1892.) MORTGAGE-SUBSTITUTION OF NOTES-PAYMENT ON FORGED NOTE--Estoppel

1. Parties to a note secured by mortgage may substitute a new note for the original one without impairing the validity of the mortgage security, although the terms of the two notes are not the same. Either note is merely evidence of the debt to be secured.

2. Where a person whose name has been forged as the maker of a promissory note makes payments on such note to an innocent holder thereof, without divulging the forgery, for the purpose of screening the forger from detection and punishment, when otherwise the holder would have initiated criminal proceedings against him, such person, when sued upon the note by the holder, will be estopped from setting up the forgery as a defense thereto. Such acts amount to an implied or indirect ratification.

(Official.)

Action by Clarinda S. Buck against Lydia E. Wood to recover land. Plaintiff had judgment, and defendant brings exceptions, and moves for a new trial. Motion sustained.

From the exceptions it appeared that the plaintiff, on the 18th of May, 1878, gave to one Adna C. Cushman a demand note of $175, to secure which she also gave said Cushman a mortgage deed of the premises in question. The plaintiff claimed that the note was surrendered to her (the plaintiff) on the same day that it was given, and therefore the mortgage, which was given to secure said note, became null and void; and the plaintiff introduced in evidence a demand note of $175, running to Adna C. Cushman, and signed by herself, which she claimed was the identical note above mentioned. The defendant also introduced in evidence a note of $175, on one year's time, running to Adna C. Cushman, purporting to be signed by the plaintiff, Mrs. Buck, claiming that that was the original note to secure which the mortgage was given. On the back of this note, produced by the defendant, were four indorsements.

The only question of fact submitted to the jury by the presiding justice was, which of the two above-mentioned notes was the note to secure which the mortgage was given? The jury returned a verdict for the plaintiff.

The counsel for the defendant claimed:

(1) That if the plaintiff and Adna C. Cushman agreed, after the execution of the mortgage, to substitute the note introduced in evidence by the defendant for the note introduced by the plaintiff, then the plaintiff would be bound by the mortgage in the hands of an innocent purchaser for value, and could not recover in this action.

(2) That, if the plaintiff made certain payments on the mortgage and note when in the hands of such innocent purchaser, she would thereby be estopped from showing any irregularity between herself and said

Cushman in regard to said note and mortgage.

The presiding justice declined to so instruct the jury, but did instruct them as follows:

"If you find that the note which is held by the defendant, and produced by Mr. Hersey, as her attorney, for $175, payable in one year, is the real note which is describe l in the mortgage, and to secure which that mortgage was executed, it being in the possession of the defendant, and produced by her counsel, then your verdict should be that the defendant did not disseise this plaintiff in manner and form as she has alleged; in other words, your verdict should be for the defendant, Mrs. Wood. If, on the other hand, you believe that is not the note described in the mortgage, and to secure which the mortgage was given, but that the note produced here by the plaintiff herself through her counsel, Mr. McGillicuddy, is the real note that was given, and that it was surrendered and given up to her with the intention thereby to render it invalid, then the condition in the mortgage was performed, and the plaintiff, Mrs. Buck, is entitled to a verdict that the defendant did disseise in manner and form as the plaintiff has declared against her.

McGillicuddy & Morey, for plaintiff. 0. H. Hersey, for defendant.

PETERS, C. J. The demandant introduced evidence showing that she was entitled to recover the premises demanded, unless a mortgage given by her to Adna C. Cushman on the premises be still in force.

The defendant, claiming her title under such mortgage, dated May 10, 1878, introduced it in evidence, together with a note bearing the demandant's name as maker, and payable to the order of Cushman, the mortgagee. The mortgage and note had been transferred, either by assignments or absolute conveyances, from Cushman down through different persons, until the property was purchased by the defendant; and the mortgage had been foreclosed. The demandant admitted the mortgage to be genuine, but denied the genuineness of the note.

She testified, although her story was contradictory and evidently disingenuous in some respects, that she made the mortgage, and another and different note from this one in defendant's hands, as an accommodation for her friend Cushman to raise money upon for his own use; that, immediately after the note and mortgage were delivered to Cushman, some difference arose between her and him, in consequence of which he gave up the note to her, although he retained the mortgage; and that she has had the note in her possession ever since; and that the note offered in evidence, and bearing her name, was never signed or authorized by her, and is a forgery. The intimation is that Cush

man forged the note in order to obtain money with which to buy himself out of a threatened criminal prosecution of some kind.

The demandant produced the note which she declares was the genuine original note accompanying the mortgage, and the evidence quite satisfactorily shows it to be so. The two notes are alike, excepting one is on demand and interest, and the other is with interest on one year. The conditional clause in the mortgage describes either note, the one as accurately as the other. There was some question whether the two notes bear the same date, as there is an obliteration of the date of the one in the hands of the defendant.

The case finds that the counsel for the defendant took these positions: First, that if the demandant and Adna C. Cushman agreed, after the execution of the mortgage, to substitute the note introduced in evidence by the defendant for the note introduced by the demandant, then the demandant would be bound by the mortgage in the hands of an innocent purchaser for value, and cannot recover in this action; and, secondly, if the demandant made certain payments on the mortgage and note when in the hands of such innocent purchaser for value, she would thereby be estopped from showing any irregularity between herself and Cushman in regard to such note and mortgage. The presiding judge declined to so instruct the jury, and submitted to the jury only the question whether the one note or the other was the note covered and described by the mortgage, the jury finding on that issue for the demandant.

A careful perusal of the evidence satisfies us that the defendant's propositions were in the main correct, and that, either upon the exceptions of motion,-more properly on the motion perhaps,-a new trial should be offered. The evidence bearing upon the point of renewal or substitution, as well as on the idea of ratification, is extremely important.

Here is a property mortgaged in 1878 to secure a note which the demandant says is a forgery, and the premises have been bought and sold for full value by her neighbors, undoubtedly with her knowledge, several times since the mortgage was given.

The mortgage has for all these years stood upon the public records unreleased, and was many years ago foreclosed. These innocent purchasers have been in open possession and occupation of the premises as owners, presumably before her eyes, for more than 10 years, without a whisper of claim or any sign of discontent on her part, and no kind of explanation of such silence is even attempted to be given. But more conclusive than this is the fact that she made at four different times payments upon the note which she alleges was forged, to an attorney who held the same for collection, making the payments without any assertion of forgery or

wrong, and without any complaint whatever. How can such conduct possibly be accounted for, unless upon the theory that she either gave the second note, or authorized it, or adopted it as her own obligation? The attorney says that she came to his office, upon a notice to her that he had the note for collection, and saw him handle the note and mortgage and indorse the payments on the note, and he confidently believes that she took the note on some one of these occasions in her own hands.

She offers no explanation of her conduct in this respect, and is driven reluctantly and haltingly to confess the facts so testified to by the attorney. She says of those payments: "I suppose it was to pay for that note,-that mortgage." She also some years ago declared to Mr. Bisbee, who desired to ascertain the fact, that the mortgage was a bona fide transaction.

In the letters of Cushman to her, put in evidence for her benefit, there are most significant indications that, even if her story of forgery be true, she had ratified the transaction in order to shield her friend from some threatened criminal punishment. In one letter he entreats her to send the interest due on the note, about $10, to the attorney holding the note. In another letter he asks her to pay the interest on the note, as he anticipates trouble if the owner should discover anything wrong about it. And so she made the requested payments. The disclosure of motive in these letters bears upon the question of ratification; and that may be accomplished in two ways: If a person whose name is forged to a note, knowing all the cir cumstances as to the signature, and intending to be bound by it, acknowledges the signature, and assumes the note as his own, he will be bound upon the note, just as if it had been originally signed by him or by his authority. That would be express or direct ratification. But indirect or implied ratification may be consummated upon grounds of estoppel. Now, if the de mandant made payments on the forged note for the purpose of preventing the exposure of her friend, the forger, when the owner of the note would have caused his arrest and punishment had he not been in this way misled by her, she should be estopped from setting up the defense of forgery when subsequently sued on the note. Forsyth v. Day, 46 Me. 176; Bank v. Keene, 53 Me. 103; Wellington v. Jackson, 121 Mass. 157.

On the other point, that the parties to a mortgage may substitute a new note for the original by way of renewal without affecting the validity of the security, the authorities are conclusive. The books abound in such cases. Hadlock v. Bulfinch, 31 Me. 246; Barrows v. Turner, 50 Me. 127; Parkhurst V. Cummings, 56 Me. 155; Watkins v. Hill, 8 Pick. 522; Pomroy v. Rice, 16 Pick. 22. In Jones on Mortgages (2d Ed., vol. 2, § 924) it is said: "No change in the form of indebted

ness or in the mode or time of payment will discharge the mortgage. A mortgage secures a debt, and not the note or bond or other evidence of it. No change in the form of the evidence or the mode or time of paymentnothing short of actual payment of the debt or an express release-will operate to discharge the mortgage.

The mortgage remains a lien until the debt it was given to secure is satisfied, and is not affected by a change of the note, or by giving a different instrument as evidence of the debt." The text of the author is fortified by an array of cases cited.

We think the jury should be allowed to determine whether there was ratification express or implied, or a renewal of the first note by substituting the second.

Motion sustained.

WALTON, VIRGIN, LIBBEY, FOSTER, and HASKELL, JJ., concurred.

JONES v. WEBSTER WOOLEN CO. (Supreme Judicial Court of Maine. Dec. 14,

DEED-DESCRIPTION

1892.)

REFERENCE TO AGREEMENT -EVIDENCE.

Where land is conveyed by clear and complete description, and no ambiguity is apparent on the face of the deed, and the grantor adds at the end of the description that the land conveyed is the same described in an agreement between him and another party, recorded in Androscoggin registry of deeds, (Book 137, p. 62,) the grantor (or his successor) cannot invoke a reference to the recorded agreement to show that a less amount of land was conveyed than, without the aid of the reference, is apparently covered by the deed. (Official.)

Action by Retiah D. Jones against the Webster Woolen Company to recover land. Heard on agreed statement of facts. Judgment of nonsuit.

George C. Wing, for plaintiff. N. & J. A. Morrill, for defendant.

PETERS, C. J. The demandant made a conveyance, to a person under whom the defendant corporation claims title to the demanded premises, which conveyance contains the following description of the premises conveyed:

"A certain lot or parcel of land situated in Lewiston and Webster, in said county of Androscoggin, on the Sabattus stream, and bounded on the north, south, and west by said stream, and on the east by land now or formerly in possession of James F. Hirst and Stephen Bangs, and being the same agreed to be conveyed by me to said Bleakie, by articles of agreement made and concluded between me and said Bleakie, dated January 1st, A. D. 1878, and recorded in Androscoggin county registry of deeds, Book 137, page 62."

The agreement referred to in this description was a lease, or contract of the nature

of a lease, between the demandant and a third party, relating to the same land as above conveyed. The difference between the descriptions in the two instruments is that the agreement contains the same specific boundaries that the deed does, and at the end of such description these words besides: "So far as the same may be flowed by the dam as at present erected and maintained by the said Bleakie, on the said Sabattus stream, at his mill site in said town of Webster, or by any other dam erected and maintained by the said Bleakie of the same height as the present dam."

The demandant contends that the reference in the conveyance to the agreement imports into the conveyance the words of description found in such agreement, just as effectually as if the same words had been inserted therein; and that the words added to the description in the agreement lessen the amount of territory that would without the reference pass by the deed.

We are unable to concur in this proposition of the demandant's counsel. No ambiguity is discoverable in the description contained in the deed. The boundaries seem to be complete in themselves. The reference is general, rather than particular, and was designed to identify locality, rather than to make more certain any limits or bounds in the deed. It would be a hazardous policy to allow a grantor to lessen the amount of land apparenuy conveyed by his deed by a general reference to some other deed or paper. Impositions could be easily practiced under such a rule, as grantees rarely pay much attention to such references, or know whether they affect their interests or not. See, for a discussion of these questions, Hathorn v. Hinds, 69 Me. 326.

Plaintiff nonsuit.

WALTON, VIRGIN, LIBBEY, FOSTER, and HASKELL, JJ., concurred.

DODGE v. BOSTON MARINE INS. CO. (Supreme Judicial Court of Maine. Dec. 19, 1892.)

MARINE INSURANCE-IMPLIED WARRANTY AS TO

SEAWORTHINESS.

There is an implied warranty of the shipowner to an insurer of the vessel that she was seaworthy at the inception of the voyage. If not seaworthy, the insurance does not attach, and the premium paid therefor may be recov ered back, as money paid without consideration. (Official.)

Report from supreme judicial court, Waldo county.

Action on a policy of marine insurance by Tewksbury Dodge against the Boston Marine Insurance Company. Heard on report. Judgment for plaintiff for premium only.

J. Williamson & Son, for plaintiff. C. P. Stetson, for defendant.

acceptance since the action was brought, if not before. It matters not what may have been the inducement that led the defendant to assume and exercise dominion over the property in January, 1892. The law does not allow him to assert himself a trespasser in taking the property. The act is a confession of acceptance. Burrill v. Parsons, 73 Me. 286. If he takes the article at all it must be for the purpose for which it is tendered to him. Mr. Benjamin says a constructive acceptance, at least, may be inferred from any act of the buyer to the goods, of wrong if not the owner of the goods, or of right if he is owner. Benj. Sales, (3d Amer. Ed.) § 144, and cases cited. Here the evidence is of a conclusive character. But acceptance after action brought is not enough to sustain acceptance before the commencement of the action.

But to return to the question of acceptance before suit brought. It is a general principle affecting this subject that whenever personal property is sold, deliverable to a particular person or at a particular place for the buyer, a delivery to such person or at such place is a completed delivery to the vendee. "The cases are numerous," said Whitman, C. J., "which show that a delivery of an article sold to a person appointed by the vendee to receive it is a delivery to the vendee." Wing v. Clark, 24 Me. 366. The same rule attaches where the delivery is to be at an agreed place. Means v. Williamson, 37 Me. 556. The precise rule, as stated in several cases in Massachusetts, is that "in an action for goods sold and delivered, if the plaintiff prove a delivery at the place agreed, and that there remained nothing further for him to do, he need not show an acceptance by the defendant." Nichols v. Morse, 100 Mass. 523; Brewer v. Railroad Co., 104 Mass. 593; Rodman v. Guilford, 112 Mass. 405. Discussions in other cases serve to illustrate the rule. Pacific Iron Works v. Long Island R. Co., 62 N. Y. 272; Spencer v. Hale, 30 Vt. 314; Strong v. Dodds, 47 Vt. 348; Hunter v. Wright, 12 Allen, 548; Page v. Morgan, 15 Q. B. Div. 228; Dyer v. Libby, 61 Me. 45; Benj. Sales, (3d Amer. Ed.) §§ 162, 199, and notes.

The delivery at a place agreed is for the buyer's accommodation. Instead of his taking the goods, they are sent to him at his direction. Then the seller's responsibility is ended, and an acceptance is implied. The buyer, in effect, agrees that such delivery shall operate as a complete transfer of the property. The buyer is not, however, pre cluded from the right of inspection or examination, unless such right has been previously exercised, and of subsequently objecting that the goods are not according to the contract. To that extent the acceptance may be considered as conditional.

But the right of rejection must be for good cause, and not upon false or frivolous

grounds; and the right must be exercised within a reasonable time, or it is lost, and the sale becomes absolute. Silence and delay for an unreasonable time are conclusive evidence of acceptance. The burden of action is upon the buyer, and he must seasonably notify the seller of his refusal to accept the goods. The seller cannot presume that objection will be alleged. Of course, there can be no refusal or repudiation if the goods are according to the contract. See cases before cited.

The case before us comes within the application of these principles. By the agreement of parties the delivery was to be at the American Express office in Lewiston. The manikin was so delivered, and remained there for months. If there had been an acceptance, either absolute or constructive, the action may be maintained. There is certainly evidence enough of it to require the jury to determine the question. If there has been an acceptance, the defendant may still have any defense that goes in reduction of damages. Morse v. Moore, 83 Me. 473, 22 Atl. Rep. 362. There is nothing in Tufts v. Grewer, 83 Me. 407, 22 Atl. Rep. 382, that conflicts with the foregoing. That case went upon other and different principles.