Hertz v. Mills

• Decision Date: 03 April 1934
• Docket Number: 30.
• Citation: 171 A. 709,166 Md. 492
• Parties: HERTZ v. MILLS ET AL.
• Court: Maryland Court of Appeals

171 A. 709

166 Md. 492

HERTZ v. MILLS ET AL.

No. 30.

Court of Appeals of Maryland

April 3, 1934

Appeal from Circuit Court, Montgomery County; Charles W. Woodward Judge.

Suit by Gustav C. Hertz against William A. Mills and wife and another. From an order sustaining a demurrer to the bill, the plaintiff appeals.

Order affirmed.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, PARKE, and SLOAN, JJ.

Robert H. McNeill and S. Wallace Dempsey, both of Washington, D. C (F. Bernard Welsh, of Rockville, on the brief), for appellant.

George P. Hoover, of Washington, D. C., and Robert Peter, Jr., of Rockville, for appellees.

URNER Judge.

On November 11, 1931, William A. Mills and Ada W. Mills, his wife, owning certain real estate in Montgomery county, as tenants by the entireties, conveyed the property to William K. Copenhaver, who immediately reconveyed it to Mrs. Mills, thereby investing her with the sole ownership of the title. There was at that time pending in the Supreme Court of the District of Columbia a suit against Mr. Mills in which the plaintiff later obtained a judgment for $15,000. Thereafter this equity suit was instituted by the judgment creditor, in the circuit court for Montgomery county, for the purpose of enforcing his claim against the property transferred by the conveyances just mentioned. The bill of complaint alleges that those transfers of title were made without consideration and with the fraudulent design to prevent the judgment creditor from resorting to the property, for the satisfaction of his claim, in the event that the judgment debtor should survive his wife as cotenant by the entirety. It is not proposed by the bill that the deeds by which the property was conveyed to Mrs. Mills separately should be annulled. The specific object of the suit is to have the title decreed to be held in trust by her for the benefit of the plaintiff in consequence of her participation in transfers alleged to have been in fraud of his rights. A demurrer to the bill was sustained by the chancellor, and the plaintiff has appealed.

The title of the defendant husband and wife as tenants by the entireties, as stated in the bill of complaint, was acquired in 1922. It is averred by the bill that the purchase price for the property was paid wholly by the husband, and that he caused the title to be conveyed to himself and his wife in order to shield himself against future debts. But, as no such objection appears to have been raised by any subsisting creditor within three years after the tenancy by entireties was created, it is now too late to question that transaction on the ground that it involved a gift by the husband to the wife of an interest in the property.

It is provided by the Code of Public General Laws, art. 45, § 1: "The property, real and personal, belonging to a woman at the time of her marriage, and all the property which she may acquire or receive after her marriage, by purchase, gift, grant, devise, bequest, descent, in the course of distribution, by her own skill, labor or personal exertions, or in any other manner, shall be protected from the debts of the husband, and not in any way be liable for the payment thereof; provided, that no acquisition of property passing to the wife from the husband after coverture shall be valid if the same has been made or granted to her in prejudice of the rights of his subsisting creditors, who, however, must assert their claims within three years after the acquisition of the property by the wife, or be absolutely barred, and, for the purpose of asserting their rights under this section, claims of creditors of the husband not yet due and matured shall be considered as due and matured."

Upon the case as presented by the bill of complaint and in the argument, the question is not whether the plaintiff, as a subsisting creditor of the husband, when the conveyances of November 11, 1931, vested the title solely in his wife, could have those transfers set aside and the title reinvested in the husband and wife as tenants by the entireties, but we are to determine whether the alleged motive for the transfer to the wife was a sufficient basis for an adjudication that the property has become impressed with a trust for the plaintiff's benefit. For the effectuation of such a trust it is prayed in the bill that the wife be required to convey the property to a commissioner appointed by the court to sell it and pay the plaintiff's judgment out of the proceeds.

It is argued, on behalf of the appellant, that, the conveyance to Copenhaver and by him to Mrs. Mills being for the alleged purpose of preventing the enforcement of the impending judgment, as against the interest of Mr. Mills in the property if he should survive his wife, their former tenancy by the entireties is not susceptible of restoration, but has been forfeited and lost. To support that contention, the appellant invokes the principle that equity will not aid one who has transferred property, for a fraudulent purpose, to recover it from the other party to the fraud, but will leave them in the position in which they have placed themselves by their own improper conduct. That principle is applied as between the parties to a fraudulent transaction. Harrison v. Harrison, 160 Md. 378, 384, 153 A. 58; Lord v. Smith, 109 Md. 42, 71 A. 430; Baxter v. Deneen, 98 Md. 181, 57 A. 601, 64 L. R. A. 949, 1 Ann. Cas. 147; Brown v. Reiley, 72 Md. 489, 20 A. 239; Snyder v. Snyder, 51 Md. 80; Schuman v. Peddicord, 50 Md. 560; Roman v. Mali, 42 Md. 513; 10 R. C. L. 353. The proposal here is to apply the principle in favor of a creditor who was not a party to the conveyances in question, and who is not concerned with any effort to have them rescinded, but who is relying upon them as the supposed origin of a greater right than he had before their execution. In our opinion, such a position is not tenable.

Even if the appellant's judgment had been obtained before those conveyances, and had been rendered in Montgomery county, where the property held by the judgment debtor and his wife as tenants by the entireties is located, the existence of such a judgment would not have imposed a lien upon the husband's interest nor have impaired the ability of the owners to dispose of the property and convey an unincumbered title. Jordan v. Reynolds, 105 Md. 288, 66 A. 37, 38, 9 L. R. A. (N. S.) 1026, 121 Am. St. Rep. 578, 12 Ann. Cas. 51; Ades v. Caplin, 132 Md. 66, 103 A. 94, L. R. A. 1918D, 276; Annapolis Banking & Trust Co. v. Neilson, 164 Md. 8, 164 A. 157. The essential nature of an estate by the entireties precludes the recognition of any burden upon it resulting from the separate act or obligation of either of the co-owners. To regard a judgment against one of them as a lien upon his or her interest in such an estate would be in derogation of the entirety of title with which each is invested. In Jordan v. Reynolds, supra, where a suit for specific performance of a contract for the sale of land held by husband and wife as tenants by the entireties was resisted upon the ground that a judgment previously entered against the husband affected the title, this court, after a review of earlier Maryland and other cases, said: "It seems, therefore, to be clear, both upon reason and authority, that the judgment in this case is not a lien upon the property, in the lifetime of the wife. There is nothing that can be seized and sold under an execution upon the judgment. Property held by this tenure cannot be sold without the joinder of the wife

( McCubbin v. Stanford, supra [85 Md. 380, 37 A. 214 60 Am. St. Rep. 329]), and the...