Wood v. Savage

1 Walk. Ch. 471

• Court: Michigan Court of Chancery
• Decided: September 15, 1844
• Status: Published

Opinion

The Chancellor.

Regarding the purchase of the Washtenaw farm as a performance of the antenuptial parole agreement, and in the light of a settlement, after marriage, of the wife’s property on her, in pursuance of such agreement, the question is, whether or no such settlement, made after marriage, and having nothing but the antenuptial parole agreement to support it, was fraudulent and void against the then existing creditors of the husband.

The complainants were creditors of the husband, when Phelps’ undivided half of the farm was purchased, if not when the first purchase was made, of Reighley.

The case of Reade v. Livingston, 3 J. C. R. 481, is relied on as authority against the validity of such settlements, as to existing creditors. The point, however, was not decided in that case, nor was it necessary to decide it. Chancellor Kent discussed it at some length, and intimated an opinion adverse to the validity of such settlements ; but he decided there was no antenuptial contract proved, and held the settlement void in that case, on the ground of its being voluntary, and made after marriage, by a party indebted at the time. The only difficulty he found in sustaining such settlements, was the statute of frauds. He admits that prior to the statute, such settlements were held to be good; and refers to Griffin v. Stanhope, Cro. Jac. 454, and Sir Ralph, Bovy's case, 1 Vent. R. 193, in which a “settlement after marriage, in pursuance of a prior parole agreement was held good.” “ But,” he says, “ these were cases prior to the statute of frauds (29 Charles II.) which renders void all promises in consideration of marriage ; and, therefore, since the statute, it has been determined that the agreement, to be valid, must be in writing;” and refers to the case of Montacute v. Maxwell, 1 Str. 236; 1 P. Wms. R. 618. That was a bill by a wife against her husband, for a settlement of her property on her, in pursuance of an antenuptial agreement. It was, therefore, a case clearly within the statute ; but it has no bearing, that I am able to discover, on the question. It is one thing to decree the specific performance of a parole agreement, and another to declare such agreement, when executed, fraudulent and void. The statute requiring such agreement to be in writing, it seems to me, does not require such a construction. It was not made for the benefit of creditors, as the statute against fraudulent conveyances, but to prevent perjury, and secure more circumspection in entering into certain classes of contracts. In Dundas v. Dutens, 1 Ves. R. 196, Lord Thurlow was of opinion such settlements were good against creditors.

Such a settlement cannot be regarded as a voluntary settlement after marriage. The parole agreement, which the husband was morally, and in conscience, bound to perform, is a sufficient consideration to sustain the settlement. Such was the opinion of Lord Parker, who decided the case of Montacute v. Maxwell. In the language of Chancellor Kent, “he thought, however, that if the husband, after marriage, had in writing admitted the former agreement, it might have been material, and a sufficient consideration to support a subsequent promise in writing.” In many cases at law, a moral obligation, as contradistinguished from a legal liability, has been held a sufficient consideration to support a promise; and why not in equity, not to support a naked promise, but performance? If the agreement had been reduced to writing, this Court would, after the marriage, on a bill filed by the wife, have compelled the husband to lay out the $1,500 in real estate for her.

By the statute in existence when the marriage took place, (Laws of Michigan, 1833, p. 342, § 10,) no action could be brought, whereby to charge any person, upon any agreement made in consideration of marriage, unless such agreement, or some note or memorandum thereof, was in writing, and signed by the party to be charged therewith, or some person by him authorised. This part of the statute has no reference to creditors, who are not mentioned in connection with the contracts required to be in writing; much less does it declare such contracts, when not in writing, fraudulent and void against creditors. As I have already stated, it was not made for the benefit of creditors, but for an entirely different object. The husband having, of his own accord, done what he was morally bound to do, and what the Court, but for the statute, would have compelled him to do, — shall what he has done be declared fraudulent and void ? I know of no case going this length; and it would, it appears to me, be a strange doctrine for a court of equity to advance, that an act, which a party was in conscience bound to do, was at the same time fraudulent and void as to creditors.

Moses B. says he was solvent, and worth between four and five thousand dollars, when he was married; and that the fifteen hundred dollars were not immediately invested, as real estate was at the time rising in value, and could not be purchased on favorable terms. In November, 1837, two years after the marriage, the Reighley half of the farm was purchased, and paid for. This was a year before complainants obtained their judgment. In June, 1839, the other half was purchased of Phelps, $500 paid, and a mortgage executed by Sophia, and promissory notes by her and her husband, for the balance of the purchase money, which is still unpaid, and a lien upon the farm. I see nothing to induce a belief the farm was not purchased in good faith, and in execution of the antenuptial agreement. The fact that the $1,500 was used by the firm of M. B. & W. Savage, in their business, until a favorable opportunity offered for investing it in real estate, is no evidence of fraud, or of a determination on the part of Moses B. not to keep his agreement with his wife. It was used without the consent or approbation of Sophia.

As to the property in Monroe, it was sold to Moses Savage, to enable'M. B. & W. Savage to pay a confidential debt. It was sold for $800, cash, at a time of great pecuniary distress, when money was scarce, and real estate a drug that could hardly be sold for cash at any price. The witnesses examined to prove its value at the time, state it was worth a thousand dollars in cash. Conceding this point, the inadequacy of price is not sufficiently great to warrant an inference of fraud. More especially, as fraud is unequivocally denied; the $800 was paid in cash, and went to pay the debts of the firm; and Moses B. states he then believed himself solvent, and able to pay all his debts.

No question is made as to the adequacy of the price paid for Moses B.’s life estate in the farm.

The bill must be dismissed, but without costs, against all the defendants except Moses B. and William Savage; against whom it may be necessary to retain it until the receiver’s account of the property that has come into his hands is settled.