Appeal of Freeman

• Decision Date: 25 April 1899
• Citation: 71 Conn. 708,43 A. 185
• Court: Connecticut Supreme Court
• Parties: Appeal of FREEMAN.

43 A. 185

71 Conn. 708

Appeal of FREEMAN.

Supreme Court of Errors of Connecticut.

April 25, 1899.

Appeal from superior court, Hartford county; Samuel O. Prentice, Judge.

Appeal by Edward A. Freeman, trustee of the insolvent estate of H. Drusilla Mitchell, from the doings of the commissioners on the estate in allowing a claim, which amounted to $21,456.67, in favor of the American Exchange National Bank of Chicago, taken to the superior court. Judgment disallowing claim, and claimant appeals. Reversed.

The claim presented to the commissioners was for $20,000, described as money due In three ways: (1) By virtue of an agreement made by her and one George H. Mitchell on March 3, 1892; (2) on a note of January 15, 1894, made by them jointly for said sum, with interest; and (3) for cash loaned and laid out upon a guaranty made by them, dated March 3, 1892. It was also stated that the bank held a trust deed, as a partial security for the note, upon land in Chicago, of uncertain value. The statement of claim filed in the superior court on the appeal, after setting out the note, and describing the trust deed of Chicago land given for its security, alleged that the commissioners, after deducting the value of the security, allowed the balance of the claim; that subsequently, and since this appeal was taken, the trustee under the deed and the bank filed a bill of complaint in the circuit court of Cook county, Ill., upon which judgment was rendered that said land be sold, and the net proceeds paid over to the bank; and that on September 20, 1897, $11,601.41 was due to the bank on the note, and still remained unpaid. The appellant moved that the parts of this statement of claim referring to the Illinois suit and its results be struck out, because the same were "immaterial and impertinent, and relate to questions exclusively within the jurisdiction of the commissioners on said estate in the first instance, and then of this court on appeal from the doings of said commissioners." This motion was granted (R. Wheeler, J.). The trustee in insolvency then made answer that after March 3, 1892, the insolvent, at her domicile, in Bristol, Conn., signed with her husband, George H. Mitchell (now deceased), at his request, a written guaranty of that date to said bank to the extent of $20,000, of a certain indebtedness to it of two mercantile firms in which he was interested, which paper was by him sent by mail to Chicago, and delivered to the bank; that she also signed with him, and at his request, at Bristol, on January 15, 1894, the $20,000 note and trust deed, which were sent by mail by him to the bank at Chicago, to be held as collateral security for the obligations arising under the guaranty; and that Mrs. Mitchell had been the wife of said George H. Mitchell since 1875, and had always lived at Bristol. The answer also alleged that the two firms referred to in the statement of claim became insolvent and made assignments for the benefit of their creditors in 1893, and that the bank had received certain payments from them or their assignees, reducing in that year the indebtedness guarantied to $11,500. These last allegations were denied by the reply, and the others admitted. The reply also set out at length the proceedings in the Illinois suit. These showed that the suit was one in equity for a foreclosure, brought by the trustee under the trust deed and the bank on October 27, 1896, after the appeal in the present action, to a court of competent jurisdiction in Illinois, against sundry parties, including H. Drusilla Mitchell and the appellant, as the trustee of her estate in insolvency, praying for an account of the amount due under the terms of the deed, and that she, or some one of the defendants, might be decreed to pay the sum that might be so found due, and that in default of such payment the land embraced in the deed might be sold, and its proceeds applied upon said debt, and a foreclosure decreed, and execution issued against her for any deficiency, and for such other relief as to equity might pertain; that she and the trustee in insolvency had due notice, and appeared and filed an answer setting up, among other things, that she signed the note and trust deed at her residence, in Connecticut, at the request of her late husband, who was then a citizen and resident of that state, to secure an indebtedness incurred by the firm doing business in Chicago, of which he was a co-partner; that the note was delivered in Connecticut to the agent of the bank; that it was without consideration, so far as she was concerned; and that it was void, as to her, by virtue of the statutes of Connecticut, which provided that no married woman could become a surety for her husband, nor make any instrument, binding upon her, to secure his debt; that the master in chancery to whom the cause was referred made a report in favor of the complainants; that she and the appellant, as trustee in insolvency of her estate, filed objections to the report, for that the findings were contrary to the law of Connecticut, where the guaranty, note, and deed were executed; that these objections were overruled; that exceptions on the same grounds were taken to the report before the court, which were also overruled; that a decree was passed in June, 1897, confirming the report, finding an indebtedness of $23,168.41 to exist, which was secured by the deed, limiting 10 days for redemption, and in default thereof ordering a sale; that a sale was duly made and reported for the sum of $12,500, leaving a deficiency of $11,601.41 "to be paid by H. Drusilla Mitchell, and for which she is accountable"; and that a final decree was entered September 20, 1897, confirming the sale and report, and adjudging that the bank recover of her $11,601.41. An appeal was granted on the same day, on condition that a sufficient bond be filed, but none was filed. The reply further alleged that the subject-matter of the Illinois suit was the same as that set forth in the statement of claim in the present action, and that the Illinois judgment for $11,601.41 was the same as the present claim. To these allegations of the reply a demurrer was filed and sustained (Prentice, J.) because "the action described therein was begun, and decree and judgment in the same obtained, after the expiration of the time for the presentation of claims to said commissioners, and after the report of said commissioners allowing and disallowing claims against the estate of said insolvent debtor had been duly filed in the court of probate for the district of Bristol, and after this appeal had been taken therefrom to this court. Said judgment was not presented to, nor passed upon by, said commissioners." An agreed finding of facts was then filed, upon which judgment was rendered (Prentice, J.) disallowing the claim.

The following claims of law were made by the bank, and overruled: (1) That, upon the facts found, the bank is entitled to judgment for the amount of the difference between the sum received by said bank from the sale of the mortgage security, and the face of said mortgage note, with interest according to its terms; (2) that said mortgage note was delivered to said bank, at Chicago, in the state of Illinois, and is binding and valid under the laws of the state of Illinois; (3) that said guaranty was drawn at the bank, at Chicago, in the state of Illinois, by Mr. Morse, and was by him there delivered to said bank, and is binding and valid under the laws of the state of Illinois; (4) that said mortgage note of $20,000 and the mortgage securing the same, were delivered to said bank, at Chicago, in the state of Illinois, and affected the real estate in that state, and were drawn and were intended to conform to and be performed in that state, and in conformity to its laws; (5) that by the laws of the state of Illinois the said H. Drusilla Mitchell became liable to said American Exchange National Bank, whether or not she was a married woman, when she signed said guaranty and note; (6) that the rules of comity between the states apply, and the contract made under the circumstances disclosed in the finding is binding, and should be recognized by the courts in this state.

Charles H. Briscoe and W. A. Briscoe, for appellant.

Theodore M. Maltbie, for appellee.

BALDWIN, J. (after stating the facts). A claim against the estate of H. Drusilla Mitchell, an insolvent debtor, was presented by the American Exchange National Bank of Chicago, and allowed in full by the commissioners. A...