Berwick v. Frere

The opinion of the court was delivered by Nicholls, C. J. It is claimed on behalf of Suthon and the executor of McCan that Mrs. James D. Capron became indebted to McCan in the sum of ten thousand dollars and interest through a loan made to her on the seventh day of February, 1890, on the faith of the certificate or order of the District Judge of the court of her residence, authorizing her to contract said loan, and that said loan was legally secured under the same authorization by special mortgage on her undivided half of the plantation owned jointly between herself and husband, and cultivated as a sugar plantation; that she legally sold [210] her interest to McCan through McMurdo (acting on his behalf) in payment of her indebtedness; that her husband having sold his undivided half also to McMurdo (for McCan) the latter then becoming the owner of the entire property, sold the same to plaintiff’s husband, the price being secured by mortgage; that said sale was legal, and that plaintiff, through her own sale to McCan, divested herself of all interest in the premises; that if the sale should be set aside McCan should be reinstated in bis position, quoad Mrs. Capron and the property to the position which he occupied prior to her sale. The property in question at the time of the loan made by McCan was as to one undivided half of the paraphernal property of the wife of James D. Capron. The other undivided half belonged to the husband, he having acquired it from his wife’s sister. At the time of the loan the husband’s half was struck by a special mortgage and vendor’s privilege securing notes given by the purchaser to his vendor. The property had been cultivated for some years as a sugar plantation, and the wife had for several years, under the authorization of the judge, mortgaged her undivided half to different factors to assist in carrying on the place. On February 7, 1890, D. C. McCan made the loan which has given rise to this litigation. On the face of the papers McCan appears to have loaned Mrs. Capron ten thousand dollars, for which he executed notes and secured the same by special mortgage on her undivided half of the property. On the face of the papers James D. Capron secured the whole amount by mortgage on his half. It is urged that McCan is protected by the authorization of the judgw to the wife from the attack she makes in this case. The mere fact that a married woman has been authorized by the judge to contract a debt of ten thousand dollars does not necessarily conclusively bind her if she subsequently undertakes to bind herself for that amount. The certificate of the judge shifts the burden of proof as to the character of the engagement. An examination of the act of mortgage between McCan, James D. Capron and Mrs. Capron satisfies us that the act does not truly disclose the relations of the parties to it. We are of the opinion that on its face, knowledge was brought home to McCan that Capron and wife owned the plantation jointly in equal, proportions; that the money about to be borrowed was intended to be used for the purpose of cultivating the plantation that year; that the lender knew that the [211] husband was really carrying on the whole place for and on behalf of the community. The husband’s half at that time, as we have said, was encumbered by a special mortgage. It was important that whatever advances should be made should, if possible, be secured to their full extent by mortgage. It was evidently supposed that under and through the wife’s authorization the lender would be protected on her half of the property to the full amount which she was authorized to borrow, but if not, then by making the husband secure it in its entirety by a second mortgage on his own behalf, McCan would still occupy a safe position. Matters were made to take that shape, but we think that the act bears intrinsic evidence that McCan was not dealing with James D. Capron really as a surety; that he was dealing with the husband as a principal, and that she was really mortgaging her property for her husband’s debts. (Moore vs. Staneel, 36 An. 824.) Defendants say that McCan did not occupy the position of factor toward James D. Capron; that he was simply an “ out and out” lender of money to Mrs. Capron, and that the mortgage was a “ flat” mortgage. If this be true what means that portion of the act in which it is declared that “it was expressly agreed and understood that McOan should have the exclusive right to apply the net proceeds of sale of all products shipped and all payments made to him to the payment of any indebtedness which may be due now, or which may hereafter become due to him by said ‘mortgagors,’ whether upon an ‘open account’ or to the debt secured and intended to be secured by these presents according to his view of the case; that such application might be made at such times and in such manner as he might elect; that no application of such proceeds of sales or money to the payment of an indebtedness on an open account which may at any time be due to him by the said ‘ mortgagors ’ shall impair, lessen or prejudice the indebtedness evidenced by notes and secured or intended to be secured by this instrument or the security herein and hereby provided for, and that said mortgagee shall have the full and undisputed right to impute payment as he may determine to whatsoever debt may be due by said' ‘mortgagors.’ ” What “ debts made by open account,” what “debts due by mortgagors,” are here referred to? Certainly not any due by her. It is very true that a husband may become a surety for his wife; (it has been so held), but we think the term of the mortgage act point [212] unmistakably to the fact that the form in which this act was drawn was resorted to simply as a means to enable the lender to get secured on the wife’s property for debts of her husband. On the face of the papers the crop (the means by which the District Court contemplated that any liability to be incurred under his certificate was to be paid) was expressly authorized to be taken from her and applied to her husband’s debts, either upon open account or otherwise, leaving her property utterly without protection. What effect did the acts between McMurdo and her husband and between McMurdo and herself have upon the situation ? It is conceded that McMurdo and McOan are to be taken and considered as one and the same person. We think that the two acts of sale (those to McMurdo and that of McMurdo to Oapron, the husband) are to be read together and as forming one continuous transaction. Were the acts of sale from Mrs. Oapron to McMurdo, and from McMurdo to James D. Oapron, intended really as sales, or were they merely resorted to in order to place the matter in more satisfactory form than they had been in before? What was the object and what the motive of these acts, and what did they rest on? At that time McOan held the notes secured by special mortgage and vendor’s privilege on Capron’s half of the property. It was thought best that the property should be made to stand in its entirety in the name of Oapron, the husband, and that the indebtedness should appear what it really was, an indebtedness due by himself, but the apparent mortgage to McOan, indebtedness of the wife was made use of as an instrumentality by which to shift ownership from herself to her husband and mask the character of the wife’s connection with the debt. We are of the opinion that the sale from Mrs. Capron. to McMurdo can not stand, there being no legal consideration for the same, and that sale being the basis of the sale to Capron from McMurdo of Mrs. Capron’s half of the property, the sale of that undivided half to Capron falls also. We do not think that the plaintiff, Walter J. Suthon, occupies a better position than does the succession of McCan. We think his knowledge of the situation (although he may have drawn erroneous conclusions from it) effectually prevents his pleading that the equities have been cut off in his favor. [213] We are of the opinion that the judgment appealed from is erroneous. It is ordered, adjudged and decreed that the judgment appealed from be and the same is hereby annulled, avoided and reversed; and it is now ordered, adjudged and decreed that Mrs. Mary Berwick, wife of James D. Capron, be and she is recognized and declared to be the owner of the undivided half of the plantation seized herein and described in the pleadings, and she is restored to the possession and enjoyment of the same, free from the encumbrances placed upon it by her husband, James D. Capron, in favor of D. C. MeCan or Charles McMurdo, the said mortgage being declared to be null, void and of no effect as against said undivided half of said property. It is also ordered, adjudged and decreed that the sale of the undivided half of said property, made on the 18th of April, 1898, by act before John J. Ward, notary public, by Mrs. Mary Berwick, wife of James D. Oapron, to Charles J. McMurdo, and the sale made by Charles J. McMurdo on the same day, before the same notary, to James D. Oapron, of the undivided half of said property herein adjudged to be the property of said Mrs. Mary Berwick, wife of James D. Oapron, be and the same are hereby decreed null, void and of no effect. It is further ordered that the injunction herein issued be and the ■same is reinstated and the same is now perpetuated. Rehearing refused January 4, 1897.