Frank v. Lilienfeld

• Decision Date: 05 August 1880
• Citation: 74 Va. 377
• Court: Virginia Supreme Court
• Parties: FRANK & ADLER v. LILIENFELD & als.

74 Va. 377

FRANK & ADLER v. LILIENFELD & als.

Supreme Court of Appeals of Virginia.

August 5, 1880

Absent Moncure, P.

I. A husband, who was a merchant, wishing to purchase a certain small lot of goods from another merchant, obtained from his wife, who had a separate estate, to secure the payment of the purchase money, an endorsement of a printed form of a negotiable note. The date, time and place of payment, amount and name of payee, were all left blank at the time of the delivery of said endorsed blank note by the wife to the husband. The husband failed to make this purchase, and some time thereafter, and when the wife says she thought the blank endorsed paper had been destroyed, he went to another city and purchased from other parties a much larger amount of goods than was contemplated at the time of the endorsement. These last parties names were then inserted by their clerk as payees, and the note filled up as to amount, date, time place of payment, & c., to suit the purchase as made from them--they being ignorant of the purpose for which the note was first signed by the wife and delivered to the husband. The note was protested for non-payment. On a bill filed by the payees to subject the separate estate of the wife to its payment--HELD:

1. The wife is bound by the endorsement. The authority implied by a signature to a blank note, and the credit given, are so extensive, that the party so signing will be bound, although the holder was only authorized to use it for one purpose and has perverted it to another. But the holder cannot alter the material terms of the instrument by erasing what is written or printed as part of the same; or pervert its scope and meaning by filling blanks and stipulations repugnant to what is clearly expressed in the note before it was delivered by the endorser in blank.

2. To invalidate the title of the holder of a negotiable instrument, endorsed in blank, acquired in due course of trade, and before maturity, it is not sufficient to show circumstances in the acquisition of the note affecting the holder with mere suspicion, or that he was guilty of gross negligence; but it is necessary to show that he was guilty of fraud. This is not proved against the holders of the note in this case.

3. Instead of inserting the wife's name as payee in the note, the holders put in their own names. This is merely matter of form, does not make the wife a second endorser to the holders, or affect in any way her liability to them on said note.

II. The property settled on the wife belonged to her before her marriage, and consisted of realty and personalty--the personalty being her interest in a former husband's stock of goods, debts due, & c., worth ten thousand dollars. The provisions of the deed conferring on the wife the amplest power over the property, is followed by a clause which directs that the trustee " shall sell, convey, transfer and deliver all or any portion of the property, estate or effects conveyed, and the rents, issues and profits thereof to such person or persons as the wife may direct by a writing, signed by her and attested by two witnesses." HELD:

1. The wife must be regarded in equity as the absolute owner, with all the powers of a feme sole over them, of the personal property and rents and profits of the realty conveyed by the deed with power to dispose of the corpus of the realty by her sole act in the mode prescribed by the deed, or, if that is not exclusive, by the joint deed of herself and her husband.

2. The separate estate of the wife is liable to the payment of the debt, but the engagement of the wife being a general one, and not a specific lien (which must be created on the realty in the mode prescribed for its absolute sale) the personal property and the rents and profits of the realty only are liable to be subjected to its payments.

III. Where the object of a bill is merely to subject the separate estate of a wife, and her husband is made a formal party only, she is a competent witness in the case, and the plaintiffs are also. And an answer filed by the husband although responsive to the bill, cannot be used as evidence for the wife and against the plaintiffs, whilst that filed by her can be so used, so far as its statements are responsive, and based on facts within her own knowledge.

This case was heard in Richmond but was decided at Wytheville. It was a suit in equity in the chancery court of the city of Richmond brought by Frank & Adler, partners, to subject the separate estate of Janette Lilienfeld to the payment of a negotiable note for $628.66 made by her husband S. B. Lilienfeld and which the plaintiffs claimed was endorsed by her for his accommodation. The bill was dismissed by the court below; and thereupon Frank & Adler applied to a judge of this court for an appeal; which was awarded. The case is stated by Judge Burks in his opinion.

John S. Wise, for the appellants.

E. Y. Cannon, for the appellees.

OPINION

BURKS, J.

Before proceeding to the consideration of this case on its merits, several preliminary matters must be disposed of.

1. The exception to the deposition of Mrs. Lilienfeld on the ground of her alleged incompetency as a witness.

The rule at common law that husband and wife are not allowed to testify either for or against each other is not altered, but expressly retained by our statute removing disqualification of witnesses on account of interest. Code of 1873, ch. 172, §§ 21, 22. But Mrs. Lilienfeld did not depose for her husband, nor against him. She deposed wholly in her own behalf, and her evidence does not, and cannot effect him. It is true, he is a party to the suit, but for the sake of conformity merely. The sole object of the bill is to reach her separate estate. He has no legal interest in the subject matter. No relief is sought, nor could any decree be rendered against him in the cause. He does not dispute his personal liability on the note in controversy, and the remedy at law as to him is complete. The exception must be overruled.

2. It follows, that the exception to the depositions of the complainants, Frank & Adler, must also be overruled, as they are not incompetent to testify unless Mrs. Lilienfeld be so.

3. The counsel of Mrs. Lilienfeld claims that the answer of her husband to the bill is responsive, and therefore evidence for her against the complainants.

The refutation of this pretension is furnished by the facts already stated. The husband, although made a party for the sake of conformity, has no legal interest in the cause, and no discovery from him nor relief against him is asked; nor upon the case stated in the pleadings and made by the proofs could any personal decree be rendered against him. Besides, the interest of the wife is adverse to her husband. They filed separate answers, and the separate answer of one defendant cannot be used as evidence in the cause either for or against a co-defendant. Such is the general rule. There are some exceptions in cases of joint interest, privity, and the like, but this case does not fall within any of those exceptions. On the contrary, the relation of the parties, (that of husband and wife), with an adverse interest in the wife, would seem to render the application of the general rule peculiarly proper. Whether a bill against several defendants, having no interest in common, and without privity of any sort, may not be so framed, in relation to the discovery and relief prayed, as to render the answer of one defendant, which is responsive to the bill and unfavorable to the complainant, evidence against the latter in favor of a co-defendant, is a question not presented by the case we now have to deal with, and therefore need not be determined. 3 Greenleaf's Ev., § 283 and notes; 1 Dan. Ch. Prac. (4th Perk. Ed.), 841 note 7; Id. 843, note 7; Pettit v. Jennings and others, 2 Rob. R. (Va.) 676; Morriss v. Nixon, 1 How. U. S. R. 118, 126, 127.

While the husband's answer is without any weight as proof in the cause, the answer of the wife is admissible as evidence in her own behalf and against the complainants, so far as its statements are responsive to the bill and based on facts within her own knowledge. Clark's ex'or v. Van Riemsdyk, 9 Cranch. R. 153, 160, 161.

From the pleadings and proofs in the record, we have substantially the following case:

Lilienfeld (the husband), proposed to purchase from one Bloomberg, a merchant in Richmond, a lot of goods, and to secure the payment of the price, his wife, who had a separate estate agreed to endorse her husband's note to be delivered to Bloomberg. She says, that her husband represented to her, that the amount of the purchase was some forty or fifty dollars. According to the testimony of other witnesses the actual amount was much larger. But whatever the amount was supposed to be, she endorsed in blank and delivered to her husband for the purpose aforesaid, a printed form of a note with blanks left on the face for date, time and place of payment, amount, and name of payee, and without the signature, it seems, at that time of her husband as maker. The printed part would seem to indicate, that the note was intended to be negotiable. The blank for the name of the payee was followed by the words " or order without offset _____ dollars negotiable and payable," & c. Lilienfeld did not consummate the purchase of the goods from Bloomberg, and therefore did not use the note for the intended purpose. He kept it, and his wife says, she thought it had been destroyed. Some months afterwards, (the precise time is not disclosed by the record), Lilienfeld, who, it seems, was merchandizing at Weldon, North Carolina, went to Baltimore to purchase goods. He bought goods of the complainants and of another firm to the amount, in the aggregate,...