First State Bank of Corwith v. Williams

• Decision Date: 05 June 1909
• Citation: 143 Iowa 177,121 N.W. 702
• Parties: FIRST STATE BANK OF CORWITH v. WILLIAMS.
• Court: Iowa Supreme Court

143 Iowa 177

121 N.W. 702

FIRST STATE BANK OF CORWITH

v.WILLIAMS.

Supreme Court of Iowa.

June 5, 1909.

Weaver, J., dissenting.

Appeal from District Court, Hancock County; C. H. Kelley, Judge.

Action on a promissory note resulted in judgment as prayed. The defendant appeals. Affirmed.John Hamill and Seneff & Bliss, for appellant.

John E. Wichman and C. R. Wood, for appellee.

LADD, J.

The receiver appointed November 27, 1907, to settle the affairs of the First State Bank of Corwith found among its assets a promissory note of $1,372, executed to the bank by the defendant and his wife, dated March 23, 1907, bearing interest at the rate of 8 per cent. per annum and payable November 1st of that year. This action is based thereon. The defendant admitted the execution of the note, but averred that there was a partial failure of consideration, in that it was given in renewal of the note of $271.22, conceded to be valid, and another note of $1,000 dated March 21, 1906, and payable to the bank March 1, 1907, purporting to be signed by the defendant and his wife. It is said in the answer that the last note was forged, and that, by falsely representing that it was genuine, the cashier of the bank induced the defendant to execute the note sued on. The receiver pleaded in reply a general denial, and that defendant was estopped from interposing the defense. The defendant testified: That, at the time he signed the note, the cashier exhibited to him the $1,000 note; that upon examining it he stated that he did not recollect about it; that the cashier replied that he certainly gave it, or it could not have been in the bank, and that the signatures were genuine, and the books of the bank so showed; that defendant studied a little bit over it, and not being certain, and relying upon the cashier's integrity and statements, executed the note sued on. Both notes were handed to him. He carried them home, and made no further objection to the note alleged to have been forged until after the bank had been closed by the appointment of the receiver over eight months afterwards. He denied having signed the note, as did his wife, but admitted that he knew as much about the transaction when the note sued on was executed as he did at the trial.

Any rulings excluding evidence which may have been erroneous were cured by its subsequent admission, and the only inquiry for us to determine is whether the court erred in directing a verdict for the plaintiff. It is to be noted that the cashier made no claim to personal knowledge, nor does it appear that he was aware of the facts being otherwise than represented. This being so, the allegations of fraud were not supported by the evidence. The evidence did not raise an issue of whether the $1,000 note was genuine, but, as we think, this was foreclosed by the execution of the new note. This was necessarily on the ground of ratification, as to which the authorities seem to be in sharp conflict. An “act done for another by a person not assuming to act for himself, but for such other person, though without any precedent authority whatever, becomes the act of the principal if subsequently ratified by him.” Wilson v. Tumman, 6 M. & S. 236. But may an act of one not assuming to be for, but for personating another, as in forging a signature, be ratified? Answering in the affirmative, see: Howard v. Duncan, 3 Lans. (N. Y.) 175; Greenfield Bank v. Crafts, 4 Allen (Mass.) 447;Hefner v. Vandolah, 62 Ill. 483, 14 Am. Rep. 106. See 3 Randolph on Com. Pap. § 1775. Contra, and holding that silence, when confronted with the forged instrument or even a promise to pay it or to be bound thereby, unless this be for a consideration or has misled the holder to his prejudice, will not preclude the defense of forgery, see: McKenzie v. British Linen Co., 34 Eng. Rep. 301; Brooks v. Hook, L. R. 6 Exch. 89; Wilson v. Hayes, 40 Minn. 531, 42 N. W. 467, 4 L. R. A. 196, 12 Am. St. Rep. 754;Workman v. Wright, 33 Ohio St. 405, 31 Am. Rep. 546;Warren v. Fant's Trustee, 79 Ky. 1;Woodruff v. Munroe, 33 Md. 148. See Smith v. Tramel, 68 Iowa, 488, 27 N. W. 471. The decisions seem to be agreed, however, that, if the holder had been misled to his prejudice by the conduct or promises of the person whose name has been forged, the latter will be estopped from pleading that the instrument is not genuine. Buck v. Wood, 85 Me. 204, 27 Atl. 103;Kuriger v. Joest, 22 Ind. App. 633, 52 N. E. 764, 54 N. E. 414. See Daniels on Neg. Inst. (5th Ed.) § 1352b. See Bell v. Mahin, 69 Iowa, 408, 29 N. W. 331; section 3060a (23), Code Supp. 1907.

The circumstances were such as to estop defendant from interposing the defense. Both the notes for which that sued on was executed were past due. One of them is conceded to have been valid, and the extension of time for payment involved in the giving of the last note was a valuable consideration. So, too, in connection therewith was the surrender to the defendant of the note alleged to have been forged and the extension of time for paying the sum named therein. But for this the bank might have proceeded against the person who...