Elliott v. Hawley

Hadley, J. The purpose of this action is to subject certain real estate in the city of Seattle to execution sale. The suit was brought by the appellant, as administrator of the estate of E. B. Earle, and against the respondents, who are husband and wife. On the 3d day of June, 1898, respondent Frank R. Hawley executed his promissory note for the sum of $1,000, payable to the order of one Shedd, who' afterwards transferred it to the said E. B. Earle, the latter being now deceased. Said Hawley claims that the note was given merely as an accommodation to said Shedd to enable him to raise some money, but that question is immaterial here, since a judgment founded upon the note was rendered in favor of the administrator of Shedd’s deceased assignee, and against said respondent, in the superior court of King county, on the 6th day of January, 1902. There was no appeal from said judgment, and it is sought here to have it declared that the judgment is a lien upon the said real estate, and that the land is subject to levy and sale for the satisfaction of the judgment. At the time said note was made the said Frank R. Hawley was unmarried. Afterwards, on the 9th day of — 587 — July, 1898, lie and his co-respondent became husband and wife. The obligation represented by the note was therefore the separate debt of Frank It. Hawley. The real estate in controversy was conveyed to the respondent Katherine W. Hawley on or about October 24, 1899, and the complaint alleges that it was purchased with the separate funds of the husband. It is averred that the conveyance was made to the wife without consideration paid or agreed to be paid by her, and in furtherance of a fraudulent scheme and design, on the part of both husband and wife, to cheat, delay, and defraud the creditors of the husband. The answer denies said allegations, and affirmatively alleges that the property was purchased with the separate funds of Katherine W. Hawley, and that the same is her sole and separate property. A trial was had before the court without a jury. The findings of the court cover many details, and, while we deem it unnecessary to set them all out, yet a somewhat extended statement of the facts found will lead to a better understanding of the case. The court found, that respondent Frank It. Hawley had not been a resident of the state of Washington at any time during the ten years last past, and that respondent Katherine W. Hawley has never been a resident of the state; that the respondents were married in the state of California, and thereafter, in the autumn of 1898, living together as husband and wife, they took up their abode at or near claim Ho. 9 above Discovery, on Little Minook Creek, Alaska; that said claim Ho. 9 was owned by a corporation in which said Frank It. Hawley was a stockholder; that about said time said Hawley and his uncle, one Iieasoner, planned to take a lay, or contract for working on shares, on a portion of said claim; that thereafter said Hawley was made manager of — 588 — said corporation, and of its operations on said claim, and said lay was then taken hy said Reasoner and Katherine W. Hawley in equal shares. It was also found, that the work upon the lay was performed by said Reasoner and another, the latter being paid for his services from Mrs. Hawley’s share of the clean-up; that Mrs. Hawley did not perform actual manual labor upon the claim, but that she was frequently on said lay ground while the work was progressing, inspected the same, and consulted with her partner Reasoner concerning the work; that, as a result of the work upon the lay and the clean-up therefrom, Mrs. Hawley’s net share of the proceeds was about $450, which sum, by her authority and direction, was, by her husband, invested for her in the spring of 1899; that said investment was in a partnership known as Mitchell & Co., composed of the two respondents and one Archie Mitchell; that the husband invested in the partnership an equal amount of his own funds, and that said Mitchell owned a half interest in the partnership, leaving a one-fourth interest each to Mr. and Mrs. Hawley; that the partnership operations were on Anvil Creek, near Home, Alaska, and the gold representing the partnership’s share of the clean-up was brought to the United States assay office at Seattle, Washington, in one entire lot, converted into money, and deposited in a bank at Seattle to the credit and in the name of Mitchell & Co.; that the purchase price of said real estate was paid by a check on said deposit, drawn hy respondent E. L. Hawley, in the firm name of Mitchell & Co., in favor of E. M. Carr, who was acting as attorney and agent for Mrs. Hawley in the purchase of the lots; that it was understood, and in good faith believed, both by Hawley and his wife, that the money so invested was the separate money of Mrs. Hawley. — 589 — The findings also set out in full a number of sections from Hill’s Annotated Laws of Oregon, as being, by virtue of the United States statutes, in full force and effect throughout the territory of Alaska until June 6, 1900. Among other provisions of said statutes are the following: “ § 2992. The property and pecuniary rights of every married woman at the time of her marriage, or afterwards acquired by gift, devise or inheritance, shall not be subject to the debts or contracts of her husband, and she may manage, sell, convey, or devise the same by will to the same extent and in the same manner that her husband can property belonging to him.” “ § 2993. The property, either real or personal, acquired by any married woman during coverture, by her own labor, shall not be liable for the debts, contracts or liabilities of her husband, but shall, in all respects, be subject to the same exceptions and liabilities as property owned at the time of her marriage or afterwards acquired by gift, devise or inheritance.” “§ 2873. Neither husband or wife is liable for the debts or liabilities of the other incurred before marriage, and except as herein otherwise declared they are not liable for the separate debts of each other, nor is the rent or income of such property liable for the separate debts of the other.” “§ 2997. Contracts may be made by the wife and liabilities incurred, and the same enforced by or against her to the same extent and in the same manner as if she were unmarried.” It was further found that, at the time said conveyance was made to Mrs. Hawley, her husband was wholly solvent, and that he then and afterwards had on deposit, in the Washington National Bank of Seattle, moneys belonging to him largely in excess of his total indebtedness. From the facts found, the court concluded that the lands purchased became the sole and separate property of Mrs. Haw — 590 — ley, and that her hushand has never at any time had, and has not now, any interest therein. Judgment was entered denying the demand of the complaint and dismissing the action. The plaintiff has appealed. Errors are assigned upon the court’s findings, but we are satisfied, after reading the evidence, that the facts as found by the court are sustained by the evidence submitted. If there was no error in the conclusion that the purchase money for the lots involved — acquired in the manner it was — became the separate money of Mrs. Hawley, then the judgment was right. It will be observed by reference to §§ 2992 and 2993 of the Oregon statutes quoted above, and which were in force in Alaska when Mrs. Hawley was engaged in her enterprises there, that neither real nor personal property, acquired by a married woman during coverture by her own labor, shall be liable for the debts of her husband, but shall be absolutely her own, and subject to her disposal. Under the evidence and the findings, Mrs. Hawley agreed with Reasoner to work the lay above mentioned on shares. This she had a legal right to do, under the terms of § 2997, supra. Appellant, however, insists that the proceeds of the lay work could not have become her separate property unless .she had actually performed manual labor upon the claim. We do not think' the words “by her own labor,” used in § 2993, supra, were intended to be so restricted, but, as suggested by respondents’ counsel, that they rather mean, by her own efforts. She deliberately agreed with Reasoner to work a lay, and to pay for the services of a man as a helper in her place. She was often upon the ground to see how the work progressed, and advised with Reasoner about it. The helper was paid from her share of the proneeds. We think, under such circumstances, that the — 591 — money was acquired by her own exertions, and that, under the Jaw, it became her separate money. The court in its findings traced that money to a subsequent investment, and found that it yielded yet more. The findings do not disclose the amount, but the evidence shows that her share of the proceeds of such investment in the Home partnership enterprise was more than $4,000, and that said sum was placed in the Seattle bank, and from it came the money which purchased the lots in question. Thus the money was acquired by Mrs. Hawley in Alaska under laws which made it her separate property, and when it was brought to Seattle it still remained such. Appellant, however, insists that under Board of Trade v. Hayden, 4 Wash. 263, 30 Pac. 87; 32 Pac. 224, 31 Am. St. 919, 16 L. R. A. 530, the wife could not enter into a contract of partnership with her husband. It will be remembered that the husband and wife and one Mitchell composed the Home partnership of Mitchell & Co. The rule discussed and decided in the case cited is for the protection of the wife’s separate property, to prevent her from entering into such engagements with her husband that her separate property may be taken from her in satisfaction of his debts. The purpose of the rule is, not to work a loss to the wife, but to prevent it. In this instance money which went into the Home enterprise was shown to be her separate money. It yielded a large percentage of increase. The wife was entitled to the legitimate increase upon the investment of her separate money. It is further urged that these funds have been commingled with those of the husband, and that, under Yesler v. Hochstettler, 4 Wash. 349, 30 Pac. 398, they are not separate funds of the wife. There has never been a commingling which leads to any confusion. The amount invested by each was a definite sum ; — 592 — each sum yielded its definite increase, and the whole of each has at all times been easily ascertainable. This was not confusion, and the separate interests did not lose their identity as such. The judgment is affirmed. Fullerton, C. J., and Mount, Anders, and Dunbar, JJ., concur.