Dickson v. Shay , 45 N.J. Eq. 821 ( 1889 )

The opinion of the court was delivered by

Garrison, J.

The pleadings, in this case, present the issue of a judgment •creditor seeking to reach property which his debtor has placed beyond the reach of legal process.

The defendants are husband and wife. The fraud alleged is, that the wife permitted the husband, while a debtor, to carry on business in her name in a place of business owned by her. The .gravamen is, that the profits of the business thus conducted have gone into the improvement of the wife’s real estate.

The court of chancery resolved the question of fraud against •the defendants, and, by stating an account between the husband’s business and the wife’s property, reached the conclusion that •several hundi’eds of dollars of his earnings had gone into her realty. For the amount thus ascertained, the complainant was •given a lien upon the wife’s real estate.

The- material for such an account was furnished by the defendants, but the method of stating it, adopted by the court, was the suggestion of the complainant. As stated, the account stands thus:

Total expenditures of defendants............................................. $6,159 11

Total receipts from wife’s separate estate.................................. 5,511 00-

Balance of expenditures over income....................................... $648 11

which balance (so the argument was), must have come from the earnings of the husband, and have gone into the wife’s real estate,. together with some smaller items.

The account further discloses that of the total amount expended, to wit, $6,159.11, the sum of $4,687.20 was expended' upon the wife’s estate, while the sum of $1,471.91 was for miscellaneous disbursements not connected therewith.

The fallacy of the method of accounting adopted is, that it arbitrarily applies the income of the wife’s separate property to the liquidatioñ of the husband’s miscellaneous disbursements, before applying any of it to the improvement of her separate estate.

The entire fund was in the husband’s hands, the amount of whose earnings is unknown, but it is known that, with his wife’s income, it was sufficient to pay both the miscellaneous disbursements and the expenditure upon her realty. The presumption of fact is, that he applied his own earnings, and not his wife’s income, to those miscellaneous matters for which he was responsible and she was not. There is no rule of law or equity by which a wife’s separate property will be arbitrarily applied to the payment either of current living expenses or of' her husband’s debts.

Bearing in mind this presumption, and rendering unto the wife the things which are hers, the account states itself thus:

Amount of wife’s income.............,......................................... $5,511 00-

Amount expended on lier real estate....................................... 4,687 20

Excess of income.................................................................. $823 80-

which, deducted from $1,471.91, gives $648.11 as the amount of the husband’s presumptive earnings which have gone into his miscellaneous disbursements. If we deduct from both sides of this account all items connected with the transactions in horses, it will not materially change the result. So far, then, from its being shown that any of the husband’s earnings went into his wife’s real estate, it appears certain that some hundreds of dollars of her income went with his earnings into the common fund for miscellaneous expenses.

The result thus reached, and the balance shown in favor of the wife’s property, must control the question of the fixtures and other smaller items not directly connected with the husband’s business, and in regard to which no fraudulent disposition was shown.

The decree should be reversed, and the bill of complaint dismissed.

Decree unanimously reversed.