Union Trust Company v. Grosman/Opinion of the Court

This is a suit brought by the petitioner in the District Court of the United States for the Northern District of Texas upon two promissory notes made in Chicago by Hiram Grosman and another, and a continuing guaranty executed in the same place by the respondent, Mrs. Grosman, the wife of Hiram Grosman, as part of the same transaction as the earlier note. A decree was rendered for the plaintiff in the District Court, but upon appeal by Mrs. Grosman was reversed as against her by the Circuit Court of Appeals, on the ground that it subjected her separate property to the payment of the demand, contrary to the public policy of the State in which the suit was brought. 228 Fed. 610, 143 C. C. A. 132, Ann. Cas. 1917B, 613. Mrs. Grosman and her husband were domiciled in Texas, as the plaintiff seems to have known, and made the contracts while temporarily in Chicago. We assume for the moment that if she had given the guaranty in Texas it would have been void, and on the other hand that if she had been domiciled in Illinois when she made her promise she would have been bound. The main question is which law is to prevail.

If this suit were brought in Illinois it would present broader issues. On the one side would be decisions that locus regit actum, and the consideration that when a woman goes through the form of contracting in an independent State, theoretically that State has the present * power to hold her to performance, whatever may be the law of her domicile. It might be urged that the contract should be given elsewhere the effect that the law of the place of making might have insured by physical force. See Michigan Trust Co. v. Ferry, 228 U.S. 346, 353, 33 Sup. Ct. 550, 57 L. Ed. 867. On the other hand it is obvious that practically at least no State would take any steps, if it could, before a breach of an undertaking like this. The contract being a continuing one of uncertain duration the plaintiff had notice that in case of a breach it probably might have to resort to the defendant's domicile for a remedy, as it did in fact. In such a case very possibly an Illinois Court might decide that a woman could not lay hold of a temporary absence from her domicile to create remedies against her in that domicile that the law there did not allow her to create, and therefore that the contract was void. This has been held concerning a contract made with a more definite view to the disregard of the laws of a neighboring State. Graves v. Johnson, 156 Mass. 211, 212, 30 N. E. 818, 15 L. R. A. 834, 32 Am. St. Rep. 446.

But when the suit is brought in a court of the domicile there is no room for doubt. It is extravagant to suppose that the courts of that place will help a married woman to make her property there liable in circumstances in which the local law says that it shall be free, simply by stepping across a State line long enough to contract. The Kensington, 183 U.S. 263, 269, 22 Sup. Ct. 102, 46 L. Ed. 190; Armstrong v. Best, 112 N. C. 59, 17 S. E. 14, 25 L. R. A. 188, 34 Am. St. Rep. 473; Bank of Louisiana v. Williams, 46 Miss. 618, 12 Am. Rep. 319; Baer v. Terry, 105 La. 479, 480, 29 South. 886; Palmer v. Palmer, 26 Utah, 31, 40, 72 Pac. 3, 61 L. R. A. 641, 99 Am. St. Rep. 820. See generally, Seamans v. Temple Co., 105 Mich. 400, 63 N. W. 408, 28 L. R. A. 430, 55 Am. St. Rep. 457; Dicey, Conflict of Laws (2d Ed.) 34, General Principle No. II(B) and as to torts, Id. 645, Rule 177. There is nothing opposed to this view in those decisions in which the Courts have enforced similar contracts of women domiciled where the law allowed such contracts to be made. It is one thing for a Court to decline to be an instrument for depriving citizens belonging to the jurisdiction of their property in ways not intended by the law that governs them, another to deny its offices to enforce obligations good by the lex domicili and the lex loci contractus against women that the local laws have no duty to protect. International Harvester Co. v. McAdam, 142 Wis. 114, 124 N. W. 1042, 26 L. R. A. (N. S.) 774, 20 Ann. Cas. 614; Merrielles v. State Bank of Keokuk, 5 Tex. Civ. App. 483, 24 S. W. 564. The case of Milliken v. Pratt, 125 Mass. 374, 28 Am. Rep. 241, went to the verge of the law in holding a Massachusetts woman liable in Massachusetts on a contract that she could not have made there, because made by a letter in Maine, although her person remained always within the jurisdiction of Massachusetts. It is safe to conjecture that the decision would have been different if the law of Massachusetts had not been changed before the bringing of the suit so as to allow such contracts to be made. 125 Mass. 377, 383, 28 Am. Rep. 241.

Texas legislation is on the background of an adoption of the common law. If the statutes have not gone so far as to enable a woman to bind her separate property or herself in order to secure her husband's debts, they prohibit it, and no argument can make it clearer that the policy of that State is opposed to such an obligation. It does not help at all to point out the steps in emancipation that have been taken and to argue prophetically that the rest is to come. We have no concern with the future. It has not come yet. The only question remaining, then, is whether the Court below was right in its interpretation of the Texas law. This was not denied with much confidence and we see no sufficient reason for departing from the opinion of the Court below and the intimations of all the Texas decisions that we have seen. Red River National Bank v. Ferguson, (Tex. Civ. App.) 192 N. W. 1088; Shaw v. Proctor (Tex. Civ. App.) 193 S. W. 1104; Akin v. First National Bank of Bridgeport (Tex. Civ. App.) 194 S. W. 610, 612; First State Bank of Tomball v. Tinkham (Tex. Civ. App.) 195 S. W. 880.

If the decree would have been right in a Court of the State of Texas it was right in a District Court of the United States sitting in the same state. Pritchard v. Norton, 106 U.S. 124, 129, 1 Sup. Ct. 102, 27 L. Ed. 104.

Decree affirmed.