Court of Common Pleas of Lancaster County Manheim National Bank v. Celesta M. Hacker and J. H. Hacker. Husband and wife-Judgment note· Married woman as surety or accommodation maker for husband - When judgment should be opened Act of June 8, 1893, P. L. 344. Where a judgment was entered on a note signed by a husband and wife and the proceeds used to pay off certain prior notes, signed by the husband and wife and by the husband alone, which were given for money borrowed for his business purposes, and the wife obtained no benefit from the transaction, the plaintiff having knowledge of the facts, the judgment should be opened as to her, although the proceeds of the judgment were first credited to the wife's individual account and by her checked over to her husband. While a married woman may borrow money on her own accuont and do what she pleases with it afterwards, she cannot become surety or accommodation maker or endorser for her husband, and her liability is not determined alone by the form of the obligation but its real purpose may be inquired into and it will be declared void if its purpose is to evade the restrictions of the law. Rule to open judgment and let the defendant, Celesta M. Hacker, into a defense. November Term, 1920, No. 72. John E. Malone, for rule. Harnish & Harnish, contra. December 31, 1920. Opinion by LANDIS, P. J. On May 6, 1920, the above named defendants signed a judgment note of that date in favor of the plaintiff for the sum of $5,000.00. At the same time they signed a judgment bond for the sum of $5,000.00, which was at once entered of record. The judgment bond stated upon its face the following: "This judgment bond is given as collateral security to secure the payment of such items of the present or future. liability of Celesta M. Hacker and Jacob H. Hacker to the Manheim National Bank, of Manheim, Pa., as the said Manheim National Bank may select or designate." On November 18, 1920, the judgment note was entered to November Term, 1920, No. 72, and execution having been issued thereon to January Term, 1921, No. 1, the personal property of Celesta M. Hacker was levied upon by the Sheriff. She thereupon presented her petition to this Court, averring that, at the time of the confession of said judgment, she was not indebted to the plaintiff, and that the debt of $5,000.00 due to the bank was the debt of her husband, who had borrowed the money from it for his own purposes; that she signed the bond at the request of the plaintiff bank as accommodation maker for her husband, and that the same was on this account void as to her. The facts of the case are briefly these: J. H. Hacker was conducting a clothing business in the Borough of Manheim. He was indebted to the Keystone National Bank of Manheim on four promissory notes: one, dated October 28, 1919, for $500.00, renewed March 18, 1920, for thirty days; one, dated February 19, 1920, for $200.00, payable in thirty days; one, dated February 23, 1920, for $725.00, renewed March 24, 1920, for thirty days; and one, signed by himself and his wife, Celesta M. Hacker, dated March 2, 1920, for $3,000.00, payable VOL. XXXVII, No. 65 Manheim National Bank v. Celesta M. Hacker and J. H. Hacker. in sixty days. All of these notes were payable to the order of William H. Barto, and he was accommodation endorser upon them. In addition, the Keystone National Bank held a judgment bond for $5,000.00, signed by Hacker and his wife, as collateral security. Barto told Hacker that he wanted to go into business for himself, and therefore wished to get off these notes. Because of this, Hacker approached Jacob L. Graybill, the president of the Manheim National Bank, and asked him for a loan of $5,000.00. On April 21, 1920, the Manheim National Bank loaned $2,000.00 on a note, signed by Mrs. Hacker and her husband. The proceeds of the note were credited to her account, and she then gave a check to her husband for the same amount, who deposited it in the bank to his own credit. On May 6, 1920, they also gave a note for $5,000.00. The note for $2,000.00 was lifted, and the sum of $3,000.00 was credited to Mrs. Hacker, who thereupon gave her check to her husband for that sum, and he deposited it in the bank, and, receiving credit for it, paid it out for his own purposes. The four notes which were held by the Keystone National Bank were paid as follows: The first one on April 19, 1920; the second and third ones on April 12, 1920; and the fourth one, on May 6, 1920, the same day on which the judgment note was given by Mrs. Hacker and her husband to the Manheim National Bank. In the depositions taken, Hacker testified that, when he saw Mr. Graybill concerning the loan, he stated the situation to him fully, including the fact that he had given a judgment note to the Keystone National Bank as collateral security; that Graybill then asked him whether he would be willing to give the Manheim National Bank the same security, to which Hacker replied that he would; that Mr. Graybill then told him to go to the bank, and that he did so, and the further negotiations were consummated with Mr. Kready, the cashier of the bank. Mr. Graybill does not in his deposition deny this testimony, but says that he cannot recall it, and both he and Mr. Kready testify that the money was loaned to Mrs. Hacker and not to Mr. Hacker. Mr. Kready prepared the judgment note and bond, and Hacker signed it, and then took it over to his wife, who also signed it. It was then returned to the bank, and the bank gave her credit for the amount of the loans. Hacker says that Mr. Kready told him to get her check, and, having done this, he deposited it in the bank, and it was credited to his account on his bank book. Mrs. Hacker was never at the bank and never saw any of the officers about this loan. Hacker made the arrangements and acted as go-between in the transaction; but Mrs. Hacker says she knew what she was signing, that she had told him she would help him, and that it was a loan for his benefit. Since the passage of the Acts of Assembly enlarging the powers of married women, they are enabled to contract debts on their own behalf on the credit of their separate estate. This is, however, subject to some limitations, included in which is the absolute prohibition from becoming surety for anoher. A married woman may create a loan for herself and do what she pleases with the money after she borrows it. It has never been held that, where a married woman borrows money on her Manheim National Bank v. Celesta M. Hacker and J. H. Hacker. own account, the lender has any concern in relation to the use she makes of it; but she cannot become surety, and her liability is not to be determined alone by the form of the obligation into which she enters. Inquiry may be made as to its real object, and it will be declared void, notwithstanding its form, if in fact it is a device to evade the restriction imposed by the statute. Class & Nachod Brewing Co. v. Rago, 240 Pa. 470. In Manor National Bank v. Lowery, 242 Pa. 559, a judgment was entered on petition of a wife, and an issue was granted to try the facts alleged. At the trial, it appeared that the husband had arranged with the cashier of the bank for a loan of $1,500.00. The wife was taken to the bank by her husband, and there, with him, having signed a judgment note, she immediately left. A certificate was issued to the husband for $1,000.00, and $300.00 was issued for the payment of a mortgage on her land, so that the bank might have a first lien. The balance was credited to the husband. The cashier of the bank testified that the money was loaned to the wife and not to her husband, and that she requested that the money should be appropriated as her husband should direct. The wife denied that she had anything to do with negotiating the loan. The case was submitted to a jury, who found for the defendant. In Kemper v. Richardson, 72 Sup. 115, the plaintiff, who was a note broker, was applied to by W. E. Richardson for a loan of $200.00. Kemper agreed to loan the money on a note signed by Richardson and his mother as surety. Before the money was paid, it was, however, discovered that the mother was a married woman. Thereupon Kemper refused to loan Richardson the money, but said: “If your mother will borrow the money for you, all right." A note was then prepared for the mother to sign, and a check for the amount, to the order of Mrs. Richardson, less some expenses, was put in a sealed envelope and given to the son, who, upon her endorsement, secured the money. Upon this state of facts, it was held that the Court below should have opened the judgment. Orlady, J., delivering the opinion of the Court, said: "The law will look through all disguises and subterfuges, and will open the judgment where the testimony shows a manifest intention to avoid the provisions of an Act of Assembly. A jury could fairly find that the device in this case was a transparent attempt to make the mother surety or guarantor for the money her son was borrowing from Kemper. We have nothing to do with terms of the transaction as between Kemper and the son. The law leaves them to their own method of dealing with each other, but it places a barrier around a married woman to protect her from all kinds of deceit and impositions." In Oswald v. Jones, 254 Pa. 32, it appeared that the husband of a married woman made application to the payee for a loan, to enable him to engage in the hotel business, and offered his wife as surety; that the payee refused to make the loan in that form, but made it directly to the wife, knowing the purpose for which it was to be applied; that the money was in fact invested in the husband's business, and the wife received no benefit from the transaction, and that the payee never dealt directly with her, but exclusively with the husband. Manheim National Bank v. Celesta M. Hacker and J. H. Hacker. As In a per curiam opinion, the Court said: "The testimony conclusively shows that the whole ransaction was a transparent device adopted by the plaintiff and the hustand to evade an express statutory enactment; to create, by form, a liability, where by law none in fact existed. she received no benefit, as the plaintiff was in no way deceived, she was under neither moral nor legal obligation to pay, and there should have been no verdict against her': Patrick & Co. v. Smith, 165 Pa. 526." It would, therefore, appear to us that this judgment must be opened. The defendant's testimony clearly shows that Mrs. Hacker received no benefit from the loans; that the money was used by her husband for his own purposes, and that the officials of the bank knew that it was to be so used. This, if believed by a jury, is sufficient to sustain her contentions and avoid the note; for, under such circumstances, she was accommodation maker and surety for her husband, and it would be an attempt indirectly to do that which the Act of Assembly expressly prohibits. In our judgment, the issue should be tried by a jury, and we, therefore, make the rule to open the judgment absolute as to Celesta M. Hacker. Rule made absolute as to Celesta M. Hacker. Court of Common Pleas of Lancaster County H. C. Boyer v. Celesta Hacker and J. H. Hacker. Husband and wife — Judgment against married woman for husband's debt-Opening of. A judgment note entered on a note signed by a husband and wife which was given in payment of a previous note signed by the husband alone for his individual debt should be opened as to the wife, as on the face of the note she signed as surety, where she received no benefit from the note and her husband got her to. sign it at the plaintiff's request. Rule to open judgment and let Celesta M. Hacker into a defense. November Term, 1920, No. 20. John E. Malone, for rule. Harnish & Harnish, contra. December 24, 1920. Opinion by LANDIS, P. J. There is no material dispute between the parties as to the facts of this case. The petitioner and her husband signed the following judg ment note: $1000.00 MANHEIM, PA., MAY 28TH, 1920. Sixty days after date we or either of us promise to pay value received. And further, we do hereby empower any attorney of any court of record within the United States or elsewhere, to appear for us and with or without declaration H. C. Boyer v. Celesta M. Hacker and J. H. Hacker. Witness our hands and seals M. M. HARNISH SUE M. STROH CELESTA M. HACKER [SEAL] [SEAL] On May 29, 1920, this judgment note was entered in this Court to April Term, 1920, No. 202. On October 9, 1920, execution was issued thereon, and the personal property of Celesta M. Hacker was levied upon by the Sheriff. On October 13, 1920, she presented her petition to the Court, praying that the judgment should be opened and she should be let into a defense. The transaction out of which the judgment arose took place between the plaintiff and J. H. Hacker, the husband of the petitioner. The plaintiff was the owner of a pool room and bowling alley located in the Borough of Manheim, and in the same building in which Hacker carried on a store business. In December, 1919, Hacker purchased this pool room, etc., from Boyer for the sum of $1,000.00. As he had no money, Hacker gave his individual note, payable April 15, 1920. When the note became due, Hacker did not pay it. On May 28, 1920, Boyer, who lives in Frederick, Maryland, went to Manheim ostensibly to see. about it, and he and Hacker came to Lancaster to the office of M. M. Harnish, Esq., who was counsel for Boyer. They asked Hacker if he could get security on the note, and mentioned Mrs. Hacker, who owned real estate. Hacker said he thought he could get her on it, and Mr. Harnish, who had previously examined the records in the Court House, prepared the above recited note, and Hacker signed it. He and Boyer then went to Manheim, and Hacker, taking the note to his wife, obtained her signature to it. Mrs. Hacker never met Boyer, and it is not pretended that she had any interest in the pool room and bowling alley. Under this state of facts, can she be held liable on this note? As was said by this Court in The Fulton National Bank v. Emma C. Bear, 31 LANC. LAW REVIEW 323, a case very similar to the present one: "Concerning the law of the case, there ought not to be much doubt." The Act of June 8, 1893, P. L. 344, section 1, declares that "hereafter a married woman shall have the same right and power as an unmarried person to acquire, own, possess, control, use, lease, sell or otherwise dispose of any property of any kind, real, personal or mixed, and either in possession or expectancy, and may exercise the said right |