Morrison v. Morrison's Assignee , 113 Ky. 507 ( 1902 )

Opinion op tiie court ry

JUDGE BURNAM

Reversing.

Iii March, 1874, the appellant, Mary G. Morrison, purchased from M. M. Mays a tract containing about 80 acres of land, near Owensboro, in consideration of $8,400, of which $4,000 was paid in cash, and for the balance two notes were executed for $1,200 each by Mary G. Morrison and her husband, payable in one and two years, respectively, from date. Tin* .land was conveyed to Mary G. Morrison as separate estate. The notes were not paid*at maturity, and in 1.877 aggregated $3,000. In order to pay them, the appellant and her husband borrowed $3,000 from the Owensboro Savings Bank, securing the loan by a mortgage on i lie land. The loan was carried by the bank until May, 1888, when they demanded payment. To meet this demand, appellant applied to the Mutual1 Life Insurance Company of, Kentucky for a loan of the same amount. The company refused- to make the loan unless Mrs. Morrison would transfer the title to the property to her husband; and in compliance with this requirement, the appellant and her husband, on the 8th of March, 1888, conveyed the land to W. T. Ellis for the recited consideration of one dollar, and that he would convey the land to lier husband, which he did on the same day. The insurance company thereupon loaned to d. A. Morrison $3,000, taking his note therefor and a mortgage, in which the wife united, on the land, to secure its payment. After carrying this loan for about 10 years, the insurance company demanded payment, and’ to secure tin- money to pay off the indebtedness to the insurance company, the appellant, on the 19th of April, 1898 borrowed from P. A. Miller $5,123, for Avliicli she executed her note, dm5 three years after date, with interest at 0 per cent., payable semi-annually. This note was also signed by her husband, and was secured by a mortgage on the 80-acre tract of land above referred to. Three thous- and dollars of -this loan was applied to the debt due the insurance company, and the balance was used by the appellee J. A. Morrison, with the knowledge and consent of the wife, in payment of other debts due by him io other parties, for which appellant was not liable. On the 28th of December, 1S99, the appellee J. A. Morrison, having become indebted to divers persons for money which he was unable to pay executed and delivered a’general deed of assignment of all his property, including the real estate conveyed to him by his wife, for the benefit of all his creditors, to the appellee J. H. Tlarsh, who brought this suit in the Daviess circuit court, asking that the creditors of his assignor be required to set up their claims therein, and foryi sale of the land in controversy to pay them. Appellant was made a defendant in this action, and filed her answer setting out the facts set out above, and claimed the land as her separate property, and that it could not be sold to satisfy the debts of her husband except to the extent of $3,000, which represented the balance of the purchase money thereon borrowed from P. A. Miller. The appellee, P. A.-'Miller, filed her answer and cross petition, setting ■ p her debt and mortgage, to which appellant replied, denying her right to subject the property except to the extent of the $3,000. Upon final hearing, the trial court rendered a judgment subjecting the land in controversy to the payment of the entire mortgage debt of P. A. AHller, and also claims, aggregating $3,500, due to the creditors of her husband, for which she was in no wise bound. From this judgment Airs. Alorrison appeals.

Counsel for appellant contends that the transfer of the title of the land in controversy in response to the demand of the insurance company in 1888 was without consideration except to the extent of the $3,000 borrowed to pay off the existing lien for purchase money against the land, as she was a married woman, and held the propertj7 as her separate estate; and that the creditors of her husband are not entitled to subject the property to the payment of their debts for which‘she was not legally bound; whilst appellee contends that the money originally paid for the land was' Airs. Alorrison’s general estate, and that, as she herself converted it into separate estate, the provision of the general statute securing to her the same interest in the proceeds as in the estate conveyed does not apply. This content ion is based upon the case of Chrismas v. Hahn (10 R., 377); 9 P. W., 279, and that, having voluntarily transferred the title of the property to her husband, it is subject to the demands of his creditors created after the conveyance to him. It is impossible for us to determine from the record whether the $1,000 originally paid by Airs. Alorrison was her separate ('state or general estate. In her answer and cross petition she alleges that the money was her property alone, and in her deposition she testifies that it was boquested to her by an unde in New York. But in our view of the case this question is wholly immaterial. Under the Revised Statutes, a married woman could not alienate either her separate, real or personal estate except where it was a gift, when she could do so with the consent of the donor or his personal representative. The statute provided: “Such estates, heretofore created, shall not be sold or encumbered but by order of ~a court of equity, and only for the purpose of exchange and reinvestment for the same use as (hat of the original conveyance or devise; and the court shall see that the exchange and reinvestment is properly made." Bee 2 Revised Statutes, p. 28, c. 47, art. 4, section 17. This provision of the Revised Statute was changed by the General Assembly in 18(58 (General Statutes, p. 74:>. c. 52, section 17) so as to read as follows: “Separate estates and trust estates conveyed or devised to a married woman may be sold and conveyed in the same manner as if such estates had been conveyed or devised absolutely, if there be nothing in the deed or will under which they are held forbidding same, and if the husband or trustee, if there' be one, unite with the wife in the conveyance. But her interest shall be the same in the proceeds as it was in the estate." The reason for this change in the statute is clearly stated in Baird v. Bruning, 84 Ky., 649 (4 R., 206), as follows: “The restriction contained in this statute operated in a great measure in many instances to deprive tlvv married women of the substantial enjoyment of the property dedicated to her sole and separate' use. The mode ot sale was cumbersome, and the requirement that in all cases-an exchange or reinvestment should be made under the supervision of the chancellor, became to a great extent, merely arbitrary and inconsistent with the best .interest of the cestui que use, and, in addition to the objections above, the legal costs, attorney’s fees, and delays incident to a' proceeding to sell became burdensome, and wore the unreasonable results of an extreme notion, embodied in that statute, that the full enjoyment of the use had better be curtailed than to leave, the alienation and management of the wife’s separate estate subject to her binding power gnd unrestrained influence of her husband. And for the purpose of facilitating alienation, security against the husband’s imprudence or selfishness, and to enable the wife to enjoy her separate estate, which is generally, if not in (’very case, created for her maintenance and comfort, the statute first named was abrogated, and in lieu thereof the section of the general statutes was adopted.” The purpose of the change in the statute was to facilitate the transfer of the separate estate, but was not intended to change its character. Both under the Revised Statutes and the General Statutes, the law was well settled that a married woman could not mortgage her separate estate to secure the debt of her husband for the reason that her separate estate continued in the proceeds of a sale or mortgage, and to permit her to mortgage it for the debt of another would defeat the intention of the statute. See Stuart v. Wilder, 56 Ky., 47, and Hanly v Downing, 61 Ky., 56; Association v. Jarvis, 92 Ky., 566 (13 R., 797) (18 S. W., 454); Hirshman v. Brashears, 79 Ky., 258 (2 R., 246); Magill v. Trust Co., 81 Ky., 129. As she could not mortgage her real estate we think it necessarily follows that she could ■ not convey it to her husband for the express purpose of enabling him to do so. Appellant’s husband therefore held the property after the conveyance to him in trust for Ins wife, subject to the claim of the insurance company for money advanced toi pay off the vendor’s lien. We are therefore of the opinion that this property could not be subjected to the claims of creditors of J. A. Morrison for winch appellant was in no wise bound.

The deed of Mrs. P. A. Miller, however, stands upon a different footing. The act of March 15, 1894, which is article 3, c. 66 of the Kentucky Statutes, abolished the distinction which previously existed" between the separate and general estate of married women, and in effect made all of her property separate; estate, and gave her the right to pledge the same for the debt, default, or misdoing of another, including her husband, if such estate shall have been set apart for that purpose by deed of mortgage or other conveyance. See section 2.127 of the» Kentucky Statutes. This provision of the statutes was considered by this court'in Miller a7. Sanders, 98 Ky., 538 (17 R., 1114) (33 S. W., 621), and it was there held that the Avife could hind her real estate by mortgage made to secure the debt of her husband; and this case has been subsequently followed in Lane v. Bank (14 R., 873) (21 S. W., 756, Tipton v. Bank (17 R., 960) 33 S. W., 205, and in New Farmers’ Bank’s Trustee v. Blythe, 21 Ky., Law Rep., 1033. It follows that the mortgage made to Mrs. P. A. Miller is an enforceable'obligation, and the real estate in controversy is properly subjected to her claim.

But, for reasons indicated, in so far as the judgment subjected it to the payment of the claim of the general creditors of her husband it is reversed, and cause remanded for proceedings consistent herewith.