CIT Corporation v. Sanderson

• Decision Date: 25 August 1930
• Docket Number: No. 4119.,4119.
• Citation: 43 F.2d 985
• Parties: C. I. T. CORPORATION v. SANDERSON.
• Court: U.S. District Court — District of Idaho

43 F.2d 985 (1930)

C. I. T. CORPORATION v. SANDERSON.

No. 4119.

District Court, D. Idaho, E. D.

August 25, 1930.

L. E. Glennon, of Salmon, Idaho, for petitioner.

Ralph Albaugh, of Idaho Falls, Idaho, for respondent.

CAVANAH, District Judge.

The C. I. T. Corporation, a California corporation, files its involuntary petition in bankruptcy against Maude C. Sanderson, a married woman, praying that she be adjudged a bankrupt upon the ground that she is insolvent, and while so has committed acts of bankruptcy in conveying, within four months preceding the filing of the petition, certain real property owned by her in her own name and as her sole property, for the purpose and with the intent to defraud petitioner, her principal creditor, and preferring the Pacific Finance Corporation, another of her creditors.

The indebtedness of the bankrupt to the petitioner arises out of an alleged liability as a guarantor on a written instrument signed by her while she was residing in Idaho in which she, with others, in consideration of an extension of credit to the Sanderson Motor Car Company guaranteed the payment of all sums advanced by petitioner to the Sanderson Motor Car Company. After the instrument was signed by her and three other persons in Idaho, guarantors, it was forwarded by them to the petitioner at San Francisco, Cal., who accepted it, and thereafter advances of money were made by petitioner to the Sanderson Motor Car Company in the sum of $17,426.32, which is unpaid for the reason of the insolvency and inability of the Sanderson Motor Car Company to meet its financial obligations.

Since the petition has been amended there remains but one question for decision on the motion to dismiss, which is: Whether a contract signed by a married woman, resident and domiciled in the state of Idaho, and forwarded for acceptance and completion to the other party thereto in the state of California, shall be enforced in the state of Idaho, although such contract would be invalid if governed by the laws of Idaho. It seems settled under the laws of Idaho that the disability of a married woman to enter into contracts has not been removed except where she contracts for her own use or benefit or in reference to the management and control or for the use and benefit of her separate property. Bank of Commerce v. Baldwin, 12 Idaho, 202, 85 P. 497; Meir & Frank Co. v. Bruce, 30 Idaho, 732, 168 P. 5. While under the laws of the state of California the rule is to the contrary, for a married woman there may bind herself by contract even though the transaction does not respect her separate property. California (Civil) Code, vol. 1, § 158; Wood v. Orford, 52 Cal. 412; Goad v. Moulton, 67 Cal. 536, 8 P. 63; Burkle v. Levy, 70 Cal. 250, 11 P. 643. And such is the case where she enters into a contract as surety or guarantor. Anderson v. Shaffer, 98 Cal. App. 457, 277 P. 185; Stafford v. Hill, 53 Cal. App. 337, 200 P. 33.

The current of authority is fairly uniform in holding that the validity of a contract is to be determined by the law of the state in which it is made; if it is invalid where made, it is invalid everywhere. In Scudder v. Union National Bank, 91 U. S. 406, 412, 23 L. Ed. 245, this principle is clearly stated: "Matters bearing upon the execution, the interpretation, and the validity of a contract are determined by the law of the place where the contract is made. Matters connected with its performance are regulated by the law prevailing at the place of performance. Matters respecting the remedy, such as the bringing of suits, admissibility of evidence, statutes of limitation, depend upon the law of the place where the suit is brought." Andrews v. Pond, 13 Pet. 65, 10 L. Ed. 61. Milliken v. Pratt, 125 Mass. 374, 28 Am. Rep. 241; International Harvester Co. v. McAdam, 142 Wis. 114, 124 N. W. 1042, 26 L. R. A. (N. S.) 774, 20 Ann. Cas. 614.

The chief contention of the petitioner is that although the bankrupt was a resident and domiciled in the state of Idaho at the time she signed the guaranty contract, yet it contains a provision that "it is to be construed according to the laws of the state of California," and that its execution was not completed until accepted by the petitioner in California, which fixes the place of its entering into in that state. To make it a complete contract it had to be accepted by the C. I. T. Corporation, which was done in the state of California. The final acceptance of the guaranty contract by the petitioner was an act in contemplation of every person who signed it, was a necessary step to complete the execution of it by the guarantors, and to make it...