
    James A. Patteson, Resp’t, v. Amelia M. Graham, App’lt.
    
      (New York Court of Common Pleas, General Term,
    
    
      Filed May 7, 1888.)
    
    1. Contracts—By married women—Laws relating to, prior to Laws 1884, chap. 381—-Evidence supporting finding that contract was FOR BENEFIT OF SEPARATE ESTATE.
    Prior to the passage of Laws 1884, chapter 381, a married woman could not bind herself by contract unless the obligation was created by her in or about carrying on her trade or business, or the contract related to or was made for the benefit of her separate estate, or the intention to charge her separate estate was expressed in the instrument or contract by which the liability was created. In pursuance of the request of the defendant, a married woman, the plaintiff made his check for $3,000 to the order of a third party, for which amount she agreed to give her note, bearing seven per cent interest, a rate at that time allowed by law. The defendant at that time had a separate estate, but was not engaged in carrying on any trade or business. Ho intention to charge her separate estate was expressed in the request for the loan or the receipt acknowledging it. At the time the loan was made to the defendant she owned real estate which was subject to a mortgage made by her husband and herself to two parties, one of whom was the. payee of the check, to secure the payment of certain notes. This mortgage provided for the release of several pieces of the mortgaged property upon the production and deposit with the mortgagees, paid or cancelled, of a number of notes specified. Subsequent to the payment by the plaintiff, in accordance with the defendant’s directions, the mortgagees executed and delivered to the defendant a release of the mortgaged property, and soon thereafter she sold the same free from the lien of the mortgage. Held, that these facts and circumstances indicated that the payment made by the plaintiff at the defendant’s request was so directed for the purpose of having the money applied towards the extinguishment of the lien of the mortgage, and that in the absence of evidence on the part of the defendant that she had other dealings with the payee of the check, supported a finding that the money so paid at her direction was for the benefit of her separate estate.
    3. Same—Rate of interest secured by governs till payment of MERGES IN JUDGMENT.
    
      Held, that the contract between the parties having provided for interest at a specified rate, that rate governed until payment, or until the contract was merged in judgment.
    
      
      Masten & Nichols, for app’lt; Foster & Thomson, for resp’t.
   Allen, J.—

This is an appeal from a judgment entered upon the report of a referee in favor of the plaintiff against the defendant for the sum of $5331.09. The action was brought to recover the sum of $3,000 alleged to have been loaned and advanced by the plaintiff to the defendant at her instance and request on or about the 34th day of February, 1863, and which, it is alleged she undertook and promised to repay, with interest at seven per cent. The defendant by her answer denied the loan, and pleaded as a separate defense that at the time it was alleged to have been made she was a married woman.

Plaintiff claims to have delivered to one John McKesson his check for the sum of $3,000, which was paid in regular course, in accordance with the written request of the defendant contained in the following letter:

“New York, 24th February, ’63.

Dear Sir — Please make the cheque for the $2,000, for which I herewith hand you receipt, to the order of John McKesson, Esq., and oblige,

Yours truly,

A. M. WHITLOCK.”

This letter was accompanied by the following receipt, written upon the same sheet of paper:

“ New York, February 24th, ’63.

Received from James A. Patteson, Esq., the sum of $3,000 in check to the order of James McKesson, Esq., and for which am’t I am to give him my note bearing interest at seven per cent payable—

A. M. WHITLOCK.”

The check of plaintiff for the sum of $3,000 payable to the order of John McKesson dated the same day as the letter and receipt, was put in evidence. The signature of the plaintiff was proved, the endorsement of the check by McKesson was shown to be in the handwriting of John McKesson, and the endorsement, “For deposit in the bank of New York, McKesson & Robbins,” was proved to be in the handwriting of a-member of that firm.

The defendant testifies that she has no recollection of the letter and receipt, exhibits 1 and 3; she admits that the signature looks like hers; she says she cannot say surely that it is, but that it looks like her handwriting as she remembers it at that time. The witness Graham, her present husband, says that it is, in his opinion, her signature.

From the evidence upon this branch of the case, the referee found that the defendant signed the letter and receipt ■above referred to, and that the sum of money therein mentioned was delivered by the plaintiff in accordance with her direction, to John McKesson. This finding is supported by the evidence and we cannot say the referee erred in making it.

The referee has also found that at the time of the making of the said loan the defendant had a separate estate.

The defendant has testified that during the year 1863 she did not have any separate estate, and did not own any property in her own right. She is, however, directly contradicted by the documentary evidence in the case, which shows that at the time of contract she was the owner of certain property in the county of Westchester, which was conveyed to her by John J. Grane in the year 1861, and which remained her property until some time in the year 1864, when it was sold by her. As to this matter, the finding of "the referee was clearly correct.

Prior to the passage of chapter 381 of the Laws of 1884, a married woman could not bind herself by contract, unless the obligation was created by her in or about carrying on her trade or business, or the contract related to or was made for the benefit of her separate estate, or intention to charge the separate estate was expressed in the instrument or contract by which the liability was created. The referee has found as a fact that the defendant was not engaged in the carrying on of any trade or business at the time the loan was made to her. No intention to charge her separate estate was expressed in the letter and receipt put in evidence. The ground of defendant’s liability therefore must be that the contract related to or was made for the benefit of her separate estate. The referee has found that the money paid by the plaintiff at her request to McKesson, was paid to a creditor who had a lien by mortgage on her separate estate, and was for its benefit.

It appears by the evidence that the land above referred to as owned by the defendant, was, with other property, subject to a mortgage made by her husband and herself in 1861 to John McKesson and Edward Haight, to secure 100 notes for $1,000 each; this mortgage contained provisions for the release from the lien of it, of the several pieces of property mortgaged, upon the production and deposit with the mortgagees, paid or cancelled, of a number of notes specified.

Sometime after the payment to McKesson by the plaintiff in accordance with defendant’s directions, McKesson and Haight, the mortgagees, executed and delivered to the defendant a release from the lien of the said mortgage of the land owned by the defendant, and she very soon thereafter sold the same free from the lien of the mortgage. The defendant has not attempted to furnish any reason for directing Mr. Patteson to pay the sum of $2,000 to John McKesson, and the facts proved, the circumstances of the case and the probabilities, indicate that such payment was so directed for the purpose of having the money applied towards the extinguishment of the lien of the mortgage. It was competent for her to show, by herself or by Mr. Mc-Kesson, that she had other dealings with Mr. McKesson, and that she directed the money to be paid to him for a different, purpose. She has not done so, and we are of opinion that the referee has not erred in his decision upon this branch of the case, that the money paid by her direction by the plaintiff to John McKesson wa,s so paid to him for the benefit of her separate estate.

The referee has committed no error in directing the payment of interest at the rate of seven per cent up to the date of his report. The contract between the parties provided for interest at a specified rate; that contract rate governs, until payment, or until the contract is merged in judgment. O'Brien v. Young, 95 N. Y., 428.

Where interest is allowed not by virture of any contract, to pay it, but simply as damages because of default in discharge of an obligation, the legal rate must govern. Here, however, there was a contract to pay interest at the rate of seven per cent.

We do not think there are any other questions in this, case which require discussion, and we can discover no just ground for reversing this judgment.

The judgment must therefore be affirmed, with costs.

Larremore, Ch. J., and Bookstaver, J., concur.  