Winchester-Simmons Co. v. Cutler, 199 N.C. 709 (1930)

Nov. 12, 1930 · Supreme Court of North Carolina

199 N.C. 709

WINCHESTER-SIMMONS COMPANY and H. P. WHITEHURST, Receiver of L. H. CUTLER, Sr., v. L. H. CUTLER, Sr., and MISS LAURA A. ROBERTS.

(Filed 12 November, 1930.)

1. Execution B a — Laud held by husband and wife by entireties is not subject to execution on several judgments against either.

Lands devised or conveyed to husband and wife as such carries to them the title by entirety and is not subject to execution of a judgment against either of them severally during their joint lives, the principle of jus aeereseeniU applying.

2. Husband and Wife G a — Deed by husband and wife to land held by entirety carries title to grantee free from judgment lien against one of them.

In the absence of fraud which would vitiate their deed a conveyance of land executed and delivered by husband and wife to lands held by them in entirety conveys the entire title to the lands to their grantee not subject to execution under a judgment against only one of them.

3. Fraudulent Conveyances A c — Creditor of husband may not set aside deed of husband and wife, the wife and grantee having no fraudulent intent.

Where a husband induces his wife to join in a sufficient deed to their daughter conveying lands held by them in entirety with the purpose unknown to the wife and their grantee of defeating the levy under a judgment of his creditor, his judgment creditor then having no right of execution against the land cannot be defrauded of a right, and the wife and their grantee being free from fraudulent intent, the conveyance is not subject to be defeated on the ground that it was executed in fraud of the rights of his personal judgment creditor.

4. Husband and Wife G a — Husband may convey his interest in land held by entireties without imputation of fraud as against his judgment creditor.

During their joint lives the husband has only a possibility of acquiring the full title to lands held by them in entireties, and such interest is not subject to a lien by virtue of a judgment .against him alone, and he may convey this interest that he has without imputation of fraud against his judgment creditor.

5. Fraudulent Conveyances A c — In this case held: there was no allegation that grantee took title,, impressed with trust, and Davis v. Bass does not apply. ' '

AVhore it 'appears' in the complaint in an action to subject lands to a levy under a judgment against the husband alone that the husband and wife had held the lands by entireties and had conveyed a good and sufficient fee-simple title to their granddaughter by their joint conveyance, there is no sufficient allegation that their grantee took the title impressed by a trust. Davis v. Bass, 188 N. C., 200, cited and distinguished.

Appeal by plaintiffs from Barnhill, J., at May Term, 1930, of CuaveN.

Affirmed.

This action was beard on defendant’s demurrer to tbe complaint filed therein by tbe plaintiffs.- Tbe facts alleged in tbe complaint and' admitted by tbe demurrer are as follows:

•Tbe plaintiff, "Winchester-Simmons Company, is a judgment creditor of tbe defendant, L. H. Cutler, Sr. Its judgment for the sum of $2,842.08, with interest and cost, was duly docketed in tbe office of tbe clerk of tbe Superior Court of Craven County on 21 September, 1925. An execution issued on said judgment on 1 July, 1927, was returned by tbe sheriff of Craven County unsatisfied.

•The plaintiff, H. P. Whitehurst, was duly appointed receiver of tbe defendant,- L. H. Cutler, Sr., in certain proceedings instituted by tbe plaintiff, Winchester-Simmons Company, on 1 August, 1927, supplemental to said execution. No payment has been made on said judgment by the defendant, L. H. Cutler, Sr., or by tbe said receiver out of any property which has come into- bis bands. Tbe full amount of said judgment, with interest and cost, is now due and unpaid.

During tbe month of October, 1926, Mrs. Sarah E. Wadsworth died in Craven County, having first, made and published her last will and testament, which .has since been duly probated and recorded. By said last will and testament tbe testatrix gave and devised to tbe defendant, L. H. Cutler, Sr., and bis wife, Mrs. Laura D. Cutler, the lot of land described in tbe complaint. Tbe said lot of land is situate in tbe city of New Bern, in Craven County. By said devise, tbe said L. H. Cutler, Sr.,' 'and bis wife, Mrs. Laura D. Cutler, took and held an estate by tbe entirety in said lot of land.

On 5 June, 1928, tbe said L. H. Cutler, Sr., and bis wife, Mrs. Laura D. Cutler, conveyed tbe lot of land devised to them, as tenants by tbe entirety, to tbe defendant, Miss Laura A. Roberts, their granddaughter. Tbe deed by which said lot of land was conveyed was executed by both L. H. Cutler, Sr., and Mrs. Laura D. Cutler. They conveyed said lot of land without receiving therefor any valuable consideration from Miss Laura A. Roberts. Tbe consideration recited in said deed is, “ten dollars and other valuable considerations.”

At tbe date of said deed tbe plaintiffs were prosecuting certain actions and proceedings to subject to tbe payment of tbe judgment owned by tbe plaintiff, Winchester-Simmons Company, and against tbe defendant, L. H. Cutler, Sr., tbe interest of said defendant in certain bonds wbicb bad been giren and bequeathed by Mrs. Sarab E. Wadsworth, by her last will and testament, to said defendant and bis wife,- Mrs. Laura D. Cutler. Tbe said L. H. Cutler, Sr., was contesting the right of plaintiffs to recover in said actions and proceedings. He was advised that if be survived bis wife, who was then in bad health, be would become tbe owner, by virtue of such survivorship, of tbe lot of land in wbicb be and bis said wife then bad an estate by tbe entirety, and that said lot of land would in that event become subject to tbe lien of tbe docketed judgment owned by tbe plaintiff, Wincbester-Simmons Company, against him, and to sale under execution for tbe satisfaction of said judgment.

Tbe purpose of tbe defendant, L. H. Cutler, Sr., in executing tbe deed by which said lot of land was conveyed to bis granddaughter, tbe defendant, Miss Laura A. Roberts, and in procuring bis wife, Mrs. Laura D. Cutler, to join him in tbe execution of tbe same, was to convey tbe title to said lot of land to bis said granddaughter, in order that in tbe event be should survive bis wife, tbe said granddaughter might bold tbe title to tbe said lot of land, and thereby prevent the said judgment from becoming a lien on said lot of land. It-was bis purpose by said conveyance to defeat tbe right of the plaintiffs to have said lot of land sold under execution for tbe satisfaction of said judgment, in tbe event be should become tbe owner thereof by survivorship. Neither Mrs. Laura D. Cutler, nor tbe defendant, Miss Laura A. Roberts, participated or shared with tbe said L. H. Cutler, Sr., in said purpose. Neither of them knew bis purpose in executing said deed, or in procuring bis wife to join him in tbe execution of the same. Since the execution of said deed, Mrs. Laura D. Cutler has died, leaving surviving her husband, tbe defendant, L. H. Cutler, Sr.

On the foregoing facts alleged in their complaint, plaintiffs demanded judgment that tbe deed executed by L. H. Cutler, Sr., and bis wife, Mrs. Laura D. Cutler, by wbicb tbe lot of land described in tbe complaint was conveyed by them to tbe defendant, Miss Laura A. Roberts,be declared void, as to tbe plaintiffs, and that said lot of land be subjected to tbe payment of tbe judgment now owned by tbe plaintiff, Wincbester-Simmons Company against tbe defendant, L. H. Cutler, Sr.

Tbe court was of opinion that tbe facts stated in tbe complaint are not sufficient to constitute a cause of action on wbicb tbe plaintiffs are entitled to tbe relief demanded in this action, and that tbe demurrer should be sustained.

From judgment in accordance with this opinion, dismissing the action, plaintiffs appealed to the Supreme Court.

Ernest M. Green for plaintiff.

Whitehurst & Barden and Ward <& Ward for defendants.

CoNNOR, J.

In Davis v. Bass, 188 N. C., 200, 124 S. E., 566, it is said: “When land is conveyed or devised to a husband and wife as such, they take the estate so conveyed or devised, as tenants by the entirety, and not as joint tenants or tenants in common. Harrison v. Ray, 108 N. C., 215. This tenancy by the entirety takes its origin from the common law when husband and wife were regarded as one person, and a conveyance to them by name was a conveyance in law to but one person. The estate rests upon the doctrine of the unity of person, and, upon the death of one, the whole belongs to the other, not solely by right of survivorship, but also by virtue of,the grant which vested the entire estate in each grantee. Long v. Barnes, 87 N. C., 329; Bertles v. Nunan, 92 N. Y., 152. These two individuals, by virtue of their marital relationship, acquire the entire estate, and each is deemed to be seized of the whole and not of a moiety or an undivided portion thereof. They are seized of the whole, because at common law they were considered but one person; and the estate thus created has never been destroyed or changed by statute in North Carolina. Freeman v. Belfer, 173 N. C., 587. It still possesses here the same properties and incidents as at common law. Bynum v. Wicker, 141 N. C., 95. The act abolishing survivorship in joint tenancies in fee (C. S., 1735), does not apply to tenancies by entirety. Motley v. Whitemore, 19 N. C., 537. A joint estate is distinguished by the four unities of time, title, interest and possession (Moore v. Trust Co., 178 N. C., p. 124); and it has been held that in tenancies by the entirety, a fifth unity is added to the four common-law unities recognized in joint tenancies, to‘wit, unity of person. Topping v. Sadler, 50 N. C., 357.”

Two of the properties or incidents of this estate which, in view of changes in the law in conformity with changes in social conditions, has been declared by this Court to be an anomaly, are stated in Davis v. Bass as follows:

“4. Lands held by husband and wife as tenants by the entirety are not subject to levy under execution on a judgment rendered against either the husband or the wife alone, nor can the interest of either be thus sold, because the right of survivorship is merely an incident of the estate, and does not constitute a remainder, either vested or contingent ; but a judgment rendered against the husband and wife jointly, upon a joint obligation, may be satisfied out of an estate in lands held by them as tenants by the entirety. Martin v. Lewis, 187 N. C., 473, 30 C. J., 573.”

“14. A sale by husband and wife and a division of the proceeds ends an estate by the entirety. Moore v. Trust Co., 178 N. C., 118.”'

Because of the nature of the estate, acquired by the defendant, L. H. Cutler, Sr., and his wife in the lot devised to them as tenants by the entirety, by Mrs. Sarah E. Wadsworth, and of the properties and incidents of said estate, the judgment in favor of the plaintiff, "Winchester-Simmons Company and against the defendant, L. H. Cutler, Sr., was not a lien on said lot at any time during the joint lives of said L. H. Cutler, Sr., and his wife, Mrs. Laura D. Cutler, nor was said lot subject to sale under execution for the satisfaction of said judgment during said time. In Bruce v. Nicholson, 109 N. C., 202, 13 S. E., 790, it is said: “As we have seen, the husband, who is the judgment debtor in this case, had no interest in the land that he could dispose of, nor that was subject to sale under execution or any legal process. A sale would be ineffectual. The possibility that the husband might survive his wife and thus become the sole owner of the property, was not the subject of sale or lien. This did not constitute or create any present estate, legal or equitable, any more than a contingent remainder or any other mere prospective possibility. Bristol v. Hallyburton, 93 N. C., 384.”

If the deed executed by L. H. Cutler, Sr., and his wife, Mrs. Laura D. Cutler, by which they jointly conveyed the lot of land described in the complaint to the defendant, Miss Laura A. Eoberts, is valid, although the defendant, L. H. Cutler, Sr., has survived his wife, he had-.no interest or estate in said lot of land, at the commencement of this action, to which said judgment could attach as a lien, or which was subject to sale under execution for the satisfaction of said judgment. The lot of land was conveyed by both L. H. Cutler, Sr., and his wife, Laura D. Cutler; each at the date of their deed was seized of the whole estate in said lo.t, and not of a moiety, or of an undivided .portion thereof. Davis v. Bass, supra. It is expressly alleged in the complaint that Mrs. Laura D. Cutler did not participate or share with her husband in his purpose by the execution of said deed to hinder, delay and defraud the plaintiffs. She, at least, with the joinder of her husband, had the right to convey said lot of land to her granddaughter. The purpose of her husband, who at the date of the deed had the same interest in the land as she had — no more and no less — not disclosed to her, could not render the deed void as to her.

Nor can it be held on the facts alleged in the complaint that 'the purpose of L. H. Cutler, Sr., in executing the deed, and thereby joining with his wife in the conveyance of the land, was fraudulent, thus rendering the deed void. In Teague v. Downs, 69 N. C., 280, it' is said that as creditors of a husband had no right to subject his estate by the ••curtesy in lands' owned by Ms wife, to the satisfaction of Ms 'debts, during the life of the wife, he was at liberty, if so minded, to surrender his .estate in said land, and that such surrender could not be held fraudulent as to his creditors. See, also, Dortch v. Benton, 98 N. C., 190, 3 S. E., 638, in which it was held that as a debtor’s homestead is not subject to sale under execution on a judgment against him, his conveyance of. the homestead was not fraudulent as to Ms creditors, although it was otherwise as to a conveyance of the land subject to the homestead. At the date of the deed from L. H. Cutler, Sr., and his wife, Laura D. Cutler, to their granddaughter, L. H. Cutler, Sr., had no interest in the land conveyed by the deed, present or prospective, which was subject to sale for the satisfaction of the judgment against him, then owned by the plaintiff, 'Winchester-Simmons Company; he had only a possibility of owning such interest or estate, contingent upon the uncertainty of his surviving his wife. This was not such an interest or estate as could be sold under execution for the satisfaction of the judgment. Bruce v. Nicholson, supra,. His conveyance of the land, with the joinder of his wife, thus surrendering his right to an estate in the land, upon his survivorship, was not fraudulent as to the plaintiffs.

It does not appear from the allegations of the complaint that the defendant, Miss Laura A. Roberts, took the title to the land conveyed to her, with a trust impressed upon her title, by the terms of the deed, or by parol. It is expressly alleged in the complaint that she did not participate, or share with the defendant, L. H. Cutler, Sr., in the pur■pose with which it is alleged he executed the deed. The decision of this Court in Davis v. Bass, supra, is, therefore, not controlling in the instant case.

We concur in the opinion of the Superior Court that the facts alleged ■in the complaint are not sufficient to constitute a cause of action on which plaintiffs are entitled to .relief in this action. The judgment is

Affirmed.