Court Opinion

ID: 6614651
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:20:58.287397+00
Date Added: 2024-06-11T15:58:29.015788
License: Public Domain

Rombauer, J.,
delivered the opinion of the court.
It must be conceded, both upon reason and authority, that where the name of one person is signed by another to a written promise, the person whose name is thus signed can be legally held as promisor only on one of three grounds. These are, that he either expressly authorized the act, or, that he subsequently ratified it, or, that he is estopped by his conduct to disavow it.
As one may do by another what he can do himself, the law on the first ground of liability above stated is very simple, and the fact in any given case easily established. It is not so easy, however, to determine what will amount in any such case either to a ratification or to an estoppel.
“The distinction between a contract intentionally assented to or ratified in fact, and an estoppel to deny the validity of the contract is very wide. In the former case the party is bound, because he intended to be; in the latter he is bound notwithstanding there was no such intention, because the other party will be prejudiced and *315defrauded by Ms conduct, unless- tbe law treat him as legally bound.” — Forsyth v. Day, 53 Me. 196.
In tbe case now before us, tbe plaintiff, an innocent holder of a promissory note acquired for value before maturity, sued tbe defendant- as maker of such note. Tbe answer denied tbe execution of tbe instrument under oath. It stands conceded by tbe testimony tbat tbe note was not signed by tbe defendant, but was signed witb defendant’s name by one Davie, wbo discounted it, and received tbe proceeds thereof. Plaintiff claimed, and gave evidencq tending to show, tbat Davie signed defendant’s name to tbe note at defendant’s request; tbat defendant subsequently, witb full knowledge tbat Davie bad signed bis name to tbe note, and bad received tbe proceeds, promised to pay the same; and tbat Davie bad repeatedly, on former occasions, signed defendant’s name to notes and discounted the notes witb plaintiff.
Plaintiff also gave evidence tending to show tbat tbe former notes thus executed and discounted, bad all been paid, and tbat they were not paid by Davie, wbo, besides defendant, was tbe only party to tbe paper.
All these facts were denied by tbe defendant, but tbe preponderance of evidence on all tbe controverted facts, witb exception of tbe one showing express authority, was on plaintiff’s side.
These being tbe issues and tbe testimony given to sustain them, tbe court of its own motion, among others, gave tbe following instructions to tbe jury:
2. “Although tbe jury may believe from tbe evidence tbat Wm. Davie was not authorized by tbe defendant to sign tbe note sued upon, yet if you further believe tbat said defendant, subsequent to tbe signing of tbe note, ratified tbe act of said Davie in signing tbe note in question, then tbe defendant is bound by said note. And tbe court further instructs you tbat an unequivocal promise made by tbe defendant to pay tbe note after be found tbe note in suit bad been signed in bis, defendant’s, name, and by said Davie, would be a ratification of tbe signature.”
*3163. “If you. believe from the evidence that prior to March 12, 1883, the witness Davie had signed the name of the defendant to other notes than the one in suit and had them discounted by the plaintiff, and that such act had been done by said Davie with the defendant’s knowledge and assent, and- all such notes had been paid to plaintiff; and if you believe that said Davie signed the defendant’s name to the note sued upon and sold it to the plaintiff, and the plaintiff bought the note in good faith and before maturity, supposing the signature to be that of the defendant, and having acquired such knowledge as it had of defendant’s signature from said other notes purporting to be signed by defendant which had been paid, then plaintiff is entitled to recover even though it was signed without defendant's authority, and even though there was no ratification of the signattbre by the defendant."
The jury found a verdict for plaintiff, and the defendant appealed to this court, and here urges that these instructions, under the facts of the case, state incorrect propositions of law.
The objection urged to instruction No. 2 is its concluding sentence, which tells the jury that an unconditional promise made by the defendant to pay the note, after he found it had been signed in his name by Davie, was of itself a ratification of the signature.
Ratification is a question that can arise solely in connection with the law of agency. It is essential, therefore, that the party whose act is to be ratified should have assumed to act as agent for another at the date of the act ■sought to be ratified. It would seem, however, that the act of ratification is evidence both of the existence of the agency at the time of the doing of the unauthorized act, and of its subsequent validation by'adoption. “ If I make a contract,” says a careful writer, “in the name of a person who has not given me an authority, he will be under no obligation to ratify it, nor will he be bound to the performance of it. But if, with full knowledge of what I have done, he ratify the act, he will be considered to have contracted originally by my agency, for the ratifi*317cation is equivalent to an original authority.” — Livermore on P. & A., vol. I, p. 44.
It will be seen that in the case at bar, ii the agency of Davie existed as claimed in his own testimony, there was no need of a subsequent ratification, because there is no pretense in his testimony that the agency existed for any other purpose in this transaction but for the purpose of sigwcxg plaintiff1 s name to the note sued upon. Instruction No. 2, therefore, puts the case to the jury on this theory: that even though they may believe that the agency of Davie for defendant, in signing the note with defendant’s name is not established by direct testimony, yet if they find that defendant promised to pay the note, then such agency is conclusively established by the presumption of adoption, arising from an unconditional promise to pay.
In this we believe the instruction goes one step too far. A careful examination of the authorities, cited by respondent fails to disclose any case wherein a promise to pay, however unconditional, has in itself been held equivalent to a ratification of an otherwise unauthorized act.
Judge Story says that if a person should sign or endorse a note as agent for another without authority, and the principal should afterwards, with full knowledge, promise to pay it accordingly, that would amount to a ratification. — Story on Agency, 9 ed. sect. 254. But an examition of the cases cited in support of the text fails to support that position. The only case which seemingly goes to that extent is the case of Commercial Bank v. Warren (15 N. Y. 581), in which Judge Selden says that, “no valid distinction can be taken between a ratification of, and a promise to perform, the engagement entered into by the agent.” But an examination of the case will show that the plaintiff who had given evidence of a subsequent promise, and had relied upon such promise as evidence of ratification had been non-suited in the trial court, and that the only question before the appellate court was whether such promise amounted to evidence of ratification.
*318Some confusion has arisen in the minds of text writers as to whether the question of ratification is a question of law or fact, because courts have decided in some instances as a matter of law that there was no evidence of any ratification. Bnt in that respect, ratification is like any other fact sought to be proved. Whether there is any evidence legally sufficient tending to establish it, must always be a question of law, but whether in case there is such evidence, the evidence does prove it must always remain a question of fact.
We hold that the court erred in declaring in instruction No. 2 that an unequivocal promise was as a matter of law ratification of the signature, all' the more so as there was no evidence in the case that defendant had at any time promised to pay the note according to its terms. All that the court could do was to submit the fact to the jury as evidence from which they might infer a ratification.
Instruction No. 3 is given on the theory of estoppel, and is likewise erroneous. The mere fact that defendant may have authorized Davie on former occasions to sign his name to notes, and that Davie obtained money on such notes from plaintiff, cannot of itself estop defendant from denying Davie’s authority in this particular instance, unless there has been a course of dealing established between the parties on the subject, which would justify the bank to assume that the paper in controversy was signed by defendant’s authority. The evidence may have tended to show such a course of dealing, but whether it did or not, should have been submitted to the jury as an element of the estoppel, all the more so as the evidence on the question whether the officers of the bank relied on the similarity of the signature with former signatures and were thereby misled to their prejudice, was, to say the least, far from conclusive. Such course of dealing cannot be assumed by the court as a matter of law to" have existed, simply because the defendant may have authorized Davie to discount with the plaintiff some other notes signed in a similar manner, and the further *319fact that such notes were discounted by Davie, and paid to the bank by some one.
As the testimony was conflicting on the subject of Davie’s authority, and as the giving of these two instructions (which we find erroneous) were necessarily prejudicial to defendant, the judgment will be- reversed and the cause remanded. It is so ordered.
All the judges concur.