Scottish American Mortgage Co. v. Deas

The opinion of the court was delivered by Mit. Chief Justice MoIver. The action in this case was for the foreclosure of a mortgage of real estate given by the defendant, Mrs. Mary R. Deas, to the plaintiff to secure the payment of sundry notes executed by her in favor of the plaintiff. This mortgage and these notes, bearing date 15th of March, 1884, it is admitted, were executed by Mrs. Deas, but she being a married woman at the time, the defence is, that the contract evidenced by these papers was not such an one as she was capable — 49 — of making at the time, under the law as it then stood. The contract in question was made to secure the repayment of money borrowed from the plaintiff, and one of the important inquiries in the case is whether this money was borrowed by Mrs. Deas or by her husband. It seems that under the usage of the plaintiff this money was loaned upon a written application, a copy of which is set out in the “Case,” signed “Mary R. Deas,” though the testimony shows that she did not in person sign her name, but the same was signed by her husband and co defendant, Allen Deas; but the testimony likewise shows, or at least tends to show,' that the signatures of husband and wife resembled each other so much that one not familiar with them might readily take one for the other. This written application, amongst other items therein stated, gives the name of the borrower as “Mary R. Deas,” and the husband’s name as “Allen Deas.” It also states that the borrower has certain specified stock on the land — horses, cows, mules, and hogs; and in response to the inquiry whether the land proposed to be mortgaged to the plaintiff is entirely free from encumbrance, the answer is, “No; small balance on mortgage given to get advances. Will pay same out of portion of funds.” And in response to the inquiry whether the land is “leased to any one, or has any person a right of possession thereof aside from yourself?” the answer is, “No.” It is undisputed that the money borrowed from plaintiff, or much the greater part of it, was used to pay a debt secured by a prior mortgage of the same land to II. Gr. Carrison, the small balance of the amount loaned being appropriated to the payment of insurance and the expense of negotiating the loan by plaintiff. The mortgage to Carrison was executed on-the 1st of February, 1883, by Allen Deas and Mary R. Deas, his wife, and is combined with a lien on the crops, as well as a mortgage on certain personal property — horses and mules. This lien and mortgage recites that the party of the first part, Carrison, agrees to advance to the parties of the second part, Allen Deas and Mary R. Deas, money and supplies “to enable them to carry on their agricultural operations.” The case was referred to the master simply to take and report the testimony. The only oral testimony taken by the master is — 50 — that of Allen Deas and his wife. From this testimony there can be no doubt that the land covered by the mortgage sought to be foreclosed ivas the separate property of Mrs. Deas, and the real question in this case is, whether her separate property can be held liable for the payment of the debt secured by the mortgage to the plaintiff. 1 While there can be no doubt that Mrs. Deas executed the papers evidencing and securing the mortgage debt, yet that alone would not be sufficient to bind her separate estate; the plaintiff must go further and show that the contract was made with reference to her separate estate. This question of the liability of a married woman upon a contract, after the amendment of 1882, and before the act of 1887 was passed, has been so often before this court recently that it cannot be necessary now to go into any discussion of the law upon the subject. It will be sufficient to quote from one of the most recent cases, what must now be regarded as the settled law7 upon the subject. In Hibernia Savings Institution v. Luhn (34 S. C., 184), after citing numerous cases, it is said: “It must be regarded as settled that where a married woman, either directly or through her agent, borrows money from another, the money so borrowed becomes at once a part of her separate estate, and her contract to repay the same is a contract with reference to her separate estate, which may be enforced against her; and that the lender, in the absence of notice to the contrary, has a right to assume that the money was borrowed for the use of the married woman, and she is estopped from denying that fact, unless it is shown that the lender had notice to the contrary.” 2 As in the case just quoted from, it seems to us-that in view of this well settled law, the material inquiries in this case are: 1st. Whether the money secured by the mortgage to plaintiff was borrowed for the use of Mrs. Deas. 2nd. If not, whether the plaintiff, at the time of the loan, had any notice that it was borrowed for the use of her husband. While it is true that the testimony shows that though the written application for the loan was signed “Mary R. Deas,” yet in fact her name was not signed by her in person, but was signed by her husband without her previous knowledge or direct authority, yet — 51 — it is equally manifest that the husband supposed that he had his wife’s authority to sign her name, for he says, “I signed Mrs. Deas’s application for the loan myself. In matters of importance she signed for herself; not considering that of sufficient importance, I signed for her. When I brought the papers for her signature, she first knew of the loan, but I had explained a short time before I brought her the papers about the loan.” And Mrs. Deas in her testimony says, “When my husband brought the notes and mortgage for me to sign, I knew it was to borrow money from the Scotch Loan Company at the time I signed the notes and mortgage.” And again she says, “Mr. Deas always managed my business in this county since I was married. I gave no written or verbal consent.” It is clear, therefore, that although Mrs. Deas may not have previously given her husband any express authority to sign her name to the application for the loan, that he had her implied authority to manage all of her business, and after he had signed her name to the writtern application for the loan, she expressly ratified and confirmed his act by executing in her own person the papers required in pursuance of the application for the loan. Any other view would, it seems to us, convict Allen Deas of attempting a fraud upon his wife, as well as upon the plaintiff, by forging her name to the application for the loan — a view which certainly cannot be accepted, If, therefore, Mrs. Deas must be regarded as having subsequently ratified the previously unauthorized act of her husband in signing her name to the application for the loan, it is thé same as if she had expressly authorized the signing of her name, and she is bound by the statements contained in such application. From these statements the plaintiff was fully justified in supposing that the money was borrowed by Mrs. Deas for her own use, for she is expressly named as the borrower, and that the money was borrowed for her own use, as the statement is that the money was to be used, in part at least, to remove an encumbrance from her land. It seems to us clear that Allen Deas must be regarded as the agent of his wife in negotiating this loan from the plaintiff; for although they both testify that the husband was never appointed agent of his wife, yet from all the testimony, it is very obvious — 52 — that what they really meant was, as Mrs. Deas says, that she never ‘‘verbally or in writing” constituted Allen Deas her agent to negotiate this loan — that is, that he had never in express terms been appointed her agent. Yet as it is undoubtedly true that agency may be, and often 'is, established by circumstances as well as by direct and express evidence, we think it cannot bo doubted from all the circumstances that Allen Deas was not only the general agent of his wife in transacting all of her business, but his agency in this particular transaction was expressly recognized by her when she executed the notes and mortgage and gave them to her husband to be delivered to the plaintiff. In this respect this case is very similar to that of the Hibernia Savings Institution v. Luhn (34 S. C., 176, supra), which had not been published when the Circuit Judge rendered his decree in this case. 3 It is contended, however, by respondents that even if this be so, yet as plaintiff, through its agent, had notice that the money was borrowed for the purpose of paying the mortgage debt to Carrison, which it is claimed was a debt of the husband and not of the wife, the separate estate of the wife cannot be held liable under the rule laid down above. This renders it necessary to inquire whether the Carrison debt was a debt of the husband, and so known to the plaintiff or its agent. It seems to us that the testimony unmistakably shows the contrary. In the first place, the representation made in the application for the loan, which, as we have seen, must be regarded as a representation of the wife, was that the money was borrowed, in part at least, for the purpose of removing an encumbrance on her separate estate, which the testimony shows was the Carrison mortgage, and the terms of that mortgage, together with the testimony of both husband and wife, show beyond all dispute that the Carrison debt was the debt of the wife and not of the husband, being contracted for supplies furnished to and used upon her plantation — not rented by the husband from the wife, but managed by him for the benefit of the family. Mrs. Deas says: “Mr. Deas always managed my business in this county since I was married. I, gave no written or verbal consent. I consented as a wife consents to her husband taking charge of her property. I knew that Mr. Deas was insolvent — 53 — and owned no property. Had no verbal or written lease from Mr. Deas of the land; he managed the business for me.” Allen Deas says, “I was insolvent at the time I was married, December 19, 1878. I have lived upon this land with my family since that time. I have managed the property for my wife and attended all business matters for her ; never leased the place from her.” Now if, as this testimony shows, Allen Deas never rented this land from his wife, but, on the contrary, managed it for her, it would seem that the supplies furnished by Carrison to “run the place,” would constitute a debt of the wife contracted as to her separate estate, through her manager or agent, her husband, for which she would be liable; and money borrowed by her to pay such debt, to remove the encumbrance upon her separate estate, would constitute a debt for which she would be liable. Wallace v. Carter, 32 S. C., 314; Chambers v. Bookman, Ibid., 455. 4 Under the view which we have taken of the case, the constitutional question presented by the seventh ground of appeal does not necessarily arise, and need not therefore be considered. While this court undoubtedly has the power to declare an act of the legislature unconstitutional, and for that reason void, yet the exercise of such a power is a delicate matter, sLnd it should not be done unnecessarily ; especially where, as in this case, the court was not full when the question was presented. It seems to us that the Circuit Judge, in view of the facts and the law applicable thereto, erred in holding that the contract here sought to be enforced was not such a contract as a married woman was capable of making, and for that reason adjudging that the complaint be dismissed. The judgment of this court is, that the judgment of the Circuit Court be reversed, and the case be remanded to that court for the purpose of carrying out the views herein announced.