Case ID: ill-app_13/html/0268-01.html
Source: Caselaw Access Project
Author: {"author": "Pleasants, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Elmer Washburn, Receiver, etc., v. Frederick Roesch et al.
    1. Acknowledgment—Denial by grantors—Official act of notary.—Where an alleged acknowledgment of a mortgage by a wife was explicitly denied by the husband and wife, the grantors, but was supported by the official certificate of the notary in due form, and his positive testimony that he explained the contents, etc., and that the wife acknowledged the deed as certified. Held, that the notary, being a disinterested witness, and free from all imputation of fraud or collusion, his official act and testimoi y can not be overcome by the denial of the grantors alone.
    2. Misrepresentations by husband.-—This acknowledgment, after such explanation by the notary, would cure the previous misrepresentation by the husband as to the character of the instrument the wife was to sign, if such misrepresentation, to which the company which held the mortgage was in no way a party, would otherwise have avoided the mortgage in the hands of the company, which the court does not concede.
    3. Mortgage of wife’s separate estate.—Under the acts of 1861 and 1869, a married woman could charge her separate estate for the debt of her husband by a mortgage of her separate property and homestead, in the execution of which the husband joined.
    4. Corporation and stockholder—Organization de facto— IJser.—As between an acting corporation and its stockholder, the stockholder can not insist lhat the corporation must show a compliance with all the required conditions of the statute. Organization defacto and user are sufficient.
    5. Defense—Corporation—Husband and wife.—Where a bill was filed to foreclose a mortgage of the separate property and homestead of a wife, alleged to have been executed by the husband and wife to secure the payment of the husband’s promissory note. Held, that the defense that the note and mortgage were signed and delivered' to the company before §100,000 of the capital stock had been paid in, in money, as required by statute, can not be made by the husband; and the wife can not make it for him nor for herself, in this collateral proceeding. If the husband is liable on the note, the wife, who is concerned only in the mortgage, can not avoid it except for a reason pertaining to the mortgage.
    6. Defense as to payment for stock.—The husband can not be heard to make the ungracious defense than the note secured by mortgage was given for the first installment, being twenty-five per cent, of the subscription of said defendant to the capital stock of the company, and that for this the company was not authorized to take anything in lieu of money; especially in view of the fact that the company was expressly authorized by statute to invest its means in such securities.
    
      Appeal from the Circuit Court of Lake county; the Hon. C. W. Upton, Judge, presiding.
    Opinion filed July 27, 1883.
    Mr. Francis Laokner, for appellant;
    that parties act on the faith of a notary’s certificate, and in the absence of fraud and collusion, his certificate must be entitled to the fullest credit, cited Canal and Dock Co. v. Russell, 68 Ill. 431; Russell v. Baptist Theol. Union, 73 Ill. 341; Kerr v. Russell, 69 Ill. 671; Lowell v. Wren, 80 Ill. 239; Crane v. Coane, 81 Ill. 166; Spurgin v. Traub, 65 Ill. 172; Marston v. Brittenham, 76 Ill. 614; Graham v. Anderson, 42 Ill. 518; Monroe v. Poorman, 62 Ill. 526; Smith v. Allis, 12 Reporter, 192; Fitzgerald v. Fitzgerald, 100 Ill. 385.
    Where a company exists da facto, a person who contracts with such body will not be heard to insist that its organization was illegal to avoid liability on his part: Ill. G. T. R. R. Co. v. Cook, 29 Ill. 242; Goodrich v. Reynolds, 31 Ill. 497; Bigelow v. Gregory, 73 Ill. 201; Rice v. R. I. & A. R. R. Co. 21 Ill. 95.
    Under the law of 1869, a married woman could mortgage her separate property to secure her husband’s debt, the latter joining in the conveyance: Edwards v. Schoeneman, 104 Ill. 278; Spurgin v. Traub, 65 Ill. 170; Barnes v. Ehrman, 74 Ill. 492; Ladew v. Paine, 82 Ill. 221; Morrison v. Brown, 83 Ill. 562.
    As to the effect of the laws regulating the 'wife’s control over her real estate: Hogan v. Hogan, 89 Ill. 427.
    Appellant had a right to take this mortgage in payment of a stock subscription: R. S. Ch. 73, § 36.
    Mr. Charles Whitney, for appellee;
    that where the subject-matter of a suit concerns the separate matter of the wife, testimony of the husband is admissible to corroborate the wife’s, cited Lowell v. Wren, 80 Ill. 238; R. S. 1874, Title Evidence, § 5.
    Conveyances of married women for the transfer of their real estate, must be acknowledged in the proper form prescribed by the statute, otherwise the deed is useless as a conveyance of title: Lindley v. Smith, 58 Ill. 250; Kerr v. Russell, 69 Ill. 666; Bressler v. Kent, 61 Ill. 426.
    As to how corporate existence can be acquired: Bigelow v. Gregory, 73 Ill. 197; Green’s Brice’s Ultra Vires, 392; Angell & Ames on Corporations, §§ 147, 521-529; Gross Stat. 1869, p. 363, § 33.
    A corporation of limited powers can take nothing in payment for stock subscribed except money, unless by express provision of its charter: Navigation Co. v. Comr’s, etc. 7 Jones (Law), 275; Phila. & W. R. R. Co. v. Hickman, 28 Penn. St. 318; Henry v. V. R. R. Co. 17 Ohio, 187; King v. Elliott, 5 S. & M. 428; Highland Turnpike Co. v. McKean, 11 John. 98; Goshen & M. T. Co. v. Hurtin, 9 John. 217; Green’s Brice’s Ultra Vires, 392, 419, 420.
    A married woman under the laws of the State in force in 1869, who' became security for her husband’s debt, can interpose coverture as a defense even in equity: Carpenter v. Mitchell, 50 Ill. 470; Schmidt v. Postel, 63 Ill. 58.
    A note and mortgage given by a married woman prior to the laws of 1874, for a pre-existing debt of her husband, is void: Wilhelm v. Schmidt, 84 Ill. 183; Taylor v. Boardman, 92 Ill. 566; Kohn v. Russell, 91 Ill. 138.
   Pleasants, J.

February, 1877, the predecessor of appellant, as receiver of the Teutonic Life Insurance Company, filed this bill to foreclose a mortgage of the separate property and homestead of Mrs. Lena Roesch in Waukegan, alleged to have been executed by her and Frederick Roesch, her husband, on the 22d day of September, 1869, to secure the payment of his promissory note of September 21, 1869, for $1,250, with interest at the rate of seven per cent, per annum, payable in three years from said date. Ellis, who was made defendant as having or claiming some interest in the premises subsequent to that of the mortgage, was defaulted.

The defendants, Roesch, by separate answers set up several defenses, viz: That the note and mortgage were signed and delivered to the company before $100,000 of the capital stock had been paid in in money, and that this payment was required by Sec. 14 of the act of March 26, 1869, before it would be authorized to do business: Laws of 1869, p. 229; that the note was given for the first installment, being twenty-five per cent, of the subscription of said Frederick to the capital stock of said company, and that for this the company was not authorized to take anything in lieu of money; that the premises were then and still are the separate property and homestead of a married woman and the indebtedness to secure which the mortgage was taken, if any, was wholly that of her said husband, for which she never received any consideration; that her signature .to said mortgage was procured by fraud and circumvention of her husband; and that said mortgage was never explained to nor understood or acknowledged by her.

Mrs. Roesch also filed a cross-bill, averring the same facts set forth in her answer and praying that said mortgage be canceled and set aside as a cloud upon her title.

Issues having been joined and proofs taken, the court by its decree rendered on final hearing found that the mortgage was given upon the separate property of the wife to secure the indebtedness of her husband previously contracted, and was therefore null and void; dismissed the bill for want of evidence; set aside the mortgage as a cloud upon her title pursuant to the prayer of her cross-bill, and adjudged the costs against the complainant.

It does not appear that any other question of fact or law was found or ruled upon by the court besides those so set forth in the decree.

There was no dispute as to those so found, nor any other that we deem material except the.alleged acknowledgment.

The latter was explicitly denied by both the defendants Roesch, but was supported by the official certificate of the notary in due form, and his positive testimony that he was personally acquainted with the parties; that he knew Mrs. Roesch did not speak or understand the English language, and that he fully explained to her in German and apart from her husband the contents and meaning of the instrument and the effect of the acknowledgment, of which facts he said he had a distinct recollection, and that she thereupon did-acknowledge it as certified. Being a disinterested xvitness and free from all imputation of fraud or collusion, his official act and testimony can not he overcome by the denial of the grantors alone. So it seems to be settled by the Supreme Court, upon a review of former decisions in the latest case on the subject. Heacock v. Lubbucke, Chicago Legal News of June 2, 1883. And this acknowledgment, after such explanation, would cure the previous misrepresentation by her husband as to the character of the instrument she xvas to sign, if such misrepresentation, to xvhich the company xvas in ho xvay a party, xvould otherwise have avoided it in the hands of the company, xvhicli xveby no means concede. Spurgin v. Traub, 65 Ill. 170.

That under the acts of 1861 and 1869 a married woman could charge her separate estate for the debt of her husband by an instrument of this character in the execution of xvhicli he joined, is also settled by the late case of Edwards v. Schœneman, 104 Ill. 278.

As against her husband his note secured by mortgage, in lieu of money, for the first installment of his ’subscription was valid and binding, especially in view of the fact that the company was expressly authorized by the same section of the act before cited, to inxmstits means in such securities. Underwood’s Statutes, 1878, Chap. 73, Sec. 36. He can not be heard to make so ungracious a defense. Ill. River R. R. Co. v. Zimmer, 20 Ill. 657; Ill. Gr. Trunk R. R. Co. v. Cook, 29 Id. 242; Goodrich v. Reynolds, Wilder & Co. 31 Id. 496-7.

Hor to dispute the organization of the corporation to whose capital stock he had thus subscribed, on the ground that $100,000 had not been paid in in cash as required by the statute to authorize it to do business. In Bigelow v. Gregory, 73 Ill. 197, where the defendants were sought to be charged personally and prima faoie, were so liable, but by way of defense set up that they were incorporated under a general laxv, ■it was held that they must show a substantial compliance with all the required conditions; but that was expressly distinguished from a case between an acting corporation and its stockholder. In the latter the defendant can not insist upon such proof. Organization cía facto and user, which here arc not denied, are sufficient. Rice v. R. I. & Alton R. R. Co. 21 Ill. 95; Goodrich v. Reynolds, supra; P. & P. U. R’y Co. v. N. P. & F. R’y Co. 105 Ill. 110; (on the general rule in such cases see, also, Cross v. Pinckneyville Mill Co. 17 Ill. 54; Griswold v. Trustees of Peoria University, 26 Id. 41; Baker v. Adm’r of Backus, 32 Id. 79; Mitchell v. Deeds, 49 Id. 417; Marsh v. Astoria Lodge, 27 Id. 421; Pr. & Trs. of Mendota v. Thompson, 20 Id. 197; Town of Lewiston v. Proctor, 27 Id. 414; Hamilton v. Town of Carthage, 24 Id. 22; Thompson v. Candor, 60 Id. 347.)

And since he can not make this defense for himself we hold that she can not make it for him nor for herself in this collateral proceeding.

The claim against her husband is and from the beginning was lawful and valid. So far as the wife is concerned there is no attempt to enforce it against her, either as principal or surety, but only her property which she voluntarily and specifically pledged for the very purpose of having it so dealt with in the event that has happened, to wit: the failure of her husband to pay it. This is not the case of a note apparently against both, in which both are sought to be charged upon it, and one, whether as principal or surety, might have a defense not available to the other. So far as liability on the note is concerned the only question is whether the husband is liable. If he is, she, who is concerned only in the mortgage, can not avoid it except for a reason pertaining to the mortgage. She can not plead that her husband,, although individually liable on the note as to himself, is not liable thereon as to her. Such language would be unintelligible. The only condition of the defeasance of the mortgage is that he shall not be liable and in default on the note. If he is, then the mortgage, according to its conditions, is-of full force and effect against her. ■

For these reasons we think the- court erred in dismissing the biil and in granting the relief asked for in the cross-bill. The decree is reversed and the cause remanded for further proceedings in conformity with this.opinion. .

Reversed and remanded.