Saunders v. Ferrill, 23 N.C. 97, 1 Ired. 97 (1840)

June 1840 · Supreme Court of North Carolina

23 N.C. 97, 1 Ired. 97

EDWARD SAUNDERS vs. JOHN L. FERRILL.

The act of 1829, ch. 20, (1 Rev. Stal. ch. 37, sec. 24,) which enacts that no deed of trust or mortgage shall be valid to pass property, as against creditors, but from the registration thereof, embraces only those deeds in trust which are intended as securities for debts; and does not include deeds of settlement between husband and wife, in which the properly is conveyed to a trustee in trust for the wife — the deeds of the latter class being provided for, as to their registration, in the 29th see-lion of the same Revised Statute.

Where the subscribing witness to any instrument, except a negotiable one, becomes interested in a suit brought by him, his handwriting may be proved to establish the execution of the instrument, whether his interest was thrown upon him by operation of law, or was acquired by., his own voluntary act.

A post-nuptial settlement, made between husband and wife, in which a greater interest in the property is secured to the wife than was provided for in the marriage articles, is void as against' creditors, under the acts of 13 Eliz. and 1715 (1 Rev. Stat. ch. 50, sec 1.)

A husband is incompetent to testify in favour of his wife; and will not, therefore, be admitted as a witness to establish a settlement in her favour against his creditors; nor will his subsequent declarations be admitted for that purpose.

No ante-nuptial agreement or transaction between husband and wife can be proved to support a settlement made after marriage, to the obstruction of the husband’s creditors; for the act of 1785, Rev. eh. 238, (1 Rev. St. ch. 37, sec. 29, 30,) which requires “ all marriage settlements, and other marriage contracts” to be registered within a particular time, to make them valid against creditors, must necessarily exclude all such contracts as in their nature do not admit of registration.

Upon a treaty of marriage, between Hector C. Homer and Eliza Savills, they entered into written articles, bearing date the 19th of June, 1837, whereby it was agreed, that' all the estates, real and personal, of the intended wife, should be settled to her sole and separate use, during her life, with remainder after her death to the intended husband in absolute property. The marriage took effect shortly thereafter. The articles were attested by the present plaintiff alone; and were proved by his oath in August, and registered in September, 1837. On the 1st day of February, 1839, Mr. and Mrs. Homer united in a deed of settlement between themselves, of the first part, and Edward Saunders, the present plaintiff, of the second part; in which, after a reference to the articles by date, it is recited, that by the same he, the husband, covenanted that all the property, real and personal, then bei0ngi0g t0 the said Eliza, should, after the marriage, be and remain her property during her natural life, and free from any claim, right or title of the said Hector; and it is thereby witnessed, “ that for the more effectually carrying the said agreement into execution, and for the purpose of providing for the said Eliza,” they, the husband and wile, convey to the plaintiff, as trustee, in fee a tract of land, and also five slaves and other personal chattels, all of which had belonged to the wife, “ in trust for the sole and separate use of the said Eliza, and at her sole and separate disposal; with power to the said Eliza, by her last will, or any writing by her duly-executed, to give away or dispose of any part or all of the said land, negroes and goods.” This deed was executed by all the parties, and was proved in February, and registered on the 8th of March, 1839.

Jn the year 1838, the husband contracted debts, for which judgments were rendered; and executions issued, bearing teste before the 8th day of March, 1839, and were delivered to the defendant, the sheriff of Camden county, who seized some of the slaves conveyed by the settlement. The plaintiff then brought this action of Detinue; which came on to be tried at Camden, on the last circuit, before his honor Judge Peakson, on the general issue.

After reading the deed to himself, the plaintiff proposed to give in evidence the articles of the 19th of June, 1837; and for the purpose of establishing the execution thereof, he offered witnesses to prove his own handwriting, as the subscribing witness. To that evidence the defendant objected; but it was received by the Court, and the articles were thus proved and read to the jury.

The defendant thereupon insisted, that the deed of settlement was void as against the creditors, notwithstanding the articles; inasmuch as by the settlement, the whole property is secured to the wife, and to be at her disposal, and by the articles she was to have only a life estate, and the remainder, in both the realty and personalty, was to enure to the husband. And, thereupon, for the purpose of removing the ground of that objection, the plaintiff offered to prove by witnesses, that the said Hector did, before the marriage, verbally agree with the said Eliza, to settle upon her, absolutely, all her estates, including the negroes now sued for. To this evidence the defendant also objected; but it was admitted by the Court.

The plaintiff then further offered Hector C. Homer as a witness, to prove that he did make such an agreement with his intended wife as that last alleged; and that he purposely drew the said articles variant from the said' verbal agreement; and fraudulently procured her to execute the same, without letting her know of the difference between them. To this evidence the defendant also objected; but it was received by the Court.

The plaintiff then further offered to prove by witnesses, the declarations of the said Hector C, Homer, to the same effect with the evidence by himself given as above; to which also the defendant objected; but the Court received it.

The counsel for the defendant then moved the Court to instruct the jury, that the deed to the plaintiff was void, as-against the creditors, because the executions were' tested before the deed was registered; which instruction the Court refused to give. The jury found for the plaintiff; and from the judgment the defendant appealed.

Badger, for the defendant,

contended that all the instructions of the Judge were wrong. He was wrong in saying that the plaintiff’s handwriting might be proved. The general rule is, that the plaintiff cannot give in evidence his acts o-r declarations; and the only exception to the rule is, where-the law casts an interest upon an instrumentary witness. Here the witness became a party- voluntarily, and cannot-prove his acts or declarations.

The husband’s declarations were certainly not admissible to prove the settlement different from the agreement.

The deed of 1839 was void, as being fraudulent against his creditors. The property was vested in the husband, and the Judge allowed parole.evidence to be given to show that the property was not to be in him. The deed was not registered, and of course could not defeat the creditors of the hus'jaiM. then, the deed, if made, but not registered, would have been void as to creditors, much more is it void in this cage> -g sjmqar cases 0f dee¿s jQ trust and mortgages. Could an alleged fraud in a mortgage defeat creditors'? It will be void as to creditors, unless made and registered in proper time.

Homer and wife cannot set up the settlement in an action against the Sheriff. They must go into a Court of Equity, to have the true agreement established.

J. II Bryan, for the plaintiff.

The acts or declarations of a subscribing witness to an instrument, are always admissible, when he becomes a party; and that whether he becomes so voluntarily or by operation of law. Here the plaintiff is but a naked trustee, and had no interest when the declaration was made. The declaration of a party beneficially interested will be excluded; but if he were not so interested, it will be received. The declarations of Homer were admissible. See Guy v. Hall, 3 Murph. Rep. 150. And here the same facts were proved by a competent witness; and the verdict may be sustained upon his testimony.

Marriage is a gift of the wife’s property to the husband, tie is not a purchaser; and his creditors cannot set up a claim as purchasers. Upon the question whether the settlement has any thing to sustain it against the husband, see Lady Arundell vs. Phipps, 10 Ves. 139 — Atherly on Mar. Set. 149, 1^5. — .Shaio vs. Jalceman, 4 East. Rep. 201. An equitable right is a consideration at law. Noblet vs. Green, 2 Dev. Rep. -517. In ascertaining a fraudulent intent, the situation of the parties is to be looked at; and whether there was an obligation, legal or equitable, see Montar/ate v. Maxwell, 1 Peer Wins. 618. If there were a parole agreement for a settlement, and, by fraud, it was not made, it might be established by parole; and it would stand upon a valuable consideration, and would be sustained as against creditors, if made before their liens commenced.

As to the lien of the execution before the registration, the act with regard to marriage settlements is different from that in relation to mortgages and deeds in trust. See 1 Rev. Stat. ch. 37, sec. 23, 24, and 29, 30.

Ruffin, Chief Justice,

after stating the case as above, proceeded as follows. As the last point is unconnected with the others, it may be disposed of at once. From the terms of the exception we must take it, that the executions, though prior to the registration, were tested after the execution of the deed. The objection is, therefore, founded exclusively on the Revised Statute, ch. 37, sec. 24, (act of 1829, ch. 20;) which enacts that no deed of trust or mortgage shall be valid to pass property as against creditors, but from the registration. Our opinion is, that the act does not embrace every deed in which a trust happens to be declared; and that the instrument before us is not within it. The object was-to give notice of encumbrances; and the “ deed of trust” meant in the act, is that species, which though of recent origin, has grown into general use as a security for debts, in the nature of a mortgage with a power of sale. This results from the manner in which the two kinds of conveyance, “ deed of trust” and “ mortgage,” are associated in that section of the act. But the special provision in the 29th section of the same act, as now digested in the Revised Statutes, for the probate, and registration of marriage contracts, prevents the application to them of the general words of the 24th section. This particular species of “ deed of trust” is to be governed by its own peculiar regulations. This exception is, therefore, unfounded.

Another exception, on the part of the defendant, as to the proof of the articles by testimony to the handwriting of the plaintiff as the subscribing witness thereto, we likewise deem to be unfounded. It was admitted at the bar, that the evidence would have been proper, if the law had, after his attestation, thrown the interest on the plaintiff. But it was con tended that, in a suit brought by the witness himself, the evidence is not competent, when the plaintiff acquires the interest by his own act. Were the question new, we should at least hesitate on it, as' the distinction seems to have much reason in it; and, indeed, with, respect to endorsements to subscribing witnesses to negotiable instruments, it is estabfished at law. Hall vs. Bynum, 2 Hay. Rep. 329. But the rule seems, to be confined to that particular case. The books contain many instances, in recent times, in which proof has been received of the handwriting, where the subscribing witness had become the administrator of the obligee, or the executor of the obligee; or where the obligee and Witness had intermarried. From these cases, we cannot distinguish the present in principle; and, therefore, we think the articles well proved.

But the important consideration is, whether the articles, after they were established, are sufficient to sustain the settlement under which the plaintiff claims title? Upon that, the defendant’s objection at the trial is unanswerable. Valid ante-nuptial contracts will undoubtedly support a settlement made after marriage in conformity to them. There are both a moral and an equitable obligation, which render the articles a good consideration for the settlement. But without such articles, a post-nuptial settlement is voluntary and void under the Stat. 13th Eliz., (see 1 Rev. Stat. ch. 50, sec. 1,) as has long been settled. So it necessarily must be, when by the settlement the husband secures to the wife or issue of the marriage more than by the articles he engaged. This settlement goes much beyond the articles, and deprives the husband of a valuable interest, which the articles not only left in him, but expressly secured to him. For that excess then, at the least, the deed to the plaintiff must be invalid: that is to say, if the case is to rest on the articles by themselves.— But it thence follows, on a settled principle, that the settlement is not good even for the life of the wife. The deed is avoided by the act of 1715, or 13th Eliz., as being, at least in part, not founded on a valuable consideration, but voluntary. There is but one trust declared in this deed, and that is in favour of Mrs. Homer. In such a case the court cannot apportion the operation of the instrument to its considerations, and hold it in part bad, and in part good, as at common law; but must execute the stern condemnation of the statute,, which says it shall be utterly void.

But the plaintiff asks to supply the defect in the articles in this respect, by the verbal agreement between the parties, and the alleged fraud by Homer on his intended wife. Although not necessary to the decision of the cause, yet, as the parties have raised the questions in the record and in the argument, it is perhaps our duty to dispose, in the first place, of the objections as to the modes of proof on those points.

We have so lately had occasion to say, in a similar case, that husband and wife cannot be witnesses for each other, that we need now only refer to that decision. Pearson vs. Daniel, 2 Dev. & Bat. Eq. Rep. 360.

Still less, if possible, are the husband’s subsequent declarations competent against his creditors. They are not privies with him, bat claim against, and not merely under, him. Briley vs. Cherry, 2 Dev. Rep. 2.

The remaining part of the defendant’s objection to the proposed evidence of the plaintiff, is to its insufficiency or irrelevancy. If the supposed parole agreement and fraud, though established, would not tend to sustain the deed, it is useless and illegal to hear the proof. Against the husband, or those claiming under him as volunteers, equity would set up such a parole agreement, unless it be specially required by statute to be in writing; as in England is the case by Stat. 29, Charles 2; and a fraud in obtaining from the woman the execution of an instrument, which purposely omitted a material part of the agreement, would doubtless be redressed, notwithstanding such a statute, But in respect of creditors, the act of 1785, Rev. ch. 238, (see 1 Rev. Stat. ch. 37, sec. 29, 30,) establishes, we think, a different and opposite principle. The effect of that act is to prevent any verbal agreement or transaction between the intended husband and wife, from obstructing a creditor. It is entitled “an act directing that marriage settlements and other marriage contracts shall be registered, and for preventing injury to creditors.” Aiter reciting that marriage settlements and other marriage contracts have been frequently made and kept secret, whereby the possessors, upon the credit of the apparent property, have been enabled to contract great debts, to the manifest deception and injury .of their creditors: For remedy whereof for the future, it is enacted, that all marriage settlements and other marriage contracts, whereby any estate shall be secure(^ to ^le wife or husband, shall be proved and registered as therein mentioned; and all not so proved and registered, sjj_ajp void against creditors. This language shews clearly an intention of the Legislature; that as to his creditors the vesting of the property of the wife in the husband, jure mariti, should not be prevented by any secret agreement, whether written or verbal. The secrecy, of the agreement is the evil on which the preamble dwells, as tending to deceive creditors. The act designs to take from the parties all opportunity of practising such deception,' and thus to “prevent injury to creditors,” by giving to all such arrangements that degree of publicity which can be derived from registration. The enactment, therefore, is, that if not proved, within six months, and registered within one month thereafter, they shall be void. It is not sufficient that the settlement should be written and registered. That requires, as has been before mentioned, the support of the agreement before marriage; and the act requires that agreement, as well as the settlement, to be registered — using the words “ all marriage settlements and other marriage contracts.” We are to go back, therefore, to the first agreement; and if that be found defective, the post-nuptial settlement made in execution of it, cannot stand. The proposition is self-evident that those agreements must be in writing, because in that form alone do they admit of registration. And the law must be the same, when there is an attempt to vary a written and registered agreement by parole, to the prejudice of creditors. To allow it would amount to a repeal of the act. Gregory vs. Perkins, 4 Dev. Rep. 50.

It is true, this shuts the door against correcting mistakes in drawing those instruments, and leaves an opening for practising frauds on confiding women. Generally, however, they havé the advantages of friends and counsel in such treaties; and, therefore, there is no great danger of their being over-reached. But the answer is, that the Legislature must have been aware of those possibilities; and, being aware of them, thought they would so seldom occur as, practically, not to amount to a grievance, or, at least, to one at all comparable tó those arising out of “ the frequent secret contracts” between intended husbands and wives; Therefore, .the act makes a registered, and, of course, a written instrument the only evidence against the husband’s creditors that “ any estate has been secured to the wife.”

Our opinion therefore, is, that the deed to the plaintiff does not pass the title of the slaves to him; and that no evidence of the verbal agreement or fraud alleged ought to have been admitted. The remedy of Mrs. Homer is, upon the articles in equity; where, for any thing now seen to the contrary, they will be specifically decreed in their present form.

Per. Curiam. Judgment reversed.