This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Questions of the capacity of the parties to a contract are said by many courts to be determined by the law of the place where the contract is made.1 Under this subject by far the most numerous class of cases concern contracts of married women. This is probably because there is far greater difference in the law of the different states on the question of a married woman's capacity to make contracts than on any other topic of capacity. There are four inconsistent theories as to the law controlling the capacity of a married woman to bind herself by contract. (1) The capacity of a married woman to bind herself by contract is governed by the law of the place where the contract is made,2 unless by the law of place of her domicile she lacks capacity entirely.3 Accordingly, the contract of a married woman, valid at her domicile where made will be enforced in another jurisdiction by the law of which she has no capacity to contract.4 In some of these cases the contract is made at the domicile of the married woman and is to be performed there. If valid there, it is enforced in other states, though if made at the state of the forum it would be void.5 It must be observed that the place where the contract is made is not the place where it is signed, but where it takes effect.6 Accordingly, if a married woman signs a contract in the state of her domicile and delivers it in another state, the latter is the place where the contract is made and under this doctrine its laws will control.7 A note was executed in form by a husband to his wife, and indorsed by her as accommodation indorser in New Jersey, where she had no power to contract with her husband. She knew that it was to be negotiated in New York, where ouch contract was valid. It was in fact negotiated there, and there first went into effect. It was held that she was liable on such contract in New Jersey.8 A married woman domiciled in Alabama signed a note there as surety for her husband. The note was payable in Illinois and suit thereon was brought in New York. In Alabama she had no authority to act as surety for her husband; in Illinois, she had. The majority of the court found from the record that, though the note was intended by the makers to be negotiated in Illinois, the married woman did not know of such intention; and accordingly held that her capacity was to be determined by Alabama law. A dissenting opinion held that Illinois law should govern, on the ground that the record showed that she knew of such intention.9 A married woman, domiciled in Kentucky, accepted a conveyance there from her husband in which she assumed a note given for the purchase money. By the law of Kentucky where the Common-Law rule was in force, a husband could not contract with his wife. The realty was situated in Virginia, by the law of which state a husband could contract with his wife. In a suit against her on the note in Kentucky it was held that the law of Kentucky controlled as to her capacity; and that accordingly she was not personally liable.10 A married woman delivered notes in Missouri, where she was domiciled, as security for her husband to pay for certain mules. In Missouri she had power to bind her separate estate by a contract not made for the benefit thereof. In Louisiana she had no such power. In a suit on the nores in Louisiana, it was held that Missouri law governed and that the notes were valid.11 It has been suggested that the validity of a note given by a married woman to discharge a pre-e risting liability is controlled by the law of the place where Mich liability was incurred and not by the law of the place v here such note is given. A married woman signed a bond in Ohio as surety where she could thus bind herself. Subsequently in Indiana where she could not thus bind herself, she gave a note in discharge of such liability. The note was So. 886.) held valid.12 The qualification already suggested, that the married woman must not be totally disqualified by the law of her domicile, needs comment. This negative proposition is too broad and cannot safely be converted into an affirmative proposition. A narrower principle, however, will go far toward reconciling the differences of opinion. If the policy of the law of a married woman's domicile forbids her from binding herself by contract, and an attempt is made to enforce in the forum of her domicile, the principle that no court can be required by comity to enforce a contract which is contrary to its own public policy,13 has been invoked to prevent the enforcing of such contract.1* Since this rule does not involve the liability of the married woman, but solely the policy of the law of the forum, a change in the policy of the law between the time that the contract is made and the time that action is brought, will make such contract enforceable in the forum of her domicile.15 Further, this principle cannot protect a married woman who makes a contract at her domicile where it is valid, and subsequently removes her domicile to a state where such contract is invalid.16 While this principle will reconcile many cases apparently contradictory, it is not adopted uniformly. The rule that the contract of a married woman if valid where made will be enforced everywhere has been applied by some courts even to cases where the contract was sought to be enforced in the forum within which the married woman was domiciled and by the law of which she had no capacity to make contracts.17 (2) The law of the domicile controls as to the capacity of a married woman to make a contract even if it is executed elsewhere.18 Thus a note was signed in Tennessee by a married woman there domiciled. It was delivered in Ohio and there payable. By the law of Ohio she had capacity to bind herself. By the law of Tennessee she did not. Suit was brought in Tennessee. It was held that her capacity was determined by Tennessee law.19 (3) Other courts hold that the law of the place of performance governs.20 (4) It has been suggested that the law of the forum controls.21 There is, however, no reason and but little authority in this view. (5) The foregoing contracts concern personal liability or personal property. Different principles usually control conveyances of realty or contracts affecting it. By reason of this difference in subject-matter neither of the theories on this subject, though inconsistent with each other, can properly be said to be inconsistent with any of the foregoing. The two theories upon this subject are as follows: (a) The capacity of a married woman to deal with her realty and to contract concerning it is controlled by the law of the place where the realty is situated.22 Thus the validity of a sale of realty by a husband to his wife,23 or a mortgage given by her in one state on land situated in another,24 are each controlled by the law of the state where the land is situated. From the nature of actions concerning realty this is necessarily the law of the forum, as well. So the law of the place where the realty is situated and the suit is brought controls as to the validity of a contract whereby a married woman seeks to charge her separate estate.25 So the validity of a note and mortgage executed to bind the separate estate of a married woman for her husband's debt at her domicile, where she has no such power,26 is controlled by the law of the place where the realty is situated; even if it is given to secure her liability as surety which is void where the contract is made.27 (b) A minority of the courts hold that in contracts concerning realty the law of the domicile controls if the contract is made there.28 A married woman domiciled in North Carolina executed a covenant there whereby she released dower in realty in Massachusetts. By statute in North Carolina, after complying with the statute, she acquired capacity as a free trader to bind herself by contract. It was held that North Carolina law applied.29 As pointed out in the dissenting opinion filed in the last case, this leads to the remarkable result that a contract for realty may be enforced specifically when if the contract had been performed and the conveyance made, the contract would have been void. A minority of the courts also hold that a contract whereby a married woman seeks to charge here separate estate is to be controlled by the law of the place where made.30 A married woman, domiciled in Kansas indorsed her husband's note there. In Kansas she had power to charge her separate estate at law. She owned realty in Michigan, by the law of which state she did not have such power. Suit was brought on such note in Michigan. It was held that her capacity was controlled by Kansas law.31