Case Name: Crouse v. Morse et ux.
Court: Iowa Supreme Court
Jurisdiction: Iowa
Decision Date: 1878-10-24
Citations: 49 Iowa 382
Docket Number: 
Parties: Crouse v. Morse et ux.
Judges: 
Reporter: Iowa Reports
Volume: 49
Pages: 382–391

Head Matter:
Crouse v. Morse et ux.
1. Conveyance: mistake rtf fact: husband and wife: trust. Tlie defendants purchased, with the separate means of the wife, certain realty, which was conveyed to her. They subsequently exchanged it for other realty, the deed for which was, by mistake, executed to the husband as grantee, and so recorded, without the knowledge of the wife. The husband afterwards signed a note as surety, and was accepted as such upon the credit established by his apparent ownership of the property in question. But before the maturity of the note he conveyed the property to a third party, who conveyed to the wife: Meld—
1. That as between himself and wife the husband became her trustee, and could have been compelled to convey to her.
2. That the husband, being indebted both to plaintiff and to his ■wife, could elect to paj' the debt of the one to the exclusion of the other.
3. That no lien having attached the husband, by the conveyance, was able to vest a full and perfect title in the wife.
Under the facts as stated, Day, J., dissenting. holds that the wife is estopped to show that her husband was not the real owner, and that the title to the property was in herself.
Appeal from Pottawattamie District Cowt't.
Thursday, October 24.
This is an action in equity to subject certain property — the legal title to which is in the defendant Frances C. — to the payment of a judgment recovered against J. W. Morse. The court dismissed the petition, and plaintiff appeals. The facts are stated in the opinion.
Clinton, Ilart & Breiver, for appellant.
Montgomery & Scott, for appellee.

Opinion:
Seevers, J.
The facts in this case are as follows: "The defendants, J. W. and Frances C. Morse, are husband and wife, and were married in 1863. In 1864 or 1865 they purchased, with the separate means of Frances C. Morse, the undivided half of lot 2 in Palmer's block in Council Bluffs, and the same was conveyed to Frances C. Morsa. In 1867 the defendant Frances C. Morse, acting through her agent, J. W. Morse, exchanged this property with H. C. Nutt for lots 1 and 2 in Jeffries' subdivision to Council Bluffs. H. C. Nutt executed the deed for this property to the defendant J. W. Morse by mistake. J. W. Morse did not know that the deed was executed to himself until it was returned from the recorder's office, soon after the deed was executed, and Frances C. Morse did not know it until this siiit was instituted. In December, 1869, the plaintiff, through her husband and agent, W. S. Crouse, sold to A. J. Scoville certain hotel furniture. When the sale was first contemplated deferred payments were to be secured by mortgage upon the property sold. In consummating the transaction the mortgage security was waived, and instead thereof J. W. Morse signed the note as surety. W. S. Crouse, as plaintiff's agent, previous to accepting J. W. Morse as security, searched the records and ascertained that he owned and held in his own name, as shown by the records, the property in controversy, and upon the strength of this he was taken as security upon the note and mortgage was waived. The note being about to mature, J. W. Morse, for the purpose of placing the title in his wife, where it belonged, but with no fraudulent intent, on the 23d day of May, 1870, conveyed the property in controversy to his brother, H. S. Morse, who, on the 16th day of following June, conveyed said property to the defendant Frances O. Morse. On the 1st day of August, 1870, suit was instituted upon the note above referred to, and at the March Term, 1871, judgment was rendered for six hundred and seventy-two dollars and eighty-two cents, which is unsatisfied. Seoville had no property out of which the debt could be made after it matured, and J. W. Morse is insolvent. "
An opinion, concurred in by a majority of the court, was filed at a former term reversing the judgment of the court below on the ground that Mrs. Morse was estopped from setting up or claiming title to the aforesaid real estate.
A petition for a rehearing was filed in which it is suggested that, conceding J. W. Morse to be the legal owner of the property, still, as the plaintiff had no lien thereon, Morse could have sold and conveyed to a stranger at the time he conveyed to his wife, and that the title of the former would have been perfect as against the plaintiff.
On this ground a rehearing was granted. The view above presented was not considered by the court when this case was formerly before us.
Without impugning the former opinion, or in any manner adhering thereto, we are constrained to believe only a partial view of the law applicable to the facts was therein considered, and that the conclusion reached was incorrect, and cannot be supported. Our reasons will be briefly stated.
When the conveyance was made to J. W. Morse by Nutt, he became, as between himself and wife, a trustee, and held the title in trust for her, and she could, we incline to think, by an appropriate proceeding in equity, have compelled him to convey to her; or, if he refused to convey, an indebtedness to the extent or value of the property would have been created. The relation of debtor and creditor would have existed between Morse and his wife, • and there is no rule of law that will prevent the debtor from' paying such debt.
It has been held under the Revision, time and again, that! a wife may acquire and own property, both real and personal, in her own right. She may loan her husband money and take obligations therefor (Logan v. Hall, 19 Iowa, 491), and in case her husband becomes insolvent and makes a general assignment she will share pro rata with other creditors. In the matter of Alexander, 37 Iowa, 454.
We deem it immaterial whether under the Revision a wife could sue her husband or not, for, as has been said, he could at least voluntarily discharge any legal obligations resting on him, if done in good faith and without fraud.
To say the least, J. W. Morse was indebted to both the plaintiff and his wife. Both debts were equally meritorious. Neither had a lien and their equities were equal. It was, therefore, both legal and competent for either, by the use of any legal means and the greater diligence, to have obtained a lien on the property in question, or payment of the amount due from the common debtor to the exclusion of the other; or such debtor could voluntarily pay or secure one to the exclusion of the other.
It was held in Chase, Merritt & Blanchard v. Walters, 28 Iowa, 460, "that where two or more bona fide creditors are engaged in a race for priority, the one it cannot have his right defeated and postponed to a tardy or less fortunate one, by showing the fraudulent motive and knowledge of it by the creditor which prompted the debtor to give such priority."
It is unnecessary to go this length, because there is no proof of a fraudulent intent on the part of any one.
It has been held, under the Revision, if a wife leaves personal property under the control of her husband, and he, while so in possession, becomes indebted, that such property may be seized on execution therefor, unless she has filed the notice required by section 2502. Stewart v. Bishop, 33 Iowa, 584, and other cases.
This statute, however, has no reference to real property, and credit was not extended in this case to the husband by reason of his indebtedness to his wife, or because he had any personal property in his possession belonging to her, but under the belief that he was the owner of real estate.
The plaintiff did not know, however, whether J. W. Morse was indebted for such real property or not. It may be well conceded he was the owner of the real estate, but at the same time it must be also conceded he was indebted to his wife therefor, or that he held the title in trust for her. In either event he could well convey the property to her, and thereby discharge such indebtedness, or for the purpose of discharging the trust. A full and perfect title would by such conveyance vest in Mrs. Morse, unless a lien had attached to the property before the same was made.
' Many illustrations might be giveff in support of this proposition. It is useless, however, to pursue the subject further, for, as we understand, Doyle v. McGuire, 38 Iowa, 410, is decisive of the case at bar. In that case McGuire became indebted to the plaintiff in 1865, and judgment was entered thereon in 1871. In 1866 and 1867 he became indebted to his wife. One Thompson, at the time both debts were contracted, held the legal title to certain lands in trust for McGuire, and in 1868, by his direction, Thompson conveyed the lands to Mrs. McGuire in payment of the indebtedness to her. The plaintiff sought to subject the lands so conveyed to the payment of his judgment. But it was held he was not entitled to such or any relief.
It is claimed there is a class of cases which hold, when property is entrusted to an agent which he uses and controls as his own, and while so in his possession it is seized on execution for his debts, that the owner is estopped from claiming the property. White v. Morgan, 42 Iowa, 113. Conceding this to be true, there is a clear distinction between those cases and the present. To make the case just cited an authority in this, the plaintiff should have obtained judgment and a lien on the property before J. W. Morse parted with the title. Having obtained a lien while the title was in Morse we are not prepared to say such lien could have been displaced by or rendered subordinate to Mrs. Morse's equity.
Affirmed.