Citizens' State Bank of Enderlin v. Skeffington
| Decision Date | 04 January 1924 |
| Docket Number | 358 |
| Citation | 196 N.W. 953,50 N.D. 494 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Ransom County, North Dakota Allen, J. Action on a promissory note.
Affirmed.
Ego Craig & Thompson, for appellant.
Appellant contends, that on the record of this case, the plaintiff is in the same position as one who takes a note without any endorsement whatever. See § 49, Negotiable Instruments Law and the notes by commentator in Crawford's Neg. Inst Law, pp. 89-91. Compare § 6934, Comp. Laws.
The request, in substance correctly states the law, is applicable to the facts, and it was manifest error to refuse. See § 56, Crawford, Neg. Inst. Law, pp. 102-105. Compare with § 6941, Comp. Laws.
"Title to commercial paper passes by indorsement and when the indorsement is made by one other than the owner, it is necessary to show that the one making such indorsement had authority from the owner to indorse the same, and the party asserting ownership by virtue of such indorsement has the burden of proving such authority." Alcester v. Weeks, 189 N.W. 941.
"The indorsement of commercial paper being an act that must be done in writing, the authority to perform such an act must be conferred by written authority." Ibid. ; 21 R. C. L. 870, P 45; 2 C. J. 836.
Kvello & Adams, for respondent.
"One who ratifies the unauthorized act of an agent by accepting the benefits of the transaction will be held to incur the obligations as well as the benefits of the transaction." Fleming v. Sherwood, 24 N.D. 144, 139 N.W. 101.
"Though the secretary of a corporation has no authority to transfer commercial paper, yet the corporation may, by its subsequent conduct, ratify such a transfer." McCormick v. Bittinger (Colo.) 37 P. 736; Coykendall v. Constable (N. Y.) 1 N.E. 884; Brown v. Wilson (S. C.) 55 Am. St. Rep. 779.
The maker cannot deny the authority of the indorsement by the payee's agent as against the bona fide holder. New Haven City Bank v. Perkins (N. Y.) 85 Am. Dec. 322.
In a suit by the holder in due course against the maker of a negotiable note the genuineness of the indorsee's signature is immaterial if he has either authorized or ratified the indorsement. Manchester v. Parsons (W. Va.) 84 S.E. 885.
Ratification may be shown by recognition of the indorsee as owner. 8 C. J. p. 338, note 3 (c) 4.
Acceptance of the proceeds of a sale of a note ratifies the transaction. Hunt v. Liztenberger (Ind.) 42 N.E. 240; Continental Nat. Bank v. Koehler (N. Y.) 22 N.E. 1133; Wheeler v. Mfg. Co., (Pa.) 22 A. 667; Allen v. Olympia Light, etc., Co., (Wash.) 43 P. 55.
The principal must repudiate the unauthorized contract of indorsement within a reasonable time. Lynch v. Smith (Colo.) 54 P. 634; Anderson v. Johnson (Minn.) 77 N.W. 26; Hotchkiss v. Roehm (Pa.) 37 A. 119; McWhinne v. Martin (Wis.) 46 N.W. 118.
Ratification relates back to the time when the unauthorized act was done, and makes it as effective from that moment as if it had been originally authorized, and that therefore upon ratification of parties to all intents and purposes stands in the same position as though the person assuming to act as agent had acted under authority conferred. Kraft v. Wilson (Cal.) 37 P. 790; Ansonia v. Cooper (Conn.) 30 A. 760; Connett v. Chicago (Ill.) 29 N.E. 280; Long v. Osborn (Iowa) 59 N.W. 14; Municipal Secur. Co. v. Baker Co., (Or.) 54 P. 174; Bell v. Waynesborough (Pa.) 45 A. 930.
No fraud can be predicated upon mere expression of an opinion in regard to a matter of which the other party is clearly competent to judge. Heyrock v. Surerus, 9 N.D. 28, 81 N.W. 36.
A false representation of mining stock, selling at 15 per cent of its par value that it is worth par is not one upon which the purchaser has the right to rely. Gunderson v. Havana-Clyde Min. Co., 22 N.D. 320, 133 N.W. 554.
Representation to the subscriber for stock that the earnings of the corporation would take care of his note and that he never would be called on to pay anything were not representations of fact on which he had a right to rely, but mere expressions of opinion as to what the future would bring forth.
A subscription to corporate stock is a good consideration for a note though the stock is not delivered. Doyon v. Fogleson (S.D.) 192 N.W. 752.
No one has a right to rely on representation which merely amounts to statements of opinion. Mattock v. Zippy (Ark.) 14 S.W. 546.
Representations are not actionable unless the bearer was justified in relying thereon in the exercise of common prudence and diligence. 26 C. J. p. 1142; Brandt v. Krogh (Cal.) 111 P. 275; Wheelright v. Vanderbilt (Or.) 138 P. 857.
There can be no fraud without misrepresentation of a past or existing fact or something equivalent thereto. Marshall McCartney Co. v. Halloran, 15 N.D. 71, 106 N.W. 293.
The burden is on the party alleging that the fraud was of an actionable nature and not, for instance, a mere estimate of future expenses, instead of definite and positive statement covering a past period. 27 C. J. p. 47, § 174.
This is an appeal from the district court of Ransom county. The plaintiff brought this action against the defendant upon a promissory note. There was a jury trial, with verdict and judgment entered thereon in favor of the plaintiff for the full amount of the note. The defendant appeals. The appeal is from the judgment.
On the 19th of September, 1919, the defendant executed a promissory note in the sum of $ 102, with interest at the rate of 8 per cent payable to the Publishers National Service Bureau and payable November 1, 1920. On September 22, 1919, the note was negotiated to the plaintiff.
The complaint is in the usual form. The defendant's answer admits the corporate character of the plaintiff, but denies every other allegation in the complaint. In general, it is alleged that the defendant was induced to execute the note by one Zimmerman, who made numerous fraudulent representations in order to accomplish his designs. It is alleged that Zimmerman represented himself to be the agent of the Bureau, and, for the purpose of deceiving the defendant, falsely stated that if defendant would subscribe for stock in the corporation, the earnings of the stock would automatically retire defendant's note to be given in payment for the stock; that the defendant and other subscribers for such stock would own and control the corporation and have a vote and a voice in the election of the corporate officers thereof; that the promoters intended to establish two papers in the county, one at Enderlin and one at Lisbon; and that such papers would be established at such places as soon as the canvass for the stock had been completed and the organization perfected and subscribers would then control the enterprise; that Zimmerman further represented that the Bureau was a corporation under the laws of the state of North Dakota, authorized by the State Banking Board to sell stock under the provisions of chapter 91, Session Laws of 1915, and amendments thereof, commonly known as the Blue Sky Law; that such statement was untrue and that the Bureau did not have a license to sell stock in the state. It is then alleged that the defendant, believing such representations, was induced to sign the note and subscribe for the capital stock; that, though the Bureau was a speculative enterprise, it neglected to comply with the provisions of chapter 91 of the Session Laws of 1915 and amendments.
The record in the case tends to show the following facts pertaining to the numerous assignments of errors on this appeal. The defendant testifies, in substance, that on or about the 19th day of September, 1919, one Zimmerman called at his farm home and persuaded him to sign the note in suit; that Zimmerman represented the Publishers National Service Bureau, one of the enterprises organized in connection with the promotion of the interests of the organization known as the Nonpartisan League; that Zimmerman advised plaintiff that this Bureau contemplated the organization of newspapers throughout the State of North Dakota; that the newspaper to be organized would be controlled by the stockholders of the organization in each county. This witness further stated that Zimmerman said "As soon as this paper was organized, the paper would be controlled by the stockholders of the paper and that the Publishers National Service Bureau would get editors and get out the news sheet so that the papers throughout the state would be uniform and they would have the same propaganda." The defendant further testified that Zimmerman told him that the dividends on the stock for which Zimmerman solicited defendant's subscription, would pay the note given, and that no cash outlay of any kind would ever be required of him. Defendant knew and understood that he subscribed to the capital stock of a corporation to be organized in Ransom county; that such was his primary purpose and the end he had in view when he subscribed for the stock; he testifies, further, that he understood that the paper would be located at Lisbon, but in point of fact, it was located at Enderlin in the same county, and the defendant, shortly after the subscription by him and the execution of the note in suit, began regularly to receive a copy of the paper and has at all times since received the same. The defendant further admits that some of his neighbors were interested in this corporation and in fact actively concerned in it. Quite frequently the witness says he cannot remember. He says he cannot remember whether Zimmerman said anything about organizing a newspaper at Enderlin...
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