National Granite Bank v. Tyndale

Morton, J. These two cases were argued together. The first is an action at law, and was before this court on the defendant’s exceptions in 173 Mass. 517, and it was there held that the maker of the notes being a married woman, and the notes being made payable to the order of her husband and indorsed by him, no action could be maintained on them against her. It — 549 — comes before us now on exceptions by the plaintiff to a ruling by the presiding justice that upon the plaintiff’s offer of proof an action could not be maintained against the administrator on the common counts for money lent or for money had and received, and to a ruling that the plaintiff was not entitled to avail itself of the facts set up in the bill in equity in answer to the defence that the notes were void because made payable to the husband of the defendant’s intestate. The plaintiff offered to show that on December 29, 1891, it lent the defendant’s intestate $15,000, and that at the same time the defendant’s intestate gave the plaintiff three promissory notes for $15,000, payable to the order of her husband and indorsed by him and by two other parties; that subsequently the defendant’s intestate repudiated the notes on the ground that, having been made payable to her husband and indorsed by him, they were void; and that the plaintiff had expressly refused to make the loan to the other parties or on their individual credit, and made the loan only to the defendant’s intestate and on her credit. We think that the ruling was erroneous. The offer was to show that the loan was made to the defendant’s intestate and on her credit. This was consistent with the form of the note, of which she was the maker, and of which the other parties were, as between them and the bank, the indorsers. Lewis v. Monahan, 173 Mass. 122. The fact that the note was declared void as to her did not destroy the original transaction or avoid the debt created by the loan to her. Walker v. Mayo, 143 Mass. 42. Sutton v. Toomer, 7 B. & C. 416. If the other parties to the note had been co-makers with her, and the loan had been made to all of them, and the note bad afterwards been avoided by one of them, there would seem to be no doubt that the payee could have maintained an action against all of them for money had and received or money lent. Leonard v. First Congregational Society in Taunton, 2 Cush. 462. In such a case, the note having been received on the faith that it was the valid note of all, the payee would be “ warranted in treating it as a nullity, and resorting to the original contract.” Leonard v. First Congregational Society in Taunton, ubi supra. A fortiori ought that to be the case when the liability of the other parties is, as here, collateral and the action is brought against the maker — 550 — alone. It is true that the plaintiff could have treated the note as valid as against the other parties, and that if the plaintiff had sued and recovered against the last indorser, for instance, the husband might have been estopped in an action against him by a subsequent indorser to deny the validity of the note. Roby v. Phelan, 118 Mass. 541. But this action is not against the indorsers, and the counts that we are considering are not upon the note. The only use of the note which the plaintiff can make in relying on those counts is as evidence tending to show the terms on which the loan was made to the defendant’s intestate. It cannot recover upon the note and the common counts both; and so far as it relies upon the common counts it must be taken to rely upon the original contract with the maker of the note, and, therefore, to have elected to treat the note as a nullity. In such a case the plaintiff would have no ground of recovery against parties whose only liability as between them and the bank is that of indorsers on the note. The plaintiff contends, however, that it is entitled to be relieved in equity against the defence that the notes are void because made payable by the defendant’s intestate to her husband. Its contention is, in substance, that the defendant’s intestate, having received and kept the proceeds of the notes, is estopped in equity to deny their validity. But a party cannot be relieved in equity, we think, by reason of an estoppel any more than at law, from the effect of a positive rule of law. It is the rule of law that controls the conduct of parties, not the conduct of parties the rule of law. To hold otherwise would be to permit parties to set aside at their pleasure, with the aid of a court of equity, the rule of the common law which has been declared and recognized by the Legislature and by this co,urt that contracts between husband and wife are void. It is true that under some circumstances, as, for instance, in the case of trusts and contracts made in contemplation of marriage, contracts between husband and wife have been enforced in equity. See Frankel v. Frankel, 173 Mass. 214. But in this Commonwealth, whatever may be the rule elsewhere, it never has been held that validity could be given to contracts between husband and wife, or in the analogous case of contracts made during minority, by means of the doctrine of equitable estoppel. See — 551 — Fowle v. Torrey, 135 Mass. 87; Baker v. Stone, 136 Mass. 405; Woodward v. Spurr, 141 Mass. 283 ; Clark v. Patterson, 158 Mass. 388. Moreover, there is no allegation in the bill of any conduct or representation, fraudulent or otherwise, on the part of the defend^ ant’s intestate whereby the plaintiff was induced to take the notes and part with its money to her, and thus the very foundation of an estoppel, equitable or otherwise, fails. It is consistent with the allegations in the bill that the plaintiff knew that the defendant’s intestate was the wife of the payee, and acted in regard to the transaction on its own knowledge. It is manifest that the fact that the notes are void does not of itself entitle the plaintiff to relief. Equity does not undertake to afford relief in all cases where contracts are for any reason void in the form in which they have been entered into. The result is that in the action at law we think the exceptions should be sustained, and that in the bill in equity the decree sustaining the demurrer and dismissing the bill with costs should be affirmed. So ordered.-