Sawyers v. Baker

CLOPTON, J. On the application for a re-hearing, we have re-examined and re-considered the pleadings and proof, in connection with the decree of the chancellor. It may be conceded that a married woman is not entitled to recover money, though the corpus of her statutory separate estate, which her husband has used, with her concurrence, in the purchase of lands for her. It being the duty and right of the husband, as trustee, to invest the money of iiis wife so as to make it productive, she will not be permitted to repudiate as void an investment made for her by her consent, the benefits of which she received. If the present was a case of an investment made by Baker for his wife, with her concurrence, the principles pressed by counsel might be applicable. If Mrs. Baker’s rights were acquired through, and were dependent on the contract of her husband with Boone, the performance of its terms and conditions on her part would be preliminary and antecedent to the enforcement of such rights, unless there were special circumstances modifying the rule. But such is not the case made by the pleadings and proof. The lands were purchased from Boone by Baker, for himself, and in his own name, though he used in payment, or part pay [466] ment, the distributive share of his wife in her grandfather’s estate, with her consent. The case presented is that of a trustee having invested money in the purchase of lands in his own name. No principle is better established in courts of equity, than that if a trustee invests money, under his control in a fiduciary capacity, in the purchase of lands, the cestui que trust may charge the trustee personally, or trace the money, and claim the lands, or charge them with its payment. It lias been uniformly held, that this rule is applicable to the investment by the husband, of the statutory separate estate of the wife, in lands; and when the husband uses money belonging to the separate estate of his wife, in the purchase of lands, taking the conveyance in his own name, the wife may claim the lands, or charge them with the payment of the money: an equity is created in her favor. This equity may be asserted against all persons, except purchasers for value without notice. — Tilford v. Torrey, 53 Ala. 120; Nettles v. Nettles, 67 Ala. 599. There can be no question, that Raker purchased the lands from Boone in his own name, and that he paid for them with the distributive share of his wife, which was her statutory separate estate; the conveyance to be made.to him, when his vendor was in condition to make a deed, or cause one to be made. An equity thereupon arose in favor of Mrs. Baker, which a court of equity will enforce, unless prevented by prior and existing, or supervening rights of third persons. It is insisted, that the rights of the sureties of Boone on his note for the purchase-money, under the mortgage of November 7,1874, are superior to the equity of Mrs. Baker, and that they also have a superior right by subrogation. The lands of the estate of McCollum were sold by Boone, as administrator, in 1872, under an order of the Probate Court, on a credit until January 1, 1874, and were purchased by himself. Sawyers and Gamble were the sureties on his note for the purchase-money. After the maturity of the note, on November 7, 1874, Boone, without any present or new consideration, executed to his sureties, for their indemnity, a mortgage on a part of the lands purchased by him, being the land in controversy. Afterwards, Boone sold the mortgaged lands to Baker, on the agreement that Baker should apply his wife’s distributive share, to the amount of $500.00, in payment; Boone having previously resigned, or having been removed as administrator, and Gillespie having been appointed administrator de bonis non. Thereupon, Baker receipted Gillespie for his wife’s distributive share, and the amount was credited on Boone’s note. The sureties, in 1877,’paid the balance of the note. At the time the mortgage was executed, no conveyance of the lands had been made to Boone. A conveyance was not [467] made until after the full payment of the purchase-money, in January, 1877. Until then, the legal title remained in the heirs of McCollum, one of whom was Mrs. Baker. The mortgage conveyed only Boone’s equity. The equity of the mortgagees can not prevail against the equity of Mrs. Baker, supported by her legal title, under the special circumstances of this case. The mortgagees were liable for the entire purchase-money due by Boone, and were not authorized to make the mortgage security available, until judgment was rendered on the note, and Boone made default in its payment. Nearly one-half of the principal of the note was paid with the distributive share of Mrs. Baker. The sureties took the benefit of this payment, with notice of the source and mode of payment. In such case, they will not be permitted to enforce the lien on the same land, against the equity of Mrs. Baker, for the payment of the balance of the note, and thus obtain a double realization and indemnity from the same security. Such was the rule applied in this case on a former appeal. — Sawyers v. Baker, 72 Ala. 49. The contract of sale between Boone and Baker was in parol. Conceding, as the answer of defendant claims and alleges, that Baker was never put in possession by the seller, and never was in possession, the contract of sale was void under the statute of frauds; and Mrs. Baker was entitled to recover from Boone the money paid, in an action at law. The mortgagees, when with notice they took advantage of the payment, and received and accepted a discharge, pro tanto, from liability as sureties on the note for the purchase-money, ratified the pajnnent, subject to all its equities and-burdens. Being a payment made by a trustee with trust funds, from which the cestui que trust received no benefit whatever, the equity of the cestui que trust is to charge it on the land, in which it was invested. If the sureties did not intend to hold the land for further and future indemnity against liability for the unpaid portion of the note, subject -and subordinate to this equity, they should have promptly disaffirmed the payment on receiving notice. But, having availed themselves of its benefit, with knowledge of its character, the court will not maintain in their favor an equity, either under the mortgage, or by subrogation, superior to the equity of Mrs. Baker, with whose money the payment was made, and who would have been entitled to, and would have-received, as an heir, her portion of the entire purchase-money, had it been paid by the sureties. The conveyance to Boone in 1877, under an order of the Probate Court, vested in him the legal title. The sale by Sawyers to Sandlin was not made, so far as disclosed by the record, in pursuance of the power contained in the mortgage, [468] and, consequently, was not a valid foreclosure. The only effect which the sale and conveyance to Sandlin can have, is to operate an equitable assignment of the mortgage. As such assignee, he acquired no higher or other rights than the mortgagees possessed. — Sloan v. Frothingham, 72 Ala. 289. We have assumed, that the mortgagees and Sandlin had notice of the equity of Mrs. Baker, for the reason, that the chancellor so found on the evidence. There is not a decided preponderance of evidence against his conclusion. Considering the conflict in the testimony, the chancellor might have reasonably attained either conclusion. We will not disturb his finding on a question of fact, unless we see clearly it is wrong. Marlow v. Marlow, 52 Ala. 113. The chancellor erred, however, in decreeing that Mrs. Baker be allowed interest. The husband alone, so long as he, remains trustee, is entitled to receive, and may transfer, the income of his wife’s statutory separate estate. When suit is brought on a promissory note, or for the detention of property, the corpus of her statutory separate, in the name of the wife, interest or hire, being a mere incident of the suit, is recoverable. — Pickens v. Oliver, 29 Ala. 528. But, when a married woman brings suit to recover property belonging to her statutory separate estate, which has been sold by her husband, or brings her bill to charge land with the payment of money which has been used by him in its purchase, she is not entitled, in the one case, to recover hire, nor interest in the other. Whitman v. Abernathy, 33 Ala. 154; Ryall v. Prince, 71 Ala. 66. The extent of Mrs. Baker’s equity is to have the corpus of her separate estate restored. The judgment of affirmance is set aside, the decree of the chancellor is reversed, and a decree will be here rendered in accordance with this opinion. Costs of appeal will be divided between appellants and appellees.