Sloan v. Frothingham

BBICKELL, C. J. The first question presented in the argument of counsel is, whether Mrs. Sloan has such an interest in the annuity payable to herself and husband during their joint lives, as entitles her to maintain a bill for the foreclosure of the mortgage given to secure its payment, and to redeem from the senior mortgage upon the same premises. By the common law, obligations or promises for the payment of money to the wife, or to husband and wife jointly, made during coverture, on the death of the husband without having reduced them to possession, or without having done some act in disaffirmance of the right of the wife, survived to her, and she held them as against the claim of his personal representative. — 1 Bright on Hus. & Wife, 38; 1 Bishop on Married Women, §§ 87-8. A note for the payment of money, payable to the husband and wife, secm-ed by mortgage, on the death of the husband survived to the wife.—Draper v. Jackson, 16 Mass. 480. A bond given to husband and wife, for their maintenance during each of their lives, survives to the wife. And if in his own name the husband had taken a mortgage to secure the payment of [the bond, on his death, without having disaffirmed the right of the wife, the mortgage enured to her — 602 — benefit.—Pike v. Collins, 33 Maine, 38. Or, if, suing in their joint names, the husband recovered judgment on such bond, after his death, the wife could by scvre facias revive and enforce it.—Schoonmaker v. Elmendorf, 10 Johns. 48. In all such obligations, or promises, the wife had a distinct, legal and beneficial interest, of which she could be divested only by some act of the husband in disaffirmance of it, and of appropriation to his exclusive use.—Boret v. Spelman, 4 Comst. 284. If the intervention of a court of equity was necessary to aid the husband, or his assignee, in reducing them to possession, the court would enforce the equity of the wife to a settlement, making for her the same provision which would have been-made, if they had been ehoses in action accruing to her before marriage. — 2 Story’s Eq. §§ 1404-08. The only distinction, of substance, recognized between such ehoses in action, accruing to the wife after marriage, and ehoses in action accruing to her before marriage, was in the mode of suing at law for their recovery. In all actions upon the ante-nuptial ehoses of the wife, husband and wife must have joined; and the suit was essentially the suit of the wife, “for the thing in controversy was hers.” . In suing upon her post-nuptial ehoses of this character, the husband could sue alone, or, at his option, join the wife; and if she w'as joined, her rights were precisely the same as her rights to her ante-nuptial ehoses. — 1 Bishop on Married Women, § 92. The whole doctrine grew out of the common-law theory of the unity of the marriage relation — the incorporation of. the legal existence of the wife into that of the husband, and her consequent incapacity to take and hold property.- Prom that incapacity resulted the principle, that the husband was entitled to take and hold all chattels of which she was possessed at the time of marriage, or ■ subsequently coining to her possession; and the right to make his own all her ehoses in action, by reducing them to possession. There was, however, in the wife a distinct, legal and beneficial interest, - recognized by the common law, until it was defeated by the act of the husband.—Richardson v. Daggett, 4 Vermont, 334. The constitution and the statutes have changed and superseded wholly the theory and principles of the common law, so far as they defined and established the relation of the husband to the property and rights of property of the wife; creating a new system, variant in its policy, and in all its juovisions. The wife is recognized as a distinct legal person, with as full capacity to take and hold property and rights of property, as if she had not entered into the matrimonial union. In this respect, her legal existence is not lost, or merged in that of the husband.—Walthall v. Goree, 36 Ala. 728; Stone v. Gazzam, 46 Ala. 274. The words of the statute are as broad and com — 603 — prehensive as could have been employed. “All property of the wife, held by her previous to. the marriage, or which she may become entitled to after the marriage, in any manner, is the separate estate of the wife.” The term “property,” as employed in the statute, includes every right which the wife can have in and to things real or. personal, things in possession or in action. In Soulard v. United States, 4 Peters, 511, it was said by C. J. MaRsiiaul, that as applied to lands, the term “ comprehends every species of title, inchoate or complete. It is supposed to embrace those rights which lie in contract; those which are executory; as well as those which are executed.” And in Jackson v. Howell, 17 Johns. 283, it is defined as “ the highest right a man can have to anything; being used for that right which one hath to lands or tenements, goods or chattels, which no way depend on another man’s courtesy.” When the statute is read and construed in the light of, and in connection with the common law, and the principles and policy it was intended to supersede, there can be no doubt that the term “property,” as employed in the statute, comprehends every species of property, and every right of property, to which the marital rights of the husband would have extended, and which could have been converted from the property and right of the wrife, into his property and right. In Walthall v. Goree, supra, it is said: “ By .this legislation, the one legal person of the common law lias been resolved into two distinct persons, so far, at least, as the capacity of taking separate estates is concerned.” The character of the property, or right of property, is not of importance; nor is it material whether it resided in the wife at the time of the marriage, or is subsequently acquired. If, in the creation of the right, there is not a limitation to the sole and separate use of the wife, the constitution and statutes intervene, and pronounce that it is her separate estate — 7that it is held by her freed from all right, and claim of the husband— held as if she were not associated with him in marriage. If the covenant for the payment of the annuity, and the obligation in the mortgage, had been payable to two distinct persons by name, there would be no doubt that they would have taken it by moieties, though an action at law for its recovery must have been in their names jointly. The statute converting the husband and wife into two distinct persons, as to property and rights of property, they take the annuity 'by moieties, as they would have taken if not married.—Walthall v. Goree, supra, it is unimportant, in any view of this case, whether, by the terms of this covenant and mortgage, an equitable separate estate is created. The rights of the wife are the same, whether her right is to be deduced from the terms of the covenant and mortgage, or from the operation of — 604 — the constitution and statutes. The husband is clothed with the power to receive the annuity; but the power to make it his own by receiving is excluded. It is for “ the mutual benefit ” of himself and wife that he is authorized to receive it. If we regard the wife’s interest in the annuity as her statutory estate, as trustee for the wife, the husband would have been entitled to receive it; and conferring the power in express terms, is the mere expression of the legal effect and operation, in this respect, of the covenant and mortgage. If regarded as an equitable separate estate, the husband would receive the annuity, charged with a trust to apply it to the benefit of the wife, as well as for his own benefit. In either case, upon receiving the annuity, he would become a trustee, and liable to account to the wife. The assignment made by the husband is, in its terms, limited to his right and interest; was not intended to embrace more, and is incapable of operating upon or affecting the right of the wife. The indorsement, or the transfer in any mode, by one of several payees or obligees of an instrument, will not pass the title. The largest operation it can have is as an equitable assignment of the right of the assignor or indorser. — 2 Parsons’ Notes & Bills, 4. 2. The former suit was the suit of the husband only, not the suit of the wife. The decree rendered -was not a decree upon the merits, but of dismissal, in pursuance of the agreement of the husband. The legal presumption is, that the husband had by agreement adjusted the matter in controversy, so far as he had rights or interests involved; and it would operate as a bar to another suit by him, founded on the claim he had adjusted. He was without power, by any settlement or adjustment, to extinguish the rights and interests of the wife, and there is no indication of any purpose on his part to affect them. Michan v. Wyatt, 21 Ala. 813; Thomas v. James, 32 Ala. 723. 3-4. The sale of the mortgaged piemises by the personal representatives of Cary, deriving their appointment from a tribunal in New York, was not a valid execution of the power of sale contained in the mortgage executed by Belshaw and Powell to Tatham. It was inoperative to pass title to the purchaser, to cut off the equity of redemption of the mortgagor, or to impair the rights of junior mortgagees to be let in to redeem.—Sloan v. Frothingham, 65 Ala. 593. Irregular and unauthorized as was the sale, the money received having been properly applied by the personal representatives, and the domestic personal representative, with the' heirs and next of kin, having ratified and confirmed it, the purchaser is entitled to subrogation to their rights. He is an equitable assignee of the mortgage, and of the mortgage debt. The purchasers from him succeed to his rights, — 605 — and are entitled to the benefit and protection of the debt and mortgage. — 2 Jones Mortgages, §§ 1678,1903. 5. This, however, is as far as the ratification and confirmation can extend. If the sale had been regular — if it had been a valid execution of the power — it would'have been the equivalent of a foreclosure under the decree of a court of equity. A foreclosure and sale, under a decree of a court of equity, would have affected and bound only the parties to the suit, not concluding or operating to the prejudice of those who were not parties. The title only of the parties would pass to the purchaser. The irregular, unauthorized sale is incapable of ratification or confirmation by the one party in interest, to the prejudice of others who do not join in it, — as incapable as would be a decree of foreclosure to bind parties not before the court. As to parties other than themselves, the ratification and confirmation of the sale by the personal representative, the heirs and next of kin of the assignee of the mortgage and mortgage debt, is res inter alios acta. — 1 Jones Mortgages, § 732. 6. The sale was made with the knowledge, and if not with the expressed consent, certainly without the dissent of the mortgagor, Belshaw. He was not in ignorance, or under misapprehension, of any of the facts attending the sale, unless it was superinduced by his own neglect to make inquiry. For more than seven years there was, on his part, unqualified acquiescence in the sale. .Whether, under these facts, he could not be deemed to have waived his right to avoid the sale, if a material question, would not be free from difficulty. There is more than the failure to dissent from, or object to the sale, at the time it was made, and continuous acquiescence in it. The surplus of the proceeds of the sale, after satisfying the mortgage debt, ascertained and computed by himself, upon an erroneous method (as it now seems) of calculating the interest, he received from the. purchaser. It is a plain principle of right and justice, that if there is an unauthorized sale of property, real or personal, the owner can not take the purchase-money,and reclaim the property. The books abound with cases, in which courts of equity have precluded parties, who have adopted and ratified unauthorized sales, by receiving the whole or a part of the purchase-money, from setting them aside, to the prejudice of the parties from whom the money was received. In the application of this principle, no distinction is made between sales which are void, and sales which are voidable. The whole principle is, that the party had the right to repudiate, or to ratify the sale — to take its benefits, or reject them and its burdens. Electing to take the benefits, there would be gross injustice, if, to the injury of others, he were permitted at pleasure to question the validity of the sale, — to retract the assent which he had given to it. — 606 — 2 Smith’s Lead. Cases, 770; Goodman v. Winter, 64 Ala. 434; Pickens v. Yarborough, 30 Ala. 408; Merritt v. Horne, 5 Ohio St. 307. 7. A mortgagee, entering into possession of the mortgaged premises before foreclosure, is accountable for the rents and profits he may receive, or which he could with'reasonable diligence have received. The liability rests upon him, if he enters under a void or voidable sale.—Bigler v. Waller, 14 Wall. 297; Childs v. Childs, 10 Ohio St. 339. The purchase of Frothingham, at the unauthorized sale made by the personal representatives of Cary, when confirmed, operated simply a transfer of the mortgage and of the mortgage debt, and 'to these the purchasers from him were subrogated. While in possession, he, and the purchasers from him, can be regarded in no other light than as mortgagees in possession before foreclosure. Standing in that relation, taking the rents and profits in trust for their application to the payment of the mortgage debt, they must account for then to the junior mortgagees, having the equity of redemption.—Childs v. Childs, supra. &. The right of the husband to receive the annuity was expressed to be for the “mutual benefit” of himself and wife. The moiety of the wife, as we have said, he would take and hold in trust that he would apply it to her benefit. Occupying to the wife this relation of trust and confidence, if he disclaimed the relation, or placed himself in such a condition that a fair and diligent execution of the trust is not be expected from him, the power and duty of a court of equity to remove him is undoubted. Perry on Trusts, § 275. The abandonment of the wife, taking up a permanent residence in a foreign country, coupled with the assignment of his interest in the annuity, render the interference of the court necessary, the revocation of his authority to receive the moiety of the annuity to which the wife is entitled, and committing the authority to a trustee of the appointment of the court. Without prolonging the further examination of the case, we are satisfied that Mrs. Sloan, as a junior mortgagee, should be let in to redeem, upon the payment of the senior mortgage debt, subject to a deduction of the net rents and profits received by the purchaser at the unauthorized sale of the mortgaged premises, or by his assignees, or which with reasonable diligence they could have received, and to the removal of the husband as trustee, and the appointment of a trustee to receive her moiety of the annuity payable during the joint lives of herself and husband. The decree of the chancellor, dismissing her -bill, must be reversed, and a decree here rendered granting the relief indicated. The decree dismissing the cross-bill of Belshaw must be affirmed.