De War v. First Nat. Bank

Mr. Justice Benson delivered the opinion of the court. 1, 2. The evidence submitted upon the trial discloses that either on November 26, 1909, or a short time prior thereto, the plaintiff, having $3,611.40 on deposit in defendant bank, of which T. R. Sheridan was president, had a conversation with him in the bank wherein she expressed a willingness to lend a portion of her money, not exceeding $3,000, if good security were had. There is a conflict between her testimony and that of Sheridan as to who was to pass upon the [265] sufficiency of the security. She says that she never authorized him to make any loan without consulting her, and that she told him she would not make any loan without first consulting her husband. Sheridan says she told him to lend the money upon good security, using his own judgment in the matter. In any event, on November 26th, without consulting her, or receiving from her any check or other written order for the money, he proceeded to “lend” the same in the following manner: He was associated as a partner with A. M. Kelsay in the sheep-raising business in Harney County. The partnership business was all conducted in the name of Kelsay, who had an account with the defendant bank. This account had been long overdrawn in a sum exceeding $3,000. Sheridan had advanced more than his just proportion of the moneys used in the sheep business and was much disturbed about Kelsay’s overdraft. He therefore made a journey to Harney County for the purpose of obtaining a satisfactory adjustment of the matter. Kelsay then authorized him to negotiate a loan and to sign his name in securing the money. Based upon this statement of facts, he proceeded to make a demand note for $3,000 payable to plaintiff, and signed it, “A. M. Kelsay, T. R. S.” Her account was then charged with that amount of money checked out, and Kelsay’s account was credited with the same, whereupon, to use the language of witness Sheridan, “he owed less than he did before.” He also testified that Kelsay never saw the note, and the record is silent as to his ever having any knowledge of the transaction whatever. It appears that the venture in sheep was a disastrous failure, and that Kelsay some time thereafter removed to Imperial Valley, in California. There is no merit in defendant’s plea in estoppel, for the letter written by Groodhart, even if it could [266] be used in favor of tbe bank, a question not necessary to decide, is expressly worded in sucb a manner as to obviate any necessity of a reply, unless she could truthfully sign the certificate inclosed therewith. If this were all of the record, we should affirm the judgment; but the defendant offered evidence tending to prove a ratification by plaintiff of Sheridan’s wrongful acts. She had testified upon cross-examination that the note had for a time been in her possession, and defendant offered to prove by two witnesses that she had had conversations with them in which she expressed a wish to dispose of the note and said that she was willing to discount it. This testimony was excluded, and this ruling is assigned as error. It is true that the defendant would have been required to go further, and show that acts tending to prove ratification were made with full knowledge of all the facts and circumstances surrounding the transaction; but its offered testimony was a step in that direction, and the ruling of the court, sustaining an objection thereto and forbidding its submission to the jury, was error, and the judgment must be reversed and the cause remanded for a new trial. Beversed. Mr. Chief Justice Moore and Mb. Justice Eakin absent.