Equitable Building & Loan Ass'n v. King

48 Fla. 252

• Court: Supreme Court of Florida
• Decided: June 15, 1904
• Status: Published

Opinion

Carter, P. J.

(after stating the facts). — The conveyance to appellant, by Louise G. King and her husband, is executed and acknowledged with all the formalities required by our statutes regulating the conveyance of married women’s property. It appears upon its face to be collateral to or security for a loan, and, therefore, under our statutes relating to mortgages, it must be construed to be a mortgage. The effort here is to foreclose it as a mortgage for the amount due upon the bond executed by Louise G. King, or if the bond be declared invalid, then for the amount of the loan made by appellant to Louise G. King to enable her to pay off a valid purchase money mortgage upon her separate statutory property.

We will first ascertain the validity of the bond. It contains a clause that “this obligation is a Georgia contract, and in all respects subject to and governed by the laws of Georgia.” Appellant argues that as the bond purports to have been executed with reference to the laws of that State, its validity should be tested by those laws, and not by the laws of Florida. Without admitting that the rule contended for would apply in this case, it is sufficient to say that the court does not take judicial notice of the laws of a sister State, and there is no proof in this record that the bond is valid under the laws of Georgia. Sammis v. Wightman, 31 Fla. 10, 12 South. Rep. 526. Its validity must, therefore, be tested by the laws of this State, where the parties resided and executed it, and where it is sought to be enforced.

It has been frequently held by this court that in the absence of statute authorizing a married woman to make notes or bonds, her contracts of that nature are not binding upon her personally either at law or in equity. Section 2208, Revised Statutes, 1892, authorizes married women to hold stock in building and loan associations and to borrow money, and to execute a note or bond secured by mortgage upon her separate real estate to secure such loan, but expressly provides • that the husband “must join in the execution of such note or bond and mortgage to give it validity.” The appellant is a foreign building and loan association, but the statute authorizing it to engage in business in this State (chap. 4158, acts of 1893) does not relieve it from the general rule, which requires that the validity of its contracts made in this State must be tested by the laws applicable to domestic corporations of like character. Skinner v. Southern Home Building & Loan Association, 46 Fla. 547, 35 South. Rep. 67. The bond being executed by the married woman alone, is invalid under the statute above referred to, and even if the mortgage was intended as security for its performance such mortgage can not be enforced, as security for the installments upon stock, premiums, fines, etc., which the bond undertakes to require the married woman to pay. The mortgage deed purports on its face to have been given as collateral for a loan, not as security for performance of the conditions of the bond, or as security for the payment of the installments on stock, premiums, fines, etc. In the face of this statement in the mortgage deed, it is doubtful if the security could be extended to cover the installments, premiums, fines, etc., mentioned in the bond, as a part of or substitute for the loan mentioned in the mortgage deed, but it is not necessary to decide that question in view of our holding that the bond is invalid. The mortgage deed is executed and acknowledged by the married woman and by her husband, with all the formalities required by law, and it purports’to have been given as collateral for a loan. A loan of $1,200 was in fact made to Louise G. King, with the knowledge and consent of her husband, for the benefit of her separate statutory property, and the money was actually used for the benefit of that property by payment of a valid purchase money mortgage constituting a lien thereon. There is no question of doubt from the testimony that the mortgage deed was executed for the purpose of securing repayment of that loan. Is it valid for that purpose? It will be observed that the mortgage deed states merely that it is “collateral for a loan,” without stating the amount, the time when due, the purpose for which it was made or that a note, bond, or other writing had been given therefor. Is this sufficiently definite to enable appellant to make proof of the loan and to foreclose the mortgage deed for the amount due, as against Louise G. King, the maker of the instrument, R. R. Rosborough, a subsequent mortgagee, and Lee Graham, the subsequent purchaser of the property? We have no statute requiring a mortgage to state upon its face the precise amount of the debt, or the other matters above mentioned. Our recording statutes do not undertake to prescribe the contents of mortgages, hut merely require them to be recorded in order to be effectual as against creditors or subsequent purchasers for a valuable consideration and without notice. Section 1972, Rev. Stats. 1892. Under section 1981, Rev. Stats. 1892, a deed absolute made for the purpose or with the intention of securing the payment of money is to be deemed merely a mortgage, and under repeated decisions of this court it may be enforced as a mortgage for the debt it was intended to secure, though no mention of the debt is made in the instrument itself, and the evidence of the debt rests in other writings or in parol only. The record of a deed absolute, or of a mortgage which does not state the amount or other particulars of the debt which on its face it purports to secure, is sufficient to put creditors and subsequent purchasers upon notice that the grantee has rights in the property, and upon proper inquiry those rights may be ascertained. If proper inquiry is made and the party is misled or fails to ascertain the facts his rights may be superior to those of the grantee, but there is no suggestion in this case that either Rosborough or Graham made any inquiry, or that they were in any way misled before or at the time they accepted the mortgage in the one case, and the deed in the other, from Louise G. King and her husband, and they each acquired their rights long after the mortgage deed to appellant was duly recorded. Graham, it is true, purchased the .property after the court had sustained a demurrer to the original bill, but the bill was afterwards amended, and, at the time he purchased, there had been no final adjudication that the mortgage was invalid. While there is some conflict of authority upon the question as may be seen by reference to 1 Jones on Mortgages, section 344, we think that reason and the weight of authority sustain the sufficiency of the description of the debt intended to be secured by the mortgage deed in the present case. Michigan Insurance Company of Detroit v. Brown, 11 Mich. 265; Hurd v. Robinson, 11 Ohio St., 232; Curtis v. Flinn, 46 Ark. 70; Nazro v. Ware, 38 Minn. 443, 38 N. W. Rep. 359; 1 Jones on Mortgages,section 70, 343 et seq; Note 49 Am. St. Rep. 207.

Though the amount of the debt is not specified in this instrument it purports on its face to have been given in consideration of the sum of $1,200, lawful money paid by the grantee to the grantors and as collateral for a loan. We are not required to determine whether where the mortgage or deed given as security by a married woman does not state the amount intended to be secured, a debt exceeding the sum stated as the consideration can be proved by evidence dehors the mortgage itself, because here we hold on other grounds, that the mortgage deed can be enforced only for the amount of the loan, which is the same as the amount of the consideration expressed in the instrument. See First National Bank of Florida v. Ashmead, 33 Fla. 416, 14 South. Rep. 886.

J. W. F. King, the husband of Louise G. King, in no manner bound himself for the payment of the loan made by the association to his wife. He did not sign the application for the loan, nor did he ever promise either verbally or in writing to make himself personally responsible for the debt. On the contrary, it very clearly appears that he merely assisted his wife in obtaining the loan which was for the benefit of her separate property, and its repayment was intended to be secured by conveyances of her separate property alone. The mortgage deed contains no covenant to repay the loan upon which he could be held personally responsible. The question as to the validity of the mortgage under these circumstances is an interesting as well as a difficult one. Section 1956, Rev. Stats. 1892, provides that “any married woman owning real property may sell, convey or mortgage it as she might do if she were not married; provided her husband join in such sale, conveyance or mortgage.” In Hodges v. Price, 18 Fla. 342, it was held that the promissory note of a married woman was void; that it was not effective to bind her person either at law or in equity; that her separate property could not be charged for the amount due upon her simple promissory note though a mortgage was duly executed by her and her husband to secure it, where the bill for foreclosure of the mortgage did not allege that the amount so secured was the purchase money promised to be paid by her for the mortgaged property, nor contain other allegations showing that her separate property should be subjected to payment of the amount. In Mattair v. Card, 18 Fla. 761, the court held that a mortgage duly executed by husband and wife upon the property to secure a note signed by them both was valid. It was contended in argument that the note was void as to the wife and, as there were no allegations in the bill to show that her property should be charged, the mortgage could not be foreclosed. The court said as the note was signed by the husband it was prima facie valid as to him; that as the statute authorized the wife to sell, transfer and mortgage her real estate as if she were unmarried, her husband joining therein, it would seem to settle the question that she could bind her real estate to secure any'valid indebtedness of herself and her husband. The cases of Dollner, Potter & Co. v. Snow, 16 Fla. 86, and Hodges v. Price, supra, were referred to and held not to apply to the circumstances of that case, the court remarking that the testimony and answers of defendants showed that the note and mortgage were given to secure the purchase price of property conveyed to the wife. The court said further: “The equitable rule is that any debt contracted by a married woman for the benefit of her separate estate or property is valid to the extent that it may be enforced out of any such estate or property whether expressly secured by mortgage or not.” In Dzialynski v. Bank of Jacksonville, 23 Fla. 346, 2 South. Rep. 696, it was held that a mortgage upon a married woman’s property duly executed by husband and wife to secure a joint and several note signed by them, was valid, though it appeared that the note was not given for the purchase price of the laird, nor for money applied to or used for the improvement of the land or any of the separate estate of the wife, nor that the husband had any interest in the land. The case of Hodges v. Price, supra, was referred to, the court saying: “As we understand that case, it decides that the promissory note of the wife, not joined in by the husband, considered without the aid of any allegations to show that it was given for a debt for which the law authorized her to charge her separate property, was a nullity.” Referring to the statute authorizing married women to mortgage their property the court said: “There is no condition as to the nature of the debt for which she can mortgage her property and we see no reason why, when the husband joins in the mortgage and it is properly acknowledged and authenticated, the wife can not make a valid mortgage for the securing of any kind of debt that a person sui juris could.”

The precise question we are now called upon to decide, viz: whether a mortgage duly executed by husband and wife upon the wife’s separate statutory property, to secure repayment of money loaned the wife and used by her, for the benefit of her separate statutory property, where neither the husband nor any other person has made himself liable for the debt, is valid, has not been decided in this State, though it has been frequently held by this court that a married woman’s separate statutory property may be charged in equity for the purchase price thereof and for debts contracted for its benefit, and the constitution of 1885 expressly provides (Sec. 2, Art. XI) that “a married woman’s separate real or personal property may be charged in equity and sold, or the uses, rents and profits thereof sequestrated for the purchase money thereof; or for money or thing due upon any agreement made by her in writing for the benefit of her separate property; or for the price of any property purchased by her, or for labor and material used with her knowledge or assent in the construction of buildings, or repairs, or improvements upon her property, or for agricultural or other labor bestowed thereon with her knowledge and consent.” While it is true that married women can not make contracts of any kind, except those expressly authorized by statute, that will bind them personally either at law or in equity, yet their agreements made for the benefit of their separate statutory property have never been regarded as absolutely void for all purposes, but, on the contrary, courts of equity have charged the séparate property for money due thereon, and, as the agreements are valid to that extent, we hold that it is competent to secure the money due upon such agreements by mortgage of the separate statutory property where the capacity to mortgage is conferred in general terms, as by our statute above quoted, and the-mortgage is duly executed and acknowledged in compliance with law. The question is very thoroughly discussed in Brookings v. White, 49 Me. 479, and we fully approve the reasoning in that case. See, also, Franklin v. Beatty, 27 Miss. 347; Pemberton v. Johnson, 46 Mo. 342; Damon v. Deeves, 57 Mich. 247, 23 N. W. Rep. 798; Gregory v. Van Voorst, 85 Ind. 108; Wolbach v. The Lehigh Building Association, 84 Pa. St. 211.

It is contended, however, that the debt for the security of which this mortgage was given was one falling within the second clause of the constitutional provision quoted, “for money or thing due upon any agreement made by her in writing for the benefit of her separate property,” and that there is no such agreement in writing in the present case as is contemplated by the constitution. Whether the mortgage alone is a sufficient writing we do not find it necessary to decide, but the written application for the loan taken in connection with the mortgage, answers, in the opinion of the court, every requirement of the constitution, as no particular form of the agreement required to be in writing is prescribed. Those instruments show a loan of $1,200 in money to Louise G. King for the purpose of paying off a mortgage upon her separate statutory property, and that she agreed to repay the money so borrowed. The mortgage deed is therefore valid and enforceable for the loan, though not for the bond, but no deficiency decree can be entered against Louise G. King if the mortgaged property fails to sell for enough to pay the amount due upon the loan.

The decree of the Circuit Court will be reversed with directions to ascertain the amount due upon the loan of $1,200, with interest, less such sums as have been paid to appellant by Louise G. King for installments upon stock, premiums, fines and interest, and to enter a decree in favor of appellant foreclosing the mortgage deed and directing sale of the property to pay the sum found to be due.

Shackleford and Whitfield, JJ., concur.

Taylor, C. J., and Cockrell, J., concur in the opinion.

Hocker, J., being disqualified, took no part in the consideration of the case.