Cresap v. Furst Thomas

Holden, P. J., delivered the opinion of the court. This suit was brought by Furst & Thomas, appellees, against appellant, H. -W. Cresap, to recover on a writ- . ten guaranty signed by Cresap, with three other parties, in which Cresap guaranteed the payment of an account made by one Farris, who was an agent and salesman for the appellees, Furst & Thomas. The amount claimed as due by Cresap to appellees was one thousand five hundred forty-seven dollars and eighty-five cents, for which judgment was rendered, and from which this appeal is prosecuted. Stated briefly, the case is this: H. M. Farris secured the agency to sell the goods of Fflrst & Thomas, and was required to give a written guaranty, signed by three persons, guaranteeing that whatever account Farris might make with the appellees would be paid. It seems that *36 Farris and one Mr. Wolfe, who was an agent to solicit and recommend contracts of agency to appellees, who would then accept or reject such contracts when presented to them at Freeport, 111., approached the appellant, Cresap, and asked him to sign the guaranty, as they had already the names of P. L. Lomineck and J. A¡. Lomineck on the guaranty, with Farris as principal, and needed one more. Mr. Wolfe took the bond out of his pocket and showed it to appellant, who, seeing the names of the two other guarantors on the instrument, and knowing them to be responsible men, signed the guaranty. The written guaranty was turned over to Mr. Wolfe, who sent it to the appellees, Furst & Thomas, at Freeport, 111., for their acceptance or rejection, he recommending the proposed agency of Farris and the written guaranty signed by the two Lominecks, the appellant, Cresap, and the principal, Farris. The appellees received the guaranty signed by appellant and the others, and, believing it to be regular and valid in all respects, accepted it and entered into an agency contract with the said Farris. In the course of time Farris got behind in his accounts with appellees, and finally became indebted in the sum of about one thousand three hundred dollars, whereupon this suit was instituted to collect this amount from the guarantors, including the appellant, Cresap. A peremptory instruction was granted the appellee. There is no substantial conflict in the evidence. The defense presented by appellant is that the name of J. A. Lomineck was forged to the written guaranty, and that it was represented to appellant that the two Lomineck’s had signed the guaranty, and that upon this false representation he signed the guaranty;; that he would not have signed it had he known the name of J. A. Lomineck was forged. The appellees contend the judgment of the lower court is correct, because that even though one of the names on the guaranty was forged, still this would not release *37 appellant as a guarantor thereon because the guarantees, the appellees, had no knowledge of nor connection with the forgery, but accepted the guaranty in good faith and without notice of the forgery of the name of one of the guarantors, and that therefore the other guarantors on the obligation are liable for the amount due by the principal debtor. The. rule seems to be well settled in all jurisdictions that a guarantor is not released from the debt of a principal debtor where the guarantor’s signature is obtained by fraud of the principal debtor, unless the guarantee, or obligee, participates in or has knowledge of the fraud. In the case before us it conclusively appears that appellees accepted the contract of guaranty at their place of business at Freeport, 111., and they had no knowledge that any one of the signatures of the guarantors had been forged; therefore the appellant was liable as guarantor of the account of the principal, H. M. Farris. In the case of Watkins Medicine Co. v. Hargett et al., 209 Ala., 165, 95 So., 811, the court held that: “The fraud by which the principal debtor obtained a guaranty from the guarantors does not defeat the liability of the guarantors to a guarantee who did not participate in the fraud and had no knowledge thereof. Where one of two innocent parties must suffer by a fraud perpetrated by another, the law imposes the loss upon the party who, by his misplaced confidence, Ms enabled the fraud to be committed.” But it is argued by appellant that since Wolfe was the agent of the appellees, and had the written guaranty in his pocket and solicited appellant to sign it, this was a participation in the forgery, or that the agent Wolfe at least had notice of the forgery, and that notice to Wolfe, the agent, was notice to appellees, and for that reason the appellant should be released from the guaranty. The contention would be full of merit if the record did not show that Wolfe was merely an agent, with limited authority to recommend contracts and agencies to appel *38 lees, who accepted or rejected them at their place of business at Fleeport, 111.; consequently, if Wolfe knew of the forgery, it would not be notice to appellees, who accepted the guaranty at their place of business at Free-port, 111., because Wolfe had no authority to bind appellees. It is not shown, however, from this record that Wolfe had anything to do with the forgery or knew anything about it, as it seems that he did no more than solicit the signature of appellant and present the written guaranty, already signed by the two Lominecks and F'arris, Farris being present also for the same purpose. But if it be conceded that Wolfe knew of the forgery, still, as we have stated above, this would not be notice to appellees that would defeat their claim against the appellant as one of the guarantors in the transaction. Watkins Medicine Co. v. Hargett et al., 209 Ala. 165, 95 So, 811, 28 C. J., 927, 39 Ann. Cas. 505. In view of the conclusion reached above, the judgment of the lower court is affirmed. Affirmed,.