This action was brought to charge the separate estate of the defendant, Abby McNett, with the money due on a covenant, by which she, together with her husband, guaranteed the collection of certain mortgages which she assigned to the plaintiff's testator. He had exhausted his remedy on the mortgages and accompanying bonds, leaving a considerable amount of the money secured by them unpaid. Under ordinary circumstances this deficiency would be a debt recoverable against the guarantors; but Mrs. McNett was, when she executed the guaranty, and still is, a married woman. She is the owner of both real and personal estate, and the question is, whether it is in the power of the court to cause it to be applied to the payment of this debt.
Mrs. McNett had property by inheritance, and she purchased and had conveyed to her after her marriage, in the year 1852, a lot of land in Buffalo. The bonds and mortgages which were assigned to the plaintiff's testator, with *Page 378 the guaranty mentioned, were given to her for portions of this lot which she had sold; and the remainder of her property, which it is sought to subject in this action, is the produce of sales of other portions of the lot.
The judge has found, in his conclusions of fact, that the bonds and mortgages were sold to Mr. White, the plaintiff's testator, by the husband of A.J. McNett, with the assent of the defendant Abby, and that they joined in the assignment and guaranty. One question is, how this finding is to be understood. She was the owner of the securities. They ran to her as the obligee and mortgagee. There is no pretense that prior to the assignment to Mr. White, she had parted with her property in them. The assignment, therefore, which was executed, was her assignment. The subject assigned was hers, and her husband had no control over it. Her execution of the instrument was not, therefore, by way of assent to the transaction, but was the operative feature of that transaction. The more correct expression would have been that she sold and assigned the securities, and that the husband joined in the instrument to signify his assent to the transaction. He was in no sense an assignor, for he had nothing to assign. But it is further found that the consideration of the assignment was received by the husband and appropriated to his own use, and that no part of it was ever received by her, and it is added that her separate estate, by which I understand the remainder of her property, was not in any manner benefited by the sale of the securities. It is not said that she was not benefited by the transaction, but only that her separate estate was not. The most favorable construction of the finding, is that she, possessing, as she did, the property in these securities, assigned them to White for a certain sum of money, and made a gift of that money to her husband. In connection with the sale, and forming a part of the transaction, she added her guaranty of the collection of the securities, and he joined in that contract. In this he was her surety. The contract has been broken, and she has property out of which the damages may be paid, but it is presumed that he has none. *Page 379
I am of opinion that her separate estate, or what remains of it, is justly chargeable with this debt.
Her guaranty was part and parcel of the contract by which she disposed of the bonds and mortgages. That contract was made in the course of the administration and management of her separate estate. She owned the securities, and they were a part of her separate estate. She, in her character of owner, elected to dispose of them; and she was enabled to sell them to Mr. White by engaging, in effect, that if their enforcement, with legal diligence, did not produce the amount payable by their terms, she would make good the deficiency. The husband added his personal responsibility to the engagement, but that circumstance did not detract from the binding force of her contract, or prejudice the remedies which the creditor might have against her or her estate.
The estate of Mrs. McNett, in the land conveyed to her in 1852, was a legal estate in contradistinction to property vested in trustees for her sole and separate use. She held it under the statute of 1849, with the same unlimited power of disposition which she would have had if not under the disability of coverture — with the same power, in short, which any owner of property has. It would be very strange if her power to subject it to the satisfaction of her engagements were weaker than that of a femecovert who has property settled to her use. But that has never been contended. Judge COMSTOCK considered that question with great attention, in Yale v. Dederer, when it first came before us. (18 N.Y., 265, 272.) He stated the question to be whether a married woman might not charge her legal estate, held under this statute, in the same cases and to the extent recognized by courts of equity in respect to estates held for her separate use. After referring to the various considerations bearing upon it, he said: "My conclusion, therefore, is that although the legal disability to contract remains as at common law, a married woman may, as incidental to the perfect right of property, and power of disposition which she takes under this statute, charge her estate for the purposes and to the extent which the rule of equity has heretofore sanctioned in *Page 380 reference to separate estates." Judge HARRIS, who prepared the only other published opinion, took precisely the same view, holding that a married woman had the same power to charge her real estate, held by legal title under the statute, which she had in respect to similar property vested in trustees to her use, under a settlement (p. 279). Now, there is an unbroken series of adjudications extending from Norton v. Turvill, 1723 (2 P. Wms., 144), down to Owens v. Dickenson, in 1840 (1 Craig Phillips, 48), and not questioned by any later case, to the effect that the general engagements of a married woman, such as her notes, bonds, and simple contract debts, are enforceable against her separate property, by decrees of courts of equity. There have been some diversities of opinions as to the theory upon which the court interposed, but none as to its power and duty to exercise the jurisdiction. The principle finally settled upon in the last mentioned case is, that to whatever extent she has the power of dealing with her separate property, she has also the other power incident to property in general, namely, the power of contracting debts to be paid out of it.
The only extent to which this principle of equity law, well settled in England before the revolution, has been qualified in this court, is by denying its application to debts contracted by a woman as surety for her husband. That exception has been made and is now fully established. (Yale v. Dederer, supra, andS.C., 22 N.Y., 450.) In the last mentioned report, it is stated by the reporter to have been the opinion of a majority of the court, that the intention to charge the separate estate must be stated in the contract itself, or the consideration must be one going to the direct benefit of the estate.
The liability of Mrs. McNett, in the present case, could be very well sustained upon that statement of the rule. The contract upon which the plaintiff seeks to recover this debt was made by her in a dealing with her separate estate. It was parcel of the terms of an entire contract by which she disposed of and obtained the money for a part of that estate. It was for the benefit of the estate in the sense of being for *Page 381 the uses and purposes of the estate. It is of no moment that she gave away the purchase-money to her husband. She might have given it to any one else, or have spent it for dress or luxuries. The bargain by which she sold her securities and added the guaranty, was moreover for the benefit of her separate estate, inasmuch as it added to the residue of that estate the amount which was realized by the transaction. Surely, the creditor, who has trusted to her engagement, relying, as he is presumed to have done, on her ability arising from the possession of separate property, is not bound to see that she disposed of the money prudently and wisely. Suppose she had mortgaged her real estate, giving to the lender her personal covenant for repayment, can there be any doubt but that, if the mortgaged property had proved insufficient, the creditor could have resorted to her other separate property? and would it have been any answer, that she gave the money away?
A guaranty of payment or of collectibility, is a very common covenant to be added to the assignment of a chose in action. It is somewhat similar to a covenant of title in a conveyance of real estate. The statute, in terms, authorizes a married woman to dispose of her separate property in the same manner and with the like effect as if she were unmarried. It would be a solecism to hold that her bargains are valid against parties dealing with her, to the full extent of all their property, but that they are not binding on her to the extent of her separate estate.
I am in favor of reversing the judgment appealed from, and ordering a new trial.
PORTER, J., concurred with the Ch. J. POTTER was for affirmance upon the finding of fact by the referee.
Judgment affirmed. *Page 382