Strader v. Haley

• Citation: 216 Minn. 315,12 N.W.2d 608
• Decision Date: 31 December 1943
• Docket Number: No. 33571-33575.,33571-33575.
• Parties: STRADER v. HALEY et al.
• Court: Supreme Court of Minnesota (US)

12 N.W.2d 608

216 Minn. 315

STRADER v. HALEY et al.

No. 33571-33575.

Supreme Court of Minnesota.

December 31, 1943.

Rehearing Denied January 20, 1944.

Appeal from District Court, Ramsey County; Kenneth G. Brill, Judge.

Four separate actions by Marjorie T. Strader against Dan Haley, etc., and others to recover amounts of checks, and an action for declaratory judgment by Marjorie T. Strader against the Liberty State Bank. The actions were tried together. Judgments for defendants, and plaintiff appeals.

Affirmed.

R. Edison Barr, of St. Paul, for appellant.

Mogren, O'Donnell & Harvey, W. H. Fallon, Mark H. Gehan, and Smith, Waldorf & Sehm, all of St. Paul, for respondents.

PETERSON, Justice.

In four separate actions against the defendants other than the Liberty State Bank, plaintiff seeks to recover the amounts of checks the payment of which she claims was obtained by means of forgeries of her name as drawer or endorsee by the defendant Haley. In the case against the bank she asks for a declaratory judgment that the bank is liable to her for the amounts of certain of the checks paid by it and charged to her account. The five actions were tried together.

Between July 11, 1936, and June 14, 1941, 69 such checks aggregating $1,852.55 were negotiated by Haley. In the action against Haley as sole defendant, plaintiff claims that during July and August, 1936, Haley forged her name as a drawer on two checks dated July 11 and 13 respectively for $15 each payable to Haley; that he endorsed the checks; that he obtained cash therefor from one McBride or McBryan, to whom the checks were returned by the bank on account of insufficient funds, and that, because of threats to prosecute her for issuing checks with insufficient funds, she paid them through her attorney, Charles N. Dohs.

In the actions against Haley and the defendants other than the bank, plaintiff seeks to recover the amounts paid on checks in which she was named as payee and upon which she claims her endorsement was forged. In the Lux case she also seeks to recover upon three checks aggregating $65 upon which she claims her signature both as drawer and endorsee was forged.

In the bank case as it stood at the time of trial, plaintiff sought a declaratory judgment that the three checks held by Lux, upon which she claimed her name was forged as drawer and endorsee, were forgeries and that the bank was liable for having paid the same under the forged signature and endorsement and that Lux was liable for having received payment thereunder from the bank. The checks were charged back to Lux by the bank, and Lux counterclaimed on them. So far as plaintiff's account with the bank was concerned, it stood as though the checks had never been charged to it.

Numerous defenses were interposed, including denials of plaintiff's claims, estoppel, ratification, and negligence on the part of plaintiff with respect to Haley's acts which defendants claimed prevented recovery. We deem it necessary to discuss only one of them, viz., ratification, because an affirmance upon that ground requires an affirmance in all the cases.

The first two checks — those cashed by McBryan — were cashed in July, 1936. The next check, which was a dividend check payable to plaintiff, was cashed about six months afterwards, some time after February 1, 1937. During the year 1938, between January 17 and November 15, 11 checks were cashed at intervals varying from one-half to one and one-half months. In 1939, four checks were cashed at intervals of one, three, and seven months. During 1940, 20 checks, and during 1941, 22 checks were cashed at intervals generally of one-half to a month. The checks varied in amount from $10 to $50. Park Recreation Parlor, Inc., cashed 31 checks of the face value of $555; Lux, 20 checks of the face value of $695; Esslinger, Incorporated, 7 checks of the face value of $330.55; and Liberty State Bank, 8 checks of the face value of $207.

During the greater portion of the period from 1936 until the latter part of September 1941, Haley and his wife lived with plaintiff in her home without charge or payment of rent. Plaintiff furnished their meals. Haley and his wife did some work about the house in payment therefor and served as companions for plaintiff. During all this time income due to plaintiff was collected by Charles N. Dohs, her attorney, acting as her agent, and later R. Edison Barr, and paid to her directly at the rate of $100 per month to defray her household expenses with checks varying in amount from $10 to $50. These checks were delivered by mail. Plaintiff received many checks other than those here involved. It is undisputed that Haley at the specific instance and direction of plaintiff cashed most of those checks.

Plaintiff's claim and her testimony in support thereof are to the effect that her name was forged on all the checks in dispute; that by means of the forged signatures Haley negotiated the checks and obtained payment thereof; and that he converted the proceeds of the checks to his own use. She claims that he obtained possession of the checks in dispute in which she was named as payee without her knowledge and consent and forged endorsements thereon for the purpose of negotiating them.

The evidence for defendants is to the effect that the checks in dispute, the same as the others, were endorsed by plaintiff as payee; that she delivered them to Haley so endorsed with directions to cash them, to purchase groceries, liquor, and beer for her and to pay the balance to her; that he carried out her directions explicitly and that she received from Haley the full proceeds of the checks in cash and merchandise purchased as she had directed.

During a considerable part of the time when the Haleys lived with plaintiff and when the checks in dispute were cashed, Haley was unemployed. He then had no income and no means of his own with which to make the purchases of merchandise or the payments of money in question. No reason is suggested in the evidence why he should have made such purchases or payments, if he were able to do so, with his own funds. On the contrary, the only reason suggested for such acts is that the merchandise was purchased with plaintiff's money and that the money turned over to her belonged to her.

Plaintiff was without means of support other than the checks received from her attorneys. She depended on getting the checks promptly, and if the checks did not arrive on the day they were due she promptly called her attorney on the telephone concerning the matter. She did not call him concerning any of the checks in question. She testified that she needed the proceeds of the checks to pay her living expenses and that she never had over $20 in cash on hand. Yet, the evidence shows that during 1938, 1940, and 1941 all the checks covering periods for as long as two months were cashed by Haley and that she managed to get along the same as if she had received them.

Both sides offered expert testimony relative to the genuineness of the signatures. As to the facts concerning Haley's getting possession of the checks, his acting as plaintiff's agent in cashing them and accounting to her for the proceeds thereof, plaintiff's case stands on her unsupported testimony. As to such facts, defendants' version was supported by the testimony of both Mr. and Mrs. Haley, by one of the slips written by plaintiff listing the merchandise to be purchased for her by Haley, by testimony to the effect that plaintiff on one occasion accompanied Haley to Esslinger's place, where she sat in the automobile while he went inside to cash a check and to purchase merchandise, and by the other facts which have been stated above.

Although the actions were for the recovery of money judgments and triable to a jury, the parties stipulated that the only issue to be submitted to the jury was whether any, and if so which, signatures of plaintiff appearing on the checks were written by Haley. The verdict was that all the signatures of plaintiff on the checks in question were written by him. The court in each case adopted the finding so made and among other things made findings of its own to the effect that plaintiff received from Haley all the proceeds of the checks in the form of cash and merchandise; that all the cash and merchandise was received by plaintiff under such circumstances that she was charged with notice and knowledge that the same were the proceeds of the checks in question; that plaintiff accepted the merchandise and cash under such circumstances that the same were in full satisfaction and payment for the proceeds of all said checks and that by her silence and conduct plaintiff ratified, affirmed, and accepted the actions of Haley in cashing the checks. Among others, the court found as a conclusion of law that the plaintiff had ratified Haley's actions and conduct in cashing the checks.

1. The first question is whether or not, assuming a ratification in fact, plaintiff is liable for Haley's acts. Where a signature on a check or other negotiable instrument is forged or unauthorized, the rights of the parties to the instrument are determined by N.I.L. § 23, Minn.St.1941, § 335.12, Mason St.1927, § 7066, which provides: "When a signature is forged or made without the authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority."

The problem here is whether or not "precluded" includes cases of ratification. The authorities are in conflict, and consequently we must choose what appears to us to be the correct rule. The question is one of statutory construction.

The section in question, like many other provisions of N.I.L., is declaratory of...