Farmers & Mechanics' National Bank of Rochester v. Gregory

By the Court, J ohnson, J. To my mind it is a very clear proposition that our recent statutes for the better protection of the separate property of married women, have no relation to, or effect upon, real estate conveyed to husband and wife jointly. This was so held by Sutherland, J. at special term in Goelet v. Gori, (31 Barb. 314.) In such a case the wife has no separate estate, but is seised with the husband of the entirety ; neither having any separate or severable part or portion, but the two, as one in law, holding the entire estate. They hold thus not as joint tenants, or as tenants in common, but as tenants by entireties ; and the same mode of conveyance which would make two other persons joint tenants will make the husband and wife tenants of the entirety. (2 Kent’s Com. 132. 3d ed. Torrey v. Torrey, 14 N. Y. Rep. 430. Jackson v. Stevens, 16 John. 110. Rogers v. Benson, 5 John. Ch. 431.) Neither can sell without the consent of the other, and the survivor takes the whole. But during the life of both, the husband is entitled to possession of the entire estate, and to the rents and profits, and may even alien the wife’s interest during their joint lives. And the estate will, it seems, be in such alienee, subject to the right of the wife or her heirs, to enter and enjoy the same, at the death of the husband, freed and discharged, from all his debts and engagements. (2 Kent’s Com. 133. 1 Preston on Abstracts of Title, 334, 435, 436. Jackson v. McConnell, 19 Wend. 175.) The debt in .question was contracted .by the husband while the defendants held the real estate, jointly, as husband and wife. Afterwards, and before the plaintiff obtained its judgment, the defendants conveyed the same to George N. Deming for#11, 000, who paid #8000 in cash and assumed a mortgage of #3000, which the defendants had previously given, upon163 the property. This sum of $8000 was received by the wife and retained by her. So that when the plaintiff obtained judgment and issued execution, the husband had nothing out of which the debt could be collected. There was no intention, as the referee finds, to defraud creditors, in any of the transactions between the defendants. The question then arises, as to the legal effect and operation, in respect to the avails, upon the conveyance by them of the real estate thus held. When the estate thus held was voluntarily converted into money, to whom did the money belong ? Undoubtedly, - as it seems to me, it belonged to the husband exclusively, in, virtue of his marital rights. The learned referee held, as a conclusion of law, that upon the sale the interests of the defendants became severed and each took, as matter of law, • one half of the avails. But I am unable to see upon what principle of law such a result could be produced. Their estate in the land was an entirety, arising from their unity as husband and wife ; and how the joint conveyance of this estate by them, and its conversion into money, could operate as a severance of the money, into equal parts, and vest such parts in each, as separate property, would be difficult, I think, to demonstrate. It would rather, in my opinion, follow the law of personal property in possession of the husband, and vest in him exclusively. The defendants’ counsel insists that inasmuch as there was no fraud in the transfer of the real estate, by which it was vested in the defendants as husband and wife, the wife is entitled to retain the proceeds of the sale to her own use as against the creditors of the husband, who became such during the joint ownership of the realty. This I think would have been the case, had the real estate been settled upon, and conveyed to her, as her separate estate. The husband, at the time of the conveyance to the trustee, and the reconveyance by the latter to both was free from debt and might have vested her with the exclusive title, and had that been done, equity, would, upon familiar principles have pro [164] tected the right of the wife, against the claims of subsequent creditors of the husband, both as respects the land and its avails, upon a sale by her. This has often been done, and it is unnecessary to cite authorities to sustain the proposition. But that is not the case here. ¡No separate estate was settled upon, or vested in, the wife ; nor was it even so intended. \ It was intended that the husband should have a joint title, with right of exclusive control during the joint lives, and the entire estate if he survived. He did not give up, or design to give up, his entire interest and settle it upon his wife. It is argued, however, that equity should protect the wife the same as though she had been vested with the entire title; because it was intended as a provision for her future support during her natural life. The referee has not found that such was the fact, although there was evidence before him tending to prove it. But this is not very material, because he could not have found that it was intended to vest in her the exclusive title, or to provide for her future support and maintenance in any other manner or to any greater extent than would legally flow from such an arrangement as was in fact made. It was not even found, nor was the fact proved, that when the wife received the avails of the sale, they were so received by her upon any understanding or agreement between herself and her husband that they.should be hers exclusively, and be held and used by her as her separate property. She received them and held them with such right only as the law accorded to her. It is not necessary in this case to discuss, or to determine, the question, whether under all the circumstances of the case equity would, notwithstanding the strict rule of law, protect from the creditors, of the husband a moiety of the avails of the sale, in view of the manifest intention to settle upon her an interest in his property, for her future use and benefit; because the plaintiff's demand will only consume a small portion of the other moiety. And I feel very clear that no rule of equity will give the wife the entire amount as her separate property, to the ex165 elusion of the rights of the husband and of his creditors. To do that, would require a new arrangement entirely, and one never contemplated by the parties themselves, which no court has any power to make. Under the arrangement they did make, and consummate, when the land was conveyed to both, the creditors of the husband had rights as against his alienable interest, and the court should not, even if it had the arbitrary power, now, deprive them of those rights. [Monroe General Term, June 8, 1867. The real estate belonged originally to the husband exclusively, and he caused it to be conveyed to them jointly. This gave him the use and control of it, and the right to take and use as he might see fit, the rents and profits, during their joint lives at least; and if it were to be held that such a disposition of one’s property deprived creditors of all claim upon it, a new and convenient mode would be discovered of keeping and enjoying any amount of property in defiance of any and all creditors. But as there never was any separate estate or right in the wife, neither the statutes, nor the rules of equity, are sufficient to enable her to appropriate the entire property to herself, to the exclusion of the husband’s creditors, although they became such during the joint ownership. I am clearly of the opinion, therefore, that the referee has committed no error of which the defendants or either of them can complain, and that the judgment should be affirmed. Welles, E. D. Smith and Johnson, Justices.]