#### KATHERINE H. ETHEREDGE v. CLAUDE A. COCHRAN and JAMES P. HARRIS, Administrators of the Estate of C. LANE ETHEREDGE, Deceased.

(Filed 27 February, 1929.)

Husband and Wife — Wife’s Separate Estate — Rights and Liabilities of Husband — Gifts—Presumptions.

Under the change made in the law of married women’s property rights by C. S., 2506, and Article X, sec. 6 of our Constitution, whereby a married woman is authorized to contract and deal so as to affect her real and personal property in the same manner and with the same effect as if she were unmarried, with certain restrictions as to her real estate, C. S., 2507, it is Held,, where she receives checks from her parents as a personal gift to her which she endorses and delivers to her husband, there is a presumption that he receives the money in trust for her, and in the absence of evidence that it was a gift, she may recover the same in her ¿ction against him, or, after his death, 'against his personal representative.

Appeal by defendants from Harwood, Special Judge, at October Special Term, 1928, of Mecklenbue&¡

0. Lane Etheredge was the sole owner and proprietor .of an unincorj porated business which he conducted in the city1 of Charlotte under the name of the Etheredge Motor Sales Company. W. Y. Hartman, of Pittsburgh, Pa., the plaintiff’s father, gave her the sum of $45,000 in the three checks as follows: (1) A check for $10,000 dated 12 May, 1922; (2) a check for $15,000 dated 4 March, 1924, drawn by the Mellon National Bank of Pittsburgh on the National Bank of Commerce of New York, payable to the order of the plaintiff; (3) a check for $20,000 dated 11 February, 1924, drawn by the Mellon National Bank of Pittsburgh on the Bank of America, payable to the order of the plaintiff. All these checks were endorsed in due form by the plaintiff. C. Lane Ether-*682edge died on 2 July, 1926, and on 7 July, 1926, the defendants qualified as administrators of his estate.

The plaintiff brought suit to recover of the defendants the sum of $45,000, the aggregate amount of the checks, alleging in substance that the intestate had received and had never accounted to the plaintiff for any part of this amount. The defendants answered, admitting that their intestate had received of the plaintiff $10,000 on 12 May, 1922, $20,000 on 14 February, 1924, and $15,000 on 7 March, 1924, and that no part of either sum was thereafter received by the plaintiff from the intestate or from the defendants. The defendants' motion for nonsuit was overruled and they excepted. Thereupon they tendered instructions to the effect that if a wife, having money in her possession which belongs to her, by her voluntary act transfers it to her husband, the law presumes the transfer to be a gift in the absence of evidence tending to show a loan; and that the burden of proving that the transaction was a loan was upon the plaintiff. These prayers were refused and the trial judge instructed the jury that if a wife, having funds in her possession, transfers the same to her husband there is a presumption, nothing else appearing, that the transaction is a loan and that the husband will undertake to repay it; and, further, that it is incumbent upon the husband who asserts it to show that the transfer is a gift.

It was admitted that the claim for $10,000 is barred and the jury returned a verdict for the plaintiff in the sum of $35,000. Judgment for plaintiff. Exception and appeal by defendants.

Whitlock, Dockery & Shaw for plaintiff.

F. A. McGleneghan and Taliaferro & Clarkson for defendants.

Adams, J.

It is admitted that the plaintiff was the owner of the checks; that she duly endorsed them; that her husband collected them, and that the plaintiff has never been repaid. The question is whether the transfer of the wife’s money to her husband raised the presumption of a loan or the presumption of a gift.

On this question judicial opinion is not unanimous, but the weight of authority and, we think, the better reasoning uphold the doctrine that where the separate property of the wife comes into the hands of her husband either from her directly or from another duly authorized to act for her there is no presumption that the transfer is a gift. The doctrine is clearly stated in Stickney v. Stickney, 131 U. S., 227, 33 Law Ed., 136, 143 : “Whenever a husband acquires possession of the separate property of his wife, whether with or without her consent, he must be deemed to hold it in trust for her benefit, in the absence of any direct evidence that she intended to make a gift of it to him.” When, as with *683us, tbe property of a married woman is ber sole and separate estate and is free from liability for tbe debts or obligations of ber busband, tbe presumption is tbat it continues bers. Grabill v. Moyer, 45 Pa., 533. In Bergey’s Appeal, 60 Pa., 408, 100 Am. Dec., 578, it was shown tbat tbe busband and wife were together when tbe wife was paid a sum of money out of ber father’s and ber mother’s estates; tbat tbe busband “picked up tbe money, counted it, and did not put it down again,” but invested it in a farm. In reference to tbe question whether tbe transaction was a gift to tbe busband tbe Court said: “Not a word was spoken by tbe wife when ber busband took up tbe money to count it, and put it in bis pocket. Nor do we ever bear of a word thereafter to tbe effect tbat tbe wife bad made a gift of it. No inference of a gift from tbe transaction as detailed could, we think, arise. She was not bound to attempt a rescue of it from him, or proclaim tbat it was not a gift. She might rest on tbe idea tbat bis receipt, in ber presence, was with tbe intent to take care of it for ber.” These two cases are cited with approval in Stickney v. Stickney, supra; and in Parrett v. Palmer, 8 Ind. Appeals, 356, 52 A. S. E., 479, a similar conclusion is based upon additional citations: “We have here a case where tbe wife’s money passes directly and voluntarily from ber bands to tbat of ber busband, with no finding as to whether a gift was intended, or whether be received tbe money simply as an agent or trustee for her.- Under such circumstances, what is tbe presumption of tbe law? It has long been conceded to be tbe law tbat a woman could bestow ber separate property upon ber busband by way of gift, unless prevented by some special limitation of ber powers over it, but courts of equity view such transactions with care and caution, and in dread of undue influence: Story’s Equity Jurisprudence, sec. 1395. 'There is no doubt tbat courts should narrowly scrutinize cases of alleged gifts from tbe wife to tbe husband.’ Hardy v. Van Harlingen, 7 Ohio St., 208: 'As regards tbe corpus of tbe separate estate, no presumption arises in favor of a busband who has received it. He is prima facie a trustee for bis wife, and a gift from ber to him will not be inferred without clear evidence.’ 2 Lewin on Trusts, 778: 'A simple payment by tbe wife to tbe busband of tbe income of ber separate estate may be treated as a gift to him. . . ¶. Tbe receipt by him of separate capital moneys of tbe wife stands on a different footing. A transfer of ber separate property into bis name is prima facie no gift.’ Crawley’s Law of Husband and Wife, 268. So, also, in Eversley on Domestic Eelations, 409 : 'She may make a gift of ber separate property to ber busband for bis own use, or tbat of tbe family, but tbe onus lies upon tbe busband of proving tbat a gift was intended, and tbat be has not influenced ber act and conduct.’ Rich v. Cockell, 9 Ves., 369; Hughes v. Wells, 9 Hare, 749; Wales v. Newbould, 9 Mich., 45; Boyd v. *684 De La Montagnie, 73 N. Y., 498; 29 Am. Rep., 197; Reeves on Domestic Relations (4 ed.), 216, note; McNally v. Weld, 30 Minn., 209; Green v. Carlill, 4 Ch. Div., 882; Jones v. Davenport, 44 N. J. Eq., 33; Bergey’s Appeal, 60 Pa. St., 408; 100 Am. Dec., 578.”

This we understand to be tbe prevailing rule where tbe wife bolds ber separate personal property as if a feme sole. It is provided by statute and by tbe Constitution tbat tbe real and personal property of any female in tbis State, acquired'before marriage, and all property, real and personal, to wbicb sbe may, after marriage, become in any manner entitled, shall be and remain tbe sole and separate estate and property of such female, and shall not be liable for any debts, obligations or engagements of ber husband, and may be devised and bequeathed, and, with tbe written assent of ber husband, conveyed by ber as if sbe were unmarried. C. S., 2506; Constitution, Article X, sec. 6. It is further enacted tbat subject to tbe provisions of C. S., 2515, every married woman is authorized to contract and deal so as to affect ber real and personal property in tbe same manner and with tbe same effect as if sbe were unmarried, but no conveyance of ber real estate shall be valid unless made with tbe written assent of ber husband as provided by section 6 of Article X of tbe Constitution, and ber privy examination as to tbe execution of tbe same taken and certified as now required by law. C. S., 2507.

By virtue of these and other provisions tbe relation wbicb married women formerly sustained to their husbands has been materially modified. Unity of person in tbe strict common-law sense no longer exists, and many of tbe common-law disabilities have been removed. Not only may they contract with each other; a married woman may now sue ber husband in contract or in tort. Dorsett v. Dorsett, 183 N. C., 354; Roberts v. Roberts, 185 N. C., 566.

We apprehend tbat it was considerations of tbis kind tbat led tbe Court to remark in Stickney v. Stickney, supra, “There are decisions of courts of some of tbe other States, bolding tbat a presumption arises of a gift from tbe wife to tbe husband of moneys placed by ber in bis bands, unless an express promise is made by him at tbe time tbat be will account to ber for them or invest them for her benefit. But tbe decisions we have cited are more in accordance, we think, with tbe spirit and purpose of tbe Married' Woman’s Act, and only by conformity with them can it be fully carried out.”

Tbe reason for tbe rule is thus stated in Parrett v. Palmer, supra: “Tbe trust and confidence ordinarily reposed by tbe wife in tbe husband; ber natural reliance and dependence upon him for tbe management of her business; tbe fact tbat, as a rule, tbe husband is possessed of general business experitence, while tbe experience of tbe wife is usually limited— *685all these considerations sustain us in the conclusion that where the wife voluntarily delivers her money to the husband the law presumes that he takes it as trustee for her, and not as a gift, even though there be no express promise to repay.”

The transaction raises not the presumption of a gift from the wife to the husband, but the presumption that, he received and must account for the money. Haymond v. Bledsoe, 11 Ind. Appeals, 202, 54 A. S. R., 502; Sykes v. City Savings Bank, 115 Mich., 321, 60 A. S. R., 562; King v. King, 24 Ind. App., 598, 19 A. S. R., 287; Comer v. Hayworth, 30 Ind. App., 144, 96 A. S. R., 335, 13 R. C. L., 1371, sec. 416; 30 C. J., 680.

By some courts a distinction is drawn between receipt of the rents or income of the wife’s estate and receipt of the corpus or principal. 13 R. C. L., 1387; Estate of Hauer, 140 Pa., 420, 23 A. S. R., 245. In considering the question before us it is necessary to keep in mind the further distinction between the husband’s relation to his wife’s property before and since the statutory “emancipation” of married women. Some of the eases cited in the appellant’s brief must be read in the light of this distinction. In Rea v. Rea, 156 N. C., 529, the question was whether the wife’s written transfer to her husband of shares of stock was subject to the provisions of C. S., 2515; and it was said that the section applies to contracts and not to gifts. None of these decisions is inconsistent with the conclusion we have reached. We find

No error. •