Quidort's Administrator v. Pergeaux

| New York Court of Chancery | Oct 15, 1867

The Chancellor.

The complainant, as administrator of Quidort, in October, 1865, recovered in the Essex County Circuit Court, a judgment against the defendant, Constant Y. Pergeaux, for $573. The execution issued on this judgment, was returned wholly unsatisfied; and the complainant filed his bill in this court against the defendants,- C. Y. Pergeaux and Martha Marguerite, his wife, charging that the premises known as No.-52 Mechanic street, in the city of Newark, which had been conveyed to said Maria Pergeaux, by Martin B. Clinchard, by deed dated August first, 1860, were the property of her husband, and had been bought and paid for with his money, and. were held by her for the benefit of her husband, and to aid him in defrauding his creditors; and praying that these premises may be declared to be held in trust for the complainant, and other creditors of Pergeaux, and may be sold for the purpose of paying the judgment of the complainant.

The defendants deny the fraud and the trust, and answer that the premises were bought and paid for by the defendant, Maria Pergeaux, in her own name, for her own use, and with money of her own separate estate.

There are two preliminary questions as to evidence. The defendants offered evidence to show that Quidort left a will, and that therefore the grant of administration to the complainant by the surrogate of Essex, was unlawful and void. This evidence cannot be received, as the question of the right to administration cannot be examined here. The granting administration is exclusively with the Ordinary and his surrogates. The grant is a proceeding in rem, in the strict sense of that term. It constitutes the person to whom it is granted the administrator, whether rightfully or wrongly granted; and it cannot be inquired into here collaterally. The act of the surrogate can only be reviewed by appeal to the Orphans Court, or Prerogative Court. Like the acts of all other regularly constituted tribunals, the acts of the surrogate cannot be impeached collaterally. The only question that can be made is, whether he had jurisdiction. If the supposed intestate was not dead, or if letters lawfully granted to some one else were in existence, the grant would be void.

The other question is upon the admissibility of the evidence of the defendants. The action is by the complainant, in his representative capacity, and the defendants clearly cannot be witnesses.

By the answer and proofs, it appears that the premises were purchased by the defendant, Maria, of Martin B. Clinchard, on the first day of August, 1860, for $5000, of which $500 was paid in cash, out of her own separate property; the residue of the purchase money was to be paid in yearly instalments of $500 each, without interest; the payment was secured by a mortgage on the premises. The defendants, or one of them, had kept a saloon and restaurant, for the sale of liquors and other refreshments, on the premises, from the year 1855 ; the premises were then rented of Clinchard. The answer states that the premises were leased to Mrs. Pergeaux, and the business was set up with her money, and conducted by her, with the advice and assistance of Mr. Pergeaux, who, for these services, was to have his support and that of his family, out of the profits; and the residue was to be for the benefit of the separate estate of Mrs. Pergeaux. Mr. Clinchard, in his testimony, states that the business was commenced on the premises in 1855, by Mr. Pergeaux and a Mr. Caíame, in partnership, and that the money was furnished by Mr. Caíame; that they had at first, a lease to them for two years, of the premises; that after that lease, he gave a lease to Mr. Pergeaux for the term of five years, before the expiration of which, the premises were conveyed to Mrs. Pergeaux. He says that Mrs. Pergeaux paid him the $500 paid at the delivery of the deed; she paid it in French gold, just after her return from Europe; and that he understood it was money that she had received of her own estate, when in Europe. The answer on this point is responsive to the bill, and as it is corroborated by Clinchard, and contradicted by no one, it must be considered as established that the money paid at the conveyance to her, was the money of Mrs. Pergeaux. She had a right to buy this property with her own money, and to take the deed in her own name. And the deed or conveyance was no fraud upon his creditors, even if the object of taking the title in her name had been to avoid any claim by judgment against him, for debts which he then owed.

The subsequent payments of $2500 or $3000 were made out of the profits of the business carried on upon the premises ; it was the business established there before the purchase of the premises, which had been continued since, conducted by Mr. Pergeaux and his wife. The answer says that these payments were made out of the separate property of Mrs. Pergeaux; but it claims the profits of this business as her separate estate, and does not set out any other separate estate which she had, out of which they could have been paid, and admits that she was enabled to make them by her success in business. In stating that the business in 1855 was set up by Mrs. Pergeaux, with her separate property, the answer is not responsive to the bill, and this fact is not proved by any witness; and the testimony of Mr. Clinchard contradicts it. As the proof stands, the business was set up by Mr. Pergeaux and Mr. Caíame, with the funds of the latter, and was continued by Mr. Pergeaux, until 1860; with whose funds, or in whose name, does not appear; but the presumption is, if the business of a firm is continued in the same place after dissolution, by one of the members, that it is continued by him for his own benefit, and by liis own means. The bill charges that the business lately carried on upon the premises, was carried on by Constant Pergeaux, in the name of Mrs. Pergeaux, and that they claim and pretend that both the premises and the business belong to Mrs. Pergeaux.' The charge is indefinite, by the use of the word lately: but I shall consider it as going back to the purchase of the property, and that the answer is responsive to the bill, from that time. The answer states that the business was carried on by Mrs. Pergeaux, with her own money, in her own name, for her own benefit; and although Mr. Pergeaux assisted, that he was to receive for his services the support of himself and family, and nothing more.

A husband is, at law, entitled to the earnings of his wife. The common law is not altered in this respect by the married women’s act. But he may allow his wife to take her own earnings and appropriate them to her separate use, and such appropriation is good, even as against his creditors. When they are invested in her name, neither he nor his creditors can disturb them. It has been so decided in this state, in the case of Stall v. Fulton, Vroom 430, and in this court, in Johnson v. Vail, 1 McCarter 423, and in Skillman v. Skillman, 2 Deas. 403. These cases hold, that a husband may give to his wife the proceeds of her own labor, although, in such cases, the actual gift must be clearly proved. But the opinion of Chancellor Green, in Skillman v. Skillman, holds, that “ where a married woman carries on business in her own name, the avails of the business are not protected by the statute in relation to married women, but they remain the property of the husband, liable to be seized and taken in execution for the payment of his debts.” In New York, the act of 1860, not yet copied into the legislation of this state, provides for that; their act of 1848, from which our married women’s act was copied, did not enable a married woman to cany on business for herself, in her own name. Freeman v. Orsor, 5 Duer 477.

In the cases of Skillman v. Skillman, and Johnson v. Vail, Chancellor Green, in deciding that the wife is entitled to the rents and products of her farm or other property, and the products of the labor of herself and minor children, distinguishes these from the proceeds of trade, carried on by her with her separate property.

If a married woman cannot carry on trade or business in her own name so that she can bind herself personally in relation thereto, but such power is confined to contracts relating to such separate estate as she may legally hold, then it follows, as a necessary consequence, that the business is the business of her husband, and the profits are his property. And, while a husband may, as against his creditors, allow his wife to have for her separate use the earnings of herself and of the labor of their minor children, he may not give toiler, to be invested in her own name, the proceeds of his own business, skill, and labor. Else it would follow, that any married man who became embarrassed, could transfer his business to his wife, and continue it himself in her name, with all his skill and ability, and if she only took, or seemed to take, some part in the transaction of it, might invest the proceeds of his labor and management in the name of his wife, and set his creditors at defiance.

The law was intended to protect the property and earnings of a married woman, and not the property or earnings of her husband against his creditors; and when, as in this case, they mix up the earnings of the wife with those of the husband, so that they cannot be separated, the husband cannot make a clear, distinct gift of her own earnings to' his wife, and they remain, as at common law", his property.

There is no evidence in this case that the wife originally, or in 1860, put any of her separate property in this business, or that she had any separate property beyond the sum of $500, paid to Clinchard. The only proof is in the answer, and beyond that sum it is not responsive, and there must be proof. And besides the fact that the government license, the ■only means by which the business could be carried on, was taken out in his name, there is much other evidence to lead to the belief that the business was really the business of the husband, transferred to, and carried on in the name of the wife, for the purpose of delaying creditors in recovering their •debts. I do not doubt that such was the fact.

In either view of the case, the profits of the business, with which §3000 has been paid on the mortgage to Clinchard, was the property of the husband, and, under the circumstances of this case, it must be considered as paid on that property, to keep it in her name beyond the reach of his creditors. This disposition of it, therefore, is a fraud upon his creditors, and so fax as they are concerned, the property will be decreed to be held by 'the defendant, Maria Marguerite Pergeaux, in trust for the payment of his creditors, subject to the mortgage to Clinchard, and to her claim for the sum advanced out of her separate property for the purchase, and interest thereon.