Id. at 553, 298 P. at 954. Simply “ ‘[a] word’ from the bank to [the borrowers] ‘would doubtless have prevented the [bank's] loss.’ ” Id. at 554, 298 P. at 954 (quoting Gioso v. Di Bell, 88 Colo. 287, 289, 295 P. 919, 919 (1931)). Accordingly, the court held that “[p]ayment to Siener, because of his ostensible ownership [of the note], coupled with his undisclosed agency to collect principal and interest of said note, operates as a complete defense against bank's claim” to foreclose.
[2, 3] The parties agree, and it is the law, "That when one of two innocent persons must suffer from the acts of a third he must suffer who put it in the power of the wrongdoer to inflict the injury." Gioso v. Di Bell, 88 Colo. 287, 295 Pac. 919. "When payment is made to the payee after transfer of a promissory note, and the maker does not exact delivery of the note itself, the maker's liability, according to the general rule, still continues. To that rule, however, there are several well-known exceptions.
Where an assignee of a note secured by a mortgage suffers and permits the assignor to hold himself out as still the owner of the note and mortgage, an accord and satisfaction made by the assignor with the maker of the note who acts in good faith is valid and binding. Home Sav. Bank v. Stewart, 78 Neb. 624, 110 N.W. 947; First Nat. Bank v. Rasmussen, 57 N.D. 208, 220 N.W. 840; Doe v. Callow, 64 Kan. 886, 67 P. 824; Fowle v. Outcalt, 64 Kan. 352, 67 P. 889; Easton v. Littooy, 91 Wn. 648, 158 P. 531; Wolford v. Young, 105 Iowa, 512, 75 N.W. 349; First State Bank v. Tobin, 204 Iowa, 456, 215 N.W. 767; Sherrill v. Cole, 144 Okl. 301, 291 P. 54; Colo. Nat. Bank v. Rehbein, 88 Colo. 547, 298 P. 952; Colorado Nat. Bank v. David, 89 Colo. 238, 1 P.(2d) 578; Gioso v. Di Bell, 88 Colo. 287, 295 P. 919; Michie v. Bradshaw, 227 Ala. 302, 149 So. 809; Shoemaker v. Ragland, 202 Iowa, 947, 211 N.W. 564. And where the transferee of a note knows actually or by implication that his transferor is collecting, principal and interest from the maker who has no knowledge of the transfer, and offers no objection, the payment should in equity be treated as made to the holder's agent.
Mr. W.F. O'Leary, for Respondent, submitted a brief and argued the cause orally. Citing to the point of equitable estoppel: Whitney v. Krasne, 209 Iowa, 236, 225 N.W. 245; Sioux City Cattle Loan Co. v. Lovrien, 198 Iowa, 296, 197 N.W. 914; Lusby v. Hershey State Bank, 207 Iowa, 147, 217 N.W. 459, 222 N.W. 450; Lindbloom v. Employers' etc. Assur. Corp., 88 Mont. 488, 295 P. 1007; Cowell Lime Cement Co. v. Santa Cruz County Nat. Bank, 82 Cal.App. 519, 255 P. 881; Minnesota L. Tr. Co. v. Busby, 84 Mont. 373, 275 P. 761; Campbell v. Gowans, 35 Utah, 268, 100 P. 397, 414, 19 Ann. Cas. 660, 23 L.R.A. (n.s.) 414; Easton v. Littooy, 91 Wn. 648, 158 P. 531; Catlin v. Reed, 141 Okla. 14, 283 P. 549, 67 A.L.R. 1410; Gioso v. Di Bell, 88 Colo. 287, 295 P. 919; Eldridge v. Finnegar, 25 Okla. 28, 105 P. 334, 28 L.R.A. (n.s.) 227; Keyworth v. Nevada Packard Mines, 43 Nev. 428, 186 P. 1110. If recognized principles of ratification are applied, appellant should prevail.
It may be that the record is insufficient to prove an express agency but unquestionably it does establish agency by implication. Wales v. Mower, 44 Colo. 146, 96 Pac. 971; Stark v. Stephens, 76 Colo. 550, 233 Pac. 619; Frost v. Fisher, 13 Colo. App. 322, 58 Pac. 872; Hahn v. Alexander, 87 Colo. 353, 287 Pac. 855; Galligan v. Schapiro, 82 Colo. 423, 260 Pac. 519; Gioso v. Di Bell, 88 Colo. 287, 295 Pac. 919. If Siener had disclosed this agency, the Giggals would have required the production and cancellation of the original note. In order to avoid such disclosure and its consequences, Siener forged a similar note and caused the Giggals to believe it to be genuine and to make payment thereof.