Court Opinion

ID: 9633897
Source: CourtListenerOpinion
Date Created: 2023-08-22 12:05:59.8526+00
Date Added: 2024-06-11T09:21:44.033774
License: Public Domain

DONALDSON, Justice,
dissenting.
Were we today deciding for the first time whether a married woman should be personally liable on all contracts she freely enters, I - would agree with the majority that she should be. That, however, is not what I perceive to be the central issue here. The crux of this case is whether it is necessary at this late date to change a long-established rule of law to the detriment of those who have relied upon this Court’s earlier decisions.
Before continuing, I believe it is necessary to identify clearly the rule of law which the majority changes. Beginning with Dernham & Kaufmann v. Rowley, 4 Idaho 753, 44 P. 643 (1896), this Court has consistently held that a married woman cannot become personally liable for a community debt.1 Neither the Dernham decision, however, nor any subsequent decision, prevented a married woman from obligating her separate property for a community debt. This distinction was explained in Bank of Commerce, Ltd. v. Baldwin, 12 Idaho 202, 210, 85 P. 497, 499 (1906).
“In order to create a charge against her estate for such a debt [one not contracted for her use and benefit or that of her separate property], it must be made a charge in rem by a mortgage or pledge of the property or in some manner known to or recognized by the law as constituting a lien upon or charge against the specific property. * * * It has been repeatedly held that a married woman who signs a promissory note with her husband for the payment of his debt, and executes a mortgage on her property to secure the payment of the same, creates a liability only in rem and not in personam. The property encumbered is liable for the payment of the debt, but when exhausted the obligation, as against the wife, is extinguished, and no personal liability attaches.”
Thus, a married woman was not prevented from obligating her separate property for a community debt. She was, however, limited in the manner in which she could do so.
The majority contends that when the legislature in 1903 enacted I.C. § 32-904, it intended to change the rule announced in Dernham thereby making married women personally liable upon all of their contracts. According to the majority, I.C. § 32-904 was misconstrued when first interpreted in Bank of Commerce, Ltd. v. Baldwin, supra, on subsequent appeal, 14 Idaho 75, 93 P. 504 (1908), and this misinterpretation was then followed by subsequent cases. The majority ignores the fact that, had the Baldwin decisions and those which followed failed to interpret I.C. § 32-904 in accord with the legislative intent, the legislature in over sixty-eight years took no action to correct the error. Furthermore, the majority bases its criticism of the early cases upon a misreading of those cases.2 Irrespective of the reasons *166supporting the change, however, I believe the main issue to be the contracts to which the change should apply.
The respondent signed the purchase contract in this case in 1968. Under the law which then existed, she personally, and *167therefore her separate property, would not be liable under the contract. The majority now changes the law and applies it to respondent’s contract. In doing so, it creates respondent’s liability under the contract eight years after she signed it. I believe it is both unnecessary and unjust to apply the change in this manner.
As to contracts such as the present one, the legislature has acted to change the law. In 1974 it amended I.C. § 32-912 to give a married woman rights coequal with that of her husband in the management and control of the community property. The amendment also provided:
“any community obligation incurred by either the husband or the wife without the consent in writing of the other shall not obligate the separate property of the spouse who did not so consent.”
The necessary implication of the amendment is that the separate property of a married woman will be obligated if she cosigns with her husband a contract for a community obligation after July 1, 1974, the effective date of the amendment.3
More importantly, however, I believe that any change in this law should apply prospectively only. The present case is an example of the inequity which will result from applying the change to existing contracts. Appellant knew prior to entering into this contract that respondent’s husband had little or no assets of -his own, and that the house in which respondent and her husband resided was her separate property. The transaction was for the benefit of the community and not for the benefit of respondent’s separate property. She made no representation of any kind, false or otherwise, nor committed any acts which induced appellant to rely upon her credit for performance under the contract. In addition, respondent was not an active participant either in the negotiations for the transaction or in the management of the business. Respondent's only involvement in the entire transaction was her signing the contract because her husband “came home and told me I had to sign it.”
Furthermore, had appellant desired to obtain security for the performance of respondent and her husband under the contract, he could have insisted that respondent execute a mortgage upon her house. None of the decisions of this Court would have prevented this, and respondent would have known that she was obligating her separate property for the community debt. Appellant did not so insist, however. Thus, in justifiable reliance upon eighty years of decisions from this Court, respondent signed the contract assuming that she personally, and therefore her separate property, would not be liable. Now, eight years later, the majority give appellant a windfall. They retroactively alter the contract by changing the law under which it is to be governed, thereby making respondent and her separate property liable.
In appropriate cases we have not hesitated to hold a married woman estopped to claim nonliability based upon her marital status. Frost v. Mead, 86 Idaho 155, 383 P.2d 834 (1963); Overland Nat'l Bank v. Halveston, 33 Idaho 489, 196 P. 217 (1921). Thus, the majority decision will change the result only in those cases in which estoppel would not apply — cases such as the present one in which the married woman’s involvement in the transaction is minimal. Because of the inequity which will result from applying this change in the law to existing contracts, I would affirm the judgment of the district court.
BISTLINE, J., concurs in the dissent.

. Correctly stated, the rule is that a married woman cannot be personally liable for a debt not contracted for her use and benefit or that of her separate property. For the sake of clarity, I will refer to the rule as preventing a married woman from becoming personally liable for a community debt since that is the type of obligation involved in this case.

. The majority begins by quoting from Dernham & Kaufmann v. Rowley, supra. They conclude that the Dernham court recognized that as to the separate property over which she had control, a married woman had the right “to pledge it for a debt of the husband or to voluntarily become a surety for his debt.” If the majority means that the Dem-ham court recognized that a married woman could pledge her separate property for her husband’s debt, they are correct. If they mean that she could obligate either herself or her separate property by agreeing to become a surety for his debt, they are incorrect. The married woman in that case co-signed with her husband a promissory note which was either a community debt or his separate debt. The court held that neither she nor her separate property was liable under the note. If she could incur liability by guaranteeing her husband’s debts, she could certainly do so by co-signing a promissory note with him.
The majority then cites Jaeckel v. Pease, supra, to support its contention that “the *166Court soon retreated from the statements contained in Dernham.” The holdings in both cases were identical. The wife, who joined with her husband in executing a promissory note, would not be personally liable, unless the debt was contracted by her for the use of her separate property, or for her own use and benefit.
The majority next attacks Bank of Commerce, Ltd. v. Baldwin, supra, the first case to construe I.C. § 32-904. The majority states that in construing the statute the Baldwin court “ignored both R.S. § 3220 [now codified as I.C. § 29-101] and the expansive language in Dernham.” The majority also contends that the Baldwin court cited a passage from Dernham as authority in construing the newly-enacted statute thereby ignoring the changes presumably intended by the legislature.
First, the “expansive language” in Dernham is the result of the majority’s misreading of that case. Second, although the Baldwin court may have “ignored” R.S. § 3220 in the sense that it did not discuss it, 1 doubt that the court was unaware of the statute. The Dernham court considered the statute and concluded that its purpose was not to give married women the right to make all contracts which may be made by a single woman. Finally, the Baldwin court did not cite Dernham as authority for construing the newly-enacted statute, thereby ignoring the legislative intent. Although the first Baldwin decision did not consider at length the legislative intent, the court did so in the subsequent appeal of that case. 14 Idaho 75, 93 P. 504 (1908). Prior to 1903 the husband generally had the right to manage and control his wife’s separate property. R.S. §§ 2497 and 2498 (1887). The new statute gave the wife the right to manage and control her separate property, including the right to “enter into any contract with reference to the same,” which right was coequal to that of a married man in dealing with his property. The issue as the court saw it was whether the legislature intended to merely transfer to the wife the right to manage and control her separate property, or whether it also intended to make her personally liable upon all of her contracts. After considering the meaning of the phrase “with reference to the same,” the court concluded :
“It is evident to us that had the Legislature desired to change the rule as previously announced by this court, and grant the wife the right to become surety and guarantor and to sign accommodation paper and go bail, it would have done so in clear and unmistakable terms. In other words, the Legislature would not have limited her right to contract to those instances merely which have ‘reference to her separate property.’ ” 14 Idaho at 82, 93 P. at 506-07.
The majority next criticizes Loomis v. Gray, 60 Idaho 193, 90 P.2d 529 (1939). They quote from Loomis and set out the rule announced in McLaren v. Hall, 26 Iowa 297 (1869). The majority then states that the Loomis court’s reliance upon McLaren was misplaced
“because the Court in McLaren did not say that a woman could not bind herself and her separate property by her own acts. The Iowa court only said in that case that the husband had not been acting as her agent in the management of her separate property, that he had not bound her by his acts, and that she did not have to repudiate his unauthorized acts in order to prevent herself from being bound by them.”
The Loomis court did not rely upon McLaren to support the rule that a married woman cannot become personally liable for a community debt. Both the statement by the Loomis court which the majority quotes and the court’s reliance upon McLaren were in response to the creditor’s argument “that by failing to speak or protest, appellant [the wife] is estopped to repudiate her husband’s acts or to deny he acted for and as her agent.” 60 Idaho at 210, 90 P.2d at 536. Thus, both the Loomis quotation and the reliance upon McLaren were to support the rule that a married woman had no duty to repudiate the unauthorized acts of her husband. They were not, as the majority implies, intended as support for the rule that she cannot become liable for community debts.
Finally the majority cites Booth Mercantile Company v. Murphy, 14 Idaho 212, 93 P. 777 (1908). I fail to see how that case could support the majority decision here. In Booth not only had the married woman executed a promissory note for her own use and benefit, but she had mortgaged her separate property as security for the note. The Booth court expressly stated that it
“does not depart from the well-recognized rule which has been adopted in this state, that, in order to charge the separate property of the wife, or render it liable to levy and sale, it must be alleged in the complaint and proven on the trial that the debt was incurred for the use and benefit of her separate property, or was a contract by her for her own use and benefit.” 14 Idaho at 221, 93 P. at 779-80.
In the present case, the contract signed by respondent was a community obligation, and she did not execute a mortgage upon her home.

. Although the amendment would cover the contract in this case, it is not as broad a change as that which the majority makes. For example, it does not cover either oral contracts or those incurring non-community obligations.