Case ID: ohio-st_54/html/0273-01.html
Source: Caselaw Access Project
Author: {"author": "Bradbury, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Newman et al. v. King.
    
      Promissory note — Date a material part — Alteration by payee renders instrument void.
    
    The date borne by a promissory note is a material part thereof; and if the payee, without the knowledge or consent of the maker, alter its date after the note has been delivered to him, such act renders the instrument void even in the hands of an 'nnocent indorsee for value.
    (Decided March 17, 1896.)
    ERROR to the Circuit Court of Morgan county.-
    This action was brought in the court of common pleas of Morgan county by the defendant in error, Charles J. King, as the indorsee of a promissory note, against the makers thereof, Ida Newman, Martha Martin and George Martin. The verdict and judgment of the court of common pleas was for the makers of the note. The cause was taken on error to the circuit court, where the judgment of the court of common pleas was reversed. One of the grounds of reversal was that the latter court erred in its instructions to the jury, as well as by its refusal to instruct the jury as requested by the plaintiff below. Thereupon the plaintiffs in error brought the cause to this court to obtain a reversal of the judgment of the circuit court and an affirmance of that of the court of common pleas.
    
      E. M. Stanbery and TannehMl & lyne, for plaintiffs in error.
    The note and the concurrent written contract constitute one and the same contract though on different papers. Jacobs v. Mitchell et al., 46 Ohio St., 601.
    A change of the date destroys the identity, and confuses the traces of his obligations, and every reason of policy and principle forbid that the laws should tolerate tampering with the rights and engagements of others. Daniel, Negotiable Instruments, section 1376; English v. Breneman, 41 Am. Dec., 96; Charlton v. Reed, 47 Am. Rep., 808; Lighter v. Bates, 22 Am. Dec., 92; Harsh v. Keppler, 28 Ohio St., 200.
    The question of a true or false date, or of an alteration to correct a mistake in the date of the note is not made an issue, by the pleadings, in this case. If it was desired to show that the note, at the time of its execution didn’t bear the date intended by the parties, the defendant in error should have set out in his replies that the note, by mistake, was not drawn in accordance with the intention of the parties, and that the correction was made in conformity to such intention. Evans v. Foreman, 60 Mo., 450.
    An alteration of the date of a note by the payee thereof without the knowledge or consent of the makers thereof so as to make the date of the note correspond to the date originally agreed upon by the parties thereto, is a material alteration and avoids the note .even in the hands of an innocent holder. Brown v. Straw, 29 Am. Rep., 369; Thompson on Trials, section 1395.
    And the rule holds even though the alteration be made with honest intent, in order to conform the note to the agreement of' the parties. The alteration vitiates the note regardless of the intention. Bowers v. Jewell, 2 N. H., 543; Markham v. Gonastan, Cro. El., 627; Brandt on Guarantyship and Surety, section 331; Wood v. Steel, 6 Wall., 80; Am. and Eng. Ency. of Law, 510; Haskell v. Champion, 30 Mo., 136.
    
      MoElhiney db Hanford, for defendant in error.
    1. Was any alteration made after the note was executed? and,
    2. Was such alteration material or immaterial?
    Many questions enter the consideration of every claimed alteration. One important one being the intent, was not it done in good faith and to corrects mistake? And if so done- and it does in fact correct a mutual mistake made by the parties to the instruments, we contend that it is immaterial. King sought to make the proof in this case through Frampton that the note was written, signed and delivered on Monday, June 23, 1890.
    Frampton said in answer to question 15, that the note originally bore date of June 22. Then to show a reason for a change of date, the question was put, Was June 22, 1890, a true or false date for that note? The answer to this question accounts for the change made, and makes the change consistent with honesty of purpose, and negatives the idea of fraudulent designs, and as throwing light on this transaction should have been permitted to go to the jury.
    Assuming that this change was made after the note was signed, and assuming it was made by Frampton, yet the defendant in error says the alteration would be an immaterial alteration; that the change, whenever made, was made to correct an error; that, in fact, it did correct an error; that it was done in good faith, neither fraud nor prejudice having been charged in the pleadings or soug’ht to be proved on the trial of the cause. Daniel on Negotiable Instruments, 2 vol. sections 1403 and 1404. Dennison v. Jessup, 1 Disney, 580; Jessup v. Dennison, 2 Disney, 150; Duker v. Franz, 3 Am. Rep., 314; Ames v. Colburn, 11. Gray, 390; Derby v. Thrall, 8 Am. Rep., 389; Fuller v. Green, 54 Am. Dec., 600; Harst v. Wagner, 22 Am. Dec., 255 ; parsons on Contracts, 2 vol. section VII., at pages 717, 718, 719 and 720; Huntington & McIntire v. Finch Co., 3 O. S., 445; Wait’s Actions and Defenses, vol. 6, page 474, section 11, page 487, section 5, and page 493, section 16; Greenleaf on Evidence,. vol. 1, section 565; Fullerton v. Sturgis, 4 O. S., 586. The presumption is the alteration is made with good motives. 48 Ohio St., 296; Parsons on Bills and Notes, vol. 2, page 569.
   Bradbury, J.

The promissory note, the subject of this action, was executed, by Ida Newman, Martha Martin and George Martin, and delivered to the payee, J. C. Frampton. By successive indorsements, made in due course of business and before due, the note was transferred to defendant in error, Charles J. King, for value.

The makers of the note answered, contesting, among other defenses, its validity on the ground that the payee, after its delivery to him, and without their consent and knowledge, altered its date from June 22, 1890, to June 23, 1890. This was denied by the holder of the note, defendant in error, in his reply. Upon the issue thus arising, and after the testimony bearing thereon had been given to the jury, the holder of the note, defendant in error, requested the court to charge the jury as follows:

“If the jury find from the evidence that J. C. Frampton ■ did alter the date of this note from June 22, 1890, to June 23, 1890, and further find that such alteration was only for the purpose of making the note bear its true date, and that such alteration did in fact make such note bear its true date, then such alteration is an immaterial alteration, and is not a good defense in this action,” but the court refused to so charge as requested, to which' refusal the plaintiff' at the time excepted.

Thereupon the court charged the jury upon this point as follows: “Now I say to you as matter of law in this case, gentlemen, that if you shall find from the evidence in this case that since the defendants signed the note sued upon in this action, the same has been altered by the payee thereof J. C. Frampton, without the knowledge or consent of either of these’defendants, by changing the date thereof from June 22, to June 23, that such alteration and change would, in law, amount to and would be a material alteration, and such alteration would render the note void as to these defendants, and would operate to discharge them from all liability thereon, although you may believe from the evidence that the plaintiff took the note in the regular course of business before due, for a valuable consideration and without notice of such alteration. ” To which charge as given the plaintiff at the time excepted.

The verdict and judgment were against the validity of the note. This judgment the circuit court reversed on the ground, among others, that the court of common pleas erred in refusing to charge the proposition requested, and in charging as it did upon the subject. This is the only question arising on the record of sufficient importance to require attention. That the date borne by a promissory note is a material matter is not seriously contested. That it is material, we think, clear upon both reason and authority, the time of payment and the bar of the statute of limitations both depend upon its date. If the date of a promissory note may be changed one day, why not two days? If two days are not material, what number shall be held material? No satisfactory answer can be made. By changing its date the identity of the instrument is destroyed, and it is no longer the contract made by the parties. Bowers v. Jewell, 2 N. H., 543; Wood v. Steele, 6 Wall., 80; Inglish v. Breneman, 5 Ark., 377; Miller v. Gilleland, 19 Pa. St., 119; Brown v. Straw, 6 Neb., 536.

The authorities bearing upon this proposition are quite numerous, but to cite them further would be a work of supererogation.

If by reason of the alteration it has ceased to be the contract of the parties, the defense thus aris ing is available against an innocent purchaser Charlton v. Reed, 61 Iowa, 166; Cronkhite v. Nebeker, 81 Ind., 319; Haskell v. Champion, 30 Mo., 136; Wood v. Steele, 6 Wall., 80. Other authorities could be cited, but we do not think it at all necessary to support by an extended list of precedents, a proposition so obviously consistent with sound reason.

The defendant in error contends that, although the date which a promissory note bears may be a material matter, yet that as the note in controversy, according to the intention of all the parties to it, should have been dated June 23d, instead of June 22d, 1890, an alteration made by the payee honestly and in good faith after its delivery to him, that merely caused the instrument to express the date intended, even if done without the knowledge or consent of the makers, would not render the note void. This contention finds support from reputable authorities. In Decker v. Franz, 7 Bush. (Ky.), 273, a promissory note had been dated in 1868, and the payee altered the date to 1869 by changing the figure “8” to “9” without the knowledge or consent of the maker. The court maintained the validity of the note on the ground that in its altered condition it conformed to the intention of the parties. The same doctrine is maintained in Mississippi. McRaven v. Crisler, adm’x, 53 Miss., 542; in Maine, Hervey v. Harvey, 15 Me., 357. In the latter case, however, great weight was given to the fact that the maker knew of the mistake, while the other parties did not, and the court' seemed to be of opinion that his attempt to avail himself of the alteration as a defense constituted a fraud upon the plaintiff. Ib., 359; Clute v. Small, 17 Wend., 238; Bowers v. Jewell, 2 N. H., 543.

Other cases, cited as sustaining this doctrine-do not support it to the extent claimed for them.

Thus, in Johnson v. Johnson's estate, 66 Mich., 525, which was an action to charge the estate of the principal maker of a promissory note for the debt evidenced thereby, a note had been given on October 23, 1876, for the balance due on account stated between the parties, but by mistake was dated October 23, 1875. The trial court found that the payee honestly,, and with no fraudulent intent, changed the “5" to a “6.” This was done without the knowledge or consent of the makers. After-wards the principal made two payments on the note, upon which circumstances some stress was placed by the court, although it does not appear that he knew of the alteration, when the payments were made. The wife of Johnson had signed the note as surety. The court seemed to be of opinion that the alteration changed the contract and discharged the wife, for the court said “the fact that Mrs. Johnson was not bound by the note would not discharge her husband for whom she signed as surety. ” The claim was allowed against the estate of the principal. The reasoning of the court is not very clearly set forth, but sufficient appears to show that the decision was quite as m.uch due to the theory that the original considertion, the account stated, would support the claim as to any other principle, the. court saying: “And furthermore the account stated, which was the foundation of the note would form a new basis of indebtedness.”

In some cases the alteration was sustained on the ground that it was made by an agent of the maker, or drawer, before delivery. Brett v. Pecard, Ryan & Moody, N. P., 37; Van Brunt & Slaight v. Eoff, 35 Barb., (N. Y.), 501. In other 'cases the note or bill of exchange was held valid, notwithstanding the insertion of a word without the knowledge of the maker or drawer, upon the ground that the word inserted was implied by the contents of the instrument.

The question raised by the instructions given and refused, relate solely to the effect to be given to a promissory note, after its date has been altered by the payee without the knowledg*e or consent of the maker.

The question is one of public policy. Doubtless, all minds will concur in the proposition that after a written instrument has been altered in a material matter, it no longer retains its identity; it is in fact a new contract, and imposes obligations and secures rights different from those it imposed or secured at its origin. Nor will any reasonable mind contend that one of the parties to a written instrument may alter it without the consent of the others so that it will express anything not intended by the parties. The contention is, however, that it may be altered by one party, alone without the knowledge or consent of the others, if in its altered condition, it conforms to the intention of the parties, and the alteration was honestly made; and that, that being true, it may be enforced in its altered condition. The reasoning is that, as, in its changed condition, it expresses the intention of the parties, no injury has been done by the alteration. That, no doubt is true, in every case of an alteration in so far as it concerns the parties affected by it. If, in its altered state, it requires the obligor to do the particular thing he agreed to do, mo personal wrong has been inflicted on him. In this view of the matter the number and extent of the alterations are immaterial, for, however great and numerous they may happen to be, the instrument in its changed condition requires the' obligor to do just what he promised, and therefore, in good conscience, ought to do. The question, however, does not rest solely upon this aspect of the matter. Regard should be had to the policy of maintaining the integrity of written instruments; particularly those whose character, or nature, is such that their possession and custody belong to one party only.

" * Promissory notes are of this class. This policy, we think, denies to the custodian of a written instrument,- to whose possession its nature necessarily confides it, the power to alter its terms in any-material matter whatever, in order that it may conform to his notion of what the parties intended when it was executed.

Deliberate tampering with written instruments by their obligees upon any pretense whatever should not be encouraged. If the right to do so in respect to any material matter should be established the principles by which satisfactory limits can be fixed to such right are not apparent. And if established, the nature of the right is such that probably it would be rarely exercised by the prudent and conscientious custodian of a written instrument in any ease; but instead it would be used chiefly if not altogether by those at whose hands its exercise would be fraught with peril to the integrity of written instruments, namely, those who, if not actually unscrupulous, are at least regardless of the rights of others.

Where, by mistake, a written instrument does not conform to the intention of the parties, and they cannot agree respecting the mistake and its correction, an adequate remedy has been provided according to the principles of "equity jurisprudence, by courts having jurisdiction to correct such mistakes where rules of evidence appropriate to establish the fact of mistake are prescribed and enforced.

In this state an alteration appearing on the face of a promissory note is presumed to have been made at or before the time of its execution, and the burden of proof is east upon one who seeks to establish the contrary; Franklin v. Baker, 48 Ohio St., 296, and this seems to be the rule that gen-' erally prevails throughout the United States. Bailey v. Taylor, 11 Conn., 531; Speake v. U. S., 9 Cranch, 37; Wickes v. Caulk, 5th Harr. & John., 36.

This presumption, that, an alteration appearing on the face, of a written instrument was made at or before its execution, is an additional and obvious reason for denying to the custodian of any instrument to which the presumption applies, any authority to' change its terms in a material respect.

Otherwise a party by his own act may change the burden of proof and thus deprive the other party of a valuable right. Before the alteration was in fact made, should he have sought a correction through the medium of a court of justice, the burden would have rested upon him to establish the mistake by clear and convincing evidence. Having made the alteration, when, perhaps years after-wards,- he seeks the enforcement of the instrument in its altered state, this ex parte act, by its inherent force, raises a presumption that the alteration had been made at or before its execution, and thus the burden of establishing the fact that the alteration was made afterwards, is thrown upon the party who alleges it.

Ve are not at this time concerned as to the effect that a material, though innocently made, alteration of a written instrument may have upon the rights of the beneficiary in it, to recover on account of the original consideration moving between the parties, nor with his right to restore the instrument to its original condition and to enforce it when thus restored. Because the only question raised by the record relates to the right to recover upon the instrument itself in its altered condition; for the instructions given and refused by the trial court, to which exceptions were taken, bore upon this last question only.

The action was brought by an indorsee who sought a recovery upon the instrument itself. The makers denied that the instrument was the one they had executed, because its date had been altered without their knowledge or consent. This was the is she. to which the instructions in controversy relate, and we think the court of common pleas laid down the correct rule upon the subject. The view we have adopted finds support among the text writers, and in the decisions of courts of high authority. Inglish v. Breneman, 5 Ark., 377; Charlton v. Reed, 61 Iowa, 166; Wood v. Steele, 6 Wall., 80; Haskell v. Champion, 30 Mo., 136-138; 1 Thompson on Trials, section 1395; Evans v. Foreman, 60 Mo., 449; Moore v. Lessee of Bickham & West, 4 Binn., 1; Miller v. Gilleland, 19 Pa. St., 119.

However, the judgment of reversal was not placed solely upon the ground of error in the charge given and refused, but rested, also, upon the action of the court of common pleas in excluding evidence offered by the defendant in error, plaintiff below, which evidence we think was material and competent.

Therefore, the judgment of reversal was correct and will be affirmed.

Judgment affirmed.