American Blower Co. v. MacKenzie
| Decision Date | 01 May 1929 |
| Docket Number | 381. |
| Parties | 197 N.C. 152, 64 A.L.R. 1047 v. MacKENZIE. AMERICAN BLOWER CO. et al. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Guilford County; A. M. Stack, Judge.
Action by the American Blower Company and others against B MacKenzie, in which a receiver was appointed, and defendant's wife, Ethel T. MacKenzie, filed a claim. From the judgment, claimant appeals. Error.
Foreclosure of mortgage may be effected in equity.
Sidney J. Stern, of Greensboro, for appellant.
King Sapp & King, Shuping & Hampton, and J. S. Duncan, all of Greensboro, for creditors.
Broadhurst & Robinson, of Greensboro, for receiver.
This action was instituted by the American Blower Company to recover the sum of $5,422.10, with interest from August 31 1926, alleged to be due for appliances and equipment sold to the defendant. It was alleged in the complaint that the defendant was indebted in large amounts to sundry other creditors, that he was insolvent, and that the administration of his estate demanded the appointment of a receiver. Other creditors were given leave to join in the suit. Upon admission of all the allegations in the complaint, Judge Oglesby, finding as a fact that the defendant was insolvent appointed a receiver of his property.
At this time the defendant was the owner in fee of two lots in the city of Greensboro. On the first lot was a deed of trust executed on March 31, 1920, by the defendant and his wife, to Julian Price, as trustee for the Jefferson Standard Life Insurance Company; on the second, a deed of trust executed by the defendant to the Atlantic Bank & Trust Company, as trustee for G. S. Boren and C. H. Andrews, on March 18, 1925; and, on both lots, a deed of trust, dated July 14, 1925, executed by the defendant and his wife to R. D. Douglas, as trustee for the Greensboro Bank & Trust Company. The deed held by Price was executed to secure an indebtedness of $20,000, evidenced by notes signed by the defendant and his wife, to whom the surplus in case of sale was to be paid; the remainder due on these notes and assumed by the purchaser being $17,451.61. The deed held by the Atlantic Bank & Trust Company was made to secure a debt of $71,500 as the purchase price of land, evidenced by notes signed by the defendant, to whom upon sale the surplus was to be paid; the remainder due and assumed by the purchaser being $45,750. The deed held by R. D. Douglas was intended to secure notes signed by the defendant, to whom any surplus was to be paid; the remainder due and assumed by the purchaser being $30,304.61.
By an order of court the receiver was authorized to sell the defendant's assets by public auction or at private sale. He reported that he had received from C. C. Hudson an offer to pay $126,000 for the two lots on these terms: Hudson was to get a deed in fee with full covenants, and was to assume payment of the deeds of trust; and all taxes and assessments against the property were to be paid by the receiver or credited on the amount offered. The defendant and his wife consented to join the receiver in conveying the property to Hudson for the purpose of releasing such right of homestead or inchoate right of dower as they were entitled to, with the understanding that the funds derived from the sale of the property should be impressed with such right of homestead or inchoate right of dower. The offer was accepted, and on June 18, 1927, they and the receiver executed and delivered to Hudson, Inc., a deed in fee, in which is recited the purchaser's agreement to pay the amounts secured by the respective deeds of trust.
The receiver advertised for claims, and among those presented was that of the defendant's wife, Ethel T. MacKenzie. She contended that, as the funds were to be impressed with her inchoate right of dower, she was entitled to $25,568.18 on this theory: Her expectancy was 31.1 years, and that of her husband 14.7 years; one-third of the income from the purchase price of the property was $2,530; the cash annuity of $1 for 16.4 years (her expectancy beyond that of her husband) according to the annuity tables (C. S. § 1791) is $10.106, and the cash value of an annuity of $2,530 for the same period is $25,568.18.
The receiver rejected this claim on the ground that during the life of the husband the wife had no vested interest or estate in his property which would entitle her to participate in the fund either as a preferred or as an unsecured creditor. Upon exceptions filed Judge Stack gave judgment as follows: That two-thirds of the amount available to creditors ($29,521.45) be paid ratably to the creditors whose claims had been allowed, and that the remaining one-third be turned over to the clerk to be loaned on good security; that the income therefrom during the joint lives of the defendant and his wife, after payment of all taxes, be distributed from time to time ratably on the allowed claims; that if the claimant die before her husband the principal and undistributed interest be paid on such claim; that if she survive her husband the income be paid to her during her natural life, or at her election the present cash value; and that after her death the fund be distributed ratably among the creditors whose claims had been allowed. The claimant excepted and appealed.
In rendering judgment his honor probably had in mind the principle stated in Vartie v. Underwood, 18 Barb. (N. Y.) 561, as it is given in Gore v. Townsend, 105 N.C. 228, 11 S.E. 160, 8 L. R. A. 443: "The wife's inchoate right in the husband's land follows the surplus moneys raised by a sale in virtue of the power of sale in a mortgage executed by her with her husband, and will be protected against the claims of the husband's creditors by directing one-third of such surplus moneys to be invested, and the interest only to be paid to the creditors during the joint lives of husband and wife." But the present appeal rests upon the wife's demand that the cash value of her inchoate right of dower be determined; it presents for review the questions whether the present pecuniary value of such right may be determined, and, if it may, whether the value of the land without deducting the debts secured by the deeds of trust shall form the basis of computation.
Inchoate dower, or the inchoate right of dower, is the interest which the wife has in the lands of her husband during his life, and which may become a right of dower upon his death. Black's Law Dictionary. In Gwathmey v. Pearce, 74 N.C. 398 it is defined as a vested right to dower; in State v. Wincroft, 76 N.C. 38, as a mere right which may never exist, not an estate in her husband's land; in Gatewood v. Tomlinson, 113 N.C. 312, 18 S.E. 318, as an inchoate right or estate in land, the enjoyment of which is postponed until the death of the husband; in Rodman v. Robinson, 134 N.C. 503, 47 S.E. 19, 65 L. R. A. 682, 101 Am. St. Rep. 877, as a right which the wife has in her husband's land, contingent upon her surviving him; and in Trust Co. v. Benbow, 135 N.C. 303, 47 S.E. 435, as a valuable interest in land. In Bethell v. McKinney, 164 N.C. 71, 80 S.E. 162, it is said to be an existing incumbrance on land within the meaning of a covenant against incumbrances, and in Corporation Commission v. Dunn, 174 N.C. 679, 94 S.E. 481, L. R. A. 1918F, 498, Ann. Cas. 1918D, 1086, quoting from 14 Cyc. 925, to be neither an estate nor an interest in land. Referring to the nature and incidents of this right, the court said in Gore v. Townsend, supra: . ...
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