Ort v. Fowler

• Decision Date: 07 February 1884
• Citation: 2 P. 580,31 Kan. 478
• Parties: WILLIAM ORT v. MARY FOWLER
• Court: Kansas Supreme Court

2 P. 580

31 Kan. 478

WILLIAM ORT v. MARY FOWLER

Supreme Court of Kansas

February 7, 1884

Error from Harvey District Court.

ACTION by Fowler against Ort, upon a promissory note. Trial at the September Term, 1881, and verdict and judgment for plaintiff. Defendant brings the case to this court. The facts are stated in the opinion.

Judgment affirmed.

John Reid, for plaintiff in error.

Greene & Shaver, for defendant in error.

BREWER J. All the Justices concurring.

OPINION

BREWER, J.:

February 7, 1881, Mary Fowler, as and for her bill of particulars filed with a justice of the peace an instrument in writing of which the following is a copy:

"$ 90. MACON TOWN, KAS., Aug. 2, 1880.

"Six months after date, I promise to pay to the order of Wilson, Parks & Co. ninety dollars, for value received, with interest at the rate of 10 per cent. per annum from date. The payee reserves the right to extend the time of payment thereof if he desires. WILLIAM ORT."

On the back of said instrument was the following: "Wilson, Parks & Co." A summons was issued by the justice and served upon the defendant. Defendant appeared, and before the trial filed with the justice his affidavit denying that there then was or ever had been any firm, partnership, or corporation, doing business under the name of Wilson, Parks & Co.; denying that he ever had any dealings with any person or persons representing himself or themselves as such partnership or corporation; denying that any persons doing business under the name of Wilson, Parks & Co. indorsed or authorized the indorsement of such partnership or corporate name upon the back of the instrument sued on; and also denying the execution by him of the instrument sued on. April 1, 1881, the cause was tried before the justice and judgment rendered for plaintiff for the amount then due by the terms of said instrument. The defendant appealed to the district court, where, on October 5, 1881, a trial was had before the court and a jury, and a verdict and judgment were rendered for the plaintiff. Defendant's motion for a new trial being overruled, he brings the case here for review.

On the trial these uncontradicted facts appeared from the testimony of the defendant: On or about the day of the date of the note, a stranger came to where he was working alone in the field about half a mile from his house. The man represented himself as the state agent of Wilson, Parks & Co. for the sale of iron posts and wire fences, and after some conversation persuaded defendant to accept an agency for his township. What followed is thus narrated by defendant in his testimony:

"The man then filled up two contracts of agency. They were both of the same size and shape, and looked just alike. They were about half the size of an ordinary sheet of legal cap, with a border all around near the edge. I did not have my spectacles with me. I did not ask him for a written contract; he said he would do it himself. He said that as I hadn't my specs with me, he would read the contract. I held one in my hand and looked over his shoulder while he read. He did not read anything about a note, and I know they were not notes. We had no talk about signing notes. I could see a little better then than now, but I could not read without spelling out every word. I tried to follow him as he read. I expected him to read the contract right, as I could not spell it out good myself without my spectacles. He read it just as we had talked. I was to have a commission on all I sold, but I don't remember how much it was. The man then signed them, and then I signed them one at a time on the back of his book. There were no other papers on the book at the time. He then told me to take my choice, and I took one. There was nothing said about a promissory note in connection with the contract of agency. The contract does not say anything about a note, either. It did not read that way. I signed my name only twice, and that was to the two contracts. I did not intend to and did not sign anything but the contracts. We did not talk about signing anything else. I know the papers I signed were just the same, and they said 'contract' or 'agreement' at the top. I know they were not notes."

It is very evident from this and the other testimony that the defendant has been made the victim of an atrocious swindle. Obviously this stranger, under the pretense of obtaining defendant's signature to two contracts, obtained his signature to this note, or else, having obtained his signature to the contracts, forged it to the note. Clearly the defendant had no thought of signing a note, and did not suppose he was doing it. The plaintiff claimed as a bona fide purchaser before maturity. Now the first question which we deem important to consider is that presented by these two instructions:

"2. The law is that where one of two innocent parties must suffer because of the fraud of another, that one must suffer who by his own negligence made it possible for the fraud to be committed. If therefore you believe from the evidence that defendant negligently signed the note in question under the belief that he was signing an ordinary contract for the agency for the sale of certain wire-fence material in Halstead township, and delivered the same to the agent of Wilson, Parks & Co., and that said note was assigned to plaintiff for a valuable consideration and before it became due, and he knew nothing of the fraud practiced upon defendant at the time of the purchase of said note, then plaintiff is entitled to recover the amount of the note and interest, and this regardless of the fact whether there ever was such a firm in existence as the firm of Wilson, Parks & Co., or not.

"3. If the note was procured from the defendant without any negligence on his part, by fraud and trickery and without any consideration, then plaintiff cannot recover; but the mere relying upon the reading and word of a stranger, if such was the fact, would be evidence of such negligence on the part of defendant as would make him liable for the amount of the note in the hands of an innocent holder for value."

There is no serious question as to the general proposition that, when one of two innocent parties must suffer by reason of the fraud of a third, that one must suffer who by his own negligence made it possible for the fraud to be committed. But the point of objection is in the affirmation that the mere relying upon the reading and word of a stranger is such negligence as will make the party so relying liable for the amount of the note in the hands of a bona fide holder. This presents a serious and doubtful question, one upon which courts have differed. A party is betrayed into signing a bill or note by the assurance that it is an instrument of a different kind. Under what circumstances ought he to be liable thereon? One view entertained is, that as he never intended to execute a bill or note, it cannot be considered his act, and he should not be held liable thereon any more than if his name had been forged to such an instrument. A second view is, that it is always a question of fact for the jury whether under the circumstances the party was guilty of negligence. A third is the view adopted by the trial court, that as matter of law, one must be adjudged guilty of such negligence as to render him liable who, possessed of all his faculties and able to read, signs a bill or note, relying upon the assurance or the reading of a stranger that it is a different instrument.

We approve of the latter doctrine. It presents a case, of course, of which one of two innocent parties must suffer; but the bona fide holder is not only innocent, but free from all negligence. He has done only that which a prudent, careful man might properly do, while on the other hand the maker of the note has omitted ordinary care and prudence. A party cannot guard against forgery; but if in possession of his faculties and able to read, he can know the character of every instrument to which he puts his signature; and it is a duty which he owes to any party who may be subsequently affected by his act, to know what it is which he signs. By his signature he invites the credence of the world to every statement and promise which is in the instrument he has subscribed; and he is guilty of negligence if he omits to use the ordinary means of ascertaining what those provisions and statements are. If he has eyes and can see, he ought to examine; if he can read, he ought to read; and he has no right to send his signature out into the world affixed to an instrument of whose contents he is ignorant. If he relies upon the word of a stranger, he makes that stranger his agent. He adopts his reading as his own knowledge. What his agent knows, he knows; and he cannot disaffirm the acts of that agent done within the scope of the authority he has intrusted to him.

In support of the views first suggested may be cited the cases of Walker v. Ebert, 29 Wis. 194; Kellogg v. Steiner, 29 id. 627; Taylor v. Atchison, 54 Ill. 196, though this case seems to have been rested on a statute, and to recognize the common law to be as held by us; Puffer v. Smith, 57 Ill. 527; Wait v. Pomeroy, 20 Mich. 425; Gibbs v. Linabury, 22 id. 479; Soper v. Peck, S. C. Mich., 17 N.W. 57; Briggs v. Ewart, 51 Mo. 245; Cluse v. Guthrie, 42 Ind. 227; Detwiler v. Bish, 44 id. 70.

In support of the view approved by us may be cited: 1 Daniel on Negotiable Insts., § 850; Putnam v. Sullivan, 4 Mass. 45; Douglass v. Matting, 29 Iowa 498; Chapman v. Rose, 56 N.Y. 137; Shirts v. Overjohn, 60 Mo. 305; Dinsmore v. Stimbert, S. C. Nebraska, 11 N.W. 872; Mackey v. Peterson, S. C. Minn., 13 N.W. 132; Hopkins v. Insurance Co., 57 Iowa 203, 10 N.W. 605.

In 1 Daniel, supra, the author thus states the rule:

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