Opinion
07-07-1875
SAYERS & als. v. WALL & als.
Wade and J. A. Campbell, for the appellants. Gilmore and Walker, for the appellees.
Judge Staples had been counsel in the cause.
I. In November 1855 S made a deed by which he conveyed in fee to his wife E his entire real estate lying in the county of P, his then residence, of about 700 acres, and seven days afterwards acknowledged the deed in the clerk's office of the county. At the time he owed no debts, and had personal property, including slaves, amounting to ten or twelve thousand dollars. He afterwards in the course of business contracted debts; and losing his slaves by the results of the war, his personal property was not sufficient to pay his debts. His wife died in 1864, leaving children. HELD:
1. The conveyance, though void at law, is valid in equity, and vests in the wife both the legal and equitable title to the land, as of her separate estate, in which the husband, the wife being dead, is not entitled to curtesy.
2. Upon the death of the wife, her heirs were entitled to the immediate possession of the land.
3. There being no charge or proof of fraud by S in making the deed, the subsequent creditors of S have no equity against E and her children to entitle them to subject the land to the payment of the debts of S subsequently contracted.
4. Though the conveyance is not founded on a valuable but only on a meritorious consideration in favor of a wife and children, a court of equity will give effect to it against subsequent creditors of S.
II. A bill having been filed by the creditors of S to subject the land to the payment of their debts, without alluding to the deed from S to his wife, her children present their petition to the court setting out the deed and their rights under it, and ask that they may be made defendants in the suit, that they may defend their rights under it; and they are permitted, without objection by the plaintiffs, to file their answers. HELD:
1. If they were not necessary parties, they were certainly proper parties; and having been permitted to appear and set up their claim, the plaintiffs cannot afterwards object that they were made parties.
2. If it would have been more proper to assert their rights by a cross-bill, their petition may be treated as such.
In June 1871 William J. Wall and William J. Jordan, late merchants and partners, who sued for the benefit of William J. Wall, filed their bill in the County court of Pulaski county, in which they alleged that in 1867 they had recovered a judgment against Reuben Sayers for $1,266.52, with interest, & c. That said Sayers had no personal property liable to execution, but that he was seized in fee simple of a tract of land in the county of Pulaski containing seven hundred and fifty acres; and that the rent of this land would not pay their debt in five years. And making Reuben Sayers a party defendant, they pray that so much of the land as is necessary to pay off their judgment may be sold, and for general relief.
In July 1872 two other judgment creditors of Reuben Sayers were, upon their petitions, permitted to come in as plaintiffs, to have satisfaction of their judgments out of the same land.
In January 1871 the court made a decree directing S.W. Poage, one of the commissioners of the court, to ascertain and report the amounts of judgments against the defendant Reuben Sayers, and the priorities of the liens of the said judgments, and the real estate owned by said Sayers, its location, the number of acres and the condition of the title to it, with any special matter, & c.
In March 1872 Sayers answered the bill. He admits the judgment of Hall & Jordan; but says, that whilst he was at one time the owner of the land mentioned in the bill, he is not now, and has not been the owner thereof for some sixteen years: that he has no right or interest in said property; that the same is in the possession of and under the control of James H. Comer and Margaret M. his wife, A. C. Dunn and Angeletta his wife, J. Howe Sayers and James C. Deaderick and Lizzie his wife, who claim and are entitled to the said property in fee simple as heirs at law of Eleanor A. Sayers deceased.
At the same term of the court Comer and wife, Dunn and wife, and J. Howe Sayers, asked for and obtained leave to file their petition in the cause. In their petition they say that the said Margaret M., Angeletta and J. Howe Sayers with Elizabeth J. the wife of James Deaderick, are the children and heirs at law of Mrs. Eleanor Ann Sayers deceased, and inherited from her at her death, a fee simple estate in a tract of land containing about seven hundred acres, situate near Dublin depot in the county of Pulaski. That the petitioners are owners of three-fourths of said land, and are now and have been for several years, in the possession and enjoyment of the same. That Hall & Jordan who claim as judgment creditors of Reuben Sayers, have filed their bill in this court seeking to subject said land of the petitioners to satisfy their said judgment. That Reuben Sayers has no title to said land, but the fee simple thereto is vested in the petitioners and said Deaderick and wife; and that the petitioners have not in any manner parted with or conveyed away their title to or interest in said land. They are informed that a commissioner of the court has filed with his report in the cause, a paper purporting to be the deed of your petitioners for their interest in said land to Reuben Sayers; and they aver that said paper is not their deed, and is wholly inoperative and void. The petitioners are therefore interested in the subject-matter of said suit, and ask that they be made parties defendants in the cause, and that their rights may be protected.
At the May term of the court the plaintiffs amended their bill, and made Deaderick and wife defendants in the suit. In their bill they say they have been informed that these persons claim an interest in the land in the original bill mentioned. Plaintiffs do not admit that they have any interest, and insist, that if they assert any right to the said land or any part thereof, they may be required to make full and satisfactory proof of their title.
At the August term of the court J. Howe Sayers, Comer & wife and Deaderick & wife, by leave of the court, filed their answers, to which the plaintiff replied generally. They aver that the land which the plaintiff seeks to subject to the payment of his debt, was in November 1855 conveyed by Reuben Sayers to his wife Eleanor A. Sayers, and the deed was immediately put upon record. That at that time Reuben Sayers owed very little, and retained property ample to pay his debts. That not more than fifty dollars of the plaintiff's debt was then due. That Mrs. Sayers died in 1864, leaving J. Howe Sayers, Mrs. Comer, Mrs. Dunn and Mrs. Deaderick her children and heirs at law. That soon after the war the said heirs agreed to sell the land if $30,000 could be gotten for it; and A. C. Dunn was authorized to make the sale if he could do it at that price. That as the parties were scattered, it was agreed among them that they would make a deed conveying the land to Reuben Sayers, to be held by a third person as an escrow, to be delivered to Reuben Sayers when the sale was made, that he might convey the land to the purchaser, and thus prevent delay, and remove any cloud upon the title from the fact that Reuben Sayers had conveyed the land directly to his wife. That accordingly a deed was prepared and was executed by J. Howe Sayers, Comer & wife and Dunn & wife; and it was expected that Lizzie, the youngest child who was not quite of age, would execute a like deed on her coming of age. That the deed when executed, was intended to be deposited with Isaac Hudson, their attorney; but remained with the justice who took the acknowledgment of the parties; and Lizzie, on coming of age, declining to execute a deed, and Dunn having failed to sell the land, defendants regarded the deed as of no effect, and supposed it had been destroyed, as instructions to that effect had been given to said attorney. That said deed never was delivered to Reuben Sayers, but remained with the justice who took the acknowledgment of the parties, until about the commencement of this suit, when the plaintiff Wall, with a full knowledge of these facts, obtained said deed from the said justice by paying him his price therefor, and then procured the recordation of the same by affixing the necessary U. S. revenue stamps, and paying the clerk his recording fee and the state tax.
The answer of Deaderick and wife is to the same effect, except as to the deed executed by the other defendants: They were no parties to that deed.
The deed from Reuben Sayers to his wife is as follows: This deed made this the 15th day of November in the year one thousand eight hundred and fifty-five, between Reuben Sayers and Eleanor Ann Sayers, his wife: Witnesseth, that whereas the said Reuben Sayers intending shortly to visit the Western country, and knowing the uncertainty of life, and to provide a permanent home and a future residence for his family, in case he should not be permitted to return in safety home, and seeking to provide against confusion at all events, now this indenture witnesseth, that for and in consideration of the premises, and for the natural love and affection he has for his wife, the said Reuben Sayers doth grant unto the said Eleanor Ann Sayers his entire real estate lying in the county of Pulaski, his present residence, containing seven hundred acres, more or less. Witness the following signature and seal.
REUBEN SAYERS, [Seal.]
This deed was acknowledged by Reuben Sayers in the clerk's office, on the 21st day of November 1855, and admitted to record.
The deed from Comer & wife and others to Reuben Sayers bears date 22d of November 1867, and says, in consideration of the natural love and affection they have for their father, the said Reuben Sayers, they do grant unto the said Reuben Sayers all their right, title and interest whatsoever, both at law and in equity, to all the land embraced in and conveyed by a deed executed by the said Reuben Sayers to his wife Eleanor A. Sayers on the 15th of November 1855; and the same grantors release all their claims as heirs at law of the said Eleanor A. Sayers to the said grantee, to the said land.
This deed was acknowledged before a justice by Comer and J. Howe Sayers on the day of its date, and by Mrs. Comer before two justices on the same day, and it was acknowledged by Dunn before the same justices on the -- day of February 1868, and by Mrs. Dunn on the 2d of May 1868. And it was presented in the clerk's office on the 27th of April 1871, and admitted to record on that day.
The evidence shows very clearly, that at the date of the deed from Reuben Sayers to his wife, all the debts he owed did not amount to one hundred dollars, and that he then owned personal property, including eight valuable negroes, worth from ten to twelve thousand dollars. He continued to live on the land, with his wife and children, doing apparently a prosperous business; and at the end of the war he owned thirteen slaves, which were then lost to him. This evidence is sufficiently stated by Judge Anderson in his opinion.
It also clearly appeared from the evidence, that the deed from Comer and wife, Dunn and wife, and J. Howe Sayers, to Reuben Sayers, was made for the purposes stated in their answer; that it had never been delivered to Reuben Sayers, but had been retained by the justice who took the acknowledgments of the grantors until his fees should be paid, and that Wall, the plaintiff, obtained it from him by paying the fees, without authority from any party to the deed, and that he had it put to record.
The commissioner to whom the case was referred made his report in February 1872, in which he stated the judgments against Reuben Sayers as amounting to, of principal $5,028.38, of interest up to the 1st of February 1872 $3,275.35, costs, $68.28, equal to $8,372.01. The interest on all of these debts commenced after the date and record of the deed from Reuben Sayers to his wife.
The cause came on to be finally heard on the 8th day of January 1873, when the court decreed that the deed from Reuben Sayers to his wife was fraudulent and void as to his creditors; and it appearing from the evidence that the judgments, which were liens upon the land, could not be paid out of the rents in five years, it was further decreed that unless Reuben Sayers, or some one for him, should pay off said debts before the 1st day of the next February, a commissioner named, after advertising, & c., should proceed to sell at public auction upon the premises the said land, or so much thereof as would be sufficient to pay off said debts, & c., upon a credit of one, two and three years, in equal instalments, except as to a sum sufficient to pay the costs of suit and expenses of sale, which should be for cash. From this decree Comer and wife and the other heirs of Mrs. Sayers obtained an appeal to the Circuit court of Pulaski county, where the said decree was affirmed; and they then obtained an appeal to this court.
Wade and J. A. Campbell, for the appellants.
This is a bill to subject land to the payment of debts.
1. Nothing is said in the bill about the conveyance from Sayers to his wife, and no charge of fraud is made; but by the decree said conveyance is adjudged to be fraudulent and void, and is set aside and made void. Fraud must be charged specifically. Steed v. Baker, 13 Gratt. 380.
2. The decree is not warranted by the bill. Fowler & wife v. Saunders, 4 Call. 361; Sheppard's ex'or v. Starke & wife, 3 Munf. 29 and 40.
The plaintiff will not be permitted to prove, or require proof of, any fact not set forth in his bill. 1 Dan'l Ch. Pra. 424; Sto. Eq. Pl., sections 27, 28 and 257; Crockett v. Lee, 7 Wheat. R. 522.
The admissions in the answer cannot supply the want of a specific averment in the bill. Jackson v. Ashton, 11 Pet. R. 229, 248.
3. The facts disclosed by the record did not warrant the court in subjecting the lands of appellants to the payment of R. Sayers' debts. He was free from debt when he executed the deed to his wife, and had the right to determine upon the reasonableness and propriety of such settlement. See Sexton v. Wheaton, 8 Wheat. R. 229; Sims v. Rickets, 35 Ind. R. 181; Peck v. Brummagin, 31 Cal. R. 440; Townsend v. Maynard, 45 Penn. R. 198.
Subsequent creditors will not be allowed to defeat a settlement made on the wife. Cord on the L. and Eq. Rights of Married Women, sections 54 and 75; Schouler on D. R., page 277, and note on 283.
4. The deed from Sayers to his wife, although void at law, is good in a court of equity. Jones & wife v. Obenchain, 10 Gratt. 259; Fox v. Jones, 1 West Virginia R. 205; Mews v. Mews, 21 L. and Eq. R. (Eng.) 556; Hunt v. Johnston, 4 Amer. R. 632; Sims v. Rickets, supra; Peck v. Brown, 2 Rob. R. (N. Y.) 120.
It is an executed and not an executory contract. Hunt v. Johnson, supra.
The meritorious consideration set out in the deed is sufficient to support it where there are no existing creditors. 1 Lead. Cas. in Eq. 228 and 230; Sheppard v. Sheppard, 7 John. Ch. R. 57; Darlington v. McCoole, 1 Leigh 36; Hunt v. Johnston, and Jones v. Obenchain.
5. The intervention of a trustee is not indispensable. The husband will be treated as a trustee for his wife. Bishop on Husband & Wife, sections 117 and 800; 1 Perry on Trusts, sections 95 and 240; 1 Lead. Cases in Eq., pp. 307 and 309; Story's Eq. Jus. 1380; Wallingsford v. Allen, 10 Pet. R. 583; Peck v. Brown, and Fox v. Jones, supra.
If Sayers could have conveyed his lands in trust for the benefit of his wife, by a deed which would have been valid in law under the circumstances, then his deed will be sustained in a court of equity. Sims v. Rickets, 35 Ind. R. 181, 183; Schouler on D. R., page 286.
If the deed is insufficient to pass the legal title, because of the relations which existed between the grantor and grantee, this defect should be aided by a court of equity. 1 Lead. Cases in Eq., 330 and 288.
6. A conveyance by husband to his wife creates a separate estate in favor of the wife. 1 Lead. Cases in Eq. 539, 540 and 541; Tyler on Inf. and Cov., pp. 491, 492 and 493; Hill on Trustees, 653, 654, and note; Sims v. Rickets, ( supra. )
7. The possession by the husband after the conveyaace is no badge of fraud. Schouler on D. R., 283 note; 2 Perry on Trusts, page 277, section 678.
It is not pretended that the deed was made with any fraudulent intent, and there is nothing in the case which impeaches the fairness of the transaction, or raises a doubt as to good faith of the grantor in seeking to provide a permanent home for his family against the possible misfortunes of a future day.
Gilmore and Walker, for the appellees.
1. The deed in this cause is a conditional one, and the condition is a condition precedent. The grantor " returning in safety home," no estate ever vested in the grantee. 2 Bl. Comm. 154; Co. Litt. 217; 4 Kent's Comm. 125; 2 Rob. Prac. p. 59; 5 Rob. Prac. p. 679, and note.
2. If the deed be not a conditional one, yet, being a deed directly from husband to wife, it is void at law, and will only be enforced in a court of equity where it is made on valuable consideration or is a suitable provision for a wife or child; and where it is made as a suitable provision for a wife or child, the court of equity will not enforce the deed if the rights of creditors are interfered with. Sheppard v. Sheppard, 7 John. Ch. R. 57; White v. Wager, 25 N.Y. 328; Winans v. Peebles, 32 N.Y. 423; Sexton v. Wheaton, 8 Wheat. R. 224; Jones & wife v. Obenchain, 10. Gratt. 259; Ellison v. Ellison, 1 Lead. Cas. in Eq. p. 199; Spence's Eq. Juris. 852; Wright v. Wright, 1 Ves. Sr. R. 409.
3. The deed in this case is not a suitable provision for the wife. It gives to her all his real estate, worth, according to the testimony, $30,000. All the property retained by the grantor, according to his own testimony, did not exceed ten or twelve thousand dollars.
4. A court of equity will not enforce a deed from husband to wife if there is any unfairness in it. Sims v. Rickets, 35 Ind. R. 181; Thompson v. Mills, 39 Ind. R. 528.
5. The deed in this case hindered, delayed and defrauded creditors to the extent of the debts contracted prior to the date of the deed; and for that reason ought not to be upheld in a court of equity. The question in such a case is not whether the debtor retained property enough in his hands to pay his then debts, but the question is were those debts paid, and, if the debts were not paid, it is the same as if he had conveyed away all his property. Spirett v. Willons, 3 De Gex, Jones & Smith, p. 302; approved in Freeman v. Pope, Eng. Law. Rep. 9 Eq. Cases 206.
ANDERSON J.
This controversy is in relation to the deed executed by Reuben Sayers to his wife, Eleanor Ann Sayers, on the 15th day of November 1855; whether the real estate conveyed by it vested in Mrs. Sayers, and descended to her children and heirs at her death; and whether they can hold it against subsequent creditors of Reuben Sayers.
Before proceeding with this inquiry, it will be well to dispose of a question raised by the record, whether the appellants, or any of them, have, by their deed, reinvested Reuben Sayers with any interest or estate, which he may have passed to his wife by said deed? No such reconveyance or release to Reuben Sayers is alleged by the plaintiffs in their pleadings. But a paper, purporting to be a deed of conveyance or release from three of the four heirs of Mrs. Sayers to Reuben Sayers, having been brought to the notice of the court by the master, and a certified copy of it from the records of the register's office exhibited with his report, it was very properly noticed by the appellants in their petitions to be made parties defendants and in their answers. They aver in their petitions, and in their answers, that said paper was never delivered as their deed. That it was never intended to be delivered as a deed, except only upon a certain contingency which never arose, and that it never was delivered. That one of the plaintiffs got possession of it from the magistrate before whom it had been acknowledged, without the knowledge or consent of either of them, or of Reuben Sayers, to whom it had not been delivered, by paying the magistrate's fees, who delivered it to him without authority. And that the plaintiff, after thus getting unlawful possession of it, without authority, and without their or Reuben Sayers' knowledge or consent, lodged it with the clerk to be recorded, and paid the tax on it and the clerk's fees for recording. These allegations are fully sustained by evidence.
I am clearly of opinion that said paper cannot operate as a conveyance or release of anything to Reuben Sayers; and that if there was any estate vested in the appellants by the death of Mrs. Eleanor H. Sayers, under the conveyance of November 15th, 1855, it is not divested or impaired by that paper.
I proceed now to inquire, whether any rights vested in Mrs. Sayers, under the said conveyance of her husband, which have descended to her children, and which are not liable to the judgments of subsequent creditors of the grantor against him? This is the important, the main question in the cause.
" There is nothing inequitable or unjust (Mr. Justice Story remarks) in a man's making a voluntary conveyance or gift, either to a wife or to a child, or even to a stranger, if it is not at the time prejudicial to the rights of any other persons, or in furtherance of any meditated design of future fraud or injury to other persons." Stor. Eq. Jur., § 356.
In Sexton v. Wheaton, 8 Wheat. R. 229, Marshall, Chief Justice, in delivering the opinion of the court, assumes that the conveyance in that case " must be considered as a voluntary settlement made on his wife by a man who was indebted at the time." And he inquires, " Can it be sustained against subsequent creditors?" In his answer to that question he says: " It would seem to be a consequence of that absolute power which a man possesses over his own property, that he may make any disposition of it which does not interfere with the existing rights of others; and such disposition, if it be fair and real, will be valid. " In these few words, that great judge enunciates a principle, upon which all cases of this class may be determined, and upon which their decision may rest. It is the absolute right of a man to dispose of his own property as he pleases, so that he does no injury to the existing rights of others. The question is, in every case, did the voluntary conveyance interfere with the existing rights of others? If it did not, and was real and bona fide, the grantor having an absolute right to part with his own property, and to bestow it on whom he pleases, his conveyance is valid. There are none who can gainsay it. By his deed of conveyance his grantee is absolutely invested with the title; and the subsequent dealings of the grantor with others, or the liabilities which he may subsequently come under to others, cannot impair or affect the rights which had vested in his grantee. The property which vested in his grantee by a fair and bona fide conveyance, is no longer his, and cannot be made liable for his debts subsequently contracted. " The limitations to this power (the Chief Justice further says) are those only which are prescribed by law." He then proceeds to consider the statute against fraudulent conveyances. " " " In construing this statute (he says) the courts have considered every conveyance, not made on consideration deemed valuable in law, as void against previous creditors. With regard to subsequent creditors the application of this statute appears to have admitted of some doubt." After a lucid and extensive review of the cases, he thus concludes: " From these cases it appears that the construction of this statute is completely settled in England. We believe that the same construction has been maintained in the United States. A voluntary settlement in favor of a wife and children is not to be impeached by subsequent creditors on the ground of its being voluntary." I think, in this conclusion, he is sustained by the current of decisions in England and America.
But it may be impeached on the ground that it is fraudulent. The plaintiffs do not charge fraud in their original or amended bill. They take no notice of this deed of conveyance in any way. They altogether ignore it, although they had actual knowledge of its existence before they brought this suit. They did not bring the suit until after they got possession of the paper purporting to be the deed of three of the children and heirs of Eleanor A. Sayers to Reuben Sayers. Mr. Cecil, the justice, testifies that they got possession of it in the spring of 1871, and he thinks before the 1st of June 1871, the date of the institution of this suit; and the certificate of its recordation is dated 27th April 1871. They must have had possession of it prior to that date. This paper refers expressly to the deed from Reuben Sayers, to his wife Eleanor A. Sayers, of the 15th of November 1855, and purports to release all their claims as heirs at law of said Eleanor. The plaintiffs certainly had actual knowledge of the existence of the said deed at that time, if they had not before. The presumption is, they had knowledge of it before. There was no concealment of it. It was written by the clerk, the printed copy states, on the 15th of November. On the 21st of November it was acknowledged before him in his office after it had been delivered to Mrs. Sayers, and was admitted to record. No doubt it was a subject of remark, and was known generally by his neighbors. But the registration was constructive notice to the world, and the presumption is, that these plaintiffs were apprized of it when they afterwards credited him. The only allegation of fraud is made by Hudson, administrator of Hamilton Sayers, in his petition for a rehearing. Yet the final decree for the sale of the lands is founded only upon the ground that the conveyance is fraudulent and void as to creditors. If fraud had been alleged in the pleadings, (and it might have been by an amended bill or by answer to the appellant's petitions to be admitted defendants, if the plaintiffs believed there was any ground for the allegation,) what proof is there to support such a charge, or the assumption of the decree? Mr. Justice Story adds to what I have heretofore quoted from him, and in the same section: " If, indeed, there is any design of fraud or collusion, or intent to deceive third persons in such conveyances, although the party be not then indebted, the conveyance will be held entirely void as to subsequent as well as to present creditors; for it is not bona fide. " Cord's Legal and Equitable rights of Married Women, § 54, 75, citing Ld. Townsend v. Windham, 2 Ves. Sen. R. 1; 12 Ves. R. 155. Let the rule, as thus clearly laid down, be applied to the case in hand.
At the date of said deed, Reuben Sayers, the grantor, was the owner of a large personal property, in addition to the real estate he conveyed to his wife, consisting of slaves, horses, cattle, sheep, hogs, wagons, farming implements, house furniture, & c., of the value of from ten to twelve thousand dollars. His indebtedness did not exceed $100. After the execution of said deed, he continued to live upon the farm, and had the management of it, supporting his wife, and educating and maintaining their children. He purchased and paid for another tract of land, which he sold again. He dealt liberally in cattle, buying and selling, which seems to have been a source of considerable income; he seems to have been a man of thrift and good credit, and his personal estate was augmented rather than diminished, until the end of the war. The trifling debt he owed prior to the execution of the deed in question, seems to have been satisfied, and the debts which he now owes, and which are proved in this cause, were contracted by him subsequent to said conveyance. The precise date at which they were severally contracted does not appear, but none of them earlier than 1857 or the latter part of 1856, except two small notes amounting to about $51, which he owed prior to the conveyance, and which were transferred to the plaintiffs, it does not appear when. These notes were incorporated with the debt, subsequently contracted with Wall & Jordan, and embraced in the new obligation, which they took for the whole--upon which he afterwards paid, as appears from the judgment, $75. Whether he had made any payment to those parties upon his indebtedness to them, before the execution of the bond or note upon which the judgment was rendered, does not appear. I think, whether the evidence shows the novation of that small pre-existing debt, or not, it may be assumed, so far as it concerns the question now involved, that it has been satisfied. And I think it may be fairly inferred from the evidence in the record, that there was not a point of time, from the 15th of November 1855 until the close of the war, that a moiety of the personal estate owned by Reuben Sayers, would not have been ample, and more than sufficient, to have paid every debt he owed in the world. The conduct of his creditors shows that they regarded it ample to secure them. It was upon the faith of that they credited him, and forbore to collect their debts--for they must be presumed to have known that the real estate did not belong to him, but was the property of his wife. (It does not appear that they thought of sueing until after they got possession of the supposed deed of release.) And we have seen that his personal estate was ample to give him the credit he had.
What fraudulent motive could he have had to make said conveyance to his wife? He still retained ample property in his own hands to satisfy all the debts which he actually subsequently contracted. It could not, therefore, have been in anticipation of contracting those debts and avoiding the payment of them that he conveyed his real estate to his wife; for he had ample property left to satisfy them. The same fact is a complete answer to the argument of appellee's counsel, that he made the conveyance in contemplation of incurring a debt of $3,000 for the building of a residence on the farm. Why would he have made a conveyance for such a purpose, when he knew that he retained property out of which the cost of the building he contemplated erecting could be made, if it were even threefold or fourfold the actual cost. I am satisfied from the proofs in the cause, that Reuben Sayers, in contracting the subsequent debts, was conscious of his ability to pay them, and had no thought or purpose of not paying them; and that his creditors credited him, and forebore with him, upon the faith of his personal property, which was ample to pay his debts; and that he and they were disappointed by the result of the war, which wrested from him, by the power of the sword, the property which he relied on in the main as affording him the means of paying his debts, and upon the faith of which his creditors credited him. It does not appear that he was sued by any creditor before the close of the war. If all of them had sued and obtained judgments before its termination, he had ample property to have satisfied every dollar he owed; and if their debts are lost, it is the misfortune of both, rather than the wrong of either.
But it was argued by appellee's counsel, that the conveyance of the whole of his real estate to his wife--so large a proportion of all he was worth--is a badge of fraud. The same argument was urged in Sexton v. Wheaton. It was contended that the house and lot contained in the deed to his wife was the bulk of Wheaton's estate. The chief justice said: " If the fact were proved, it does not follow that the conveyance must be fraudulent. If a man, entirely unincumbered, has a right to make a voluntary settlement of a part of his estate, it is difficult to say how much of it he may settle. In Stephens v. Olive, 2 Bro. Ch. R. 90, the whole real estate appears to have been settled, subject to a mortgage of a debt of £ 500; but that settlement was sustained. * * A man who makes such a conveyance necessarily impairs his credit (unless he has large personal property, as in this case); and, if openly done, warns those with whom he deals not to trust him too far; but this is not fraud." Nor is the possession by the husband after the conveyance a badge of fraud. Schouler D. R. 283, note; 2 Perry on Trusts p. 277, § 678. I can see no evidence of fraud in this case. On the contrary, I think the circumstances disclosed by the evidence in the record show that Reuben Sayers, in executing the conveyance to his wife, of the 15th of November 1855, acted fairly and in good faith, and that there is no ground even for the suspicion of fraud.
The question now arises as to the validity of the deed to vest the real estate in Eleanor A. Sayers. It is a conveyance directly from a husband to his wife. It seems to be well settled that at law it has no validity, because of the legal unity between husband and wife, the latter having no legal existence separate from her husband. As a consequence of this old common law doctrine, it is held by courts of law, that a deed directly from a husband to his wife must be inoperative and void; whilst if it had been made to a third person, for the benefit and separate use of the wife, the same courts hold that it is valid, and vests the beneficial estate in the wife. Equity, which looks more to the substance than the form, holds that the conveyance directly from the husband to the wife, if fair and free from the taint of fraud, is just as valid as if the conveyance had been made to a trustee for the benefit of the wife. Equity will interpose a trustee to hold the estate for the benefit of the wife, or will treat the husband as a trustee for the wife, and will give the same effect to the conveyance, as if it had been made to a third person, for the sole and separate use of the wife. Huber v. Huber's adm'ors, 10 Ohio R. 371; Wallingsford v. Allen, 10 Peters R. 583; 24 Verm. R. 375; Deming v. Williams, 26 Conn. R. 226; Putnam v. Bickwell, 18 Wis. R. 333; Sims v. Rickets, 9 Amer. Rep. 681; Shepard v. Shepard, 7 John. C. R. 57; Jones & wife v. Obenchain & als., 10 Gratt. 259. These cases fully sustain the doctrine as I have laid it down. In Deming v. Williams, 26 Conn. supra, the judge, in a very lucid opinion, says the cases found in the books from Slanning v. Style, decided in 1734, 3 P. W'ms 334, to the present time, sustain the principle, " that so far as the form and substance of the gift or alienation are important, that which would be good if made to a third person, is good in a court of equity if made by the husband to his wife." That is sensible.
In the same case it was held, that in order to give the wife a separate use, words indicating such intention are necessary in a conveyance from a stranger to the wife; but that it seemed to be " well settled that they are not necessary in a conveyance direct from the husband to the wife. The law attaches to absolute deeds, and transfers (says the court) a full alienation of the entire interest or property, so far as the alienation is permitted by the principles of law and equity." Whitten v. Whitten, 3 Cush. R. 191, supports the same doctrine. It is treated as the settled doctrine; and, according to this authority, the deed from Reuben Sayers to his wife, if absolute, vested in his wife a separate estate, though such words are not used; and consequently he is not entitled to curtesy.
As a corollary of the foregoing, whilst as held by the courts of law, the deed of the 15th of November 1855 passed nothing from Reuben Sayers to his wife, and divested from him nothing of his title; by the rules and principles of equity, if the deed, according to its intent and effect, is absolute, it immediately divested the grantor of all title in his own right, legal or equitable, in the property conveyed, and vested an absolute separate estate in it in his wife. The legal, as well as the equitable estate, was vested in her by the terms of the deed, which could not take effect by reason of the legal fiction, that the wife and the husband are one, and she can have no legal existence separate from him; but equity regards the title of the husband in his own right as having passed from him to the wife, vesting in her a separate estate, in which the husband has no interest in his own right, legal or equitable. And courts of equity will exert their powers when necessary, and in a proper care, to give full effect to such conveyances. In order to give the deed of conveyance in question such effect, nothing further is necessary to be done by the grantor. He signed, sealed and delivered the deed, and acknowledged it to be his act and deed in the mode prescribed by law; and the same has been registered according to the requirements of the statute. Nothing farther is necessary to be done by the husband, or can be done by him, in order to complete and perfect the conveyance. As done, upon the principles and doctrines of equity, the title of the husband is divested, and is vested in the wife, and that, I take it, without any action by a court of equity. Thus, though there had been no action by the court of equity, an absolute separate estate was vested in Eleanor A. Sayers, upon the principles and doctrines of equity, immediately upon the execution of said conveyance. She remained invested with such separate estate until her death, when it descended to her children, just as if it had been an estate recognized at law. And now when it is sought to divest that estate from them, and subject it to the payment of the subsequent debts of the grantor, though courts of law will not recognize the conveyance made to her, under whom they claim, it being a valid conveyance upon the principles of equity, it is competent for them to invoke the aid of equity, to give effect to the deed, and to protect them in their rights; and it is proper for them to invoke that protection in this suit, which seeks, by a court of equity, to subject their property to the payment of the grantor's debts.
It was contended for the appellees, that the appellants were not properly before the court, and ought not to be allowed to assert their claims in this suit: or at least they could only do so, by a cross-bill. James Deaderick and his wife were made defendants by the amended bill, and the other appellants were made defendants upon their petitions, and had leave to file their answers, without objection by the appellees. I am not sure that they were not necessary parties. They were in the actual enjoyment of the subject matter of the suit, and had an interest in it which was likely to be defeated or diminished by the plaintiffs' claim; and had an immediate interest in resisting the plaintiffs' demand; and all persons who have such immediate interests are necessary parties to the suit. I Daniel's Chy. Plead. & Prac., chap. 5, § 2, p. 246. It is the constant aim of courts of equity to do complete justice, by deciding upon and settling the rights of all persons interested in the subject matter of the suit, that further litigation may be prevented. And courts of equity delight to do justice, and not by halves. Stor. Equ. Plead., § 72. If it is true, as contended by the learned counsel, the plaintiffs might have proceeded to enforce their judgment liens, ignoring the appellants' claim of title, subjected the property to sale, and proceeded by ejectment at law to dispossess the appellants, in which they must have succeeded, as the appellants could not have asserted their title in a court of law, and that the decree in this suit for the sale would not be binding on them if they were not parties, the appellants would thereby have been driven to the necessity of bringing a suit in equity to injoin the plaintiffs, and to assert their rights, which might have been litigated and determined in this suit. Why thus multiply suits? The plaintiffs were proceeding in a court of equity to enforce their judgment liens against lands which they knew the appellants claimed to be their property, and denied to be chargeable with their judgments; that their defence could only be made in a court of equity, and that complete justice could be done in this suit, by deciding upon and settling the rights of all persons interested in the subject matter of the suit. It seems to me they ought to have been made parties. How could there have been a fair sale of the lands to satisfy their judgments until the rights of the appellants were determined? They would have of course asserted their claim, and forbid the sale, and who would have felt safe in purchasing until the validity of their claim was determined? It was necessary to make them parties in order to remove a cloud which rested on the title, before a decree for the sale. I am inclined to think they were necessary parties in this suit. But it is not necessary to decide that question now, as they have been made parties, and in many cases a person may be made a party though he is not an indispensable party. Story's Eq. Plead., § 153. In this case they were made parties on their motion, and I think properly so. And although it perhaps would have been more proper to have asserted their claim by cross-bill, I think their claim was a defence to the proceeding by the plaintiffs, and might be made by answer, in which the affirmative matter of defence was set out. But their petition might be treated as a cross-bill. It seems that they were properly before the court, and that the case was before the court, by admitting them parties defendant, in such form as to enable it to decide and settle the rights of all parties interested in the subject, and to do complete justice, and prevent a multiplicity of suits.
But it is contended for the appellees, that a court of equity will not give effect to a conveyance from husband to wife against creditors, though subsequent to the conveyance, upon any consideration which is not valuable. I can perceive no good reason why subsequent creditors should have any superior equity to that of the heir of the grantor, where he had given the property to a second wife, who was not the mother of the heir claiming it. If his deed of gift divested him of the lands and vested them in another, and the transaction was open and fair and untainted with fraud, the property ceased to be his from the date of the conveyance, and became the property of his wife, to her separate use; and I cannot perceive what equity his subsequent creditors would have, who credited him upon the faith of his own property, to charge his wife's property with the payment of his debts. " It is true," Mr. Justice Story says, " that in regard to the defective execution of powers, & c., courts of equity do not always interfere and grant relief, but grant it only in favor of persons in a moral sense entitled to the same, and viewed with peculiar favor, and where there are no opposing equities on the other side." (1 Stor. Eq. Juris. § 95, cited by appellee's counsel in brief.) Here the author says, the relief will be granted in favor of a person who is in a moral sense entitled to the same; and none are more so than a wife or children. But the author adds, " where there are no opposing equities on the other side." I have said that I cannot perceive the ground of an equity in the subsequent creditor to charge the wife's separate estate with the debt of her husband, for which he obtained credit upon the faith of his own property. I think the circumstances of this case, which I have already detailed, are peculiarly strong against any such claim on the part of these creditors of the husband. Having by their forbearance lost their debts, in consequence of their debtor's losing his property by the result of the war, upon the faith of which their debts were contracted, it seems to me they would have no equity to charge the property of the wife, which was openly and fairly settled upon her as her separate estate long before those debts were contracted. So that in this case there are no opposing equities; and the authority cited seems to be strongly in support of the interference of a court of equity to give the aid sought.
But will a court of equity give effect to the conveyance which is founded not upon valuable, but only meritorious consideration, in favor of a wife or children? Upon this point I will refer to Stor. Eq. Jur., § 169, where he expressly states the assistance will be given to a person standing upon a valuable or meritorious consideration. The authorities upon this point are somewhat conflicting, and as this opinion is already too much extended, I will not undertake to review them, but will content myself with a reference to the opinion of Allen, Judge, in Jones & wife v. Obenchain & als., 10 Gratt. 261, in which he reviews the decisions on the subject. It was held by Judge Allen, and all the judges concurred in his opinion--that where there was a meritorious consideration, meaning thereby a provision for a wife or child, equity would enforce a defective conveyance. In support of that opinion he cites Shepard v. Shepard, 7 John. Ch. R.; and Kekewich v. Manning, 12 Eng. L. & E. R. 120. He refers to the opinions of Lord Thurlow and Lord Eldon as favoring the doctrine, and the remarks of Brooke, J., in Darlington v. McCoole, 1 Leigh 36. He cites two decisions by the Court of Appeals of Kentucky, and the remarks of Chief Justice Gibson in Dennison v. Gochring, 4 Barr Pa. R. 175. He also cites and relies on the opinion of Lord Chancellor Sugden in Ellis v. Nimmo; and reviews the decisions, which it is said overrules that decision of the Lord Chancellor, which he was of opinion were decided on other grounds. But suppose he had regarded those subsequent cases as overruling Nimmo & Ellis, would it have changed his opinion and the decision of this court in Jones v. Obenchain? I can hardly think it would. The opinion of Lord Chancellor Sugden was not, nor were the decisions of the courts of Great Britain, authority with this court; but the Lord Chancellor's opinion was regarded with the consideration that its intrinsic merit and the respect due to his great learning entitled it to receive. And the cases which are said to have overruled him were before this court and reviewed by Judge Allen, and did not change the decision. I must regard that case therefore as a decision of this question by the Court of Appeals of Virginia in which all the judges concurred, and am not disposed to disturb it, whether Nimmo & Ellis has been overruled or not. And I find it is sustained by other American decisions, which are entitled to very great respect. I will only refer to a recent decision of the Court of Appeals of Indiana, in Sims v. Rickets, supra, which I think is in point.
It remains now only to inquire whether the deed in question is a real bona fide conveyance, and whether it is absolute or only conditional. We have seen that it was fair and unassailable even upon the suspicion of fraud as to the creditors of the grantor or other persons: was it a real and bona fide conveyance as between the husband and wife? The terms of the deed, and the deliberation and solemnity of the act, the lapse of time for reflection from the writing of the deed until its acknowledgment and recordation, the continued acquiescence of the husband during the lifetime of his wife, for a period of nearly ten years after the execution of the deed, without even an attempt to obtain a release from her (which may be regarded as a confirmation of the conveyance to her), leave no room for doubt that the transaction was real and bona fide between them, and was intended to divest the grantor of his title, and to vest it in his wife, according to the terms of the deed. Is the conveyance absolute, or only conditional?
This inquiry can only be answered by recurring to the instrument itself. It recites, " that whereas the said Reuben Sayers, intending shortly to visit the western country, and knowing the uncertainty of life, and to provide a permanent home and a future residence for his family, in case he should not be permitted to return in safety home, and seeking to provide against confusion at all events, now this indenture witnesseth, that for and in consideration of the premises, and for the natural love and affection he has for his wife, the said Reuben Sayers doth grant unto the said Eleanor Ann Sayers his entire real estate lying in the county of Pulaski, his present residence, containing seven hundred acres, more or less. Witness the following signature and seal." Signed, " Reuben Sayers. Seal."
There are two considerations set out in this deed, which moved the grantor to its execution: first, the providing a permanent home and future residence for his family; second, the love and affection he had for his wife.
Let it be conceded that one consideration of the conveyance was to provide a home for his family in case he did not safely return from the western country, which he expected shortly to visit. If he did return safely, then the conveyance was unnecessary to provide a home for his family on that contingency. But when he executed the deed he did not know that it would so happen, and in consideration of the uncertainty of his safe return he makes an absolute conveyance to his wife. It is not a conveyance to take effect only upon condition that he does not safely return. But the contingency that he may not return is the consideration which moves him to make the conveyance. Is that a conditional conveyance? I think not. The title has passed from him by his own act, upon a consideration which is in part contingent. And the contingency not happening the deed is not void; for it was not made to depend upon the happening of that contingency. It was just because of the uncertainty, the possibility that it might happen, he made an absolute conveyance to his wife.
But the consideration of the conveyance was not merely to provide a home for his family in case he had not a safe return. If he had stopped then it might have been so understood. But seeking to remove all confusion (uncertainty) on that point, he adds, " and" " at all events." That is, as I understand it to comprehend, whether he visited the western country and was not permitted safely to return or not--whether he lived or died, " at all events" he would make the conveyance. And his indenture witnessed that for and in consideration of the premises, and for the love and affection he had for his wife, he granted to her the land in controversy. This latter was a sufficient consideration to support the deed, even if the contingent consideration had failed. Skipwith v. Cabell, 20 Gratt. How could he claim a defeasance? I think it is an absolute conveyance, and not conditional. Upon the whole I am of opinion to reverse the decree of the court below, and to enter here such decree as ought to have been entered by the Circuit court, reversing the decree of the County court, and dismissing the plaintiffs' bill with costs.
The other judges concurred in the opinion of Anderson J.
The decree was as follows:
This day came again the parties by their counsel, and the court having maturely considered the transcript of the record of the said decree and the arguments of counsel, is of opinion, for reasons stated in writing and filed with the record, that the said Circuit court erred in affirming the said decree of the said County court, instead of reversing the same and dismissing the bill in this cause, as it should have done. Therefore, it is decreed and ordered, that for the said error the said decree of the said Circuit court be reversed and annulled, and that the appellees pay to the appellants their costs by them about the prosecution of their appeal here expended: and this court proceeding to render such decree in the premises as the Circuit court ought to have rendered, it is further decreed and ordered, that the said decree of the said County court be also reversed and annulled, and that the appellees pay to the appellants their costs by them in this cause expended as well in the said County court as in the said Circuit court.
DECREE REVERSED.