Case ID: sc-eq_11/html/0385-01.html
Source: Caselaw Access Project
Author: {"author": "Chancellor Harper", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William. E. Perryclear, v. M. Jacobs and James Slowman.
    Before marriage J. S. executed a deed to the plaintiff as trustee, by which he settled on his intended wife, a legacy due to her. The deed was recorded in the mesne conveyance office, but not in that of Secretary of State. Suit had been brought before marriage for the legacy, and after marriage a decree obtained in the wife’s favor and the funds received by the solicitor employed to prosecute the suit, .who, at the instance of the husband, and without the concurrence of the trustee, accepted an order in favor of a creditor of the husband. On a bill by the trustee to declare the creditor’s claim invalid, and to have the settlement enforced, the Court decreed the trust fund recovered on the legacy, to be paid over to the trustee. [*505]
    The order was an assignment of the husband’s interest, but he had none, having previously parted with it by the settlement, which, though void, for want of recording as to creditors who could reach the fund without the aid of equity, was good between the parties. [506]
    As the creditors could only reach the wife’s choses in action in equity, the Court will, on his application to obtain the fund, make a settlement on the wife, or one being already made by the husband, enforce that. [*507]
    The husband and solicitor could not by their act change the rights of the parties ; and the acceptance of the order was a nullity. [*508]
    The wife has the right to a settlement out of her separate property, whether the application be by the husband or his assignees to obtain the possession, and an assignee for valuable consideration is subject to the same equity as the husband [*509]
    Creditors of the husband have no interest in the wife’s expectancy not reduced into possession, and if they trust him on the faith of it, it is at their peril. [*509]
    As the Court may compel the husband, on his application for his wife’s estate to make a settlement, so he may of his own accord make one, and that either of a part or the whole of her choses ; and his creditors should not object. [*510]
    In equity the husband may make an assignment of his wife’s choses for her separate use by parol; and although a deed of settlement not recorded is void as a mar- . riage settlement, it would operate as an assignment of his interest, and put the property out of the reach of his creditors. [*510]
    The recovery being for the wife’s separate use, the marital rights did not attach. [*510]
    Heard at Coosawhatchie, January Term, 1835, before Chancellor De Saussure, who delivered the following decree :—
    The bill states, that previous to the marriage of James Slowman with Sarah Oswald, a deed of settlement was executed, by which a certain claim, which she had as one of the legatees of George Stevens, was conveyed to plaintiff, as trustee, for certain uses therein set forth. That the deed of settlement was recorded in the office of the Register of mesne conveyance in Beaufort District, but omitted to be recorded, from ignorance of the law, in the office of the Secretary of State. That no portion of the legacy came into the hands of the plaintiff, but he was informed recently by the solicitor employed before the marriage to recover the legacy from the estate of Stevens, that by a decree of this Court, a certain *sum of money was due plaintiff, as trustee of Mrs. Slowman. D -* The solicitor also informed him, that he had accepted an order of James Slowman, in favor of Myer Jacobs, made after the marriage, and that he must retain that amount in his hands; and that other creditors of James Slowman would seek to make the legacy to Mrs. Slowman, when reduced to possession, liable for the debts of said Slowman. The plaintiff states, that as the legacy has never been in the possession of said Slowman, it may be considered as impounded in this Court, being in the hands of the solicitor, who recovered the same for Mrs. Slowman, from the estate of Stevens; and that the assignment of the husband, ought not to prevail against the equity of the wife, more especially as the husband had previously executed the deed, by which the right to the legacy was conveyed to plaintiff, as trustee for Mrs. Slowman. That plaintiff had refused to acknowledge the right of the said Myer Jacobs, to he paid out of the fund now in the hands of plaintiff’s solicitor in the suit under which the legacy was recovered. That as the marriage deed was recorded in the office of the district in which all the parties resided, and had been drawn up by the gentleman at the bar, then and now the attorney, solicitor and agent of the said Myer Jacobs, as well as of the said Sarah Slowman, this ought to be considered as notice of the existence of the deed of settlement. The bill, therefore, prays that the claim of Myer Jacobs may be declared invalid, and that James Slowman may be ordered to make a sufficient settlement of his wife’s property.
    The answer of James Slowman, admits the execution of the marriage settlement, and that he subsequently drew the order on the solicitor, who had recovered the legacy for Mrs. Slowman, in favor of Myer Jacobs, as before stated. That he did not mean thereby to defraud his wife and children, or to defeat their rights under the deed, but that having been informed that the deed was void, for want of being fully recorded according to law, he thought himself at liberty to draw the order he did, on the fund in favor of one of his creditors. That he is willing to do justice to his creditors as far as in his power, and also to his family, as the Court may order and direct.
    The answer of Myer Jacobs insists upon his rights under the order drawn by James Slowman on the solicitor, who recovered the legacy in question, which was accepted by him. The answer ^denies any r*gQg notice of the deed of settlement, and insists that the same not L being duly recorded, is void as to creditors.
    The facts appear to be, as stated in the proceedings, and upon them the question arises, whether the order of the husband, in favor of Myer Jacobs, to pay a debt of his own, on the solicitor who had recovered the legacy to Mrs. Slowman and held the fund in his hands, and which order the solicitor has accepted, is such an assignment of the wife’s equity, as will transfer to the said creditor a right to be paid out of the fund, to the prejudice of the wife and children. The uses and trusts expressed in the marriage settlement were, that the trustee should permit the said Sarah Oswald, and her assigns, to receive and take the rents, wages, profits and emoluments, and increase of the said legacy, to her sole and separate use and benefit, during her natural life, free from the control, debts or engagements of her intended husband, James Slowman, and her receipt to be a sufficient discharge to said trustee ; and upon her death in the lifetime of the said James Slowman, then the trustee should assign and transfer the said legacy or bequest, and the proceeds from it, to and among the children of the said Sarah Slowman.
    The question, as above stated, is whether under the circumstances of the case, the order drawn by James Slowman, the husband of said Sarah, the legatee, on the solicitor who recovered the legacy from the estate of Stevens, is such an assignment of his interests in the legacy bequeathed to his wife, as vested an interest in the assignee, to the prejudice and rights of the wife and children, under the deed of marriage settlement ? This order was an informal mode of assigning any interests which the husband might have in the legacy, but as there is no particular mode prescribed by law, for transferring such an interest, I am of opinion that it may be considered well enough to carry whatever interest the husband had in the legacy, to the extent of the order. The question then arises, what interest had the husband in the said legacy ? If there had been no marriage settlement, the husband would have had such an interest therein, as to have been able to assign the same, and if the assignee could have obtained the interest assigned, without coming to this Court for its aid in procuring the fund, he would be able to hold it. But if he were obliged to come to this Court for its aid, that would not be furnished without a proper provision for the wife out of the fund. In this case, however, *there was a marriage settlement, duly executed before the marriage, by which the husband had joined in conveying to a trustee, this legacy then unrecovered, to the sole and separate use of the wife, free from his control of debts, and after her death to her lawful children. By that instrument the husband parted with all the rights and interests which he might have acquired by the marriage, and of course the right of transferring or assigning any in the legacy in question, to his creditors. It is, however, argued, that the marriage settlement, not having been recorded, according to the provisions of the statute, the same is void, and that the creditors of the husband have a right to avail themselves of the defect, and obtain payment of the debts due to them out of the fund. There is no doubt, that the non-recording the instrument according to law, avoided the same as to creditors, and they are at liberty to enforce their legal processes as far as the same could be used. But a power to enforce their legal remedies would not enable them to touch a legacy, or money, in the hands of an attorney or solicitor; an execution could not be levied on it. Then it can be reached only by application to this Court, on the equitable rights of the parties. Now, if we examine these, it appears that the husband had parted with all the interests he might acquire to the legacy in question, by executing a marriage settlement to.a trustee for the benefit of his wife and children. That instrument was void as to creditors for wa;it of due recording; but it was valid as between the parties. The husband was bound by it, and however his creditors might lay hold of the fund, if they could get at it by legal processes, the husband could do no act to affect it. He was not at liberty to assign it to his creditors or any body else, and they could not, by the order of the husband, who had parted with all his rights to the trustee, acquire any power over this equity. If the solicitor, who had been employed to recover the legacy for the trustee of Mrs. Slowman, had not accepted the order of the husband, to be paid out of the fund in his hands, the creditor, Mr. Myer Jacobs, must have come here to obtain the effect of his order, and his equity would have been resisted by the equity of the wife, which existed independent of the settlement. But the acceptance of the order by the solicitor, has in some degree changed the situation of the parties, and obliged the trustee to come here for protection. The question arises, was the solicitor at liberty to do so ? For *5081 ^le PurPose recovering the legacy he was the agent of the -I trustee for the benefit of the cestui que use, and when recovered, he had no authority over the fund. It was at the disposal of the trustee, aud should have been paid over to him who was the real employer. lie had no authority to change the situation of the parties by any act of his, or his own position as the solicitor of the trust estate, for that of a stakeholder. It was for the Court to decide what effects flowed from the non-recording the marriage settlement. The act of acceptance by the solici- or, was, therefore, a nullity, done no doubt with good intentions, and to promote, as he thought, the purposes of justice. But he transcended his powers, for it is understood he had no authority from the trustee to accept orders or make payments to the husband’s creditors, out of the trust fund in question. The acceptance, then, being put out of the way, the plaintiff is entitled to a decree, directing that the fund be paid over to the trustee. Should the creditor, however, be disposed to persevere in his claim, he may still, perhaps, file his bill, and seek his redress against the trustee and the trust fund.
    It is ordered that the trust fund recovered on the legacy be paid over to the trustee.
    Defendant, Jacobs, appealed on the following grounds :
    1. Because Slowman’s order on his solicitor, in favor of Jacobs, for four hundred and eighty-five dollars, was a legal and valid assignment of so much of his wife’s legacy, and being for valuable consideration, gave the assignee a claim paramount to the rights of the trustee under the unrecorded deed of marriage settlement.
    2. Because the assignee is a bona fide and fair creditor, as well as a purchaser for valuable consideration, without notice, and is, by the principles of equity, as well as by the positive enactments of the Legislature, entitled to payment from the property covered by the marriage settlements.
    
      3'. Because, if the defendant, Jacobs, can procure redress, as the Chancellor intimates in his decree, “by filing a bill against the trustee, and the trust fund,” the decree in this case should have been in his favor, inasmuch as all the parties to be affected by such a decree, as well as the fund itself) were in Court.
    4. Because there is nothing in the showing of the plaintiff, to give jurisdiction of his case to a Court of Equity, as against the defendant, Jacobs.
    *5. Because the decree is in other respects contrary to the prin- r*-™ ciples of equity, as is settled by decided cases, and contrary to *- the unc'ontradicted facts in the defendant’s (Jacob’s) answer, and ought to be reversed.
    
      Treville, for appellant.
    
      A. M. Smith, contra.
   Chancellor Harper

delivered the opinion of the Court.

The right of the wife to a settlement out of her separate property, which is subject to the jurisdiction of this Court, is too well settled to be questioned. As is said by Chancellor Kent, in Kenney v. Udal, 5 John. Ch. Rep. 464, “the wife’s equity attaches upon her personal property, when it is subject to the jurisdiction of this Court and is the object of the suit, into whatsoever hands it may have come, or in whatever manner it may have been transferred. The same rule applies, whether the application be by the husband, or his representatives or assignees, to obtain possession of the property, or whether it be by the wife or her trustee, or by any other person partaking of that character, praying for a provision out of that property.” An assignee, even for a valuable consideration, stands in the same situation with the husband, and is subject to the same equity, when he comes to seek for the wife’s property. Creditors of the husband have no interest whatever in the wife’s expectancy, not yet reduced into possession, and if they think proper to credit him on the faith of it, it is at their peril. The case of Elibank v. Montolieu, 5 Ves. 737, is one in which the bill of the wife was sustained against the husband and the administrator of an estate of whioh she was entitled to a distributive share, and who was also a creditor of the husband, and claimed to retain the fund for the satisfaction of his debt. But the Court, not questioning but that he might retain as against any right of the husband, held that he was in no better situation than the husband, and decreed a settlement. In Carr v. Taylor, 10 Ves. 574, a bill was sustained by the wife against an administrator and the assignees of a bankrupt husband. . If the husband obtains actual possession of the property, it is out of the reach of the Court; but while it is within the control of the Court, it will enforce the right of the wife.

But what the husband may be compelled to do by the Court, *he „ may certainly do of his own accord. He may make a settlement L & ü of his wife’s expectancy upon her, and creditors cannot impeach it. The Court, in directing settlement, generally, orders a reference to ascertain the proper settlement. But if the husband should assent, it would, as of course, order a settlement of the whole property, and creditors could not be heard to object to it. He may assign his wife’s legacy in the hands of the executor to a trustee for the wife’s separate use; and certainly I suppose such a trustee might maintain a bill against the executor, for the benefit of the wife. But in equity, an assignment may be made on sufficient consideration, by parol merely. There can be no doubt but that the equity of the wife is a sufficient consideration; and I do not see how such an assignment of the wife’s legacy could be questioned. Notwithstanding the decision of the Court, in the case of Price v. White, (Carolina Law Jour. 297,) where a written settlement was actually executed, I do not perceive how any question could arise as to the necessity of recording such parol assignment. If the executor should pay over to such a trustee, it would still be the wife’s chose in action; which neither the husband nor creditors could touch without the aid of this Court or some Court of concurrent jurisdiction, and still subject to the wife’s equity, if they should attempt to reach it. And no prejudice could arise to creditors, by misleading them to credit the husband, on the appearance of property in his possession, if the trustee retained the money or any other property in his possession, and paid over the rents and profits to the wife. If he should permit chattels to go into the hands of the husband, this might, perhaps, be construed a surrender of the trust, and the marital rights attach upon them, so as to render them liable to creditors.

In this case, we are to regard the defendant, Slowman, as having assigned the legacy to the plaintiff. If the solicitor received the money merely as the agent of Slowman, then I think it is the same thing as if Slowman himself had recovered it, and he must be regarded as having reduced it into possession. But if, in consequence of an understanding between Slowman, his wife, and the plaintiff, he was directed to receive it, and pay it over to plaintiff for the separate use of the wife, this was, in effect, an assignment to plaintiff, and the solicitor’s receipt of the money was plaintiff’s receipt. To the plaintiff alone was the solicitor responsible for it, and Slowman’s subsequent assignment of a part of *the J same fund to the defendant, Jacobs, was a mere nullity ; and this, entirely independent of any effect to be given to the marriage settlement. The husband has never had possession ,of the money, and whether in the hands of the solicitor or the plaintiff, is still the wife’s chose in action.

The Chancellor states that the solicitor received the money as the agent of plaintiff. But it is supposed, in argument, that this may have been a mistaken impression. But all the circumstances of the case indicate that he did not act merely as the agent of the husband. He was the solicitor of the wife in the suit for recovering the legacy before the marriage, and when, after the marriage, the husband became a party to the suit, he continued the solicitor of husband and wife. As soon as he received the money, he advised the plaintiff of it, and, as it was agreed at the hearing, paid over the principal part of the fund. How is it possible to account for this, but by such an understanding as I have supposed ? The deed itself, however void it may be as a marriage settlement, and though we give it no greater effect than if it had been a mere verbal agreement in consideration of marriage, yet furnishes plenary evidence of the understanding and agreement of the parties, to assign the legacy to plaintiff. It shows that the solicitor received it for the plaintiff, and that he is the proper person to maintain the suit for it. It is possible that the money might have been recovered of the solicitor by a different proceeding. But the plaintiff is entitled to have the rights of his cestui que trust declared, as against tbe husband and bis assignee, Jacobs. He comes here properly, to give effect to the assignment.

The Chancellor’s decree is therefore affirmed.

Chancellors De Saussure and Johnson, concurred.

Chancellor Johnston, dubitante.