Bank of Commerce v. Bernero

• Decision Date: 07 April 1885
• Citation: 17 Mo.App. 313
• Parties: BANK OF COMMERCE, Respondent, v. A. BERNERO, Appellant.
• Court: Missouri Court of Appeals

17 Mo.App. 313

BANK OF COMMERCE, Respondent,

v.A. BERNERO, Appellant.

St. Louis Court of Appeals, Missouri.

Apr. 7, 1885.

APPEAL from the St. Louis Circuit Court, THAYER, J.

Reversed and remanded.

A. R. TAYLOR, for the appellant: An unequivocal promise to pay the note was not a ratification.-- Middleton v. Railroad, 62 Mo. 579; Cravens v. Gilleland, 63 Mo. 28; Sauer v. Brincker, 77 Mo. 294. There was no estoppel.-- Fuzz v. Burr, 7 Mo. App. 588.

A. ARNSTEIN, for the respondent: The acts of the defendant amounted to a ratification.-- Hefner v. Vandolah, 62 Ill. 483; Dow v. Spenney, 29 Mo. 286; Bank v. Gay, 63 Mo. 33, 40. And worked an estoppel.-- Barber v. Gingell, 3 Esp. 60; Crout v. DeWolf, 1 R. I. 393; Forsyth v. Day, 46 Me. 176; Story on Agency, sect. 56; Chidsey v. Porter, 21 Pa. 390; Bigelow on Estoppel, p. 448.

ROMBAUER, J., delivered the opinion of the court.

It must be conceded, both upon reason and authority, that where the name of one person is signed by another to a written promise, the person whose name is thus signed can be legally held as promisor only on one of three grounds. These are, that he either expressly authorized the act, or, that he subsequently ratified it, or, that he is estopped by his conduct to disavow it.

As one may do by another what he can do himself, the law on the first ground of liability above stated is very simple, and the fact in any given case easily established. It is not so easy, however, to determine what will amount in any such case either to a ratification or to an estoppel.

“The distinction between a contract intentionally assented to or ratified in fact, and an estoppel to deny the validity of the contract is very wide. In the former case the party is bound, because he intended to be; in the latter he is bound notwithstanding there was no such intention, because the other party will be prejudiced and defrauded by his conduct, unless the law treat him as legally bound.”-- Forsyth v. Day, 53 Me. 196.

In the case now before us, the plaintiff, an innocent holder of a promissory note acquired for value before maturity, sued the defendant as maker of such note. The answer denied the execution of the instrument under oath. It stands conceded by the testimony that the note was not signed by the defendant, but was signed with defendant's name by one Davie, who discounted it, and received the proceeds thereof. Plaintiff claimed, and gave evidence tending to show, that Davie signed defendant's name to the note at defendant's request; that defendant subsequently, with full knowledge that Davie had signed his name to the note, and had received the proceeds, promised to pay the same; and that Davie had repeatedly, on former occasions, signed defendant's name to notes and discounted the notes with plaintiff.

Plaintiff also gave evidence tending to show that the former notes thus executed and discounted, had all been paid, and that they were not paid by Davie, who, besides defendant, was the only party to the paper.

All these facts were denied by the defendant, but the preponderance of evidence on all the controverted facts, with exception of the one showing express authority, was on plaintiff's side.

These being the issues and the testimony given to sustain them, the court of its own motion, among others, gave the following instructions to the jury:

2. “Although the jury may believe from the evidence that Wm. Davie was not authorized by the defendant to sign the note sued upon, yet if you further believe that said defendant, subsequent to the signing of the note, ratified the act of said Davie in signing the note in question, then the defendant is bound by said note. And the court further instructs you that an unequivocal promise made by the defendant to pay the note after he found the note in suit had been signed in his, defendant's, name, and by said Davie, would be a ratification of the signature.”

3. “If you believe from the evidence that prior to March 12, 1883, the witness Davie had signed the name of the defendant to other notes than the one in suit and had them discounted by the plaintiff, and that such act had been done by said Davie with the defendant's knowledge and assent, and all such notes had been paid to plaintiff; and if you believe that said Davie signed the defendant's name to the note sued upon and sold it to the plaintiff, and the plaintiff bought the note in good faith and before maturity, supposing the signature to be that of the defendant, and having acquired such knowledge as it had of defendant's signature from said other notes purporting to be signed by defendant which had been paid, then plaintiff is entitled to recover even though it was signed without defendant's authority, and even though there was no ratification of the signature by the defendant.”

The jury found a verdict for plaintiff, and the defendant appealed to this court, and here urges that these instructions, under the facts of the case, state incorrect propositions of law.

The objection urged to instruction No. 2 is its concluding sentence, which tells the jury that an unconditional promise made by the defendant to pay the note, after he found it had been signed in his name by Davie, was of itself a ratification of the signature.

Ratification is a question that can arise solely in connection with the law of agency. It is essential, therefore, that the party whose act is to be ratified should have assumed to act as agent for another at the date of the act sought to be ratified. It would seem, however, that the...