McKinnon v. McDonald, 57 N.C. 1, 4 Jones Eq. 1 (1858)

June 1858 · Supreme Court of North Carolina

57 N.C. 1, 4 Jones Eq. 1

MURDOCK McKINNON against ELIZA McDONALD and others. ^*

The English doctrine, that a wife, by an arrangement with her husband, can become a. free-trader, and hold the proceeds of her labor to the exclusion of his creditors, does not obtain in this State.

Where land was purchased by a feme with her earnings and the deed made to her, a sale of such land, under an execution against the husband, passes nothing.

If a party defendant, who has no interest in the subject matter in controversy, disclaim all right, the bill will be dismissed as to him, with costs ; but if he set up claim, and insist upon a declaration of his rights, the dismissal, as to. him, will be made without costs.

This bill was filed in the Court of Equity of Cumberland County, and removed by consent to this Court.

The plaintiff alleges that the defendant, Alexander McDonald, was indebted to him in the sum of $134, in two several notes, on which he recovered judgments before justices of the peace, and took out executions thereon — that the same were levied on the tract of land which is the subject of this controversy, and that it was sold to the defendant McLeran, for the sum of one dollar, and that no part of his debt has been satisfied. He further alleges, that the land in question, was bought by the defendant, Eliza, wife of the said McDonald, and the deed taken in her name; that this was done on the ground and claim, that the said Eliza had been permitted by her husband to work for herself, and to have the proceeds of her own personal labor.

The plaintiff contends that the wife’s labor belongs to the husband, and that by the policy of the law's of this State, no such protection is afforded to the earnings of the wife as to secure it to her, and that this land having been purchased with money, which in law, was the husband’s, the same is subject to the payment of his debts; that the purchase by McLeran amounts to nothing, for that there was no legal or equitable estate in the husband which could be sold by execution, or if there wTas any such, he avers that the said McLeran purchased upon an exprees trust to hold for the defendant, Eliza, the wife. The prayer of the bill is to subject the land in question to plaintiff’s debt.

The answer of the defendant Eliza, the wife, states that, her husband the defendant, Alexander, greatly neglected his family, and was much addicted to intemperance; that on this account, she was obliged to live apart from him; that she obtained the privilege from her said husband of working for the support of herself and family, with an understanding and agreement that whatever she could make, beyond such support, should be her own exclusive property, free from his debts, and beyond his control; that being a good seamstress, she was able, by dint of diligence and economy, to lay up, from time to time, small sums wherewith she purchased the land in question, and by the same kind of exertions paid for the building of a house thereon; that this was long before the indebtedness of her husband to the plaintiff arose; that it was very well known in the vicinity that she wras permitted by her husba nd to trad and work for herself; that she was credited and charged in the books of merchants in the town of Fayetteville, on her own account, and not on that of her husband, who, for a great number of years, was not at all looked to for any debt of her contracting, nor for any of the expenses of the family; that this purchase was made by her since the act of 1818, and that the object was to vest an absolute title in herself for her sole use and benefit.

The defendant, McLeran, says that he purchased the land without any concert or understanding with the defendant, Eliza; that he knew nothing of the previous judgments, or of the proposed sale; that happening to be present when the sheriff cried the sale, he bid one dollar, at which the land in question -was knocked off to him, and he took the sheriff’s deed for it. He further says, that after the sale, he made a public declaration, that if any friend of Mrs. McDonald would pajr him back the sum paid by him, he would release the title to her. He insists, as the case now stands, upon the validity of his purchase.

The answer of McDonald, the husband, confirms the allegations in the answer of the wife.

The cause was heard upon bill and answers, and tramsmitted to this Court.

G. G. Wright, for the plaintiff, argued as follows :

1st. That the earnings of the wife, during the coverture, were the earnings of the husband, for which the husband could sue alone, or as matter of favor, j oin his wife. And that lands, so purchased, were, in Equity, the lands of the husband, unless under peculiar circumstances which do not arise in this case. But, where the legal title is in the wife, the husband has no such interest as is liable under the statute of 1812, because there is no estate as contemplated by that enactment. It is only a “jus merum,” a mere right to asubpcena for the declaration of a trust, as distinguished from a trust actually in esse, or the estate within the meaning of the act. Kelson v. Hughes, Jones’ Eq. vol. 2nd page, 37 — top.; also, Rev. Code, for the statute of 1812.

2nd. It cannot be claimed for tbe wife that she is a “ sole trader ” by any general law or particular custom. The policy of our law, with an eye to domestic harmony, has been against it; hence the supposed merger of the existence of the wife into that of her husband. A man cannot grant to his wife during the coverture, albeit he may devise lands, for that takes effect after the death of the devisor. He may covenant with, another to stand seized, or make a feofment to her use ; Litt. sec. 168, 1 vol. But he cannot covenant with her to stand seized, because they are one. She may be his agent, and if she buys with his money, she becomes his trustee, and the lands his. The husband may rejmdiate the contract out and out, but because he may assent to such agency, it does not change the relation of the parties, nor vest in her an interest which flows from the consideration paid by the husband. In ornease, the lands were purchased without consulting McDonald, without his knowledge, and at a time wdien he w-as confessedly insolvent. It is true, he assented aftenvards, but not until he had obtained credit upon the faith of lands purchashed ■with his money.

The case of Kee v. Yasser, Ire. Eq., vol. 2d, p. 553, presents the question between the executor and the wife of the testator:as between them, the law is plain enough, but how it would be, if the complainant had been a creditor, (which is our case) the Court, in that event, did not decide. The land was evidently bought without his knowledge at the time, and he had the right to insist upon a conveyance to himself; he was insolvent then, and ever afterwards, and he cannot now assent to an arrangement which, while it procures credit, withholds the means of payment. It would be a blind, a trap if it were so. Whatever right McDonald, after the purchase, had to call for the estate, to that right a bona fide creditor succeeds.

3rd. As to the other defendant, McLeran, he can only have what he got at la/w under his sheriff’s deed, wdiich was the bare possession. McDonald had nothing more; he wras not a tenant by courtesy inchoate, because a man cannot be that of a mere right.. The wife must be seized. And if McLeran got nothing, and is in possession of lands that do not belong to him, he holds upon an implied trust, for the benefit either of McDonald, or any dona fide creditor, as is substantially set forth in Page v. Goodman, Ire. Eq., vol. 8, page 16. He is a volunteer; his condition is that of a speculator, and cannot by any peferred Equity call for the estate to the prejudice of complainant’s right, who is a dona fide creditor.

4th. If it be insisted, that because McLeran got nothing, he is improperly made a party, the answer is, he is interested in the subject matter of the decree, and his rights to the possession, even, ought not to be passed upon without his being heard, because the prayer is a specific one, under the before recited case of Page v. Goodman; and this, too, whether he traverses the holding for the benefit of his co-defendant or not, for the reason before given.

5th. The case does not present that of a “ naked trust,’’ and, therefore, liable under the statute of 1812. It is not within the provisions of 13 Eliz., because it was no conveyance dy the husband to defraud creditors, and for that reason void. It is not within the statute of 1848, for protection of feme coverts’ estate, because not by descent or devise, but simply a mere right in the husband to have lands, purchased with his own money, to be declared his lands, and liable to his debts, to all of which rights, his creditors succeed, whether in the hands of the original holder or those of a voluntary purchaser at the sheriff’s sale.

Panics and Shepherd, for the defendants.

* This case, and the one following it, were decided at the last term, and omitted by inadvertence.

Pearson, J.

The plaintiff, -who is a creditor of the defendant McDonald, seeks to subject the land mentioned in the pleadings, to the payment of his debts, on the ground that, although the title is in the defendant, Eliza, the wife of the other defendant, yet the land was paid for with his money, and she holds the title in trust for him ; which trust Equity will subject to the claims of creditors.

The defense is, that the land was paid for with the earnings of the wife ; that the husband being an intemperate, thriftless man, long before the plaintiff’s debt was contracted, gave his wife the privilege of working for herself, and acting as a free trader, without being subject to his control, or to his marital rights; that she was a good seamstress, and by hard work, and economy, managed to support herself, and lay up enough of her earnings to pay for the land, and accordingly bought and paid for it, and had the deed executed to herself; which was also before the debt of the plaintiff was contracted. The case presents this question : does the doctrine of “pin-money,” by which, in the English Equity jurisprudence, a husband is allowed to give his wife the privilege of working for herself, acting as a free trader, and of acquiring profits by her earnings, and savings, which neither he nor his creditors can reach, obtain in this State?

After much consideration, we are satisfied that it does not; because it is inconsistent with our legislation in regard to the rights and duties of husband and wife, it is at variance with the habits and usages of our people, and tends to produce an artificial and complicated state of things; so that, while at law, the wife’s existence is considered as merged in that of her husband, her earnings are his, she cannot contract, or sue and be sued, in Equity she is entitled to her earnings — may act as a free trader, acquire property — -contract, sue, and be sued, in respect thereto.

Adams, in his treatise on Equity, page 42, says the rule that tire equitable ownership is subject to the same restraints of policy, as if the legal estate were transferred, has two singular exceptions: The one in what is called “separate use and pin-money trusts.” The other is what is called “ the wife’s equity for a settlement.” lie classes them together, and speaks of both as in equal violation of principle, and a departure from the maxim, eguitas-seguitur legem,.

In Allen v. Allen, 6 Ire. Eq. 293, it is settled that “ the wife’s equity for a settlement,” is a doctrine that does not obtain in this State. Ruffin, C. J., in delivering the opinion of the Court, says, in England, “ there arose the clearest case imaginable for the interposition of either the Legislature or the Chancellor, in aid of the wife’s claim for protection against destitution. It happened that the Parliament left the matter to the courts.” On which necessity, the chancellors based the doctrine. He then shows, that in this State, the Legislature has not left the matter to the courts; and then draws the conclusion, by a course of reasoning, which cannot be answered, that, in this State the wife has not an equity for a settlement. The same reasoning applies with equal force to the kindred doctrine of “pin-money,” and will show that it also is super-ceded by our legislation. In addition to the legislation relied on to show that the former is superceded, in regard to the latter, the act of 1828, Eev. Code, ch. 39, sec’s 1, 13, expressly provides for the cases, on account of which, the Engy lish Chancellors, in the absence of legislation, felt called on to devise and introduce the doctrine of pin-money / “When a man shall become an habitual drunkard, or spend-thrift, wasting his substance to the impoverishment of his family, liis wife may claim alimony.” “The court may decree that she may sue and be sued in her own name, and that all property she may procure by her own industry, or may accrue to her by descent, &c., shall be secured to her, and shall not be liable to the control or the debts of her husband, and on her death without a disposition by will, &c., it shall be transmissible in the same manner as if she were a feme sole.”

Our courts, therefore, have no pretext for adopting the doctrine of pin-money, even if it commended itself by a fitness to the state of things existing among us; but it is surely the part of wisdom, and conducive to the general good, to require wives, whose condition imposes upon them the necessity to becom & free-traders, to give notoriety to the fact, by having it made a matter of record, in such manner that all may know it, and that their rights may be protected, as well in the courts of Law, as in Equity, instead of leaving it to be arranged by secret agreement between husband and wife, thereby opening the door to fraud and perjury, by enabling the husband to sail under false colors — acquire credit, and avoid the payment of his debts, on the ground that he had allowed his wife to have her own earnings and acquire separate property.

Kee v. Vasser, 2 Ire. Eq., 553, was cited for the defendants. That case is distinguishable from this; for it was a contest between the wife, and the executor of the husband. It is, however, sufficient to remark in regard to it, that the point was not made, and the attention of the Court was not directed to its consideration. The Court simply cite the English cases on the subject, and do not enter into the question how far the doctrine is applicable here.

We thus reject another of those refined doctrines of equity jurisprudence, which render the English system so extremely ly artificial and complicated; and add “Pin-money” to the list of “ Part performance,” “The lien of a vendor for the purchase money.” “ The duty of the purchaser to see to the application of the purchase money,” and “The wife’s equity for a settlement.”

The plaintiff is entitled to the relief asked for against the defendants.

As the title was in the wife, and the creditors had only a right in Equity to convert her into a trustee, it follows that the husband had no interest which was liable to execution at law, consequently the defendant McLeran acquired nothing by his purchase, and if he had disclaimed, the bill would have been dismissed as to him with costs, but as he jnsists on a declaration as to his rights, the bill will be dismissed as to him without costs.

Per Curiam. Decree accordingly.