Gwynn v. Gwynn

The opinion of the court was delivered by

Mr. Justice McIver.

After the decision of this court in this case, reported in 27 S. C., at page 525, the creditors of the plaintiff were called in to establish their demands. Amongst the claims presented under that order, was one in favor .of the National Bank of Spartanburg, evidenced by a note, of which the following is a copy:

“January 14, 1884. Twelve months after date I promise to pay to the order of A. J. Gwynn thirteen hundred dollars, value received, negotiable and payable at the National Bank of Spartanburg, S. C. If not paid at maturity, interest thereafter at the rate of 7 per cent, per annum. This note is made with reference to my separate estate, and is intended to be a charge upon the same. M. L. GWYNN.
“(Indorsed): A. J. Gwynn.”

*484At the time this note was given, the plaintiff, who was then, and is yet, a married woman, the wife of her co-defendant, A. J. Gwynn, executed a mortgage on lands of her separate estate to secure the payment of said note; but whether this mortgage was given directly to the bank, or to A. J. Gwynn, the payee of the note, and by him transferred to the bank, does not appear, though the probability is, that it was given directly to the bank, and we will assume that such was the fact. The note above copied Avas discounted by the bank, and the proceeds applied to the payment of two similar notes previously discounted by the bank, one due and the other to become due, and the balance paid over by the bank to A. J. GAvynn. It appeared also that Mr. Sanders, as assignee, had, from the proceeds of the plaintiff’s separate estate, made a payment of íavo hundred dollars on the note in question, taking from the bank what is termed “a refunding receipt,” by which we understand the bank obligated itself to refund the money thus paid in case it should be determined the plaintiff was not legally liable on the note.

The testimony was taken by a referee, and appears to be fully set out in the “Case”; and upon that testimony the Circuit Judge held that the plaintiff Avas not liable on the note, and consequently that the payment of the two hundred dollars must be refunded by the bank, and the credit cancelled. From this judgment the bank appeals upon the following grounds: “1. Because his honor erred in decreeing that the note of the National Bank of Spartanburg, S. C., was not a valid and binding obligation upon Marie L. Gwynn. 2. That his honor erred in not decreeing that Marie L. GAvynn was estopped from denying the terms of the note. 3. That his honor erred in decreeing that the National Bank of Spartanbui’g, S. C., should pay back to C. P. Sanders, the assignee, the tAvo hundred dollars paid by him to the bank.”

The Circuit Judge bases his conclusion upon the ground, that notwithstanding the fact that Mrs. Gwynn was, apparently, the maker of the note, yet, with the full knoAvledge of the bank, her husband controlled the proceeds, and after the same had been applied to the payment of other similar notes held by the bank, as far as necessary for that purpose, the balance was paid over to the husband without any authority from the wife. He also held *485that “the declaration in the note of her purpose to charge her separate estate is not sufficient to bind her. It was no more than a declaration of her intention that her separate estate should be bound; but it could not have that effect unless made with reference to her separate estate, in the sense in which that language has been interpreted by our courts,” recognizing, however, the estoppel which might arise from her representing as matter of fact, that the money was borrowed for the uses of her separate estate, provided the bank had not been privy to the purpose of applying the money to her husband’s own uses.

While it is quite true, that where a married woman, before or at the time she contracts a debt, represents to the creditors, as matter of fact, that the contract is made with reference to her separate estate, and nothing more appears, she may be estopped from disputing or denying that the fact is as she has represented it to be, yet if it also appears that the creditor was not misled by such representation, because he knew that the fact was not as represented, but that in fact the debt was contracted for the benefit of the husband, then there can be no estoppel, for the very obvious reason, that one of the essential elements of estoppel is wanting. So that the practical questions in this case are: 1st, Whether the plaintiff, before or at the time she signed the note in question, represented to the bank, as matter of fact, that the money proposed to be borrowed was for the use of her separate estate. 2nd. If so, whether the bank was misled by such representation.

There is much force in the view which the Circuit Judge seems to have taken as to the proper construction of the language used in the note, and that it amounted to nothing more than a declaration of intention, on the part of the plaintiff, to bind her separate estate, which wmuld be clearly insufficient to raise an estoppel. The language is: “This note is made with reference to my separate estate, and is intended to be a charge upon the same.” This is susceptible of two constructions: 1st. That the debt evidenced by the note was contracted with reference to the separate estate— for the uses of such estate — and is, therefore, intended to bind the same. 2nd. That the note was made with a view to bind the separate estate, and, in that sense, is made with reference to such *486estate. There is certainly no such representation here, as there was in Greig v. Smith (29 S. C., 426), that the money sought to be borrowed was, as a matter of fact, for the use of the married woman herself. If the declaration, that the note was made with reference to the separate estate, was intended to be a representation of'fact, that the money borrowed was for the use of the separate estate, then the additional declaration, that the note was intended to bind the separate estate, was wholly unnecessary, as the intention would be immaterial, provided the fact was as represented.

But even assuming that the Circuit Judge erred in construing the terms of the note, and that those terms must be regarded as not merely an expression of an intention to bind the separate estate, but as a representation of fact, which would have that effect, the important inquiry still remains, whether the bank was misled by such representation. This is a question of fact, which has been decided adversely to appellant by the Circuit Judge, and we cannot say that there is error in his conclusion — certainly no such manifest error as would warrant this court, under the well settled rule, in reversing his decision. On the contrary, it seems to us that there is. much in the testimony to support his view. The president of the bank himself says, in his testimony, that he did not rely upon the statements contained in the note, and would not have discounted the note without the mortgage, the terms of which are not before us. ’ He, no doubt, in common with many other persons, supposed that while a married woman could not bind herself by a note as surety for another (for, he says, he had ■been cautioned against taking a married woman as endorser on a note), she could bind herself by a mortgage. This remark of the president of the bank goes to show that the bank regarded Mrs. Gwynn merely as surety for her husband, although she was nominally the maker of the note; and this is confirmed by the subsequent conduct of the bank in dealing with the proceeds of the note, paying over the balance of the proceeds to the husband without any order or request from his wife, although there was not the slightest evidence that he was her agent, or in any way authorized to represent her. This, with other circumstances appearing in the testimony, which need not be adverted to here, *487certainly tends strongly to show that the bank regarded A. J. Gwynn, and not his wife, as the real borrower of the money, and that she was merely his surety, and dealt with him, accordingly, .as such. If so, then it is clear that the bank was not misled by any representation of fact made in the note, or otherwise, if any such was made. There can be no doubt that the bank was misled as to-matter of law, but certainly not by the plaintiff, as there is no pretence that resort was had to her for legal advice; but, as we have seen, unless it was misled by some representation of fact by the plaintiff, the estoppel could not arise.

The third ground of appeal cannot be sustained. The cases of. Robinson v. City Council (2 Rich., 317) and Kenneth & Gibson v. So. Ca. Railroad Co. (15 Id., 284), cited to sustain it, are not applicable. Those were cases in which actions, called under the former procedure actions for money had and received to the use of the plaintiff, were brought to recover back money voluntarily paid without protest, objection, or duress of any kind, and rest upon an entirely different principle from that involved in the present inquiry, as may be seen by the elaborate discussion in the case last named. Here, however, when the two hundred dollars was paid, Mr. Sanders took what is termed a refunding receipt from the bank, by which, as we understand, the bank obligated itself to refund the amount paid upon the happening of a certain contingency. It is, therefore, a matter resting upon an express contract; and now, when it has been determined that the contingency provided for has happened, there can be no doubt that the bank is bound to comply with its express promise.

The judgment of this court is, that the judgment of the Circuit Court be affirmed.

Mr. Chief Justice Simpson concurred.