Loomis v. Gray

• Decision Date: 22 April 1939
• Docket Number: 6609
• Citation: 60 Idaho 193,90 P.2d 529
• Parties: BYRON E. LOOMIS, Respondent, v. ORA S. GRAY, Appellant
• Court: Idaho Supreme Court

90 P.2d 529

60 Idaho 193

BYRON E. LOOMIS, Respondent, v. ORA S. GRAY, Appellant

No. 6609

Supreme Court of Idaho

April 22, 1939

HUSBAND AND WIFE-SEPARATE PROPERTY OF WIFE-LIABILITY FOR HUSBAND'S UNAUTHORIZED ACTS.

1. A married woman cannot bind herself personally for the payment of a debt that is not contracted for her own use, or for the use or benefit of her separate estate, or in connection with the control and management thereof, or in carrying on or conducting business therewith. (I. C. A., sec. 31-904.)

2. Where wife contended that note signed by her evidenced loan to husband and not to her, that borrowed money was not used for benefit of her separate property and that she personally received no benefit from loan, fact that wife did not protest against nor repudiate acts of her husband did not estop her from denying liability on note, or from repudiating her husband's acts or from denying that he acted for her and as her agent. (I. C. A., sec. 31-904.)

3. It is common knowledge that wives are not usually experienced in business, do not know what they may sign without making their separate property liable nor what they must not sign to avoid making it liable. (I. C. A., sec. 31-904.)

4. A wife need not openly repudiate acts of her husband in order to protect her separate property from liability for husband's unauthorized acts. (I. C. A., sec. 31-904.)

APPEAL from the District Court of the Seventh Judicial District, for Canyon County. Hon. Thomas E. Buckner, Judge.

Action for recovery on promissory note. From judgment for plaintiff defendant appeals. Reversed and remanded with directions to grant a new trial.

Reversed and remanded with directions. Costs awarded to appellant. Petition for rehearing denied.

Richards & Haga, for Appellant.

The common law disability of a married woman to borrow money and enter into contracts has not been removed in the state of Idaho, except as to contracts for her own use or benefit, or for the use and benefit of her separate property. (Ness v. Coffer, 42 Idaho 78, 244 P. 145; Meier & Frank Co. v. Bruce, 30 Idaho 732, 168 P. 5.)

The Act of March 9, 1903, Session Laws 1903, p. 345, deposed the husband as manager of the separate property of the wife, but did not grant unlimited contractual rights to the wife, but enlarged her powers to contract with reference only to her separate property. (Sec. 31-904, I. C. A.)

Where the earnings from a business venture would be community property, it is clearly error to find and hold that the money was borrowed for the benefit of the wife's separate property or for her personal benefit. On a note given for a loan for community property, the wife is not personally liable beyond the property pledged as security therefor by mortgage or incumbrance in writing. (Bank of Commerce v Baldwin, 12 Idaho 202, 210, 85 P. 497.)

Martin & Martin, for Respondent.

A wife may constitute her husband her agent, and such agency is to be proven by the same character and amount of evidence as would prove agency in any other person. (30 C. J. 619; see pars. 169 and 171; Hulsman v. Ireland, 205 Cal. 345 270 P. 948, see pars. (1-4) 1st col., p. 950.)

The subsequent ratification by a principal of an authorized act of an agent, with knowledge of the facts, is the equivalent of a previous authorization, and no new consideration is required. Such ratification may be shown by words, or by acts and circumstances. Retention of benefits is a ratification. ( Blackwell v. Kercheval, 27 Idaho 537, 149 P. 1060; Pettengill v. Blackman, 30 Idaho 241, see p. 257, 164 P. 358; Bevercombe v. Denney & Co., 40 Idaho 34, see beginning near middle p. 46, 231 P. 427; Exchange State Bank v. Taber, 26 Idaho 723, see p. 737, 145 P. 1090.)

HOLDEN, J. Ailshie, C. J., Budge, Givens, Morgan, JJ., concur.

OPINION

HOLDEN, J.

J. P. Gray and Ora S. Gray were married in 1915. Shortly thereafter Gray deeded his wife, as a wedding present, a lot located at Mesa. When the Grays later moved from Mesa to Nampa, Gray sold the lot for $ 4,000 and gave appellant the money, later investing it in the Robinson-Buick Co., a concern engaged in the automobile business at Nampa, which operated both Buick and Chevrolet agencies. In 1925, after the Grays moved from Mesa to Nampa, a co-partnership was formed by W. R. Showalter and appellant, under the firm name of Showalter Chevrolet Co. A deal was then made with the Robinson-Buick Co. by Showalter and Gray, whereby the Chevrolet agency, cars and parts, representing appellant's interest in the Robinson-Buick Co., were taken over by the co-partnership and Showalter became the manager of the co-partnership business.

At some time prior to May 25, 1927, Gray and respondent Byron E. Loomis, cousins, met at Portland, Oregon, where Loomis resided. The matter of forming a partnership for the purpose of engaging in the automobile business was suggested by Gray. In response to the suggestion, respondent stated he did not care for such an arrangement. As a result of further conversation between the two, and a later long-distance phone call from Gray to respondent, the latter inclosed his check to Gray for the sum of $ 15,000, in a brief note, reading:

"Dear J. P. (Gray)

Am in a big rush to write but here's the money and good luck.

B. E. L."

May 25, 1927, appellant signed at Nampa, Idaho, the promissory note sued upon, after which Gray endorsed thereon: "I hereby guarantee payment of the within note. (Signed) J. P. Gray." Gray then forwarded the note to respondent. By the terms of the note appellant promised to pay respondent the sum of $ 15,000 (the amount of respondent's check) within a year, with interest thereon at the rate of 10% per annum. Gray also mailed, along with the note, the following:

"Dr. Byron E. Loomis,

Morgan Bldg.,

Portland, Ore.

Dear Sir:--

In consideration of your having loaned to my wife, Ora S. Gray this date, the sum of fifteen thousand dollars, in evidence of which she gave her note, I hereby agree to pay you as a bonus or commission for making such loan 5% on said fifteen thousand dollars from this date until paid, and further agree to purchase this note from you at face value and interest on Jan. 1, 1928, or any date thereafter that you may wish to dispose of it.

Yours very truly,

(Signed)

J. P. GRAY."

JPG/OSG

With the borrowed money a Chevrolet automobile agency located at Weiser was purchased and operated for several years under the name of the Intermountain Chevrolet Co.

May 31, 1927, Gray wrote Loomis:

"Dear Byron:

I was at Weiser last week and failed to acknowledge promptly your check for $ 15,000 as I should have done, which I wish to do at this time, and thank you, although had I not gone so far with the deal, I would have given it up when I found that you were not anxious for it, but am positive that the revenue guaranteed you will be easily taken from the earnings of the business and a good profit left for looking after it.

Six carloads of automobiles have been ordered, and as soon as we have been operating a short time, I will let you know how it is going. . . .

Sincerely,

J. P. GRAY."

June 8, 1928, Loomis wrote Gray as follows:

"Dear Jude,

In looking over my deposit for yesterday I noticed that the notes which I have of yours here dated May 25th and not having heard from you lately thought I had better write and remind you of the date.

The last time we talked about it, you suggested my letting it run for another year.

That is all right with me if you still feel the same, and I was only wondering if you were going to pay the interest at this time as I had rather figured on it in making a loan to Dr. DuBois who is building a new garage near you on Alder St.

I have a chance to loan him $ 25,000 on a first mortgage on a $ 90,000 property and the absolute security of the thing appeals to me. . . ."

June 9, 1928, Gray wrote Loomis as follows:

"Dear Byron:--

I have been away a good portion of the time during the past three weeks, and outside when here, and seem to have overlooked your interest. This is the rush season in the automobile business up here in the country, which necessitates carrying heavy stocks and considerable paper, and we are enclosing check for $ 1500 in payment of interest from May 25, 1927 to May 25, 1928, with the idea that it will not make any difference to you if the bonus check reaches you later in the season.

Chevrolets are selling better than ever, and we will have another very good fruit crop this season, which I have been looking after rather closely recently . . . . "

May 23, 1931, Gray wrote Loomis:

"Dear Byron:

I am enclosing check for $ 2250 of which $ 1500 is in payment of interest on note from May 25, 1930 to May 25, 1931, and $ 750 bonus for the same period . . . .

Things have not been so bad around here the past year, and at the present time automobiles are selling well, but I guess they are like liquor, people will have them and find the funds to pay for them and either that is the condition at Portland or times are good with you for there were two hundred sixty-four Chevrolets sold there last month . . . . "

August 7, 1931, appellant signed and acknowledged the following:

"CERTIFICATE OF NAMES OF PARTNERS OR OWNERS

Trade Name: INTERMOUNTAIN CHEVROLET CO.

I do hereby certify that business is being transacted at Weiser, in Washington County, Idaho, under the designation, name, or style of Intermountain Chevrolet Co.

That the true or real full name of the party or parties conducting or transacting or intending to conduct or transact said business or having an interest therein, and Post Office address or addresses of said person or persons are as follows:

Name Address

Ora S. Gray Nampa, Idaho

We further...