1. Where one of four joint tenants makes a deed of trust (a
mortgage) of land conveyed to the four -- the deed of trust
purporting to convey the whole estate -- it is not necessary, on a
bill filed to have the land sold under the deed of trust (in other
words, to foreclose the mortgage), to make the three who do not
convey parties defendant to the bill.
2. It is settled doctrine that a married woman may charge her
separate property for the payment of her husband's debt by any
instrument in writing in which she in terms plainly shows her
purpose so to charge it, she describing the property specifically
and executing the instrument of charge in the manner required be
law.
3. Though equity will enforce in the most rigid manner good
faith on the part of a trustee, and vigilantly watch any
acquisition by him in his individual character of property which
has ever been the subject of his trust, yet where he has sold the
trust property to another, that sale having been judicially
confirmed after opposition by the
cestui que trust, the
fact that thirteen years afterwards he bought the property from the
person to whom he once sold it does not of necessity vitiate his
purchase. The question in such a case becomes one of actual fraud.
And where, on a bill charging fraud, the answer denies it in the
fullest manner, alleging a purchase
bona fide and for full
value paid, and that when he, the trustee, made the sale to the
person from whom he has since bought it, the purchase by himself,
now called in question, was not thought of either by himself or his
vendee -- the court will not decree the purchase fraudulent, the
case being heard on the pleadings and without any proof's
taken.
Page 89 U. S. 330
4. The complainants in this case, who alleged fraud and relied
on the trustee's possession of the trust property after an alleged
sale of it as evidence of it, not stating
when the trustee
came into possession -- that is to say, how soon after his former
sale -- the court assumed the time to be thirteen years, this term
having elapsed between the date of the sale by the trustee and the
filing of the bill (or cross-bill, rather) to set it asides, the
court acting on the presumption that the complainant stated the
case as favorably as he could for himself, and would have mentioned
the fact that the trustee had been in possession long before the
bill was filed if he had really been so.
In the year 1849, by deed of bargain and sale, all in technical
form, one Colburn conveyed to Mrs. Mary Bell and to her three
children, John, Sarah, and Maria, by name, a piece of ground
described, in the District of Columbia, with the appurtenances, the
grant being
"unto the said Mary, John, Sarah, and Maria, their heirs and
assigns forever, to have and to hold the said described land and
premises with the appurtenances unto them the said Mary (the
mother), John, Sarah, and Maria, their heirs and assigns forever,
to them and their sole use, benefit and behoof forever."
The mother subsequently married a man named Beall, and so became
Mrs. Mary Beall.
In this state of things, the estate of one Magruder, in
Maryland, being about to be sold by a certain Stephen, as trustee,
under a decree of court there, Beall bought it for $10,100, and in
pursuance of the terms of sale as prescribed by the decree paid to
Stephen, the trustee, $1,000 in cash, and gave to him his three
notes, each for $3,033.33 1/3, secured by a deed executed by
himself and wife, all with recitals of its history and purpose and
with everything in or about it, in form, purporting to convey the
whole of the tract of land which Colburn in 1849 had
conveyed to her the said Mrs. Beall (while bearing the name of
Bell), and to her three children. The children were not parties to
the deed of trust.
The order of court for the sale of Magruder's property
Page 89 U. S. 331
directed that a deed should be given by Stephen, the trustee,
only on the payment by the purchaser of all the purchase money.
Beall, the husband, did not pay his three notes, and a resale by
Stephen of the original property was directed by the court having
jurisdiction of the matter. The proceeds were directed to be
applied to discharge the three notes, and any surplus was to be
paid to Beall. A resale by public auction was accordingly made on
the 5th of May, 1859; the purchaser being one Crowley. The price,
however, thus obtained was but $6,478, thus leaving a debt due by
Beall of $2,622, exclusive of interest. The resale was reported to
the court and was confirmed by it, after an opposition to it by
Beall. To get satisfaction for the deficit of $2,622 and interest
Stephen, the trustee, now, June, 1871, filed a bill in the court
below against Mr. and Mrs. Beall, praying an account of what was
due to him on the notes and a sale of the property which had been
conveyed to him by Mr. and Mrs. Beall in the deed of trust, or of
so much of it as would satisfy what should be found due.
Mr. and Mrs. Beall answered. They set up that at the time of the
execution of the deed of trust, the title to the lot was in Mrs.
Beall (then Mrs. Bell), "jointly with her children," naming them;
and "submitted that the lot could not now be sold without affecting
their rights."
They submitted further that Mrs. Beall could neither at law nor
in equity pledge her separate estate for the payment of her
husband's debt.
On a cross-bill filed by them, they averred that when the sale
was made by Stephen as trustee, to Beall, Stephen misrepresented
the value of the property, much exaggerating it, and promised to
execute a valid deed to Beall for it, on receiving the $1,000 and
the notes.
They averred further that Stephen was now in possession of the
land of Magruder said to have been resold to Crowley, that the said
resale was really made for Stephen, the trustee, and fraudulent as
being a purchase made by a trustee at his own sale. They did not in
this cross-bill state
Page 89 U. S. 332
when Stephen came into possession of the property once
held by him in trust, nor state any other thing to show how long
after the "resale" it was. The cross-bill itself was sworn to
February 28, 1872.
Stephen, in answer to this cross-bill, denying his promise to
execute any deed before the full purchase money was actually paid,
admitted that he was in possession of the land resold, but averred
that the resale to Crowley was a
bona fide sale, and that
he Stephen was in possession by a
bona fide purchase from
Crowley, and for full consideration which had been paid by him. He
denied all fraud in the said purchase by Crowley on the resale and
in his own purchase, and averred that his own purchase from Crowley
was not thought of by either himself or Crowley until after
Crowley's purchase had been made, and, of course, that it was made
without any fraudulent combination with Crowley. But he did not
state the date when he came into possession of the property on his
alleged purchase from Crowley.
No proofs being made, the case was heard on the pleadings.
The court below dismissed the bill, and Stephen appealed.
Page 89 U. S. 335
MR. JUSTICE HUNT delivered the opinion of the Court.
The counsel for the appellee sustains the decree below
dismissing the bill upon three grounds: 1st., because the
complainant failed to join the necessary parties defendant; 2d.,
because a wife could not, at the date of the deed in question from
Mrs. Beall, encumber her estate for the benefit of her husband;
3d., because the complainant acted in bad faith.
We will consider the different grounds in their order.
1. As to the necessity of further parties defendant.
Mrs. Beall was the owner of one-fourth of the property referred
to, and no more. This one-fourth she could convey, and no more.
Whether the terms of her deed purported to convey this portion only
or the whole is not important. She could not convey the remaining
three-fourths, nor could the general language of her deed create a
cloud upon the title of her children. The record showed exactly
what title she had and exactly what title the children had. No
relief was asked against the children, and no claim made by the
trustees that their rights were affected by the deed of their
mother. The bill was filed against Mrs. Beall and her husband only,
and judgment only asked against them. No judgment could be taken
against the children or that would affect their estate, nor would a
sale of their interest have any legal effect. [
Footnote 1]
If the grantees were tenants in common, it is not denied that
Mrs. Beall could convey her portion or interest without affecting
the rights of her cotenants, and that her deed in this case would
effect that purpose. It is said, however, that as the law of
Maryland stood in 1801, and was thence carried into the District of
Columbia, the conveyance to Mrs. Beall and her children created a
joint tenancy, and that being a joint tenant, her conveyance in
1857 did not bind her interest only, but affected, also, that of
her cotenants.
Page 89 U. S. 336
We cannot recognize this conclusion. We find the law on this
point thus laid down, in Coke Littleton and in Bacon's
Abridgment:
"If there be three joint tenants and one aliens his part, the
other two are joint tenants of their parts that remain, and hold
them in common with the alienee. [
Footnote 2]"
"If one joint tenant bargains and sells his moiety and dies
before the deed is enrolled, yet the deed, being afterwards
enrolled, shall work a severance
ab initio, and support by
relation the interest of the bargainee. But if one joint tenant
bargains and sells all the lands, and before enrollment the other
dies, his part shall survive, for the freehold not being out of him
the jointure remains, and though afterwards the deed is enrolled,
yet only a moiety shall pass, for the enrollment by relation cannot
make the grant of any better effect than it would have been if it
had taken effect immediately. [
Footnote 3]"
It is laid down in the same authorities that if one joint tenant
agree to alien, but do not, and die, this will not sever the joint
tenancy, nor bind the survivor. But it is held in
Hinton v.
Hinton, [
Footnote 4] that
in equity it may be enforced if the articles amount to an equitable
severance of the jointure.
We think it clear upon these authorities that the attempted
conveyance by Mrs. Beall of the entire premises had no effect upon
the interest of her cotenants, conceding them to have been joint
tenants. The law is well settled that no cloud is cast upon a title
by a proceeding or claim, where the record through which title is
to be made shows a defense to the claim. [
Footnote 5] It would not be proper under such
circumstances that the children should be parties defendants.
[
Footnote 6]
Page 89 U. S. 337
We dismiss, then, as unfounded the argument of a want of parties
defendant.
2. The dismissal of the bill is defended upon the further ground
that the debt sought to be secured is the debt of the husband, and
that it was not competent for the wife to encumber her individual
property to secure her husband's debts.
In support of this argument,
Steffy v. Steffy,
[
Footnote 7] in the Court of
Appeals of Maryland, is cited, but that case does not bear upon the
question. That was not the case of an attempt to encumber the
separate property of the wife for the debt of the husband. It was a
case in which both husband and wife had joined in an agreement to
sell the lands of the wife upon a bill for specific performance the
interest of the husband was adjudged to be bound, but the execution
of a contract simply was held to be inoperative to convey the
estate of or to bind the married woman under the statutes of
Maryland.
Nor is
Central Bank of Frederick v. Copeland, [
Footnote 8] in the same court and also
cited, an authority to the point insisted upon. It was there held
that a mortgage by a wife for her husband's debts, obtained from
her by threats, and the exercise by the husband of an authority so
excessive as to subjugate her will, was not binding upon her.
There is nothing in these authorities to indicate that the law
of Maryland or of the District of Columbia on this subject is in
any respect peculiar. The case rests upon and must be governed by
the general principles applicable to the subject.
As to a wife's individual property generally, it is well settled
that she may, by joining in a deed with her husband, convey any
interest she has in real estate. Such a deed conveys the interest
of both. [
Footnote 9]
The doctrine that a married woman has the power to charge her
separate estate with the payment of her husband's
Page 89 U. S. 338
debts, or any other debt contracted by her as principal or as
surety, has been uniformly sustained for a long period of time.
[
Footnote 10]
The question has been in respect to the manner in which the
conceded power should be exercised, and in respect to the requisite
evidence of its due execution. Whether the simple execution of an
obligation by a married woman operates to charge her estate, or
whether she must declare such to be her intention; whether an oral
statement of such intention is sufficient, or whether it must be in
writing; whether such intention must be manifested in the contract
itself or may be separately manifested; whether a declaration of an
intention to bind her separate property is sufficient, or whether
the property intended to be charged must be specifically described,
have been the subject of discussion at different times. But that a
married woman, by an instrument in writing by which she expressly
charges her separate property for the payment of a debt, which
charge is contained in the instrument creating the debt, and where
the property is specifically described, and which instrument is
executed in the manner required by law, may create a valid charge
upon such property is agreed in all the books.
The instrument before us contains all these requisites, and we
cannot doubt its validity. Whether the property is her separate
estate or her individual property merely, the result is the
same.
3. It was farther contended that the bad faith of the
complainant should bar his recovery.
The defendants in a cross-bill allege fraud in the original sale
to Mr. Beall in that the complainant deceived and defrauded them by
promising to execute a deed of the Magruder property, as soon as
they made the purchase, and
Page 89 U. S. 339
by misrepresentations of the value of the land. This is denied
by the complainant in his answer to the cross-bill. It will be
remembered also that the order of sale expressly prohibited the
giving a deed until the whole purchase money should be paid. Fraud
is alleged again in that the purchase by Crowley at the resale was
for the benefit of Stephen, the complainant, upon an agreement that
the property should be transferred to him, and that the same had
been conveyed to him. All fraud is denied in the answer. The
alleged agreement or understanding between Crowley and the
complainant Stephen is denied in all its parts. It is admitted by
Stephen that subsequently, without any previous understanding, and
in good faith and for a fair price paid, the complainant purchased
of Crowley the property bought by him at the resale. The interval
between the purchase by Crowley at the resale and the purchase from
him by the complainant does not appear. Crowley's purchase was made
in May, 1859. In February, 1872, thirteen years having elapsed, it
is alleged and admitted that a conveyance had been made by Crowley
to the complainant. On the principle that every pleader states his
case as favorably to him as he is able to do, we may assume that
this time had mostly elapsed before the purchase was made by the
complainant. No proofs were taken. The case was heard on bill and
answer. It narrows itself down to this: there being no
understanding or agreement between the purchaser at a public sale
and the trustee making the sale, there being no collusion between
them, there being no fraud in fact, the duties of the trustee in
respect to the sale being ended and his doings confirmed by the
court having the subject in charge, does the circumstance that
years afterwards, the trustee bought the property from the
purchaser in good faith and for a fair price paid to him vitiate
and annul the public sale to the purchaser?
If there was a fraud on the part of the complainant in making
the sale, at which Crowley was the purchaser, it arose from an act,
an intention, or an omission then done or existing. A subsequent
purchase may afford evidence
Page 89 U. S. 340
that the original sale was made to permit that purchase, and
that the end illustrates what the parties all the while intended.
But to make a fraudulent sale, it is necessary to go back to the
acts, the intents, or the neglects existing at the time of the
sale. It would seem to be a self-evident proposition that when it
is conceded that a sale was in fact fair, honest, and just when
made, that no unlawful act or intent then existed, that a
fraudulent intent or an unjust dealing as to that time could not be
imputed to the party from subsequent occurrences. It stands upon
pleadings here that at the time of the sale, the complainant had no
understanding that he should ever have any interest in the property
-- in other words, Crowley bought it for himself and for his own
exclusive benefit. There was no collusion -- that is, the property
was fairly sold and for all that could be obtained for it. The sale
was reported to and confirmed by the court. This constituted a
discharge of the duty of the trustee in making the sale. It is
quite difficult to conceive that any subsequent facts (leaving
these in full force) can establish that such a sale is
fraudulent.
It is a general rule that a trustee cannot deal with the subject
of his trust. If one acting as trustee for others becomes himself
interested in the purchase, the
cestuis que trust are
entitled, of course, to have the sale set aside unless the trustee
had fairly divested himself of the character of trustee, and the
fact that the purchase was made through the intervention of a third
person makes no difference. [
Footnote 11]
We should be unwilling to weaken the obligation of good faith
and fidelity required by the law of a trustee. We have frequently
enforced such obligations in the most rigid manner. It would,
however, be a great straining of a good principle to hold that a
purchase by a trustee from the purchaser at a public sale, under
the circumstances before us, is necessarily fraudulent.
There is a class of cases undoubtedly in which transfers
Page 89 U. S. 341
of property are adjudged to be fraudulent, although there be no
actual fraud meditated by the parties. Such are the cases of an
assignment by an insolvent debtor reserving portions of the
assigned property for his own benefit, requiring releases from
creditors as a condition of participating in the fund, and the
like.
The case we are considering bears no resemblance to these cases.
There is in a purchase by a trustee nothing that of itself and
necessarily vitiates the original sale. Whether culpable or
commendable depends upon the circumstances of each case. It may be
wrong and it may be right. It may be approved by the parties
interested and affirmed. It may be condemned by them and avoided.
When it is found that the transaction is itself perfectly fair and
honest, that the purchase was not contemplated at the original
sale, but was first thought of years afterwards, and was then made
for a full and fair consideration actually paid by the trustee and
after the fiduciary duty was at an end, we find no authority to
justify us in pronouncing the original sale to have been
fraudulent.
Upon the whole case, the decree must be reversed and the
record remanded with directions to enter a decree in conformity
with this opinion, with leave to the parties to amend their
pleadings if they shall be so advised. Reversal and remand
accordingly.
[
Footnote 1]
Ward v. Dewey, 16 N.Y. 519;
Heywood v. City of
Buffalo, 14
id. 534;
Cox v. Clift, 2
Comstock 118; Story's Equity § 700.
[
Footnote 2]
Coke Littleton 189; Bacon's Abridgment, title "Joint Tenants,"
E.
[
Footnote 3]
Coke Littleton, 186, 186a; Bacon's Abridgment, title "Joint
Tenant," I, 3.
[
Footnote 4]
2 Vesey 634.
[
Footnote 5]
Ward v. Dewey, 16 N.Y. 519;
Heywood v. City of
Buffalo, 14
id. 534;
Cox v. Clift, 2
Comstock 118; Story's Equity § 700.
[
Footnote 6]
See Reed v. Vanderheyden, 5 Cowen 719;
Bailey v.
Inglee, 2 Paige 278.
[
Footnote 7]
19 Md. 5.
[
Footnote 8]
18
id. 305.
[
Footnote 9]
1 Washburn on Real Property *280.
[
Footnote 10]
Hulme v. Tenant, 1 Brown's Chancery Cases 16;
Standford v. Marshall, 2 Atkyns 69;
Bullpin v.
Clarke, 17 Vesey 365;
Jaques v. Methodist Episcopal
Church, 17 Johnson 548;
Yale v. Dederer, 22 N.Y. 450;
Same Case, 18
id. 276;
Corn Exchange
Insurance Co. v. Babcock, 42
id. 615; Story's Equity
§ 1396, 1401a.
[
Footnote 11]
Jewett v. Miller, 10 N.Y. 402;
Slade v. Van
Vechten, 11 Paige 21;
Van Epps v. Van Epps, 9
id. 237;
Bank of Orleans v. Torrey, 7 Hill 260;
Hawley v. Cramer, 4 Cowen 717; Hill on Trustees, *536,
h.
