Filler v. Tyler

Buchanan, J., delivered the opinion of the court. The first question to he disposed of upon this appeal,-is, whether or not this court has jurisdiction of it. The appellant is the owner of two debts evidenced by judgments, neither of which amount to the sum of $500, but together amount to more than that sum. When the suit was instituted he was the owner of only one of the judgments, but before the decree was rendered in the cause settling the rights of the parties, he had become the owner of the other judgment by assignment. It is alleged in the pleadings of the appellees that the assignment was not made in good faith, but was obtained merely for the purpose of giving the appellant the right of appeal. If it was true that the assignment was not obtained in good faith and was merely colorable in order to give the right of appeal, this court would not have jurisdiction, but in order to defeat its jurisdiction the fact that the assignment was not made in good faith must be made to appear. Fink Brothers & Co. v. Denny, 75 Va. 663, 667-8; 2 Barton’s Ch. Pr. 1113. The assignment purports on its face to be for value, and is under seal, and must be presumed to have been made in good faith in the absence of evidence to the contrary. The motion to dismiss for want of jurisdiction must therefore be overruled. The appellant insists that his demurrer to the original bill ought to have been sustained, because the appellee had a complete and adequate remedy at law. The bill was filed by the wife of Douglas Tyler to enjoin the sale of certain personal property, of which she claimed to be the equitable owner, and which had been levied on as the — 464 — property of her husband under executions issued upon the judgments owned by the appellant. The bill alleges that she and her husband were married in the year 1869, that her parents died soon afterwards, and that from them she inherited real estate of the value of $50,000, and personal estate of the value of $10,000, which came into the possession of her husband; that he had little, if any, property of his own, and was a man without business capacity —the result was that he squandered the greater part of the personal property, and became heavily indebted; that in the year 1885 she agreed with her husband to convey in fee one of her two tracts of land inherited by her, as aforesaid, to satisfy certain individual debts of her husband, and to secure certain other debts which he owed, and that in consideration thereof, and contemporaneously therewith, he undertook to surrender and secure to her her inherited property, real and personal, free from his debts; that pursuant to this agreement she united with him in executing three deeds of trust upon h er lands to secure his individual debts to the amount of $18,000. The first was executed in 1885 for $13,000, the second in 1888 for $1,500, and the third and last in 1890 for $3,500. Contemporaneously with the execution of the last mentioned deed of trust, and pursuant to the agreement aforesaid, her husband conveyed to a trustee, for her benefit, all the right, title, and interest which he had in the said real estate, together with the personal property which belonged to him, or which he had an interest in, upon the lands, including all stock, farming utensils, and furniture. This deed was duly recorded. She further alleges, among other things, that the amount for which she had bound her lands by uniting in the deeds of trust was much more than the value of her husband’s marital rights or interest in her property; that in making such settlement, independently of their agreement, he was only doing what a court of equity — 465 — would have compelled him to do; that in uniting in the deeds of trust, and thus charging her property with the payment of her husband’s debts, she became his surety and is entitled to all the rights of a surety, that her husband is hopelessly insolvent; that the personal property settled upon her has been levied on to satisfy the judgments of the appellant; that she is threatened with a multiplicity of suits; and that, in order to prevent such sale and to avoid such threatened litigation, she has brought this suit, and desires to have all matters connected therewith litigated, and, upon these grounds, prays for an injunction to prevent a sale under the executions of the appellant; and, upon a hearing of the cause, asks that the property embraced in the deed of settlement be decreed to be hers, and for general relief. The demurrer to the bill, which appellant insists the Circuit Court erred in overruling, is based upon the ground that section 2999 of the Code of 1887 provided a complete and adequate remedy at law, and that a court of equity has no jurisdiction of the case. Even if all the relief to which Mrs. Tyler was entitled, upon the facts stated in her bill, could have been had in a court of law under the section of the Code referred to, a court of equity rvould still have had jurisdiction. The equitable separate estate of a married woman is the creature of a court of equity, and an injunction will always be granted, where necessary, to protect, aid, or enforce any equitable estate, or interest, which she may have. 3 Pomeroy’s Eq. Jur. sec. 1345. Courts of equity, having such jurisdiction before the enactment of the statute now found in section 2999 of the Code of 1887 (see Revisors’ Report of Code of 1849, page 765, note,) still retain it, although the statute may furnish a complete and adequate remedy at law. Courts of equity having once acquired jurisdiction never lose it because jurisdiction of the same matters are given to law courts, unless the statute — 466 — giving such, jurisdiction uses prohibitory or restrictive words. 1 Barton’s Ch. Pr. 60, 61. The Circuit Court did not err in overuling the dermurrer. Another error assigned is, that the Circuit Court erred in sustaining the validity of the deed of settlement. The record shows, as stated above, that Mrs. Tyler had united in three deeds of trust charging the land inherited from her parents with the payment of debts amounting to $18,000, of which sum more than $16,000 remained due and unpaid; it further shows that her husband was sixty years of age, and utterly insolvent; that the annual rental value of her lands is $1,600, and that the personal property embraced in the deed of settlement and levied on, was worth about one hundred dollars more than the appellant’s debts. Mrs. Tyler does not attempt to prove the agreement between herself and her husband, set up in the bill, and her right to relief upon that ground is wholly unsupported, and was abandoned in argument by her counsel. She relies entirely for relief upon the ground that when she united with her husband in each of the three deeds of trust charging her maiden lands with her husband’s individual debts, she became the surety of her husband, and that she is entitled to all the rights of a surety, and that since her lands are bound for and will have to be subjected to the payment of those debts, which are greater in amount than the value of her insolvent husband’s rights in her lands, the conveyance made for her protection is valid and binding. The record shows sufficiently, we think, that the debts secured by the deeds of trust weie the individual debts of the husband; at least, it appears that the notes evidencing such indebtedness were his individual notes, and, in the absence of proof that the money for which they were given went into the hands of the wife for her own use as her separate estate, the presumption is that the debts secured are the debts of the — 467 — husband. Huntington v. Huntington, 2 White & Tudor’s Lead. Cases, part (2), page 1929; Clancy’s Rights of Married Women, 589-90. It also shows that the amount of the husband’s debts charged upon the wife’s lands is greater than the value of the property conveyed by the husband for her protection. If, therefore, the wife can be considered as the husband’s surety, and as entited to the rights of a surety against the husband and his creditors, the conveyance made for her benefit must be sustained. It is well settled in this State that where a wife unites with her husband in conveying her maiden lands absolutely, the presumption is that she gives to her husband all her interest therein, and it is insisted that the same presumption arises when she unites with her husband in charging her lands with the payment of his debts, and that she does not thereby become his surety unless there is an express agreement to that effect. Counsel do not refer to, nor has the court, in its researches, been able to find, any decision of this court, upon this question. It was decided in England at an early day, viz., in 1702, in the case of Huntington v. Huntington, 2 Lead. Cases in Eq. (part 2) 1922, that where a wife unites with her husband. in putting a mortgage upon her estate of inheritance for the benefit of her husband, her estate was only a surety for his indebtedness. , In the English notes to that case it is said it is a well-established general rule that whenever husband and wife mortgage her estate of inheritance for the benefit of her husband, the wife or heir will be entitled after the death of the husband to have it exonerated out of the estate of her husband, real and personal, her estate being only considered as a surety for his debt. Even, it is said, a creditor of a wife may, upon the refusal of her representatives, file a bill to obtain such exonera — 468 — tion, and a number of cases are cited to sustain the statement made in the note, including decisions made by Lord Hardwicke and Lord Eldon. Lord Chancellor Westbury, in the case of Gleaves v. Paine, 1 De Gex, Jones, and Smith, 87, 95, decided in the year 1863, said: “The estate of the husband being mortgaged in the manner here described for the husband’s debt, the wife unquestionably assumes, in the eye of a court of equity, the character of a surety for the husband. Properly speaking, she is not a surety, but she is so called by analogy. She has title to call upon her husband to exonerate her estate from the debt.” The Court of Appeals of New York, in such cases, treats the wife or her estate as the surety of her husband, and holds, as do the English courts, that she is entitled to all the rights of a surety. In the case of the Bank of Albion v. Burns and others, 46 N. Y. 170, 174, it was said: “The property of the wife having been mortgaged to secure the debt of her husband, she occupied the position of a surety, with all the rights, legal and equitable, incident to that relation; and the defendants, having succeeded by inheritance to the estate and interest of their mother, occupy the same position, and are entitled to every defense which could have availed the original mortgagor had she lived. Gahn v. Niemcericz, 11 Wend. 312; Loomer v. Wheelwright, 3 Sand. Ch. Rep. 135; Smith v. Townsend, 25 N. Y. 479.” In Loomer v. Wheelwright, 3 Sand. Ch., at page 135, it is said: “I see no reason why a different rule should be applied to the wife’s case from that which is applied in other instances of principal and surety. If I mortgage my farm to secure my friend’s debt, and the creditors know it is my farm, I become surety for my friend, and the creditor is bound to respect that relationship. The law indulges him in no pre — 469 — sumption that I intend to make a gift to my Mend, or that the debt was secured in some way for the benefit of my property. Why should such a conjecture or presumption be applied to the wife in order to disparage her claim as surety ? If there should be any different rule, it ought rather to provide an inference in her favor than to strain a point against her. ’ ’ Olancv, in his work on the Rights of Married Women, says: “If wife join her husband in a mortgage of her real estate (also of her separate estate) for his debt, she will be considered in equity as his creditor.” Clancy’s Rights of Married Women, 589. “Where a wife,” he says, “joins her husband in a mortgage of her estate for his debt, the inference drawn by a court of equity from these circumstances is that she intends to be repaid; and even though the equity of redemption should be reserved to the husband and his heirs, still there is a resulting trust to the wife after the objects of the mortgage have been satisfied. ’’ Clancy on Rights of Married Women, 590; Bish. on Law of Married Women, sec. 604. The strongest reason urged against holding that the wife under such circumstances should be treated as a surety is that it will encourage the perpetration of frauds on the part of husband and wife. The opportunity for fraud in cases where the wife unites with her husband in charging her real estate with his individual debts cannot be very great, since her title to her lands will generally appear of record, as will also the mortgage or deed of trust charging them, and the creditors of the husband will have all the necessary means of ascertaining the ownership of the lands and the character of the charges thereon. But if it were otherwise, the wife cannot be deprived of her rights simply because the relation between her and her husband may enable him the more easily to defraud his creditors. The English courts, as above shown, treated her — 470 — in such-cases as surety -when the rules of the common law prevailed in all their rigor, and the rights of the wife were much less liberally dealt with than now. Both upon principle and precedent, we think, that a married woman who unites with her husband by mortgage, or deed of trust, in charging her inherited land with the individual debts of her husband, should be considered as the surety of her husband and entitled to all the rights of a surety in the absence of any agreement to the contrary. In this case the consideration furnished by the wife was ample for the settlement made upon her by her husband, and the Circuit Court rightly held that the deed of settlement was valid. It is claimed by the appellant that the settlement made upon Mrs. Tyler by her husband cannot be sustained upon the ground that she was his surety, because no such case is made in her bill. It is true, the bill is based chiefly upon the agreement between her and her husband alleged to have been made in the year 1885, but the facts which show that she was her husband’s surety are fully stated iu the bill, and it is also distinctly alleged that she was his surety, and she asks for all the protection to which she is entitled as surety. It would have been better pleading to have stated her case as surety more fully, but Ave think the allegations and prayer of the bill are sufficient to entitle her to the relief granted her by the Circuit Court. The appellant insists that, if it be held that such conveyance is valid, and that Mrs. Tyler became the owner of the property thereby conveyed for her own separate use, free from the debts of her husband, still she is bound for the judgment of the Patapsco Guano Company against her husband and the appellant, and which has been paid by the latter,' because the note upon which that judgment is founded is the joint note of her husband and herself. This assignment of — 471 — error cannot be sustained. The note upon which the appellant’s judgment is founded was made by Douglas Tyler and endorsed by his wife, Mrs. Tyler, and at the time the note Avas made and endorsed she owned no separate estate. This note was executed and endorsed prior to July, 1890, when the deed of settlement was made. The agreement set up in the bill betrveen Mrs. Tyler and her husband, by which he undertook to make a settlement upon her, was prior to the execution and endorsement of the note, but that agreement was not proved, and no rights were acquired under it by the wife. Unless the Avife had the power to charge her separate estate acquired after the note Avas so endorsed upon which appellant’s judgment was founded, the note was a mere.nullity as to her. The agreements of a married woman differ from contracts proper, inasmuch as they give rise to no personal remedy against the married woman, but only to a remedy against her separate estate. This court held in Crockett v. Doriot, 85 Va. 240, that the statutory separate estate of a married woman could not be subjected for her engagements entered into prior to the acquisition of such estate. There does not seem to be any reason why the rule should be different in the case of her equitable separate estate. The ground upon which courts of equity have subjected her equitable separate estate for her engagements has been, that both she and the party with whom she made her engagements dealt with reference to her existing separate estate. Mr. Pomeroy lays down what seems to be the correct rule upon the subject, as follows: “If a married woman, having separate estate, enters into an engagement, which, if she were a feme sole, would constitute a personal obligation against her, and in entering into such engagement she purports to contract, not for her husband (i. e., not in behalf of her husband as his agent), but for herself and on the credit of her separate estate, — 472 — and it was so intended by her, and so understood by the person with whom she is contracting, that constitutes an obligation for which the person with whom she is contrating has the right to make her separate estate liable. ’ ’ 3 Pomeroy Eq. Jur., sec. 1121. Tested by this rule, it is clear that the equitable separate estate, acquired after her engagements had been entered into, cannot be subjected for their payment; for, neither she nor the party with whom she entered into the engagements can be presumed to have dealt with reference to what did not exist when the engagements were made. We are of opinion that the contracts or engagements of a-married woman can be enforced against the equitable separate estate only which she held at the time of entering into the engagement, or so much thereof as she owns when decree is rendered, and not against equitable separate estate which was acquired after the time of making the engagement. We are of opinion that there is no error in the decree complained of, and that it should be affirmed. Affirmed.