Case ID: ky_55/html/0482-01.html
Source: Caselaw Access Project
Author: {"author": "Judge Simmon", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Burch and Wife, &c. vs. Breckinridge, &c.
    APPEAL FROM I-IBNDERSON CIRCUIT.
    X. The act of 1796, subjecting trust estates to the payment of the debts of the cestui qui trust, has no application to the separate estate of a feme covert.
    
    2. As a general rule a feme covert cannot, according to the common law, contract as a feme sole, nor as such sue or. be sued. Courts of equity acting upon this principle, have held that a feme covert cannot bind herself personally, nor bind her separate estate by her general personal engagements. (2 Roper, side page 235; 10 B. Monroe, 320.)
    3. A feme covert may charge her separate estate whenever she thinks proper to do so. This intention must be manifest. It is not sufficient that she create debts. There must be an agreement express or implied to charge her separate estate.
    4. The execution of a note, or endorsement of a bill of exchange, has been regarded as manifesting an intention by a feme covert to charge her separate estate. (7 B. Monroe, 293; 13 lb., 384.)
    5. Land, the separate property of a feme covert, cannot be made liable to satisfy debts created by verbal contracts. She cannot alien by parol, nor can she charge it by parol contract, (2 Atkins, 379,) otherwise in respect to her personal estate, where the charge will be limited by the intention to charge it.
    6. The trustee holding the title to the separate estate of the wife, cannot charge the same with her debts — her consent is indispensibie.
    7. Where infants appear in court on their own petition to be made parties, process is not necessary; that the court appointed a guardian ad litem to answer, was sufficient.
    On the 19th day of October, 1841, Alex. M. Burch conveyed to James K. Burch certain slaves and other property in trust for the benefit of his wife, Elizabeth M. Burch, during her life, with remainder to the children of said Alex. M. and Elizabeth M. Burch. The deed of trust was duly recorded in the county court clerk’s office of Fayette. All the property specified in the deed of trust belonged to Elizabeth M. Burch before the marriage. In 1848, by a decree of the Fayette circuit court, James P. Breckinridge was appointed trustee in the place of James K. Burch, who declined farther to act. Debts to a considerable amount were contracted by Mrs. E. M. Burch foi the support of herself and family, and Breckinridge, the trustee, had made considerable advancements to her. In 1849 he filed his bill in the Henderson circuit court where all the parties lived, asking a settlement of his accounts as trustee, and the payment of the debts contracted by Mrs. Burch for the support of herself and family; and that a sufficiency of the trust property be sold to pay the debts, and that another trustee be appointed. Various persons, claiming to have demands against Mrs. Burch, were made parties, who set up claims; and the infant children of A. M. and E. M. Burch were also made parties at the instance of their father as their next friend. The circuit court on final hearing removed the trustee, and decreed that the various claims set up against the trust estate (amounting to about $4,000) be paid, and that the life estate of Mrs. Burch in so many of the slaves as should be necessary to pay the demands should be sold, and the proceeds applied to that purpose; and that the purchaser be required to give bond to A. M. Burch and Helen M. Burch, the two infant children, to surrender the slaves, if living, upon the death of E. M. Burch, and in the mean time not to remove them out of the state.
    From that decree Burch and wife, and the heirs, have appealed to this court.
    
      James Harlan for appellants—
    Relied upon the following grounds for the reversal of the decree:
    1. The proper parties were not before the court. James K. Burch, in whom the legal title in the property was vested by the deed of trust of the 19th of October, 1841, was a necessary and indispensable party to the suit.
    2. The children of the appellants (Alexander M* and Helen M.) were not properly before the court. Neither of them was served with process; nor was any order made appointing a guardian ad litem to defend for them; nor was any time given them after they arrived at full age to show cause against the decree. (2 Marshall, 235; 3 Marshall, 143 ; 4 J.J. Marshall, 567; 1 Dana-, 369.)
    3. The exceptions of the appellants to the report of commissioner Rankin, should have been- sustained by the circuit court.
    4. The court erred in rendering, a joint decree against the husband and wife for the supposed debts of the latter. No decree should have been rendered against the husband.
    5. The decree subjecting the trust property to the payment of either of the claims set up against it is-erroneous. If the trust property were liable, that liability could only extend to the unappropriated profits.
    6. The court had no power to render a decree exceeding the annual profits of the trust property.
    
      7. The rights of those entitled in remainder were-not properly secured by the decree.
    8. The court erred in decreeing that the property, to-wit, the life estate of Mrs. Burch, should be sold in satisfaction of the claims set forth in the pleadings.
    9. The decree is for more tlian the- evidence authorized, admitting the complainants were entitled to a decree for any amount.
    10. The same grounds are relied upon for’the reversal of the decree upon the writ of error prosecuted in the names of Alexander M. Burch, the younger, and Helen M. Burch, children of the appellants.
    
      L. W. Powell for appellees—
    1. It is contended by appellants that James K. Burch, the first trustee, was a necessary party. He had no- interest in the controversy. The only interest he ever had was as trustee; from that he had been removed by the chancellor, who had ample power to do so. And by his removal and the appointment of another trustee to carry into effect the trust, the title to all the property passed' to- the se~ cond trustee. (See Hill on Trustees,p. Hi) The appointment was made in accordance with an express provision in the deed of trust, that “in case of the 'death of the trustee, or his inability to act, the Fayette chancery court shall have power to appoint a new trustee, who shall have the powers, rights and titles vested in the said James K. Burch.” The record shows the appointment of J. P. Breckinridge. It is so alleged in the bill, and admitted in the answer.
    2. It is also contended that the infant children were not regularly before the court. They, by their father as next friend, filed their petition to be admitted as parties — they were made parties by the order of the court. It was .not necessary that process should issue against them in such a state of case —(see Gashwiller's heirs vs. Mcllvoy, 1- Mar shall, 85)— a guardian ad litem was appointed for them.
    The decree was properly rendered against A. M. Burch and wife. His interest is only affected so far as he might have a benefit from the life estate of his wife in the property. The interest of the children to the remainder .is well protected by the bond required by the decree .of the court. They have no interest in the property until the death of their mother, and it was therefore erroneous to give them day .after their arrival of full age to show cause against the decree. There is no decree against them or their interest.
    3. The circuit court did not err in decreeing satisfaction of the debts by a sale of the interest of Mrs. Burch in the trust property. The debts were contracted by Mrs. Burch for the benefit of herself and family, and it was understood by her, and those who credited her, that the credit was given upon the faith of the trust property; that A. M. Burch, the husband, was insolvent, and that she had no other estate but that held in trust.
    The statute of 1796 makes the interest of the cestui 
      
      qU{ trust liable for debts as estates held in fee. (Slat.. Lctii, 443.)
    
      1. The act of 1796,subjecting trust estates to the payment of the debts of the cestui qui trust, has no application to the separate estate of a feme covert.
    
    2. As a general rule a feme covert cannot, according to the common law, contract as a feme sole, nor as such sue or be sued. Courts of equity acting up on this principle have held that a feme covert cannot bind herself personally, nor bind her separate estate by her general personal engage ments. (2 Roper, side page 235; lOJJ.Hfore., 320.)
    3. A feme covert may charge her separate estate whenever she thinks proper to do so. This intention must be manifest. It is not sufficient that she create debts. There must be an agreement express or implied to charge her separate estate.
    
      It would require an unreasonable length of time to pay the debts, amounting to about $4,000, out of the hire of the slaves, which would not exceed $600 a year, and by the death of some of the most valuable of the slaves, or the early death of the tenant for life, payment might be wholly defeated. We insist on an affirmance.
    January 10.
   Judge Simmon

delivered the opinion of the Court.

The act of 1796, subjecting estates held in trust to the payment of debts, has no application in a case of this kind. The deed vests in the wife a separate estate, which belongs to her, exclusive of her husband, and which in many respects is entirely dissimilar to other estates that are held in trust. (Sharp vs. Wickliffe, 3 Littell, 12.)

As a general rule, a married woman cannot, according to the common law, contract as a feme sole, nor as such sue or be sued. That being the legal rule, courts of equity acting in conformity with it, have held that the wife cannot bind herself personally, nor bind her separate estate, by her general personal engagements. If, therefore, the wife contracts debts generally, without doing any act indicating an intention specifically to charge her separate estate with the payment of them, a court of equity will not direct an application of such estate to be made for that purpose. (2 Roper, side page, 235 ; Coleman vs. Woolley's ex’r, 10 B. Mon., 320.)

Courts of equity, however, as a consequence of the doctrine established by them, that a married woman may have and enjoy separate estate, enable her to deal with it, and to alien or incumber it, when she shows an intention so to dispose of it, but that intention must be manifested by her, otherwise her separate estate will not be held liable. Its liability for her debts does not arise out of their creation merely. but out of an agreement by her, either express or implied, that it shall be liable for their payment.

4. The execution of anote, or endorsement of a bill of exchange has been regarded as manifesting an intention by a feme covert to charge her separate estate. (7 B. Mon., 293; 13 lb., 384.)

5. Land, the separate property of a feme covert, cannot be made liable to satisfy debts created by verbal contracts. She cannot alien by parol, nor can she charge it by parol contract, (2 Atkins, 379,) otherwise in respect to her personal estate, where the charge will be limited by the intention to charge it.

It has been held by this court, that the execution by a feme covert of a bond or a promissory note, or the endoi-sement by her of a bill of exchange, should be regarded as a sufficient indication of her intention to charge her separate property with the payment of the debt. In such cases, although no reference be made to her separate estate, the execution of the security is deemed to be an implied agreement on her part that it shall be liable for the demand. (Jarman, &c., vs. Wilkerson, 7 B. Mon., 293; Bell & Terry vs. Kellar, 13 B. Mon., 384.)

The extent to which her separate property may be subjected to the demands of creditors, claiming under parol agreements, has not been determined by this court. So far as the separate property consists of land, it cannot be made liable by a verbal contract. The wife cannot alien or dispose of her real estate except by a written agreement, and as a charge upon it for the payment of debts operates as a disposition of it pro tanto, it can only be created by a contract in writing. (Clark vs. Miller, 2 Atk., 379.) But with respect to her other separate estate, consisting of personalty and slaves, where she has verbally agreed that part of it shall be appropriated to the payment of a debt which she is about to create, there seems to be no good reason why this agreement should not be regarded as constituting a charge upon it. Where, however, a verbal agreement is made, without any reference to her separate estate, then it will not be bound, unless the circumstances are sufficient to prove that, in fact, the understanding between her and the person with whom she has contracted. was that it should be liable. But where there is no express agreement, and one arises only by implication, a court of equity will not allow such implied agreement to extend to any except that part of the estate which, it may be inferred from the circumstances, the wife intended to charge with the payment of the debt.

6. The trustee holding the title to the separate l estate of the wife cannot charge the same with her debts— her consent is indispensable.

Now, applying these principles to the demands asserted in the present suit, and the right of the creditors to any relief is very questionable. No express agreement by the wife to charge her separate estate for the payment of these debts, was either alleged or proved. The mere fact 'that they were contracted by her, does not, as we have seen, render her separate estate liable for their payment. Were they, then, contracted under such circumstances as will justify the presumption that the contracting parties understood that they were to be a charge upon her separate property? The wife did not, when the debts were created, live apart from her husband, nor is it shown that he was insolvent. The only circumstance from which it can be inferred that an understanding existed, both on her part and the part of the creditors, that the debts were to some extent to be a charge upon her separate estate is, that the accounts were created in the name of the trustee, as may be presumed with her knowledge and consent, inasmuch as she executed receipts to him for some debts which had been created in the same manner, and had been paid by him. The agreement of the trustee that her separate property should be liable for the debts, cannot create any charge upon it. Her own contract is indispensably necessary for this purpose, and such a contract on her part can only be implied in this case from the fact that she knew her creditors looked to her separate property for the payment of their debts, and with this knowledge continued to deal with them, and permitted her trustee to pay the debts thus contracted by her, out of her estate. On this ground, we think her separate estate should be chargeable with the payment of these debts.

But the question still arises as to how far a court of equity will extend this implied agreement by her, that her separate estate should be liable for the payment of these debts. They were all created merely for the current expenditures of the family; none of them arose out of a contract for the purchase of land or slaves, or for any property but such as would be consumed in the use. 'It cannot be presumed, in the absence of any express agreement to that effect, and without the execution of a security in writing, that she intended to create a charge on the principal of her estate, and subject it to sale for the payment of store accounts and other current family expenditures. The only reasonable and legitimate presumption is that she intended the profits of her estate to defray her current expenses, and a court of equity should not carry the implication against her to any greater extent. If parties deal with a married woman, without any express contract in reference to her separate property, they have no reason to complain if, in furnishing her with articles for consumption merely, they are restricted to the profits of her estate, and are not permitted to subject the estate itself to sale for the payment of their demands.

It is true, that in this case the defendant has been improvident, having in less than two years incurred a debt of some four thousand dollars, when the annual profits of her estate did not probably exceed some five or six hundred. But her trustee, instead of checking this improvidence on her part, seems rather to have encouraged it, by advancing her money, paying off her bills, and taking receipts from her for the whole of it. From these acts of his, she may have inferred that the profits of her estate received by him were sufficient to meet all these disbursements, as he only required her to execute receipts to him as her trustee, and never intimated to her that a sale of any part of her separate estate would be necessary for their payment. He clearly has no claim against any part of her estate except the profits. It cannot be presumed that by executing receipts to him for money, she intended to charge any part of her estate but that which came into his hands as money. He could not, by the terms of the trust, convert any part of the trust estate into money, except the profits. — ■ If any of the property itself were sold, the proceeds were, by the terms of the trust, to be re-invested, and the property purchased was to be subject to the same restrictions and limitations that the property sold had been subject to. The trustee, to put the most charitable construction on his conduct, acted with great indiscretion, and without a due regard to his duty, in creating a debt against his cestui qui use, exceeding very considerably the profits of her estate, and that in a manner which was calculated to induce her to believe that he had the money in his hands, and only wanted her receipts to show how it had been appropriated. Under these circumstances, it is equitable and just that the payment of his debt should be postponed, without interest, until the debts due to the other creditors be paid out of the hires of the wife’s slaves.

No part of the wife’s separate property, except the hire of the slaves, is to be subjected to the payment of any of the demands asserted in this suit.— These hires must be first applied to the payment of such debts, excluding that due to the trustee, as was contracted by the wife, or by her order. For these debts no personal decree should be rendered against the wife, but the decree for their payment should be in rem against the profits of her estate, the land excepted. They should be paid ratably out of the annual profits until they are discharged ; and then these profits should be applied to the payment of the debt due to the trustee. The profits of the land are not subjected, because a disposition of the anticipated profits of real estate, is substantially a disposition of the estate itself, during the time that the profits are disposed of, and a contract to effect that object must be in writing. Besides, in creating an implied agreement on the part of the wife to charge the profits of her separate estate, it ought not to be presumed that she intended to divest herself entirely of all means of support; and for this reason, also, this implied agreement should not be extended to the profits of her real estate.

7. Where infants appear in court, on their own petition, to be made parties, process is not necessary; that the court appointed a guardian ad litem to answer, was sufficient.

With respect to the errors assigned by the infants on the writ of error sued out by them, none of them seem to be available, except the one relating to the merits of the decree. As they were made parties upon their own petition, they were in court, and the service of process upon them was unnecessary. A guardian ad litem was appointed for them by the court, and their answer was filed by him. If it had been proper to decree a sale of their mother’s life estate in the slaves, their interest in remainder was as well guarded and secured by the decree as it could be, and they were not prejudiced by the omission to give day to show cause against it. But a sale of the life estate was more prejudicial to them than the annual hiring of the slaves would be, because their estate in remainder will be in less jeopardy, and be subjected to less hazard, from the latter, than it would be from the former mode of subjecting it to the payment of these debts. The purchaser of the life estate might remove the slaves to parts unknown, and he and his security in the bond, which he vvas required to execute to have them forthcoming, might both become insolvent before the expiration of the life estate. This hazard will not be incurred when the slaves are only hired by the year, so that the decree, as rendered, was prejudicial to the children, as well as to their mother.

As the wife has the right to sell her estate for life in any of her separate property, she may do so if she thinks proper, for the purpose of creating in that way a fund for the payment of these liabilities, instead of having them discharged in the manner pointed out in this opinion.

Wherefore, the decree is reversed upon the appeal taken by the husband and wife, and also upon the writ of error prosecuted by the children, and cause remanded with directions to ascertain what amount of the debts sued for were contracted by the wife, or by her order, and forfurther proceedings and decree in conformity with this opinion.