Case ID: nj-eq_34/html/0010-01.html
Source: Caselaw Access Project
Author: {"author": "The Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John W. Ferdon v. Agnes M. Miller et al.
    A married woman, in order to enable her husband to procure his portion of the capital of a partnership, gave a mortgage on her separate estate to her husband’s partner, to be used for the purpose. He obtained the money from the complainant oil an assignment of the mortgage—Held, that an agreement between the partners and the mortgagor as to the payment- of the mortgage-out of the husband’s profits of the firm’s business, could not affect the title or interest of the complainant in the mortgage, he having had no notice of snoli. agreement at the time of the assignment.
    Note.—The text-books and cases oiled therein agree that, generally speaking-, a wife may mortgage her separate estate to secure her husband’s debt, 1 Bishop on Mar. Wom. 604, 874; 1 Jones on Mort. §§ 109, 110, 113, 114; 2 White & Tudor’s Lead. Cas. in Eq. 1922. And the later cases, where there exists no statutory prohibition, confirm the same doctrine, Voorhies v. Granberry, 5 Baxter 704; Molloy v. Clapp, 2 Lea 586; McFerrin v. White, 6 Coldw. 499; Layman v. Schultz, 60 Ind. 547, and cases cited; Brick v. Scott, 47 Ind. 299; Nippel v. Hammond, 4 Colorado 211; Radford v. Carwile, 13 W. Va. 572; Williams v. Urnston, 35 Ohio St. 296; Hall v. Eccleston, 37 Md. 510; Kerchner v. Kempton, 47 Md. 568; Kinner v. Walsh, 44 Mo. 65; Wilcox v. Todd, 64 Mo. 388; Purvis v. Carstaphan, 73 N. C. 575; Mebane v. Mebane, 80 N. C. 34; Black v. Galway, 24 Pa. St. 18; O’Hara v. Baum, 88 Pa. St. 114; Burnett v. Hawpe, 25 Gratt. 481; Fraser v. Fishburne, 4 Rich. (N. S.) 314; Witsell v. Charleston, 7 Id. 88; Nourse v. Henshaw, 123 Mass. 96; Hassey v. Wilke (Cal.), 10 Reporter 521; Rhodes v. Gibbs, 39 Tex. 432; Leffingwell v. Freyer, 21 Wis. 398; Stephen v. Beall, 22 Wall. 329; Daniels v. Henderson, 5 Fla. 452; Campbell v. Tompkins, 5 Stew. Eq. 170, 6 Id. 362; Stone v. Montgomery, 35 Miss. 83; Butterfield v. Stanton, 44 Miss. 16.
    
    Bill to foreclose. On final hearing on pleadings and proofs..
    
      Mr. O. H. Voorhis, for complainant.
    
      Mr. R. 0. Babbitt, for defendants.
   The Chancellor.

In March, 1875, Christopher R. Miller and John Ferdon enterecl into copartnership in business, in Yew York. It was agreed between them that each should contribute half of the capital, which was to be $3,000. Miller not having the money to contribute his share, it was agreed between thorn that he and' his wife should give Ferdon their bond, secured by mortgage on property in Jersey City, the title to which was in Mrs. Miller, to secure payment of $1,500, to enable Ferdon to raise it. The bond and mortgage were given accordingly, and Ferdon having raised the money on his note for $2,000, endorsed for his accommodation by the complainant, and the security of a $1,000 government bond, borrowed by him from J. W. Littlefield, the return of which bond the complainant guaranteed, and the note being still unpaid and the bond unreturned, Ferdon assigned the bond and mortgage to the complainant in November, 1875, to secure him against his liability upon his endorsement and guaranty. The complainant, subsequently to the assignment, paid the note, and paid to Littlefield $1,000, in discharge of his obligation upon his guaranty, to enable Littlefield to redeem the government bond. The bond and mortgage were payable in two years from their date, March 1st, 1875, with interest payable semi-annually, and contained a provision that in case of default for thirty days in the payment of interest, the principal should, at the option of the holder, be due immediately, and also a provision giving to-the Millers the right to pay the principal before it should become due, in installments of not less than $200.

Tlie contrary doctrine is held under the Alabama statute, Mitchell v. Lippincott, 2 Woods 467; 1 Cent. L. J. 302; Wilson v. Knight, 59 Ala. 172; Thames v. Rembert, 63 Ala. 562; Blakeslie v. Mobile Co., 57 Ala. 205; Williams v. Bass, Id. 487; and the Georgia statute, Dunbar v. Mize, 53 Ga. 435; Campbell v. Murray, 62 Ga. 86; Veal v. Hurt, 63 Ga. 728; and the Mississippi statute, beyond the wife’s income, Erwin v. Hill, 47 Miss. 675; McDuff v. Beauchamp, 50 Miss. 531; Hand v. Winn, 52 Miss. 784; Klein v. McNamara, 54 Miss. 90; Stephenson v. Miller, 57 Miss. 48; see Lightfoot v. Bass, 2 Tenn. Ch. 677.

Where the mortgage covers lands of both husband and wife, William and Mary College v. Powell, 12 Gratt. 372.

Where the indebtedness of the husband is future, Hoffey v. Carey, 73 Pa. St. 431; or past, Wilhelm v. Schmidt, 84 Ill. 183; Eisenlord v. Snyder, 71 N. Y. 45; Mize v. Hawkins, 54 Ga. 500.

Tiie lex rei sites governs, Frierson v. Williams, 57 Miss. 451; see Bell v. Packard, 69 Me. 105; Burchard v. Dunbar, 82 Ill. 451.

Only the wife can take advantage of her coverture as a defence, Ricketson v. Giles, 91 Ill. 154; McGarock v. Whitfield, 45 Miss. 452; Whitworth v. Carder, 43 Miss. 61; Campbell v. Babcock, 27 Wis. 512; Denison v. Gibson, 24 Mich. 187; Stewart v. Boyle, 23 La. Ann. 83; Kerchner v. Kempton, 47 Md. 568.

Contra: Ragsdale v. Gossett, 2 Lea 729; Third National Bank v. Blake, 73 N. Y. 260; Coats v. McKee, 26 Ind. 223; Brookings v. White, 49 Me. 479; Claverie v. Gerodias, 30 La. Ann. 291; Jenz v. Gugel, 26 Ohio St. 527; Williams v. Hugunin, 69 Ill. 214; Doyle v. Kelly, 75 Ill. 574; Taylor v. Boardman, 92 Ill. 566; Sweazy v. Kammar, 51 Iowa 642; Yale v. Dederer, 68 N. Y. 329; Second Nat. Bank v. Miller, 2 N. Y. Sup. Ct. 104; Smith v. Williams, 43 Conn. 409; Foxworth v. Magee, 44 Miss. 430.

So, where the obligation is jointly signed by the husband and wife, Bressler v. Kent, 61 Ill. 426; Schmidt v. Postel, 63 Ill. 58; Hennessey v. Ryan, 7 R. I. 548; Rhodes v. Gibbs, 39 Tex. 432; Davies y. Jenkins, L. R. (6 Ch. Div.) 728; Viser v. Scruggs, 49 Miss. 705; Agnew v. Merritt, 10 Minn. 308.

A. married woman cannot become surety on a guardian’s bond, Gosman v. Conger, 7 Hun 60, 69 N. Y. 87.

The defence made to this suit, which is brought to foreclose the mortgage, is, first, that the mortgage cannot be enforced, because it was given by Mrs. Miller upon her separate estate, and is, as she insists, a mere promise to pay the debt or answer for the default of her husband; and next, that the bond and mortgage were given on the understanding that the firm was to make use thereof, if necessary, for business purposes, until Miller’s ■share of the net profits should amount to the sum named in the bond and mortgage, and then they were to be delivered up for cancellation; and it is alleged that in September, 1875, before thp assignment to the complainant, Miller’s share of the net profits amounted to $2,600, and it was agreed between him and John Perdón that $600 of that amount should be applied to the payment of the bond and mortgage, and the balance remain in the hands of the firm subject to Miller’s order, to be drawn out by him if he should wish to do so, and that Miller did not draw it out, but John Perdón held it, and ought to have applied it to the payment of the bond and mortgage, and informed the Millers that he had done so, and promised to return the bqnd and mortgage to them.

A married woman may, with her husband, mortgage her land to secure the payment of his debt, or the debt of any other person, for the payment of which she is in no way liable, and in which she has no interest. Jones on Mort. § 118. And her mortgage, given to secure the payment of the bond of her husband, will not be regarded as without validity or binding effect,, simply because the consideration of the bond is an obligation merely moral, and not enforceable at law or in equity. Campbell v. Tompkins, 5 Stew. Eq. 170; S. C., affirmed, 6 Stew. Eq. 362. Mrs. Miller’s mortgage of her separate estate, made for the purpose of being negotiated, is clearly valid against her in the hands of a bona fide assignee for value.

As to an appeal bond, Woolsey v. Brown, 11 Hun 53.

A note, without reference to her separate estate therein, is sufficient to-charge her as such surety, Bishop on Mar. Wom. § 878; Williams v. Urmston, 35 Ohio St. 296; Metropolitan Bank v. Taylor, 62 Mo. 338; Burnett v. Hawpe, 25 Gratt. 481; Hall v. Eccleston, 37 Md. 510; Major v. Holmes, 124 Mass. 108; Willsey v. Hutchins, 10 Hun 502; McVey v. Cantrell, 70 N. Y. 295; Williams v. King, 43 Conn. 569; Radford v. Carwile, 13 W. Va. 644.

Fraud or duress employed to obtain the wife’s signature, annuls the instrument, Levi v. Earl, 30 Ohio St. 147; Singer Manf. Co. v. Rawson, 50 Iowa 634; Smith v. Osborn, 33 Mich. 410; Linn v. Blizzard, 70 Ind. 23; Mersuran v. Werges, 3 Fed. Rep. 378; Barth v. Kasa, 30 La. Ann. 940; Hammit v. Bull, 8 Phila. 29. See Wright v. Pennington, 12 Vr. 48, 14 Vr. ; Comegys v. Clarke, 44 Md. 108; Freeman v. Wilson, 51 Miss. 329.

But not in the hands of an innocent holder, Conn. Life Ins. Co. v. McCormick, 45 Cal. 580; Finnegan v. Finnegan, 3 Tenn. Ch. 510; Spurgin v. Traub, 65 III. 170.—[Bep.

As to the other ground of defence : Mrs. Miller herself says that John Eerdon was to use the bond and mortgage as security for the $1,500, until the time when Miller’s share of the net profits should amount to that sum, and, if necessary, he was to raise money on them. Again, she says they were given to enable Miller to go into business with Eerdon, to secure Miller’s share of the capital; that he was to put in $1,500, and did put it in,, by giving the mortgage. Miller says the mortgage was given toEerdon as a collateral to enable him to raise money, and that the mortgage represented half of the capital, and he also says that Fer-don was to take the mortgage and raise money, if necessary, for the firm. He says he understood that Ferdon procured $1,500 for him for his share of the capital. The proof is that Ferdon obtained it by means of the complainant’s endorsement and guaranty before mentioned, to secure which the bond and mortgage were assigned. It appears by the. books of the concern that Miller is 'credited, under date of March 15th, 1875, with the $1,500, as so much cash put in by him, and Ferdon has a like credit under the same date. Both Miller and his wife say in their testimony as well as in their answer, that the bond and mortgage Avere to be used as security to raise the money, if necessary. It appears, in fact, to have been necessary. And when they had been used for the purpose by assigning them to the complainant, the title of the complainant to them could not be affected by any agreement between the Millers and Ferdon as to the payment thereof out of the profits, of which he had no notice when he took his assignment. The complainant is no relation or connection of Ferdon. There is nothing in the evidence to induce doubt as to his bonafides in the transaction, or as to his candor in his testimony, and he is corroborated by John Ferdon. The Millers confided the bond and mortgage to Fer-don in order that he might negotiate them, and to that end and that he might appear to be the true owner of them, made them in his favor. They contained no evidence of any trust or confidence, but purported to be securities for an existing debt, with careful ¡provision to secure the prompt payment of interest on the one hand, and the privilege of payment of the principal by installments on the other. There was no indication or intimation that they were not in all respects what they purported to be. If there had been, it would have been fatal to their negotiability. The complainant is entitled to a decree.