Spruance v. Equitable Trust Company

• Decision Date: 16 March 1918
• Citation: 103 A. 577,12 Del.Ch. 12
• Court: Court of Chancery of Delaware
• Parties: EMMA A. SPRUANCE v. EQUITABLE TRUST COMPANY, Executor of the Last Will and Testament of James Harvey Spruance, Deceased

103 A. 577

12 Del.Ch. 12

EMMA A. SPRUANCE v. EQUITABLE TRUST COMPANY, Executor of the Last Will and Testament of James Harvey Spruance, Deceased

Court of Chancery of Delaware, New Castle

March 16, 1918

BILL IN EQUITY by a widow to have the executor of her deceased husband repay to her certain sums of money alleged to be due on account of loans to and payments made on account of her husband. The cause was heard on bill, answer, testimony of witnesses produced before the Chancellor and exhibits. The facts appear in the opinion of the Chancellor.

Franklin Brockson, for complainant.

Hugh M Morris, for defendant.

OPINION

THE CHANCELLOR

The complainant seeks to recover from the executor of her deceased husband certain moneys of her own and not obtained from her husband. Having on deposit in a bank $ 5,000 she drew four checks. One check was to the order of Heaton & Wood for $ 476. On the stub of the check book were the words "Hardwood floors," and it was shown that the payee had theretofore put down new floors of hardwood in the dwelling house owned by the complainant's husband, and which was their residence. Another check was to the order of her husband for $ 3,100, and on the stub in his handwriting were the words "Two houses 111 & 113 Franklin." It was shown that in July, 1915, he purchased at public sale two houses, Nos. 111 and 113 Franklin Street for $ 1,750 each declaring at the time that it was his wife's money that he was investing in the houses. The title was taken in his name, and afterwards he and his wife joined in mortgaging the houses. In November and December, 1916, they joined in deeds conveying them to the purchasers to whom they were sold at an advance of about $ 375, and he not only received the rents of the houses while the title to them was in him, but also the money realized by the resale thereof. She also gave him two other checks, one for $ 500 on October 19, 1915, and the other on December 27, 1915, for $ 400.

Dr Spruance died May 15, 1917, entirely solvent, and by will made provision for his wife, but made in it no mention of transactions between him and her. All of the checks bore the indorsement of the payees, and were paid from her bank deposit. This was substantially all of the pertinent facts. There was no evidence showing a promise or agreement on his part to return any of the moneys represented by the checks or account with his wife as to the rents or profits derived from the real estate which he bought and sold, or to repay her the money spent by her for hardwood floors. It was not shown that the new floors were necessary repairs or an unnecessary improvement to his real estate. Neither was it shown whether the moneys had or had not been repaid in the life of the husband. It was not shown what use was made of the sums of $ 400 and $ 500 paid to him. Of course, the wife was under a statutory disability to testify as to any statement by or transaction with her deceased husband, because she was a party to the cause in which a decree was sought against his estate.

There is no difficulty as to the jurisdiction of this court to decide the questions raised. Elsewhere the disability of husband and wife to make contracts is said to exist only during coverture, and that upon the termination thereof by death, or divorce, the contractual rights may be enforced, in the former case by or against the representative of the deceased spouse. But such is not the law in Delaware. A bond given by a wife to her husband for moneys of his loaned to her for use on her sole and separate property is invalid and cannot be enforced at law either during coverture or after the death of either or both of them. See Masten v. Herring, 22 Del. 282, 6 Penne. 282, 66 A. 368, and affirmed by the Supreme Court, where the executor of a married man brought an action of debt against the administrator of his wife on a bond given the husband by his wife during coverture. Therefore there is nothing in the act concerning the rights of married women to change the well-established jurisdiction of an equitable assumptist by a widow against the representative of her deceased husband. 2 Story's Equity Jurisprudence, § 1368.

Under the allegations of the bill the complainant is not entitled to repayment of the money represented by the check for $ 476. By the bill it was claimed to have been a loan by her to her husband which implies a promise of repayment; whereas the proof made by her was that the check was given in payment for floors put down by the payees in her husband's dwelling house, which is quite a different thing from a loan of money and inconsistent therewith. Therefore, it is not necessary to decide the question discussed by counsel, as to whether in the absence of a promise a wife may recover from her deceased husband's estate money expended by her from her own moneys on his dwelling house.

One question to be decided is whether the estate of her husband is liable to the complainant for the moneys paid by her to her husband and by him used in the purchase of real estate, and if so, to what extent. The facts are very bare. By joining in the mortgages and conveyances of the land which he purchased with her money, she presumably knew that he had taken title in his own name, sold the property at an advance and received the settlement. But it is not necessary to depend upon presumptions of law as to liability arising from the few known facts, if it has been shown that in these transactions he was acting as her agent.

There is in this State a decision of Chancellor Saulsbury directly bearing on the questions raised in this case, viz., the case of Hood v. Jones, 5 Del.Ch. 77 (1875). In that case land in Baltimore was purchased with money of Araminta Jones, then the wife of Charles R. Jones, and title thereto taken in the name of a trustee for her as fully as though she were a feme sole. Afterwards, the trustee being dead, she and her husband mortgaged the land for $ 2,300 to secure the payment of money which according to the mortgage was distinctly loaned to her husband by the mortgagee. The mortgagee gave to the wife a check for the money so loaned and she indorsed it over to her husband. The mortgaged property was then sold and conveyed by the mortgagors for $ 4,000, and a check for the balance, after deducting the mortgage debt, was given to the husband for the account of his wife, and he indorsed the check expressly as her agent and received the money. He then gave a judgment bond for $ 4,000 to a trustee for his wife. Later he engaged in business, and failed and his creditors recovered a judgment. Before they obtained a levy, judgment was entered on the bond held by the trustee for Araminta Jones, a levy on her husband's goods was made and the same were sold. The creditors of the husband filed a bill against the husband, his wife, her trustee and the sheriff alleging fraudulent collusion to prevent them from collecting their claims. The bill was dismissed, Chancellor Saulsbury holding that in making the mortgage of her own property for his debt the relation of principal and surety arose, and she was entitled to all the rights arising from the relationship, including reimbursement. Also that the receipt by her husband as her agent of the proceeds of sale of her land over and above the mortgage debt created the relation of debtor and creditor between them. That, therefore, the bond was not fraudulent, but was executed for a consideration which in equity is sufficient and made the bond valid.

In the opinion the Chancellor found that the bond would not have been valid as a voluntary one, or as a settlement for his wife, but only as an acknowledgment of an indebtedness. He distinctly based his opinion not upon the law of Maryland, where the land in question was located, but upon general equitable principles. 5 Del.Ch. 77. After reviewing authorities he found that two principles were established: (1) "The receipt and appropriation by a husband of money constituting the separate estate of his wife with her knowledge and acquiescence does not establish the relation of debtor and creditor between them and entitle the wife to compensation out of her husband's assets, unless at the time of such receipt there was an understanding, between them that he should repay the money so received and appropriated; and that in the absence of such an understanding, the law presumes the money to be a gift by the wife to the husband." (2) When, however, she joins her husband in mortgaging her separate estate for the payment of his debt, no such presumption arises, but on the contrary the law determines the relation which arises from the transaction to be that of principal and surety, and like any other surety she is entitled to reimbursement from him if the debt is paid from her separate property.

Applying these principles he found that she was surety for the mortgage debt of $ 2,300 and entitled to reimbursement by him. Also that in receiving the balance of the purchase money for her land, over and above the mortgage debt, on a check drawn in his favor for her, and indorsed by him as her agent, he thereby became indebted to her in the amount so received.

There is, therefore, deducible from this opinion and decision this principle: The receipt and appropriation by the husband of his wife's separate property with her knowledge and acquiescence, does not in the absence of an understanding or agreement between them create the relation of debtor and creditor; but that it is otherwise if he receives her separate property as her agent, even in the absence of such agreement or understanding.

It should be noted that this case was decided before married women were by statute given control of their separate property as fully as though a feme sole,...