Grand Island Banking Co. v. Wright

Norval, J.

Tlie Grand Island Banking Company and John Lang each brought a separate action in tlie district court of Hall county against Mary E. Wriglit and Frederick Wright, wife and husband, to foreclose two real estate mortgages upon the same property, given by the defendants to secure promissory notes executed by them. Subsequently the suits were consolidated by consent of parties, a decree of foreclosure was entered, and the mortgaged premises were sold thereunder; but the proceeds were insufficient to pay the amount due upon the mortgages. Applications for deficiency judgments were made by the plaintiffs, which were denied as to the defendant Mary E. Wright, but such judgment was rendered against *576the said Frederick Wright in favor of each of the plaintiffs for the full amount due them respectively, after applying the proceeds arising from the sale of the mortgaged property. Plaintiffs appeal from the decision denying their applications ■ for judgments in deficiency against Mary E. Wright. The sole question in the case is whether she was liable to a personal judgment upon either of the notes secured by the mortgages. It is undisputed that the notes and mortgages were signed by both defendants, tjiat the real estate covered by the mortgages at the time they were executed was owned by Mary E. Wright, who was then a married woman living with her husband, and that in neither of the notes or mortgages is there any stipulation to the effect that they were given with reference to her separate property, or that her estate generally should be bound for the payment of the debts secured by said mortgages. There is to be found in the bill of exceptions evidence tending to establish that the notes were executed to obtain loans made to the husband alone for his individual use and benefit; that no paid of the debts was contracted by the wife, or-in her behalf; that she signed the notes as surety merely for Mr. Wright, there being no agreement or*understanding of any kind, nor any fact or circumstances proven, from which an inference can be drawn that her property, other than that covered by the mortgages, if any she possessed, which is not shown,- should be liable for the payment of the notes. We are persuaded that the evidence adduced was sufficient to authorize the trial court in finding that the notes were' not made with reference to Mrs. Wright’s separate estate, or that she agreed, or intended to bind the same, except to the extent of the property actually pledged by the mortgages. Under the facts disclosed by this record was either of the plaintiffs entitled to a deficiency judgment against Mrs. Wright?

The important question that confronts us in this case is the liability of a married woman on her contracts of suretyship. The solution of this question depends upon *577the extent of the power conferred upon her by the legislature to create debts to be paid out of her separate property, since, at common law, a married woman is Avliolly incompetent to contract in her OAvn name, and this rule is in force in this state unless it has been abrogated in whole or in part by statute. By section 1, chapter 53, Compiled Statutes, the.property Avhich a woman may own at the time of her marriage, and the rents, issues, and profits, or proceeds thereof, as well as any property subsequently acquired by descent, devise, or the gift from any person except her husband, are her sole and separate property, and not subject to the disposal of her husband or liable for his debts, except for necessaries furnished the family, and not then until execution against the husband for such indebtedness has been returned unsatisfied for want of property Avhereon to make a levy. Section 2 declares: “A married woman, while the marriage relation subsists, may .bargain, sell, and convey her real and personal property, and enter into any contract Avitli reference to the same in the same manner, to the same extent, and with like effect as a married man may in relation to his real and personal property.” Section 3 provides: “A woman may, Avliile married, sue and be sued, in the same manner as if she Avere unmarried.” Section 4 is in this language: “Any married woman may carry on trade or business, and perform any labor or services on her sole and separate account; and the earnings of any married woman, from her trade, business, labor, or services, shall be her sole and separate property, and may be used and invested by her in her own name.”

Thus it will be observed the legislature has to some extent removed the common-law disability of a married woman. In this state she may acquire and hold property in her own right, and may engage in business on her separate account, and her earnings derived either from such trade or business or from her labor or services she owns in her own right. The implied poAver of a feme covert to contract is given by the last section quoted; but this only *578extends to lier separate trade or business and to contracts with reference to her personal services. The express authority conferred upon married women to enter into contracts is to be found in section 2 copied above. But this statute does not expressly, nor by implication, enlarge a wife’s capacity to contract generally. She can buy and sell property in her own name and upon her own account, and enter into valid contracts with reference to her separate estate the same as if she were a feme sole, or as a married man may in relation to his property. The statute does not undertake to confer upon a married woman an unrestricted power to make contracts, but such right is limited to contracts made with reference to, and upon the faith and credit of, her separate property or estate. Upon such contract she is liable, but all her other engagements and obligations are void as at common law. To hold unqualifiedly that a married woman has the same right to enter into contracts, and to the same extent, as a man would be to disregard the qualifying clause of said section 2, which confers upon her the authority to “enter into any contract with reference to the same [her property] in the same manner, to the same extent, and with like effect as a married man may in relation to his real and personal property.” If the legislature had intended to wholly remove the common-law disabilities of a married woman, and give her general power to make contracts of all kinds, this intention, doubtless, would have been expressed in apt and appropriate language. It would have expressly enacted that she could bind herself and her property by her general engagements whether made or entered into for the benefit, or on account of, her separate property or not, instead of empowering her to contract alone with reference to her own property, trade, and business. In construing this statute it is important to bear in mind that the legislature was not attempting to impose disabilities upon married women, but was engaged in removing some of those already existing. She can contract only so far as her disabilities have been so *579removed by the legislature. The statute requires that contracts, to be valid, must be entered into with reference to her separate property, and it is for the courts to so construe this enactment as to carry out the legislative will. It is true section 3 permits a married woman to sue and be sued, but this does not authorize the recovery of a judgment against her when no cause of action exists, nor does it attempt to declare what contracts of hers will support an action; what are valid or what are nugatory. The construction we have given the statute is in accord with numerous decisions of this court. (Davis v. First Nat. Bank of Cheyenne, 5 Neb. 242; Hale v. Christy, 8 Neb. 264; Spaun v. Mercer, 8 Neb. 357; State Savings Bank v. Scott, 10 Neb. 83; Barnum v. Young, 10 Neb. 309; Gillespie v. Smith, 20 Neb. 455; Eckman v. Scott, 34 Neb. 817; Godfrey v. Megahan, 38 Neb. 748; Buffalo County Nat. Bank v. Sharpe, 40 Neb. 123; McKinney v. Hopwood, 46 Neb. 871.)

Hale v. Christy, cited above, was an action to foreclose a mortgage given by the defendants, husband and wife, to secure their promissory note. The trial court found that the wife was personally liable for the debt. This court held she incurred no personal obligation by executing the note. The third paragraph of the syllabus reads as follows: “Under sections 42 and 43, chapter 61, General Statutes, a married woman may sell and convey real estate, or any interest she may have therein, the same as if she were single. As to her other contracts she is liable only to the extent that they are made with reference to, and on the faith and credit of, her separate estate.” It is suggested that the holding in that case as to the personal liability of Mrs. Christy was mere obiter for the reason the question did not then arise, and could not until the court came to render a deficiency judgment. The finding in the decree of foreclosure that Mrs. Christy was personally liable for the debt would have bound her, unless set aside, so that the decision on that proposition was not obiter. This is the effect of the decision in Stover v. Tompkins, 34 Neb. 465. We quote the first clause of *580the syllabus of the case: “Where a grantee of real estate has assumed in the deed of conveyance a certain mortgage as part of the consideration, and in an action to foreclose had been made a defendant and a decree rendered against him that he should be liable in case of deficiency, which decree remained unreversed and- without modification, he will not be permitted, when judgment for deficiency is sought, to set up facts which existed when the original decree was obtained and should have beeu pleaded to show that he was not liable.”

State Savings Bank v. Scott, 10 Neb. 83, was an action upon a joint and several promissory note signed by W. D. Scott and S. A. Scott, husband and wife. The coverture of Mrs. Scott was pleaded. The trial court found that she executed the note as surety for her husband, and was not liable for its payment. This court affirmed the judgment, the last clause of the syllabus being in the following language: “A wife is bound by her contracts when made with reference to or upon the faith and credit of her separate estate, but she is not bound as surety upon a promissory note unless it appears that she intended thereby to bind her separate estate.” The same doctrine was again stated in Eckman v. Scott, 34 Neb. 817.

Barnum v. Young, 10 Neb. 309, was a suit against a married woman upon her promissory note, the sole question involved being whether her coverture relieved her from liability for its payment. From a verdict in her favor the plaintiff prosecuted error. This court affirmed the judgment, and approved, as containing a fair expression of the law, the following instructions given upon the trial:

“1. The defendant being a married woman at the time she signed the note in question, she will not be liable for the payment thereof unless it was given with reference to, and on the faith and credit of, her separate property and estate.
“2. You are instructed by the court that under the law and evidence of this case the material question fdr you to *581settle from tlie evidence is, Did the defendant, at the time she gave the note to John Cl. Compton, contract with reference to and upon the faith and'credit of her separate (‘state? If she did so contract, then she would, unde i’ the law of this case, be liable for the full amount of the note. But if from the evidence you find that she did not so contract with reference to, and upon the faith and credit of, her separate estate, then you must find for the defendant.”

Godfrey v. Megahan, 38 Neb. 748, was a suit against a husband and wife upon a promissory note executed by them for a pre-existing debt of the husband, the wife signing the same as surety merely. She pleaded her coverture, and that the note Avas not executed Avith reference to her separate property, trade, or business, but at the request of her husband as surety for him. Upon a trial to the court this defense was sustained and the action dismissed as to Mrs. Megalian, which judgment Avas sustained upon a revieAV of the record by this court. The propositions decided in that case are clearly stated in the syllabus of the opinion prepared by Ragan, C., a-; follows:

“1. The disability of a married woman to make a valid contract remains the same as at common laAV, except in so far as such disability has been removed by our statutes.
“2. The statute has removed the common laAV disability of a married woman to make contracts only in cases where the contract made has reference to her separate property, trade, or business, or Avas made upon the faith and credit thereof, and with intent on her part to thereby bind her separate property.
“3. Whether a contract of a married woman was made Avith reference to her separate property, trade, or business, or upon the faith and credit thereof, and with intent on her part to thereby bind her separate property, is alAvays a question of fact.”

In Buffalo County Nat. Bank v. Sharpe, 40 Neb. 123, it *582was held that where a married woman executes a mortgage on her real estate to secure the debt of her husband, her separate estate to the extent of the property mortgaged is bound for the payment of such debt. Of the same purport is the case of Watts v. Gantl, 42 Neb. 869.

In Smith v. Spaulding, 40 Neb. 339, it was decided that a married woman may contract as surety for her-husband, but that decision did not overrule or modify the prior adjudications of this court relative to the liabilities of married women on their contracts, as an examination of the opinion will disclose. This court held that'the trial court in that case erred in refusing an instruction embodying the proposition enunciated in the syllabus in Barnum v. Young, 10 Neb. 309.

In Briggs v. First Nat. Bank of Beatrice, 41 Neb. 17, it was ruled that a married Avornan is liable on a note which she signed as surety,, when the note contained a clause pledging her separate estate for its payment.

This court has not in any instance decided that a married woman is personally liable on. her general engagements, or that all the common-law disabilities of a feme covert have been abrogated in this state. On the contrary, the rule has been steadfastly adhered to that her contracts to be walid must be made with reference to, and upon the faith and credit of, her separate property. Her intention to charge such estate must be disclosed. If the rule laid down in the decisions mentioned above so long adhered to is to be abrogated, it should be by legislative enactment.

There is much confusion and conflict in the decisions of. the courts of the different states upon the proposition whether the intention to charge the separate estate by the giving of a promissory note must be expressed on the face of the instrument, or whether it may be established by parol evidence. It is not necessary in this case that Ave should decide between the two rules, since it does not appear from the note itself, nor was it established by other testimony, that it Avas her intention to bind *583her own property, other than that covered by the mortgage.

It is claimed that when a feme covert executes a note the presumption arises that she intended thereby to charge her separate estate or property. To this doctrine we cannot assent. A married woman cannot contract generally, and the burden is cast upon the one seeking to enforce a contract against her to show that it is an obligation she was authorized to make under the-statute. An infant is not liable on his contract as a general rule, except for necessaries, but in an action against him on a contract, it is a good defense to establish his minority, unless the plaintiff shows the debt was for necessaries furnished the minor. The burden is not upon the infant to show that the indebtedness was not incurred'for necessaries. (Wood v. Losey, 15 N. W. Rep. [Mich.] 557.) So in a suit against a married woman when her coverture is pleaded and proven, it devolves upon the plaintin io show that the contract was made with reference to and upon the credit of her separate estate. (Vogel v. Leichner, 102 Ind. 55; Cupp v. Campbell, 103 Ind. 213; Jouchert v. Johnson, 108 Ind. 436; Stillwell v. Adams, 29 Ark. 346; Fisk v. Mills, 62 N. W. Rep. [Mich.] 559; Fechheimer v. Peirce, 70 Mich. 440, 38 N. W. Rep. 325; Kenton Ins. Co. of Kentucky v. McClellan, 43 Mich. 564, 6 N. W. Rep. 88; Schmidt v. Spencer, 87 Mich. 121, 49 N. W. Rep. 479; Haydock Carriage Co. v. Pier, 74 Wis. 582, 43 N. W. Rep. 502; Buhler v. Jennings, 49 Mich. 538, 14 N. W. Rep. 488; Menard v. Sydnor, 29 Tex. 257; Trimlle v. Miller, 24 Tex. 215; Haynes v. Stovall, 23 Tex. 625; Covington v. Burleson, 28 Tex. 368; Baird v. Patillo, 24 S. W. Rep. [Tex.] 813; Early v. Law, 20 S. E. Rep. [S. Car.] 136; Litton v. Baldwin, 8 Humph. [Tenn.] 209; Hughes v. Peters, 1 Cold. [Tenn] 67; Lane v. Traders Deposit Bank, 21 S. W. Rep. [Ky.] 756; Habenicht v. Rawls, 24 S. Car. 461; West v. Laraway, 28 Mich. 464.)

Fechheimer v. Peirce, 70 Mich. 440, was an action upon a promissory note, signed by Ella G. Peirce and Grand *584Peirce, husband and wife. The instrument purported to be signed by the husband as surety. It was shown on the trial that the note was given for a loan of money made to the husband. The check for the money was delivered to him, although it was payable to the order of his wife. The jury returned a verdict against both makers, and a judgment rendered thereon was reversed by the supreme court. Campbell, J., in delivering the opinion of the court, said: “We think there was nothing to go to the jury against defendant. It is the law of this state that a married woman can make no obligation except on account of her own separate property, and that anyone seeking to hold her must make out an affirmative case. * * The signing of a note by a married woman creates no presumption of consideration, but it must be proved.”

While there are authorities which hold that when a married woman signs a note, the presumption arises that she intended thereby to charge her separate property, it is believed that the rule we have- adopted is more consistent with sound principle and the weight of authority.

It is argued that if Mrs. Wright is not liable in this case for the deficiency remaining after the sale of the property, because of her coverture, the entire debt was void as to her, and the mortgages upon her real estate given to secure the same indebtedness were not enforcear ble. The argument is fallacious. She pledged certain of her separate estate to the payment of this indebtedness, and for that reason, to the extent of the proceeds of such property, her separate estate was bound. Further than that she never agreed nor was it her intention that her property should stand as security for the debts of her husband. A wife may make a valid mortgage upon her real estate to secure a note executed by the husband, for his indebtedness, since the intention to charge her own property is manifest. (Nelson v. Bevins, 19 Neb. 715; Buffalo County Nat. Bank v. Sharpe, 40 Neb. 123; Watts v. Gantt, 42 Neb. 869.) But it does not follow *585tlxat she is liable on the contract of suretyship where such contract was not made'upon the faith and credit of her separate estate, and where she did not intend that such estate should be bound for the payment of the debt. Plaintiff’s were not entitled to a personal judgment against Mrs. Wright. (Gaynor v. Blewett, 86 Wis. 399; Johnson Co. v. Rugg, 18 Ia. 137; Rogers v. Weil, 12 Wis. 741; Wolff v. Van Metre, 19 Ia. 134; Salinas v. Turner, 33 S. Car. 231; Greig v. Smith, 29 S. Car. 426; American Mortgage Co. of Scotland v. Owens, 72 Fed. Rep. 219, 18 C. C. A. 513.)

Affirmed.

Harrison, C. J., having presided in the trial court, took no part in the above opinion. Sullivan, J., and Ragan, C., concurring.