Peoples-Pittsburgh Tr. Co. v. McCaffrey Et Ux. , 336 Pa. 547 ( 1939 )

The issue in this case is whether a married woman is liable on the bond she executed, which accompanied a mortgage covering a property owned by her and her husband as tenants by the entireties. Judgment was entered upon the bond. The judgment was opened to permit the wife to make defense, and the trial, on the question of her liability, resulted in a finding in her favor. The case comes to us on plaintiff's appeal.

John McCaffrey and Mary McCaffrey were husband and wife. Thomas McCaffrey, brother of John, was in the real estate business. Thomas introduced John to the assistant manager of the mortgage department of Peoples Savings and Trust Company, now Peoples-Pittsburgh Trust Company, the appellant. John told the assistant manager that he desired to apply for a mortgage loan. The assistant manager at his request filled out a printed form of application for the loan. John stated that he owned the property and that the mortgage was to be his. He signed the application and the address of Thomas's real estate office was noted thereon. The loan was approved by the expectant lender. A letter was written to Thomas apprizing him of the fact. At this time it was not known that the property to be mortgaged was owned by John and his wife by entireties. This was discovered when the title was examined at the instance of the attorney for the trust company. He prepared a bond and mortgage to be signed by both husband and wife and sent them to Thomas McCaffrey for execution. They were signed by husband and wife and returned to the attorney, who had the mortgage recorded. The papers are dated April 12, 1920. April 16, 1920, the attorney drew his firm's check to the order of husband and wife for the amount of the loan and mailed it to them. The check was returned with their endorsements.

The wife testified that she had nothing to do with the application for the loan, that her husband said he wanted her to sign "this," that she signed, not knowing it was for money borrowed; that she did not know what she was signing and got none of the proceeds of the loan. In effect she said she did not read the bond and mortgage. Whether she read them or not she was just as much bound by them as though she had: Com., touse, v. Gudaitis, 323 Pa. 110, 186 A. 82; Berardini v. Kay,326 Pa. 481, 192 A. 882; Doneyho v. Scottdale Conn. R. R. Co.,330 Pa. 207, 199 A. 162.

We have, therefore, a situation where a married woman, joint owner of a property, executes a bond and mortgage securing a loan, endorses a check drawn to her and her husband's order for the proceeds and years afterwards repudiates the transaction and denies liability on the bond on the ground that she was a surety or accommodation maker. May she repudiate her obligation? We are of opinion on the facts as shown she may not. This is not a case where there was "window dressing" to give color to a wife's liability, such as Sears v. Birbeck,321 Pa. 375, 184 A. 6; Western National Bank of York v. Levin,331 Pa. 113, 200 A. 71; Martz v. McKinley, 96 Pa. Super. 213. Here, she was a joint owner of the property primarily to secure the loan. The transaction was an ordinary business one such as is taking place daily. There was no bad faith or subterfuge on the lender's part. She was in no way deceived by its officers. When she endorsed the check they could rely upon her signature as showing that she received the money and that the loan was to her as well as to her husband. If she had been a tenant in common and her co-owner or owners had been other than her husband and a loan had been made and papers signed as here, she certainly would not be heard to repudiate it. The fact that her co-owner is her husband can make no difference.

There was no obligation on the trust company to see that she used the proceeds of the loan for her individual purposes. One who lends money directly to a married woman is not required to see that it was borrowed for or applied to a purpose recognized in the act giving her contractual capacity: Scranton LackawannaTrust Co. v. Birdeck, 333 Pa. 502, 5 A. (2) 196. Having joined in the obligation and received the proceeds of the loan, she is liable and it is immaterial what she did with the money after receiving it: Newtown T. T. Co. v. Underwood, 317 Pa. 212,177 A. 27; Frankford Trust Co. v. Wszolek, 320 Pa. 437,183 A. 52; York Trust Co. v. Vandersloot, 334 Pa. 591, 6 A. (2) 498. It is unimportant that the original application and negotiations for the loan were conducted by the husband and that the wife took no part therein: York Trust Co. v.Vandersloot, supra.

The judgment in favor of the defendant is reversed and the court below is directed to reinstate the judgment in plaintiff's favor.