Partridge v. Havens , 10 Paige Ch. 618 ( 1844 )

The Chancellor.

If the complainant had filed his bill as a judgment creditor of N. Havens, for the purpose of reaching an interest in this property which still belonged to his debtor, or to reach it upon the ground that it had been conveyed to the children in fraud of the complainant’s rights as a creditor, the objection made in behalf of these infant defendants that the judgment debtor should have been made a party, would have been well taken. And as infants cannot be prejudiced by the neglect of their guardian ad litem to make such an objection in the answer, the objection may be raised by their counsel at the hearing. But if N. Havens ever had any interest in the premises, as a resulting trust, or otherwise, the assistant vice chancellor is clearly right in supposing that such, interest passed to the assignees by virtue o-f the assignment of November, 1822. And if their subsequent conveyance to the complainant was valid, he and the infant defendants were alone interested in the property, after that conveyance ; and no other persons were necessary or proper parties to the bill in this cause at the time of filing it in May, 1824.

But the assistant vice chancellor was clearly right in supposing that the complainant acquired no title to the premises, either legal or equitable, under the conveyance from the assignees. I have not been able to find any evidence whatever from which I can pres.ume that the conveyance was intended to be made in payment or satisfaction of the complainant’s judgment, or of any part thereof. That judgment was for several hundred dollars; and yet the nominal consideration inserted in the conveyance from the assignees is but one dollar. Even that nominal sum was not paid; for the assignees were examined as witnesses, and both testified that they received no consideration whatever for the conveyance. And no agreement appears to have been made between the parties to that conveyance that even the one dollar mentioned therein should, in any event, be applied upon the judgment. Nor does the complainant allege in his bill that there was an agreement to receive that conveyance in payment, or in part payment, of his judgment against N. Havens. On the contrary, he expressly avers and charges, that with the exception of a very small sum collected by the sheriff upon the execution, the whole amount of the judgment, with the interest thereon, is still due to him. Even if there were no other creditors in this case who "were entitled to share in the proceeds of the assigned property, the assignor would be entitled to have whatever his interest therein was worth applied upon the judgment ; so that his future earnings might not be liable for the whole amount of the debt.

The effect of the arrest of the defendant in the judgment, upon the ca. sa., and of his subsequent assignment and discharge under the act to abolish imprisonment for debt in certain cases, (Laws of 1819, p. 117, § 6,) was to vest all the property and effects of the defendant who was thus arrested and in execution in his assignees, discharged of any legal or equitable lien which the plaintiff in the judgment might have had therein before such defendant was arrested on the ca. sa.; but to leave the judgment in full force and effect as against any property which N. Havens might acquire subsequent to the assignment. If the equitable title to the premises in question, therefore, was in the judgment debtor at the time of the assignment, by the operation of a resulting trust or otherwise, the complainant can claim no interest in the property, by virtue of the right which he originally had to an equitable lien, under the provisions of the fourth section of the act concerning uses. (1 R. L. of 1813, p. 74.) For by changing the judgment debtor in execution, he lost his lien, if it previously existed ; and he can now only claim an interest in the premises through the assignees. And this voluntary conveyance from the assignees, without consideration and in violation of the trust upon which the interest, if any, of the judgment debtor in the premises had been assigned to them, furnishes no sufficient foundation for an application to the equitable powers of this court for relief. The bill, therefore, was properly dismissed upon that ground alone.

Again; I think, upon the facts of this case, that the assistant vice chancellor was wrong in supposing that there was even a resulting trust, as to the premises in question, in favor of N. Havens. The wife had an equitable right to. a support for herself and her infant children, out of the moneys given to her by the will of her brother; which equity the court would have protected and enforced at any time before the legacy was reduced to possession by her husband. That equity was a sufficient consideration for the agreement between her and her husband, that the balance of the legacy still due from the administrator should, if collected by the husband, be appropriated for the benefit of herself and her children solely. For if the husband had not consented to that arrangement, she might have applied to this court to protect her equity in the fund. And a post-nuptial contract between husband and wife, founded upon a sufficient consideration, by which property is set apart for her separate use, although void at law, will be sustained in equity. (Garlick v. Strong, 3 Paige, 440.) That such an agreement was made in this case, previous to the receipt of the two sums of money, due upon the legacy, which subsequently formed the sole consideration for the conveyance of the premises in question to Joshua Downs, and through him to these defendants, there can be very little room for doubt. The complainant has examined Mr. and Mrs. Havens as witnesses in this cause, and they both testify positively to such an agreement. And that the husband intended to carry this agreement into effect in good faith, after the receipt of the money, is evident from the fact that it was loaned upon the same understanding; although the parties do not appear to have been sufficiently acquainted with the law to take proper securities for the loans, in the name of a trustee, for the wife and children. This court converts the husband into a trustee for the wife in many cases, where it is necessary to protect her" equitable rights. And I am inclined to think that if the husband had taken these funds, which he had agreed should be held for the sole use of the wife and children, and had invested them in the purchase of this lot, and had taken the conveyance therefor in his own name, without her consent, it would have been the duty of the court to have declared a resulting trust in favor of his wife and children, in these premises, in consequence of this misapplication of the fund. If so, the conveyance to Joshua Downs would have raised a resulting trust in the premises in this case, not in favor of the husband, but a resulting trust for the separate use of the wife and children.

Both conveyances in this case, however, were but different parts of the same transaction, and were intended to carry into effect the agreement by which the wife consented that her interest in the fund should be conveyed directly to the children ; instead of having it secured for her separate use and the use of the children, according to the original agreement with the husband. The effect of the conveyances, therefore, is the same as if the conveyance by the executors of John Downs had been made directly to the defendants, under this new agreement, without the intervention of Joshua Downs. Looking upon the transaction in that light, there cannot be a pretence of a resulting trust in behalf of 1ST. Havens. But if the money which formed the consideration of the conveyance had belonged absolutely to him, in his own right, such an investment might have been a fraud upon his creditors, so as to raise a resulting trust in their favor, if necessary, to enable them to reach the fund in the hands of these defendants.

The general rule, previous to the revised statutes, undoubtedly was, that if a man purchased real estate and paid for it with his own funds, and took a conveyance therefor in the name of a third person, there was a resulting trust in his favor •, unless the person in whose name the conveyance was made could introduce some evidence to rebut the legal presumption of such a trust. But no such presumption arose where a parent advanced the purchase money, or consideration, and took a conveyance in the name of his child. For in such a case the law presumed the conveyance was intended as a gift or advancement to the child. (Lew. Law of Trusts, 169. 3 Sug. Law of Vend. 10th Lond. ed. 262.) Here the children were wholly unprovided for. And the testimony, instead of rebutting the presumption that the intention of the parents was to vest a beneficial interest in the premises in the children, shows that such was evidently their intention.

The decree appealed from must therefore be afiirmed, with costs.