endorsers of the assignor’s note to the Farmers Bank, (and for the payment of which note the assignment was in part made,) parties. It is true, if ultimately available, it would have benefitted them, yet if the funds which are still in court, and have not yet been applied to the credit of the note, should be abstracted from its extinguishment, by a decree of the chancellor, it is perfectly clear, under such circumstances, that in any suit against the endorsers, the chancellor’s decree would be a complete bar, to their claiming any credit on the note on account of the assignment, either at law or in equity, or setting up the same, against the right of recovery. The decree would not be liable to the objection of res inter alios acta. So that a complete déeree could pass without the appearance of the endorsers as parties.

It has been urged against the appellant, that having failed to file exceptions to the auditor’s report, the application should have been to the chancellor to open the audit, so that she might have had an opportunity of filing her exceptions to the distribution. But we apprehend, that no formal order of the chancellor was necessary for opening the account, and granting leave to the appellant to file exceptions. The auditor made his report on the 22d of July; on the 23d, the order passes for a distribution, and the next day, and before the money is paid over, the appellant expresses her dissatisfaction with the distribution of the fund, and prays the chancellor, that a provision out of these funds may be made for her. This bringing as it does, the whole subject matter of the order of the 23d July, before the court, contains in substance and effect, an objection to the report upon which the order was founded; and the court in reviewing its own order, was thus necessarily called upon by the shape which the petition assumed, to re-examine the auditor’s report, in as effectual a manner, as he could have been called to do, had he passed a formal order for re-opening the account.

The wife’s right of survivorship, it perhaps is not necessary critically to examine. For it has not been alleged as at all probable, that any future dividends of this estate, would extinguish the claims of the Farmers Bank, according to the terms of the assignment, after the wife’s equitable provision shall be abstracted therefrom; and because any claim to survivorship which she might have, would always be subject to the payment of the equitable assignee. The character and extent of the provision for the wife, would seem in every case, to be governed by its peculiar circumstances, and to be regulated by the whole of the wife’s fortune, and what the husband had previously received. We have no other lights furnished us by the record upon this subject, than is contained in the auditor’s reports,-and-, when we consider the sums heretofore paid over of her fortune, to the assignees, we conceive the sum in the hands of the administrators according to the last report of the auditor, and which was distributed by the order of the 23d July, 1830, but a very inadequate provision. This we shall assign her for her maintenance, and that of her children, it she have any, with such further sum as the chancellor shall conceive proper, should more funds be brought into court for distribution.

The order therefore of the chancellor, of the 2d day of December, in the year 1830, so far as it' dismisses the appellant’s petition, is reversed, and this court proceeding to decree as the chancellor should have done, will pass an order directing the proceeds, at the date of the said order, in the hands of the administrators, to be paid over to the appellant, on account of her provision for her maintenance, and that of her children, if she have any.

DECREE REVERSED.