Court Opinion

ID: 7051357
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:00:39.98672+00
Date Added: 2024-06-11T16:11:45.387504
License: Public Domain

Dissenting Opinion.
McBride, J.
The note in this case was payable at a bank in this State. It was, therefore, upon its face, commercial paper, governed by the law merchant.
It was transferred, before due, to one who took it in good faith, in the ordinary course of business, and paid full value for it. The only fact shown by the record which is relied upon to invalidate it in the hands of the endorsee is, that he knew the maker was a married woman, and that although upon its face it purports to be what the endorsee in good fáith supposed it was, her individual contract, it was in fact a contract of suretyship. The court expressly finds that the endorsee had no knowledge of this latter fact. The rule by which the innocent endorsee of commercial paper is protected against alleged illegality in its consideration is stated by eminent authority as follows: “The bona fide holder for value who has received the paper in the usual course of business is unaffected by the fact that it originated in an illegal consideration, without any distinction between cases of illegality founded in moral crime or turpitude, which are termed mala in se, and those founded in positive statutory prohibition, which are termed mala prohibita. The law extends this peculiar protection to negotiable instruments, because it would seriously embarrass mercantile transactions to expose the trader to the consequences of having the bill or note passed to him impeached for some covert defect. There is, however, one exception to this rule: That when a statute, expressly or by necessary implication, declares the instrument absolutely void, it gathers no vitality by its circulation in respect to the parties executing it. * * * There are a very few cases in which the statute renders such instruments absolutely void; and the most important, if not the only in*273stances now to be met with, are the statutes against usury and gaming.” Daniel Negot. Inst., section 197.
While the letter of the statute, section 5119, R. S. 1881, is, that contracts of suretyship by a married woman “ as to her shall be void,” the spirit of the statute, as repeatedly interpreted by this court, makes them voidable, and not void. Indeed, in the case of Bennett v. Mattingly, 110 Ind. 197, the court expressly decided that such contracts were not void, but voidable. See, also, the case of Plant v. Storey, ante, p. 146, deciding the same thing. The statute does not purport to declare them absolutely void, but only void as to her. The option is with her to repudiate them. If she declines to interpose the defence, no one else can do so. The defence is purely personal. The logic of Johnson v. Jouchert, 124 Ind. 105, also is, that such contracts are voidable and not void. See, also, the many cases there cited. Not even privies in estate can avoid such contracts without her cooperation.
The voidable rather than void character of such contracts is easily demonstrable, and is logically and unerringly certain if there is any consistency whatever in the many recent decisions of this court relating to that subject.
The last clause of section 5117, R. S. 1881, provides that a married woman “ shall be bound by an estoppel in pais like any other person.” It has been many times decided that a married woman, contracting as surety, may be estopped to defend upon that ground. Ward v. Berkshire Life Ins. Co., 108 Ind. 301; Rogers v. Union, etc., Ins. Co., 111 Ind. 343; Lane v. Schlemmer, 114 Ind. 296; Bouvey v. McNeal, 126 Ind. 541; Cummings v. Martin, 128 Ind. 20.
This could not be true if the contract was absolutely void. Á transaction which is void can not be purged of its infirmity by means of an estoppel. Martin v. Zellerbach, 38 Cal. 300 (99 Am. Dec. 365); Cook v. Walling, 117 Ind. 9.
Cook v. Walling, supra, furnishes a most forcible illustra*274tion of this doctrine. Mary C. Walling was wife of Creed C. Walling. The husband absented himself for more than seven years. The wife, supposing him dead, married one Hughes. She bought land, taking the title in the name of Mary C. Hughes. She, with her reputed husband, Hughes, in the year 1875 mortgaged the land to one Kate C. Cook for a debt due to her. At that time, and for a year thereafter, she lived and cohabited with Hughes, and claimed him as her husband, and was reputed to be his lawful wife. In 1876 Creed C. Walling returned. His wife abandoned, and was divorced from Hughes, and resumed her relations as wife of Walling. It was held that the mortgage was absolutely void, because the lawful husband Walling had not joined in it, and that, being void, she was not estopped and could not be es-topped to defend against it.
While the mortgage in that case was executed before the enactment of section 5117, supra, the same doctrine is reiterated in Johnson v. Jouchert, supra, relating to a transaction occurring in 1884, since that section became a law. I therefore feel amply justified by the authority of this court in insisting that such contracts are not absolutely void; that they are void only in a qualified sense, and that the word “ voidable,” instead of “ void,” would have much more accurately expressed the legislative meaning. To now hold otherwise would require the express overruling of Bennett v. Mattingly, supra, and Plant v. Storey, supra, and the tacit overruling of many other well considered cases. If this is true, it follows that bona fide holders of such notes .are entitled to protection under the rule above quoted from Daniel on Negotiable Instruments, which is abundantly supported by authority. The cases seeming to assert a different doctrine are either cases where the contract is absolutely void (in which case no estoppel can avail), or they are cases decided in jurisdictions where, as in this State prior to 1881, a married woman can not'be estopped by matter in pais.
This court has repeatedly decided that as the law now is. *275in this State, the ability of a married woman to contract is the rule, and disability is the exception. Miller v. Shields, 124 Ind. 166; Arnold, v. Engleman, 103 Ind. 512; Rosa v. Prather, 103 Ind. 191; Vogel v. Leichner, 102 Ind. 55.
It has. also decided that where a married woman executes her individual note, .it is prima facie her individual contract. She is presumed to have received the consideration, and,, if she asserts, notwithstanding the form of her contract, that it is a contract of suretyship, the burden is on her to establish that fact. Miller v. Shields, 124 Ind. 166 (174), et seq.
Where a married woman executes her negotiable note alone, it will be presumed to be for her individual debt, and not a contract of suretyship, for several good reasons:
1st. A person is presumed to intend to do what is within his’right and power rather than what is beyond them. Lawson Presumptive Ev., Rule 68, p. 276; Pool v. Morris, 29 Ga. 395.
2d. The law forbids her to make any contract of surety-ship, and the presumption is that any act was done of right, and not of. wrong. Lawson P. Ev., Rule 16, p. 81.
3d. In commercial transactions the presumption is that the usual course of business was followed by the parties thereto. Lawson P. Ev., Rule 15, p. 67.
4th. Negotiable paper is presumed to have been regularly negotiated, and to be, or to have been regularly held. Lawson P. Ev., Rule 15 — sub-rule 3, p. 77; Randolph Com. Paper, section 1024.
5th. The expression of consideration (which is found in express terms on the face of this note) of itself raises a presumption of consideration moving from the payee to the maker. Randolph Com. Paper, section 178, and authorities cited ; also, sections 562, et seq., and authorities cited.
6th. Every one is presumed to know the law. This applies to married women, in common with all other persons. They are, therefore, presumed to know that a promissory *276note, payable to order or bearer at a bank in this State, is negotiable as an inland bill of exchange.
Filed April 27, 1892.
They are presumed to know that one of the distinguishing and most valuable characteristics of such a note is the facility with which it may be transferred, and the protection afforded an innocent endorsee for value before maturity against equities existing between the maker and the payee. When a married woman executes her promissory note, payable at a bank in this State, she is chargeable with knowledge of all the legal incidents of sueli a contract. When her note thus executed is offered for negotiation in the ordinary course of business, she is bound to know that it carries with it all of the foregoing presumptions. When a married women thus executes and puts in circulation her note, which she must know carries with it to an innocent endorsee for value such presumption, she has done an act which partakes of the character of an estoppel in pais, and should estop her to say to such innocent endorsee that it is not what it purports to be, and what she has deliberately authorized him to believe it was.
When an act is done, or a statement made by a person which can not be contradicted or contravened without fraud on his part and injury to others, whose conduct has been influenced by the act or admission, the character of an estoppel attaches to it. State, ex rel., v. Pepper, 31 Ind. 76; Ray v. McMurtry, 20 Ind. 307 (308), and many other authorities. However, a proposition so fundamental and elementary in the law of estoppel in pais needs no citation of authority to support it.
With all deference to my colleagues, in my opinion the conclusion reached by the majority of the court mistakes the law, can not be sustained by valid reasoning, and will simply serve as a barricade, behind which dishonesty may entrench itself. I can not concur.