Wilson v. Cummings , 196 Ga. 17 ( 1943 )

1. Since the facts in these separate actions of ejectment brought by a married woman are essentially the same and controlled by the same legal principles, the cases are determined together.

2. Notwithstanding the inhibition of the Code, § 53-503, against a wife's binding of her "separate estate by any contract of suretyship nor by any assumption of the debts of her husband," and against "any sale of her separate estate, made to a creditor of her husband in extinguishment of his debts," she may otherwise contract and deal with her property as a feme sole. Therefore "A married woman may borrow money for the purpose of paying debts of her husband, and give her note and mortgage," or security deed, "and such a contract will be binding upon her, although the lender may know, at the time the loan is made, that she is borrowing it for this purpose, if he is not the husband's creditor who is to be thus paid, and is no party to any arrangement or scheme between the husband and wife of which the borrowing of the money by her for such purpose is the outcome." Braswell v. Federal Land Bank of Columbia, 165 Ga. 123 (3) (139 S.E. 861), and cit.; Garrett v. Thornton, 157 Ga. 487 (3) (121 S.E. 820); Roan v. Union Central Life Insurance Co., 181 Ga. 335 (182 S.E. 21); Saxon v. National City Bank, 169 Ga. 784 (2), 788 (151 S.E. 501); Williamson v. Walker, 183 Ga. 320 (188 S.E. 346); Magid v. Beaver, 185 Ga. 669, 677 (196 S.E. 422); Carlton v. Moultrie Banking Co., 170 Ga. 185 (152 S.E. 215); Johnson v. Leffler Co., 122 Ga. 670 (1, 3) (50 S.E. 488). With regard to the right of the wife to repudiate any such colorable scheme or device, and to cancel her deed or recover by ejectment the land conveyed, as against the husband's creditor or one participating in the transaction, see Jackson v. Reeves, 156 Ga. 802 (2-4) (120 S.E. 541); Bond v. Sullivan, 133 Ga. 160 (1-3) (65 S.E. 376, 134 Am. St. R. 199); Taylor v. Allen, 112 Ga. 330 (37 S.E. 408).

3. Notwithstanding the language of the Code, § 53-503, declaring "absolutely void" a sale by a wife to a creditor of her husband in extinguishment of his debts, such a transaction is not corrupt or immoral, so as to "import utter nullity, not only as between the original parties, but as between one of these and the successors or privies of the other. . . The rule is economical, not moral; and its policy is in favor of a class, and not of the public at large." Thus, when a wife "makes a conveyance such as her ordinary power renders her competent to make, and upon the face of it acknowledges a consideration and the payment of it, not disclosing that her husband's debt was any part of the consideration, or that the whole transaction was not for her sole benefit, and delivers that conveyance to the purchaser, she does an act calculated to mislead any person to whom the purchaser may offer the property for sale, and to whom her conveyance may be exhibited as evidence of title, if in fact her husband's debt was concerned in the consideration. . . If, trusting to the document . . . any person should be honestly misled by it," she must "abide the consequences." Married women are not exempt from the equitable principles protecting bona fide purchasers or from the rules of estoppel. Sutton v. Aiken, 62 Ga. 733 (2, 3), 741-743; Dotterer v. Pike, 60 Ga. 29, 30, 42. See, to the same effect, Jones v. Harrell, 110 Ga. 373, 377 (35 S.E. 690); Southern Mutual Building Loan Association v. Perry, 103 Ga. 800 (30 S.E. 658); Smith v. Smith, 134 Ga. 485 (68 S.E. 70); Colquitt v. Dye, 29 Ga. App. 247 (3) (114 S.E. 643); Wootten v. Braswell, 48 Ga. App. 312 (172 S.E. 679), and cit.; Savannah Bank Trust Co. v. Groover, 56 Ga. App. 27 (4), 35 (192 S.E. 49), and cit.

(a) The preceding decisions, which deal with the exact point in question, are controlling as to the rights of bona fide purchasers of property conveyed by married women, and the rules of estoppel in favor of such purchasers. Therefore the cases dealing with the rights of bona fide purchasers from grantees under security deeds, which under the former usury statutes were void when tainted with usury (Code, 1910, § 3442), are not in point. The distinction between the two classes of cases may be based on the fact that "the defence of usury is founded on public policy" (Bailey v. Lumpkin, 1 Ga. 392, 409), whereas, as already indicated, the inhibition with respect to married women is a rule which is economical, not moral, and its policy is in favor of a class, and not of the public at large." Sutton v. Aiken, supra.

4. Under the proceeding rules, the court did not err in directing the verdict for the defendant in either of the ejectment suits brought by a wife to recover against purchasers from the grantee in her deed to secure debt, where the evidence showed without dispute that each of the defendants bought his tract for value and in good faith, without notice of any possible claim by the plaintiff as a married woman, and received warranty deeds to such tracts from the grantee in the plaintiff's security deed, after the wife had defaulted on her deed, and the grantee therein advertised and sold the property and executed a deed to itself by virtue of a power of sale in such security deed.

5. The preceding holdings render it unnecessary to determine questions raised by other exceptions of the plaintiff wife, as to whether or not there was sufficient evidence for the jury to pass on the validity of her security deed, on her contention that it was executed under a colorable scheme to pay her husband's indebtedness to persons other than the grantee; or as to whether the agent company, through which she and her husband arranged the loan, was the agent of the lender or a dual agent for both the lender and herself, so as to bind the lender with any participation of the agent in any illegal purpose of the transaction.

Judgments affirmed. All the Justicesconcur.

Nos. 14518, 14519. MAY 6, 1943. On October 2, 1941, Mrs. Lonnie K. Wilson, the wife of W. A. Wilson, filed two separate but similar actions of ejectment in the fictitious form, one against John C. Cummings to recover 77.2 acres of land in lot 245, 16th district, Sumter County, and the other against Willie O. Pritchard to recover 111.4 acres, adjoining this land and in the same lot. Each of the defendants pleaded a good title, in that the tracts were included in a deed to secure debt, which had been executed by the plaintiff wife to the Mutual Benefit Life Insurance Company; that on January 17, 1933, this company as attorney in fact for her had executed to itself a deed under a power of sale in the instrument, and had been in possession thereunder until it sold the tracts to the respective defendants by warranty deeds; and that the deed to Cummings was recorded on February 1, 1940, and the deed to Pritchard was recorded on August 2, 1941. Each of the defendants also pleaded a good prescriptive title by virtue of actual, adverse, and uninterrupted possession by their predecessor in title and by themselves, respectively, for more than seven years. Each further pleaded, that he was a bona fide purchaser; that he bought the property in good faith, believing he was getting good title; that the plaintiff knew of the foreclosure under her security deed, and the subsequent possession adverse to her, "has acquiesced in the same, . . and for all of said reasons is estopped to proceed any further with this suit."

In each of the trials, the evidence was similar in all respects save as hereafter indicated. On motion of each defendant a verdict was directed in his favor; to which rulings the plaintiff wife excepted in her separate writs of error. Essential portions of the evidence are as follows: The plaintiff originally owned lot 245, containing 199-1/2 acres, under a deed in 1912 from her father. On October 30, 1923, she conveyed by security deed to the Mutual Benefit Life Insurance Company this lot, together with 126.1 acres in other lots conveyed to her by her husband in a deed recorded on the same date as the security deed. Her deed to the company purported to secure a note and a loan of $6500. Although over $5000 of this was used to pay the husband's debt to the Bank of Leslie, and the balance, except $170 and some odd dollars received by the wife and except the expenses of the loan, was used to pay other indebtedness of the husband, the loan papers did not disclose the purpose for which the money was to be used.

The plaintiff wife offered testimony in effect that the loan was arranged by her husband through Empire Loan Trust Company and R. C. Ellis, its vice-president, which forwarded her application, handled the details of the loan, and received a commission as agent; that at the suggestion of the officer named, in order to obtain a loan for the desired amount, the husband deeded his property to the wife, and she included both tracts of land in her deed; and that this officer of the agent company had full knowledge of the purpose of the loan to pay the husband's debts. The evidence indicated that the wife herself never saw or dealt with this officer; and that the persuasion, to which the wife yielded after some delay, in order to assist her husband, was exercised only by the husband. In evidence was the application for the loan, which was signed and sworn to by the wife, which was addressed to Empire Loan Trust Company, and which purported to appoint it as agent of the applicant in obtaining the loan, and recited facts as to the land and the loan, but which was not addressed to any particular lender. There was also evidence that the agent company, while it had represented the Mutual Benefit Life Insurance Company in attending to the closing details of loans after they were made by that Company, and in subsequently "servicing" loans, would also forward applications and endeavor to obtain loans for borrowers from other companies. The officer of the agent company testified that it had been appointed by the plaintiff as her agent, and so acted for her and other borrowers; that it was only a broker; and that it never was the agent of the Mutual Benefit Life Insurance Company. The plaintiff relied on this and additional evidence, in support of her exceptions to the direction of the verdict against her in each of the ejectment cases. The essential basis of her exceptions is as follows: that the evidence was sufficient to make issues for the jury to decide — (1) as to whether the security deed from the plaintiff wife to the Mutual Benefit Life Insurance Company was void, on the theory that it was executed as the result of a colorable plan and scheme by Empire Loan Trust Company for her to pay indebtedness of the husband; and (2) as to whether the agent company, acting through its officer, was the agent of the insurance company, or agent of both the borrower and lender, so that the knowledge and participation of the agent in the transaction would bind the insurance company. The plaintiff further contends, that, under the statute relating to sales by married women to pay their husbands' debts, the security deed from the wife to the insurance company was "absolutely void," and therefore the company could not convey good title to either defendant, even though they might have been bona fide purchasers.

As to the defenses of bona fide purchase and estoppel against the plaintiff, each warranty deed from the Mutual Benefit Life Insurance Company to the defendants was made for a consideration of $2000. The deed to Cummings was dated January 3, 1940, and recorded February 1, 1940. The deed to Pritchard was executed June 16, 1941, and recorded August 2, 1941. Cummings testified, that he bought his tract and went into possession believing he was getting good title, and "based on that I made valuable improvements on it, nobody up to the time that suit was served on me ever said anything to me about any trouble with the title. I guess I live 600 or 700 yards from [plaintiff and her husband]; they have been around a good bit ever since I have been there; there was nothing to have kept them from telling me what their interest was, if they had any; they saw me making improvements." Pritchard testified to like effect; that he bought his land and went into possession, thinking he was getting good title. "I have made valuable improvements on it since I went there. . . Nobody ever said anything to me before this suit was filed about anybody claiming any interest in that title. I live about 300 or 400 yards across the road from [plaintiff and her husband]. . . I built that house and made the improvements on it about the first of the year, this year; we started a little of it before the first of the year in December. I did not know this suit was filed before I bought the land; right about the time I started the improvements I heard some talk about it. I had to go ahead and finish it. I had done bought it."

As to the question of estoppel, the plaintiff's husband testified that the plaintiff, when the property was advertised and sold by Mutual Benefit Life Insurance Company under a power in the security deed from the plaintiff, was in default on the loan; that both he and the plaintiff knew the property was being advertised for sale; that after the company bought the land in at the sale, he rented it from the company until the company sold it to the defendants; that he and the plaintiff lived on land adjoining and in sight of the defendants' tracts; that he saw Mr. Cummings "building him a house on it and other improvements, . . and I saw Mr. Pritchard when he moved on it, and saw him building a home on it and making improvements there, and they have both been living on it ever since then. . . Neither [plaintiff] nor I made any effort to stop the sale of that land; . . just let it go on to sale."

The plaintiff testified that the defendants "did not know anything about those conversations" in her home between her and her husband about getting the loan from the insurance company "until now. . . I have never told them even up until to-day about the conversation when I objected to getting the loan. . . I saw them building over there on it; they knew there was trouble. I never did mention it to them myself. I know Mr. Pritchard had personal knowledge of it; he never told me he did. I know he knew it, because he could not build a house on it until you all told him to go on with it. I don't know whether or not he could build his house before he got his loan closed on the property. . . I did not ever see Mr. Cummings or Mr. Pritchard. I knew that after the Mutual Benefit advertised and sold that land my husband rented it from them, knew he paid the rent to them every year; we were renting it, and as long as we were renting it I felt all right and I did not go into a lawsuit. I did not want any lawsuit." She further testified, that her first discussion with any one as to her legal rights was with a nephew of her husband "about December a year ago [1941];" that she "never had been satisfied, and wanted it investigated, and asked him to investigate it. In just about a month or two I got a letter from him, and he advised me to sue. I was not considered in this thing at all."