Humphreys v. . Finch

Sjiith, C. J., (after stating the facts). While the only specific issue submitted to the jury was as to the presence of the seal opposite the name of the defendant when his signature was affixed, and this is found against him, he was not allowed to prove the insertion in the space left open for the purpose, of a sum double that agreed upon between them. This evidence was not pertinent to the inquiry drawn up, and could only be competent upon a general denial of the execution of the paper. Except for this latter purpose, it was properly excluded, and this may have been the ground of the ruling of the Court. But we are willing to consider the question of the effect of such proof, if fully establishing the fact, upon the defendant’s liability. The general proposition is not controvertible, that an agency to bind a principal by an instrument under seal, (and this includes every essential part of it), must be created and the authority conferred by a writing under seal, and this in actions at law has been repeatedly ruled, as the cases to which we have been referred abundantly show. McKee v. Hicks, 2 Dev., 379; Davenport v. Sleight, 2 D. & B., 381; Graham v. *307 Holt, 3 Ired., 300; Marsh v. Brooks, 11 Ired., 489; Bland v. O'Hagan, 64 N. C., 471. But while the instrument has no legal force as a covenant of the principal, when changed by an agent possessing written or oral authority only to act, a question arises whether one who verbally authorizes an agent to fill up a blank with a specific sum of-money, left open and in his hands for the purpose, and then deliver it in its completed form, shall be at liberty when this is done and money obtained from another acting in good faith and with no knowledge of the fact, to disavow his obligation and consummate the fraud upon the holder. In a blended system of law and equity, shall the party who puts the means in the hands of his agent to get money upon a false assurance of his own liability, and with nothing to excite suspicion as to the integrity of the transaction upon the paper or otherwise, be allowed, when the money has been thus obtained upon his credit, to set up the defence and escape responsibility? In Mason v. Williams, 66 N. C., 565, it is decided that one •who has title and knows he has, who is present at a sale of the property as belonging to another, and is silent when it is public^ announced in his hearing before the bidding begins, that all persons claiming the same are requested to make known their claims, is not at liberty to deny the title acquired by an innocent purchaser at such sale. This was upon a sale of a steam engine. In Saunderson v. Ballance, 2 Jones Eq., 322, the same doctrine was in a measure applied to a sale of land, except that the purchaser was required to repay the party estopped the money he paid for the land. If by such conduct persons are not allowed to set up title to property and cause the loss of the money paid by an innocent purchaser, why should the defendant be permitted to avail himself of the want of sufficient legal authority in the agent to supply the blank in the bond, where, by his own *308 act, he virtualty declares to all who may take the paper, that such authority has been conferred? It has accordingly been held, where a defence to an action upon a bond was set up by some of the obligors, sureties, that it was not to be delivered until executed by another surety of which no indication was seen in the paper or otherwise given, that it could not be available to the sureties. Da ir v. United States, 16 Wall., 1. Delivering the opinion, Justice Davis thus declares the law: “ Sound policy requires that the person who proceeds on the faith of acts or admissions of this character, should be protected, by estopping the party who has brought about this state, of things, from alleging anything in opposition to the natural consequences of his own course of action. It is, accordingly, established doctrine, that whenever an act is done, or statement made by a party, which cannot be contradicted without fraud on his part, and injury to others, whose conduct has been influenced by the act or admission, the character of an estoppel will attach' to what otherwise would be mere matter of evidence.” To this he adds, that “ in the execution of the bond, the sureties declared to all persons interested to know, that they were parties to the covenant, and bound by it.” This ruling is affirmed in Butler v. United States, 21 Wall., 272, and extended to embrace a case where every blank was left in the form of the writing to be filled, and was filled, this being done by the principal, “ in the scope of his apparent authority.” But if the bond be a nullity, and no obligation imposed by it upon the defendant, it is not the less true, that authority was given to borrow the money riponthe face of the paper, not limited, and we see’ no reason why the act of borrowing does not itself create the liability, even if the attempt to give it in the shape of a covenant proves ineffectual, and this is *309 hardly a departure from the form of the demand in the action. Its essence is the recovery of the unpaid residue of the money loaned, due on the bond or on the antecedent agreement expressed in it. The invalidity of the bond cannot invalidate the act of borrowing upon the credit of both whose names are subscribed to it, nor remove the liability thus incurred to repay. But it is unnecessary to pursue the inquiry further. There is no error, and the judgment must be affirmed. No error. Affirmed.