Opinion
(January Term, 1867.)
1. If one, who has a general power over an estate, exercises it for purposes regarded as secondary, a court of equity will hold such estate as thereby rendered liable to all the usual incidents of property; therefore,
2. Where a feme covert, who had a separate estate, with a general power of appointing the same by deed or will, disposed of such estate to various devisees and legatees, subjecting expressly only a portion of it to the payment of her debts: Held, that her creditors had a right to resort to the whole estate for their satisfaction.
BILL to obtain instructions as to the duty of the complainant, as administrator with the will annexed of the late Mrs. Margaret G. Hinton, filed to Fall Term, 1859, of WAKE, and at Fall Term, 1866, set for hearing upon bill, answers and exhibits, and transferred to this court. The husband and the devisees and legatees of the testatrix were made parties.
Batchelor, for the creditors.
(104) B. F. Moore and Haywood, contra.
The deed, under which Mrs. Hinton acquired the right to make a will, conveyed the property to a trustee, "to the sole and separate use of Margaret G. Hinton, wife of Joseph B. Hinton, as if she were a feme sole," etc., and to "convey the slaves and lot as she may, by any paper-writing executed by her in the nature of a deed or will, direct, although she may, at the execution of said deed, or will, or paper in the nature of either, be under coverture," etc.
The will expressed an intention "hereby to execute all powers of appointment to all property, real and personal, owned by me, and of which I have the right to dispose, by virtue of any deed, will or agreement whatsoever, and especially by virtue of a deed," etc. [the above]. By the first clause of the will Mrs. Hinton directed a negro, (102) named "Happy," to be sold, and the money arising therefrom "to be applied to the payment of my debts and funeral expenses, my debts being very small, and principally due to Mr. James McKimmon and Dr. Fabius J. Haywood; and out of the surplus" — she gave some legacies. By the second clause she gave a valuable house and lot in Raleigh, certain slaves and other property to her husband for life, and then over. Her debts were not mentioned in any other part of the will, which consisted of seven clauses.
The executor named in the will having renounced, the complainant propounded the will in Wake County Court, at November Term, 1857, when, under the direction of Mr. Badger, then presiding, the verdict of the jury upon the issue, "Is the paper-writing, etc., or any part thereof, the last will and testament of Margaret G. Hinton, deceased, and if so, what part?" was thus entered, viz.: "That the said paper-writing is the last will and testament of the said Margaret G. Hinton, late wife of the caveator, Joseph B. Hinton, of and concerning all the property, estate and effects of which, notwithstanding her coverture, she had power to dispose, under the deed of Sarah Stone in the said paper-writing mentioned, and of and concerning all other property, estate and effects of any of which she had otherwise power to dispose, without the consent of her husband, and as to such property, estate and effects she did devise, bequeath, appoint and direct as contained in the said paper-writing."
The bill, which was filed by the plaintiff as the administrator cum testamento annexo of Margaret G. Hinton, deceased, wife of the defendant, Joseph B. Hinton, propounds many questions about which it asks the advice of the court; but on the argument here only one of them has been pressed on our attention. It is, whether the property, real and personal, which the testatrix disposed of by her will, under the power conferred upon her by the deed of her sister, Sarah Stone, mentioned in the pleadings, is liable as assets for the payment of the debts of the decedent.
We are decidedly of the opinion that it is.
The power is undoubtedly what is called a general one. It directs the trustee, who is to hold the property for her sole and separate use during her life, to convey it "as she may, by any paper-writing executed by her in the nature of a deed or will, direct, although she may at the execution of said deed or will, or paper in the nature of either, be under coverture; and in case she die without making any (105) conveyance of it," then the trustee is to hold the personalty in trust for her personal representatives, and the realty for her heirs-at-law. That a power expressed in such terms is a general one is settled. Lord Townsend v. Windham, 2 Ves. Sen., 1; Jenny v. Andrews, 6 Madd., 264; Tomlinson v. Dighton, 1 P. Wms., 149, 171.
It is too plain for doubt, that the will of the testatrix is an execution of the power, for it expressly refers both to it and the property embraced in it; and, furthermore, the will is proved as having been made in execution not only of that identical power, but of all others with which she was invested. In such a case it is a well established principle of equity in England that the property appointed shall form part of the assets of the appointor and be subject to the claims of his creditors in preference to the claims of the appointee. 4 Kent., 333. The reason for the doctrine is well expressed in an opinion delivered by Chief Justice Parker, of New Hampshire, in Johnson v. Cushing, 15 N. H., 307. "Where the owner of property, who has the right to dispose of it in such manner and under such limitations as he pleases, confers upon another the general power of making such disposition of it as he pleases, or, in other words, invests him with all the attributes of ownership over it, and that other accepts the power thus tendered to him and undertakes to exercise dominion over the subject matter as if he was an owner; the original proprietor having authorized the other to treat it as if it was the property of the latter, by exercising all the power over it which he could exert if it were actually his property; and he having undertaken to treat it as if it was his property by making a disposition of it under such a power, a Court of Equity may well do what the parties have done — that is, treat it as the property of the appointor and make it subject to the incidents attending such property. The court in such case do no more than treat it as the (106) property of the party, who, by the express authority of the owner, has the power and right to treat it as if it were his property, and who undertakes to do so." If it be treated as the property of the appointor, it will of course be liable to his debts in preference to the claims of volunteers under his appointment.
This principle of equity has been introduced into our system, and applied to the case of a married woman exercising a power of appointment given to her over property settled to her sole and separate use during life. In Leigh v. Smith, 38 N.C. 442, which was fully considered and decided, after arguments by very able counsel on both sides, it was held that the appointees under a will of property which a feme covert had a right under marriage articles to appoint to any person she might think proper, were trustees in the first instance for her creditors; and it was so held, though the will did not make any mention of her debts, or in any way attempt to provide for their payment.
But it is said by the counsel for the defendants that this doctrine has been modified by the recent decisions of this court, and Felton v. Reid, 52 N.C. 269, and Knox v. Jordan, 58 N.C. 175, are relied upon to show that the separate estate of a married woman is not liable to her debts or other personal engagements generally, but only where the debt is charged specifically upon the separate estate, with the concurrence of the trustee, if there be one. It will be seen at once that these latter cases apply to the debts sought to be charged upon the separate estate of a feme covert during her life, and not to her debts claimed out of property which she had appointed under a power to others by a will, or a deed to take effect after her death.
It is certain that the court, which decided the case of Leigh v. Smith, ubi supra, thought there was a difference; for at the next (107) preceding term it had decided the case of Frazier v. Brownlow, 38 N.C. 237, which is referred to with approbation in Knox v. Jordan, ubi supra.
The case at bar, however, can not derive any aid from Felton v. Reid and Knox v. Jordan, because the testatrix expressly recognizes her debts, and attempts to provide for their payment. It is true that they were not recognized with the concurrence of her trustee, but that omission, even if a recognition were necessary in the case of the execution of a power, would be excused, because the pleadings show that the trustee was dead when the will was made, and it does not appear that any other was appointed in his stead.
We have only to say, further, that the appropriation of the proceeds of the sale of the woman Happy, as the fund out of which the debts of the testatrix are to be paid, can not prevent the creditors from claiming their debts out of the other property appointed under the power, if from any cause the specified fund is not available for the purpose. Let a decree be drawn in accordance with this opinion.
PER CURIAM. Decree accordingly.
Cited: S. c., 63 N.C. 81; Hicks v. Ward, 107 N.C. 393.
(108)