Court Opinion

ID: 9542187
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:31:41.268775+00
Date Added: 2024-06-11T15:06:52.681598
License: Public Domain

McCown, J.,
dissenting.
The District Court not only -dismissed the sixth cause of action but also specifically held and1 decreed that “there was' no legal liability on the part of plaintiff KAMI Kountry Broadcasting Company to pay the First National Bank of Cozad- the sum of $4,000 plus interest as set forth in the Sixth Cause of Action contained in -the plaintiff’s Amended Petition.”
The majority opinion correctly equates the dismissal o,f the‘ sixth cause of action with sustaining a demurrer and at least tacitly concedes that the finding there was no legal liability on the part of plaintiff to pay the First National Bank of Cozad the sum of $4,000 plus interest may be equated with the granting of a judgment on the pleadings or a summary judgment.
The parties’ arguments and contentions are all directed at issues grounded on the legal effect of the forged promissory note. The majority opinion adopts the same approach. All have concentrated on whether -the forged *336promissory note was legally and contractually binding on the plaintiff to the exclusion of other critical issues. Even if it be assumed that the defendant is correct and that the forged signature is wholly inoperative to bind the plaintiff on contract liability for the note, that does not affect the possible tort liability of the plaintiff to the bank for $4,000 for the fraud of its agent and general manager. It is obvious that if the manager of the radio station forged the $4,000 note and wrongfully appropriated the proceeds to his own use he committed a fraud upon the plaintiff or the bank or both.
While the pleadings, may be inept and skeletal as to some details, they establish that Dean L. McLain, while he was acting as general manager of the plaintiff in charge of its radio station, without authority forged the signature of the plaintiff’s president on a promissory note in the amount of $4,000 to the First National Bank of Cozad, Nebraska, and wrongfully appropriated the proceeds thereof to his own use. The pleadings, also specifically allege that plaintiff later paid to the bank the sum of $4,000, plus interest, in payment of the promissory note.
Other portions of the pleadings and exhibits establish that plaintiff’s bank account was maintained at the First National Bank of Cozad and that McLain had authority to and did write checks on that account, many of which were unauthorized and fraudulent. Reasonable inferences may be drawm that the forged note purported to be a note of the plaintiff, signed by its president, and that the proceeds of the forged note were delivered by the bank and received by McLain in his capacity as general manager of the plaintiff. While the allegation that McLain “wrongfully appropriated the proceeds thereof to his own use” might well have been subject to a motion to' make more definite and certain as to details, that was not done. Taken in the light most favorable to plaintiff, if McLain appropriated the proceeds from the bank account of the plaintiff, there was a loss of *337plaintiff’s money or property within the language of the fidelity bond.
At this point it is also appropriate to note that the fidelity bond was not limited to money or property owned by the insured. Section 7 of the bond provides: “The insured property may be owned by the Insured or held by the Insured in any capacity whether or not the Insured is liable for the loss thereof, or may be property as respects which the Insured is legally liable.”
Restatement, Agency 2d, section 261, provides: “A principal who puts a servant or other agent in a position which enables the agent, while apparently acting within his authority, to commit a fraud upon third persons is subject to liability to such third persons for the fraud.” Comment a to this section states: “The principal is subject to liability under the rule stated in this Section although he is entirely innocent, has received no benefit from the transaction, and, as stated in Section 262, although the agent acted solely for his own purposes. Liability is based upon the fact that the agent’s position facilitates the consummation of the fraud, in that from the point of view of the third person the transaction seems regular on its face and the agent appears to be acting in the ordinary course of the business confided to him.” Illustration 1 involves a forged document delivered by a bank employee who received payment for it.
Restatement, Agency 2d, section 262, provides: “A person who otherwise would be liable to another for the misrepresentations of one apparently acting for him is not relieved from liability by the fact that the servant or other agent acts entirely for his own purposes, unless the other has notice of this.” The comment to this section, in expressing the rationale for the rule states: “It is, however, for the ultimate interest of persons employing agents, as well as for the benefit of the public, that persons dealing with agents should be able to rely upon apparently true statements by agents who* are pur*338porting to. act .and. are apparently acting in the interests of the principal.”
Restatement, Agency .2d,, section 161, provides: “A general agent for a disclosed or partially disclosed principal. subjects! his principal to liability for acts done on, his account which usually accompany or. are incidental to transactions which the agent is authorized to conduct if, although they are forbidden by the principal, the other party reasonably believes that the agent is authorized to do them and has no notice that he is not so authorized.”
Section 1-103, U. C. C., provides: “Unless displaced by the particular provisions; of this act, the .principles of law and equity, including the law merchant, and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause shall supplement its provisions.”
Section 3-404, U. C. C., quite clearly provides that any unauthorized signature to a promissory note is wholly inoperative unless ratified, and that any unauthorized signature may be ratified. Comment 3 to that section establishes that a forgery may be ratified and1 that such-adoption or ratification is retroactive and may be found from conduct as well as from express statements. In this case, payment of the note to the bank by the plaintiff after full knowledge of the facts constituted ratification. The only real issue is whether there was any legal liability of plaintiff to the bank arising out of the acts of McLain in obtaining the $4,000 from the bank, or whether the ratification was voluntary.
The facts pleaded here and the reasonable inferences frpm them were sufficient to withstand demurrer. Neither was the defendant entitled as a matter of law to a judgment that there was no legal liability on the part of plaintiff to pay the First National Bank of Cozad the' sum of $4,000 plus interest. Such determinations should await the presentation of evidence. No evidence has. yet' been presented.
*339If there was a legal liability, on- the plaintiff to re* spond in tort to the bank for the fraud of McLain, the payment of $4,000 to the bank was clearly a loss covered by the bond. The cases cited in the majority opinion simply do not reach such an issue.
The judgment of the District Court should have been reversed and the cause remanded to determine whether the evidence could or would support the possible tort liability of the plaintiff to the bank for the fraud of plaintiff’s agent and general manager.
Spencer, J., joins in this dissent.