Court Opinion

ID: 3499378
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:06:38.55647+00
Date Added: 2024-06-11T14:15:53.715070
License: Public Domain

I am unable to concur in the views of Mr. Justice SHARPE, in this case that defendant is liable on her note. By the common law a married woman has no power to contract. By statute she is permitted to do so with reference to her separate estate. 3 Comp. Laws 1915, § 11485. In the construction which the court has given this statute for three-quarters of a century, it has jealously guarded the estates of married women. Repeated attempts have been made to sail around the statute and the holdings of this court, but they have usually been in vain, as the court has insisted upon looking at the substance of the transaction instead of the form. As to these attempts R. C. L. observes:
"If it appears that an elaboration of outward details was, as both parties knew, but a cloak to cover an attempt to conclude a contract of suretyship in violation of the statute, the indirection in method by which they have proceeded will not avail to save the transaction. Whatever device may be resorted to for the purpose of evading the statute, if the person seeking to enforce the contract knew of, or participated in, the design, or purposely remained ignorant, courts will deal with the transaction according to its substance, regardless of the form in which it may have been disguised." 13 R. C. L. p. 1302.
With the previous attitude of this court in mind, let us examine this transaction. Defendant was a married woman. She was a stockholder in the Detroit Transportation Truck Company, an industrial corporation. The company had given the plaintiff a promissory note for $2,000. It did not pay the note when due. Plaintiff attached a part of the company's assets and took charge of the plant. *Page 495 
This was in June. Various suggestions were made for a settlement. Finally, in December, defendant had a conference with plaintiff, and she suggested indorsing the note, and thereby releasing the assets of the company. This suggestion was declined because defendant was a married woman and could not become a surety. At a later conference it was suggested that she purchase the note. This was agreed to and she purchased the company's note and gave her note to plaintiff in payment of the principal and interest.
It takes very little acumen to see that this form of handling the matter was adopted to avoid the statute and the holdings of this court. Defendant did not want the note as an investment. She evidently had no money to purchase it. Except for the fact that she was a stockholder and wanted to assist the corporation she would not have purchased it. Financially, this placed her in no different position than she would have been had she signed as a surety. If she had indorsed the note as a surety and the company had defaulted, she would have been obligated (morally) to pay the note and had recourse to the assets of the company to reimburse her. If she purchased the note and the company defaulted she would have had recourse to the same assets. The suggestion that defendant purchase the note was clearly an ingenious subterfuge and device to enable her to avoid the statute and open the way for her to become a surety. This court has considered at length the suretyship of married women for corporations in which they were interested.Russel v. Savings Bank, 39 Mich. 671 (33 Am. Rep. 444); DetroitChamber of Commerce v. Goodman, 110 Mich. 498 (35 L.R.A. 96);Fitzgerald v. Garson Productions, 221 Mich. 88; Jarzembinski v.Plodowski, 225 Mich. 104; Kirby v. Orloff, 226 Mich. 413. In each of these cases the suretyship of a married woman, who was a stockholder in *Page 496 
the company, was declared invalid. In the last-named case it was said by Justice McDONALD:
"In the present case the defendant's note was not given in relation to or for the benefit of her separate estate. It was the undertaking of a married woman to pay the debt of another. The fact that it was to pay the debt of a corporation in which she was the principal stockholder does not alter the character of her liability. Her legal identity as a stockholder is distinct from that of the corporation. The corporate property is not her separate estate. When she contracted to pay the debts of the corporation she was not dealing with reference to her separate estate. Though she may have been indirectly benefited as a stockholder, she received no consideration affecting her individual estate.
" 'The statute does not intend to remove all the common-law disabilities resting upon married women. The design was to confer upon a wife the right to enjoy and dispose of her own property, and to acquire property, and the statute should not be extended by construction to cases not embraced in its language nor within its design.' Detroit Chamber of Commerce v.Goodman, 110 Mich. 498 (35 L.R.A. 96)."
If the evasion of the statute be successful in this case it will, in effect, repeal the statute. In any given case where a married woman desires to become a surety she will not sign as such but will purchase the obligation of the person she desires to assist and give her own note in payment. When it is established that this kind of transaction is legal the statute will have lost its force. To say, as this court has hitherto said, that such a transaction is invalid, will deprive married women of no rights which they have hitherto enjoyed. They may still make contracts and deal with reference to their separate property. They may purchase securities in good faith when it is not done per force of a plan to make them surety for another. I think this court should keep on construing the statute as it has done for nearly three-quarters of a *Page 497 
century. If any changes are to be made they should be made by the legislature.
The trial court made an error in charging upon the question of burden of proof. Judd v. Judd, 187 Mich. 612. In view of what he had said to the jury, the error was not very important. It was, however, erroneous.
The judgment should be reversed, with no new trial, with costs to defendant.
MOORE and WIEST, JJ., concurred with BIRD, J.