Harmon v. Winegar , 157 Ark. 254 ( 1923 )

Hart, J.,

(after stating the facts). To reverse the decree the plaintiff relies upon the case of Maloney v. Hale, 153 Ark. 162. In that case the court held that, where a wife permitted her husband to use her money and personal property as an apparent basis of credit, she is estopped from claiming the property as against one who extended credit to her husband on the faith thereof. In that case the husband failed in business, and about a year afterwards he again engaged in business in the name of Hale & Co. The wife claimed the business, and said that she obtained the money with which to start it from her brother-in-law. The business was conducted solely by the husband under the name of Hale & Co. for many years. The wife never gave any attention whatever to the business. The husband obtained credit on the faith of its being his own business. The money of the wife and the business skill and industry of the husband could not be separated. There was no question but that the creditors extended credit to the husband on the faith that it was Ms own business. He had no other basis of credit. Hence the court held that, the plaintiff having given the husband credit on the faith of Ms supposed ownership of the business, it would be a fraud on him for the wife to be allowed to claim the business. In cases of this sort, however, it is essential, in order that the plaintiff may invoke this estoppel against the. wife, that he should have given credit to the husband upon the faith of, and in the reasonable and justifiable belief in, the fact that the husband was the actual owner of the property in controversy, and without notice of any facts and circumstances that would lead to the belief that the property was claimed by the wife.

In the present case the wife mortgaged her homestead to secure the money with which she purchased the mortgages on the Barry farm. It is true that she did this with the view of selling'the farm to the corporation promoted by her husband for use in erecting a large sanitarium. The motive which prompted, her to make the purchase, however, cuts no figure in' the case. The fact remains that she did purchase the mortgages with her own money. It is also insisted that she purchased the mortgages for less than their face value. This did not make any difference. That was a matter which solely concerned the mortgagees. The validity of their mortgages is not even questioned by the plaintiff. Mrs. Winegar had a right to foreclose the mortgages after they were assigned to her and to purchase the mortgaged land at the foreclosure sale. It is not shown that the husband had possession of the land or that his wife permitted him to use it as a source of credit.

The evidence also shows that the automobile -was given her by a wealthy oil man in token of his appreciation of professional services rendered him and members of his family by Dr. Winegar. It is not shown that the automobile was given as a part payment for these medical services. The evidence shows that it was a gift, pure and simple, to the wife, and we.are not concerned with the motive which prompted the gift, in the absence of a showing that it was intended as a payment, in whole or in part, for the medical services performed upon the giver by her husband. It is not shown that the husband used it as a basis of credit.

With regard to the office furniture, the case is not so plain, but we are of the opinion that the finding of the chancellor in favor of Mrs. Winegar on this point is not against the preponderance of the evidence. The evidence is plain that Mrs. Winegar bought the furniture and paid for it. She exhibited the receipted bill which she obtained from the dealer who. sold her the furniture. She testified to the amount of money that her father gave her, and the large amount inherited from him after his death. She gave the place where he died, and the records there would have shown the falsity of her testimony as to the amount that she received when her father’s estate was administered upon and distributed to his heirs. No contradiction of her testimony in this respect was made. Hence, if the plaintiff has any standing iii this case as to the furniture, it must be upon principles of equitable estoppel on the ground that Mrs. Winegar permitted her husband to take possession of it and acquire credit on the strength of it, and, the plaintiff having given him credit on the faith of his supposed ownership of it, it would be a fraud on her for Mrs. Winegar to now claim that the furniture is hers.

According to the testimony of Mrs. Winegar, she at all times claimed the furniture and collected the rent on it while it was in her husband’s possession. The chief source of her husband’s income as a physician and surgeon would necessarily arise from his professional services, and his office furniture would be merely an incident to his profession.

It does not even appear that he obtained the loan from the plaintiff on account of having this furniture. He was engaged with an associate, who also had signed the note sued on, in promoting a $10,000,000 enterprise. Both Dr. Winegar and his associate spent large sums of money and much time in promoting this enterprise. The plaintiff thought that it would be a success, and that Dr. Winegar and his associate had considerable means. It does not appear that his office furniture was ever considered in the premises at all.

In the case relied on for a reversal of the decree the wife necessarily knew that the husband was conducting the business solely on his own account, and that credit was being extended to him solely on the faith of his supposed ownership of the business. He was insolvent, and had no other source of income. His ability to earn money was inseparable from the business.

Here the office furniture was but a small incident in the business of Dr. Winegar. He claimed to be a physician and surgeon of note, and obtained credit from the plaintiff on her belief in the success of the enterprise promoled bv him and his associates.

The chancellor found that, under the peculiar circumstances of this case, no fraud was practiced upon the plaintiff, and that the doctrine of equitable estoppel did not apply. It cannot be said that his finding is against the preponderance of the evidence, and the decree will therefore be affirmed.