Hicks v. . Skinner , 71 N.C. 539 ( 1874 )

delivering the opinion of the Court, says: "The statute has no reference to a case where the title has been vested by the laws of another State, but operates only on sales, mortgages and gifts made in Maryland. The writing is to be recorded in the same county where the seller shall reside when it is executed. The seller, R. B. Lee, residing in Virginia, it was impossible for Mrs. Lee to comply with this act. That the Virginia deed secured to Mrs. Lee the same rights here that it did in Virginia we apprehend to be, to some extent, an adjudged question." He then cites Smith v. Burch, 3 Har. Johns. (Md.), and Crenshaw v. Anthony, Martin Yer. (Tenn.), 110.

The plaintiff's bill was dismissed.

In DeLane v. Moore, 14 Howard S.C., 253, decided in 1852, the facts in substance were, that Mrs. DeLane, a widow residing in South Carolina, in contemplation of marriage with John Yancey, entered into an ante-nuptial contract, whereby certain slaves were agreed to be settled to her separate use. There was no conveyance to a trustee. The marriage took place and the deed, or a copy of it, was recorded in South Carolina, but not, it seems, in exact compliance with the laws of that State. Afterwards the parties removed to Alabama, where after the death of the wife the husband sold the slaves to one Gover. The bill was brought by the representative of the wife against the administrator of Gover to remove the slaves. The Court (by DANIEL, J.,) say: "It has been made a ground of defence in the answers (549) in the Court below, and it has also been insisted on in the argument here, that admitting the ante-nuptial contract to have been recorded in the State of South Carolina, and in consequence thereof to have been so operative as to affect with notice creditors and purchasers within that State, yet that upon the removal of the parties carrying with them the property into another State or jurisdiction, the influence of the contract for the protection of the property would be wholly destroyed and the subject attempted to be secured would be open to claims by creditors or purchasers subsequently coming into existence. The position here advanced is not now assumed for the first time in argument in this Court. It has upon a former occasion been pressed upon its attention and has been looked into with care, and unless it be the intention of the Court to retrace the course heretofore adopted, this may now be, as it formerly was called, an adjudged question." He then cites with approval the case ofU.S. Bank v. Lee. In Adams v. Hayes, 24 N.C. 361, it is admitted that a parol gift of slaves made in South Carolina, good at common law which prevails in that State as to such gift, would be good after the property is brought here, notwithstanding our law requiring such gifts to be in writing and registered, and it does not seem to have been thought that it would make any difference whether at the time of the gift the property was intended to be brought here or not. In our opinion it is not a matter of any importance whether the contract was technically executed or executory, so far as it concerns the question now before us. In equity, what is agreed to be done is considered as done, whenever such a conclusion is necessary to support the rights of the parties under it.

No doubt nice distinctions may be drawn between those cases and the present, but none we think that are essential. The principle at the bottom of them all is, that by the contract the property remained in or passed to the wife in the State where it was made; that it was her (550) property, and her estate did not change its character on being carried with the parties into another State, although by the laws of the latter State, registration is required of such instruments executed there or taking effect upon property situated there.

There remains the enquiry which is mainly one of fact, did Thomas E. Skinner receive the money of his wife and bring it into this State as her agent, upon an agreement to invest it in her name, and did he purchase and improve the lot in question with it, and in violation of his agreement, take the title to himself? There can be no question that the husband received a very large sum as the agent of his wife, and the referee finds that he received it upon an understanding that he would return it or invest it in her name, and especially that he would invest a part of it in buying and improving the lot in question. The whole lot was conveyed by Cook to Lewis, Williams, Jones and Thomas E. Skinner on 1st April, 1856. The part of it now in question was conveyed to Thomas E. Skinner by his co-tenants on 17th September, 1859. The referee finds that it does not appear by whom the consideration of the deed of 1856 was paid, but that it was not paid with the money of Mrs. Skinner. This is immaterial.

He also finds that it does not appear by whose means the consideration of $6,000 recited in the deed of 1859 was paid.

The deed to Womble recites that the consideration of the deed of 1859 was paid by Thomas E. Skinner from his wife's estate. This recital would support an equity in his wife against him, to have the title conveyed to or for her; but is admittedly no evidence against his creditors. We think, however, that although the referee does not directly find this fact, he does find other facts from which this must necessarily be inferred.

A principal who undertakes to follow his money into property, into which it has been fraudulently converted by his agent, is not required to show that the identical bills of exchange or bank notes which he gave to the agent with directions to pay for certain property, were paid for that property. If this were so, the agent need only convert the bills of exchange into bank notes, or the bank notes (551) into others, in order to make his fraud successful. Fraud cannot so easily evade pursuit. The principal need only show that he gave money to the agent upon a promise to invest it in the purchase of certain property, and that the agent did afterwards purchase that property and take the property to himself. Upon this proof there is a clear equity to follow the property and have it conveyed as it ought to have been.

That is just the case here. The referee finds that between _____ and _____ the husband received large sums as agent of the wife; that he agreed to invest a part of that money in this lot in her name; that in 1859 he did purchase the lot, and at first directed Mr. Lewis to make the deed to his wife, as the payment was to be from her means; that he afterwards told Lewis to draw the deed to him, as it would injure his credit if made to his wife; and that it was accordingly so drawn. Can a Court of equity doubt, upon these facts, that the land was paid for with the principal's money? If it will refuse to allow a principal to follow his money under these circumstances, upon what proof can he do so?

We think that we are bound to draw the conclusion from these facts, and without reference to the recital in the deed from the husband to Womble that in contemplation of law, Mrs. Skinner's money went to pay for the lot.

The referee directly finds that her money, to the sum exceeding $10,000, paid for the buildings, etc.

If it were not clear that Mrs. Skinner's money paid for the lot, as well as for the buildings and furniture, there might be a question of the apportionment of the fund. But in the view we take of the case, no such question arises.

On these facts, the equity of Mrs. Skinner against her husband and his creditors is indisputable. It rests on a valuable consideration, isbona fide, and there is nothing in the circumstances attending it, to make it fraudulent as to her husband's creditors.

(552) As to any conclusions of fraud to be drawn from her silent acquiescence in the dealings of her husband so far as they were known to her; as for example, his sale of a part of the lot to Dr. Johnson; that is disposed of by the observations of CATRON, J., in the U.S.Bank v. Lee, p. 119. The learned Judge says in substance: "If a party having title to property stands by, and sees another deal with it as his own, and does not make his title known under circumstances which require him to do so, that is a fraud which estops him from setting up his title afterwards. How far that principle would apply to a wife standing by, and seeing her husband deal with her property, the Court does not decide. But Mrs. Lee was only passive and silent, although she may have known that Lee was obtaining credit on the strength of her property. A Court of Chancery will not hold her responsible because of her silence."

In the present case it does not appear when Mrs. Skinner first knew that her husband had taken a deed for the lot in his own name.

We are of opinion that the plaintiff purchased subject to the equity of Mrs. Skinner, and that her equity is paramount to the claim of the creditors of her husband.

PER CURIAM. A decree may be drawn in conformity with this opinion.