U.S. Nat. Bank v. Herron

• Citation: 144 P. 661,73 Or. 391
• Parties: UNITED STATES NAT. BANK v. HERRON ET AL.
• Decision Date: 08 December 1914
• Court: Supreme Court of Oregon

144 P. 661

73 Or. 391

UNITED STATES NAT. BANK v. HERRON ET AL.

Supreme Court of Oregon

December 8, 1914

In Banc.

Appeal from Circuit Court, Malheur County; Dalton Biggs, Judge.

Action by the United States National Bank, a corporation, against Charles E. Herron, Catherine L. Shehan, and others. From a judgment for plaintiff, the second named defendant appeals. Reversed.

Bean and McNary, JJ., dissenting.

W. H. Brooke, of Ontario, T. H. Crawford, of La Grande (R. W. Swagler, of Ontario, Crawford & Eakin, of La Grande and J. J. Darlington, of Washington, D. C., on the brief) for appellant. George E. Davis, of Vale, for respondent.

RAMSEY J.

This is a suit in equity to recover from the defendants, Charles E Herron, Estey A. Herron, and Catherine L Shehan, the principal sum of $5,000, with interest thereon at the rate of 6 per cent. per annum from September 6, 1910, claimed to be due on two promissory notes, and for the foreclosure of a mortgage, claimed to have been executed by said parties on 480 acres of land in Malheur county, to secure the payment of said sum of $5,000 and interest, etc. The complaint asked, also, for the correction of an error in the description of the said land as stated in the complaint.

Both of said promissory notes and also said mortgage are dated and were executed on September 6, 1910, at Vale, Or., and said notes were made payable at the United States National Bank of Vale. The defendant Catherine L. Shehan resides in the city of Washington, D. C., and she did not execute either of said notes or said mortgage in person, and she was not in Oregon when they were executed. One of said notes was executed for $3,000 and the other for $2,000. They are exactly alike, except as to the amounts for which they were executed. The said notes were made payable to the order of Harry R. Garrett on or before one year after date, etc., and each of them is witnessed by two witnesses. Said mortgage was made to Harry R. Garrett, and it is in the usual form. Said notes were indorsed and passed to the plaintiff for a valuable consideration at about the date of the execution thereof. Said mortgage was assigned, but the assignment was not under seal, nor was it acknowledged before any officer.

The complaint alleges the execution of said promissory notes, their negotiation, and the execution and assignment of said mortgage and the recording of said mortgage. The complaint is lengthy, and sets out a copy of a power of attorney, executed by Catherine L. Shehan to Charles E. Herron, authorizing him to execute, and sign her name to a negotiable promissory note and deliver the same to Harry R. Garrett for $5,000; it to be payable to the order of said Garrett, on or before one year after its date, bearing interest at 6 per cent. per annum and payable at any bank in Vale, and authorizing him to make a mortgage on said 480 acres of land, to secure the payment of said note, etc. Paragraph 16 of said complaint is as follows:

"That said notes and said mortgage were given to secure a loan of $5,000, which sum in cash, lawful money of the United States of America, was on the execution and delivery of said instruments paid over to the said Charles E. Herron, and the whole thereof was thereupon by said Herron applied wholly to the use and benefit of the defendant Catherine L. Shehan, by investments in her business pursuits and to the payment of her just debts and liabilities all in Malheur county, Ore., all of which benefits she, the defendant Shehan, then and there accepted and retained, and she does now still have and retain the same."

Catherine L. Shehan filed an answer to said complaint denying each and every allegation thereof, except paragraphs 1, 2, 4, 10, and 11. She denies paragraph 16 of the complaint set out supra.

A decree was rendered in favor of the plaintiff and against Charles E. Herron, Estey A. Herron, and Catherine L. Shehan for the recovery of said $5,000 and interest thereon at the rate of 6 per cent. per annum from September 6, 1910, and for costs and disbursements, and foreclosing said mortgage, etc. The defendant Catherine L. Shehan appeals from the whole of said decree; the other defendants do not appeal. In form, said promissory notes are joint and several. The defendant Shehan makes several points upon which she relies for a reversal of said decree.

1. She contends that she did not authorize her attorney in fact, Charles E. Herron, to execute either of said promissory notes or said mortgage, and she bases this contention upon the terms of the power of attorney, which she executed to him. Said power of attorney was received at Vale the day that said notes and said mortgage were made, and all of the parties to said notes and mortgage and the plaintiff bank knew the contents of said power of attorney before said notes and mortgage were executed and before any part of the consideration for the execution of said notes and mortgage was paid or delivered. Said notes and said mortgage show on their faces that the name of Catherine L. Shehan was subscribed thereto "by her attorney in fact, Charles E. Herron."

The following is a copy of said power of attorney:

"Know all men by these presents, that I, Catherine L. Shehan, a widow, of Washington City, in the District of Columbia, do hereby make, constitute and appoint Charles E. Herron of Vale, in the state of Oregon, my true and lawful attorney, in and for the purposes hereinafter mentioned, to wit: He is hereby authorized and empowered to execute and sign my name to a negotiable promissory note and deliver the same to Harry R. Garrett, said note to be dated September 6, 1910, for the sum of five thousand dollars ($5,000.00), payable to the order of said Garrett on or before one year after its date and bearing interest at six (6) per cent. per annum and payable at any bank at Vale, Oregon. And the said Herron is further authorized to execute in my name a mortgage, or deed of trust, to secure the payment of said note and interest, upon and covering four hundred and eighty (480) acres of land owned by me in Malheur county, Oregon, that being all the land owned by me in said county, and also all my right, title and interest in and to all water rights and surveys and reservoir and dam sites owned by me in said county. Said mortgage or deed of trust to be in the ordinary form, used in said county and the said Herron is authorized to sign my name to said note and mortgage, or deed of trust, and to acknowledge for me and in my name the execution of the said mortgage, or deed of trust, and to deliver said note and mortgage or deed of trust, to said Garrett, and said note and mortgage or deed of trust, so executed and acknowledged to said Garrett shall be in all respects as binding on me as though I had personally executed and acknowledged the same.

"In witness whereof, I have hereunto set my hand and seal this third day of September, 1910.

"Catherine L. Shehan. [ Seal.]

"Signed, sealed and delivered in the presence of us as witnesses:

"Alexander H. Galt,

"M. A. Ballinger."

Said instrument was properly executed, acknowledged, and certified.

The following is a copy of one said promissory notes:

"No. 2. $3,000.00.

Vale, Oregon, September 6, 1910.

"On or before one year after date, for value received, I promise to pay to the order of Harry R. Garrett, at the United States National Bank of Vale, Oregon, the sum of three thousand dollars ($3,000.00) in gold coin of the United States, at the present standard value, with interest thereon in like gold coin at the rate of six per cent. per annum, from date until maturity, interest to be paid semiannually, and if not so paid, the whole sum principal and interest, to become due and collectible at the option of the holder of this note, and in case suit or action is instituted to collect this note or any part thereof, I promise to pay, in addition to the costs and disbursements provided by statute, an additional ten per cent. of the amount sued upon for attorney's fees.

"Charles E. Herron.

"Estey A. Herron,

"By Her Attorney in Fact, Charles E. Herron.

"Catherine L. Shehan,

"By Her Attorney in Fact, Charles E. Herron.

"Witness:

"J. R. Weaver.

"John W. Corson."

The note for $2,000 is just like the foregoing copy, except as to the amount of the principal.

2. The main question for decision is: Did the power of attorney, set out supra, authorize Charles E. Herron to subscribe the name of the defendant Catherine L. Shehan to said promissory notes? The said power of attorney confers upon said Herron the following power to execute a promissory note:

"He is hereby authorized and empowered to execute and sign my name to a negotiable promissory note and deliver the same to Harry R. Garrett, said note to be dated September 6, 1910, for the sum of five thousand dollars ($5,000.00), payable to the order of said Garrett, on or before one year after date, and

bearing interest at six per cent. per annum, and payable at any bank at Vale, Oregon."

It will be observed that said instrument makes Herron the special agent of Mrs. Shehan for certain stated purposes: (a) He was not authorized to borrow money; but he was empowered to execute and sign her name to a promissory note having certain stated qualities. (b) He was authorized to execute one note and it was to be for $5,000. (c) It was to be dated September 6, 1910, and to be a negotiable note, and payable to the order of said Garrett on or before one year after its date at any bank in Vale, and it was to bear interest at the rate of 6 per cent. per annum. The power does not state anything concerning the execution of said note by any person other than Mrs. Shehan. Said power, also, authorized Herron to execute, in the name of Mrs. Shehan, a mortgage or deed of trust "to...