Case Name: Marks, Respondent, vs. Schram, imp., Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1901-03-19
Citations: 109 Wis. 452
Docket Number: 
Parties: Marks, Respondent, vs. Schram, imp., Appellant.
Judges: Bardeen, J., took no part.
Reporter: Wisconsin Reports
Volume: 109
Pages: 452–456

Head Matter:
Marks, Respondent, vs. Schram, imp., Appellant.
December 11, 1900
March 19, 1901.
Promissory notes: Indorsement: Delivery in blank to maker: Alteration.Forgery: Ratification: Notice to payee.
1. Where one person indorses his name upon the back of a blank promissory note and delivers it to another for the accommodation of the latter, to be used in a certain way, and the latter makes material alterations therein and uses it for a different purpose, the indorser will be liable thereon, if, knowing the facts as to the alteration and negotiation of the note, he acknowledges it and promises to pay it, even though such alterations constitute in law a forgery.
[2. Whether the payee of a note bearing the indorsement of a third: person is put upon inquiry as to the maker’s authority to use it, by obliteration of the words “ after date ” and “ or order ” from the printed form and the substitution of others in their place, doubted, but not determined.]
Appeal from a judgment of the superior court of Milwaukee county: J. 0. Ludwig, Judge.
Affirmed.
This is an action upon a nonnegotiable demand note for-$11,000, payable to the plaintiff, dated August 20, 1894,. signed by the defendant Richard Sehram, and purporting to be indorsed by the defendant J. B. Sehram. There was. no answer by the defendant Richard Sehram, but the defendant Joseph B. Sehram answered, alleging that the note-in question was an accommodation note; that when he indorsed his name upon it it was simply a blank form promissory note, and that in this condition he sent it to Richard Sehram by mail, so that Richard might renew a previously executed accommodation note upon which the appellant was. indorser; that Richard Sehram thereafter made material and fraudulent alterations in the note, and did not use it for the purpose intended.
It appears by the evidence in the case that in August,. 1894, and for a number of years prior thereto, the defendant Richard Sehram was engaged in the woolen business in the city of New York; that the appellant, Joseph B. Sehram, is the father of said Richard, and lives in the city of Chicago; •that the appellant had at various times previous to 1894 made accommodation indorsements of his son’s notes for the purpose of helping him in his business by discounting ■the same at banks in the city of New York; that in August, 1894, the appellant sent to Richard a note in the ordinary form, with the blanks unfilled, and his name indorsed upon the back; that when said paper was thus sent it read as follows:
(( _ _
“-after date, I promise to pay to-or order -Dollars, value received, at-.
• ((_5?
The appellant testifies that his son requested this note to use in reducing the amount of a note in a bank, and that it was sent with the understanding that it should be so used; but the son denies that any limitation on the use of the blank existed. It further appears that, after receiving this paper, Richard Sehram filled up the blanks in the note, and drew a line through the words “ after date ” and “ or order,” so that the same read as follows:
$11,000.00. New York, August 20th, 1894.
“ On demand, I promise to pay to Mr. E. N. Monies Eleven Thousand Dollars, value received, at my office, 476 West 4th St. Riohaed Scheam.”
The testimony of Richard Sehram and E. N. Mm'lts shows that some time previous to the 24th day of September, 1894, Jiarhs had loaned to Richard Sehram eleven $1,000 railroad bonds, and that Richard Sehram had used these bonds as ■collateral in borrowing money at banks; that on the 24th ■of September, 1894, Richard Sehram gave the note in question to the plaintiff, and that the plaintiff then gave Richard Sehram a certified check for $11,000; that Richard Sehram used the check in taking up the said bank loans, which amounted to $10,500, returned the collateral bonds to Maries, and returned the remainder, $500i
The note was not paid at maturity, and was protested March 17, 1897. It further appears that some time in the fall of 1896 the defendant Joseph B. Schram went to New York City, and that a meeting was then held in New York, at which there were present the plaintiff, th¿ defendant Richard Schram, and Joseph B. Schram, Louis Schram, a brother of Richard, and one Kuhn, who was the father of Richard’s wife. The note in suit was produced at the meeting, and it is claimed on the part of the plaintiff that the appellant, Joseph B. Schram, after looking at the note, said that that was his note and his indorsement, and that he would take care of the note after Richard’s other matters had been adjusted. The defendant Joseph B. Schram admits that the note was produced, and that he saw and read it; but claims that he denied liability thereon and refused to pay it.
At the close of the evidence both parties moved for the direction of the verdict, and both motions were denied. The court submitted to the jury a single question as a special verdict, to wit: “ Did the defendant Joseph B. Schram, in the fall of 1896, agree to pay the plaintiff the note in suit?” The jury answered this question in the affirmative, and judgment was thereupon rendered for the plaintiff for the amount of the note in suit, and the defendant Joseph B. Schram appeals.
For the appellant there were briefs by WimMer, Flanders, Smith, Bottum & Vilas, and oral argument by J. G. Flanders and Ghas. F. Fcowsett.
They contended, inter alia, that according to the weight of authority a forgery cannot be ratified by the party against whom the crime was committed so as to make him liable upon the forged instrument. Henry Christian B. & L. Asso: v. Walton, 181 Fa. St. 201; Iloioard ,v. Turner, 155 Pa. St. 349; Shisler v. Yandike, 92 Pa. St. 44; Brook v. Hook, L. R. 6 Exch. 98; Woodruff v. Munroe, 33 Md. 158; Workman v. Wright, 33 Obio St. 405; Henry v. Heeb, 114 lad. 278; Wilson v. Hayes, 40 Minn. 531; Owsley v. Philips, 78 Ky. 517; ■ Warner v. Fant's Trustee, 79 Ky. 1; Ferry v. Taylor, 33 Mo. 334; 2 Daniel, Neg. Inst. § 1352.
For the respondent there was a brief by Miller, Hoyes <& Miller, and oral argument by Oeo.-H Hoyes.
To the point that a forgery may be ratified and that no new consideration is necessary, they cited Greenfield Bank. v. Grafts, 4 Allen, 447; Wellington v. Jackson, 121 Mass. 157; Barrtlelt v. Tucker, 104 Mass. 336; Bow's Fx'r v. Spermy's Ex'r, 29 Mo. 386; First Hat. Bank v. Gay, 63 Mo. 40; Cravens v.. Gillilcm, 63 Mo. 28; Gaseo Ba/nk v. Keene, 53 Me. 103; For-syth v. Day, 46 Me. 176; Commercial Bank v. Warren, Ifi N. Y. 577; Howard v. Duncan, 3 Pans. 174; Hefner v. Yan-dolah, 62 Ill. 483; Gleason v. Henry, 71 Ill. 109; Paul v. Berry, 78 Ill. 158; Forsythe v. Bonta, 5 Push, 547; Corser v. Paul, 41 N. H. 24; Union Bank v. Middlebrook, 33 Conn. 95; Grout v. DeWolf, 1 R. I. 393; Mechem, Agency, § 116; Pelton v. Prescott, 13 IoAva, 567.

Opinion:
The following opinion was filed January 8,1901:
"WiNslow, J.
The trial court rightly held that if the appellant, knowing of the alterations in the note and the fact that it had been negotiated to Mariis, acknowledged it and promised .to pay it, this constituted ratification and rendered all other questions immaterial. The evidence showed that the plaintiff received the note without actual knowledge of any defect in its execution, and advanced to Richard Schrarn $11,000 on the strength of it. If it be conceded that Marks was put upon inquiry as to Richard's authority to so use the paper, by the obliteration' of the words " after date " and " or order " upon the face of the note (a proposition ex tremely doubtful — Maldaner v. Smith, 102 Wis. 30), it was still perfectly competent for the father to ratify the unauthorized act, and such ratification would be equivalent to original authority, even if such alterations constitute in law a forgery. Mechem, Agency, § 112-116; Wellington v. Jackson, 121 Mass. 157; Commercial Bank v. Warren, 15 N. Y. 577; Forsyth v. Day, 46 Me. 176; First Nat. Bank v. Gay, 63 Mo. 33; Goodspeed v. Cutler, 75 Ill. 534.
The jury have found that he ratified the act after full knowledge of the alterations and of the fact that it was held by Marks. This finding is based upon sufficient evidence, and was reached without material error; hence the judgment was right.
By the Court.— Judgment affirmed.
Bardeen, J., took no part.
A ffiotion for a rehearing was denied March 19, 1901.