Case ID: sc-eq_16/html/0320-01.html
Source: Caselaw Access Project
Author: {"author": "Curia, per Johnson, Chancellor. Wm. Harper, J. Johnston, Benj. F. Dun-kin.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sibely & Morrison vs. Eliza F. Tutt.
    
    1. The holder of a bill of a bill of exchange never can recover, against the acceptor •of it, the costs and damages consequent on. a ’protest for non payment, and a return of ’the bill, on the drawer.
    2. Where the husband, after marriage, makes a settlement to the use and benefit of the wife, and the consideration expressed is, that she has relinquished some interest, which she held independently of her husband, as of inheritance, or her equity in personalty, there is no necessity for recording the deed of settlement m the secretary of State’s office, as required by the act of 1823, in cases of marriage settlements, the thing ■relinquished, and not marriage, being the true consideration; but when there is a voluntary settlement, by the husband upon the wife, and the consideration is natural love and affection, with the sum of five dollars pro forma, it is within the mischief intended to be remedied by the the statute and must be recorded according to the act or else it becomes void for want of recording.
    
      Heard before Johnston, Chancellor.
    Edgefield,
    
      June Term, 1841.
    The complainants state in this bill, that Richard H. Tutt, the late husband of the defendant being indebted to them in the sum of $1379 68, on the 26th January, 1831, gave them his promissory note for the amount, dated at Augusta, Georgia, and payable there, three days after date, and to secure the payment, mortgaged a tract of land in this district, described in the pleadings. That the said Richard H. died possessed of the said premises and, as they believe, of other real, and a considerable personal estate, and that the defendant, under various pretences, and without administration, has possessed herself of the whole of the estate, whereof he died possessed, pretending amongst (of 1) other things, that the said Richard H. Tutt, had, in his life-time, conveyed all his estate, including the mortgaged premises, to or, in trust, for her own use, which, if any such conveyance exists, they charge to be fraudulent ,and void. The prayer of the Bill is, that in default of the payment of the said sum and the interest, which complainants claim, at the rate of eght per cent per annum, that being the legal rate of interest by the laws of Georgia, and that the said mortgage be foreclosed.
    The defendant admits, by her answer, the execution of the note and mortgage, and states that they were executed under the following circumstances. She was entited, in her own right, to the sum £-1893 18 91-4, exclusive of interest, premium of exchange, <fec., in the 3 per cent, consols of England, and in conjunction with her husband, executed the necessary powers of attorney to Chamberlain Hinchcliff of London, for a sale. of the stock and a transfer of the fund; her husband having before received a larger portion of the funds, drew a bill of exchange on Hinchcliff for the balance, and sold the same to complainants. The bill was sent on to London, and on account of the absence of Hinchcliff, when it came due, was returned unpaid. The note and mortgage set forth in the bill, were then executed for the ' security of complainants against ultimate loss; the bill of exchange was, however, sent back by complainants to London, and there fully paid by Hinchcliff.
    The defendant further states, that her husband died in 1832, and that she has continued in possession of the raorgaged premises, and all the other property whereof he died possessed, since that time, not as executrix of her own wrong, but in virtue of a deed of trust, executed hj her husband on the 28th August, 1830, recorded in the-office of the Register of Mesne Conveyances, on the 6th January,, 1831, under which she claims all the property therein mentioned as separate property, which she alleges,, with the exception of a few articles of personalty, of little value, were purchased by her husband, with the avails of the funds in England, and that the settlement contained in the said deed, was made in pursuance of the promises' and agreement of the said Richard H. Tutt, frequently expressed, before the funds in England come into his hands, and steadily affirmed, up to the time of the execution of the said deed.
    The deed referred to in the answer, is of the date, and was recorded in the office of the Register of the Mesne Conveyances at the time therein stated. By it, Richard H. Tutt, in consideration of love and affection; and five-dollars paid, conveys to James Reggs, the mortgaged premises, a number of negroes, and other personalty in trust,, for the use of the defendant for life; remainder, in fee,, equally to be divided amongst his children and grand children, living at the time of his death. As stated in the answer, the defendant was entitled to funds in England, upon which her husband, Richard H. Tutt, had before drawn, and with the proceeds paid for the mortgaged premises, and from his frequent declarations to that effect, he appears to have had a settled purpose to settle the premises to the use of his wife and children, as an act of justice to them.
    The bill drawn by Richard H. Tutt on Hinchcliff, and sold by him to complainants, was for £236: 5: 4 English sterling, and bears date 1st. September, 1830, payable fourteen days after sight, to James Beggs, and endorsed by him, and was accepted by Hinchcliff, in London, on the 28th October, 1830, and was therefore payable on the 14th November, and was protested for non-payment, and returned to the complainants.
    The amount of the note mentioned in the bill, was made up by the sum metnioned in the bill of exchange, interest, costs of protest, and damages on the re-exchange; and the-complainants, by a receipt dated 26th January, 1831, reciting these circumstances, agree to remit to London, and use their endeavors to collect the bill, and to credit Ridli-ard H. Tutt’s note with the amount received thereon. The complainants, by their Solicitor, admitted at the bar, that they did remit the bill to London, and reovered and recieved from Hinchcliff the amount, and they claim no more than the difference between that amount, and the amount of the note mentioned in the bill. The difference may be thus stated in figures:
    Amount of Note due 29th January, . 1831; $1379 68
    Deduct amount of bill £236 6 4 sterling, in $1050 07 ) ,q Interest from the 14th Nov. 1830, to 12 12 \ the 29th Jan. 1831, when the note was given, at 6 per ct.
    Balance. „ 317 49
    This balance the complainants claim tobe due them, with interest, at the rate of 8 per cent per annum, from the 29th January, 1831, the time at which the note was made payable. .
    The defendant resists this claim, on the grounds:
    1st. That the complainants were entitled, and will be presumed to have recovered and received from Hinchcliff, the costs and damages consequent on his neglect to pay the bill after acceptance.
    2d. That the complainants are not entitled to foreclose the mortgage, because the deed of settlement was prior to it, in point of time, and the land was purchased with the money of the defendant, which was the true consideration, and not that of marriage; there was, therefore, no necessity for recording it in the office of the Secretary of State, as required by the Act of 1823, in case of marriage settlements.
    There can be no doubt as to the first question. There never was a case in which it was held that the holder -could recover, against the acceptor of a bill, the costs and damage consequent on a protest for non-payment, and a re-ton of the bill on a drawer. The rules of the law of merchants on that subject were framed for, and apply exclusively to the relation of the drawer, or the endorser, and the holder. Bain, Demshee & Co, vs. Ackwith, 1 Mill. Con. Rep. 107.
    In connexion with this question, it was insisted in the argument, that as the complainants, in the end, received from Hinchcliff the amount of the bill, they were not entitled to the costs and damages. But by recurring to the evidence, it will be seen that the bill was protested for non-payment, and returned to the complainants, which entitled them to demand the costs and damage from the drawer, and the amount having been included in his note, is an admission of his liability to pay it. The receipt of the 26th January, 1831, shows that in the further prosecution of efforts to recover the amount of the bill from Hinchcliff, the complainants acted as the mere friends or agents of Richard H. Tutt, and not on their own account, or for their own benefit.
    In Banks vs. Brown et al. 2 Hill, Ch. 566, it was held, that if, after marriage, the husband make a settlement to the use of the wife, in consideration of her having relinquished some interest which she held independently of the husband, as of her inheritance, or her equity in personalty, there was no necessity for recording the deed of settlement in the office of the Secretary of State, as required by the Act of 1823, in cases of marriage settlements; the thing relinquished, and not marriage, being the true consideration ; but that a voluntary settlement by the husband on the wife, was within the mischiefs intended to be remedied by the Act, and must be recorded.
    How are the facts here 1 Defendant was entitled to a considerable amount in English 3 per cent, consols, and joined her husband in a letter of attorney, to Hinchchiff, to sell them, with instructions to remit to them the proceeds; he did .remit a portion of them, and they were invested by the husband in the mortgage premises, in his own name. Now, it will not be denied, that if the husband, during the coverture, reduced to possession the monies, or other chattels of the wife, they vest absolutely in him, and that is precisely this case ; the money which he invested in the land, was, in law, his ow;n, and not the wife’s; the settlement to her use was, therefore, a marriage settlement, and void for want of recording.
    A merit is attempted to he made of the wife\s joining in the letter of attorney to Hinchcliff, and the settled purpose of the husband to invest these funds in property, to the use of the wife and their children; and there was certainly nothing wrong in this, if no one was to be prejudiced by it. But, according to the laws, of this State, and the English Common laws, and we know of no other on this subject pervading them, the husband, without the consent, and even against the will of the wife, had the right to dispose of the consols, and might constitute an agent for. that purpose ; nor is there more in the purpose of the husband, to invest the proceeds in property, for the use of the wife.
    For any thing that appears, that was merely voluntary, but if it be put on a footing of the contract, between the husband and wife, as remarked in the argument, notwithstanding the wife may do an act, by which she will be bound, as renouncing her inheritance, or relinquishing her equity, she will neither be bound by, nor can she take a benefit from a contract with the husband. ' If the settled purpose of the husband, or an agreement between the husband and wife, that the fortune acquired by her, notwithstanding it had been reduced to possession by the husband, constitutes, either severally or together, a sufficient consideration for a settlement, all the laws, regulating marriage settlements would be nugatory, so far as concerns the fortune, acquired by the wife; if good at all, they might be made to support a settlement at any indefinite future period, and would only become necessary, or be used, where the purpose was to defraud creditors or purchasers.
    It is therefore ordered and decreed, that unless the sum of three hundred and seventeen dollars and forty-nine cents, with interest thereon, from the 29th of January, 1831, to be computed at the rate of eight per cent per annum, until the same shall be paid, and the costs of this suit paid, and shall be paid to the complainant, on or before the-day of-now next ensuing, the commissioner shall forthwith advertise and sell the the mortgaged premises described in the pleadings, on a credit of-months, the purchasers to give bond and personal security, with a mortgage on the premises for the purchase money, and that the defendant from thenceforth be forever barred and precluded from her equity of redemption in the said premises.
    The defendant appealed on the grounds.
    1st. That the complainants, the holders of the bill, having, after its protest for non-payment, received the principal and interest thereof, from the acceptor, were bound, also, to have recovered the damages.
    2d. Because Richard H. Tutt, having, previous to the execution of the mortgage to the complainants, upon sufficient consideration, conveyed the mortgaged premises to James Beggs, in trust for the defendant, the said mortgage could have no lien of the said premises.
    3d. Because, supposing the deed to Beggs, for the benefit of the defendant, to be voluntary, as against creditors, or that it is a marriage settlement, yet it is good against complainants’s demand, because they had notice of it, before their mortgage was executed.
    4th. Because the decree was, mother respects, contrary to law and equity.
    Mr. Griffin, for the motion,
    cited Bailey on Bills, 387 ; 5 Greenleafs, Rep. 174; Sugden’s Law of Vendors, 470; 1 Roper, 319-321, an accession of fortune to the wife, after marriage settlement; Clancy, 196 ; 1 Hill Ch, 343; 1 McCord, 394; 1 Bailey, 49; recording is notice; 4 McCord, 294, a purchaser, with notice, cannot be relieved; 1 Hill Ch. 118.
    Bauskett, contra.
   Curia, per Johnson, Chancellor.

The Court concur, generally, in the decree of the Circuit Court. Some of the grounds of appeal seem, however, to deserve further notice: and first, with regard to the consideration of the deed of trust, the basis of the 2d ground of appeal, the evidence with regard to which, I propose to state more in detail. James Ferry, who was examined as a witness, stated that he was employed by Richard H. Tutt, to procure the fund, to which he was entitled, in right of his wife, the defendant, to he remitted to this country, and opened a correspondence with Whishaw & Sons, attor-nie of Gray’s Inn, London, for the purpose of having the stock disposed of to the best advantage. The stock was-sold, and Tutt wasauthorized to draw bills on Lond on, for his wife’s proportion, which he did, and received the money, amounting, as lie thinks, to $7000, or upwards. Whilst this correspondence was going on, and before the bills were drawn, he had frequent conversations with Tutt, in which he always expressed his determination, to-settle this fund on his wife and children. He was anxious that it should be done in England, before he received it, and witness made a suggestion of that sort, in one of his letters to Whishaw & Sons, and wa's under the impression, that a provisional settlement had been made there;; but was afterwards informed, that it had not been done. After Tutt had been authorized to draw on the fund, he remembers a conversation in the presence of his family, in which he expressed great anxiety, that his wife and children should enjoy the benefit. Charles Goodwyn, another witness, stated, that the land and all the other property, mentioned in the deed of trust to Beggs, was paid for with the funds transmitted from England. He heard Tutt say,, that the money should be settled on his wife and children. At the time of the execution of the deed of trust, Tutt was in debt and insolvent, and remained so up to the time of his death. He knows that defendant joined with her husband, in a power of attorney, authorizing some one to ol> tain the fund in England. Now, in all this, there is nothing to shew, thatthe defendant or her friends, entered into any treaty or agreement with her husband, in regard to the dispositions of these funds. The only act which she did, was to join her husband in the power of attorney, and if that was necessary to enable him to get possession of the fund, no condition appears to have been annexed to it; in every thing else, she appears to have been entirely passive. The consideration expressed in the deed, is love and affection, to which a nominal sum of money is added, pro forma7 and I am unable to perceive, how another consideration can be extracted from the circumstances before stated. A wife may contract with her husband, in relation to her rights, over which he has no control. In the Banks vs. Brown, it was held, that the renunciation, by the wife of her inheritance, in a large estate, in consideration that the husband had before made a settlement on her, was sufficient to support the settlement against creditors, altho’ not recorded in the office of Secretary of State. So in Prescott vs. Hubbell, a settlement in consideration of the wife’s renouncing her dower, in lands sold by the husband, was held good against creditors, though not recorded; and so in Price vs. While, Carolina Law Journal, 297; so in Ward vs. Shallet, 2 Ves. Senr. 16, referred to by counsel, a settlement by the husband on the wife, was supported against creditors, on the ground, that the wife, on a conference with her friends, agreed to release her contingent interest in a bond, which he considered she might do, the transanction being between her and her husband, with the privity of her friends. Here, there is no contract or, agreement between the busband and wife, or with her friends, as to the disposition of these funds; and the fact that Tutt took the conveyance of the lands, and the other property mentioned in the deed, in his own name, and not in trust for his wife, (inferred from the circumstance, that his deed was necessary to raise the trust,) tends to the inference, that it was with him, notwithstanding his professions to the contrary, a measure intended to protect his family from the consequences of his indebtedness and insolvency. The only evidence of notice, referred to in the third ground of appeal, is the recording of the deed, in the office of the Register of Mesne Conveyances; and if notice without recording be sufficient, and recording in that office be notice, so much of the Act as requires marriage settlements to be recorded in the office of Secretary of State, is a nullity— that cannot be. It must, as a marriage settlement, be recorded in both offices, to conclude, creditors. Appeal dismissed.

DAVID JOHNSON.

We concur.

Wm. Harper, J. Johnston, Benj. F. Dun-kin. 
      
      And Lord Hardiwielte, supported tile transaction, because there was a clear consideration, arising from the wife and her friends, which was the parting with her contingent interest under the bond.