Question 386.— A bank holds a bond securing a standing overdraft up to a certain limit. Bondman dies, and it is suggested that the customer give a demand note in favour of his wife as collateral security to cover any overdraft present and future, and his wife to hand bank a mortgage on her property in favour of bank as security for her endorsement. Would this hold? Would it help matters if note were made by wife in favour of husband, and a mortgage given by wife to husband, and assigned by him to bank to secure note?

Answer.—Under the law in force in Ontario, a wife is entitled to enter into contracts which will bind her separate estate, and there is nothing to prevent her from endorsing her husband's note and making herself liable upon the contract of endorsement with respect to her separate estate, nor is there anything to prevent her from mortgaging her property to secure her endorsement. Therefore, if the formalities with respect to the making of the mortgage be properly observed, it could be made to the bank, and would form a security to the bank. Of course, the mortgage could only be taken to secure the amount of the existing indebtedness. It could not be held for future advances.