James v. Murray

Boyd, C. J., delivered tbe opinion of tbe Court. The bill of complaint was filed in this case by J. Howard Murray, administrator c. t. a. of Charles T. Waitring, deceased, against Harry B. James, Ida M., his wife, and E. Boy James, their son, for the purpose of having a deed from Harry B. James to his wife, dated December 5, 1918, and a mortgage from Harry B. and wife to E. Boy James, dated September 23, 1920, declared null and void and set aside. There is also a prayer to require Mrs. James “to deliver up and hand back” certain personal property transferred and ¹⁰³ given by her husband to her, and injunctions against the three defendants were asked for. On the 18th day of April, 1918, Charles T. Waitring was inn over and seriously injured by an automobile of Harry 33.

James, and on the 22nd of the following August he instituted a suit against James to recover damages for the injuries sustained. At a trial the court withdrew the case from the jury, instructing a verdict for the defendant. On appeal to this Court, the judgment on that verdict was reversed with costs, and the case was remanded for a new trial, being reported in 136 Md. 406 . A few months after the judgment was reversed in this Court, Charles T. Walt-ring died, Mr. Murray, his administrator c. i. a., was made party plaintiff, and on the 8th of April, 1921, a verdict was rendered in favor of the plaintiff for $8,000, upon which judgment was entered.

This bill of complaint was filed on the 19th of April, 1921, and on May 18, 1921, Harry B. J ames filed a petition in voluntary bankruptcy, and on the same day was adjudicated a bankrupt. On June 14, 1921, Harry S. Carver, trustee in bankruptcy, was substituted as complainant in the cause. On February 22, 1922, a, decree was passed setting aside the deed of the 5th of December, 1918, from Harry B. to Ida M. James, the mortgage from Mr. and Mrs. James to E. Roy James, and the transfer of the personal property mentioned in the proceedings, and declaring them to be null and void, “so far as the same may interfere with or in any manner affect the rights and claims of the estate of the said Charles T. Waitring, deceased, and any and all other creditors of the said Harry B. James.” The decree further required Ida M. James to account, on or before the first day of May, 1922, with Harry S. Carver, trustee, for the full value of the personal property so handed over to her by the purported transfer from said Harry B. James, “the value of said personalty, a:s fixed by the testimony in said case, being seven thousand dollars ($7,000).” The defendants were directed to pay the costs. From that decree this appeal was taken. ¹⁰⁴ An order was passed granting’ an injunction as prayed for in the bill, the day it was filed, upon filing; a bond in the penalty of five hundred dollars, the court giving the defendants the right to move for the rescission of the order and a dissolution of the injunction.

That motion does not appear to have been made, and the case was disposed of as if on final hearing. The defendants filed separate answers, and Mr. and Mrs. James, with leave of the court, amended their answers, setting up< a defense which was not made in the original answers, and which it will be well to now refer to. The bill alleges that when Waitring was injured and when he instituted his suit for damages and filed his declaration setting forth his claim, Harry B. James was the owner of certain real estate in Harford County, worth between four and five thousand dollars, and was also the owner of considerable personal property, worth seven or eight thousand dollars, all of which was unincumbered and in the possession, use and enjoyment of said Harry B. James; that on the 5 th day of December, 1918, said James executed a deed of all the real estate he owned to his wife, for a simulated and pretended consideration, and at the same time undertook to dispose of all his personal property to her, who took possession of it, by handing it over to her and .having it transr ferred to her upon the assessment books of Harford County. In the original answers of Mr. and Mrs. James they admitted the execution of the deed, and that at 'the time Harry B. James held the legal title of the real estate mentioned and part of the personal property, but alleged he was indebted to his wife, and had been for a number of years, in a large sum which he had agreed to pay her, and agreed to repay her in part by the conveyance of the real estate and certain personal property held by him.

They denied that the consideration was simulated and pretended, or that the transfers were in prejudice of the rights of his creditors. They alleged that the real estate was, on or about the 5th of December, 1918, worth about three thousand dollars, and that the personal property was not worth anything like the ¹⁰⁵ sum mentioned in the bill. Those answers were filed on May 26th, 1921, and on July 6th, 1921,- the amended answer of the husband was filed and, on July 11th, that of his wife. In the amended answers they alleged that by deed dated the 6 th of December, 1917, be bad conveyed the real estate and personal property to his wife; that said deed was duly executed before Ryland L. Mitchell, a notary public, and was immediately delivered by tbe husband to bis wife, and thereafter remained in her possession.

This appears in both amended answers, “and that, by inadvertence and because the same was mislaid or believed to have been lost, the said deed was not recorded by this court within the time required by law ; that thereafter, on or before the 5th day of December, in the year 1918, when it was discovered that the said deed had not been recorded, and was believed to have been mislaid or lost,” the said Ida required and demanded that “Harry B. James confirm the said deed and execute and deliver to her a deed for said property in order that the same might he recorded as required by law.” They claim that tbe deed of 1917 was not found until June, 1921, after their original answers bad been filed. It is difficult to understand why no reference was made to it in the original answers, but that was not only not done, but in them they say that the deed of December 5th, 1918, was executed and delivered in pursuance of the agreement he had made to her. In speaking of the personal property, Mr. James alleged “that the same was sold or delivered to her ou or about the date of said deed” — referring to' the deed of 1918, and Mrs. James alleged in effect the same thing. We understand that it is conceded that the deed of 1918 (which is not set out in the record) makes no reference to the one of 19.17, does not show that it was made as a confirmatory deed, or that a prior one had been made which was lost or mislaid.

If it was found in 1921, why it could not have been in 1918, or why it was left off the records so long, is not explained. The certificate of acknowledgment of that deed omits the year. As the deed was dated the 6th ¹⁰⁶ of December, 1917, if it had been recorded at any time before the 6th of December, 1918, it could have been presumed that it was acknowledged the 6th of December, 1917, under what is said in Wickes v. Caulk, 5 H. & J. 36, 42 , and Basshor v. Stewart, 54 Md. 376 , and the general desire of courts not to permit mere technical omissions or errors in certificates of acknowledgment to injuriously affect instruments required to be acknowledged and recorded. So1 far as the record discloses, it has never been recorded.

Our statutes are very liberal in allowing absolute deeds to be recorded after the six months period provided in section 13 of article 21 of the O'ode, and when so recorded, as against the grantor, his heirs or executors, and against purchasers with notice and creditors who become so- after the recording of the deeds, they have the same validity and effect as if recorded within the time prescribed (section 19, article 21). But as the deed of 1917 apparently has never been recorded, and certainly was not before the one of 1918, we cannot understand how it can have any effect as a deed. It is unnecessary to consider the effect of the notice to a third party of an unrecorded deed, or the grantee taking possession of lands purported to be conveyed, as it is not shown that the creditors had any notice of the deed of 1917, or that the grantee took possession of the lands before the deed of 1918 was executed and recorded. In addition to that, so far as the personalty is concerned, it cannot be properly contended that the deed of 1917 would have transferred it, as Mr. James still retained possession of it, and the deed was not executed as a bill of sale or mortgage of personal property must be, or that anything was done under it which gave it any effect as a deed.

It would greatly increase the danger of fraud in transactions between husband and wife, if the deed of 1917 could be given the effect claimed for it. It was made, according to the date in the body of it, before Waitring was injured, while the one of 1918 was made after the accident, after the suit was brought, and shortly after the declaration was filed, ¹⁰⁷ showing the claim of the plaintiff for $30,000 damages, hut if a husband and wife can have such a transaction as this between them, have a deed from him to her of all his property, keep the deed off the records, put it away so that they did not find it for nearly four years, then a year after its execution, during which time the husband incurred liabilities, execute another deed which is put on record, and then have the transaction relate hack to the first deed, there would be little or no protection against those who were willing to defraud, hinder or delay creditors. That cannot he permitted, and the deed of 1917 cannot be given the efficacy claimed for it. The conduct of Mr. and Mrs. James in reference to that deed is as suggestive of fraud as almost anything else in the record.

Their indifference about it after it was executed, not mentioning its existence to their counsel until after their answers were filed, when they apparently did “realize the importance of the first deed in this case,” then producing it and endeavoring to make the deed of 1918, under which they acted, relate back to 1917, is strong evidence to show that their great effort was to cut out the Waltring claim. The contention of the appellants very forcibly suggests some of the dangers which creditors would meet with if it could he sustained. The brief of the appellants is divided into three principal heads, the first of which is “as to the ‘original and primary’ deed of December 6th, 1917, confirmed by the ‘secondary and derivative’ evidential deed of December 5, 1918, to be tested by article 45, section 1.” Under that it is earnestly claimed that the limitation in the statute in that section commenced to run on December 6, 1917, the date of the first deed, and as the bill was not filed within three years from that date, it “should he dismissed quoad the deed of December 5th, 1918, which is merely ‘evidence’ of the original deed of 1917.” That section of article 45 is the well known one providing for protecting property of the wife from the debts of her husband, “provided, that no acquisition of property passing to the wife ¹⁰⁸ from the husband after coverture shall be valid if the same has been made or granted to her in prejudice of the rights of his subsisting creditors, who, however, must assert their claims within three years after the acquisition of the property by the wife or be absolutely barred.” While the language of the statute is “within three years after the acquisition of the property by the wife,” it cannot be successfully contended that a husband can make a deed to his wife, keep it off the records for three or more years, and then, when it is attacked, be permitted to have the benefit of the statute from its date. Such a construction of the statute would make it nugatory so far as the rights of creditors were concerned.

In speaking of a deed from husband to wife in Dixon v. Dixon, 128 Md. 1, 6 , Judge Urner said: “The first effort to have it declared void, as being in prejudice of creditors, was made in May, 1914, more than seven years after the deed was recorded. By the explicit terms of the statute such a proceeding must have been instituted within three years after the conveyance.” Of course, that did not mean three years after the date of an unrecorded and unknown deed. In Stieff Co. v. Ullrich, 110 Md. 629 , it was said, on page 634, that the deed then in question “should have been attacked within three years from the date of its recordation ” and in Wilson v. Vandersaal, 134 Md. 481 , it was said, on page 491, that section 14 of article 57 was not an answer to section 1 of article 45, “unless at least there was some act or omission on the part of the wife which kept the plaintiff in ignorance of the alleged fraudulent transfer, which, with usual or ordinary diligence, might not have been known or discovered.” In that case.it was implied throughout that the bar of the statute did not begin to run until the deed was recorded, unless the creditor had notice of it or had some knowledge which put him on inquiry. There can be no doubt that in this case the plaintiff was not barred by the provision in section 1 of article J5, as the statute did not begin to run until the recording of the deed of December 5, 1918.

As the bill'was filed April 19, 1921, it is not material ¹⁰⁹ when that deed was recorded, as it was executed less than three years before the proceedings to set it aside were begun. Section 15 of article 21 provides that “no deed of real property shall be valid for the purpose of passing title unless acknowledged and recorded as herein directed.” Neither sections 19, 20, 21, nor any other in article 21, relieves the appellants under the facts of this case, as the deed of 19 lY was not recorded at all, and they did nothing which could be a substitute for recording. Inasmuch as there can be no possible doubt that the limitation in article 45, section 1, could not have begun to run from the date of the deed of December, 191Y, if it had been admitted in evidence, we cannot understand how the appellants were injured by its rejection, as everything necessary to sustain it as an agreement was brought out in connection with the deed of December, 1918, and we have it before us in the record and find nothing to show injury to the appellants by reason of its rejection 'as an agreement. It was not admissible as a deed, and the proffers of the appellants set out in the record could not make it so.

The record shows that the ruling of the court was distinctly made as “to the two offers as proving the consideration of the deed of 191Y.” Again the judge said: “I have taken this in connection with the deed of 191Y. The question of your ability to show a consideration for the deed of December, 1918, is an entirely distinct proposition. These offers, as I understand, are made in connection with the deed of 191Y to show consideration for that deed. That is what I am passing on, whether these two offers, couped with the deed of December,, 191Y, give the right to put that deed in evidence.

The question of the consideration of the deed of 1918 is an entirely different proposition.” The court did not rule out all of the evidence contained in the proffers. In point of fact, some of those matters were testified to, and others undoubtedly could have been, if offered. We do not understand that the court ruled that Mrs. James could not testify in reference to the deed of 1918, or anything that we think was properly ¹¹⁰ admissible as reflecting on the consideration upon which the appellants based their right to have the transfer of the property made by the husband to the wife, but from what we have already said it will be seen that the court was right in refusing to give the deed of 1917 the effect claimed for it. The appellants contend that the conclusion of the Judge below was largely based on suspicions, in addition to what they claim were errors, especially in reference to the deed of 1917.

But we confess our inability to