Bank of Louisville v. Gray

• Decision Date: 09 December 1886
• Citation: 2 S.W. 168,84 Ky. 565
• Parties: BANK OF LOUISVILLE v. GRAY and others.
• Court: Kentucky Court of Appeals

2 S.W. 168

84 Ky. 565

BANK OF LOUISVILLE v. GRAY and others.

Court of Appeals of Kentucky.

December 9, 1886

Appeal from chancery court, Louisville.

Hamilton Pope and Wm. Lindsay, for appellant, Bank of Louisville. Woolley & Buckner, for appellees, Gray and others.

HOLT J.

Lucy A Gray, upon the death of her brother, became entitled to a portion of his estate. Her husband, George Gray, being absent, it was, on October 3, 1872, through her friend invested in 35 shares of stock of the bank of Louisville, and the certificate made out in the name of "George Gray, as trustee for Lucy A. Gray." When the husband returned, he approved the investment, and until January, 1875, the dividends were received by her, he always recognizing the trust. The stock stood in his name as trustee upon the books of the bank. At some time not definitely shown, and without the knowledge of the wife, the husband pledged the stock to Thomas H. Hays for a small loan; and thereafter the following power of attorney was executed, the wife being then a resident of Kentucky, and signing it here:

"NEW YORK, January 2, 1874.

"Know all men by these presents, that I hereby constitute and appoint Thos. H. Hays my attorney in fact for the purpose of selling and transferring thirty-five shares of stock in the Bank of Louisville, in Kentucky, hereby ratifying and confirming all my said attorney may do in the premises.

"Witness my hand. GEORGE E. H. GRAY, Trustee.

"LUCY A. GRAY."

Upon January 18, 1875, Hays, claiming to have purchased the stock from the husband, had it transferred to himself upon the books of the bank; and on April 29, 1876, he, as the attorney in fact of Lucy A. Gray and her trustee, George Gray, transferred it, for value, to the bank. This suit was brought on October 17, 1882, after demand, to compel the bank to account to the trustee for dividends upon the stock from the year 1874.

Three questions are presented: First. Was the stock the separate estate of the wife? If not, it is manifest that the judgment for her cannot be sustained. If, however, it was, then, secondly, was the power of attorney valid as to her, and does the bank occupy such an attitude that it can insist upon its purchase? Third. Under the facts proven, is she estopped from asserting the claim, or barred by time?

Separate estate is the creature of modern equity. No particular form of words is necessary to its existence. It is only needful that an intention to invest the property in the wife, to the exclusion of the husband, shall clearly appear. It may be based upon a writing or by parol from a third party. In the case of a note executed to a married woman, or in the purchase of stocks, it may be shown by evidence, aliunde the writing, that the creation of a separate estate was intended; and this character need not be imparted to it by the writing which invests her with the right to it. The paper need not, in itself, show an intent to exclude the husband.

The case now presented is unlike that of Petty v. Malier, 14 B. Mon. 198, and some kindred Kentucky cases, where it was properly held that, where a separate estate is claimed in land under a conveyance, it must be expressed in the deed, or the intention to create it therein shown. It is urged, however, that the expression of the trust merely, in the stock certificate, without expressing a separate use in the wife, did not create a separate, but merely a general, trust-estate; and that the husband could, at any time, assert his marital rights, and convert the property. If it be conceded that the mere raising of a trust for a married woman does not alone create a separate estate in her as to personalty, yet it is certainly one circumstance to be regarded in arriving at the intention of the parties, and whether one was in fact created. It is the usual, and was formerly the only, mode of creating one in personalty. It is not absolutely essential to it, because although, by the common law, a married woman cannot hold the title to personal property acquired by her, but it flows through her into the husband, yet equity, intent upon justice, will treat him as a trustee for her as to it, and thus, if invoked, give her the beneficial use of it. The intervention of a trustee is, however, at least, a circumstance tending strongly to...