In Rhode Island, a married woman holds the real and personal
estate, owned by her at the time of her marriage to her sole and
separate use after marriage, and may permit her husband to manage
it without affecting that use, and if the husband, without her
knowledge and consent, invests a part of her property in real
estate, taking title in his own name, and, on this coming to her
knowledge after a lapse of time, she requires it to be conveyed to
her, and such conveyance is made after a further lapse of time, the
husband being at the time of the conveyance insolvent, her equities
in the estate may be regarded as superior to those of the husband's
creditors if it does not farther appear that the creditors were
induced to regard him as the owner of it by reason of
representations to that effect either by him or by her.
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
Page 151 U. S. 421
its place of business in Providence, 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 mill property in Warwick, Rhode Island, 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 purposes. The husband represented to the wife at the
time that the property could be rented to a company he proposed to
form, and that 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 understood 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 purpose, the property was equipped
Page 151 U. S. 422
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, was 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.
On the 16th of October, 1880, the premises, having been put in
condition for manufacturing purposes, were leased for the term of
four years to the American Mills Company, a New York corporation,
of which the husband was a stockholder and the treasurer. In
February, 1881, the company became financially embarrassed. Its
condition having become known to William H. Garner, a brother of
Mrs. Graeffe, he informed her that, in case of its insolvency, the
property, standing in her husband's name, was liable to be taken
for its debts. The husband was thereupon again requested by the
wife to convey the property to her. In accordance with that
request, 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 National Bank of New York against Albert J. Graeffe. This
execution was levied November 15, 1881, on all the estate, right,
title, interest, 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 execution, the
Page 151 U. S. 423
interest of Albert J. Graeffe so levied upon 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 quitclaim 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 decree cancelling 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 judgment
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, where a wife for
years allowed her husband to do as he pleased with her property,
calling him to no account whatever, and where no action is taken by
her until he has become insolvent, and is about to make an
assignment. Property is permitted to stand in his name for months
after the wife has knowledge of the actual condition of the title,
and credit is given the husband on the faith that he is the real
owner. Where a wife thus permits her money or property to pass into
her husband's hands and possession to manage as he sees fit,
without any
Page 151 U. S. 424
promise by him to repay it, and persons are, for this reason,
induced to give credit to the husband, it neither 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
Humes v. Scruggs, 94 U. S.
22;
Wortman v. Price, 47 Ill. 22;
Hockett
v. Bailey, 86 Ill. 74;
Besson v. Eveland, 26 N.J.Eq.
468.
Shippee and Allen by cross-bill asked a decree cancelling 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 counsel that, pending
the action below, she obtained a divorce
a vinculo from
her husband, and by a judgment of the Supreme Court of New York had
resumed her maiden name.
Page 151 U. S. 425
MR. JUSTICE HARLAN, after stating the facts as above reported,
delivered the opinion of the Court.
In the court below, it was contended in behalf of the plaintiffs
that even if there were no agreement that the property in question
should be taken in the name of the wife, there was nothing illegal
or inequitable in preferring her to the amount of the husband's
debt to her. Upon this point, the court said:
"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 or neglected to do,
Page 151 U. S. 426
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 nothing 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 altogether 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 $6,000. 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 entirely to Mrs. Graeffe.
Page 151 U. S. 427
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 his name. She grew excited about the matter,
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 are not at liberty, upon a close scrutiny of the
evidence, to doubt the substantial accuracy of his statements.
Other testimony by him was to the following effect:
"Q. After this interview in August, and before the conveyance,
on the first of March following, had you any conversation with Mrs.
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?"
"A. In that fall of 1880, and also in the spring."
"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 you
tell her anything about it?"
"A. Yes; I told her later, with a promise to do it, and failed
to do it."
"Q. When next, prior to March 1, 1881?"
"A. Some time in February. 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."
"A. What did you say
Page 151 U. S. 428
about purchasing?"
"A. I left it to him."
"Q. 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 sometime
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 it was mine. I said I thought it was. I then spoke to
Graeffe, and he said it had not been put in my name. My brother
said immediately it must be done. I think it was he who took charge
of the affair."
"Q. Immediately after this conversation, the transfer was
made?"
"A. Yes, I think it was the next day -- just as soon as I could
possibly make arrangements."
The brother of Mrs. Graeffe here referred to was William H.
Garner, to whom the property was conveyed by Graeffe, and by whom
it was immediately conveyed to the wife. He testified:
"Some few days before the actual transfer, Mrs. Graeffe, my
sister, told me of the fact that this property belonging to her had
been transferred to her husband, and asked me to insist on its
being retransferred to her, and I did so."
Under the deed 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 in the property.
The proof fails to show that Mrs. Graeffe ever stated to anyone
that her husband owned the property, or that anyone
Page 151 U. S. 429
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.
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 place 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.
It is provided by the statutes of Rhode Island that
"the real estate, chattels real and personal estate, which are
the property of any woman before marriage or which may become the
property of any woman after marriage or which may be acquired by
her own industry shall be absolutely secured to her sole and
separate use; neither the same nor the rents, profits, or income of
the same, or any part thereof, shall be liable to be attached or in
any way taken for the debts of the husband, either before or after
her death, and upon the death of the husband, in the lifetime of
the wife, shall be and remain her sole and separate property."
Further:
"In case of the sale of any such property, the proceeds 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 wife in
the same manner and with the same rights and effect as the property
sold."
Pub.Stat.R.I. c. 166, §§ 1 and 2, p. 422. And in that state,
preferences of
bona fide debts are permitted, except when
they are assailed under the insolvent laws of that state, within
the time limited by those laws. Pub.Stat.R.I. c. 237, §§ 14 and 15,
p. 660.
Page 151 U. S. 430
In
Steadman v. Wilbur, 7 R.I. 481, 486, which involved
the validity, as against the husband's creditors, of a purchase
alleged to have been made by the wife with her separate estate of
property belonging to the husband, the court said:
"If the title conveyed to the wife were a mere equitable one,
resting in executory contract, a court of law could not set it up
against a legal title by execution acquired by purchase from a
creditor's levy and sale; but where, as in this 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 between them, the law would not,
merely from such delivery or receipt, imply a promise on his part
to replace or repay, as in case of persons not thus related, but
would require more, either in express promise or circumstances, to
prove that on those matters they had dealt with each other as
debtor and
Page 151 U. S. 431
creditor. It is not, however, as supposed, a rule of law that at
the time of each delivery or receipt of the separate property of
the wife by the husband, the latter must expressly promise to repay
the former, or to secure her out of his estate, to constitute the
relation of 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
parties who were dealing with each other on credit and in
confidence. Nor is it true that an express promise to secure or
repay out of the estate of the husband is requisite, in such a
case, to prove that her husband received her separate property as a
loan, and was therefore entitled, as against his creditors, thus to
secure and repay her. Neither at law nor in equity is inferential
proof to be rejected upon such a subject, more than upon any other,
although, as suggested, what are proper inferences may be modified
or allowed by the relation between the parties."
In
Hodges v. Hodges, 9 R.I. 32, 35, it was decided that
husband and wife, if they choose to do so, could treat each other
as lender and borrower, and that such a contract would carry with
it the usual incident of interest, the same as with other parties,
and it was held in that case that the wife was entitled to be
credited in the account between her and her husband with the
proceeds of the sale of her property, although they had been
applied to defray family expenses with her consent and approval. In
Elliott v. Benedict, 13 R.I. 463, 465, it was held that,
subject to the limitations prescribed by the insolvent laws of
Rhode Island -- which limitations do not affect the present case --
a debtor has the right to apply the whole of his property subject
to attachment to the payment of any one of his debts in preference
to others. The court said:
"At common law, it is no fraud for a debtor to pay in full any
debt which he owes, out of any property he has, whether attachable
or not, though the result, and even the proposed result, of the
payment may be that other debts will have to go unpaid, and the
common law in this regard is not affected by the statute of
fraudulent conveyances. "
Page 151 U. S. 432
And in
Bank v. Greene, 14 R.I. 1, 3, it was held that
in Rhode Island, a wife might acquire by purchase or gift from a
third person the note of her husband, and enforce payment thereof
as such third person might have done, she suing, if suit became
necessary, by next friend in equity, or through a trustee of her
estate, appointed by the court on her petition under the statute.
Alluding to the rule at common law declaring that the transfer of a
note of the husband to the wife extinguished the debt, the court
said:
"The enactment, however, of statutes recognizing the separate
existence of a married woman, by securing her property to her
exclusive use as against the husband and his creditors, and by
conferring upon her to a greater or less extent the power of
entering into contracts respecting her property, and of disposing
of it independently of her husband, has changed the common law in
this respect where such statutes prevail. They two are no longer
one, and
he that one."
The general principles thus announced by the Supreme Court of
Rhode Island are in accord with the decisions of this Court. In
Magniac v.
Thompson, 7 Pet. 348,
32 U. S. 397,
this Court said that among creditors equally meritorious, a debtor
may conscientiously prefer one to another, and it can make no
difference that the preferred creditor is his wife. So in
Bean
v. Patterson, 122 U. S. 496,
122 U. S. 500,
which related to a conveyance of real estate by a husband for the
benefit of his wife, and which conveyance was alleged to have been
made in good faith to secure debts due to her for sums previously
realized by him from sales of her individual property, the court
said:
"If, therefore, there had been no other consideration for the
deed than a desire to secure for his wife provision against the
necessities for the future, it could not be sustained. . . . That
the property in Pennsylvania, deeds of which are mentioned above,
was used for his benefit, and to pay and secure his debts is
sufficiently established. The amount realized therefrom, as we read
the evidence, was greater than the sum named in the trust deed as
due to her. That deed for her security stands, therefore, upon a
full consideration. Had it been given to a third party for a like
debt, it would not be
Page 151 U. S. 433
open to question that it would have been unassailable. The
result is not changed because the wife is the person to whom the
debt is due, and not another. While transactions by way of purchase
or security between husband and wife should be carefully
scrutinized, when they are shown to have been upon full
consideration from one to the other, or, when voluntary, that the
husband was at the time free from debt, and possessed of ample
means, the same protection should be afforded to them as to like
transactions between third parties."
To the same general effect are numerous cases:
Jewell v.
Knight, 123 U. S. 426,
123 U. S. 434,
and authorities cited;
Stickney v. Stickney, 131 U.
S. 227,
131 U. S. 238.
In the latter case, it was said that
"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."
Applying the principles recognized by this Court, as well as by
the highest court of the state in which the property in question is
situated and where the transactions in question occurred, we hold
that Mrs. Graeffe is entitled to a decree cancelling the deeds
under which the defendants claim the property described in the deed
to her. That her husband was without any means of his own, and had
in his possession substantially the entire estate of his wife,
controlling and managing it for her; that the property in question
was purchased and improved wholly with her money, under an explicit
assurance by him, before the purchase was made, that it would be
put in her name; that she relied upon his compliance with that
promise; that the husband, on the first of March, 1881, owed her a
larger sum than the amounts expended in purchasing and improving
the property; that the conveyance to Garner, in order that he might
convey to Mrs. Graeffe, was made in good faith, for the purpose,
and only for the purpose, of satisfying, to the extent of the value
of the property conveyed, the debt due to the wife, and that no one
became a creditor of the husband in consequence of any
representation made by her, or with her knowledge, that he owned
the property,
Page 151 U. S. 434
are all facts clearly established by the evidence. Why should
not the wife be protected under these circumstances? If the husband
in fact had owned this property, and, in order to prefer a part of
his creditors, had, in good faith, sold and conveyed it to them
with the intent to give a preference over other creditors, the
right of such grantees to hold it, unless the case was brought
within the insolvent laws of the state, could not be questioned. No
different rule should be enforced in this case against a wife who
has received a conveyance of property purchased with her money, and
which should have been put in her name when so purchased. By no act
or word upon her part was the husband discharged from the
performance of his agreement to put the property in her name. The
conveyance to Garner, followed by his conveyance to her, was
executed for the purpose of discharging the husband's obligation to
the wife, and was made before any creditor acquired a lien upon the
property by attachment. As between the husband and wife, a court of
equity would have compelled him to secure this property to her. If,
before any rights of attaching creditors intervened, he did
voluntarily what the law made it his duty to do, the transaction is
not subject to impeachment by his creditors, unless the wife has
been guilty of such fraudulent conduct as ought, in conscience, to
estop her from claiming the property as against such creditors. If
the wife had herself been guilty of deception, or if she had
contributed to its success by countenancing it, she might, with
justice, be charged with the consequence of her conduct.
Sexton v.
Wheaton, 8 Wheat. 229,
21 U. S. 240.
But the evidence furnishes no ground for the imputation of fraud
against her. That she relied upon the husband's promise to purchase
the property for her and invest her with the title, and that she
again relied upon his assurance, given in August, 1880, that he
would have the property conveyed to her, are circumstances that do
not affect the substance or good faith of the transaction. She
acted with all the diligence that could reasonably have been
expected or required under the circumstances. She supposed that he
kept an accurate account of all transactions involving her estate
as managed by him, and had no purpose to give
Page 151 U. S. 435
him a false credit before the world. As subsequent developments
showed, she erred in relying upon the assurances and promises of
her husband as much as she appears to have done. But as fraud
cannot be imputed to her, a court of equity ought not, for such an
error, to deprive her of that which is justly hers.
The cases cited in the opinion of the court below rest upon a
state of facts wholly different from those here presented. For
instance, in
Humes v. Scruggs, 94 U. S.
22, which was a suit by an assignee in bankruptcy to set
aside a conveyance of real estate made by a bankrupt to his wife as
being in fraud of the rights of creditors, the wife alleging in her
answer that the land was purchased by the husband with her money,
and that she believed for years that the title had been taken in
her name, the Court found that the proof showed a state of case the
reverse of that claimed by the wife. It said:
"Neither the husband nor the wife testified that there was any
agreement that the husband should hold these sums as and for the
estate of his wife, or that, when the property in question was
purchased, it was agreed to be held as her estate. On the contrary,
the moneys were held and used by the husband for nearly fifteen
years as his own property, and mingled with his personal and
partnership affairs. . . . But it is probably untrue in fact that
this land was bought for her, as she alleges in the answer, or that
she believed at any time that the title was taken in her name. . .
. If the money which a married woman might have had secured to her
own use is allowed to go into the business of her husband and be
mixed with his property, and is applied to the purchase of real
estate for his advantage, or for the purpose of giving him credit
in business, and is thus used for a series of years, there being no
specific agreement when the same is purchased that such real estate
shall be the property of the wife, the same becomes the property of
the husband for the purpose of paying his debts. He cannot retain
it until bankruptcy occurs and then convey it to his wife. Such
conveyance is in fraud of the just claims of the creditors of the
husband."
The observations of the court in
Humes v. Scruggs have
no application to the facts
Page 151 U. S. 436
that we consider to be established by the proofs in the present
case. The difference of opinion between this Court and the circuit
court arises chiefly from the conclusions of fact to be drawn from
the testimony.
In our judgment, the court should have dismissed the cross-bill,
and given to Mrs. Graeffe the relief asked by the bill.
The decree is reversed, and the cause remanded for further
proceedings in conformity with this opinion.
MR. JUSTICE BROWN was not present at the argument, and took no
part in the decision of this case.
