Court Opinion

ID: 7291551
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:34:37.359282+00
Date Added: 2024-06-11T16:19:21.332668
License: Public Domain

Pitney, Y. C.
The deed has a dual character—first, it contains a covenant by Mrs. Cronk to pay a sum of money to the complainants, stated to be a pre-existing debt due from her to them; second, a conveyance of land to secure that debt.
The first is an executory contract by a married woman, and the second an executed conveyance whose validity and liability to be enforced depends upon the enforceability of the' executory contract.
There was, in fact, no debt due and owing by Mrs. Cronk to the complainants, and this was well known by them when the mortgage was delivered to them and credited to Mr. Cronk on their books; hence, the complainants are not entitled to relief in that aspect of the ease.
The true aspect of. the case, from complainants’ standpoint, *500is that the wife became the surety of the husband for the amount mentioned.
For that purpose the covenant is entirely void, both under our statute and before its enactment, under the ruling of the court of errors and appeals in Perkins v. Elliott, 8 C. E. Gr. 526.
Nevertheless, it is quite clear that a married woman may convey her land by way of mortgage to secure her husband’s debt. Campbell v. Tompkins, 5 Stew. Eq. 170; S. C. on appeal, 6 Stew. Eq. 362; Merchant v. Thompson, 7 Stew. Eq. 73.
It follows, that if the mortgage had recited a debt from the husband to the complainants, instead of one from the wife, which did not exist, an entirely different question would have arisen.
But not only does the mortgage contain no such recital, but it does not appear that the wife knew or had any reason to believe that any such indebtedness existed, or that she was giving the mortgage to secure her husband’s debt; but the contrary, appears affirmatively.
Further: no question arises of estoppel in favor of third parties who have given credit to the firm on the strength of finding this mortgage among its assets. No equities on behalf of the complainants have intervened, unless the permitting of Cronk to remain in the firm may be considered as such. I think it does not raise an estoppel.
It is quite plain that the firm never made any profits, in the proper sense of the term, while Cronk was a partner which should be applied in payment, pro tanto, of the mortgage, for I think that a proper allowance'for the living expenses of the partners, in lieu of salary and by way of compensation for services rendered, was a proper charge against the 'apparent profits mentioned as being credited to them.
If, however, I am wrong in this view, the result is the same,. for it is quite in accord with the understanding testified to by Mr. Bliss that the whole of Cronk’s overdraft, at the date of the mortgage, should be paid out of the profits before the mortgage was surrendered,-and that overdraft was twice what the supposed profits afterwards amounted to.
The result of the evidence is that from complainants’ standpoint it is quite consistent with justice and equity that the *501mortgage should be enforced. But this does not include the whole case. On the contrary, from the defendant’s standpoint, it is equally clear that it should not be enforced.
■ The complainants insisted at the hearing and in argument— and at the hearing I was inclined to adopt the view—that the defendant could not be permitted to set up the representations made to her as an inducement to execute the instrument; but, upon consideration, I have changed my mind. The mortgage, on its face, contained a false recital, which ought to have attracted the attention of Mr. Bliss, namely, that Mrs. Cronk was indebted to the firm and gave that mortgage to secure her indebtedness.
As I have said, that rendered the mortgage, in the absence of circumstances to create an estoppel, unenforceable between the parties.
Some other ground must be found for its enforcement. The only other ground suggested, or that can be suggested, is that it was* given to secure the husband’s debt for that amount.
Now I think it entirely competent for the wife to show that she did not consciously give it for any such purpose. And I think this is so even if the burden does not rest on the complainants, as I think it does, to show affirmatively that it was so given; hence, it seems to me that the circumstances under which it was given are clearly competent, and I think that if any fraud was practiced upon or misrepresentations made to Mrs. Cronk which induced hex to execute the instrument, the complainants must take it subject to any defence which arises out of such misrepresentations.
As we have seen, they advanced nothing on the strength of it. They do not occupy the position of tona -fide purchasers, and they are subject to the general principle'that a party, however innocent, in the absence of estoppel, cannot claim through the fraud or misrepresentation of another.
But independent of that principle, I think that it .was the duty of the complainants, under the circumstances of this case, to see to it that the wife executed this mortgage with a full understanding of the effect of so doing.
There are express authorities in favor of this view.
*502In the case of Michener v. Cavender, 2 Wright 334, which was a scire facias, by mortgagee against mortgagor, corresponding with our proceedings to foreclose, the mortgage was given by the wife to secure a debt, whether of the husband or of the wife, or for money loaned, does not appear. It was delivered by the husband, in the absence of the wife, to the mortgagee, and purported to be executed by the wife and properly acknowledged by her before an alderman of the city of Philadelphia, who had authority for that purpose. In point of fact, the alderman had signed the certificate of acknowledgment, filled up in the ordinary form and covering the acknowledgment by the wife as well as the husband, without seeing the wife, before she had, in fact, executed the mortgage, and it was shown that she never did acknowledge it. It was held that those facts could be relied upon in defence of the scire facias, and that it was the duty of the mortgagee to have seen to it that she had executed it, in accordance with the requirements of the statute, and that he could not rely upon the mere certificate of the acknowledging officer.
Then, in Cridge v. Hare, 2 Outerb. 561, which was also a scire facias, by mortgagee against mortgagor, the circumstances were that Hare, the mortgagee, proposed to sell and convey to a Mrs. Workman certain chattels, by a bill of sale which gave time for the payment; and Cridge induced his wife to execute a mortgage to Hare to secure the payment of the consideration money mentioned in the bill of sale, upon his representation to her that the goods were conveyed and the bill of sale made to him (Cridge), and concealing from her the fact that the chattels were to be conveyed to Mrs. Workman. The trial judge excluded an offer to make proof of this, and in the end directed a verdict for the plaintiff. The supreme court reversed the judgment, and held that Mrs. Cridge was entitled to prove her husband’s representations made to her as an .inducement to the execution of the mortgage, although those representations were not made in the presence, or by the authority, or with the knowledge, of Mr. Hare, or any person in his behalf. It'held distinctly that the fact that Mr. Hare had taken the mortgage as collateral security for the payment by Mrs. Workman to him of the consideration money mentioned in the bill of sale did not raise an estoppel to prevent *503the wife from setting up the true facts accompanying the execution of the mortgage. ■
The case is on all-fours, in principle, with, and goes beyond, that before the court, and I think it was rightly decided.
It is to be observed here that .the representations made by the husband to the wife in this case are quite consistent with the actual facts as testified to by Mr. Bliss; and it is quite easy to believe that the husband felt entirely justified in making them, and that he practiced no fraud upon his partner, and, if so, then none on his wife.
The result is that the proofs show that the mortgage was made for a temporary purpose, and, in effect, as a loan, without any expectation that it was to be enforced, and it should not be enforced.
I will advise that the bill be dismissed, with costs.