Case one of two
Court of Appeals of Kentucky.
Maude SWAFFORD et al., Appellants, v. E. W. MANNING et al., Appellees.
Oct. 22, 1954.
ACTION: Judgment affirmed.

Suit, brought by payee's executrix and others, on note secured by a mortgage executed by husband and wife. Wife relied, for exoneration from personal liability, upon statute providing that no part of married woman's estate shall be subjected to payment of liability upon contract made after marriage to answer for debt of another, including her husband, unless the estate has been set apart for that purpose by a mortgage or other conveyance. From a judgment of the Circuit Court, Clay County, Ray C. Lewis, J., executrix appealed. The Court of Appeals, Moremen, J., held that evidence sustained finding that wife had signed note as surety.

MOREMEN, Justice.
Appellant, Maude Swafford, individually and as executrix of the estate of her deceased husband, G. G. Swafford, filed complaint against appellees, E. W. Manning and his wife, Eunice Manning, by which she sought to enforce payment of a note in the principal sum of $3,000 secured by a mortgage executed by appellees. No defense was offered by E. W. Manning, but appellee, Eunice Manning, pleaded that she signed the note only as surety for the debt represented by the note and secured by the mortgage on her property; that it was entirely the obligation of her husband who received the money, and that she had received no benefit from the proceeds whatsoever. She relied on KRS 404.010(2), which provides that no part of a married woman's estate shall be subjected to the payment of any liability upon a contract made after marriage to answer for the debt of another, including her husband, unless the estate has been set apart for that purpose by a mortgage or other conveyance. (This section has been amended since this action arose. See Chapter 21, Acts of 1954.) There are some minor collateral issues in the case but neither party has briefed them and we, too, believe that the single question of whether or not the wife was a surety is decisive of the case.

The circuit court held that the wife was in fact surety, and while he adjudged that her interest in the mortgaged property should be applied to the satisfaction of the debt, the court refused to grant a personal judgment against Eunice Manning.

Since this case turns on a question of fact, we will give a summary of the evidence adduced. E. W. Manning testified that Preacher Sizemore had made arrangements with G. G. Swafford to lend the money to him (Manning) and, on December 16, 1946, he went to the Swafford home with Gib Hobbs, Preacher Sizemore and his wife, Eunice Manning, where a note and mortgage were executed after Mrs. Manning had been told that when a husband borrows money on real estate, it is necessary for his wife to sign also. It had been stipulated by the parties, inter alia, that the proceeds of the loan were given to Mrs. Manning in the form of a $3,000 check. When asked why this was done, appellee stated that he was drinking at the time and requested Swafford to make the check payable to her because he 'did not want to fool with it.' He further testified that he had no bank account but that his wife had. On the following morning she took the check to the First National Bank, cashed it, deposited $1,500 in the bank and brought $1,500 out in front of the bank where he was sitting in a car with his friend, Gib Hobbs. She turned the cash over to him, was taken home, and Manning and Gib Hobbs went to Cincinnati and in the surrounding territory dissipated the money by drinking and gambling. He returned in a day or two and subsequently spent the balance of the money and considerably more, which he obtained from his wife, in a drinking spree which lasted for over a year. He was amply corroborated in his story by his cronies who hung around his shop and joined in his spree. Eunice Manning corroborated his story in nearly all particulars and testified that she had received no benefit from the money whatsoever. It appears rather certain in the record that whenever he wanted money, she drew cash from the bank and delivered it to him. She testified she thought she was signing the note only as surety and that she would not be obligated beyond the extent of her mortgaged property.

Evidence offered by appellant is not in strict contradiction. Appellant Maude Swafford, widow of G. G. Swafford, stated that on the date the money was borrowed, Eunice was writing out the mortgage. When asked if it was her understanding that Eunice was signing as principal, she responded, 'She was writing it out all right, she did the writing.' Ray Swafford, son of Martha Swafford, testified that he was with his father when he went to attempt to collect from E. W. Manning. He said: 'Well he tried to get Edward to pay--he was behind on the interest on the note, and Edward hemmed and hawed and put him off an told him he might see his wife, she might get him up some money and the old man said, 'Well, she is the one who got the money anyway, she is the one who got that loan.' talked like he ought to have seen her in the first place.' No other evidence of substance was introduced on this question.

This court has long recognized the rule that a finding of fact by the chancellor will not be reversed unless this court is clearly convinced that it is erroneous. Ffindings of fact shall not be set aside unless clearly erroneous.

After we have considered the evidence, under the foregoing rule, we are constrained to follow the judgment of the chancellor.

Judgment affirmed.

272 S.W.2d 339
Case two of two
Court of Appeals of Kentucky.
Maude SWAFFORD et al., Appellants, v. E. W. MANNING et al., Appellees.
Nov. 16, 1956.
ACTION: Judgment affirmed.

Proceeding to set aside judgment insofar as it held that defendant wife was not personally liable on a note signed by husband and wife. The Circuit Court, Clay County, William Dixon, J., rendered judgment refusing to disturb prior judgment, and plaintiff appealed. The Court of Appeals, Milliken, C. J., held that proffered testimony, which, if proved at trial, would not have changed the result, did not constitute such new and material evidence as would justify setting aside the judgment. MILLIKEN, Chief Justice. This action is a proceeding such as is permitted by CR 60.02 to set aside the judgment entered February 4, 1955, in the above-styled case, in so far as the judgment holds Eunice Manning, wife of E. W. Manning, not to be personally liable on a note. The judgment sought to be set aside was affirmed by this court in an opinion reported in 272 S.W.2d 339, which may be referred to for a fuller discussion of the facts. The trial court refused to disturb the judgment, and this appeal has resulted. The note in question, in the amount of $3,000, was executed to G. G. Swafford by E. W. Manning and his wife, Eunice. The plaintiff-appellant, Maude Swafford (now Smith), filed the original action on the note and this action individually and as executrix of her husband's estate. In the original action no defense was offered by E. W. Manning, but the judgment of the trial court, which was affirmed by this court, sustained the contention of Eunice Manning that she had signed the note as surety for her husband, and under KRS 404.010(2) was liable only to the extent of her interest in certain property which she set aside by mortgage to secure the note. The mortgaged property has been sold and the proceeds applied to the note. In its former opinion, this court pointed out that it was a question of fact whether the wife, Eunice Manning, signed the note as surety or as principal, and affirmed the judgment of the trial court since it was not clearly erroneous. In the present proceeding, Mrs. Swafford attacks that part of the former judgment which holds Eunice Manning signed the note as surety rather than as principal, and seeks to have the judgment corrected, relying chiefly on four grounds: (1) that Mrs. Swafford, the appellant, had high blood pressure and was not mentally alert while testifying at the first trial; (2) that she has discovered new and material evidence; (3) that the appellee, Eunice Manning, repeatedly acknowledged she owed the debt of $3,000; and (4) the appellee, Eunice Manning, signed the note. In her deposition filed in this proceeding, Mrs. Swafford states that she had suffered a light stroke, was ill with high blood pressure, and therefor her memory was poor at the time of the original trial. She is corroborated in this by statements of two of her children, but no medical testimony was presented. In any event, the testimony in her deposition herein with reference to the circumstances surrounding the execution of the note, even if proved at the original trial, would not have changed the result in the case. The purported new and material evidence is the testimony of two of plaintiff's children, a daughter and a son, who state they were present in their father's house when the note was executed. The daughter stated she was in another room of the house while 'the papers' were being drawn up in the kitchen, and that appellee, Eunice Manning, was in the kitchen. However, the daughter admitted she had no personal knowledge as to whether Mrs. Manning had anything to do with the borrowing of the money, or how it was spent. The son stated he had accompanied his father on several occasions when he tried to collect from the Mannings, and that Mrs. Manning never denied she owed the money. Also, the son was present in the kitchen and saw the note and mortgage executed, but he made no statement which clarified the issue as to whether Mrs. Manning signed as surety or as principal. Moreover, both of these children of Mrs. Swafford lived in Clay County within fifteen miles of the courthouse where the trial was held, so that with due diligence their testimony could have been presented at the first trial. This is not new and material evidence within the contemplation of CR 60.02. The wife's oral promise to pay this note, assuming she did so promise, would not create any legal obligation on her part to pay it, at least so long as she remains under the disability of marriage. There is no controversy in this proceeding about the note being signed by Eunice Manning, since it has been determined that she did sign it as surety. Mrs. Swafford alleges she was taken by surprise at the trial when Mrs. Manning denied personal liability on the note as a principal, but this contention is untenable since the issue was raised by the pleadings as appears in the original record. The judgment is affirmed. HOGG, J., not sitting. Ky.,1956 SWAFFORD v. MANNING 295 S.W.2d 802


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