About to blow up!!!

My hubby suggested we name or daughter after his sister and I am livid!!!!! Here's the back story:

Hubby and I were going through some financial difficulties so he was working a lot... Like 12 hour days. He is a carpenter so he looked really run down from working himself so hard. He lost a little weight had dark circles under his eyes and was more quiet than normal. So one evening after work he went to his sisters and she asked him what he was on!!! Like she thought he was doing cocain! I'm a big sister so I can understand being concerned but when he insisted he wasn't on drugs she should have dropped it. Instead she goes around asking his friends if he's on anything and saying I look like shit too. She even told people I had a nose bleed once and I'm probably the one who got him into it! I've NEVER done drugs. And if she wasn't such a judgmental bitch and actually tried to get to know me and would know that. When we found out she was going around saying these things hubby confronted her and she refused to apologise or even say she was wrong. There's no way I'm making my child after such a judgmental bitch that obviously had zero respect for me and I'm pissed that hubby would even ask me. Am I over reacting?