American Freehold Land & Mortgage Co., of London, Ltd. v. Maxwell

Carter, J.: • I. It is claimed by appellee that the circumstances leading up to and connected with the acquisition of title by William A. Maxwell to the lands in controversy, raised an implied trust in favor of appellee for a four-fifths interest in the lands in controversy; and that the deed subsequently executed by her husband in consideration of this trust was based upon a valuable consideration, and is, therefore, valid in equity under our decisions in Waterman vs. Higgins, 28 Fla. 660, 10 South. Rep. 97; Claflin vs. Ambrose, 37 Fla. 78, 19 South. Rep. 628; and Hill vs. Meinhard, 39 Fla. 111, 21 South. Rep. 805. But we think she has failed entirely to show that any part of her money was invested in this laud. We have several times held that a married woman claiming by purchase property levied upon by virtue of an execution against her husband is held to full and strict proof that it was paid for with her money, and that in the absence of such proof the property is presumed to be her husband’s (Fairchild vs. Knight, 18 Fla. 772; Stoors vs. Stoors, 23 Fla. 274, 2 South. Rep. 368); or the conveyance will be considered a voluntary one (Alston vs. Rowles, 13 Fla. 117; Claflin vs. Ambrose, 37 Fla. 78, 19 South. Rep. 628). The appellee and her husband being citizens of the State of Georgia, the title to the money loaned Crawford in that State during their residence there, must — 500 — be determined by its laws. The evidence is very clearthát under the laws of that State, a married woman’s acquisitions prior to September, 1866, vested in her husband in all cases where he reduced the same to possession during, coverture. Not only was this money reduced to the husband’s possession prior to September, 1866, by loaning it to Crawford and taking notes-for the same in the name of the husband only, but in 1870 the old notes were taken up and a new one given to the husband, and a mortgage executed to him alone-on this land to secure the same, which became the basis of the title subsequently acquired by the husband at foreclosure sale in 1874. The title of the husband became absolute as to property Required by the wife-prior to September, 1866, by reducing it to possession-during coverture, either before or after September* 1866. Early vs. Sherwood, Dudley (Ga.) 7; Bell vs. Bell, 1 Ga. 637; Bryan vs. Rooks, 25 Ga. 622, S. C. 71 Am. Dec. 194; Sperry vs. Haslam, 57 Ga. 412; Sterling vs. Sims, 72 Ga. 51; Alston vs. Rowles, 13 Fla. 117. There is no evidence that Mr. Maxwell ever recognized any right of his wife in the money loaned to-Crawford until 1872, long after it was reduced to his-possession by unequivocal acts. The husband’s subsequent declarations, that the money loaned, or that the land acquired in partial payment thereof, belonged to the wife, are not sufficient to establish the contention that the purchase was made with funds belonging-to the separate estate of his wife. Alston vs. Rowles, 13 Fla. 117. We do not think any implied trust arises in favor of appellee, because the money of her husband only was invested in this land. The deed executed to her in 1877 is, therefore, a voluntary conveyance or post-nuptial settlement, as no considera — 501 — tion other than the supposed implied trust induced its-execution. Boulton vs. Hahn, 58 Iowa, 518, 12 N. W. Rep. 560; Meredith vs. Citizens National Bank, 92 Ind. 343; Bolling vs. Jones, 67 Ala. 508; Joiner vs. Franklin, 12 Lea, 420; Coleman vs. Burr, 93 N. Y. 17, S. C. 45 Am. Rep. 160; Suber vs. Chandler, 36 S. C. 344, 15 S. E. Rep. 426; Hart vs. Leete, 104 Mo. 315, 15 S. W. Rep. 976; Bump on Fradulent Conveyances, sec. 280; Clarke vs. King, 34 W. Va. 631, 12 S. E. Rep. 775. II. The deed from Mr. Maxwell to appellee can not be sustained as a voluntary conveyance, or post-nuptial settlement. This deed purports to have been executed in 1877 in the presence of Thos. M. Eden, and N. A. Smith, Notary Public. On October 5, 1883, the-grantor appeared before said notary and acknowledged its execution, but it was not filed for record until February 24, 1886. In the meantime W. A. Maxwell remained ostensibly in possession of the premises until his death, exercising acts of ownership over the property, though notifying his agents and tenants that the property belonged to his wife, representing to appellant as a basis of credit originally, and to procure an extension of the debt subsequently, that he owned the land, listing it for taxation in his own name, bringing suits in his own name to recover rents, perfecting the title by taking deeds in his own name and placing-same upon the public records. These circumstances-collectively lend support to the theory advanced in appellant’s answer, that this deed was not executed on its purported date, but was executed in 1883 or 1886, and antedated. It is true that under our statutes the property of the wife, even if derived from him, remains in the care and custody of the husband. — 502 — and that he is entitled to the rents and profits thereof, but this only emphasizes the necessity of giving general and public notice of such a change in the title, by recording the conveyance, if authorized to be recorded, in order that creditors may not be deceived into extending credit to the husband upon the faith of his recorded title, and possession apparently held under it. No excuse for failure to record this deed is attempted to be shown. Appellee testified that it was delivered to her in 1877, and another witness said Mr. Maxwell told him in 1881 that he had deeded the land to his wife. Even after it was acknowledged for record it was withheld for more than two years. A simple failure to record a conveyance of real property, does not of itself render the instrument fraudulent as to creditors, but it is one circumstance which, in connection with others, may avoid the deed. Where the instrument is a voluntary conveyance from husband to wife, and it is withheld from record until after equities of the husband’s creditors without notice attach to the property, either by reason of some lien or because of credit extended upon the faith of the grant- or’s possession and apparent ownership of record, of the property conveyed, the conveyance will be invalid as against such creditors. Fetters vs. Duvernois, 73 Mich. 481, 41 N. W. Rep. 514; Coates vs. Gerlach, 44 Pa. St. 43; Wait on Fradulent Conveyances, sec. 235; Warner vs. Watson, 35 Fla. 402. In this case the conveyance was from a husband to his wife, without consideration, withheld from record without explanation for ten years and until the husband had become practically insolvent, there was never any decided change in the possession of the property conveyed until the husband’s death in 1888, the appel — 503 — lant extended credit to the husband long before the record of the deed upon his representation that he owned this property, and that it was unincumbered which representation, according to the records of Alachua county at the time, were apparently true. Add to this the circumstances in evidence tending to show that the deed was not executed in 1877, but probably in 1883 or in 1886, after appellant’s debt was contracted, and we think it very clear that the appellee failed to sustain her case by evidence sufficient to justify the decree of the chancellor. III. The bill of complaint sought to enjoin the sale under appellant’s execution, not only of the four-fifths interest in the premises claimed as the property of appellee, but also of the remaining undivided one-fifth interest, as to which appellee claimed no title, but only the lien of a subsisting mortgage. The bill alleged that this mortgage was given appellee by her husband to secure a sum of money loaned by her to him; that it was duly recorded in Alachua county long prior to the entry of the judgment upon which appellant's execution issued; that appellee was in possession of the mortgaged property, and that appellant had no property in this State. No other facts were stated or relied upon as authorizing the inj unction as to this one fifth interest. A court of equity has no jurisdiction at the instance of a mortgagee, a mere lienholder, to enjoin a sale of mortgaged real estate under an execution issued upon a junior judgment against the mortgagor, simply because the mortgage is a prior lien upon the property, and the mortgagee is in possession thereof. The mortgagee is not the owner, even if in possession, of the mortgaged property. He has no title to be clouded — 504 — by a sale of the property under execution. He has a mere lieu under which the property may by a court of equity be ordered sold at public auction to pay his debt, at which sale he or some third person may become the purchaser. His mortgage being of record prior to the rendition of the judgment, any sale under the execution can only pass the title to the mortgaged property, subject to the mortgage if valid. If the real estate is sold, it can not be removed; nor is it rendered less valuable by a sale under execution. If a prior mortgagee were allowed to enjoin sales by subsequent lienholders, it would, at his election, as against the demands of other creditors, place in his hands a perpetual shield and in case the mortgaged property in impenetrable armor. If, under any circumstances, a mere mortgagee in possession is entitled to an injunction to protect mortgaged real estate from sale under execution against the mortgagor these circumstances are not disclosed in this record. Weidner vs. Thompson, 66 Iowa, 283, 23 N. W. Rep. 670. The decree is reversed with directions to dismiss the bill of complaint.