Sayre v. Flournoy

By the Court. Warner, J., delivering the opinion. The object of the complainants’ bill as disclosed by the record before us is, to have their debt satisfied out of the fund now in the hands of the administrator of Robert Willis Flournoy, deceased. The complainants are judgment creditors of Nathaniel A. Adams, who intermarried with Mary M. Flournoy, the sister of Robert Willis Flournoy. It appears from the record that Adams is insolvent, and that the complainants have exhausted their legal remedies against him without having been able to collect their demand. It also appears, that Mary M. Adams, the wife of their judgment debtor, is entitled to the one-sixth part of the estate of her deceased brother, Robert Willis Flournoy, of the value of eighty thousand dollars, which is in the hands of Robert Watkins Flournoy, his administrator. To the complainants’ bill the defendants demurred; First. Because there was no equity in their bill; Second. Because there was no privity between the claim of the complainants and the defendants ; Third. Because the distributive share which Mary M. Adams was entitled to have out of Said estate, was in no wise liable or subject to the claim of the complainants, as the same remained in the hands of the administrator and was therefore not vested in said Adams ; nor could it vest until the same was recovered and reduced into possession during the life time of his wife, Mary M. The Court below sustained the demurrer and dismissed the — 546 — complainants’ bill, to which the complainants excepted, and now assign the same for error in this Court. [1.] That a court of equity will assist a judgment creditor who has pursued his legal remedies to every available extent to enable him to reach trust funds belonging to the debtor, in the hands of a trustee, is, in our judgment, an undeniable proposition. Had Adams, the debtor of the complainants, been the distributee of Robert Willis Flournoy, and entitled to the distributive share now in the hands of the administrator, in his own right, they would have been entitled to the aid which they now seek by their bill. The complainants are not simple contract creditors, seeking to collect their demand out of a debtor to the estate of Robert Willis Flournoy, but they are judgment creditors, who, in equity, would be entitled to have their judgment paid out of any funds in the hands of the administrator — who is a trustee — to which their judgment debtor is entitled, in his own right, and which cannot be reached by their execution at law. The fact that the judgment creditor has exhausted all bis legal remedies without obtaining satisfaction of his judgment, gives him a right to come into a court of equity and ask its assistance to reach the fund in the hands of the administrator, held in trust for the judgment debtor; and the insolvency of the judgment debtor, in our judgment, greatly strengthens the complainants’ equity; for if the administrator should pay over to the debtor the fund held in trust for him, it might be squandered, misapplied, and placed entirely beyond the reach of the creditor. We are of the opinion, that where a creditor has obtained judgment, and pursued his legal remedies to every available extent, without obtaining satisfaction of his demand, and his debtor is entirely insolvent, a court of equity will lend its aid to assist him to reach a distributive share to which he may be entitled in his own right, in the hands of an administrator, who holds the same in trust for such judgment debtor. [2.] The complainants in this case do not seek to reach funds in the hands of the administrator to which their judgment debtor is entitled in his own right. They seek to have the distributive share of their judgment debtor’s wife, now in the hands of her deceased brother’s adminstrator, applied to the payment of her husband’s debt, before he has reduced the same to possession. To enable the complainant in a bill to maintain his suit in a court — 547 — of equity, it is essentially necessary that he should show a proper right or title to the thing or interest demanded. Story Eq. Pl. 564. The complainants in this case, as judgment creditors, ask to be subrogated to the rights of their debtor, Nathaniel A. Adams. What right or title has Nathaniel A. Adams to the distributive share of his wife in her deceased brother’s estate, now in the hands of the administrator 1 The mere naked, right to sue for and reduce the same to possession. And this mere naked right is made subservient to his wife’s equity, for when he sues for the distributive share of his wife, it is competent for the court to decree the whole fund, for the benefit of his wife and children. 2 Kent Com. 146; Like vs. Beresford, 3 Vesey Jr. R. 512. The complainants allege in their bill, that a settlement has been made on Mrs. Adams out of her father’s estate ; but this does not affect her right of survivorship to her share of her brother’s estate, nor clothe her husband or his creditors with any additional rights j for it is well settled that the wife is entitled to her equity upon a new accession of fortune. Ex parte Beresford, 1 Desaus. Eq. R. 263; Lady Elibank vs. Montolieu, 5 Vesey R. 737. The husband has the mere naked right to reduce his wife’s choses in action to possession ; and if he fails or neglects to do so during the coverture, and his wife survives him, she is entitled to them and not his representative. 2 Bl. Com. 351. This is the rule at law, and equity follows the law in this respect. Clancy Hus. & Wife 109. The creditor can only reach the property of his debtor; can the wife’s choses in action be considered as the property of the husband until he has reduced, them to'possession?- If they are his property, on what principle"is it that courts of equity decree provision to the wife, when he seeks to reduce them to possession 1 If the wife’s choses in action are theproperty of the husband, on what principle is it they survive to the wife on the death of the husband, before he has reduced them to possession % The idea that the husband has any absolute right or title to his wife’s choses in action, vested, in him, before he has reduced them to possession, is entirely inconsistent with her legal right of survivorship, as well as her equitable right to have the whole appropriated for the separate use of herself and children. In Gallego vs. Gallego’s ex’rs., 2 Brock. R. 287, Chief Justice Marshall remarked : “ The property does not become the husband’s, nor is it subject to the liabilities which attach to that — 548 — which is his, until it shall be reduced to possession. Till then, his creditors have no claim to it.” In Gayner vs. Wilkinson, 2 Dickens R. 491, Lord Bathuz’st said, “ that the interest of the wfe was not such a legal interest as the husband could assign.” In Elibank vs. Montolieu, 6 Vesey R. 743, the defendant as administrator, sought to retain out of the wife’s share of her deceased sister’s estate for a debt due by her husband; the Lord Chancellor said : “ With respect to the point made by the answer of Montolieu, that he had a right to retain against the debt of the husband, being possessed of the fund as administrator, and the wife being one of the next of kin, I am very clearly of opinion that the defendant had no right to retain.” In Wright vs. Morley, 11 Vesey R. 17, the Master of the Rolls speaking of-the rights of an assignee of the wife’s interest by the husband for a valuable consideration, said: “If the husband has but the right of reducing the wife’s interest into possession, how can he, for valuable consideration or otherwise, convey more than he has ? If he does not reduce it into possession, it clearly survives. If, then, he parts with it for a valuable consideration, and the assignee acquires a right different from that which the husband had, he parts with something different from what he has.” If Adams, the judgment debtor, has no absolute right vested in him to the fund to which his wife is entitled in the hands of the administrator, until he reduces it to possession, have the complainants, his creditors, any other or better right than he has 1 In the case of Dun vs. Bowyer, 2 McCord Ch. R. 374, the complainants were creditors of the husband, and sought to have the distributive share of the wife in the hands of an administrator applied to the payment of their debt. In delivei-ing the judgment of the Court, Johnson, Judge, said: “They (the complainants) are strangers, creditors of the husband, who seek to have their demand paid out of the wife’s equity. They have in law no lien on this fund, nor is it given by contract, and it is difficult to conceive on what pzdnciple their claim pi'oceeds. None, I appi'ehend, exists in law, and if it be a mere equity, .it is opposed by the higher equity of the wife, and they cannot be relieved.” In Perrydear vs. Jacobs, 2 Hill Ch. R. 509, Chancellor Harper said, in delivering the judgment of the Coui-t, “ Creditors of the husband have no interest whatecer in the wife’s expectancy, not yet — 549 — reduced into possession, and if they think proper to credit him on the faith of it, it is at their peril.” Mr. Clancy, in discussing the rights of the husband’s assignee for valuable consideration to the wife’s choses in action, remarks: “ Whatever right the husband’s assignee for valuable consideration of the wife’s equitable choses in action may have with respect to them, it seems that the mere creditor of the husband, who has had no assignment, has no claim, Clancy Husband and Wife, 508. Why should the creditor of the husband have a claim upon that which does not belong to the husband ? The property is not his until he reduces it to possession, but it is the property of the wife, and will survive to her on the death of her husband. Adams, the husband, has the naked right to institute a suit against Robert Watkins Flournoy, the administrator of Robert Willis Flournoy, to recover the distributive share to which his wife is entitled as next of kindred to the deceased. The complainants can only be subrogated to this naked right of their debtor. Does this naked right to sue for the property, vest in the husband any certain, legal or equitable title thereto? We think not, for the reason that the title to the property is vested in the wife, both at law and equity, until the husband reduces it to possession; consequently, the complainants have shown no perfect right to have the property of the wife applied to the payment of their demand against the husband, who is their debtor. When the distributive share of Mrs. Adams shall become the property of their debtor, then they will be entitled to have it appropriated to the payment of their debt; but at present, their debtor has only a mere expectancy in bis wife’s property, in which they have no definite title or interest, either legal or equitable. If the complainants were permitted as the creditors of the husband to take the property of the wife out of the hands of the administrator, and apply it to the payment of their demand, it would cut off and destroy the wife’s right of survivorship thereto in the event of her husband’s death. Can a court of equity compel the husband to reduce his wife’s choses in action to possession, and thus cut off and destroy her right of survivorship ? The power of the court has usually been exerted to restrain the husband and his assignees from reducing his wife’s property into his possession, and to provide for the wife and children. But the assistance of the Court is now asked to compel the husband to reduce his wife’s choses in action into his possession, that the — 550 — same may be applied to tbe payment of the husband’s debts, and to cut off her right of survivorship to that extent. Blackstone, in speaking of the wife’s choses in action, says, “ These the husband may have if he pleases, that is, if he reduces them into possession by receiving or recovering them at law; but if he dies before he has recovered or reduced them into possession, so that at his death they still continue choses in action, they shall survive to the wife; for the husband never exerted the power he had of obtaining an exclusive property in them.” 2 Black. Com. 434. The husband may have the wife’s choses in action if he pleases; but suppose the husband does not think proper to exert the power he has of reducing them to possession, will a court of equity compel him, to do so, and thus defeat the wife’s valuable right of survivorship? No case has been cited at the bar establishing such a principle, and we have the authority of Chief Justice Marshall in Gallego vs. Gallego’s, Ex’rs, before cited, for saying, that no case can be found in which creditoz's have z-equired the aid of the court to compel the husband to reduce the wife’s choses in action into his possession. Courts of equity have always been active in protecting the rights of the wife, but never active so far as we can discover in lending their aid to defeat or destroy those rights. In Napier vs. Howard, 3 Kelly R. 192, decided by this Court at Americus, the Court had acquired jurisdiction of the cause, and one of the principal questions made was as to the wife’s equity. The right of the creditor was not contested, and the question now presented for our judgment by the record in this case, was not made in that, and did not therefore enter into the consideration or judgment of the Court. In Napier vs. Howard, we directed an inquiry to be had as to what would be a suitable provision for the wife and children, including the whole fund, if necessary, and if not, then the balance to be paid over to the creditor. This case is mentioned, because the rights of the creditor would seem to have been recognised in the judgment of the Court, but as before remarked, the title of the complainant was not questioned, nor the right of a court of equity to compel the husband to reduce, his wife’s choses in action into possession, in any way considered. That case came before this Court on a bill of exceptions to the decision of the Court below in refusing to dissolve an injunction. In the case now before us, the coizzplainants seek to have their — 551 — demand against Adams, paid out of the property of his wife. Their debt was not contracted on the faith of this property of the wife, but was contracted long anterior to the death of Robert Willis Flournoy, and we have not been able to perceive upon what principle of equity they are entitled to have their demand against their debtor, paid out of property which does not, either in law or equity, belong to him. Our judgment therefore is, that the husband has no absolute or certain interest vested in him to his wife’s choses in action, until he reduces them into his possession, and that as a general rule, a court of equity will not compel him to reduce them to possession, so as to defeat the wife’s right of survivorship thereto. The [3.] complainants being the creditors of the husband, have no other rights as against the wife’s property, than the husband, who is their debtor, and to whose rights they claim to he subrogated. For these reasons, let the judgment of the Court below be affirmed. Judgment affirmed.