Opinion
11-25-1901
DEMAREST et al. v. TERHUNE.
Milton Demarest, for complainants. James M. Van Valen and Michael Dunn, for defendant.
Bill by Samuel R. Demarest, Jr., and another, against Mary E. Terhune. Demurrer to the bill overruled.
Milton Demarest, for complainants.
James M. Van Valen and Michael Dunn, for defendant.
STEVENSON, V. C. The bill sets forth the following case: The defendant Mary E. Terhune, is the widow of the complainants' testator, Jacob Terhune, deceased. The equitable rights for the enforcement of which this suit is brought arose from a business transaction in the lifetime of the husband directly between the husband and the wife. The parties resided for many years prior to the year 1899 at East Hackensack, in Bergen county, in this state. The bill states that, "by reason of some difficulty in the marital relations of the said Jacob Terhune and Mary E. Terhune, they had for many years, and up to the time of the decease of said Jacob Terhune, lived continuously in a state of separation, residing in the same house, but did not cohabit together as man and wife." Each owned considerable property, both real and personal. Because of therelations existing between these parties, some time prior to 1891 they entered into an agreement with each other to the effect that, in the event of either of them selling any real estate, such selling party should pay to the other, for the necessary release of dower or curtesy, as the case might be, "whatever sum should be agreed upon between them." After this agreement had been made, Mrs. Terhune sold a part of her real estate, and, before completing the sale, agreed to pay her husband $1,000 as the consideration of his joining in the deed and releasing his estate by the curtesy in the land conveyed. In discharge of this obligation, the wife gave the husband a promissory note as follows: "East Hackensack, Sept. 10, 1891. One year after date, I promise to pay Jacob Terhune, or his order, one thousand dollars, with interest from date. $1,000. Mary E. Terhune." After receipt of this promissory note, the husband joined in the execution of the deed. The defendant paid the interest on her note to her husband annually up to September 10, 1898. In the month of December, 1898, the defendant "left the home of her husband, and moved to the village of Hackensack." When making the last payment of interest on the note, the defendant wrote to her husband the following letter: "Hackensack, April 4, 1899. Jacob Terhune: Inclosed find check for interest for one year, due Sept. 10, 1898. Kindly mail me a receipt. Respectfully, Mary E. Terhune." Some time after Mrs. Terhune had made the abovementioned conveyance and note, but exactly when the bill does not allege, Mr. Terhune desired to sell a portion of his real estate; and thereupon, in accordance with the arrangement between them, the couple agreed that the wife should receive $1,000 for her release of dower. After this sum had been fixed, Mr. Terhune proposed to his wife that, instead of paying her in cash, he should surrender to her the note for $1,000 which he held against her. Mrs. Terhune refused to accede to this proposition, and insisted upon receiving cash. Accordingly, not having the cash until he should receive it as the result of the transaction, Mr. Terhune executed to his wife his promissory note for $1,000, payable one day after date; and on the day following he paid the note in cash, and the same was thereupon surrendered and destroyed. Jacob Terhune died October 20, 1899, and the complainants, his executors, have demanded payment of the note for the defendant. The defendant refuses to pay, taking the position that "she is not legally liable, and cannot be held for such payment, because there was no consideration for the note between her and her said husband." The bill prays for a decree compelling the defendant to pay the complainants either the amount of. her note, or the $1,000 which she received from her husband, and also prays for further and other relief, etc. The only specification in the demurrer is the common form for want of equity, viz. "that the complainants have not in and by their said bill made or stated such case as entitles them, in a court of equity, to any relief against the defendant as to the matters in said bill, or any of such matters." Prior to the argument of the demurrer the complainants moved to strike it out on the ground that it failed to comply with rule 209 of this court, which requires every demurrer to "distinctly specify the ground or grounds of. demurrer." This preliminary objection is not well taken. It is well settled that a demurrer in the old form, which specifies as its basis only want of equity, is not in conflict with the abovementioned rule. In other words, the statement in a demurrer that the bill does not set forth any case for equitable relief is a "specification" of a ground of demurrer, within the meaning of the rule; but the question remains, what attack upon the bill will be permitted under such a specification? Paper Co. v. Greacen, 45 N. J. Eq. 504, 19 Atl. 466; Van Houten v. Van Winkle, 46 N. J. Eq. 385, 20 Atl. 34; Waldron v. Bishop, 58 N. J. Eq. 583, 43 Atl. 1098. The object of the rule is to give reasonable notice to the complainant of the grounds upon which the sufficiency of his bill is to be called in question, to the end that he may prepare to meet the attack which is made, and that he may not waste his time in preparing to meet attacks which are not made. It follows that under the old form of demurrer for "want of. equity" the demurrant may raise all objections to the complainant's case on the merits, as presented in the bill of complaint, which are reasonably apparent upon a perusal of the bill and demurrer. No exact and rigid rule, from the nature of the case, can be laid down on this subject. It was not the intention of the rule to compel the demurrant to submit to his adversary his brief, or any particulars of his argument. The purpose was to notify the complainant only of the general subject-matter of the argument. If the bill and demurrer for want of equity do not give reasonable notice of any defect in or debatable question concerning the complainant's case as exhibited in his bill, then the demurrer is frivolous, but cannot be stricken out for noncompliance with rule 209. It is like a demurrer for laches, when no foundation for the charge of laches is contained in any allegation of the bill of complaint. In this case the complainants were plainly notified by the demurrer that the question to be argued was whether the bill set forth a transaction between a husband and wife which was enforceable in equity as a contract, or gave rise to any just claim on the part of the husband for equitable relief.
Turning now to the question whether the facts set forth in the bill give rise to an equitable cause of action upon the part of the husband against the wife, it is to be admitted at the outset that the defendant'spromissory note to her husband is void at law. This is not a case merely of incapacity of the husband and wife to sue each other in courts of law, but of their incapacity to make a contract which courts of law will recognize as valid. These complainants, the executors of the husband, are no more able to maintain an action at law on this contract against the defendant than was her husband in his lifetime. Bank v. Brewster, 49 N. J. Law, 231, 12 Atl. 769. Some contracts between husband and wife, however, are enforceable in a court of equity, and the question in this case is whether the bill of complaint exhibits a contract within that limited class. It is more strictly correct to say that the question is whether the bill of complaint exhibits a transaction including a contract between husband and wife, out of which arose an equitable claim of the husband against the separate estate of the wife. Contracts of married women, "as recognized by equity, are only contracts sub modo. The indebtedness which they create is not a legal indebtedness, but only an equitable liability, enforceable in a peculiar manner by courts of equity." 3 Pom. Eq. Jur. § 1121. The married woman's contract, while her common-law disabilities remained, was in fact regarded in equity as creating, not a personal liability, but a liability of her separate estate. The decree was against this separate estate, and never was against her personally. Id. § 1123; 15 Am. & Eng. Enc. Law (2d Ed.) 791, note 6. While under the statutes of this state the common-law disability of a married woman to contract generally has been largely removed, her contract with her husband remains to-day unaffected by this legislation. It is, at best, but a contract sub modo, enforceable only in equity, under equitable principles, against her separate property. Woodruff v. Clark, 42 N. J. Law, 198; Healey v. Healey, 48 N. J. Eq. 239, 21 Atl. 299; Wood v. Chetwood, 44 N. J. Eq. 64, 14 Atl. 21, affirmed in 45 N. J. Eq. 369, 19 Atl. 622.
Counsel for the defendant argue that the bill of complaint does not show that there was any consideration for the wife's promise to pay her husband $1,000. It is urged that when the note was made in 1891 the defendant had full power to convey her real estate under the provisions of the act of 1880, entitled "An act for the better securing of the property of married women living in a state of separation from their husbands" (2 Gen. St. p. 2019, § 32); that the husband's joining in the wife's deed was therefore unnecessary; that the true construction of the above-cited act leads to the conclusion that the wife's conveyance of real estate made within its provisions passes her title, free even from the estate by the curtesy which the husband otherwise might have in case he survived her. Whether this statute merely enables the wife, under certain circumstances, to make a conveyance of her land, which otherwise she could not do without the co-operation of her husband, or whether such conveyance extinguishes all possible interest of the husband in the land, or whether this statute passed in 1880 could affect the rights of Mr. Terhune in the real estate of his wife, or whether there was a probability or possibility that in case Mr. Terhune survived his wife he would have an estate by the curtesy in lands of which she died seised, are all questions which relate to the sufficiency of the consideration, —the amount of advantage to Mrs. Terhune's separate estate arising from her husband's joining in her deed, as compared with the $1,000 which she promised to pay. If all these questions are answered in favor of the defendant, it still remains that, under the circumstances set forth in this bill, it was plainly necessary that Mr. Terhune should join in any conveyance of real estate which his wife might wish to make, in order to make a title which any prudent person would be willing to take, except at a price quite disadvantageous to her. It is by no means clear that the defendant at the time she made the conveyance in question was within the operation of the act of 1880. It is true that the bill alleges that the defendant was then living "in a state of separation from her husband," thus employing the very phraseology of the statute; but this statement is qualified by subsequent allegations showing that she was residing in the same house with her husband, and that her husband, presumably, was providing otherwise for her support. The main purpose of the act of 1880 must have been to enable married women separated from their husbands to sell their real estate in order to procure the means of support which their husbands were not supplying. The defendant's situation at the time she made the conveyance and note in question does not seem to be within the spirit or the letter of this statute. If, however, this conclusion is incorrect, the defendant still, practically, was unable to make an advantageous sale of her real estate without having her husband join in the deed, because "the state of separation" necessary to make the statute applicable was not perceptible to any ordinary observer,—to the class of persons who would be possible purchasers. When a man and wife are living together in the same house,—the house of the husband,—the common judgment would be that they are not "living in a state of separation," within the meaning of the act of 1880. If the state of separation from her husband in which a wife were living should be plain and notorious,—the husband living in one county, and the wife in another,—still the signature of the husband to the wife's deed would add value thereto, apart from any question in regard to his possible estate by the curtesy, because any title taken from a married woman under the provisions of the act of 1880 would always have to be defendedby proof of facts which might be difficult to prove. In the present case the defendant's situation at the time she made the conveyance in question, if in fact within the statute of 1880, would in all probability after a very short time be extremely difficult to bring within that act by evidence which could be obtained and produced in any court. Whatever may be the construction of this statute, it is plain that Mr. Terhune's signature added great value to his wife's deed, and, in all probability, was necessary in order to enable her to effect a sale which would not be a sacrifice. I think, therefore, that it is plain that there was a substantial and valuable consideration for Mrs. Terhune's note, in the shape of an advantage to her separate estate. Mr. Terhune certainly had a bona fide claim to control the disposition of his wife's real estate, even if his actual rights in respect to that real estate were uncertain. His claim gave him, in fact, a very large control over the sale of his wife's property, as we have seen. He waived all his rights; whatever they might be, and, by joining in his wife's deed, placed her in the same position with reference to the sale of the property as if all his contentions in respect thereto had been settled adversely to his interests by the court of last resort in this state after an expensive litigation.
The argument that the defendant's contract with her husband was without consideration, in my judgment, has no foundation. But, admitting a consideration for this contract, it is insisted that all contracts which a wife enters into directly with her husband are presumably void, when set up in a court of equity against her; that the burden is upon the party setting up such a contract to allege and prove the special facts and circumstances which make it enforceable in equity. In Ireland v. Ireland, 43 N. J. Eq. 315, 12 Atl. 186, Chancellor McGill made this deliverance: "When a husband comes into court and asks for the enforcement of a contract which he has made directly with his wife, or when those who stand in his place so come, the burden is upon him or them to show the fairness of the contract, and the equities which call for its enforcement. The wife is presumed to be sub potestate viri, and the affirmative is with the husband, and those who represent him, to show that the contract was fair, open, reasonable, and well understood." The above-quoted language, if taken without reference to the facts of the case in which it was employed, and applied literally to the present case, might with great force be claimed to sustain the contention of the demurrant. It must be conceded that there is nothing to show that the amount which the wife agreed by her promissory note to pay to her husband as the price of his joining in her deed may not have been the greater part of the price which was paid to her by the purchaser. In other words, there is nothing alleged in the bill directly to show that the wife's contract was fair and unaffected by extortion. There are circumstances alleged in the bill which perhaps make such a supposition highly improbable. But if unfairness in the amount which the husband has attempted to exact from his wife for the advantage which he has conferred upon her separate estate makes her promise to pay that amount absolutely void, and leaves him (the husband) without equitable relief in the premises, it would seem that the true rule would require that this bill, in order to present an equitable cause of action, should show how much of the price of the land which the wife sold she was obliged to agree to surrender to her husband by the contract in question. I think, however, that Chancellor McGill's statement of doctrine was intended by him to be confined to the class of contracts between husband and wife which are illustrated in the case which was before him. In that case (Ireland v. Ireland) the wife filed her bill after the decease of her husband to have her dower assigned in the lands of which he died seised. The devisees of the husband, the defendants, undertook to interpose a plea which set up a contract between the husband and wife providing for their separation. The very nature of the contract exposed it to the disfavor of the court, as the chancellor intimates. But by this contract the wife, according to one construction, was made to bar her right of dower in her husband's lands for a consideration which was manifestly inadequate, —which, in fact, the chancellor declared he failed to perceive at all. In view of this aspect of the case, the learned chancellor used the language above quoted. The contract of the wife was sought to be enforced against her absolutely and to the letter. She had either barred her right of dower by her contract, or she had not. The whole case depended upon the question whether her contract with her husband was enforceable in equity strictly according to its terms. When a contract of a wife with her husband is set up against her in a court of equity in such a manner and with such effect, the pleading which exhibits it to the court should manifestly show a contract presumptively enforceable according to its terms, and therefore should conform with the principle which the chancellor indicates. But where the husband sues the wife in equity on her promissory note given for money borrowed, or goods sold and delivered by the husband to her, or for other contributions made by him to her separate estate at her request, the equitable action does not necessarily involve the enforcement of the contract according to its terms. It is a contract sub modo which is brought into court,—a contract which may be largely or wholly enforced, absolutely or upon terms, as the court may deem equitable. In fact, this class of actions in equity, brought by the husband against the wife, although they may present contracts of themost solemn nature, which at law would absolutely control the rights of the parties, are in their essential nature demands for compensation upon an equitable quantum meruit. It would seem that even though a court of equity might differ, in its judgment as to the fairness of the amount which the wife has promised to pay the husband, from the judgment of the husband at the time the contract was made, that would not constitute a reason for turning the husband altogether out of court, and refusing him that measure of compensation which the court might deem fair. During the period when in this state a married woman was generally incapacitated under our law to make contracts, but was permitted by statute to make contracts in certain cases, it was held to be necessary that the declaration in an action at law founded on a contract of a married woman must show the necessary facts which rendered her capable of making the contract. Lewis v. Perkins, 36 N. J. Law, 133; Hinkson v. Williams, 41 N. J. Law, 35. But I think no argument can be drawn from the rules of pleading established by these actions at law which applies to the present case, for the reason indicated above,—that this present case is not necessarily an action to enforce a contract, but, rather, an action to enforce an equitable lien upon property growing out of a transaction between husband and wife, of which the wife's contract was only a part. The husband's executors are suing not necessarily for the amount of the wife's promissory note, but rather for such part thereof, or for such sum of money, as this court shall deem a fair and reasonable compensation to the husband for the rights which he surrendered for the benefit of the wife's separate estate. If the bill of complaint in this case had set forth all the facts bearing upon the fairness and reasonableness of the amount which Mr. Terhune exacted from his wife, and this court from those facts should draw the inference that Mr. Terhune had exacted too large a sum, it would not follow that Mr. Terhune's executors would not be permitted in this suit to have a lien established for the amount which the court deemed reasonable and fair. The conclusion would seem to be that, where there is a substantial advantage conferred by the husband upon the separate estate of his wife in reliance upon her promises to pay him a sum of money, a bill in equity filed to enforce that promise, or to establish the husband's equity growing out of the transaction of which the promise was a part, need not set forth the facts to show the court that the husband did not in any degree overcharge the wife for what he did for the benefit of her estate. The reason, in brief, is that, even if the court finds that the husband did overcharge his wife, the correction can be made without defeating the husband's claim to that amount of compensation which the court deems fair.
Apart from the question of the amount of the husband's lien, there does not seem to be any defect in the case for equitable relief which the bill sets forth. The particular transaction which resulted in the defendant giving to her husband her promissory note for $1,000 was only part of a general arrangement or regulation of their affairs which the husband and wife had adopted, and which, under the circumstances, appears to have been reasonable and fair. Each had real estate which he or she might wish to convey. Each recognized the rights of the other in respect to any such conveyance. If either wished to convey, the other was to receive compensation for his or her co-operation, which was to be agreed upon. The wife, it seems, made the first conveyance, and agreed to pay the husband $1,000 as the consideration of his joining in the deed. The turn of the husband to pay came next, and then the wife not only demanded $1,000 from her husband, but was so far removed from any undue influence or coercion exercised by him upon her that she compelled him, against his wish, to pay the $1,000 in cash, instead of her accepting the surrender of her note, which he then was holding against her. It is also a fact of great significance that the wife paid the annual interest on the whole note, apparently without complaint, for many years; and the last of these payments was made after the wife had left the home of her husband and moved to another place. The letter which accompanied the wife's check for this last payment, dated April 4, 1899, makes no suggestion that she was paying interest on a contract which was unfair or which she had not understood, or that the amount upon which she paid interest was excessive. It may be added that the whole course of dealing between the husband and the wife set forth in the bill of complaint in which this promisory note was given by the wife to her husband indicates strongly that the wife was at all times well able to take care of herself and protect her own interests.
I shall advise an order overruling the demurrer.