Cummings et al. v. Martin.

tracts of suretyship; otherwise she can contract as freely as if she were unmarried, and her contracts are as binding upon her. It can not be doubted that one of the principal reasons for the enactment of the statute forbidding married women to enter into any contracts of suretyship,and making such contracts void as to them, was to prevent them from squandering or encumbering their property as sureties for improvident husbands. The courts have rightfully shown a disposition to scan closely contracts where there was reason to suspect that the transaction, while in form a contract, with the wife as principal, was, in fact, an attempted evasion of the statute, the consideration moving solely to the husband. Where this has been found to be true, it has uniformly been held that the contract is within the inhibition of the statute, and is void as to the wife. Dodge v. Kinzy, 101 Ind. 102; Vogel v. Leichner, 102 Ind. 55; Cupp v. Campbell, 103 Ind. 213; Brown v. Will, 103 Ind. 71; Allen v. Davis, 99 Ind. 216; Allen v. Davis, 101 Ind. 187; Orr v. White, 106 Ind. 341; Ward v. Berkshire Life Ins. Co., 108 Ind. 301; Rogers v. Union Cent. Life Ins. Co., 111 Ind. 343; Long v. Crosson, 119 Ind. 3; Security Co. v. Arbuckle, 119 Ind. 69; Nixon v. Whitely, etc., Co., 120 Ind. 360; Stewart v. Babbs, 120 Ind. 568; Engler v. Acker, 106 Ind. 223; Crooks v. Kennett, 111 Ind. 347; Miller v. Shields, 124 Ind. 166; Warey v. Forst, 102 Ind. 205.

While this is true, it is, however, not enough that, as between the husband and wife, it was understood that she was only pro forma the borrower, and that the husband was to receive the money. It would open the door to the perpetration of great frauds if mortgages were to be declared void simply because, as between the husband and wife, it was understood that the money was being borrowed for the husband's use, and was, in fact, at once handed to and used by him for his sole benefit. Rogers v. Union. Cent. Life Ins. Co., supra; Bouvey v. McNeal, 126 Ind. 541; Ward v.

Cummings et al. v. Martin.

Berkshire Life Ins. Co., 108 Ind. 301. In the latter case it is said:

"It is not material that there was a secret agreement between the husband and wife, for the appellee could not be prejudiced by an agreement of which it had no notice. The question is, not what facts were known to the mortgagors, but what facts did the appellee have knowledge of, or ought under the circumstances to be charged with having knowledge of? It is true that the appellee, having notice of Mrs. Ward's coverture, was bound to inquire whether she had capacity to make the contract; but when reasonable care and diligence are exercised, the party contracting with a married woman may rely upon her representations."

The inquiry above referred to is whether she is contracting, or proposing to contract, as principal or as surety.

It is only where the lender is a party to, or is chargeable with knowledge of, the attempted evasion of the statute that the contract is invalidated. If he in good faith loans the money to the wife, he can not be affected by any secret understanding between her and her husband. The circumstances may be such that, as between husband and wife, he is the principal debtor, and she only his surety; but if she has personally applied for the loan, and represented to the lender that it was for herself, and he, relying upon such representation has, in good faith, made the loan, she is, as to such lender, not a surety, but the principal debtor.

Language used in Vogel v. Leichner, supra, and some other cases following it, may seem to assert the proposition that in all cases where one has loaned money to a married woman, the burden of proof is on the lender to show that she received, or was to receive,the benefit of the loan; or that in the transaction she was not surety. A comparison of these cases with the later cases will show that this is the rule only where there is something about the transaction to indicate that the debt. is apparently, or may be, the debt of another, and not her debt. This is not the rule where the transaction shows upon

Cummings et al. v. Martin.

its face that it is her separate contract. See, especially, Miller v. Shields, supra; also, Long v. Crosson, supra; Security Co. v. Arbuckle, supra.

In such a case, if she attempts to escape liability on the ground that she is only surety, she must plead and prove such fact, and the burden is upon her to do so. Nor will it be enough for her to show that, as between her and her husband, she is only surety; but she must show that the creditor either contracted with her as surety, or that the circumstances were such as to charge him with knowledge of such fact. Unless there is something to put the lender upon inquiry, or suggest to him that the husband is the real borrower, he may as safely lend money to a married woman as to her husband. The same statute, by one section of which her contracts of suretyship are declared void, by another section provides that "she shall be bound by an estoppel in pais, like any other person." See the last clause of section 5117. R. S. 1881. Having by her representations secured the loan, she will be estopped to say that the representations were untrue, and that she was, after all, only surety.

The fact that the appellant, as soon as she received the money, handed it to her husband, can not affect the question. The witnesses all agree that after the note and mortgage were executed the appellee handed the money to the wife. The transaction was then complete, and when the money reached the hands of the borrower she had the right. to do with it as she wished. Appellee had then neither the power nor the right to interfere in any manner. She could not compel her to hand back the money, nor could she dictate how it should be disposed of. The same statute which limits the power of a married woman to convey or mortgage her real estate gives her unrestricted power over her personal estate. Section 5117, supra.

Having borrowed money, she may give it to her husband, or to any other person. Her dominion over her personal

The Michigan Mutual Life Insurance Company v. Custer.

estate is as absolute as is the dominion of the husband over his.

We find no error in the record, and the judgment is affirmed.

Filed April 7, 1891.

No. 14,785.

THE MICHIGAN MUTUAL LIFE INSURANCE COMPANY v.
CUSTER.

LIFE INSURANCE.-Premium Overdue and Unpaid.--Validity of Provision Against Liability.-A provision in a policy of insurance that the insurer shall not be liable for a loss occurring while a note given for premium is overdue and unpaid, is valid, and exonerates the insurer from liability while such delinquency continues.

SAME.-Waiver of Forfeiture Incurred by Non-Payment of Premium.-A pro-
vision in a policy of insurance providing for the forfeiture of the policy
for non-payment of the premium is for the benefit of the insurer, and
may be waived by it.

SAME.-Premium Note Overdue.--Extension of Time of Payment.--Loss Dur-
ing Extension.--A clause in a policy of life insurance provided that if
any premium should be settled by note, such settlement should not be
deemed a payment, but only an extension of the time for the payment
of that premium; and if the note, or any renewal of it, should not be
fully paid when due, then, for any loss occurring while such note re-
mained due and unpaid, the insurer should not be liable, but the whole
amount of the premium included in such note should be considered as
earned, and the insurer might collect it. The insured failed to pay a
premium when due, and gave his note therefor, due in seven months,
and before this note was due, the time of payment was extended by mu-
tual agreement five months, during which five months he died.
Held, that there was a sufficient consideration to support the agreement to
extend the time of payment the extra five months, that it was not a
mere indulgence to the maker; and that the insurer was liable for the
loss occurring under such policy.

SAME.-Proof of Extension of Note.-Tile Season.-Where it is alleged that
the note was extended until the season for the sale of tile for a desig-

1

The Michigan Mutual Life Insurance Company v. Custer.

nated year had expired, evidence of the period constituting the tile season is admissible to show such extension.

From the Tippecanoe Circuit Court.

W. S. Hartman, W. H. Hamelle and J. H. Adams, for appellant.

P. S. Kennedy, W. D. Wallace and T. H. Ristine, for appellee.

MILLER, J.-This action was instituted in the court below by the appellee, Eliza A. Custer, against the appellant, the Michigan Mutual Life Insurance Company. The foundation of the action was a life policy issued by the appellant upon the life of Montgomery T. Custer, the husband of the appellee.

In the third paragraph of complaint it is averred, in substance, that Eliza A. Custer is the widow of Montgomery T. Custer, late of Montgomery county, Indiana; that appellant, the Michigan Mutual Life Insurance Company, is a foreign corporation, with its principal office at Detroit, Michigan; that June 24, 1883, in consideration of the payment of $57, by Montgomery T. Custer, the appellant executed a policy of insurance, promising thereby to pay to him at the expiration of thirty-five years, the sum of $2,000, or in the event of his earlier death to pay such sum to his widow; that Montgomery T. Custer died at New Ross, Montgomery county, Indiana, May 9th, 1885, and on June 3d, following, appellee furnished appellant with proofs of death; that appellee and said Montgomery T. Custer performed all the stipulations imposed on them by such contract of insurance, except that Montgomery T. Custer did not pay the annual cash premium on said policy of insurance due June 2d, 1884; that in lieu of the payment of such premium in cash, Montgomery T. Custer executed, and the appellant insurance company accepted, on said day, a note bearing date June 2d, 1884, for $57, due seven months after date, bearing seven