Lillywhite v. Coleman

• Decision Date: 30 December 1935
• Docket Number: Civil 3625
• Citation: 46 Ariz. 523,52 P.2d 1157
• Parties: ETHEL LILLYWHITE, Now Known as Mrs. C. Warren Peterson, and C. WARREN PETERSON, Also Known as C. W. Peterson, Her Husband, Appellants, v. JOHN T. COLEMAN, Guardian of the Estate and Person of Morris and Iris Coleman, Minors, And JOHN T. COLEMAN, Individually, Appellees
• Court: Arizona Supreme Court

52 P.2d 1157

46 Ariz. 523

ETHEL LILLYWHITE, Now Known as Mrs. C. Warren Peterson, and C. WARREN PETERSON, Also Known as C. W. Peterson, Her Husband, Appellants, v. JOHN T. COLEMAN, Guardian of the Estate and Person of Morris and Iris Coleman, Minors, And JOHN T. COLEMAN, Individually, Appellees

Civil No. 3625

Supreme Court of Arizona

December 30, 1935

APPEAL from a judgment of the Superior Court of the County of Maricopa. J. C. Niles, Judge. Judgment affirmed.

Mr. M L. Ollerton, for Appellants.

Mr Albert W. Gurtler and Messrs. Laney & Laney, for Appellees.

OPINION

LOCKWOOD, C.J.

This is an appeal by Mrs. C. Warren Peterson, formerly Ethel Lillywhite, and C. Warren Peterson, her husband, hereinafter called defendants, from a judgment foreclosing a mortgage in favor of John T. Coleman as guardian of the estate and person of Morris and Iris Coleman, minors, and John T. Coleman individually, hereinafter called plaintiff. There were other defendants, but as they have not appealed, we refer to them by name as necessary.

We think the most satisfactory way of considering the appeal will be to state first the theory of the case on behalf (a) of plaintiff and (b) of the defendants, as shown by the pleadings. The complaint of plaintiff sets up that defendant Mrs. C. Warren Peterson, formerly Ethel Lillywhite, together with Leo Alldredge and Ida R. Alldredge, his wife, made their promissory note in the sum of $1,500 in favor of plaintiff as guardian of his five minor children, and to secure said note made a mortgage upon the property foreclosed in this action; that thereafter plaintiff, in his individual capacity, acquired the interest of three of the minor children in the debt; that the note and mortgage were due and unpaid, and the prayer was for judgment on the note and the usual foreclosure of mortgage. The Petersons answered, denying that Mrs. Peterson made or executed the note in question. In reply, plaintiff stated that the defendants Petersons and Ida R. Alldredge claimed that the note and mortgage were forgeries made by Leo Alldredge, who was the husband of Ida R. Alldredge and one of the parties named as defendant to the action. Plaintiff then alleged that if such signatures were so forged the defendants whose names appeared as subscribed to the note and mortgage were estopped from denying that they had executed them, setting up the facts which he relied upon as creating such an estoppel. The case was tried before the court sitting with a jury, and various interrogatories were submitted to the jury and answered by it, the answers thereto being afterwards adopted by the court in its findings of fact and judgment. Under our usual rule, we must accept these findings and the reasonable inferences to be drawn therefrom as representing the true facts of the case.

So taken, the material facts may be stated as follows: Leo Alldredge was the brother-in-law of Ethel Lillywhite. March 1, 1929, plaintiff, as guardian of his minor children, made a loan of $1,500 on the security of a note and mortgage which, on their faces, purported to be signed by Ethel Lillywhite, Leo Alldredge and Ida R. Alldredge. This note and mortgage were delivered to plaintiff by Leo Alldredge with the representation that all of the signatures thereon were true and genuine, and plaintiff, believing this to be the fact and relying thereon, delivered the $1,500 into the custody of Alldredge. As a matter of fact, the purported signatures of Ethel Lillywhite to the mortgage and note were placed thereon without her knowledge or consent by Alldredge. She did not, however, within a reasonable time after her discovery of such forgery, or at any time before the bringing of the present suit, which was more than five years after the execution of the documents, notify plaintiff that her signatures thereto were forgeries. At least once after she had discovered the forgeries she told plaintiff, in substance, that if she had the money she would pay the mortgage; that she would be willing to deed the property to the plaintiff except for the fact that the Alldredges were interested therein, but that if he wished to bring foreclosure proceedings on the mortgage she would not appear in court to contest it. The reason for her silence in regard to the forgery was her reluctance to have her brother-in-law prosecuted for a crime. Plaintiff, relying upon her silence, refrained from making an earlier effort to collect the note from Leo Alldredge and, as three of his children became of age, paid them their share of the funds represented by the mortgage from his own money, relying upon the conduct of Mrs. Peterson, as aforesaid. The result of her failure to disclose the true facts to plaintiff caused plaintiff to delay in proceeding against Leo Alldredge in such a manner that it injured to some degree his chances of collection from the latter. All of the circumstances connected with the case, including the conduct of Mrs. Peterson, were of such a nature that a reasonably prudent man would not be put on inquiry as to whether or not her signatures were forgeries.

On these findings of fact, direct and implied, we consider the assignments of error. They are eleven in number and defendants claim eight propositions of law are raised by them. They do not, however, group the assignments of error under the different propositions of law, as required by our rules. Notwithstanding this failure to group them will somewhat hamper us in our discussion of the appeal, we consider it on its merits so far as we can do so.

The first assignment is that the court refused to grant the motion of defendants for a verdict in their favor when plaintiff rested on his case in chief. We need not consider this assignment further than to say that, since defendants then proceeded to offer evidence in support of their answer, they waived the motion, and in determining whether the evidence is sufficient to sustain the verdict and judgment we should consider all of the evidence in the case, rather than that of plaintiff alone in his case in chief. Southwest Cotton Co. v. Ryan, 22 Ariz. 520, 199 P. 124.

The second, third, fourth and fifth assignments of error deal with the admission of certain evidence over the objections of defendants. It will be observed from the foregoing statement of the pleadings and facts that the vital question before the court and jury was whether the conduct of Mrs. Peterson was such that she was estopped from denying the authenticity of her signatures to the note and mortgage. The essential elements of an equitable estoppel may be stated as follows: (1) There must be a false representation or concealment of material facts; (2) it must have been made with knowledge, actual or constructive, of the facts; (3) the party to whom it was made must have been without knowledge of or the duty of inquiring further as to the real facts; (4) it must have been made with the intention it should be acted upon; and (5) the party to whom it was made must have relied on or acted on it to his prejudice. There can be no estoppel if any of these essentials are absent. 21 C.J. 1119, and cases cited. It will be observed that estoppel may rise either from the making of false representations or the concealment of facts that it is the duty of the party estopped to reveal. It is generally held that a person whose name is signed to an obligation without his authority will be estopped from denying his liability if he so acts or speaks that the holder or intending purchaser of the obligation is misled as to the validity of the signature and either purchases the obligation or relinquishes some right or suffers an injury in connection therewith in consequence. Tardio v. First Nat. Bank of Bryan, (Tex. Civ. App.) 166 S.W. 1180; Gluckman v. Darling, 85 N.J.L. 457, 89 A. 1016; Salomon v. Hopkins, 61 Conn. 47, 23 A. 716; 21 C.J. 1145. It was, therefore, necessary for plaintiff to prove either that defendants had directly represented to him that the signature of Ethel Lillywhite was genuine, or else they had made such representation of other facts as would cause a reasonably prudent man to assume therefrom that the signature was genuine, or had failed to disclose, when the circumstances were such that a disclosure was proper and required, that the signature was a forgery. We think that the questions objected to in assignments of error 2, 3, 4 and 5 all were such as were admissible on the question of whether Mrs. Peterson disclosed the fact that her signatures were forgeries or whether a reasonably prudent man, under all the surrounding circumstances, would have been put on...