Third National Bank v. Poe , 5 Ga. App. 113 ( 1908 )

Powell, J.

(After stating the foregoing facts.)

1. A married woman, who, to trace her ascent in the social, scale according to the observation of a noted French anthropologist of the last generation, was “first a beast of burden, then a domestic animal, then a slave, then a servant, and then a minor,” is now, according to our law, a free trader, subject only to three express exceptions: She can not bind her separate estate by any contract of suretyship; she can not assume to, or pay to, the creditor a debt of her husband; she can not sell her separate estate (property or money) to her husband, without the consent of the superior court. Farmers & Traders Bank v. Eubanks, 2 Ga. App. 839 (59 S. E. 193); White v. Stocker, 85 Ga. 200 (11 S. E. 604). She may give her property or money to her husband that he may pay his debts with it, in the absence of fraud; and where a gift is shown, the burden of proving fraud is on her. Civil Code, §2491; Cain v. Ligon, 71 Ga. 692 (51 Am. R. 281); Hadden v. Larned, 87 Ga. 634 (13 S. E. 806). She may borrow money to be used by her husband to pay his debts, provided the husband’s creditor is not the lender. White v. Stocker, supra; McCrory v. Grandy, 92 Ga. 327 (18 S. E. 65); Johnson v. Leffler, 122 Ga. 670 (50 S. E. 488); Nelms v. Keller, 103 Ga. 745 (30 S. E. 572); Chastain v. Peak, 111 Ga. 889 (36 S. E. 967). The fact that it is to the lender’s interest that the wife should borrow the money from him, to furnish it to her husband to pay his debts, makes the wife’s contract with the lender no less valid. Rood v. Wright, 124 Ga. 849 (53 S. E. 390). She may sell her property to get money to pay her husband’s debt, and the purchaser, if he is not the husband’s creditor, gets a good title, though he knows of the purpose. Skinner v. Braswell, 126 Ga. 761 (55 S. E. 914). She may legally procure a third person to pay the debt of her husband, and will be bound by her contract to reimburse him for so doing. Hill v. Cooley, 112 Ga. 116 (37 S. E. 109). We have stated these preliminary propositions so that it may be seen how broad are a married woman’s powers of contracting, even as to matters affecting her husband’s debts.

2. The present suit is but a form of the common-law action for money had and received. The substance of the petition and the gist of the action is that the bank received for its use and benefit $5,000 which in equity and good conscience belonged to the plaintiff. Her petition, as construed in the light of the proof, asserts that the bank allowed her husband to deliver to it the cashier’s check which was payable to him, but which was really hers, and to direct its appropriation to a purpose forbidden by law; that her husband held the check as her depository or agent —in a fiduciary relationships — and that the bank colluded, with him to break his trust, to its benefit and to her detriment. Cf. Moye v. Waters, 51 Ga. 13. It becomes pertinent to inquire, therefore, whether such an action can be maintained when the: husband’s creditor has received in payment of his pre-existing, debt a negotiable bill, standing in his name but really the property of the wife; and, if so, upon what conditions. In the leading case of Humphrey v. Copeland, 54 Ga. 543, it is held that “a creditor who receives in payment money belonging to his debtor’s wife, knowing it to be her separate estate, acquires no title to it, as against her, whether she consent to the payment or not. The code, in declaring a sale void when made by the wife to a creditor of the husband in payment of his debt, comprehends, in its reason and spirit, a transaction in money, as well as a transaction in property. Without notice of the wife’s ownership, a creditor receiving money is protected, and the burden of proving notice is upon her.” In the body of the opinion (p. 548) Judge Bleckley says: “In ruling, as we have felt bound to do, that married women can repudiate. their consent, whether express or implied, to the use of their money in transactions with their husbands, or in payment to their husband’s creditors, we do not mean to say that wives are tolerated by the law in combining with their husbands to commit fraud on other people. It is only where notice is brought home that a wife’s rights will be saved. The burden of proof is upon her,'for in every case where money is. received and value given, there is a presumption that title passes,, which stands until it is rebutted by evidence. And the measure of evidence should not be too scant in mere deference to sex.. When man and wife co-operate for good they can do much good;, and so, when they combine against third persons and co-operate for evil, they can do much harm. In protecting women, courts and juries should be careful to protect men, too, for men are not only useful in general society, but to women especially.” It appears therefore that such an action may be maintained if the husband’s creditor received the money with notice of the wife’s title to it. In the present case the property received was a negotiable instrument; the question, therefore, resolves itself into the more immedíate inquiry, what degree of notice is necessary, to impeach the title of one who has taken a negotiable instrument from the holder thereof, when the instrument in fact belongs to another? This court considered that question in the case of Walden v. Downing Co., 4 Ga. App. 534 (61 S. E. 1127). It will be seen, by reference to that case and the authorities therein cited, that one who takes a negotiable instrument as a purchaser for value (and in the payment of a pre-existing debt there is a transfer for value) from the apparent owner'gets a good title as against the true owner, unless he takes it mala fide; that “such title is not defeated^by the want of such caution in the purchase as a careful and prudent man would exercise in the conduct of his affairs, or by gross negligence;” that “mala fides consists in notice, actual or constructive, of the fact that the security [the negotiable instrument] is not the property of the person who offers it, and a privity with or participation in a fraud upon the true owner.” It will be seen, by reference to the cases of Matthews v. Poythress, 4 Ga. 287, and Shaw v. R. Co., 101 U. S. 564 (25 L. ed. 892), cited in Walden v. Downing Co., supra, that the taker of the negotiable instrument is not usually charged with any duty of inquiry by which he would become chargeable with notice of those facts to which such inquiry would lead. The case of Matthews v. Poythress, supra, is also cited as authority for the ruling in the case of Moye v. Waters, 51 Ga. 13, in which the creditor took from the husband a promissory note payable to the wife or bearer.

In the light of the generality of the principle that one may take a negotiable instrument freely from the apparent true holder, there seems to be no reason for restricting it in case the husband is the transferrer and the wife the undisclosed true owner. Such cases seem to follow the general rules of jurisprudence. Note the opening statement in the first division of the opinion in the ease of Humphrey v. Copeland, supra (p. 545); see also Gorman v. Wood, 68 Ga. 527. We find no Georgia case to the contrary. The cases cited by counsel for the defendant in error easily distinguish themselves. In Chappell v. Boyd, 61 Ga. 662, Bank v. Bell, 65 Ga. 528, Lewis v. Howell, 98 Ga. 428 (25 S. E. 504); Grant v. Miller, 107 Ga. 804 (33 S. E. 671), and Rogers v. McClure, 128 Ga. 393 (57 S. E. 692), the husband’s creditor had actual notice of the wife’s title. In Klink v. Boland, 72 Ga. 493, and Love v. Lamar, 78 Ga. 327 (3 S. E. 390), the husband and his creditor were guilty of collusion and fraud against her. In Chason v. Anderson, 119 Ga. 497 (46 S. E. 629), it is said that “unless Chason [the husband’s creditor] Tcnew the money belonged to Eeriba Anderson [the wife], he had a right to presume that it was Mason Anderson’s [the husband’s], and to apply it to his debt.” In Hull v. Sullivan, 63 Ga. 139, some of the statements of the court are very strong: “Nothing but fraud committed by Hull [the creditor], or by Sullivan [the husband] with his knowledge, would relieve her [the wife]. . . She was mistress of the title, and it was her province to see that she got the use or the fruits of the use. The law cast no duty in that respect upon Hull.”

It is true that in Humphrey v. Copeland, supra, Judge Bleckley says, “If at that time he [the creditor] knew or had reasonable cause to believe it was her money, and it was in fact hers, that was enough;” but in the light of the whole discussion in the case it is plain that there was no intention of using the phrase “reasonable cause to believe,” in any other sense than as equivalent to that constructive knowledge which amounts in substance to actual knowledge, and not as the equivalent of the expression “with notice,” which, by construction, usually means and includes all facts discoverable by reasonable inquiry. A fair example of such constructive knowledge is found in the case of Bank v. Bell, 65 Ga. 528. There a note payable jointly to the husband and wife or bearer was placed in the bank for collection; the bank collected it and placed its proceeds, by the husband’s direction, to the payment of one of his debts; the bank had actual knowledge that the note was given in payment for lands of the wife, and that the note was hers; it was held that on account of the actual knowledge of the ownership of the note, the bank had constructive knowledge' of the ownership of the proceeds of the note which it itself had collected.

If we give to the expression “reasonable cause to believe,” found in Judge Bleckley’s opinion in the Humphrey ease, supra, the same meaning it has been given by the Supreme Court of the United States in constructing the national bankruptcy act, we shall see how much it lacks of sustaining the wife’s action in the present instance. See Stucky v. Masonic Bank, 108 U. S. 74 (27 L. ed. 640), and Grant v. National Bank, 97 U. S. 80 (24 L. ed. 971). By these cases it is made plain, that “reasonable cause to believe” differs much from reasonable cause to suspect.

There is a difference, as to the duty of inquiry, where the subject-matter of the transaction is a negotiable instrument offered in the ordinary course of business, and where the subject-matter is property of another character. It would seriously embarrass business, especially the business of banking, if commercial paper could not be taken without inquiry as to its title, in the absence of more than a mere suspicion. Take the present ease, it certainly can not be claimed that the bank was in any privity or collusion with the husband or any one else to induce the wife to pay her husband’s debt; the agents in charge of the bank were expressly instructed not to allow her to do so; a solvent friend had guaranteed that the debt would be paid on the very day it was paid; it was perfectly legal for that friend to pay the debt or to furnish the husband 'with money with which to pay it, and even for the wife to agree to reimburse him if he would so furnish it (see Hill v. Cooley, 112 Ga. 116, 37 S. E. 109); the husband came into the bank with the cashier’s check of another bank, payable to the husband and indorsed by him, and suggesting no connection ■of the wife with it, and offered that check for credit to his deposit account and ultimate payment on his note; was it the duty of the teller or the cashier to inquire of him, “Is this your wife’s money?” Is it in accordance with the usage of bank officers to inquire of. their customers as to their private transactions, — as to where they get the money or checks'they offer for deposit, where they appear regular on their face ? If such an inquiry had been made, Captain Poe might justly have resented it as an act of impertinence. If he had replied merely according to his knowledge,. and not also according to his inferences and suspicions, he would have said, “I got it from my friend Bowers.” Was it the duty of the cashier or the teller, before they received the check, to go to the Merchants & Mechanics Bank and ask, “Where did Captain Poe get the check? Whose money is it?” The officials of that bank would properly have replied, “We do not recognize your right to •ask such questions. Banks do not make a practice of divulging the private business affairs of their customers transacted through them.”

The bank may have suspected that somehow or in some way Mrs. Poe had assisted in procuring the check that Captain Poe had presented; but her mere assistance in procuring the money would, not have prevented the bank from legally accepting it. ,It is shown, by the cases cited in the first division of this opinion, that there are several ways in which she might legally have enabled him to get the money with which to pay the bank’s debt. Therefore, even conceding that the cashier’s check was really Mrs. Poe’s, it seems plain to us that, in the light of the presumptions the bank was authorized to indulge, she did not carry the burden resting on her of showing that the officers of the bank, at the time they took the check from Captain Poe, knew it was'hers or that they had reasonable cause to believe (not merely suspect) that which it was necessary the bank should have had reasonable cause to believe in order to allow her to recover, namely, that the check was not Captain Poe’s, that it was not Bowers’s, that it was still hers, that she had not given it to Captain Poe.

This view of the case disposes of it without reference to many other questions presented. Indeed, we are strongly impressed with the view that the check was not her property at all, in legal contemplation; that, legally tested, the transaction necessarily shows that Bowers furnished the money at her instance and that she had no title; legal or equitable, to the check; but we have not developed that proposition; for what we have said above seems to-make a final determination of the matter. Her case necessarily rested solely upon the proposition that the bank received a commercial paper belonging to her, under such circumstances that she could recover its value in an action for money had and received. Her right to recover could not be based on the other proposition — and the two propositions are sometimes confused — that the transaction amounted to a sale of her separate estate, made to-a creditor of her husband in extinguishment of his debt, in violation of section 2488 of the Civil Code; for, although money delivered by the wife to the creditor has been held to be within the spirit and scope of this provision, the sale, actual or implied, which is an essential element is a form of. contract, and every contract requires mutuality of consent; and it is plain that even though she may have intended to transfer or sell this money or commercial paper to the bank in payment of her husband’s debt, it was never the bank’s intention to deal with her in the transaction by receiving it from her. Cf. Cason v. Heath, 86 Ga. 439 (12 S. E. 678). A close comparison of the facts of this ease with those of Walden v. Downing Co., supra, will show that the principles, announced in that casé control the one at bar.

Judgment reversed.