81 Md. 487 | Md. | 1895
Lead Opinion
delivered the opinion of the Court.'’
The record of this appeal contains three exceptions, two of which relate to the admissibility of the proof offered, and one to the rulings of the Court below in rejecting the prayers of the plaintiff, and granting that of the defendant. The questions are interesting and important, not only on account of the large sum involved, as of the principles of law invoked, and which we are now called upon to consider and apply. This is an action brought upon a promissory note in the Circuit Court for Frederick County. The note sued upon is as follows:
$5,000.00. “ Frederick, Md., Aug. 4th, 1892.
Six months after date we jointly and severally promise to pay to the order of the Frederick-Town Savings Institution, five thousand dollars for value received, negotiable and payable at the Frederick-Town Savings Institution. Wm. Wilcoxon, Andrew J. Wilcoxon, John L. Michael.”
This case was, by agreement of counsel, tried before the Court below without the intervention of a jury. The facts contained in the record are fully and satisfactorily stated by the reporter in his notes placed at the head of
It will be necessary to consider, in the first place, the legal attributes of the joint note of Wilcoxon and wife for the sum of $ 11,300, which the appellant discounted for the purpose of paying the four notes of Wilcoxon and sureties,! at the time held by the appellant, and which were delivered to Wilcoxon when the note of himself and wife had passed to the possession of the appellant. We may have occasion later on to examine some of the consequences attending the execution of the mortgage. But let us inquire as to the legal status of the note of Wilcoxon and wife, after the mortgage had been declared an illegal and fraudulent preference. It was not a necessary incident to the execution of a valid mortgage, that a note of any kind should have been given. The mortgage would have been equally valid without it, and if given, it was only collateral to the note; and the wife was in no sense a necessary party to the note. The almost universal practice in this State has been for the wife to join with her husband in the execution of the mortgage, for the sole purpose of releasing and conveying her potential right of dower; but to the accomplishment of this purpose it was in no respect essential that she should join in the making of the note. Since the passage of the Act of 1872, ch. 270, (Code, Art. 45, sec. 2), by which the wife is authorized jointly with her husband to contract in writing on any note, bill of exchange, &c., there is a manifest object to be obtained in having the wife join in the note as well as the mortgage, especially if she be seized or possessed of property.
Is it not a reasonable inference that the appellant was sufficiently well satisfied with the character of the new security which it had taken in payment of the original indebtedness of Wilcoxon on said four notes as to cause it, of its own motion, and not otherwise, to part with the possession of the four notes by delivering up the same to Wilcoxon, so that the new note and mortgage were in no just sense additional security? But there is another suggestive fact in the record which the testimony makes clear, and that is, the appellant cannot, under the circumstances of the case, justly-claim to have been without notice of the financial status of Wilcoxon, and his liability to be declared an insolvent within four months of the execution of the mortgage. The appellant had in its possession at that time, four notes, covering an indebtedness of $i 1,300, and each of. said notes was for money'borrowed by Wilcoxon during the year 1892. These notes, or most of them, had been renewed from time to time and were long past due, yet Wilcoxon had not, to the 21st of March, 1893, the date of said mortgage, paid one farthing in discharge of the principal sums constituting his indebtedness on said notes. The doctrine is well recognized that insolvency may be inferred from the circumstances surrounding a transaction. If the appellant knew that Wilcoxon was a trader and indebted to it in the .sum of $11,300, and that he had for nearly two years failed to pay his notes at maturity, in the ordinary course of business, and further knew that he had, within four months -of the execution of the mortgage, suspended payment of his negotiable paper, and had failed to resume payment thereof within twenty days thereafter, did not these circumstances ■constitute reasonable cause from which the bank was justi
There is nothing in the record to show whether Mrs. Wilcoxon is possessed of property or not, and there can be no just reason assigned why the appellant should be deprived of its indisputable right to proceed against her. If it had been the intention of the parties to controvert the responsibility of Mrs. Wilcoxon as surety on said note, it was their privilege to have done so at the trial below. But this they did not do, and without indulging in speculation as to her financial ability or looking to the consequences, as they may affect either party to this cause, we must apply the law as we find it. It is well-established law in this State, that a married woman is competent to become surety on'a note which she has signed jointly with her husband, and it is wholly immaterial whether she has separate property or not. In some of the States where the laws relating to married women have undergone changes of like character with our own, there have been well-considered decisions of the Courts of those States holding femmes covert liable to the same extent announced by this Court. It has been argued that the note is void as against the wife, because there is no consideration to bind. her. A different view is, however, taken by Chief Justice Gray, who delivered the opinion of the Court in Major v. Holmes, 124 Mass. 108. He says : “ Before the statute of 1874, ch. 184, the female defendant would not have been liable in either of those cases, because contracts could only be made by a married woman in reference to her separate property, business or earnings. But this statute has removed that restriction and in the broadest terms enables a married woman to make contracts, oral and written, sealed and unsealed, in the same manner as if she were sole, and does not require that the consideration of her contracts should enure to her own benefit.” We have given careful examination and consideration to the questions presented by this appeal,
Judgment affirmed with costs.
Dissenting Opinion
delivered the following dissenting opinion, in which Bryan and Briscoe, JJ., concur:
In March, 1893, Wilcoxon was indebted to the Frederick-Town Savings Institution in the sum of eleven thousand three hundred dollars on four promissory notes, of which two were overdue and two had not yet matured. There were sureties upon each of these notes. . Failing, after considerable pressure brought to bear by the bank, to give additional security, Wilcoxon finally agreed to execute and the bank consented to accept a mortgage upon Wilcoxon’s real estate to secure the entire indebtedness. Accordingly, a new note for eleven thousand three hundred dollars, the total amount he owed the bank, and a mortgage of even date securing that note were executed by Wilcoxon and wife and delivered to the bank; the accrued interest and discount for six months in advance were paid and the bank returned to Wilcoxon the four promissory notes evidencing the original indebtedness. The precise mode pursued in accomplishing this arrangement was as follows : The note for eleven thousand three hundred dollars, signed by Wilcoxon and wife, was apparently discounted, and the proceeds were apparently carried to his credit in his account with the bank. Against this seeming, but not real credit, he drew his check for the face amount of the four notes, with accrued interest and discount in advance on the new note, and that check was then charged up against the fictitious credit simultaneously entered. No
The question, then, which, it seems to me, lies at the very root of the controversy is, was there a payment of this note by Wilcoxon under the circumstances stated, and by the method above set forth? If there was not, then clearly, under the issue joined on the second plea, the plaintiff was entitled to recover. If there was a payment, then, of course, the debt was extinguished and the liability of Michael was at an end.
It must be borne in mind that the signatures to the note were not denied by the pleadings, and are, therefore, under Art. 75, sec. 23, sub-sec. 108 of the- Code, admitted; and hence the mere production of the note made out a prima facie case which, unless rebutted, entitled the plaintiff to recover. The defendant having pleaded payment and having thus set up new matter by way of defence had, according to settled rules of pleading and practice, the burden cast upon him to show affirmatively by evidence the truth of the facts asserted in the plea; and this included, as an integral part of the defence relied on, proof as to how and by what means the alleged payment had been made. Payment cannot be proved without at the same time showing how it was made. The method of payment is inseparable from the fact of payment, because the fact as to whether a payment has been made can only appear when the method by which it is alleged to have been made is disclosed. Now, if under the circumstances stated there was a payment, how was it made ? Was the debt evidenced by the five thousand dollar note sued on paid with money, or was it paid by the substitution
It is by no means an answer to say, that when the mortgage was taken the bank was bound to know that the lien created thereby would not prevail if attacked under the insolvent law, for the provisions of that law were as much an integral part of the mortgage as though they had been written at large therein. With those provisions, therefore, in the minds of the parties, as in contemplation of law they were in the body of the mortgage, it is not to be concluded, for there are no premises to justify it, that either the mortgagor or mortgagee contemplated the contingency would arise which would destroy the mortgage altogether; and hence,, the only tenable inference is that both the bank and Wilcoxon supposed when the negotiations were made and
Now, all pretence of a payment in money being eliminated, there are two reasons why there was no payment made at all: First, there was no payment, because if the note and the mortgage were both intended by the parties to- the transaction to constitute payment and a part of the agreed medium of payment, the mortgage, has failed to be available by reason of inherent infirmities; then the bank did not get the security it contracted to get, and it obviously cannot be treated as holding towards the surety the relation that it would have been forced to assume had it secured what it contracted for and what Wilcoxon undertook to give it. And secondly, because there is no pretence that the bank agreed to rely solely on the note of Wilcoxon and wife as in itself a payment of the antecedent indebtedness.
But beyond this, when the mortgage fell the note fell with it. The note of Wilcoxon and wife was but a part of the transaction, and a very subordinate and wholly unnecessary part, and was never intended to stand alone or severed from the mortgage. It was the accidental and not the essential feature of the arrangement; and to hold that it survived the wreck of the mortgage and constitutes by itself a payment of the note sued on, is to make the accessory serve the purpose designed originally to be accomplished by the principal — is to convert the subsidiary into the substantial term of the contract of novation or payment. Such a conclusion would hold the wife absolutely bound on the note though she signed it on the condition that it was to be secured by a mortgage on her husband’s property. Being a mere surety herself, as all the facts incontestably show,
I think there was no error in the first and second exceptions, of which the appellant can complain. The production of the note sued on and the signatures to which were undisputed, made out the plaintiff’s case; there was no evidence adduced tending to show payment, and the plaintiff was not required to prove the negative of the defendant’s plea. Hence the proposed evidence which only tended to prove that negative was immaterial.
There was error, it seems to me, in rejecting the plaintiffs and in granting the defendant’s prayers. The latter, besides being wrong in principle was entirely too general, and if for no other reason ought to have been rejected on that account. In my opinion the pro forma judgment ought to be reversed and judgment ought to be entered for the appellant.
(Filed June 19th, 1895.)