Van Derslice v. Merchants' Bank , 213 Ala. 237 ( 1925 )

The plaintiff executed a promissory note to the defendant for $5,000 for money presently borrowed by her from the defendant, and as security therefor she pledged a note and mortgage on real estate payable to her in the sum of $5,750. The note was once renewed, and, remaining unpaid after the second maturity the defendant sold the pledge for $4,750, having previously collected $500 on the principal sum due.

The plaintiff sues to recover the amount realized by defendant on the collateral note and mortgage, on the theory that the note she gave to defendant was in legal effect a security for her husband's debts, and therefore void under the statute (Code 1923, § 8272).

Several members of the jury panel were challenged by plaintiff for cause — the objection being that they were depositors in the defendant bank. The law on this subject is, we think, correctly stated as follows:

"In the absence of a statute, the fact that a juror sustains the relationship of debtor or creditor to a party to an action does not disqualify the juror to act, unless such juror is at the party's mercy or has been treated with particular indulgence by him. So, the mere fact that a person is a depositor in a bank does not, ipso facto, disqualify him to serve as a juror in cases where the bank is interested, or is the injured party in a criminal prosecution. But, under certain circumstances, his interests might be so affected by the transactions out of which the cause arose as to disqualify him." 35 Corp. Jur. 322, § 337.

Numerous well-considered decisions support this text, and the following are immediately in point. Elliott v. State, 77 Fla. 611, 82 So. 139; Twitchell v. Thompson, 78 Or. 285, 153 P. 45; Thompson v. Douglass, 35 W. Va. 337, 13 S.E. 1015. See, also, Webb v. Town of Eutaw, 9 Ala. App. 474, 476, 63 So. 687, where the reasoning in denial of the disqualification of a trial judge is strongly in point.

From such a relationship alone the law raises no implication of bias. Bias vel non is a question of fact to be determined by the trial court, and the burden of proof is on the party who challenges the juror. If it had been made to appear that the threatened judgment of $6,000 against the defendant bank would have shaken its solvency, and thereby have threatened the safety of the accounts of its depositors, these jurors would have had a material interest in the result of the suit, and would have been fairly subject to the challenge for cause. But no such showing was made. The case of Ex parte Cornwell,144 Ala. 497, 39 So. 354, strongly relied upon by appellant, is an excellent illustration of bias from actual injury to a bank depositor, as shown by the opinion of Dowdell, J.:

"Here, as a result of the alleged embezzlement for which the petitioner was indicted and to be tried, the bank wherein the judge was a depositor failed, and, unable to pay its depositors, was put into the hands of a receiver for the purpose of winding up its business. By the alleged malconduct of the petitioner, the judge is made to suffer a loss in property — money deposited with the bank — to what extent does not appear, whether the total of his deposit, or only a part, but that is immaterial. Under the facts, we think that the judge had such a personal interest in the subject-matter of the pending prosecutions, such as in the nature of things was calculated to produce in the mind a bias such as would impair, if not prevent, that equipoise which the stern morality of the common law demands in the administration of justice. Our conclusion, therefore, is that the judge was, by reason of interest in the result of the suit, disqualified to try the petitioner, and, unless he certifies his disqualification after being duly informed of our conclusion, the writ will issue as prayed for."

Manifestly, that case is not in point here. We think the challenges in this case were properly disallowed.

As a general proposition, it is well settled by our decisions that a married woman may borrow money and give it to her husband directly, or use it in payment of his debts, without offending the statute, which forbids her from becoming his surety. First Nat. Bank v. Moragne, 128 Ala. 161, 30 So. 628; Mohr v. Griffin, 137 Ala. 456, 467, 34 So. 378; Sample v. Guyer, 143 Ala. 613, 42 So. 106; Hall v. Gordon, 189 Ala. 301,66 So. 493; Bushard v. McCay, 201 Ala. 173, 77 So. 699.

But it must now be regarded as the settled law in this state, that when the wife borrows money from the husband's creditor, giving her own obligation therefor, and forthwith pays over the money to that creditor in satisfaction of her husband's debt to him, she indirectly becomes a surety for her husband's debt, within the inhibition of the statute. Lamkin v. Lovell,176 Ala. 334, 58 So. 258; Staples v. City Bank Tr. Co., 194 Ala. 687,70 So. 115; Elkins v. Bank of Henry, 180 Ala. 18,60 So. 96; Vinegar Bend Lbr. Co. v. Leftwich, 197 Ala. 352,72 So. 538; Street v. Alexander City Bank, 203 Ala. 97, 82 So. 111. A dictum in Hall v. Gordon, supra, repeated in Bushard v. McCay, supra, is apparently not in harmony with the rule as established by these decisions, but the question was not presented in those cases, and they cannot be regarded as authorities contra. In such a case the law presumes an intention to evade the statute by the mere substitution of the wife's obligation for that of the husband — the original debt of the husband remaining in fact unpaid, notwithstanding its change of raiment.

When, however, the wife does not pay over the borrowed money directly to the creditor, but it is returned to him through the husband, or other intermediary, it is a question of fact whether the transaction is a bona fide independent loan to the wife, or in effect a suretyship for the husband's debt; and the intention of the parties, at the time of the loan, is the controlling factor. If there be an agreement or understanding, expressed or implied, that the husband's debt is to be paid with the borrowed money, then to that extent — the amount of the debt to be paid, and actually paid — the wife's obligation is one of suretyship merely, and within the operation of the statute. Staples v. City Bank Tr. Co.,194 Ala. 687, 691, 70 So. 115; Lester v. Jacobs, 212 Ala. 614,103 So. 682.

The trial judge instructed the jury that if it was the intention of the parties that any part of this loan of $5,000 was to be applied to the payment of the husband's debt to the bank, the entire obligation of the wife was thereby rendered void, and she would be entitled to recover from the bank all of the proceeds of the collateral note and mortgage pledged by her to the bank, collected by it. This instruction was erroneous as to the amount of the recovery, which should have been limited as pointed out above. However, no exception was taken to this instruction by either party. Otherwise, the instructions to the jury on this issue of fact were correctly framed.

The burden of proof was on the plaintiff to show, to the reasonable satisfaction of the jury, that the parties to the loan intended that a part of the borrowed money should be applied to the husband's debt to the bank. If the issue depended merely upon the affirmation of plaintiff and her husband that it was so intended, on the one side, and of the bank's cashier, Parham, that it was not so intended, on the other, we would not feel justified in disturbing the verdict of the jury. But a careful consideration of the circumstances of the transaction, and the intimate sequence of related events participated in by the bank through its representative, the cashier, points, we think, with unerring certainty to the conclusion that the parties understood and impliedly agreed that the money borrowed nominally by the wife, was to be immediately applied to the payment of the husband's debts, including his debt to the bank, according to the direction of the cashier, who was to prorate the fund in his sound discretion. Indeed, the action of the cashier in making up the schedule of disbursements immediately after the consummation of the loan, and apportioning $1,500 to the bank, accompanied by the actual payment of that amount by the wife to her husband, and his immediate payment of that amount on his debt due to the bank, furnishes the strongest possible corroboration of the testimony of the Van Derslices, as to the common understanding in that behalf.

We are satisfied that the jury misunderstood the application of the law to the facts of the case, or else that their verdict was the result of erroneous instructions, in effect, that the plaintiff could recover the amount of the sums paid to other creditors of her husband out of the borrowed money, if she could recover at all — this, because of their unwillingness to impose upon the bank the burden, practically, of paying $3,500 of Van Derslice's outside indebtedness, which, in law and in fact, became the proper burden of the wife.

Our conclusion is that the verdict was palpably erroneous, and should have been set aside on the motion of plaintiff; and a judgment will be now rendered accordingly, setting aside the verdict and judgment for defendant, and remanding the cause for another trial.

Reversed, rendered, and remanded.

ANDERSON, C. J., and THOMAS and BOULDIN, JJ., concur.