Reid v. Peoples Bank
Reid v. Peoples Bank
Dissenting Opinion
dissenting. I dissent upon the ground that the petitioner failed to do equity as a condition precedent to this equitable action by restoring the funds which she received.
Opinion of the Court
“A wife may give property to her
The separate property of the wife “shall not be liable for the payment of any debt, default, or contract of the husband.” Code § 53-502. “. . . [W]hile the wife may contract, she may not bind her separate estate by any contract of suretyship nor by any assumption of the debts of her husband, and any sale of Jier separate estate, made to a creditor of her husband in ex-tinguishment of his debts, shall be absolutely void.” Code § 53-503.
The husband’s liability on the two deeds to secure debt was in full force - and effect at the time the property was conveyed by John S. Reid, Sr., to the petitioner. This liability of the husband was extinguished and satisfied upon the execution by the wife of her deed to secure debt to the bank in the sum of $55,000. The wife thus became obligated for the debts of the husband to a creditor of the husband. By the execution of the $55,000 note and deed not only would the property of the wife covered by the security deed be liable for the debt thus created, but the wife would be individually liable to the extent of her resources for the debts of her husband should the husband fail (as it is alleged he has failed) to make payments as they became due, or should the property be sold for an amount less than the debt secured by her deed.
The present case comes within the facts and the rule stated in Mickleberry v. O’Neal, 98 Ga. 42, 53 (25 SE 933), where this court ruled in part: “In the present case the deed in question was executed by her as an entire transaction, the vendee undertaking to and actually discharging an encumbrance upon the property purchased by her from her husband, and which encumbrance became, not by assumption of his debts but by relation, a legal chai'ge upon her estate. Had this been the entire consideration, the conveyance could have been upheld as valid.
In Bond v. Sullivan, 133 Ga. 160 (65 SE 376, 134 ASR 199), it was held: “Where a wife executes a deed conveying her property for the purpose of extinguishing her husband’s debt, in pursuance of a plan or scheme participated in by the grantee in the deed, such a deed is void, and the wife may maintain ejectment against her grantee or any one else claiming under her grantee with notice of the consideration moving the wife to make the deed to her property, without the institution of equitable proceedings to cancel the deed.” Hickman v. Cornwell, 145 Ga. 368 (89 SE 330); Ulman, Magill & Jordan Woolen Co. v. Magill, 155 Ga. 555 (117 SE 657); Meacham v. Farr, 158 Ga. 343 (123 SE 270); Magid v. Beaver, 185 Ga. 669 (196 SE 422); Turner v. Warren, 193 Ga. 455 (18 SE2d 865).
The petition alleges facts to show that the officer and agent of the defendant bank knew that a part of the proceeds of the loan made to the wife as represented by her note and deed would be used to pay off indebtedness of the husband to another bank. Since approximately $29,000 of the $55,000 loan was used and applied to pay existing obligations of the husband to another bank, the wife became surety for the husband in this amount. This court is not concerned in the present case with what the evidence may show upon the trial before a jury. The petition having alleged a cause of action good as against a general demurrer, it was error to sustain the defendant’s oral motion and dismiss the petition.
Judgment reversed.
Reference
- Full Case Name
- REID v. THE PEOPLES BANK
- Cited By
- 1 case
- Status
- Published