Holt v. Agnew , 67 Ala. 360 ( 1880 )

BRICKELL, C. J.

— It is certainly true that the motive of appellant in becoming a “free dealer,”-as it is termed, or rather in obtaining relief from the disabilities of coverture as to her statutory or other separate estate, through the decree of the Chancellor in pursuance of the statute (Code of 1876, § 2731), was the assignment of the policy Qf insurance taken in her name, on the life of her husband, to pay the debts of her husband. It is also true, the appellees aided her in obtaining the decree, with full knowledge of her motive, and to avail themselves of the assignment in discharging the obligation of the husband for which they were answerable as his sureties. The argument pressed by the couusel for the appellant is, that though she was by the decree of the Chancellor relieved from the disabilities of coverture, as to her statutory or other separate estate, and endowed with full capacity to buy, sell, hold, convey and mortgage real and. personal property, and to sue and be sued as a feme sole., yet, she was without capacity to make any disposition of her estate in payment of the debts of her husband. The incapacity is supposed to result from the constitutional provision: “The real and personal property of any female in this State, acquired before marriage, and all property, real and personal, to which she may afterwards be entitled by gift, grant, inheritance or devise, shall be and remain the separate estate and property of such female, and shall not be liable for any debts, obligations, and engagements of her husband, and may be devised or bequeathed bv her, the same as if she were a feme sole.”- Const. 1868, Art. 14, § 6; Const. 1875, Art. 10, § 6. Assuming the truth of the proposition, it is insisted the defendants, to whom the policy of insurance was assigned for the purpose of paying the debts of the husband, and who used it for that purpose, are liable as constructive trustees to respond to the appellant for the moneys realized from the 'assignment. The argument is not, however, sound — the foundation upon which it rests, that the constitution prohibits the wife from applying the estate it secures to her, to the debts, obligations, or engagements of her husband, can not be admitted. If the terms and words of the constitution, had at, and prior to, its adoption, been employed in a gift or conveyance to, or a settlement upon, a married woman, they would have created an equitable separate estate. The execution of liability of the estate for the debts of the husband would have been simply an expression of the implication of the law of an incident of the estate, and the negation of one of the conveyances resulting from coverture at common law, attaching to the estate held or acquired by the wife, to which the marital rights of the husband, as defined by the common law, attached. The constitution must be construed just as a conveyance or a gift in its terms would have been construed, at the time of its adoption. Constitutional provisions of this character, framed with the view and intended to remedy defects or evils in the common law, as it had existed in the State, must be construed and read in the light of that law. When words and terms are employed in such provisions, having by the common law a definite signification, and there is not an intention manifested to attach to them some other signification, it is more than presumption that they are used in their known and defined meaning and sense. — Cooley’s Cons. Sim. 74; Taylor v. Woods, 52 Ala. 477; Bender v. Meyer, 55 Ala. 596.

By the common law, husband and wife were regarded as but one person, for many purposes. The legal existence of the wife was lost, or, as most often expressed, merged in that of the husband. She was without capacity to contract, and had not the administration of her property. By the marriage, if she was seized of an estate of inheritance, the husband became seized thereof, taking the rents and profits during their joint lives, and, by possibility, during his life. If she had an estate of freehold, not of inheritance, as for her own life, or the life of another person, the husband became seized of such estate, and entitled to the rents and profits during marriage. If the estate was per autre vie, the husband became a special occupant of the land during the life of such person. Her chattels real passed to the husband, who had power to sell, assign, or make other disposition of them, at pleasure. As to her'choses in action, he had an unqualified right of reducing them to possession, and, thereby, acquiring absolute ownership of them. He could sue for, release, discharge, or assign them. If, without reducing them to possession, or altering their character, he died, his rights, springing out of, and dependent on, the marital relation, terminated with its dissolution. Of her personal property in possession, eo instanti, the marriage, title and possession passed to the husband. And personal property, title to, and possession of, which accrued to, or was acquired by, the wife, during the coverture, became the absolute property of the husband. Her possession was his possession, because, in the eye of the common law, she was positively incapable of a possession distinct from that of the husband. These were the property rights of the husband, as defined and declared by the common law, and when they were exercised, as a necessary incident of ownership, a liability of the property for the payment of his debts resulted. For twenty years before the present provision was introduced into the constitution, the statutes had enlarged the capacity of married women to take and hold property, and had abrogated the common law rights of the husband to the estate, real or personal, of the wife. The purpose of the constitution was the prevention by legislative enactment of a restoration of the common law, and the preservation of the enlarged capacity of the wife. Coverture does not now render her incapable of taking and holding. The capacity remains to her, in the words of the constitution, as if she 'were a feme sole. Title and ownership remaining to, and residing in her, the husband by marriage acquiring neither, nor a right to either, liability for the payment of his debts, an incident of ownership, would have been excluded, without the explicit declaration, found in the constitution, that it should not attach. It is the common law liability of the property of the wife, for the payment of the debts of the husband — a liability his creditors could enforce against the consent of the wife — to which the constitution refers. — Bender v. Meyer, 55 Ala. 576. It has no reference to the voluntary payment of the debts of the husband, as it has not to any other disposition the wife may make of the estate secui-ed to her, freed from the common law rights of the husband, and freed from subjection to such rights by legislative enactment. All such dispositions depend for their validity upon the capacity of the wife, as the owner of the estate. There was no purpose to render it illegal for the wife to pay, or secure, the debts of the husband, if the powers conferred were large enough to embrace such a disposition of her estate. And it is quite an error to suppose that a policy is established which would be offended if the wife, from affection, or on any fair consideration, should relieve her husband from the pressure of debt.

Prior to the statutes, or to the constitutional provision, whenever an estate was by the terms of its creation limited to the sole and separate use of a married woman, whether a trustee to take and hold the legal title was interposed or not, the property rights of the husband at common law were excluded, an equitable estate was created. As to such estate, a court of equity regarded the wife as a feme sole, and she could in reference to it contract, alienate, or otherwise dispose of, or charge it, as if she were fully sid juris. — Short v. Battle, 52 Ala. 460; Demarrest v. Wynkoop, 3 Johns. Ch. 129. As we have said, by appropriate terms, the constitution creates an equitable separate estate, and if the statutes did not intervene, and narrow and circumscribe the capacity of the wife to contract, and to alienate or charge it, and attach to it peculiar incidents and properties, over it she could exercise the same power which she could have exercised over an equitable separate estate. — Hooper v. Smith, 23 Ala. 639. The statutes intervene, and disable her from charging, or alienating it, in the payment of the husband’s debts, or from mortgaging or assigning, or selling it, to secure, or to pay any debt, or demand, whatever. They limit her power to a sale and conveyance, in -which the husband must join, and which must be in writing, attested by witnesses, or, acknowledged before an officer having authority to take and certify the acknowledgment of conveyances. The statutes also commit the estate to the care of the husband, as trustee, and authorize him to take the rents and profits without liability to account for them. These limitations upon the capacity of the wife, embarrassing the alienation of the estate, are found sometimes operating to lessen its value to her, and to render it of but little advantage in the maintenance of herself and family. Prom many causes the husband, without fault on his part, may become unsuitable as trustee to manage it, or it may not be safe that the rents and profits should pass into his possession. Whenever he becomes incapable of, and unfit for the’discreet management and control of the estate, the statutes confer on the wife the right to obtain a decree from the court of chancery for his removal from the trusteeship, and when such a decree is obtained, another trustee is not interposed, but the wife has the same power and control over the estate, that she would have, if she were a feme sole. (Code of 1876, §§ 2717-18). • She may then mortgage or charge it as security for her own debt, or for the debt of the husband. — Bell v. Locke, 57 Ala. 242.

The statutes go further, and authorize the Chancellor, on application of the wife, to relieve her from the disabilities of coverture as to her statutory, or other separate estate, and empowering her to buy, sell, hold, convey and mortgage real and personal property, and to sue and be sued as a feme sole. The words of the statute are plain and unambiguous, and. the power of disposition conferred on the wife is very broad when she is-relieved of the disabilities of coverture ; there is no exclusion of her power to mortgage, or to assign, her estate to secure the payment of the debts of the husband. The power to mortgage, to sell, or otherwise transfer, is general and unlimited, and there can be no reason for engrafting an exception of mortgages, or transfers of any kind, to secure the debts of the husband. The exception would be repugnant to, and inconsistent with the terms of the statute. Passing upon a private statute, enabling a married woman to receive and hold property by gift, purchase, or inheritance, as a feme sole, this court, in Perryman v. Greer, 39 Ala. 133, declared there was no doubt of her capacity to mortgage such estate as security for the debt of the husband. The appellant had full capacity, after being relieved of the disabilities of coverture by the decree of the Chancellor, to assign, or to sell, the policy of insurance, in the payment of her husband’s debts. It must, however, be observed that the statute does not confer on the wife, a general or unlimited power of contracting. It is only her capacity to buy, sell, hold, convey, and mortgage, which is enlarged.

It is insisted that although the appellant may have been sui juris, of full capacity to assign and sell the policy of insurance, yet it is shown that advantage was taken of the distressing circumstances by which she was surronuded to press her into the transaction, when she was without the aid of the advice of counsel, or of disinterested friends, and without opportunity to procure it, the appellees having the benefit of the advice of counsel, which they were pursuing. The capacity, the right to dispose of property at will and pleasure, is an incident of its ownership, which the law recognizes, and neither courts of law, nor of equity, can assume to controHt, or to annul dispositions, because they may be esteemed injudicious, unwise, or improvident, or because they may not be such as a prudent man would make, or a just, generous, and honorable man would consent to receive. Consent, free and voluntary, is, however, an essential element of every contract and of every disposition of. property. The contract, or the disposition, whatever may be its form, or character, generally, of itself, imports consent, and is sufficient evidence of it. There are relations in life, in which influence is acquired by the one party, and confidence reposed by the other — relations of which we usually speak as confidential, that open the way and afford opportunity for impositions, or undue influence, and yet, rather close the door to, and render difficult, the detection of its exercise. Such are the known relafions of trustee, and cestui que trust, guardian and ward, attorney and client, principal and agent, husband and wife, but the number or character of the relations are not defined by law; “ all the variety of relations in which dominion may be exercised by one person over another,” fall within the general term confidential relations. When, in such relation, the party subject to imposition, to undue influence, enters into a contract with, or makes a disposition of property to the other, from which detriment is sustained by the one, and benefit derived by the other, upon principles of public policy, there is no presumption of consent; the act or contract does not of itself import it. The law casts the burthen of proving the transaction fair and just, and the free consent of him who sustains the detriment, and is subject to the influence, upon the party who takes the benefit, and in whom trust was reposed^ — Johnson v. Johnson, 5 Ala. 90; Juzan v. Teulmin, 9 Ala. 684; Lowery v. Ferguson, 54 Ala. 510; Malone v. Kelly, ib. 532; Dickinson v. Bradford, 59 Ala. 581; Lanier v. Waddell, 62 Ala. 347. In all these cases, it is a very material and important circumstance, which may relieve the transaction of much of the suspicion attaching to it, and tend to show the spontaneity of the cestui que trust, if he had full opportunity to obtain, and in fact did obtain competent and independent advice in reference to the transaction from counsel, or from disinterested friends, who were bound to him, and not subject to the influence of the trustee.- — Kerr on Fraud, 151; Malone v. Kelly, 54 Ala. 546. On the other hand, if the cestui que trust has not such advice, and the trustee has it, and is acting upon it, the fact is as material and important, 'and it may be safely said, the transaction can but seldom stand vigorous judicial investigation. — Kempson v. Ashbee, R. 10 Ch. App. 19; Baker v. Bradley, 7 DeG. Mc. & G. 621; Clarkson v. Hanaway, 2 P. Wm. 205; Coffman v. Lookout Bank, (Sup. Ct. Tennessee); Southern Law Journal, April, 1881, 275.

In this case, it cannot be said there was any relation of trust and confidence existing between the parties. To the fidelity and integrity of the appellees, the appellant did not commit her interest, nor did she look to them for advice or protection. They met, and by her own act and upon her own suggestion, they were invited into the relation of parties contracting with her, that she might obtain relief for her husband, afflicted by disease, harassed in mind because of the official default, from which he apprehended the most serious and extremest consequences. Transactions with her looking to the relief of her husband, from which she sustains detriment, and does not derive corresponding benefit, in which she parts with property, or rights of property, and does not obtain an adequate, valuable consideration, in view of her distressed condition, which was known to the appellees, the plainest considerations, and highest obligations of right and justice, compel a court of equity to investigate jealously and vigilantly, and to undo them, if there be any traces of undue influence from any source, or of advantage taken of her condition. Fraud or imposition may not be shown — of either the parties may be fully acquitted, yet. if she has acted hastily, without time and opportunity for deliberation, in the absence of disinterested advice, and without opportunity to obtain it, orif she was acting under the influence of threats of the punishment of her husband, or of extreme terror, or of apprehension of his impending death, and her motive was his relief, a court of equity must intervene, and restore her to the condition in which she was, when induced into the transaction. The doctrine upon which the courts act, when a party, by the force of circumstances, is reduced to a condition in which he cannot deal upon terms of equality with another, and is peculiarly subject to oppression, or imposition, or to undue influence, is thus expressed by Judge Story : “As, where he does an act, or makes a contract, when he is under duress, or the influence of extreme terror, or of threats, or of apprehension short of duress. For, in cases of this sort, he has no free will, but stands in vinculis, and the constant rule in equity is, that, where a party is not a free agent, and is not equal to protecting himself, the court will protect him.” * * * “ On this account courts of equity watch with extreme jealousj", all contracts made by a party while under imprisonment; and, if there is the slightest ground to suspect oppression in such cases, they will set the contracts aside. Circumstances, also, of extreme necessity and distress of the party, although not accompanied by any direct restraint or duress, may, in like manner, so overcome his free agency as to justify the court in setting aside a contract made by him, on, account of some oppression, or fraudulent advantage, or imposition, attendant‘upon, it.” — 1 Story Eq,. § 239.. And so in cases of surprise, of sudden action without due deliberation, if there is great inequality of consideration in- the transaction, and advantage is taken of the circumstances which mislead, confuse or disturb the reason and judgment, the court will intervene’. — 1 Story' Eq. § 251. In all this class of cases it must be borne in mind that the distressed or necessitous condition of the party does not deprive him of the capacity to contract or of the capacity to dispose of his property in mere benevolence and1 generosity. Incapability would add to, and aggravate, rather than mitigate his misfortunes. Nor is the fact that in the light of subsequent events he may. decree his transactions' improvident, or that he does not obtain from them the anticipated benefits, or he suffers disappointment from any cause not traceable to the party with whom he deals, a ground or reason for setting them aside. All that can be said is, the circumstances excite the jealousy and vigilance of a court of equity, and when to them is added improvidence in the transaction, the court will interfere if there be traces of fraud, of undue advantage, or of surprise. — Nall v. Boyer, 30 Penn. St. 99; Green v. Thompson, 2 Fred. Eq. 365.

The facts of this case, as we collect them from the evidence are, that the husband of appellant had been, and was the secretary of an insurance company, having' the custody of its funds, and the appellees were sureties on his official bond, answerable for his defaults. In August, 1875, his health, failed, and continued to decline until his death in January, 1876.

In October, he ceased to attend to his duties as secretary, and was thereafter confined to his room. From the first of his illness, he manifested frequent terror and alarm, startiug from fright in his sleep-, which was nearly always restless and disturbed. His whole conduct at home, with his family, indicated that he was laboring under the constant apprehension of some impending evil, or misfortune, and of course the appellant was deeply distressed because of’his condition. Soon after he was confined to his room, he confessed to the appellant that he was a defaulter to the insurance company in a large sum, probably seven or eight thousand dollars, and expressed fears that the company would prosecute him criminally. This added to her grief, and after consultation, they sent for his relative, William B. Holt, to whom he communicated the fact of his default, and from whom he requested assistance to satisfy it. The appellant was present at the interview, and voluntarily expressed her willingness to give up .everything she possessed to make good her husband’s default. At a second interview, William B. Holt informed the husband that he could not aid him in paying the default, and advised him to send for his sureties, and disclose the facts to them, as they were then uninformed of them. Smith, one of the sureties,' was sent for and was informed of the default. No harshness, no threats, were indulged in by Smith, and so far as is shown, not an unkind expression. Without the presence of her husband, voluntarily, the appellant begged Smith to assist in relieving him, expressing a willingness to give up everything they possessed, for his relief. The appellee, Parker, was by Smith informed of the default, and visited the husband at his instance. To him, as to Smith, the fact of the default and its probable amount was communicated. The interview was in the presence of the appellant, • and though Parker had not spoken of, or demanded indemnity or security, the appellant again voluntarily expressed a willingness to give up everything for the relief of the husband. In answer to an enquiry from the husband, if he was liable to a criminal prosecution, Parker answered, that he believed the insurance company would be satisfied if the money was paid.

The next day Parker, at the request of the husband, again visited him, and during the interview, which was in-the presence of the appellant, the proposition was made by the husband to turn over to his sureties sundry notes, a policy of insurance in his own name, on his life, issued by the Mobile Life Insurance Company ; and the policy of insurance, (now the matter of controversy), issued to the appellant on his life, for four .thousand dollars, by the Alabama Gold Life Insurance Company. The husband explained to the appellant that this policy was payable to and could be assigned by her only, and she expressed her willingness to make the assignment, without being solicited or persuaded by Parker, and in the absence of any expression of an apprehension of the criminal prosecution of her husband, by him. or by her, or any allusion to such a prosecution. The policies were delivered to Parker, and he procured his attorneys to endorse on them the proper assignments, which were executed a few days thereafter, in the presence of Parker and William B. Holt, and after full explanation to the appellant that she had the property in and the sole power of disposing of the policy payable to her. Afterwards, Parker was informed by his attorneys, that it was doubtful whether the assignment made of the policy by'appellant and her husband, would pass title to it, and suggested that if she was willing to be made a free dealer, she could then, in her own name, make a valid assign-meat. The appellant, upon being informed of these facts, consented to make application to be relieved of the disabilities of coverture, and at her request, William B. Holt became, aud acted as, her next friend in the proceedings for that purpose. He read to her the petition, explained fully its. nature, and that the motive was to enable her to make a better and more effectual assignment of the policy of insurance. After being relieved of the disabilities of coverture, she executed a new assignment of the policy in the presence of a notary public, after it was read to her. This assignment was executed in the presence of Parker and the husband.. A sale of the policy to the G-old Life Insurance Company was then negotiated, but they declined concluding it with any one but the appellant. She visited the office of the-'company, attended by the appellee, Agnew, to consummate the sale, and in his absence, had an interview with the president and attorney of the company. The attorney was very prudent and careful, in inquiring if she was making the sale from fear, compulsion, or undue influence, from any source p or from the fear that a criminal prosecution would be commenced against her husband, if his default was not satisfied all of which she disavowed. She avowed that she was acting freely to save the good name of her husband and their children. ■ When reminded that if her husband recovered, his health would probably be so- impaired that he could not obtain another insurance on his life, declaring Parker and Agnew had been her husband’s best friends, and very kind to him, she said the policy really belonged to them, for it would have lapsed if they had not paid the last premium*. The sale was made, the money paid to her, and she was advised not to part with it, but to keep it for the support of' herself and children. Six weeks or more elapsed after the-first suggestion of an assignment of the policy of insurance before the sale and payment of the money to the appellees, by whom it was applied in payment of the husband’s default.

With some minuteness we have detailed the facts as we collect them from the evidence, because all cases of this kind depend essentially upon their own peculiar circumstances. As is to be expected, there is some conflict in the evidence but the facts stated, we regard as fully proved, and reject as disproved, other facts of which there may be some evidence.

It is obvious there was no haste, no want of deliberation upon the part of the appellant in this transaction, nor was there the want of opportunity to consult counsel if she had desired. Nor was there the absence of the advice of disinterested friends. The relation of her husband, William B. Holt, to whom they gave the first information of the husband’s default, and in whom they reposed confidence, was cognizant of all the circumstances, and acting as her next friend in the prosecution of her application to be made a free dealer, was in some degree, a participant in the transaction.

He was not under the influence of the appellees, was without any motive to promote specially their interests, and had •every motive to guard and protect the rights and interests of the appellant. To her, he was bound by the ties of relationship, and by the confidence and trust in him, which she and her husband clearly manifested. While it is not expressly shown that in words he advised the transaction, it is apparent that it had full sanction and approval, and his conduct was the equivalent of the most unqualified advice in words. Nor was there any misconception, or mistake of facts, or of her rights by the appellant. At all times, it was fully explained to her, that the policy belonged to her, and she alone had capacity to dispose of it. Nor was there importunity or persuasion on the part of the appellees. Upon her own suggestion, springing from her love of her husband, she from the first information of his distressed pecuniary condition, avowed her willingness to yield everything for his relief. Nor was she uninformed that the appellees had, and were acting with the advice of counsel, and that all the proceedings which were taken were intended to enable her to make a valid effectual assignment of the policy of insurance.

There was no imprisonment, no threat of it, nor of the criminal prosecution of the husband. The apprehension of prosecution, or of imprisonment, was one of the terrors vexing and harassing him, but it seems to have possessed him only, and when in the presence of the attorney and president of the insurance company, the appellant had every motive to speak freely and candidly, she disavowed being influenced by any such apprehension, or by any fear or compulsion. Then she avowed what we cannot, in view of all the evidence doubt, -was her real controlling motive, the desire and purpose to relieve her husband, and as far as possible the preservation untarnished, of his good name, alone influenced her. Such a motive will influence the wife, and we cannot say the law disapproves or condemns its fair, intelligent, spontaneous gratification. All the courts can do, is to be vigilant and jealous in guarding and protecting her from all abuse of the confidence her relation compels, and from all practices upon her affections by the more calculating, or the more wary, or more artful. When her confidence is not abused ; when no advantage is taken of her condition when she acts intelligently and spontaneously, free from all circumvention, having full capacity, her executed contracts cannot be undone by any court. — DeRange v. Elliott, (8 C. E. Green) 23 N. J. Eq. 486.

We have examined the evidence in this cause again and again, and after most patient consideration, and with an anxious solicitude to guard and protect the appellant, we cannot find proofs which would justify us in undoing the transaction, and compelling the appellees to restore her the money with which she voluntarily, and intelligently parted. These observations dispose of the case, and the decree of the Chancellor is affirmed.