Tiernan v. Poor

Archer, J. delivered the opinion of the court. It will not be necessary in this case, to determine whether the defence of the defendant is partly an answer, and partly a plea in bar, or whether it is 'a plea in bar supported by an answer, or, if a plea, whether it is overruled by the answer. These questions not necessarily arising on the record; no replication has been filed, and the cause has been set down for hearing by agreement of counsel upon the proceedings in the case; if it be an answer, upon bill and answer, if a plea, then upon the bill and plea, in either case, all the facts set forth in the bill are admitted to be true, not by setting the cause down for hearing, but by the pleadings in the cause, and if the defence be in fact a plea, the cause having been set down for hearing, the question is submitted on its legal sufficiency to bar the remedy which the complainant seeks. The facts of the case appear to be, that Dudley Poor was indebted to Luke Tiernan, in the sum of six hundred dollars, for rent in arrear—That for the purpose of securing the amount due, Tiernan levied a distress upon the goods of Poor—That to relieve his property from this lien, thus acquired by Tiernan, Poor and Wife agreed with him that they would execute the paper, purporting to be a mortgage, filed with the proceedings, and -Tiernan, in consideration thereof, agreed to .give up his distress—That upon the fulfilment of the agreement on the part of Poor and Wife, the goods levied upon were given up, and his lien by distress surrendered. That the property upon which the mortgage operated had belonged to Mrs. Poor, and had been conveyed by a deed of trust, on the 24th of August, 1816, by Poor and Wife, to Colum~ bus O’Donnell and John II. Poor, for the sole and separate use of Mrs. Poor, during life, and in no wise answerable for his debts and engagements, with a power to her to sell, convey and dispose of absolutely, in such manner as she might think proper to direct, without the concurrence of her husband, and from [227] and after her decease, such parts of the property as should be left undisposed of by her deed or contract, was conveyed in trust to her children and their heirs, as tenants in common. In the case of Price & Nesbit vs. Bigham’s Ex’rs, the question was presented how far it was competent for a married woman, by a contract under seal, to charge the payment of a debt on her real estate, which was settled on her by a deed of trust for her separate use, with a power to sell and convey and absolutely to dispose of the same, by a deed duly executed by her, her coverture notwithstanding, and in delivering their opinion on this point, the court after stating that hy the express terms of the trust, she might pass her lands by deed, and they emphatically ask if this power exist, “how can the power to encumber it by mortgage or charge it by contract, be denied to her?” The law allows her, notwithstanding her coverture, to part from her whole estate, upon the principle, that in doing so, she acts as a feme sole as to her separate property, and upon the like principle, and to promote fair dealing, it must be conceded to her to charge and encumber it with her debts. Whether the instrument of writing which forms the basis of this call, for the interposition of a Court of Equity, be in fact a mortgage, in the legal and technical sense of that term, in consequence of its not having been acknowledged by Mrs. Poor in the manner, in which the acts of Assembly require the acknowledgment of feme’s covert to be made, it is not necessary to determine. Nor do we mean to intimate any opinion upon the subject. For the principle is a well settled and familiar one, that where any instrument of writing is designed to operate as a transfer of property, and proper and apt terms are used whereby the meaning of the parties can be clearly ascertained, if some circumstances are omitted to give it legal validity, whereby it is deprived of its intended specific operation, a Court of Equity will set it up as a contract, or as evidence of a contract, and where the rights of innocent third parties would not thereby be effected, will, as between the parties to such instrument, carry it into specific execution, provided it be founded upon a valuable consideration, % P. W. 242. The [228] deed in this case was clearly intended to be a mortgage to secure the payment of the complainants debt, and was no doubt meant by the parties to be clothed with all the formalities and solemnities necessary to give it a legal and effective operation as such. Its design and meaning was to secure a particular debt, and to.charge it as a lien on the wife’s separate property. If it be deprived of legal validity for the want of a privy examination, we are still at liberty to look at it as illustrating and evidencing the agreement of the parties, and will coerce its execution according to that original design. Such a course would be demanded by the first principles of equity. For what could be more inequitable than to permit a party to escape from the fulfilment of his contracts, by the mere omission of legal forms ?—in which omission too, he may have been the sole actor, and in all cases a participator, and to allow him to reap the advantages from such omission, of all the consideration which constituted his inducement, for entering into the contract. A voluntary contract could neither be coerced in equity, nor could advantages from it be obtained at law. And this leads us to the enquiry, whether the consideration here was valuable, and of this there cannot be a question entertained. The admission in the cause shew that the complainant surrendered his lien on the property distrained in consideration of the security, which he and all the parties to it believed he had obtained by the mortgage. It was the mere substitution by consent of one security for another, and if relying on the acts of the parties, he has relinquished a certain indemnity, and is now to be told, that his security taken in return, and intended as an equivalent, is gone, the result would be, that equity would enable them to perpetrate a fraud. But it is said that the wife was not benefited by any of these stipulations. It is not necessary that she should have been. It is sufficient, acting with her property as a feme sole: that she contracted to pass it for her husband’s debts, on condition that a benefit should be bestowed upon her husband, and that the creditor seeking the benefit of this contract, and relying upon it, surrendered an existing security or advantage. [229] It is not meant to intimate in any tiling which has been said, that however the complainant might suffer by a reliance upon the conduct of those with whom he contracted, that the execution of this contract could be enforced against the rights of disposition contained in the deed of trust. That would constitute a paramount law, governing and controling every contract in relation to it, and it need be scarcely necessary to say, that no decree could pass against her to carry into effect any contract she might make, unless such contract were within the limits of her jus disponendi. This is a stronger case in favour of executing the contract, than was the case of Price & Nesbit vs. Bigham's Ex’rs. There the power was to pass the estate by deed. Here it is by deed or contract. Embracing by the latter term, the power to pass the estate by every kind of agreement known to the law, in which, estates of the description mentioned in the deed of trust, could pass.—As a feme sole, she had power to contract with any one, and to bind her estate, and to charge it with such contract. The power is sufficiently large and unrestrained to permit her to contract as security for others, and thus to pass her estate for the benefit of the principal, and to secure to his creditors their debts—she might voluntarily sell her lands, and with the proceeds pay her husband’s debts. Why might she not upon a consideration incumber it for the same purpose? There is nothing in the spirit and meaning of the deed of trust in opposition to such liberty; on the contrary, every thing to uphold and confirm it—while it is cautiously guarded against liability for her husband’s debts, her will and power over it is unrestrained. And if she chooses to exercise a kindness to her husband in discharging his debts, and thus charging her lands upon a sufficient consideration, there is clearly nothing in the intention of the settlement which forbids it. She was never intended to be placed in a state of pupilage with regard to her property, hut left free to act as she pleased, with regard to it, as fully and as perfectly as if she had been a feme sole, and as if she had the legal title; nor are we bound in order, to give efficacy to her acts, to see that she has sought the counsel of [230] her friends, or solicited the permission of her trustee—such a limitation would restrict her will,'in violation of the essence and spirit of the power. It is supposed that the allegations in the bill do not set up a proper foundation for the interposition of a Court of Equity. The plaintiff’s title to the assistance of the court, must always be exposed by the pleadings; but the style and character of pleading in equity has always been of a more liberal cast than that of other courts, as mispleading in matter of form has never been held to prejudice a party, provided the case made is right in matter of substance, and supported by > proper evidence. Cooper Eq. Plead. 7-8. The allegations then contained in the original and two amended bills, are in. substance these—That the property prayed to be sold was conveyed to trustees in trust for the separate use of the wife of Dudley Poor, setting out in substance the uses and trusts to which the property was subjected, it then avers the existence of a debt due from Poor to Tierncm, that Tier-nan had surrendered his lien on the property of Poor, in consideration of the execution of a mortgage by Poor and wife on the lands of the wife thus conveyed in trust, which lands thus mortgaged, are prayed to be sold for the satisfaction of the debt. According to oür views these averments make out a clear case for equitable interposition. In point of form it may not have been strictly correct to treat the instrument of writing in controversy, as a legal mortgage, as it seems to have been done in the original bill. As such it may not be clothed with the necessary legal attributes. If it be not, thus clothed, it is at all events, clearly a contract which equity will treat as a mortgage, and as between these parties, so far as concerns this suit, liable to all the incidents of a strictly legal mortgage, as much so as if all the formalities of acknowledgment, privy examination, and re- ’ gistration, had been pursued. Entertaining the views we do, we cannot but declare, that in ‘ substance, the allegations are correct and sufficient, and the equity clear and unquestionable. The decree oe the Chancellor is reversed.