McCabe v. Guido

• Decision Date: 18 February 1918
• Docket Number: 19970
• Citation: 116 Miss. 858,77 So. 801
• Court: Mississippi Supreme Court
• Parties: MCCABE v. GUIDO

77 So. 801

116 Miss. 858

MCCABE v. GUIDO

No. 19970

Supreme Court of Mississippi

February 18, 1918

Division B

APPEAL from the chancery court of Warren county, HON. E. N. THOMAS Chancellor.

Suit by H. C. McCabe, Trustee in Bankruptcy, against Frank Guido. From a decree sustaining a general demurrer to the bill of complaint, plaintiff appeals.

The facts are fully stated in the opinion of the court.

Decree reversed and cause remanded.

J. C Bryson, for appellant.

Four grounds of liability are set up in the bill of complaint first, right to recover possession of the Washington street store and stock of merchandise as the property of the bankrupt; second, liability of appellee for money used by the bankrupt in the payment and discharge of appellee's debts against the Hall's Ferry Road store; third, liability of appellee for the money used by the bankrupt in the support and maintenance of appellee's family after he had abandoned the same; fourth, right to recover any surplus of the fifteen hundred dollars borrowed over and above what was paid out in the purchase of goods for the Washington street store.

The demurrer necessarily admits the truth of all the averments of the bill in support of the several grounds of liability and being general and not special, must apply to all of them considered together and not separately as to any particular grounds of liability.

If any ground of liability appears to be well taken, then the court below erred in sustaining the demurrer, even though one or more grounds of liability set up may not be good. I shall discuss the several grounds of liability in the order set out above. As to the right to recover the Washington street store. The bill alleges that this store was originally the property of Louise Guido, the bankrupt; that money raised from her real estate purchased the stock of goods and that while it was turned over to her son, Frank Guido, Jr., to operate, the actual title to the property was in the bankrupt.

The bill further alleges that there was an attempted transfer of this store from the bankrupt to her husband, but that the assignment was verbal and not in writing and not made of record and for that reason was void as to complainant and the creditors represented by him.

Do these averments bring the case within the purview of section 2522 of the Mississippi Code of 1906? This statute provides "A transfer or conveyance of goods and chattels, between husband and wife, shall not be valid as against any third person, unless the transfer or conveyance be in writing and acknowledged and filed for record as a mortgage or deed of trust is required to be; and possession of the property shall not be equivalent to filing the writing for record, but to affect third persons, the writing must be filed for record. We submit that the averments of the bill clearly bring the case within the condemnation of the statute.

This court has construed the statute set out above in a number of cases but I shall refer to only a few of them. Gregory v. Dodds, 60 Miss. 549; Kennington v. Hemingway, 101 Miss. 259; Austin v. Posey, 64 So. 5. In considering section 2521, a companion Code provision, this court recently said in the case of Banks v. Pullen, 74 So. 424: "The statute was designed to protect the public. Secret contracts between husband and wife are condemned for obvious reasons. We see in this case a husband building a house on the land of his wife and entering into a contract whereby he was to receive the means of the wife for the purpose of securing the material with which to erect the house. The husband did not use the means to buy the material; he bought it from appellant on credit. Who must suffer? The husband is made the statutory agent of his wife whenever he uses any of her means to carry on a business in his own name."

It follows necessarily that if the assignment of the Washington street store by the bankrupt to her husband (appellee) was void that the store remained the property of the bankrupt and was her property at the time the petition in bankruptcy was filed, and, as such, the trustee in bankruptcy in entitled to it and to sell and convert the stock of merchandise into cash and apply the same to the payment of the debts proven against the bankrupt. Such is the letter of the statute and its necessary legal effect and in addition it is the even-handed justice of the situation.

Hall's Ferry Road store. It is next alleged that the Hall's Ferry Road store was largely indebted at the time the bankrupt took charge of it, for merchandise purchased before then for it by the appellee, and that the bankrupt paid these debts, and it is sought to hold appellee liable for the debts so paid, on the theory that the payments inured to his benefit.

In Caldwell v. Hart, 57 Miss. 123, this ground of liability was upheld, the court saying: "The appellees contracted with the husband as principal, extending to him personally the credit, upon the belief that he was the owner of the plantation. The sole equity of the bill to charge the wife's separate estate is that the appellees allege that they subsequently discovered that the husband purchased for the benefit of the wife's estate."

The case at bar is identical except it is now sought to hold the husband as debtor to his wife to the extent of the debts paid by her for him.

Liability for maintenance of family. There may be no direct authority under the decisions of this state to charge a husband with the wife's debts incurred by her in support and maintenance of the family, but it strongly appeals to conscience and sound morals.

In the case at bar the husband and wife were both in business, operating independent stores, the husband abandoned his wife and children, leaving the wife to maintain herself and their children from her business, thereby relieving himself and his business from the burden of family support and maintenance and casting it on the wife and her business. The husband by this relief prospered and the wife by this burden failed and thereby cast on her creditors the maintenance of the family. It would seem that the husband in good conscience ought to be held liable to recompense the wife's creditors to the extent they have contributed to the support of the husband's family.

Liability for surplus of fifteen hundred dollars. This ground of liability is controlled by section 2520, quoted above and by Caldwell v. Hart, 57 Miss. 123, cited above. "If the husband receives and appropriates to his own use the property of the wife, he shall be debtor to his wife therefor."

If all the fifteen hundred dollars was not paid out in purchasing goods for the Washington street store that which was left in the hands of the husband was the property of his wife and under the above Code provision he is debtor to his wife to that extent and necessarily to the appellant who stands here in her place.

Independent of the statute he is liable to her for the surplus of this fund remaining in his hands as her money and received by him.

As to the jurisdiction of this court. Three grounds are laid: first, under Code, section 553, as a creditors' bill seeking to set aside and annul the verbal assignment of the Washington street store as a fraud in law on creditors; second, as a bill for accounting; third, as a bill seeking to subrogate to the demands of creditors the liability of the husband to the wife for support and maintenance of the family which he cast upon her and through her upon her creditors who are now represented by appellant as her trustee in bankruptcy; fourth, as a bill to enforce the equitable liability of the husband for the property of the wife which came into his possession as provided for in Code, section 2520.

We submit that each of the foregoing grounds are sufficient but if any one of them be held good the general demurrer should have been overruled.

Henry & Canizaro, for the appellee.

Counsel for the appellant attempts to sustain this claim of liability against the appellee on the following grounds which we here quote in full, to-wit: First, "Right to recover possession of the Washington street store and stock of merchandise as the property of the bankrupt; second, Liability of appellee for money used by the bankrupt in the payment and discharge of appellee's debts" against the Hall's Ferry Road store; third, "Liability of appellee for the money used "by the bankrupt in the support and maintenance of appellee's "family" after he had abandoned the same; fourth, "Right to recover any surplus of the fifteen hundred dollars borrowed over and above what was paid out in the purchase of goods for the Washington street store."

"We will first answer appellant's counsel's suggestion that: The demurrer admits the averments in the original bill that the Washington street store belonged to the bankrupt," etc., and he says: "That the fact that the appellee filed an answer denying fraud does not help the situation. The answer having served its purpose, the consideration of it must be at an end." Our contention is that while the demurrer admits the allegations that are well pleaded, it does not admit conclusions of law by the pleader. 16 Cyc., page 277, announces the following rule: (B) What is not admitted. By virtue of the restriction of the rule just stated to well-pleaded facts, a demurrer does not admit an assertion in the nature of argument or inference based on facts pleaded, or that the construction of an instrument set out is that alleged by the pleader, or in general any allegation in the nature of legal conclusions." Perkins v. Guy, 55 Miss. 153, a demurrer admits all matters of fact well pleaded for, does not admit conclusions of law stated by the pleader. Partee v. Kortrecht, 54 Miss. 66; Watts v. Patton 66 Miss. ...