Miller v. Williamson , 5 Md. 219 ( 1853 )

Le Grand, C. J.,

delivéred the opinion of this court.

The facts in this case which it is important for us to notice are but few. The appellants’ claim rests entirely on the assignment executed on the 1st February 1849, and the effect of the settlement of a final account in the orphans court by Charles A. Williamson, as executor of Mrs. Jones, and the execution of the release to him by his wife, Mrs. Ann S. Williamson.

The assignment of Williamson to the appellants was as "executor and devisee,” and, independently of any other fact, could convey to them nothing beyond his interest as devisee, or what in this transaction the law authorised him to dispose of in his capacity as executor. As devisee, his interest under the will of Mrs. Jones was purely contingent, dependent entirely on his surviving his wdfe. The authority with which he was clothed as executor, will depend on the true nature of the transaction with Miller and Mayhew. Apart from our act of Assembly of 1843, ch. 304, an executor might sell or raise money on the property of the deceased, in the regular execution of his duty, and the party dealing with him would not be bound to inquire into his object; but if a party dealing with him knows, or had reasonable ground for believing, that he intended to misapply the money, or was in the very transaction. applying it to his own private use, he could take no advantage from the operation. Albert and Wife, vs. Savings Bank, 2 Md. Rep., 168, and the authorities there relied upon.

Now it is clear beyond all possibility of successful controversy, that the assignment and order of Williamson were given to Miller and Mayhew, to secure a debt due by the firm of Williamson, Sutton & Co., a mercantile house of which he was a member. This circumstance sufficiently, in contemplation of law, notified the assignees that the executor was about to commit a devastavit. But, it has been urged, that if they had made the proper examination in the orphans court, they would there have discovered a final account had been settled by the executor on the 9th October 1848, and, also, that Mrs. Williamson, his wife, had executed a release to him, and from this it is argued, that whether they knew or not of the final account and release when they entered into the transaction, they are nevertheless entitled to invoke these facts in support of their title. It is undoubtedly true, as a general proposition, that a party is authorized to rely upon the disclosures of the public records in support of his title; but it is equally so that he is affected by the equities in others which they exhibit. This being so, how stands the case? Thus: Miller and May hew knew, according to the imputation of the law, that the executor was misapplying the funds of the estate, that is, devoting them to his own private purposes; and, moreover, that he professedly acted as executor and devisee, which informed them there was a will on record in which was to be found specified the interests of the objects-of the testator’s bounty. If, therefore, they entered into the transaction without any knowledge of the final account of the executor, or of the release of Mrs-. Williamson, they were not in point of fact deceived by those circumstances; and if, on the other hand, they had examined the public records, they would have seen that the property assigned to them belonged for life to the wife of the executor, and, in a certain contingency, was to go to other parties, and thus in fact they would have been affected by any equity of Mrs. Williamson, or of those in- remainder. This being so, the question as to the existence of any outstanding equities is presented for our decision, and its solution- must depend upon the facts disclosed in evidence and the will of Mrs. Jones under which-the property has been acquired.

It is clear from the testimony of the executor, that he did-' not pay to his wife the sum of money for which she had given her release, but his evidence is objected to on the ground that hé is incompetent as a witness in behalf of the interest of his wife, and we think the objection well taken. There are but few exceptions to the rule which prohibits husband and wife from testifying for each other, and they relate principally, if not exclusively, to cases where, if she were not permitted to testify, she would be exposed, without remedy, to personal injury. 1 Greenleaf, sec. 343.

But while we sustain the objection to the testimony of Mr. Williamson,' we concur with the chancellor in the opinion that the testimony of Mr. Gloeker is admissible. The declarations of Williamson, when arranging with him for the preparation of the account, are part and parcel of that transaction, and it is apparent, from the whole testimony of the witness, that the account was prepared and the release given by Mrs. Williamson, not because either or both together truly explained the transaction, but to enable the executor to close lip the estate by settling a final account. But, apart from these circumstances, it must be obvious to every unprejudiced mind, that the executor did not pay the sum of money mentioned in the release of his wife. That paper bears date the 7th October 1848, and the assignment to Miller and Mayhew the 1st February 1849. The mortgage was not due until 17th September 1848. Now it is clear, from the very terms on which the appellants made the advance, that Williamson was hardly pressed for money, for it is beyond belief that a person in easy circumstances would consent to enter into a contract which subjected him to a most exhorbitant rate of interest; and yet, if we are to believe Williamson paid his wife, we are to believe he anticipated the collection of the mortgage, and then in the course of a few months consented to pledge this very mortgage, on terms perfectly inconsistent with the fact, that he was in possession of funds sufficient to enable him to purchase out the mortgage security from the estate of which he was executor. We think all the circumstances surrounding the whole case, show plainly enough that Mrs. Williamson never did receive the money; and also that Miller and Mayhew, when they received the assignment, were wholly ignorant of the settlement of the final account by the executor and the execution of the release by his wife. They no doubt supposed, as it is manifest bath he and Mr. docker did, that he was entitled to the property as his own, jure mariti. But be this as it may, they took from him the title which he had as executor and devisee, and we have shown that the law denies to an executor the power to dispose of the assets of the estate for his ¡own advantage, and if he attempt to do it with the knowledge of his assignee, or under such circumstances as reasonably ought to put the latter on the inquiry, that he can take no advantage from it. If there be any case in which such knowledge can be imputed, this is that case. The evidence shows they received the assignment in security for the payment of a debt, having no connection whatever with the estate of Mrs. Jones, and must therefore be taken as affected with all the equities, either of Mrs. Williamson or of the parties in remainder. If they were not apprised of the release until after this controversy commenced, they were not in fact deceived by it, and therefore not induced by it to deal with the executor.

If it avail anything, then it must be because of the force given to it by the law independently of their knowledge, and this involves the inquiry, how far Mrs. Williamson had the right to dispose of the interest acquired under the will of her aunt, Mrs. Jones, for if she had no right to dispose of the estate and thus defeat the interests of the parties in remainder, her act was illegal and of no effect.

Although it has been held in this State, that a specific bequest of consumable articles vests the absolute property in the legatee for life, (Evans vs. Iglehart, 6 Gill & Johns., 198,) still it has never been denied anywhere, that if it be the apparent intention of the testator that the thing shall not be consumed, but shall go to the party in remainder, that in case of danger the courts will interfere and compel the tenant for life to give security. So in the Case of Boyd and others, vs. Dennis Boyd, 6 Gill & Johns., 25, where the devise was as follows: *■<$10,000. of which you (the devisee) are already in possession of the greatest part, is to be at your disposition, and for your use, free of interest, during your natural life, but after your death to be invested in bank stock,” &e., the court held', that the tenant for life could not be compelled to give security for the amount of the devise, in absence of proof of the same being in danger; but this was placed distinctly on the ground that the language of the will was peculiarly strong and emphatic; the devisee “was to have the use and disposition of the property free of interest during his life.”

In the case now before us it is beyond all cavil, that it was the intention of the testatrix, that in the event of the death of Mr. and Mrs. Williamson without issue, that the estate devised was to be enjoyed by the parties indicated by her, and who are now before us asking that their interests may be protected; we think they are entitled to the relief which they solicit.

In the case of Smith’s Ex’cr, vs. Morgan, 8 Gill, 138, although the court held at law neither the wife alone, nor the husband and wife conjointly, can divest the wife’s interest in property to which she is entitled to her sole and separate use, yet they declined to decide the question, whether the wife is to be considered in a court of equity as a Jeme sole, with power to dispose, or possessing only such powers as the instrument which confers her title bestows.

In the case of Tiernan vs. Poor, 1 G. & J., 229, the court say: “It is not meant to intimate in any thing which has been said, that however the complainant might suffer by a reliance upon the conduct of those with whom he contracted, that this contract could be enforced against the right of disposition contained in the deed of trust. That would constitute a paramount law, governing and controlling 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.” In the eases of Tiernan vs. Poor, 1 Gill & Johns., 229, and Brundige vs. Poor, 2 Gill & Johns., 1, the deed of settlement provided, that the separateproperty of the wife should be held in trust, “for the sole and separate use, benefit and behoof, of the said Deborah, (the wife,) for life, so that she be suffered to take and receive the entire profits thereof to her own separate use, without being subject to the control of the said Dudley, or of any future husband, &c., and in nowise answerable for the payment of his or their-debts or engagements, and subject to be sold and conveyed by the said Deborah absolutely, in such manner as she may think properIn the case of Warfield and Wife, 11 Gill & Johnson, 27, the court held, that the will under which the fund was derived did not contemplate a settlement to her separate use, and therefore it was competent to husband and wife, on their joint application, to authorize the husband to withdraw the fund from chancery.

From this review of the decisions in our State, it appears it never has been decided that the wife has the right to dispose of her separate estate, unless that power be given to her by the instrument making the settlement, nor where such power is exercised in a manner different from that pointed out in the deed or will, as the case may be. So far from it, it is expressly said, in the case of Tiernan vs. Poor, that the right of disposition contained in the deed constitutes a paramount law, and that no decree could pass to enforce any contract, unless such contract be within the limits of her jus disponendL

Besides this, had the appellants made the proper inquiry they would have discovered, to say the least, that it was extremely questionable, under the law of this Slate, whether the wife, as tenant for life, had the right to receive and receipt for the money. In the case of Evans, et al., vs. Iglehart, et al., 6 Gill & Johns., 196, speaking of the duties of the executor, the court say: “If the surplus or residue thus bequeathed consists of money or property, whose use is the conversion into money, and which it could not for that reason be intended, should be specifically enjoyed nor consumed in the use, but be by the executor converted into money, for the benefit of the estate; as for example, a quantity of merchandise, a crop of tobacco, or the like, an investment thereof must be made by the executor, in some safe and productive fund, or it must be put out on adequate securities, and most properly under the authority and direction of the orphans court, or a court of equity, so as to secure the dividends, interest or income, to the legatee for life, and the principal after his death to the legatee in remainder.”

According to this decision, which has never been overruled, Mr. Williamson, as executor, ought to have applied to the orphans court for an order to invest the money secured by the mortgage, and not have assumed to hand it over to the legatee for life, to be consumed to the prejudice of the rights of those in remainder.

We do not think, as contended in argument, that the appellants are entitled to the interest due on the mortgage, which was not embraced in the final account of the executor. It stands on an entirely different footing from the cases of pin-money which were cited at the bar. In that class of cases, the wife or her representative is interdicted from recovering where she has not yearly demanded it, whatever may be due for pin-money for the years which have elapsed, and this doctrine rests on the idea, that the allowance of pin-money is for the adornment of the person of the wife, and as the husband has supported her in the meantime, the presumption is, that she has been compensated by other allowances in lieu of pin-money, 2 Bright on Husband and Wife, 289, and the authorities there collected. But with the private estate the case is wholly different. In all such cases it is her property and may be reclaimed at any time, her husband standing in the relation to her of trustee.

On the whole we are of opinion, the evidence shows that Miller and Mayhew dealt with Williamson, not as purchaser, but as executor and devisee, and, as such, he could not assign, as they claim he did, the estate of his testatrix for his own debt, and that when the transaction was consummated, they had actual knowledge he was so applying the funds of the estate to his own purposes. We also think it equally obvious Mrs. Williamson never received the amount specified in the release, and that she and those in remainder are entitled to that sum, with interest due on the mortgage to be invested for their benefit. The investment, however, should be so made as to secure to the complainants the interest on the sum during the life of Mr. Williamson, if he should survive his wife. He had clearly the right to dispose of his contingent life estate, and the complainants are entitled to have the fund so invested, as to secure to themselves the interest on it during the survivorship of Mr. Williamson, if such an event should occur. Holding these views, concurring as they do in the main with those expressed by the chancellor, we neither affirm nor reverse his decree, but will sign such an one in the premises as ought to have been passed. The case under the act of 1854, ch. 183, must go to the circuit court for the city of Baltimore, to which court the trustee, T. Parkin Scott, Esq., mentioned in the proceedings, will report his proceeding under our decree.

Cause sent to the Circuit Court for Baltimore city, under act of 1854, ch. 183.