Vanderheyden v. Mallory & Hunter

1 N.Y. 452 | NY | 1848

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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] By the common law a married woman is disabled from disposing of either real or personal estate during the marriage, with the exception of the former by fine, and, by our law, by any legal conveyance executed under a due examination; and of the latter with the privity and concurrence of her husband. That being the legal rule, a married woman cannot, at law, bind herself personally by any contract in regard to her separate property. In conformity with this principle courts of equity hold that hergeneral personal engagements will not affect her separate property. And to this extent courts of law and equity act in concert. But as a consequence of the principle established that a married woman may take and enjoy property to her separate use, courts of equity enable her to deal with it as a feme sole. The right of disposition or appointment is an incident belonging to such interest and power. She may sell, pledge, or incumber her separate estate when she shows an intention so to dispose of it, in the same manner as if she were a feme sole, unless specially restrained by the instrument under which she acquires it; and every security thereon executed by her is to be deemed an appointment pro tanto of the separate estate. (Hulme v.Tenant, 1 Brown's Ch. 16; Fetteplace v. Gorges, 1 Ves.jr. 46; 2 Story's Eq. Jur. §§ 1392, 1399; Jaques v. TheMethodist Epis. Church, 17 John. R. 549; Gardner v.Gardner, 22 Wend. R. 526.)

The great difficulty is, to ascertain what circumstances, in the absence of any positive expression of an intention to charge her separate estate, shall be deemed sufficient to create such a charge, and what sufficient to create only a general debt. But it is agreed, that there must be an intention to do so, otherwise the debt will not affect her separate estate.

The fact that the debt has been contracted by a woman during her coverture, either as a principal or as a surety, for herself, or for her husband, or jointly with him, seems ordinarily to be held prima facie evidence to charge her separate estate without any proof of a positive agreement or intention so to do. (2 Story's Eq. Jur. § 1400.)

The doctrine of appointment or appropriation in equity, however, relates wholly to engagements made or debts contracted by a married woman, as such, having a separate estate, and in reference to it. It has no application to debts contracted or engagements entered into by a feme sole.

The bill contains no allegation that Mrs. Vanderheyden, after her marriage with her present husband, did any act or made any engagement with or promise to the complainants in reference to their debt against her or in reference to her separate estate, other than, it is alleged, that soon after the intermarriage of the defendants and at several different periods subsequently, one of the complainants made application to them, urging them to make some arrangement by which the application of the debt due to the complainants from said Lenchy would be made on the debt which they owed the estate of Bradt in the hands of his executor, and that they, until about the month of February, 1843, constantly upon every request so made, evinced a desire to have an arrangement made with the executor of Bradt by which such application would be made, and that they agreed that such an arrangement should be made. This is all that the bill contains of acts charged upon Mrs. Vanderheyden since she has been a married woman, to sustain a claim of an appointment in equity by her for the payment of the complainants' debt out of her separate estate; and this, it seems to me, falls far short of bringing the claim within any principle heretofore established in equity. Even if Mrs. Vanderheyden had contracted the debt subsequently to her marriage with Vanderheyden, the facts charged expressly negative the idea that she intended to pay, or that the complainants expected to be paid, their debt, out of what is now denominated her separate estate. The allegation in that respect is, that there was a large amount due to her from, and that she had a claim upon, the estate of her late husband, Bradt, out of which she agreed to make an arrangement with his executor to enable the complainants to have applied upon the debt which they owed Bradt in the hands of his executor, the amount of the debt which she had contracted and should contract with the complainants, and that the complainants knowing that she was thus entitled and would have abundant means therefrom to pay any debt she might contract with them, credited her. It is nowhere alleged that any part of the amount to which Mrs. Vanderheyden was entitled from the estate of her former husband, out of which she promised to pay, and out of which the complainants expected to be paid in the manner stated, has ever come to her hands. For any thing appearing in the bill, the same remains in the hands of Bradt's executor, or has been collected and received by Vanderheyden, or if not, has passed to the assignee in his proceedings in bank ruptcy. The thirty-five shares of bank stock was owned and held by her from 1833 to July, 1842, when it was formally transferred to her for her separate use. The residue of the stock which is now held by her in that character did not come from the estate of her former husband. It is a part of her share bequeathed to her by her father. And although it is alleged that Mrs. Vanderheyden now holds in her own right and name a large amount of other property, it is not averred that it was all or any portion of her share in, or claim upon, her former husband's estate, in the hands of his executor, at the time of the accruing of her indebtedness to the complainants, in reference to which exclusively, she when sole, and she and her present husband since their intermarriage, it is alleged, so agreed to make an arrangement respecting the payment of the complainants' debt. Therefore I see no ground stated in the bill, which would authorize a court of equity to subject the separate property of Mrs. Vanderheyden to the payment of the complainants' debt against her. There is nothing which gives countenance to the idea, that she ever, either before or since her marriage, made any contract with the complainants indicating any intention to affect by it the property which she now holds to her separate use; but on the contrary, the bill expressly negatives such intention. The whole dealing and contract, as well prior as subsequent to her marriage, referred to other and different property as the means of paying the debt contracted by her. It is true, that prior to her marriage all of her property was liable for the payment of this debt upon a judgment and execution against her; and even after her marriage her separate property might have been subjected to it upon a judgment and execution against her and her husband, if the transfer of it or any part of it to her separate use was fraudulent as against her creditors; but that is not alleged, and of course no decree at any time, either before or since the discharge of the husband, could be made subjecting such separate property to the payment of the debt upon that ground.

It is further insisted by the defendants that the discharge in bankruptcy of the husband operated as an extinguishment of the debt against the wife, at least during coverture. It is argued that it extinguished the husband's liability for the debt. It could not operate to extinguish the debt as against the wife, unless it was the husband's debt absolutely and exclusively. The effect of the discharge is to extinguish his, not her debts. By the marriage, the law cast upon the husband a contingent and temporary liability for all the debts and demands against the wife contracted by her before coverture, if sued and judgment recovered against both, before her death, but not after. If the wife survive her husband, her sole liability revives. She may then be sued upon all her contracts made before marriage, which remain unsatisfied. The husband's liability is gone by his death, and no liability is left upon his representatives. (1 Chit. Pl. 44.)

The case of Miles v. Williams, (1 P. Wms. 249,) was referred to as an authority to show that the debt is extinguished by the discharge, as well against the wife as the husband. That was an action of debt against husband and wife, upon a bond made by the wife dum sola. The defendants jointly pleaded in bar the discharge of the husband in bankruptcy after the intermarriage, to which the plaintiff demurred. One question was whether, it being debt on a bond given by the wife dum sola, it was such a debt as should be discharged by the bankruptcy of the husband by virtue of the statute 4th Ann, ch. 17, mentioned in the plea. The words of the clause upon which it depended are, "that the bankrupt shall be discharged from all debts by him due and owing at the time he became bankrupt;" and then, in case he be sued for any such debt, the act directs "that he shall and may plead in general that the cause of action did accrue before he became bankrupt." It was held that it was the husband's debt within the meaning of the statute, and that the discharge was therefore a bar to the action. And as to the wife, it was said that it was a discharge as to her, at least a temporary one, to wit, during the husband's life; and the chief justice added, that he thought it would amount to a perfect release, and the wife would be discharged forever. But it was admitted that the decision of that case did not call for any opinion as to the effect of the discharge upon the debt in regard to the wife.

The 4th section of the United States bankrupt act of August, 1841, provides that every bankrupt who shall bona fide surrender all his property," c. shall unless, c. "be entitled to a full discharge from all his debts, to be decreed and allowed by the court which has declared him a bankrupt, and a certificate thereof granted to him by such court accordingly upon his petition filed for such purpose." "Provided, that no discharge of any bankrupt under this act shall release or discharge any person who may be liable for the same debt as a partner, joint contractor, endorser, surety or otherwise, for or with the bankrupt." And again; "And such discharge and certificate, when duly granted, shall in all courts of justice be deemed a full and complete discharge of all debts, contracts and other engagements of such bankrupt, which are proveable under this act, and may be pleaded," c.

That this debt, as against the husband in his proceedings in bankruptcy, was proveable, admits of no doubt; but that does not necessarily affect the question whether the discharge operated to extinguish the debt as against the wife. Unless it was a debt proveable under the act, the husband would not be discharged from it, for the discharge as to him only operates upon debts of that character.

The difficulty in holding the husband's discharge to be an extinguishment of the debt absolutely, is raised by the principle that the debt existing against the wife before coverture is not transferred from her to the husband by the marriage. The legal effect of that is to suspend the individual liability of the wife, and to create and cast upon the husband and wife a joint liability for the payment of the debt, to continue during the coverture and no longer, unless in the mean time judgment shall be recovered against them. And when that terminates by the death of either, the liability thus created ceases; and if the wife survive her husband, her individual liability for the debt revives, unless indeed the debt is paid, released, or judgment is recovered during the coverture. Thenature of the debt is not changed by marriage; that is only done by the recovery of a judgment against the husband and wife. It then becomes the debt of the husband, and may be enforced against him and his property after the death of the wife. And in case of the death of the wife leaving her husband surviving, he is no longer liable for the debts of the wife contracted by her before marriage, where a judgment has not been recovered: but he as her administrator would be liable for such debts to the extent of the assets which he should receive, if he took administration on her estate to which he would be entitled; and if he should not take administration on her estate, he would be presumed to have assets in his hands sufficient to satisfy her debts, and would be liable therefor. (1 R.S. 75, § 29; 2 Kent's Com. 5th ed. 116, 411.) My conclusion is that the husband's discharge operated to extinguish his liability for the debt of the wife, and would be a bar, if pleaded, to any action brought against him and his wife, for the recovery of any debt contracted by her before their marriage, and to suspend the remedy for the recovery of such debt as against the wife during coverture.

The chancellor did not (as the vice chancellor seems to have done) place his decision upon the doctrine of appointment in equity by the wife for the payment of the debt, but upon a supposed equity resulting from the fact that the husband's liability for the debt had been extinguished by his discharge under the bankrupt act, and the complainants' remedy at law against the wife and her estate suspended during coverture. And upon this ground the chancellor held that they could come into a court of equity to subject her separate property to the payment of their debt, although the husband is still living, and although the wife's separate estate, during the life of her husband, is not liable, generally, for debts contracted by her before the marriage. The only case relied on by the chancellor as an authority for his decision is the case of Biscoe v. Kennedy, (1 Brown's R. 18, n.) decided at the rolls in 1762, which was this: The defendant, Jane Kennedy, when a feme sole, was indebted to the plaintiff, Biscoe, in £ 114, by bond, 22d April, 1755, and was possessed of several leasehold houses and £ 1000 East India stock. By settlement, on her marriage with the defendant James Kennedy, all her personal estate (excepting £ 500 East India stock which the husband was to have) was conveyed to the defendant MacCollock, in trust for the separate use of the defendant Jane. The marriage having taken effect, the plaintiff filed his bill (without having sued the husband) to have the separate estate of the wife applied to the payment of the debt; which was dismissed. The plaintiff then sued out writs against the husband and wife; but the husband absconding, could not be served, and the plaintiff proceeded to outlawry, and then filed the bill to be paid out of the separate estate of the wife. The defendant insisted that during her husband's life her separate estate was not liable to this debt, contracted by her while sole. The plaintiff contended that the settlement was, as to him, fraudulent. The master of the rolls, upon the hearing, declared that upon the circumstances of the case the effects of the defendant vested in her trustee were to be considered as the property of a feme sole, and ordered the plaintiff's debt and costs to be paid out of the £ 500 East India stock in the hands of her trustee.

The declaration that the property vested in the trustee for the use of the wife should be considered as the property of a femesole, was in accordance with well settled principles, and in regard to which it is well settled that she is to be treated as afeme sole, having the general power of disposing of it, but without capacity to charge herself personally. But upon what principle the decree followed that the debt should be paid out of her separate property, during the lifetime of her husband, is not clearly stated, and cannot with any certainty be ascertained from the statement of the case or the decision of the court. The ground may have been that the wife was deemed to be restored to her capacity as a feme sole, capable of suing and being sued without her husband, regarding him as civilly dead after the outlawry, (2 Kent's Com. 154, 5th ed.; 2 Bac. Abr. tit.Baron and Feme, M. 64; Hyde v. Price, 3 Ves. jun. 444.)

If by the discharge of the husband in bankruptcy, an equity is created against the wife, to subject her separate property to the payment of the debt during the life of her husband, it would be difficult to give a good reason why such equity would not arise in every case where such creditor had exhausted his remedy against the husband and wife at law and in equity without satisfying his debt by reason of the pecuniary inability of the husband, and yet it has not as yet been suggested that such equity would arise in that case. The right of the creditor to be paid his debt, would be no stronger in the one case than in the other, and the remedy would be no more inadequate to meet the justice and equity of the case in the one than in the other. By the decree declaring the husband a bankrupt, all the property and rights of property of the wife to which the husband became entitled, either absolutely or qualifiedly, by the marriage, undisposed of previously, in addition to his other property, by operation of law became vested in the assignee in bankruptcy, subject to the wife's right by survivorship; (Van Epps v.Vandeusen, 4 Paige, 73; § 3 of the U.S. Bankrupt act ofAugust, 1841; Mitford v. Mitford, 9 Ves. Jr. 87;) in which the complainants were entitled to share on proving their debtpro rata, with all the other creditors of the husband, with certain exceptions specified in the bankrupt act. (See § 5.) And this is the remedy given by law to the creditors of a bankrupt to meet the equity and justice of their case; and for any thing alleged in the bill, the complainants might have realized their entire debt if they had pursued this remedy. At all events, if they refuse or neglect this remedy, they do not present any very high claim upon a court of equity, to alter the law to enable them to have applied the separate property of the wife, to the payment of their debt, in advance of the legal period, when it might be so subjected, namely, when the marriage shall be dissolved by the death of either husband or wife. There is no remedy for the wife to have applied any portion of the property which passed to the assignee in bankruptcy, to satisfy the complainants' debt. But they have such remedy, and although they have a remedy upon the separate property of the wife on the termination of the marriage by the death of either husband or wife, I think the wife has a strong equity against the complainants, requiring them to assert their right under the proceedings in bankruptcy.

The equity which the chancellor assumed, as arising out of the husband's discharge in bankruptcy, in this case, is very nearly akin to the equity which prevailed in the case of Freeman v.Goodham, (1 Cas. in Chan. 295,) where a feme sole bought goods, but did not pay for them, and afterwards married and died, having brought a good portion, which came to the hands of her husband, who, on the creditor's filing a bill against him to be paid for the goods, demurred; and when Lord Chancellor Nottingham overruled the demurrer, saying with some earnestness, that hewould change the common law in that point. And in the case ofPowell v. Bell, (Abr. of Cases in Eq. 16; Pre. in Chan. 256,) where it was decreed that the wife who had contracted debtsdum sola being dead, the husband should account for what he had received with her, and should be so far liable to her debts; it being insisted that one precedent relieving a creditor, was more to be regarded than three to the contrary. But these cases were disregarded or overruled, and the principles of the common law sustained and applied under the like circumstances, in Earl ofThomard v. Earl of Suffolk, (1 P. Wms. 470,) and in Heard v. Stamford, (3 id. 409.) The last case was this. A femesole was indebted to her sister in £ 50, by note. She married and brought a personal estate to the value of £ 700 to her husband, with whom she lived about a year and a quarter, and then died. The creditor by note never recovered judgment against the husband and wife, and the debt remained unpaid. The husband, on the wife's death, administered to the wife. The sister married, and with her husband brought a bill against the defendant, and finding that the choses in action of which the wife died possessed were not sufficient to pay the £ 50 debt which the wife owed dum sola; it was prayed that the defendant, the husband, for so much as he had received out of the clear personal estate of the wife upon his marriage, should be made liable to answer the plaintiff's demand. And it was insisted to be but common reason and justice, that as the wife was the owner of a visible estate upon the credit of which the plaintiff might have entrusted her; so he that had such estate should pay the debt, which he might well afford to do; that it would be a case full of hardship, if a feme sole who, in ready money, goods, jewels, c. might be worth £ 10,000, and might owe £ 1000, should afterwards marry and die, that on her death her husband should go away with the £ 10,000, and not be obliged to pay one farthing of his wife's debts. This would prove of the most pernicious consequences to the creditors; whereas, on the other hand, the husband could have no reason to complain of being liable to answer their demands, as far as he had received a fortune with his wife; and the cases of Freeman v. Goodham and Powell v. Bell were cited to show that such equity had been established under like circumstances. But Lord Chancellor Talbot said it was extremely clear, that by law the husband was liable for the wife's debts only during coverture, unless the creditor recover judgment against him in the wife's lifetime; and that he did not see how any thing less than an act of parliament could alter the law; that the wife's choses in action were assets, and would be liable, but they, it seemed, were not sufficient in the principal case to answer the demands; that in the case of Freeman v. Goodham there was some reason for the court to be provoked, when the goods themselves continued, after the death of the wife, in the hands of the husband, who notwithstanding refused to pay for them. If he relieved against the husband because he had sufficient with his wife wherewith to satisfy the demand in question; by the same reason, where a feme indebted dum sola afterwards marries, bringing no fortune to her husband, and judgment is recovered against the husband, after which the wife dies, he ought to grant relief to the husband against such judgment, which he said was not in his power; consequently there could be no ground for a court of equity to interpose in the case before him; that if the law, as it then stood, be thought inconvenient, it would be a good reason for the legislature to alter it; but till that was done, what was then law must take place. The remarks of the lord chancellor in that case may well be applied to the circumstances of this case.

It is extemely clear, that by law the wife, or her separate property, are not liable for the debts which she owed dum sola, during the life of her husband; and I do not see how any thing less than an act of the legislature can change the law. And from the circumstances of this case, I do not discover any reason even, for the court to be provoked on account of the existence of such rule of law; as it seems that the wife carried to the husband a large personal estate irrespective of her separate property, the same to which she was entitled and which in duced the complainants to give her the credit, and that nearly five years elapsed after the marriage, before the husband applied to be decreed a bankrupt, during which period it is fair to presume the complainants might have collected their debt, by proceedings against the husband and wife, out of the property which the husband received or might have received by the marriage, and which has passed to the assignee in bankruptcy; and even there, the complainants have neglected to go for their share of it. Upon the whole, I think the decree of the vice chancellor, and the affirmance of it by the chancellor, were erroneous, that it should be reversed, and the complainants' bill be dismissed with costs.

Ordered accordingly.