Overland National Bank of Boise v. Halveston

• Decision Date: 28 February 1921
• Citation: 196 P. 217,33 Idaho 489
• Parties: THE OVERLAND NATIONAL BANK OF BOISE, IDAHO, a Corporation, Plaintiff, Respondent and Cross-appellant, v. C. E. HALVESTON, Defendant, Appellant and Respondent
• Court: Idaho Supreme Court

196 P. 217

33 Idaho 489

THE OVERLAND NATIONAL BANK OF BOISE, IDAHO, a Corporation, Plaintiff, Respondent and Cross-appellant, v. C. E. HALVESTON, Defendant, Appellant and Respondent

Supreme Court of Idaho

February 28, 1921

MARRIED WOMEN-RIGHTS TO CONTRACT PRESCRIBED BY STATUTE-NEGOTIABLE NOTE-WHEN FOR HER OWN USE OR BENEFIT OR BENEFIT OF HER SEPARATE ESTATE-RIGHT TO OWN, HOLD OR TRANSFER CORPORATE STOCK-WHEN ESTOPPED TO DENY LIABILITY.

1. The rights of a married woman to contract have been greatly enlarged by the Idaho statutes, and her rights to contract are prescribed by statute and not by the rules of the common law.

2. Where a married woman executes her negotiable promissory note and receives the money therefor, and expends the same for her son and for medical attendance upon herself, and subsequently renews the note after it is transferred in due course to an innocent holder, the obligation will be regarded as having been given for her own use and benefit, or for the use and benefit of her separate estate.

3. Where a married woman executes her negotiable note in payment of an assessment upon bank stock purchased by her and carried in her name, she will be estopped from setting up the defense that such note was given for a community indebtedness and is therefore void as against her.

4. Under the constitutional provisions and enabling statutes of this state, a married woman who deals or assumes to deal in respect to matters concerning which her common law disabilities have been removed is bound by an estoppel the same as any other person.

5. Under C. S., sec, 4731, a married woman may hold, own or transfer stock in a corporation in the same manner as if she were unmarried, and will be bound by any contract with reference to such stock that may be necessary to protect her interest in the same, whether such stock be her separate property or community property.

6. In an action against a married woman upon an obligation given by her in connection with corporate stock issued to her and standing on the books of the corporation in her name, neither she nor her husband will be permitted to show that such stock is not the separate property of the wife.

APPEAL from the District Court of the Third Judicial District of the State of Idaho, for Ada County. Hon. Charles P. McCarthy Judge.

Action in cause numbered 3147 on two promissory notes and in cause numbered 3148 on one promissory note. Affirmed in part and reversed in part.

Judgment affirmed in part, and reversed and remanded in part.

Richard H. Johnson, for Appellant.

All of the notes were given by defendant, a married woman, for obligations which were in no sense her separate debts, and she is not liable therefor. (Bank of Commerce v Baldwin, 12 Idaho 202, 85 P. 497, and 14 Idaho 75, 93 P 504, 17 L. R. A., N. S., 676; McFarland v. Johnson, 22 Idaho 694, 127 P. 911; Hall v. Johns, 17 Idaho 224, 105 P. 71; Meier & Frank Co. v. Bruce, 30 Idaho 732, 168 P. 5.)

The doctrine of estoppel does not apply to a married woman in relation to a contract she had no power to make. Where she is under a legal incapacity to contract, she cannot, by her own act, enlarge her capacity to contract, and be estopped even by false representations that she has power to contract. (10 R. C. L. 738, sec. 55; Bank of America v. Banks, 101 U.S. 240, 25 L.Ed. 850, see, also, Rose's U. S. Notes; Hass v. American Nat. Bank. 42 Tex. Civ. App. 167, 94 S.W. 439; 13 R. C. L., sec. 290, p. 1253; 21 Cyc. 1343-1348; Bank of Orofino v. Wellman, 26 Idaho 425, 143 P. 1169; Steed v. Petty, 65 Tex. 490.)

Alfred A. Fraser and T. S. Risser, for Cross-appellant.

Where a married woman executes her negotiable note and such note falls into the hands of an innocent purchaser for value, before maturity, such married woman is estopped from setting up any defense to this except that of non est factum on the ground of estoppel. (Perkins v. Rowland, 69 Ga. 661; Hibernia Sav. Institute v. Luhn, 34 S.C. 176, 13 S.E. 357; McDonald v. Randall, 139 Cal. 246, 72 P. 997.)

"Married women cannot enjoy these enlarged rights of action and of property and remain irresponsible for the ordinary legal and equitable results of their conduct. Incident to this power of married women who deal with others is the capacity to be bound and to be estopped by their conduct, when the enforcement of the principle of estoppel is necessary for the protection of those with whom they deal." (Dobbin v. Cordiner, 41 Minn. 165, 16 Am. St. 683, 42 N.W. 870; Hart v. Church, 126 Cal. 471, 77 Am. St. 195, 58 P. 913.)

The bank was misled by the defendant's representations and in equity she is not now permitted to represent a different state of facts. (Kirk v. Hamilton, 102 U.S. 68, 26 L.Ed. 79; Electric Light Co. v. Bristol Gas Co., 99 Tenn. 371, 42 S.W. 19; Dickerson v. Colgrove, 100 U.S. 578, 25 L.Ed. 618; Brigham Young Trust Co. v. Wagener, 12 Utah 1, 40 P. 764; Gregg v. Von Phul, 1 Wall. (68 U. S.) 274, 17 L.Ed. 536, see, also, Rose's U. S. Notes.)

The defendant's husband is also estopped from now claiming that the shares of stock in the plaintiff's bank were community property. One who clothes another with apparent title to personal property cannot claim such property as against the creditors of such person in whose name such property stood. (Hirsch v. Norton, 115 Ind. 341, 17 N.E. 612; Young v. Vough, 23 N.J. Eq. 325; Burton's Appeal, 93 Pa. 214; Russell v. American Bell Tel. Co., 180 Mass. 467, 62 N.E. 751; Larkins v. Cohocksink Bldg. Assn., 4 Phil. 95; Williams v. Walker, 44 Hun, 628, 9 N.Y. St. 60; Helliwell, Stock and Stockholders, sec. 187; Cowdrey v. Van Denburg, 101 U.S. 572, 25 L.Ed. 923, see, also, Rose's U. S. Notes.)

LEE, J. Budge and Dunn, JJ., concur. McCarthy, J., did not participate in this decision. Rice, C. J., dissents.

OPINION

LEE, J.

The case numbered in this court 3147 is an action by plaintiff bank against defendant upon two promissory notes. In the first cause of action plaintiff asked judgment against defendant upon a note for $ 875, and in the second cause of action on a note for $ 160.

In case numbered in this court 3148 plaintiff asked judgment against defendant on a note for $ 426. These actions were consolidated and tried together. From an order denying plaintiff judgment on the note for $ 875 it appeals, and from a judgment against defendant upon a note for $ 160 in case numbered 3147 and from a judgment against defendant on a note for $ 426 in case numbered 3148, with costs and attorney's fees in each case, defendant appeals. It is stipulated that both appeals may be heard together.

Defendant is a married woman and during all times herein mentioned she lived and cohabited with her husband, T. F. Halveston, in Boise, Idaho.

All of these notes are renewals of notes given by defendant to the Idaho Trust and Savings Bank. The note for $ 875 was originally given for an assessment on 25 shares of stock of that corporation which was purchased in 1907, issued to her and carried on the books of the company in her name to the time of making this assessment in 1913. The second note for $ 160 is a renewal of a note given to the Idaho Trust and Savings Bank for money which she borrowed and gave to her son, Chester Halveston, with which to pay his overdraft at that bank. The third note for $ 426 is a renewal of a note given by defendant to the Idaho Trust and Savings Bank to take up an overdraft for her son and also for medical attendance upon herself. Plaintiff purchased all of these notes from the Idaho Trust and Savings bank before maturity, paying value therefor, and without notice of any defect in the title other than that implied by their being given by a married woman.

Defendant asks for an affirmance of the judgment denying plaintiff's right to recover on the $ 875 note and for a reversal of the judgments against her on the note for $ 160 and also on the note for $ 426, for the reason that she was at the time of giving these notes a married woman, living and cohabiting with her husband, and that these notes were given for community indebtedness, and are therefore void, and that she is not estopped from setting up their invalidity against an innocent holder for value.

Plaintiff contends that, under the provisions of C. S., sec. 4665, a married woman may borrow money, give her note therefor, and that her separate property is liable for her debt so created; that the provisions of C. S., sec. 4657, do not cover a case of a woman who is contracting generally, but has reference only to her contractual powers over her separate property; that where a married woman executes her negotiable note, and it falls into the hands of an innocent purchaser, she is estopped from setting up any defense to it except non est factum; and that where commercial paper is usurious or otherwise illegal or subject to the defense of fraud or want of failure of consideration, but has come into the hands of a bona fide purchaser for value, new paper executed in renewal of the same is valid.

There is no substantial conflict in the evidence. Plaintiff and her husband, T. F. Halveston, have been a marital community for many years, residing at Boise, Idaho. In 1907 officers of the Idaho Trust and Savings Bank sought to induce defendant's husband to purchase 25 shares of its capital stock. He replied that he did not have money enough to buy that amount of stock, but if it was agreeable to his wife the two might buy it. After some negotiations with the bank's officers the wife agreed to purchase the stock and the same was issued to her and carried on the books of the bank in her name, from the time it was purchased in 1907 to the time this assessment was levied against the stock, for which she gave her note of $ 875 in 1913. Defendan...