FOSTER, of Minnesota, being about to engage in some enterprise, and wanting money, asked his wife, who owned, in her separate right, a valuable tract of land in that State, to mortgage it for his benefit. What exactly was said or promised did not appear. However, Foster afterwards went to a notary, who exercised, as it seemed, the business of a scrivener also, and directed him to draw a mortgage of the property, with himself and wife as mortgagors, but leaving the name of the mortgagee, and the sum for which the land was mortgaged, in blank. This the magistrate did. Foster acknowledged the deed, at the magistrate's office, in this shape, and the magistrate then took the instrument to Mrs. Foster, at her husband's house, that she might sign and acknowledge it in the same shape. When the magistrate took the mortgage to her thus to execute, Mrs. Foster said, 'she was fearful that the speculation which her husband was going into would not come out right; that she did not like to mortgage that place, but that he wanted to raise a few hundred dollars, or several hundred dollars, or something to that effect,'-the magistrate, who was the witness that gave the testimony, did not recollect the exact expression which she used,-'and that she did not like to refuse him, and that so she consented to sign the mortgage.' Mrs. Foster, having signed the instrument in this blank shape, the notary, under his hand and seal, certified, in form, that the husband and wife, 'the signers and sealers of the foregoing deed,' had personally appeared before him, 'and acknowledged the signing and sealing thereof to be their voluntary act and deed, for the uses and purposes expressed;' and that the wife, 'being examined separate and apart from her said husband, and the contents of the foregoing deed made known to her by me, she then acknowledged that she executed the same freely, and without fear or compulsion from any one.' Such form of separate acknowledgment, it may be well to say, is required by statute, in Minnesota, to give any effect to a feme covert's deed. After taking the wife's acknowledgment, the notary gave the instrument to her husband. He, finding the complainant, Drury, willing to lend as much as $12,800 upon the property, himself filled up the blanks with the name of Drury, as mortgagee, and with the sum just mentioned as the amount for which the estate was mortgaged. In this form the instrument was delivered to Drury, who, knowing nothing of the facts, advanced the money in good faith, and put his mortgage on record. There was no evidence that the wife derived any benefit from the money advanced, or that she ever knew that such a large sum was advanced.
On a bill of foreclosure brought four years afterwards by Drury against Foster and wife, in the Federal Court for Minnesota, the defence was, that the mortgage was not the wife's deed; a defence which the court below thought good as to her. It accordingly dismissed the bill as regarded her, giving a decree, however, against the husband. The correctness of its action as regarded the wife was the question, on appeal, here.
Mr. Peckham for Drury, the mortgagee: All will admit that it is not easy to conceive of a case addressing itself more to a sense of equity. Drury, without a circumstance to excite suspicion, and relying upon a mortgage regular upon its face, advanced a large sum in perfect good faith. He supposed, too, as was natural, that the mortgagors were acting in equal good faith. Mrs. Foster deliberately, and with understanding, put it into the power of her husband to obtain the loan. Will she be permitted, at this late day, in conjunction with her husband, to disavow her acts, and thus, in effect, defraud an innocent third party whom she has been chiefly instrumental in bringing into his present position? Even if Mrs. Foster were entirely innocent in the premises, and was the victim of the fraud of her husband, yet either she or the plaintiff must suffer loss in the present case; and no principle is better settled than that where loss must fall upon one of two innocent parties, it must be borne by that one who is most in fault. There is no reason for exempting the wife from the operation of this rule. On the contrary, in transactions between the husband and wife and third parties, there is the strongest reason for applying the principle. It would be against public policy, and expose transactions relative to real estate to hazard, to allow a married woman to screen herself from the consequences of her own acts under the circumstances of the present case. Such a doctrine would subordinate all other interests to those of married women.