Koengeter v. Holzbaugh

• Decision Date: 07 January 1952
• Docket Number: No. 67,67
• Citation: 50 N.W.2d 778,332 Mich. 280
• Parties: KOENGETER v. HOLZBAUGH et al.
• Court: Michigan Supreme Court

Page 778

50 N.W.2d 778

332 Mich. 280

KOENGETER v. HOLZBAUGH et al.

No. 67.

Supreme Court of Michigan.

Jan. 7, 1952.

Joseph W. McDonnell, Detroit, for appellant.

Heal, Deeley, Locicero & Wilke, Detroit, for appellee.

Before the Entire Bench.

DETHMERS, Justice.

Facts material to decision are stipulated to be as follows:

'A promissory note dated April 18, 1946, was made and delivered by Dorothy K. Holzbaugh and Fred Holzbaugh to order of Henry Feldkamp or Laura Koengeter. The co-makers were husband and wife on that date. The sum of Ten Thousand ($10,000.00) Dollars was received for the said note. * * * In making the loan, the makers told the holders of the note that the loan was for the purpose of providing working capital for the Holzbaugh Machinery Sales, Inc. and the money was used for this purpose.

'Dorothy Holzbaugh was the sole stockholder of this Michigan Corporation.'

In suit on the note plaintiff obtained judgment which recited, in accord with C.L. 1948, § 557.54, Stat.Ann. § 26.184, that it was rendered upon a written instrument delivered by defendants while they were husband and wife and directed the endorsement of such recital of fact upon the writ of execution to be issued thereon. The effect of the recital, under the statute, is to prevent levy upon the sole and separate estate of defendant wife and to limit it to property of the husband and that held by them by the entireties. Plaintiff appeals, contending that the judgment and writ should not be so limited.

Were it not for the makers' expressed intention to use and subsequent actual use of the avails of the loan to provide working capital for the corporation the record would present, for lack of any proof to the contrary, a plain case of joint liability on the part of the husband and wife under the enabling provisions of C.L. 1948, § 557.52, Stat.Ann. § 26.182, which liability would be limited, as to the wife, by the provisions of C.L. 1948, § 557.53, Stat.Ann. § 26.183, to property held by her and her husband by the entireties; and plaintiff could not then be heard to complain of the judgment as entered. See Kies v. Walworth, 250 Mich. 34, 229 N.W. 519; McDougall v. Henderson, 260 Mich. 71, 244 N.W. 232. It is plaintiff's position, however, that the expressed intention and actual use of the money for the corporation entitled plaintiff to a judgment permitting levy upon the separate estate of the defendant wife, hereinafter called the defendant.

Plaintiff points out that under C.L.1948, § 557.1, Stat.Ann. § 26.161, a married woman may contract with relation to her sole and separate estate and that, in doing so, she may assume an obligation jointly with her husband for a consideration running to her with reference to her separate property, in which case the obligation may be enforced by levy not only upon property held by the entireties, but upon the wife's as well as the husband's separate estate. See Kies v. Walworth, supra; Menard v. Campbell, 180 Mich. 583, 147 N.W. 556; Whelpley v. Stoughton, 112 Mich. 594, 70 N.W. 1098; National Lumberman's Bank v. Miller, 131 Mich. 564, 91 N.W. 1024. On the other hand, a married woman's contract, except with reference to her separate property, is void. Judd v. Judd, 187 Mich. 612, 154 N.W. 31. She cannot become personally liable on an executory promise unless it concerns her separate estate; and her note given for any other consideration is void. Kenton Ins. Co. v. McClellan, 43 Mich. 564, 6 N.W. 88. In assumpsit against a married woman plaintiff has the burden of showing that consideration for the obligation sued upon passed to her and that her promise to pay had reference to her own separate property. Dowagiac National Bank v. Maier, 285 Mich. 1, 280 N.W. 86. The question presented, therefore, is whether the transaction here involved was with reference to and for the benefit of defendant's sole and separate estate.

Plaintiff cites Monroe State Savings Bank v. Orloff, 232 Mich. 486, 205 N.W. 596, in which it was held that plaintiff's surrender to the defendant married woman of a note from a corporation of which she was a stockholder constituted a consideration benefiting her separate estate sufficient to charge the latter with payment of a promissory note given by her to plaintiff in exchange therefor. This court said that the transaction amounted to a purchase by her from plaintiff of the corporation note which thereupon became a part of the assets of her separate estate. The record discloses no such addition or benefit to the assets of defendant's separate estate in the instant case except as they may have been enhanced indirectly by the benefit realized by the corporation.

Plaintiff also cites People's Wayne County Bank v. Wesolowska, 256 Mich. 45, 239 N.W. 367 and Shepard v. Bestar, 271 Mich. 219, 259 N.W. 895, for the proposition that the lender's advance knowledge of a married woman's intention to turn the money borrowed by her over to another cannot serve to relieve her separate estate of liability. In both cases the wife gave her personal note, signed by her only, and received the avails of the loan herself. Her resultant liability, which then came into being in ...