Baskett v. Rudy

• Decision Date: 12 December 1919
• Citation: 186 Ky. 208,217 S.W. 112
• Parties: BASKETT ET AL. v. RUDY.
• Court: Kentucky Court of Appeals

217 S.W. 112

186 Ky. 208

BASKETT ET AL. v. RUDY.

Court of Appeals of Kentucky.

December 12, 1919

Appeal from Circuit Court, Henderson County.

Action by the Ohio Valley Banking & Trust Company, as administrator of the estate of Jesse M. Baskett, deceased, against Rebecca G. Baskett and others, in which Lee Baskett, R. W. Nichols and J. B. Norment filed an intervening petition. Rebecca G Baskett died intestate, and the action was revived in the name of her administrator, and thereafter Nannie G. Rudy sole devisee under her will, entered appearance. From judgment dismissing petition of interveners, they appeal Nannie G. Rudy praying a cross-appeal from order overruling her motion to set aside submission and for continuance. Cause remanded, with directions to set aside judgment dismissing petition of interveners, with permission to the parties to make further preparation of the case.

Vance & Heilbronner, of Henderson, for appellants.

J. C. Worsham, of Henderson, for appellee.

HURT J.

Jesse M. Baskett died in the month of August, 1915. The Ohio Valley Banking & Trust Company qualified as his administrator, with the will annexed, and instituted an action in the circuit court against his widow and her creditors, for the settlement of his estate as an insolvent one. A few months previous to the death of the decedent, he and his wife, Rebecca G. Baskett, executed their joint promissory note to the Fidelity Mutual Life Insurance Company of Pennsylvania for the sum of $7,000, and to secure its payment executed a mortgage to the insurance company, upon two tracts of land, which was the property of Jesse M. Baskett, and four tracts of land, which was the property of Rebecca G. Baskett. The note, as well as the mortgage, was subscribed by each of them, the husband's name being first subscribed, and then underneath it the wife. Since the action to settle the estate of the husband, the insurance company, having been made a party defendant, filed its answer, in which it made a counterclaim against the administrator, and a cross-petition against Rebecca G. Baskett and the other defendants in the action, and sought a judgment against the administrator for the amount of its debt and the enforcement of its lien upon the two tracts of land embraced in the mortgage, which was the property of the decedent, but did not seek a judgment against Rebecca G. Baskett upon the note nor an enforcement of the mortgage lien upon the four tracts of land which were owned by her. The insurance company stated in its answer and cross-petition that decedent was the principal obligor in the note, and Rebecca G. Baskett, his wife, was a surety. A judgment was obtained against the administrator, and the lien of the mortgage was enforced against the lands, which were owned by decedent, and the sale of same resulted in producing a sum which was more than sufficient to satisfy the judgment. The appellants, Lee Baskett, R. W. Nichols, and J. B. Norment, were each sureties of the decedent, Jesse M. Baskett, in promissory notes which he was owing at the time of his death and were compelled to pay same. They filed in the action for the settlement of the estate of the decedent an intervening petition, as we presume, in which they alleged the indebtedness of the estate to each of them, respectively, and the manner of the creation of the indebtedness to each of them, and, further, alleged that the remaining assets were not sufficient to pay more than 10 per centum of their claim, and that the debt of the decedent and Rebecca G. Baskett to the Fidelity Mutual Life Insurance Company was a joint obligation, which obligated Rebecca G. Baskett to pay one-half of it, but that the estate of Jesse M. Baskett had been required to and had paid the entire debt, and prayed that they be subrogated to the lien which the insurance company had upon the lands of Rebecca G. Baskett, and that a sufficiency of her lands be sold to realize a sum equal to one-half of that debt, and that same be applied to the satisfaction of their debts and the debts of other general creditors. The petition of appellants was filed on January 26, 1917. On February 23, 1917, Rebecca G. Baskett filed an answer in which she denied liability on the note to the insurance company, upon the ground that at the time she subscribed her name to the note and executed the mortgage she was a married woman, and the wife of Jesse M. Baskett, who was the principal and real obligor in the note, and that she was only surety therein, and that she did not receive any part of the proceeds of the note, which was given by her husband to the insurance company, for a loan for his sole benefit, and that the loan was made to the husband, and that her execution of the mortgage upon her land was only to secure the payment of her husband's debt, and that same was done at his solicitation and with the knowledge of the obligee that she was only a surety. In a very few days after the filing of her answer, Rebecca G. Baskett died testate, and thereafter, on June 8th, the action was revived in the name of the administrator of Rebecca G. Baskett, and on the 26th day of September thereafter the appellee, Nannie G. Rudy, who is the sole devisee under the will of Rebecca G. Baskett, entered her appearance, and filed an answer, adopting the denials and averments of the answer of her devisor as her answer to the petition of appellants. The appellants did not reply to the answer of appellee until the 19th day of January, 1918, when they denied its affirmative allegations. The appellee, after the filing of her answer, took the deposition of several witnesses in an endeavor to prove that Rebecca G. Baskett was only a surety in the note, and not a principal, and that she received no part of the loan for which the note was given, nor was the same executed for her benefit, and in February, 1918, the exact time the record does not disclose, but previous to the 14th day of that month, the action was submitted for trial, and the court took the decision under advisement, but on the 14th day of February, 1918, the appellees entered a motion to set aside the submission of the case and to continue it, and as a ground upon which to base the motion she filed her affidavit, in which she stated her desire to take the depositions of certain witnesses whom she had discovered upon the previous day. On the 2d day of March following, the motion of appellee to set aside the submission and to continue the case was overruled, and the appellant's petition was then dismissed. From the judgment, dismissing their petition, the appellants have appealed. The appellee excepted to the judgment of the court overruling her motion to set aside the submission and for continuance, and from that order she has prayed a cross-appeal.

(a) In support of their contention that Rebecca G. Baskett was a principal with her husband in the execution of the note and mortgage, and they were executed and the money obtained for their joint benefit, the appellants rely solely upon the fact that there is an entire absence of anything in either the note or mortgage to indicate that she was a surety. Such state of facts appearing, the burden of proving that Rebecca G. Baskett was only a surety, and that the note was not executed for her benefit, is cast upon the appellee, as under the provisions of section 2128 of the Kentucky Statutes a married woman has power to make contracts, except in regard to the sale or incumbrance of her real estate, and to bind her property as though she were unmarried, and when she receives the money obtained upon a note executed jointly by her and her husband she is liable therefor as a principal, because it is a contract for her benefit and in reality constitutes her contract, and for her own contracts her property may be subjected to their satisfaction. However, section 2127 of the Kentucky Statutes prevents the wife's property from being subjected to the payment of persons' debts other than her own, and saves her from liability as a surety for any person, unless her estate shall have been set apart for that purpose by deed of mortgage or other conveyance. Third National Bank v. Tierney, 128 Ky. 845, 110 S.W. 293, 33 Ky. Law Rep. 418, 18 L. R. A. (N. S.) 81; Swearingen v. Tyler, 132 Ky. 465, 116 S.W. 331; Hart v. Bank of Russellville, 127 Ky. 424, 105 S.W. 934, 32 Ky. Law Rep. 338; Thomas v. Boston Banking Co., 157 Ky. 473, 163 S.W. 480.

A surety may, however, show by parol or other competent and relevant evidence the true state of facts, and that he is only a surety, although the writing executed by him appears to be a joint and several obligation, and does not show upon its face that he is other than a principal, and a married woman, who subscribes a promissory note in the attempt to become a surety of her husband, may show that fact and be released from liability, although upon the face of the note there is nothing to indicate that she is other than a joint principal in the note, and this can be done by any competent evidence which shows the true state of facts, and that the note was not executed for her benefit, but that of her husband, and that she did not receive the proceeds of the loan or the consideration for the execution of the note. Emmons v. Overton, 18 B. Mon. 648; Lewis v Harbin, 5 B. Mon. 564; Skinner v. Lynn, 51 S.W. 167, 21 Ky. Law Rep. 185; Black v. McCarley's Ex'r, 126 Ky. 825, 104 S.W. 987, 31 Ky. Law Rep. 1198; Crumbaugh...