Kinner v. Walsh

Bliss, Judge, delivered the opinion of the court. On the 18th of September, 1865, Henry Held and Anna, his wife, conveyed to Walsh, the garnishee, three separate parcels of [68] land in trust to secure certain indebtedness of Henry Held named in the deed. The agreed statement of facts shows that Anna Held, when the deed was executed, owned in her own right more than half of the land. The deed provided that in the event of a sale to satisfy the debt, the surplus, after its payment, etc., shall be paid to the grantors of the deed or their legal representatives. Anna Held died March 15,1867, leaving two children. Some of the notes of Henry Held, secured by the deed of trust, maturing, Walsh, the trustee, on the 4th of March, 1868, sold the property, paid up all the notes, the costs, expenses, etc., amounting to $2,969.30, and a surplus of $620.70 remained in his hands. To reach that surplus, and subject it to the payment of another debt of Henry Held, the plaintiff (Kinner) instituted the present proceedings in garnishment against Walsh, who replies to the interrogatories, setting forth the facts as above stated, and claiming that he holds the money in trust for the estate of Anna Held. The Circuit Court rendered judgment against the garnishee for the amount of plaintiff’s debt, and the case is brought up by writ of error. It is unnecessary, in our view of the principal question involved in this record, to pass upon the right of the plaintiff to garnishee a trust fund in the hands of the trustee. The more important question arises out of the relation of Mrs. Held and her heirs to the fund. In any proceeding, whether by garnishment or otherwise, can this money be subjected to the debts of the husband ? The original debt, to secure which the trust deed was executed, was his alone. The notes were not her contracts, nor does it appear that she was in any manner interested in them or in anything connected with them. For the aid, alone, of her husband, she conveyed her property in trust in the nature of a mortgage to secure his debts. The debts are unprovided for; the property is sold. More than half of the proceeds of the sale of what was exclusively hers is applied upon these debts, and a balance remains in the hands of the trustee. Does that money belong to the wife and her representatives or to the husband and his ? If by any lawful contract she has parted with her interest and given it to him, then his creditors, in the proper way, may come in and [69] appropriate it. But the only instrument affecting the question is the trust deed. Through that she lost most of the property embraced in it, but the object of the trust is- accomplished and a residue remains. What is the effect of the trust deed upon that residue ? If the terms of the deed are to control in its fair interpretation, it can have no effect to divest the fund from its natural course. On the other hand, by an express provision for the distribution of the fund, it belongs to her alone; for the deed provides that if the property shall be sold, the proceeds shall be appropriated to the payment of the notes, etc., “ and the remainder, if any, shall be paid to the said parties of the first part,” Mr. and Mrs. Held, “or their legal representatives.” There is only one just construction that can be given to this language, and that is that this remainder should be returned to the party of whose property it was the proceeds — the party whom the equities of the case point out as entitled to it. The relation of husband and wife has nothing to do with the question. His curtesy cuts no figure in this case. In conveying the property to secure his debts, she stands as a stranger, and all the difference there is is in her favor; for, while a stranger can make any kind of a contract with him, she could only act by the deed. The deed not designating which of the said parties should receive this surplus, it clearly belongs to her, for out of her land it was made. But disregard this reservation, and the result is the same. Anna Held died about a year before the sale. The equity of redemption descended to her heirs, and their right to'the property became complete, subject only to the trust deed and to the curtesy of her husband. That descent carried with it the right to any surplus arising from the sale of the property, after paying the debt. There is no difference in this respect between a common mortgage or a mortgage with power to sell, and a trust in the nature of a mortgage with power to sell. They are all alike redeemable, and are all given for the same end. (Washb. Real Prop., book 1, chap. 16, § 5; Bourne v. Bourne, 2 Hare, 35; Shaw v. Headley, 8 Blackf. 165; Moses v. Murgatroyd, 1 Johns. Ch. 130; Wright v. Rose, 2 Sim. & Stu. 323 ; 1 Hill. on Mort. [70] chap. 14, § 28.) It is of no importance, so far as this case is concerned, to consider the effect of the provision in the deed reserving the surplus to her “ legal representatives for, whether it go to the heir or administrator, it is equally exempt from attachment or any other proceeding to subject it to the husband’s debts. This is not a proceeding against the curtesy of the husband, if he have any in the little left after paying his debts, and the rights of his creditors in that respect need not be considered. We are referred to section 14, chap. 115, of General Statutes. This section exempts, among other things, all moneys and obligations arising from the sale of the wife’s real estate from attachment or levy during coverture for the sole debts of the husband, and is a very just provision. But it does not control the case, as it applies only to attachments, etc., “during coverture,” and not after the wife’s decease. The section furnishes a necessary safeguard for the real estate of the wife and the proceeds of its sale, securing her in its enjoyment and against loss from her husband’s debts. The provision does not apply to such estate and proceeds after her decease, nor is it needed, inasmuch as the fact of her death passes beyond his control and the reach of his creditors the property thus protected during her life. I know not on what principle counsel base their claim that the debts of the husband contracted during marriage must be presumed to have been for the joint benefit of husband and wife. Thb law makes no such general presumption, and if it did it could not apply to the property of the wife held before coverture. Upon proof of fraud, an estate of the wife derived from the husband might under some circumstances be reached by his creditors ; and certain presumptions, so far as the term applies to reasonable inferences, may arise from those circumstances. But nothing is presumed against the separate estate of the wife, not derived from the husband, that does not arise from her deed. The judgment is reversed. The other judges concur.