First Nat. Bank of Oregon City v. Allen

• Decision Date: 09 January 1923
• Citation: 106 Or. 190,211 P. 913
• Parties: FIRST NAT. BANK OF OREGON CITY v. ALLEN ET UX.
• Court: Oregon Supreme Court

211 P. 913

106 Or. 190

FIRST NAT. BANK OF OREGON CITY v. ALLEN ET UX.

Supreme Court of Oregon

January 9, 1923

In Banc.

Appeal from Circuit Court, Clackamas County; J. U. Campbell, Judge.

Action by the First National Bank of Oregon City against A. A. Allen and Susie Allen, his wife. Judgment for plaintiff, and Susie Allen alone appeals. Affirmed.

Burnett J., dissenting.

Joseph E. Hedges, of Oregon City, for appellant.

C. D., D. C. & Earle C. Latourette, of Oregon City for respondent.

McCOURT J.

Plaintiff brought this action to recover upon three promissory notes upon each of which the names of the defendants A. A. Allen and Susie Allen, husband and wife, appeared as makers. A. A. Allen failed to answer the complaint, and judgment by default was entered against him. Susie Allen, who will be hereafter referred to as "defendant," answered by a general denial of the allegations of the complaint. The notes called for principal sums respectively as follows: $300, $200, and $95.26.

A jury resulted in a verdict and judgment for plaintiff. Defendant appeals, and predicates error upon the admission of evidence, introduced over defendant's objection, for the purpose of proving an estoppel, and upon an instruction given the jury in relation to that evidence.

Defendant disclosed at the commencement of the trial that the specific defense upon which she relied was that her signature upon each of the notes in suit was a forgery.

Plaintiff introduced evidence to show that defendant signed each of the notes, and, anticipating that defendant in her testimony would deny executing the notes, introduced three letters plaintiff had written to defendant, demanding payment of the notes, also evidence that defendant had not, upon receipt of the several letters, denied the genuineness of her purported signatures upon the notes.

In an endeavor to show that it had been misled to its injury by the failure of defendant to deny signing the notes promptly upon receipt of demand of payment, and that defendant was on that account estopped from claiming that the notes were not executed by her, plaintiff offered in evidence two deeds from A. A. Allen and Susie Allen to their daughter and her husband. These deeds were executed some time after the last of the letters referred to was written, and conveyed all of the property of A. A. Allen, and some of that of Susie Allen, to the grantees therein. Defendant interposed an objection to the introduction of the deeds mentioned, on the ground that they were incompetent, irrelevant, and immaterial. The objection was overruled, and defendant was allowed an exception to the ruling of the court.

The evidence of both plaintiff and defendant, however, showed that defendant, in an interview with the president of plaintiff, which interview took place several weeks before the execution of the deeds and before the rights of plaintiff had been impaired in any way, had denied that she signed the notes in question. This defeated the attempt of plaintiff to show that it had been placed in a worse position by the silence of defendant at a time when she was required to speak, and removed from the case all question of an estoppel against defendant.

Defendant introduced evidence to prove that she did not sign any of the notes in suit. She appeared as a witness in her own behalf, and denied that she executed any of the notes, and gave evidence of circumstances from which it might have been inferred that her husband and codefendant signed her name to the several notes without her authority. Defendant also testified at length respecting the execution of the deeds to her daughter and husband, stating that they were executed pursuant to a long deferred intention to transfer the property described therein to the grantees.

The court, after instructing the jury that the only question for their determination was whether or not defendant executed the notes, and that, if she did, she was liable thereon, and if she did not, she was not liable thereon, charged the jury as follows:

"If a man forges any one of your names to a note, and passes it on to a third person--to a bank, for instance, and the bank writes you and informs you that they have a note against you, and you, by your silence, by refusing to answer the letter, would lead the bank into a worse position than it was before, you would be estopped from denying that it was your signature."

Defendant was allowed an exception to the portion of the court's instructions above quoted.

The court further informed the jury that the deeds in question, and testimony relating to them, had been offered and admitted in evidence for the purpose of showing that plaintiff had been misled to its prejudice by the conduct of defendant, but that, inasmuch as the testimony in the case showed that defendant did deny her signature before the transfer of the property, there was no evidence in the case to show that plaintiff had been placed in a worse position by reason of defendant's failure to reply to the letters, which plaintiff had addressed to her concerning the notes in suit. The court also explained that the deeds had been admitted in evidence, because the court was not advised until after the deeds had been received in evidence that defendant had denied signing the notes before the transfer was made.

Defendant contends that it was error to admit evidence for the purpose of establishing an estoppel and to instruct the jury concerning the same, for the reason that no estoppel was pleaded by plaintiff.

The rule is well established that a party to an action must plead the facts which he relies upon to establish an estoppel in pais, if there is opportunity to do so, and that a failure to so plead precludes him from taking advantage of such estoppel. Vogt v. Marshall-Wells Hdw. Co., 88 Or. 458, 464, 172 P. 123, where the earlier decisions upon this point are collected.

It is equally well established, however, that the facts relied upon to establish an estoppel need not be pleaded where there is no opportunity to do so. Morback v. Young, 58 Or. 135, 113 P. 22; West Side Lumber & Shingle Co. v. Herald, 64 Or. 210, 128 P. 1006, Ann. Cas. 1914D, 876; Stamm v. Wood, 86 Or. 174, 168 P. 69.

In its complaint, plaintiff sought to fix liability upon the defendant, as an actual maker of the notes, and upon no other ground. It was alleged therein that plaintiff executed each of the notes. Defendant answered by a general denial. As above indicated, plaintiff was informed by defendant...