First State Bank ex rel. Oelke v. Williams

Ladd, J.

The receiver appointed November 27, 1907, to settle the affairs of the First State Bank of Cor-with 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 eight percent 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 *179after the bank had been closed by the appointment of the receiver over eight mqnths afterwards. lie 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 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 not 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 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 Eandolph on Commercial Paper, section 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); *180Workman 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. 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 Negotiable Instruments (5th ed.), section 1352b. See Bell v. Mahin, 69 Iowa, 408; 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 forged it. It was prevented from so doing for more than seven months following, during which defendant retained the discredited paper, without objection. Having accepted the benefits of the adjustment to the manifest disadvantage of the bank, the defendant is estopped from again inquiring into the genuineness of the note. Moreover, the controversy has been settled. In so far as appears,' the dispute was bona fide on either side and a proper subject of adjustment. See Greenlee v. Mosuat, 116 Iowa, 535. Nothing is known now of which defendant was not aware then, so that he was in no way deceived. The bank granted further time and surrendered the old notes. The defendant executed the note in suit. The consideration on either side was ample. To constitute a consideration, it *181is enough that something is promised, done, forborne, or suffered by- the party to whom the promise is made, as consideration for the promise made to him. Harlan v. Harlan, 102 Iowa, 701; Fishbaugh v. Spunaugle, 118 Iowa, 337; McKee, v. Needles, 123 Iowa, 195; Dailey v. Minnich, 117 Iowa, 563.

Yielding to the inducement offered by the making of the new note, and by reason thereof doing that but for which the bank would not have done, i. esurrendering the note alleged to have been forged, as well as the other, and extending the time of payment of both, constituted a valuable consideration. Smith v. Smith, 4 Idaho, 1 (35 Pac. 697); Grant v. Chambers, 30 N. J. Law, 323. See Mather v. Lord Maidstone, 18 C. B. 273. “The compromise itself was the consideration as agreed to by both parties to the new note, and it was a matter of entire indifference whether the old note was genuine or a forgery.” Grant v. Chambers, supra.

The ruling was correct, and the judgment is affirmed.