Dietz v. City National Bank of Hastings

• Decision Date: 08 November 1894
• Docket Number: 5400
• Citation: 60 N.W. 896,42 Neb. 584
• Parties: CHARLES N. DIETZ v. CITY NATIONAL BANK OF HASTINGS, NEBRASKA
• Court: Nebraska Supreme Court

60 N.W. 896

42 Neb. 584

CHARLES N. DIETZ v. CITY NATIONAL BANK OF HASTINGS, NEBRASKA

No. 5400

Supreme Court of Nebraska

November 8, 1894

ERROR from the district court of Adams county. Tried below before GASLIN, J.

REVERSED.

Montgomery Charlton & Hall, for plaintiff in error:

The plaintiff in error cannot be held to have authorized the indorsement sued on. (1 Daniels, Negotiable Instruments secs. 292, 294; Gulick v. Grover, 97 Am. Dec. [N J.], 728; Davidson v. Stanley, 2 Man. & G. [Eng.], 721; Rossiter v. Rossiter, 24 Am. Dec. [N. Y.], 62; Wood v. McCain, 42 Am. Dec. [Ala.], 612; Breed v. First Nat. Bank, Central City, 4 Col., 481; Union Bank v. Mott, 39 Barb. [N. Y.], 180; Paige v. Stone, 10 Met. [Mass.], 160; Craighead v. Petterson, 72 N.Y. 279; Stamback v. Read, 62 Am. Dec. [Va.], 648; New York Iron Mine v. First Nat. Bank, Negaunee, 39 Mich. 644; Perkins v. Boothby, 71 Me. 91; Sewanee Mining Co. v. McCall, 40 Tenn. 620; Mordhurst v. Boies, 24 Iowa 99; Bickford v. Menier, 107 N.Y. 490.)

The plaintiff in error had no knowledge of the note or indorsement. He did not, therefore, ratify the acts of Elsemore. (Craighead v. Petterson, 72 N.Y. 280; Gulick v. Grover, 97 Am. Dec. [N. J.], 728; Bohart v. Oberne, 36 Kan. 284; Oberne v. Burke, 30 Neb. 581; Baldwin v. Burrows, 47 N.Y. 199; Roberts v. Rumley, 58 Iowa 301; Reynolds v. Ferree, 86 Ill. 570.)

W. W. Morsman and M. A. Hartigan, contra:

A principal who retains the proceeds of a transaction after his attention has been challenged to the same cannot repudiate the agent's acts. He must return the proceeds if he wishes to disaffirm the action of the agent. (Stewart v. Strawsburger, 51 HOW Pr. [N. Y.], 400; Sherman v. Smith, 42 HOW Pr. [N. Y.], 199; Ely v. James, 123 Mass. 36; Bacon v. Johnson, 56 Mich. 182; Hutchings v. Ladd, 16 Mich. 493; Mundorff v. Wickersham, 63 Pa. St., 87; Watterson v. Rogers, 21 Kan. 529; Ogden v. Machand, 29 La. Ann. 61.)

The ruling of the court permitting amendment of the petition was without error. (Griffith v. Short, 14 Neb. 261; O'Dea v. Washington County, 3 Neb. 121; Struthers v. McDowell, 5 Neb. 493; State v. Russell, 17 Neb. 203; Pomeroy v. White Lake Lumber Co., 33 Neb. 240; Freeman v. Webb, 21 Neb. 160; Klosterman v. Olcott, 25 Neb. 382.)

OPINION

The facts are stated in the opinion.

RYAN, C.

Charles N. Dietz was sued in the district court of Adams county as indorser on a note of Mary E. Swick and Peter Swick for $ 286.30, made on May 23, 1890, to C. N. Dietz. The indorsement on the said note on which Dietz was sought to be held liable was in these words: "C. N. Dietz, per M. L. Elsemore." Dietz was served with summons in Douglas county; his co-defendants, served in Adams county, made default, upon which judgment was rendered against them. The question litigated was the liability of Dietz upon the indorsement set out: first, because of Elsemore's authority to use the name of Dietz in that way, and second, because of after-ratification by Dietz of Elsemore's act in making such indorsement. During all the transactions Mr. Dietz was a resident of Omaha. In the year 1885 he opened a branch lumber yard at Hastings and placed Mr. Elsemore in charge of it as his agent. The authority conferred upon this agent was to sell lumber and perform the duties which would naturally devolve upon him as manager of a branch lumber yard at Hastings. Mr. Bostwick at that time was president of the City National Bank at Hastings, the defendant in error. The testimony of Mr. Dietz as to his conversation with Mr. Bostwick at that time stands uncontradicted, and was in substance as follows: I advised Mr. Bostwick in regard to his [Mr. Elsemore's] authority here; that Elsemore's business was that of an agent in my branch business here, and in order to do the business easier I should need to have a bank account and that Elsemore would deposit the money in that bank and transmit to me and make checks for the purpose of transmitting funds to me and pay any local expenses here; that was merely done for convenience. In the fall of 1888 I told him, Mr. Bostwick, I would have no use of this bank at any time by the way of accommodation of money, and that my account must never be overdrawn. I never gave Mr. Elsemore any authority under any circumstances or in any manner to sign or indorse my name to a note. It is very clear from this evidence that Mr. Elsemore had no authority to indorse the name of Mr. Dietz and thereby render him liable as indorser.

2. As to the matter of ratification, Mr. Dietz testified that the first time he ever heard Elsemore had discounted paper in his name was when this suit was brought and the summons served; that he had never heard that the Swick note had been taken and discounted at the bank before this suit was commenced; that Mr. Elsemore had never given him any property, either directly or indirectly, at the time this suit was commenced; that the first knowledge witness had that Elsemore had ever signed his name to the note was obtained at the time he came down to Omaha, in August, 1890 and told him that he had so signed his name. Mr. Elsemore was sworn as a witness, and testified in relation to this part of the transaction that he told Mr. Dietz that there had been certain moneys of his used in connection with the Dry Pressed Brick Company's business and in other respects, and that at the solicitation of Mr. Bostwick, Mr. Elsemore had signed the name of Mr. Dietz to certain notes then in the City National Bank of Hastings, being guarantied by Mr. Bostwick that they should be taken care of. These notes were of the amount of about $ 11,000 or $ 12,000. In addition to the above, this witness testified that at the same interview with Mr. Dietz he told him that between $ 5,000 and $ 6,000 of Mr. Dietz's money had been collected and applied to the brick company's business, as well as the $ 11,000 or $ 12,000 just referred to. Mr. Elsemore proposed to protect Mr. Dietz so he would not lose any money on account of his (Elsemore's) dealings with Bostwick. For this purpose Elsemore testified that he made a bill of sale in blank of the brick company's property, which was in his name, and made a deed in blank of his own real estate, which was of the value of $ 10,000 to $ 12,000. He also transferred to Mr. Dietz certain insurance policies and stock. Afterwards, at the request of Mr. Bostwick, the name of ...