Mitchell v. Finnell
Before: Temple
Synopsis
Promissory Note—Agency tor Payee—Finding Against Evidence.— Evidence establishing without conflict that the payee of a note authorized a third person to settle with the maker for sheep claimed to have been stolen from the payee of the note, and to take any thing he could get, proves authority to take a promissory note, and a finding that the note was taken without the authority or direction of the payee is not . justified by the evidence.
Id.—False Representations and Threats of Agent.—The payee of the note must be held responsible for false representations and threats of criminal prosecution made by the agent taking the note, within the scope of the authority given to him to settle with the maker and get what he could out of him.
Id.—Principal, When Bound by Acts of Agent.—A principal is bound by acts and representations of an agent within the scope of his authority, even though the agent disobeyed his positive directions.
Id.—Ratification—Indorsement of Note.—The payee must be held to have ratified whatever was done by the agent in procuring the note, by the fact that he indorsed it with the knowledge that it was given in settlement of a supposed claim of the payee against the maker.
Id.—Knowledge of Wrongful Acts.—So far as concerns the validity of the note indorsed by the payee, he is chargeable with knowledge of the wrongful acts of his agent, whether he had such knowledge or not.
Id.—Payment of Money to Agent.—The indorsement and transfer of the note being the act of the payee, it was immaterial whether the money was paid to the payee or to his agent.
Id.—Enforcement of Fraudulent Note by Bona Fide Purchaser—Recovery From Payee.—Where the maker of a note which was procured by menace and false representations of the agent of the payee is compelled to pay it to a bona fide purchaser for value, before maturity, without notice of the fraud, the payee who indorsed the note to such purchaser is responsible to the maker for the reimbursement of the money paid.
Id,—Assignment of Claim to Agent.—An agreement between the payee of the note and the agent who procured it, that the agent could have whatever he could get out of the one who made the note, does not amount to an assignment of the claim of the payee against the maker, and such agreement cannot relieve the payee of the note who indorsed it to enable a bank to collect it, from responsibility to the maker for the fraud of the agent.
Temple, C.— The complaint in this action charges that August 13,1890, plaintiff executed to defendant his promissory note for four hundred and sixty dollars, payable to defendant’s order two months after date.
That plaintiff received no consideration for the note, but was induced to execute it by threats of unlawful confinement and criminal prosecution and injury to his character, which threats were made by one W. S. Knott, acting for said defendant; also by false representations made by defendant’s agent.
That defendant, about September 1, 1890, transferred the note to the bank of Tehama county to secure the sum of two hundred and fifty dollars, with interest.
That subsequently plaintiff was compelled by a judgment rendered against him in favor of said bank, to pay said note with interest and costs, which, with an attorney’s fee paid by him, amounted to four hundred and two dollars and ninety-five cents, which sum has not been repaid.
The answer consists of denials. The court found that the note was executed without consideration, and was procured by threats of criminal prosecution, and of arrest, and through plaintiff’s fear of the same, and through threats of unlawful confinement and injury to the character of plaintiff.
The court, however, finds that the threats were made by Knott, who, in making them, was not acting for the defendant or by his authority. That the note was executed and delivered to Knott, that defendant had no interest in it, and it was not executed by his authority or direction.
That defendant did not, on or about September 1st, or at any other time, transfer the note to the bank of Tehama to secure the sum of two hundred and fifty dollars, or any other sum, but that said Knott borrowed from the bank two hundred and fifty dollars, and left the note [619]there as collateral security. That at the time the note had not been indorsed by defendant and was not indorsed by him until after it had become due. That defendant never received any thing for said note, hut indorsed it at the request of the cashier of the bank, solely for the accommodation of the bank.
A motion for a new trial was made by plaintiff, and on the motion plaintiff attacked as not supported by the evidence the findings, that:
1. The note was not taken by the authority or under the direction of defendant.
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