American Mortg. Co. of Scotland v. Owens

• Decision Date: 04 February 1896
• Docket Number: 122.
• Citation: 72 F. 219
• Parties: AMERICAN MORTG. CO. OF SCOTLAND, Limited, v. OWENS et al.
• Court: U.S. Court of Appeals — Fourth Circuit

72 F. 219

AMERICAN MORTG. CO. OF SCOTLAND, Limited, v. OWENS et al.

No. 122.

United States Court of Appeals, Fourth Circuit.

February 4, 1896

Allen J. Green (John T. Sloan, Jr., on the brief), for appellant.

J. J Brown, for appellees.

Before FULLER, Circuit Justice, GOFF, Circuit Judge, and HUGHES District Judge.

GOFF Circuit Judge.

The appellant filed its bill in the circuit court for the district of South Carolina against Missouri A. Owens and Raymond Owens, praying for foreclosure of a mortgage made by said Missouri A. Owens, dated March 12, 1886, to secure the payment of the sum of $2,500, with interest thereon, as shown by her promissory note, payable to the appellant, the allegation of the bill being that the conditions of said note and mortgage had been broken by the failure to pay, when requested, the sum due on said note. The defendant Raymond Owens was made a party, because he was the husband of the maker of said mortgage. The bill charges that the consideration of the note was a loan of $2,500 to the said Missouri A. Owens, at her request, and that it was stipulated, in the contract relating thereto, that it was to be construed under the laws of the state of South Carolina. The answer sets up that defendant Missouri A. Owens is a married woman, and that her husband borrowed the money, for which the note was given, from W. H. Duncan and the Corbin Banking Company of New York, the agents of the complainant below, for his own use and purposes; that she, at her husband's request, executed the note and mortgage; that complainant, through its said agents, knew that her husband would, and did, use the money for the payment of his own debts, and for his individual purposes, and that she was not to receive, and did not receive, one dollar of said loan that no part of it was expended for her benefit, or for the benefit of her separate estate. The cause was duly matured for hearing, and submitted on bill, answer, exhibits, and testimony, when the court passed a decree dismissing the bill, and from that order the case comes here on appeal. The court below found that the loan was made to the husband for his own purposes, upon the security of his wife's note and mortgage, and that such a contract, as to the wife and her separate estate, was void, under the laws of South Carolina applicable thereto.

The question raised on this appeal involve the construction of the laws of that state relative to the contracts of married women, as well as the finding of the facts from the testimony, and their proper application to such laws. The constitution of South Carolina (article 14, Sec. 8) provides that:

'The real and personal property of a married woman held at the time of her marriage, or that which she may thereafter acquire, either by gift, grant, inheritance, devise or otherwise, shall not be subject to levy and sale for her husband's debts, but shall be held as her separate property, and may be bequeathed, devised or alienated by her, the same as if she were unmarried.'

An act of the general assembly (14 St.at Large, 325), passed in 1870, relative to the rights of married women, under such provision of the constitution, conferred upon them the same power to contract, and be contracted with, as if they were sole. Pelzer v. Campbell, 15 S.C. 581. In December, 1882, the general assembly of South Carolina passed an act, amending the act of 1870, which, as so amended, reads as follows:

'A married woman shall have the right to purchase any species of property in her own name, and to take proper legal conveyance therefor, and to contract and be contracted with as to her separate property in the same manner as if she were unmarried: provided, that the husband shall not be liable for the debts of the wife contracted prior to or after their marriage, except for her necessary support. ' Gen. St. 1882, Sec. 2037.

It is under this enactment that the contract in question is to be construed. It is certainly true that, under the common law, a married woman could not have made the note and mortgage now in suit. If they can be maintained, it must be by virtue of the constitutional provision and the legislative enactments before mentioned. The supreme court of South Carolina has given us the proper construction and true meaning of said provisions, so that it is now no longer an open question, whatever the diversity of opinion relative thereto may have formerly been. The only contract which a married woman, in South Carolina, is authorized to make must not only relate to her separate estate, but it must be in regard to her individual property. She may, in positive terms, in a writing signed by her, declare that her object is to bind her separate estate, and still she would not be bound by it, unless it was clearly shown that the contract was intended to benefit her separate property, or that it in fact concerned or had reference to such property. Under said legislation, a married woman cannot pledge her estate by mortgage, for the purpose of securing the contract of another, which has no reference to her separate property, even though that other be her husband. In the case of Bates v. Mortgage Co., 37 S.C. 88, 16 S.E. 883, the following language was used in the decree, which was affirmed by said court, in construing the legislation referred to:

'We think it is now the settled law of this state that it is necessary, in an action to enforce a contract executed by a married woman, to show that such contract was made with reference to her separate estate; that the burden of proof is upon the party seeking to enforce such contract; and that, while a married woman may borrow money for her own use, either directly, or by her husband, as her authorized agent, and secure the same by a valid mortgage of her separate estate, yet she cannot do this for the benefit of her husband, provided the lender has knowledge of such intended use when he makes the loan.'

In the case of Salinas v. Turner, 33 S.C. 231, 11 S.E. 702, Chief Justice Simpson, delivering the opinion of the court, said:

'Now, it has been held by this court, in several cases recently decided, that, while a married woman may borrow money for her own use, etc., and secure the same by a valid mortgage, yet that she cannot do this for the benefit of her husband, provided the lender has knowledge of such intended use. This has been so recently and so plainly decided that we do not deem it necessary here to examine into the reason and foundation of the proposition. We think it sufficient simply to refer to the cases, to wit: Tribble v. Poor (S.C.) 8 S.E. 541; Gwynn v. Gwynn (S.C.) 10 S.E. 221; Greig v. Smith, 29 S.C. 426, 7 S.E. 610. If these cases have not established this proposition beyond controversy or doubt, then we do not know how a legal proposition could be established; certainly not by the decisions of a court of last resort.' In the case of Greig v. Smith, supra, Judge McIver, in his opinion, says:

'If a married woman, either personally or through an agent, obtain advances, under a representation made in the instrument intended to secure such advances, that the same are to be used in carrying on business for herself, whether the same is to be conducted by herself personally or by an agent, she is estopped from afterwards denying such representation, as it would be a fraud upon the person making the advances; and, surely, the faithlessness of her agent, in misapplying the money advanced, cannot affect the rights of the person advancing the money, without it is shown that he participated in such misapplication. Where, however, a married woman executes an obligation to pay the debt of another, her intention to bind her separate property, though expressed in the clearest and strongest terms, does not estop her from disputing her legal liability for the payment of such debt, for the simple reason that the law has denied to her the power to contract such a debt, and therefore the

...