Case ID: wis_29/html/0136-01.html
Source: Caselaw Access Project
Author: {"author": "DixoN, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Beard vs. Dedolph and others.
    
      Bills and Notes, transfer' of. Married women, rights of. Set-ojf. Practice.
    
    1. Tlie effect of our statute entitled “of the rights of married women” (B. S., eh. 95), is to absolutely remove the disabilities of coverture so far as the wife’s separate property is concerned, as well in respect to her dealings with her husband, as with every one else. As an incident to ownership, she clearly has power to make what disposition of her property she pleases; to sell or exchange it; to invest the proceeds in other property or loan it, receiving' securities therefor, and to accept payment in money or other property, the same as any other owner might do.
    
      2. Where a dealing or negotiation between a wife and husband relates to her separate property, and is necessary or proper to its management, she has all the power of a feme sole, and may take title to the property directly from him the same as if the relation of husband and wife did not exist.
    3. In case of a note payable to order, endorsement, as well as delivery, before maturity, is necessary to cut off equities existing between the maker and payee before the delivery.
    4. But the bona fide holder of such note by- delivery only is protected against everything subsequent to such delivery, especially if the note be afterward endorsed to him; such endorsement being held to relate back to the time of delivery, as to any equity outside of the note itself.
    
    5. In payment of money loaned to him by his wife, a husband delivered to her, without formal endorsement, immediately after it was made, defendants’ note payable to his order. After its maturity the wife sold it to the plaintiff; and afterward, before suit, it was endorsed by both husband and wife. Held,
    (1.) That the wife was competent to take the legal title to the note from the husband.
    (2.) That it was valid in her hands, and in the. hands of plaintiff, against any offset arising out of indebtedness of the husband to the makers, contracted after the note was transferred to the wife.
    C. The answer alleged that the husband became insolvent after the making and before the maturity of the note, and claimed on that ground an equitable set-off of defendants’ demands against him. At the trial, evidence of such insolvency, offered by defendants, was rejected. Held, That, in the absence of any intimation to the contrary, the circuit court might naturally assume that the evidence was offered merely for the purpose of showing such equitable set-off, and might properly reject it on that ground.
    7. Although the general rule that, when evidence offered is competent for any purpose, it should be received, and to reject it would be error, is indisputable; yet, it is the duty of a party, when evidence offered by him is excluded as being inadmissible for the purposes for which it was offered, to inform the court if he had any other purpose in view in making the offer; otherwise its exclusion cannot be alleged for error, on appeal, on the ground that it was admissible for such other purpose.
    APPEAL from tbe Circuit Court for Waupaca County.
    Action upon a promisory note, dated September 21, 1867, executed by tbe defendants and payable to tbe order of S. P., in one year after date. Tbe payee, immediately upon tbe delivery of tbe note, transferred it to bis wife, without formal in-dorsement, in payment for money loaned by ber to bim out of ber separate estate. ' Tbe wife retained tbe note until after its maturity and then transferred it to tbe plaintiff, and, before suit brought, it was indorsed by both husband and wife.
    Tbe answer admits tbe execution and delivery of tbe note; denies that it was transferred to tbe payee’s wife before maturity; alleges that such transfer was not made in good faith, but was fraudulent as to tbe creditors of tbe payee, and that such payee is insolvent; and that, on tbe day tbe note was executed, two of tbe makers contracted with such payee for a quantity of logs to be subsequently delivered, which be failed to deliver; and, that they afterwards sold goods to such payee and bis wife, which tbe husband agreed should apply on tbe note in suit; and seeks to recoup tbe damages for such breach of contract and to set off tbe price of tbe goods in this action.
    Tbe plaintiff putin a reply denying the counter-claim.
    There was testimony tending to show that it was expressly understood by tbe defendants when they made tbe note, that it was to be tbe property of tbe payee’s wife; also that one of the defendants signed merely as surety.
    Tbe defendants offered evidence of admissions of tbe payee of tbe note in reference to bis getting goods from their store before the maturity of tbe note; also proof of tbe log contract and of tbe damages for tbe breach thereof, and of tbe insolvency of tbe payee; all of which was ruled out by tbe court.
    Defendants’ motion for a new trial on tbe minutes of tbe judge was overruled, and judgment entered for tbe plaintiff; and tbe defendants appealed.
    
      Myron Reed & Gregory & Pinney, for appellants,
    contended that tbe transfer of tbe note to tbe payee’s wife did not pass tbe legal title so as to exclude tbe equities of tbe makers, founded on tbe same transaction in which tbe note bad its origin, citing Putnam vs, Bichnell, 18 Wis., 333,1 Parsons on Bills and Notes, 278 ; Banger vs. Cary, 1 Mete., 374; Edwards on Bills and Notes, § 287; Banlc vs. Baymond, 3 "Wend., 69 ; Pease vs. Bush, 2 Min., 107; Cunliffe vs. Whitehead, 82 Eng. C. S., 343; Hedges vs. Sealey, 9 Barb., 214; and evidence of partial failure of consideration should, therefore, have been received; that, if the note was not indorsed until after maturity, the wife’s ownership would not date from the actual sale and delivery; that the evidence offered to show the insolvency of the payee was admissible, as having a direct tendency to establish the defense that the transaction was not bona fide, but was fraudulent as to creditors, as well as to establish the defendant's right to an equitable set-off, citing 2 Paige, 581; 14 Johns., 63 ; Spear vs. Bay, 5 Wis., 193 ; that the indorsement by the husband to his wife, could not pass the legal title to her, for want of legal capacity in her to take it directly from him.
    
      Warner & Byan, for respondent,
    argued that recoupment is available only in cases where the defendant seeks to reduce the plaintiff’s recovery by showing damage to or deficiency in the value of the subject matter of the action, arising from the act or default of the plaintiff, citing 2 Whittaker’s Pr., 154; that the insolvency of the payee was immaterial, because he did not own the note after its execution; that the set-off for goods sold was inadmissible, not being owned by the defendants jointly, nor being against the plaintiff; that the Iona fide holder of a note payable to order can maintain an action thereon without alleging an indorsement to him, Billings v. Jane, 11 Barb., 620; and that a husband could transfer the legal title of a note to his wife by indorsement, in consideration of money received from her separate estate, citing Conway v. Smith, 13 Wis., 125 ; Todd v. Lee, 15 id., 365; Weisbrod v. Chi. & N.W, Bailway Go., 18 id., 35 ; Hannan v. Oxley, 23 id., 519; Pike v. Miles, id., 164.
   DixoN, C. J.

The case of Putnam v. Bicknell, 18 Wis., 333, was decided upon the law as it stood prior to the passage of the married woman’s act, and is undoubtedly a correct statement of that law, and of the rights of the wife in equity, which was all that was then required. That ease necessarily decided that the rule or principle of equity jurisprudence involved in it, and as the same existed before passage of the act, was not abrogated or affected by the act. This has been so decided in New York, where the language of the statute is the same, Lockwood v. Cullin, 4 Robertson, 129, 134 and 135. The case did nob however, decide, nor was it necessary to decide, nor did the court consider what, upon any given state of case or condition of facts, might be the strict legal rights of the wife under the act, where property is transferred by the husband directly to her. The case was readily disposed of upon the principles of law as they stood before the passage of the act, and which were unaffected by it, and no question as to what were or might have been the rights of the wife under the act was considered or determined.

It has been decided by the court of appeals of New York, that the husband may, in payment, of a debt justly due from himself to her, transfer directly to his wife, and she will thereupon acquire valid legal title to choses in action and personal property so transferred, the transaction being otherwise fair and honest, and not in fraud of the rights of creditors or others having claims against the property belonging to the husband. Kluender v. Lynch, 4 Keyes, 361, 365, 370. The decision is based upon the provisions of the act authorizing the wife having a separate estate to deal with it as if she were a feme sole. The debt due to her from her husband was her separate property, as to which she was authorized to negotiate, deal or receive in payment the same as if she were unmarried. This is the authority given by statute, and of course, if she were a single woman and her debtor not her husband, there could be no objection to the transfer. With respect to her separate property the statute has placed her upon the same footing as to all the world, her husband included, as if this were her condition — as if she were, in the words of the statute, “a single female.” As a negotiation or dealing, therefore, with respect to her separate estate, the transaction is to he looked upon as if the debtor was not. her husband, but a stranger. The marriage relation is to be disregarded, except where the question of fraud arises, and there it will be considered and the transaction more closely scrutinized on account of the greater inducements offered and facilities afforded for the commission of fraud.

Such being the obvious effect of the statute, it seems to follow, when the dealing or negotiation on the part of the wife, even with her husband, relates to her separate property, and is something necessarily or properly done in the management or control of it, that she is endowed with all the powers, privileges and capacities of a feme, sole, and consequently that she may take title to property directly from him or without the intervention of third parties, or a trustee, the same as if she were in all respects sui juris, or as if the relation of husband and wife did not exist. The statute has absolutely removed the disabilities of coverture pro tanto, as well with respect to her dealings with her husband as with every one else, by declaring that a married woman shall have and hold her sole and separate property, as if she were a single female. This seems the fair and obvious interpretation of the statute, and we think the court of appeals was correct. It is clearly an incident of the ownership with which the wife is thus clothed by the statute, that she should have the power to make what disposition of her property she pleases, to sell or exchange it, to invest the proceeds in other property, if in the form of money to loan it, receiving securities therefor, to accept payment in money or other property as any creditor can do, and, in short, do with her property whatever any owner can do with his or hers, transactions and dealings with her husband not excepted.

In this case it appears that the wife at the time of her marriage had separate property, consisting of money received from the estate of her former husband, and which she loaned to her present husband on his promise to repay it. In payment, he transferred to ber tbe note in suit, made by tbe defendants payable- to bis order. This transfer was made and tbe note delivered to tbe wife before its maturity, but without formal in-dorsement by ber husband. Tbe wife retained tbe noté until after maturity and then sold it to tbe plaintiff, who brought suit. After maturity, and before' suit broitgbt, tbe note was indorsed by tbe. husband and tbe wife. It follows from tbe principles already stated, that it was competent for tbe wife to take the legal title of tbe note by transfer from ber husband, provided it bad been sufficiently and properly indorsed by tbe husband for that purpose. Tbe note was payable to order and not transferable by delivery only, but the indorsement of tbe husband was necessary to cut off equities and defenses existing in favor of tbe makers at tbe time of tbe transfer. Tbe delivery without indorsement operated to vest tbe property in tbe note in tbe wife, subject however to such defenses as tbe makers might then have to it in tbe bands of tbe husband. Edwards on Bills and Promissory Notes; 286, 287 and authorities cited.'

But tbe bona, Jide bolder of such paper by delivery only is protected against everything subsequent to the delivery of tbe paper, especially, if it be afterwards indorsed to him, it being held that tbe indorsement relates back to tbe time of delivery, as to any equity outside of the note itself. 1 Parsons on Notes and Bills, 278; Ranger v. Gary, 1 Met., 369. The transfer to tbe wife here was immediately after tbe making and delivery of tbe note, and it does not appear that there then existed any equity or defense whatever in favor of tbe makers. Tbe defendants do not deny tbe consideration of tbe note, nor that it was fairly given, but seek by their answer to set-off an account or indebtedness of tbe husband for goods, wares and merchandise sold to him subsequently to tbe transfer of tbe note, and also a claim for damages against him arising from bis failure to deliver a quantity of logs more than six months after tbe note was transferred, in pursuance of a contract which it is alleged be bad entered into with them dn or about tbe day of tbe date of tbe note. It is not alleged tbat tbe log contract was in any manner connected witb tbe making and delivery of tbe note, or tbat the husband’s agreement to deliver tbe logs entered into or formed any part of tbe consideration of it. Tbe case falls, therefore, fully within tbe rule of tbe above authorities, where tbe subsequent indorsement is held to relate back to tbe time of actual transfer, and to exclude all such defenses as are here interposed.

Tbe foregoing observations dispose of all tbe objections and exceptions taken at tbe trial, save only to tbe ruling of tbe court excluding tbe evidence offered by tbe defendants to show tbe insolvency of tbe husband between tbe time of tbe making of tbe note and its maturity, and at tbe time of trial. It is argued tbat this was error, because tbe evidence was admissible as tending to establish tbe defense set up that tbe transfer was not made in good faith, but was fraudulent as to tbe creditors of tbe husband. It seems quite improbable, bad tbe insolvency of tbe husband been frankly admitted, tbat it would have made any difference witb tbe verdict. But we cannot be permitted to speculate upon this, if under tbe circumstances it appears that tbe evidence ought to have been admitted for this purpose. If it bad been offered for that purpose, and then rejected, we should have little doubt about tbe error. But it does not appear tbat such was tbe purpose of tbe offer. Tbe answer alleged tbe insolvency of tbe husband, and claimed tbe right of tbe defendants to an equitable set-off of their demands against him on tbat ground. It was apparently witb this object in view tbat tbe offer was made, and there can be no doubt, we think, tbat the court below so understood it at tbe time tbe evidence was excluded.

So far there was no error in excluding tbe evidence, and if tbe counsel bad any other purpose in view in making tbe offer, it was their duty so to have informed tbe court. Parties cannot come to this court for tbe correction of errors or mistakes of this nature, which on mere suggestion would have been cor-re.cte.d' or avoided in tbe court below. It is their duty to speak and make known their purposes and objections there, when the same are necessary for the proper information and guidance of the court, and not by. their silence and mode of presenting their claim or defense, to lead the court unwittingly into error, upon a point not brought forward for its consideration, and not considered. It should, under the particular circumstances of this case, we think, be made to appear that the purpose for which the evidence was offered, if it prove fraud, on which ground its admissibility is now urged, was made known to the court below at the time of the offer, or otherwise its exclusion cannot be regarded as error by this court.

The general rule, that when the evidence offered is competent for any purpose, it should be received, and it will be error to reject it, is of course indisputable and untouched. This case rests upon its own peculiar facts and circumstances.

By the Court — Judgment affirmed.