|

it can make no difference that the preferred creditor is his wife.

tively show the offense, the steps, without which the sentence cannot be good, and the sentence itself, "all parts of the record are to be interpreted together, effect being given to all, if possible, and a deficiency at one place may be supplied by what appears in another." 1 Bishop, Crim. Proc. § 1347, 1348. For these reasons the objection last stated is not a Where a husband purchases property as agent

sustained.

2. Whenever a husband acquires possession of the separate property of his wife whether with or without her consent, he must be deemed to hold it in trust for her benefit in the absence of any direct evidence that she intended to make a gift of it to him.

of his wife and with her money, under an agreement between them that the property is to be deeded to her, and then without her knowledge, causes the same to be deeded to himself, he holds the property in trust for her, and if he afterwards conveys the property to her before the rights of his attaching creditors have intervened. such conveyance is good as against his creditors, unless she has herself been guilty of fraud as to them which would estop her from claiming the property.

Argued Oct. 19, 1893. Decided Jan. 22, 1894. [No. 43.]

5. Some reference should be made to an order entered on the same day, but after the sentence was passed, in these words: “Ordered by the court, that sentence be suspended on the third count of the indictment, on which the defendant was tried and convicted by the jury for the killing of William D. Bolding." The record does not state the grounds upon which this order was based. Its object, we suppose, was to restrict the sentence to one of the two charges of murder embraced in the indictment, although the defendant had been tried and found guilty upon both. Be this as it may, that order constitutes no reason is APPEAL from a decree of the Circuit Court of the United States for the District of itself for the reversal of the judgment. It Rhode Island, dismissing a suit in equity did not prejudice the substantial rights of the brought by Mary J. Garner to obtain an injunc accused, because it did not prevent this court,tion against the Second National Bank et al., upon the present writ of error, from reversing from selling and conveying certain real properthe judgment in its application to all the ty in Rhode Island, and from attempting to oust charges contained in the indictment. This court having reached the conclusion that the judgment must be affirmed, any question as to the propriety or legality of the order suspending the sentence as to the court charging the murder of Bolding, is immaterial. It is neces420] sary, however, *in order to avoid any misapprehension, to say that this court must not be understood as expressing any opinion upon the question suggested by the words of that order, whether a court of the United States, in the absence of authority conferred by statute, has the power, after passing sentence in a criminal case, to suspend its execution indefinitely, and until the court in its discretion removes such suspension. A decision of that question is not necessary to the disposition of this case upon its merits.

There are assignments of error other than those above examined, but they are without merit, and, therefore, need not be noticed in this opinion.

We perceive no error in the record to the prejudice of the substantial rights of the plaintiff in error. Judgment affirmed.

her from the possession thereof, and decreeing relief asked by cross-bill, to wit, the cancella tion of the deeds to plaintiff as clouds upon the title. Reversed, and cause remanded for further proceedings.

Statement by Mr. Justice Harlan:

This appeal brings up for review a final decree dismissing a bill filed to obtain an injunction against the appellees, the Second National Bank, a national banking association having its place of business in Provi [421 dence, Rhode Island, Christopher A. Shippee, and Samuel W. K. Allen, from selling and conveying by deed or otherwise certain real property situated in that state, and from all attempts by actions at law or otherwise to oust Mary J. Garner, formerly Mary J. Graeffe, one of the appellants, from the peaceable and quiet enjoyment and possession of such property.

The case made by the bill is, substantially, as follows: In the winter of 1879 and 1880, Albert J. Graeffe, of New York, conceived the purpose of forming a joint stock company for manufacturing textile fabrics of wool and cotton. Having heard that there was certain

MARY J. GARNER (formerly Mary J. mill property in Warwick, Rhode Island,

Graeffe), Appt.,

V.

THE SECOND NATIONAL BANK OF
PROVIDENCE, Rhode Island, ET AL.

(See S. C. Reporter's ed. 420-436.)

Preference of creditors-husband, when trustee for wife-deed from husband to wife, when good.

1. Among creditors equally meritorious, a debtor may conscientiously prefer one to another, and NOTE.-A8 to conveyances between husband and wife, upheld in equity, see note to Bank of United States v. Lee, 10: 81.

that could be purchased and utilized at a moderate expense, he proposed to his wife, Mary J. Graeffe, who had considerable estate in her own right, that this mill property. together with other real estate and water rights adjacent and appurtenant thereto. known as the American Mills estate, be purchased, and equipped for manufacturing pur poses. The husband represented to the wife. at the time, that the property could be rented to a company he proposed to form, and that

As to obligations of married woman, as surety or quarantor for her husband or others; rights as creditor of her husband, see note to Bein v. Heath, 12:

As to voluntary deed to wife or child, when good or | 416. void, as to creditors, see note to Sexton v. Wheaton, 0: 603,

As to wife's separate property, how charged, see note to Dodge v. Knowles, 29: 144.

such an investment of her money would be safe and remunerative. When the investment was proposed, the husband was the agent and trustee of the wife, having the care, custody, and management of her property. The wife, confiding in his representations, as well as in his judgment and good intentions, gave her assent to the proposed investment. But she expressly directed-and it was so under stood between herself and her husband-that the property when purchased should be conveyed to her in fee and appear upon record in her individual name. The proposed purchase was made, the amount due for each parcel being paid out of the money of the wife which was in the hands of the husband as her agent and trustee, and was her sole and separate property. Contrary to the understanding with the wife, without her knowledge or consent, and in violation of her express directions, the husband caused the deeds and instruments of writing to be made out in his name, as if the fee was absolutely vested in him. In conformity with the original pur422] pose, the property was equipped for manufacturing purposes, the money expended to that end belonging to the wife. The result was that $48,910.94 of her money, in the hands of the husband, were expended in the purchase and equipping of this property. When the deeds were executed the wife believed that the property had been conveyed to her as her sole and separate estate, in accordance with her directions to, and understanding with, her husband, at the time of the proposed investment. She never heard that this understanding had been violated, until the summer of 1880, when she ascertained from her husband that the property stood in his name. She thereupon requested him to have it conveyed to her, without further delay. This he promised, but neglected, at the time, to do.

terest, and property he had, on March 5, 1881 (the date of the attachment in the case) in and to the property described in the deeds to him, Garner, and Mrs. Graeffe. At a sale at public auction under this exccution, the interest of *Albert J. Graeffe, so levied upon, [423 was purchased, February 28, 1882, by Christopher H. Shippee, for $499. and he received a deed from the sheriff. Mrs. Graeffe, by her attorney, forbade the sale, and gave notice that the property was her sole and separate estate. Subsequently, Shippee, by quit-claim deed, conveyed an undivided half of the estate purchased by him, as above stated, to Samuel W. K. Allen, one of the appellees.

On the 7th day of January, 1882, at public sale, under an execution upon a judgment rendered in one of the courts of Rhode Island, in favor of the Second National Bank of Providence, that bank became the purchaser, for $525, of all the right, title, and interest of Albert J. Graeffe in the above real estate and premises, on the 16th of March, 1881, and received a deed from the sheriff.

The Second National Bank, Shippee and Allen having threatened to eject Mrs. Graeffe from the possession and enjoyment of the property, this suit was brought against them in the name of Graeffe and wife. A part of the relief sought was a decrec canceling the deeds under which they respectively claimed, and thereby removing the cloud created by them upon her title.

The answers controvert all the allegations of the bill that tend to show an equity in favor of Mrs. Graeffe as against the judg ment creditors of her husband. The special grounds of defense were sustained by the court below, and are sufficiently indicated in the following extract from the opinion of the circuit judge, made part of the record:

"This is a case as disclosed by the evidence On the 16th of October, 1880, the premises where a wife for years allowed her husband having been put in condition for manufact- to do as he pleased with her property, calling uring purposes, were leased for the term of him to no account whatever, and where no four years to the American Mills Company, action is taken by her until he has become a New York corporation, of which the hus- insolvent, and is about to make an assignband was a stockholder, and the treasurer. ment. Property is permitted to stand in his In February, 1881, the company became finan-name for months after the wife has knowledge cially embarrassed. Its condition having be- of the actual condition of the title, and credit come known to William H. Garner, a brother is given the husband on the faith that he is of Mrs. Graeffe, he informed her that, in case the real owner. Where a wife thus permits of its insolvency, the property, standing in her money or property to pass into her hus her husband's name, was liable to be taken band's hands and possession to manage as he for its debts. The husband was thereupon see fit, without any *promise by him to[424 again requested by the wife to convey the repay it, and persons are, for this reason, inproperty to her. In accordance with that reduced to give credit to the husband, it neither quest, he conveyed to Garner, by warranty deed, dated March 1, 1881, and recorded March 3, 1881. The latter, by deed, dated March 1, 1881, and recorded August 13, 1881, conveyed to Mrs. Graeffe. The consideration recited in each of these deeds was $48,910.94, the amount of the wife's money that had been expended by the husband in and about the property.

An execution was issued November 7, 1881, upon a judgment rendered in one of the courts of Rhode Island, in favor of the Fourth Na tional Bank of New York against Albert J. Graeffe. This execution was levied November 15, 1881, on all the estate, right, title, in

becomes impressed with a trust in her favor, nor does she become his creditor in respect of it so as to sustain a conveyance by him to her upon the eve of his insolvency as against his general creditors"-citing Ilumes v. Scruggs, 94 U. S. 22 [24: 51]; Wortman v. Price, 47 111. 22; Hockett v. Bailey, 86 Ill. 74; Besson v. Eveland, 26 N. J. Eq. 468.

Shippee and Allen by cross bill asked a decree canceling the deeds made to Garner and Mrs. Graeffe as clouds upon their title. By the final decree the original bill was dismissed, and the relief asked by the cross-bill was given.

It is stated in the brief of appellant's coun

Appellant as complainant is entitled to main-
tain this action to establish and quiet her title.
2 Story, Eq. Jur. § 826; Fonda v. Sage, 48
Had there been no agreement between hus-N. Y. 173; Allen v. Buffalo, 39 N. Y. 386;
band and wife to buy for her in the first in- | Eldridge v. Smith, 34 Vt. 484; Lick v. Ray, 43
stance, still it was neither illegal, inequitable Cal. 83; Stout v. Cook, 37 Ill. 283; Hartford v.
nor fraudulent for him to prefer her to the Chipman, 21 Conu. 488; Downing v. Wherrin,
amount of his indebtedness to her.
19 N. H. 9, 49 Am. Dec. 139: Brewton v. Smith,
28 Ga. 442; Barron v. Robbins, 22 Mich. 35.
Mr. J. Langdon Ward, for appellees:
Where a wife permits her money or proper-

Right to prefer among creditors is a conse-ty to pass into her husband's bands and posses-
quence of ownership.

U. S. 18 How. 503 (15: 472); Watson v. Tarp- | his name. She grew excited about the matley, 59 U. S. 18 How. 517 (15: 509); Eliott v. Gower, 12 R. I. 79.

Mr. Justice Harlan delivered the opinion of the court:

ter, and insisted upon his making a conveyance to her at once. This he agreed to do. He promised that he would attend to it at once, but neglected to perform his promise. To these facts the husband testified, and we In the court below it was contended, in are not at liberty, upon a close scrutiny of behalf of the plaintiffs that even if there the evidence, to doubt the substantial acwere no agreement that the property in ques-curacy of his statements. Other testimony tion should be taken in the name of the wife, by him was to the following effect: "Q. there was nothing illegal or inequitable in After this interview in August, and before preferring her to the amount of the husband's the conveyance, on the first of March followdebt to her. Upon this point the court said:ing, had you any conversation with Mrs. "The question of the legality of a preference under Rhode Island laws does not arise in this case; for our decision rests upon the principle that Mrs. Graeffe, by her own conduct or acts, by what she permitted to be done, 426] or neglected to do, *is estopped in a court of equity from claiming this estate as against the general creditors of her husband." We are of opinion, after a careful examination of the evidence, that there was noth-A. In that fall of 1880 and also in the spring. ing in the conduct or acts of Mrs. Graeffe that precluded the court from granting the relief sought by her. The case made by the bill was in all material particulars sustained by the proof. We do not see how this conclusion can be avoided, except by disregarding alto-you tell her anything about it? A. Yes; I gether the testimony of Mrs. Graeffe and her husband. And that we do not feel at liberty to do. In our judgment what they have said under oath touching the vital issues in the case must be taken as substantially true.

Mrs. Graeffe inherited from her father and uncle property, principally real estate, worth from $100,000 to $125,000. When the estates of the uncle and father were settled up, the moneys and securities belonging to her came into the husband's hands under a power of attorney, which authorized him to receive them for her. There is no claim, as under the evidence there could not be, that the wife made a gift of this property to her husband. On the contrary, it remained in his hands to be controlled for her, although he was allowed a large discretion in its management. The husband informed his wife that she could buy the property in question, stating that it could be purchased cheaply, and that a very fair return could be derived from it if improved and leased to the Mills Company. When it was concluded to make the purchase, the husband told the wife that he "would buy the property for her," and that "the title was to be vested in her. It is beyond question that she relied upon his assurance that the property would be secured to her. She certainly understood at the time, as was quite natural, that it was to be her property. The purchase was made in March, 1880. The husband, without the knowledge of the wife, and in violation of the assurances he had given her, took the title in his own name. The price paid was about $6000. Immediately after the purchase improvements costing about $40,000 were put upon the premises. The moneys paid for the property, and that expended for its improvement, belonged entire427] ly to Mrs. Graeffe. *In August, 1880, the improvements being then in progress, she discovered, in the course of a conversation with her husband, that the property stood in

Graeffe in which she was informed as to where the required title of the property was? A. What do you mean by that? Q. How did she know that it had not been conveyed to her? A. She questioned me from time to time and I was forced to make acknowledgments to her that I had not as yet attended to the transfer. Q. When did she first question you, after the interview of August, 1880?

Q. When was it that you first told her that you had not transferred the title to her? A. August, 1880. Q. And then you told her you were going to do it? A. Yes. Q. After that when did you tell her you had not; or, did

told her later, with a promise to do it, and failed to do it. Q. When next, prior to March first, 1881? A. Some time in Febru ary; I cannot tell the date, but it was at the moment when I was borrowing money from her to pay some drafts that were maturing. She then again learned that I had not made this transfer. I told her then, and she was very much excited about it."

Mrs. Graeffe testified to the following effect: 'Q. At the time he had these conversations with you, was there anything said as to who was to take the property? A. I understood that it was to be my property. Of course, I understood it was to be my property. Q. Did you learn from time to time that purchase had been made of the property? A. Yes, Graeffe told me, and told me the price he could get, but I don't remember the figures at all. Q. What did you say *about [428 purchasing? A. I left it to him. 2. What did you say to him? A. I expected that he would purchase, and talked to that effect. Q. When did you first learn that the title to the property was not in your name? A. About August of that year, I think. I think it was some time during the summer and we were talking about the property, and he gave me to understand it was not in my name. I then insisted upon it, and he said it should be put in my name. I know we had quite a little controversy at the time. He said if that would satisfy me, it should be put in my name. Q. When next did you have any conversation with Mr. Graeffe after this interview in August on the subject of the title to this property? A. I don't think we ever spoke of it again to speak of the title until he was about to fail. About that time I spoke to my brother about it, and that was the first I knew that it had not been put in my name. Q. What did you say to your brother? A. I asked him to look out for my interest, and get my money. He asked if st

was mine. I said I thought it was. I then wife in the same manner and with the same spoke to Graeffe, and he said it had not been rights and effect as the property sold." R. put in my name. My brother said immedi- I. Pub. Stat. chap. 166, p. 422, $ 1, 2. ately it must be done. I think it was he And, in that state, preferences of bona fide who took charge of the affair. Q. Immedi- debts are permitted, except when they are ately after this conversation, the transfer was assailed under the insolvent laws of that made? A. Yes, I think it was the next day state, within the time limited by those laws. just as soon as I could possibly make ar- R. I. Pub. Stat. chap. 237, p. 660, § 14, 15. rangements.

*In Steadman v. Wilbur, 7 R. I. 481, [430 The brother of Mrs. Graeffe here referred to 486, which involved the validity, as against was William H. Garner, to whom the prop- the husband's creditors, of a purchase alleged erty was conveyed by Graeffe, and by whom to have been made by the wife, with her sepit was immediately conveyed to the wife. arate estate, of property belonging to the He testified: "Some few days before the husband, the court said: "If the title conactual transfer Mrs. Graeffe, my sister, told veyed to the wife were a mere equitable one, me of the fact that this property belonging resting in executory contract, a court of law to her had been transferred to her husband, could not set it up against a legal title by and asked me to insist on its being retrans- execution acquired by purchase from a credferred to her, and I did so. Under the deeditor's levy and sale; but where, as in this from her brother, Mrs. Graeffe claims the property as against those who obtained sheriff's deeds under attachments issued and levied after the title was vested in her. These attachments, we have seen, were levied on the right, title, and interest of the husband int he property.

The proof fails to show that Mrs. Graeffe ever stated to any one that her husband owned 429] the property, or that any *one in her presence ever spoke of him as its owner. There is some conflict in the evidence as to whether the husband represented to any creditor that he owned the property. He denies that he ever did, and we do not think the evidence authorizes us to assume that he made or intended to make any representations of that character. In any event, it must be taken that his creditors were not induced to regard him as the owner of the property by reason of any representations to that effect by, or with the knowledge of, Mrs. Graeffe.

case, the wife's legal title has been perfected by a deed, a court of law could deal, and ought to deal, with the wife's right to purchase, for a fair consideration, from her husband, precisely in the same way that a court of equity would. If this be so by the general law, how much more in this state, where, by statute, not only the wife's rights to her property are secured against her husband and his creditors, but her legal identity with respect to it, as a person distinct from her husband, is recognized, and her power to act and contract in the disposal of it, in the modes permitted by law, is acknowledged by legislative enactments. Observing that if the wife may contract with her husband at all for the purchase of his property with hers, it must be, in regard to his creditors, upon the same principle of good faith, and the giving of equivalent consideration, that any other purchaser might, and that if she loans him money, it must be with the same right to expect and receive security or repayment out of his estate, and even preferences of payment, that any other creditor has, the court proceeded : She cannot, indeed, when her husband becomes insolvent, convert into debts, as against creditors, former deliveries to him of her money or other property, or permitted receipts by him of the income or proceeds of sale of her separate estate, which at the time of such delivery or receipt were intended by her as gifts, to assist him in his business, or to pay their common expenses of living; and, considering the relation beIt is provided by the statutes of Rhode tween them, the law would not, merely from Island that "the real estate, chattels real and such delivery or receipt, imply a promise on personal estate, which are the property of his part to replace or repay, as in case of any woman before marriage, or which may persons not thus related; but would require become the property of any woman after mar- more, either in express promise or circumriage, or which may be acquired by her own stances, to prove that on those matters they industry, shall be absolutely secured to her had dealt with each other as debtor and credsole and separate use; neither the same nor itor. *It is not, however, as supposed, [431 the rents, profits, or income of the same, or a rule of law that at the time of each delivery any part thereof, shall be liable to be attached or receipt of the separate property of the wife or in any way taken for the debts of the by the husband, the latter must expressly husband, either before or after her death, and promise to repay the former, or to secure her upon the death of the husband, in the life-out of his estate, to constitute the relation of time of the wife, shall be and remain her sole and separate property;" further, "in case of the sale of any such property, the procecds of such sale or any part of the same may be invested in the name of the wife, in any property, and be secured to and holden by the

The only omission charged against her in respect to the property is that she relied upon her husband's assurance that it would be put in her name, and did not, immediately upon learning in August, 1880, that he had deceived her, take steps to have the property conveyed to her, and thereby placed herself before the public as holding the legal title. But is that omission sufficient to justify a court of equity in denying the relief asked? Let this question be examined first with reference to the law of the state where these transactions occurred.

debtor and creditor between them in regard to it. Such a promise, made before such transactions, and looking forward to and covering them, would, at law as in common sense, avail as well to prove the character of them, precisely as it would between other