Case ID: ohio-st_21/html/0163-01.html
Source: Caselaw Access Project
Author: {"author": "White, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Samuel Wallace and Hiram Park v. Alexander M Jewell.
    1. A promissory note in the form, “ I promise,” <fcc., and signed by several parties as makers, is joint as well as several.
    2. After the delivery of a joint and several note, the addition of the name of a third person as maker, with the privity of the holder, but without the consent of the original signers, vitiates the note as to the latter; otherwise, if the new party, through inadvertence or mistake, signed so as, prima facie, to indicate that his name was added in the character of maker, when in fact such was not the intention.
    3. Where a note has been materially altered, it is error for the court, in its charge, to make the legal effect of the alteration depend on what the holder conceives tobe its effect, or on his design as to the future use of the note.
    Error to the court of common pleas of Mahoning county» Reserved in the district court.
    On March 19, 1866, Jewell filed his petition in the court of common pleas, against “Almon Rany, Bostic Rany, (under name and style of Rany Bros.,) Hiram Park and Samuel Wallace defendants,” on a promissory note, of which the following is a copy:
    “ $2,000. “Youngstown, Dec. 4, 1863.
    “ Five months after date, I promise to pay to the order of A. M. Jewell, two thousand dollars at my mill in this place, with ints. at seven per cent per annum, value received.
    “ Almon Rant.
    “Rant Bros.”
    Indorsed “ Hiram Park.”
    “ Samuel Wallace.”
    The petition states that Park and Wallace indorsed the note at the time it was made and before delivery.
    The plaintiff asked judgment against the defendants for the amount of the note and interest, less a payment of $1,000, August 10, 1864.
    Bostic Rany, as one of the firm of Rany Bros., and partner of Almon Rany, answered, that the plaintiff ought not to recover against Rany Bros., for that the signature of Rany Bros, was affixed to the note, at the request of the plaintiff long after the note became due, and that the plaintiff did not,, within a reasonable time or at any time, demand payment of the note of the original makers, and give notice of nonpayment, &c.
    
    Wallace and Park answered separately: 1st. That they severally signed the note upon the back thereof as indorsers for Almon Rany the maker, and not as original signers, and that the plaintiff failed to demand payment of the maker of the note, and give notice to these defendants of non-payment <fcc.; and, 2nd. That they signed the note as indorsers for Almon Rany, and that, without their knowledge or consent, the note was materially altered, after it was delivered to the-plaintiff, and while he held it, and after it became due, in this, that the signature “Rany Bros.” who were not original makers of the note, was affixed to the face thereof.
    The plaintiff replied to the separate answers of Wallace and Park : 1st. That they severally signed the note as makers thereof, and as sureties for Almon Rany who was principal, and that they were all liable as makers ; and 2d. That whileBostic Rany had the note in his hands to indorse thereon the $1,000 payment, he, without the consent of the plaintiff, but against his protest, and without consideration, attached to the note the signature, Rany Bros., and that signature being attached to the note under those circumstances did not render Rany Bros., or any member of that firm, liable on the-note, and did not in fact or law alter the note in any respect or affect the liability of Wallace and Park thereon.
    In reply to the answer of Bostic Rany, the plaintiff stated the same facts, substantially, as are stated in the 2d reply to the answers of Wallace and Park.
    Afterward the plaintiff dismissed his petition as against Bostic Rany and Rany Bros, and took judgment against Almon Rany by default.
    The issues between the plaintiff and Wallace and Park were tried to a jury, and the verdict was against the plaintiff, and be took a second trial, under the statute.
    Before the second trial, the plaintiff filed an amended petition against Almon Rany, and Wallace and Park, stating that the defendants made and delivered the note to the plaintiff; that Wallace and Park signed the note on the back thereof as makers, at the time of the making of the note, and before it was delivered to the plaintiff; that the name of Rany Bros, was affixed to the note after its execution, without any consideration whatever, without the consent of the plaintiff, and that no liability exists on the part of Rany Bros., and no relief is sought against them, but that the amount of the note less the $1,000 payment, is due to the plaintiff from the defendants, and judgment is asked accordingly.
    Wallace and Park, in answer to the amended petition : 1st. Deny that they ever signed the note set up in that petition ; and, 2d. Say that, as accommodation indorsers, only, for Almon Rany, they signed a certain note similar in all respects to the one sued upon, except the name Rany Bros, was not signed thereto when the same was delivered to the plaintiff; that the plaintiff had, at the time the note was delivered to him, full knowledge of the character in which these defendants signed the note ; that after it was delivered to the plaintiff he procured Rany Bros, to sign it; that the note they signed is the one set forth in the amended petition ; they deny that the name Rany Bros, was affixed to the note without the procurement of the plaintiff, and deny that no liability exists on the note on the part of Rany Bros, by reason of their signing the note. They set up the bringing of this suit jointly, against Almon Rany, these defendants, and Rany Bros, upon their signature ; aver that the alteration is material, and was made without the knowledge or consent of these defendants or either of them, and was procured by the plaiutiff, with full knowledge of the facts, and was made in fraud of the rights of these defendants.
    To the second defence of this answer of Wallace and Park, the plaintiff replies : that they did not sign the note as indorsers only, but signed it as sureties; denies that he procured or requested Rany Bros, to sign the note or consented to it; denies that the firm put the signature to the note, but avers that it was the unauthorized act of Bostic Rany after the note was due, and was without consideration, validity or obligation; avers that his attorney in bringing the suit included Rany Bros, with the others, through misapprehension of the facts ; that the action had been dismissed as to Rany Bros. ; denies that the alteration is material or affects Wallace and Park in any manner; and denies all alleged fraud or intention to defraud, &c.
    The cause was again tried to a jury, and the respective parties having given evidence tending to sustain the issues on their respective parts, the defendants Wallace and Park requested the court to charge the jury that the putting the name Rany Bros, to the note after it was delivered to the plaintiff, without the knowledge or consent of these defendants, and at the request and procurement of the plaintiff, was a material alteration of the note, and would discharge these defendants from liability on it; and that it was not necessary to the materiality of the alteration that it should necessarily prejudice these defendants, nor that the' proof should show them to have been in fact damnified by the alteration, for that, occupying the position of sureties,, they might insist on the very terms of their contract; and that, if the jury should find from the evidence that they signed the note before it was delivered to the plaintiff, as accommodation indorsers or sureties, and that the name Rany Bros, was signed to the note without the knowledge' or consent of these defendants, and by the request, procurement or consent of the plaintiff, after the note was delivered to him, they were discharged from liability upon it.
    The court refused to so charge the jury; but did charge them, among other things, that putting the name Rany Bros, on the note, after delivery, was a material alteration; but that the jury should inquire: first, whether the change was consented to by the plaintiff, either at the time it was made, or afterward; that such consent might be proved by his acts and words, at the time, or afterward ; that if the plaintiff did not consent to the change, then the change is of no importance in the case, and no further attention need ber given to the matter; but if he did, then the jury are to inquire, as to the intention and state of mind of the plaintiff in doing so; that if, when the change was consented to by the plaintiff, he conceived that the apparent obligation of the previous parties thereto, by their previous signatures, would be changed thereby, or if he consented to it, designing to use it, as imposing such other obligations, then the note, as to the parties before the court, would thereby be made void; but that if the change was made, after the note was due, and consisted only in adding the name Rany Bros., under that of Almon Rany, without change in the face of the note; and if, at the time of consenting to the change, he did not conceive that the apparent obligations of the parties, by their previous signatures, would be affected by the change, and did not design to use the paper, as imposing new obligations; but acted only from the intention to acquire additional security upon the note, then it would not thereby be avoided. The court charged no further upon these points.
    To the refusal to charge as requested, and to the charge as given, Wallace and Park excepted.
    The verdict and judgment were for the plaintiff, and Wallace and Park filed their petition in error in the district court, and the case was therein reserved to this court for decision.
    
      Thomas W. Sanderson for plaintiff in error:
    1. The alteration of the note, by the addition of the name Rany Bros., after the complete execution and delivery of the note to Jewell, is a material alteration; and if the same was made by Jewell, or consented to by him, at the time, or afterward, and not assented to by the plaintiffs in error, at the time, or afterward, they are discharged thereby. 5 B. Monroe, (Ky.) 25; 8 Dana, (Ky.) 98; Gardner v. Walsh, 32 Eng. Law & Eq. 162; Master v. Miller, 4 Term Rep. 620; Same case, 1 Smith’s Lead. Cas. pt. 2, (6 Am. ed.) 1141, marg. page, 934; Woodworth v. Bank of America, 19 Johns. 391; 18 B. Monroe, (Ky.) 528; 33 Misso. 406; 17 Ind. 161; 20 Ind. 139 ; 19 Iowa, 521; Parsons on Bills and Notes, 551-61; 13 N. H. 386 ; 9 Ohio St. 443 ; Chadwick V. Eastman et al, 53 Maine, 12.
    2. If the alteration was material, and was made as stated above, it was error in the court, to charge that the jury were to inquire, “as to the intention and state of mind of Jewell,” in consenting to the alteration. The plaintiffs in error were discharged by the alteration, no matter what the intention and state of mind of Jewell at the time. Fay et al v. Smith, 1 Allen, 477, 478 ; Lee v. Stairbird, 55 Maine, 491; Chappell v. Spencer, 23 Barb. 584; Brownell v. Winnie, 29 N. Y. 400. Also, the cases cited in support of the first proposition.
    3. The plaintiffs in error are sureties upon the note, and as such, have the right to insist upon the very terms of their contract; and, therefore, the court below, after charging that the alteration was a material one, erred in refusing to charge, as requested by plaintiffs in error, that they were thereby discharged. Greenough v. Smead, 3 Ohio St. 415 ; Seymore v. Mickey, 15 Ohio St. 515 ; Sturges & Hale v. Williams, 9 Ohio St. 443, 449 ; Ludlow v. Simonds, 2 Caine’s Cases. 1; Woodworth v. Bank of America, 19 Johns. 422 ; Hall’s Admx. v. McHenry, 19 Iowa, 521; 2 Ves. Jr. 540; 18 Ves. 20; 9 Wheaton, 680; 1 Gilmer, 149; 3 Call, 69; McMiken v. Webb, 6 How. U. S. 292; Smith v. U. S. 2 Wallace, 219; 4 Wash. C. C. R. 26; U. S. v. Boyd, 15 Peters, 187 ; Leggett v. Humphries, 21 How. 66 ; Gardner v. Harback, 21 Ill. 129; Gardner v. Walsh, 32 Eng. Law & Eq. 162.
    
      Hutchins <& Glidden for defendant in error :
    1. The affixing the signature Rany Bros., to the note was not a material alteration of the note.
    One ot the strongest tests of the materiality of an alteration is given in Gardner v. Walsh, 32 E. L. & Eq. Rep. 162, 166, which is that the altered instrument, “supposing it to be genuine, would operate differently from the origina' instrument.”
    
      This note was not a joint or joint and several, but peculiarly a several contract only. The terms are, “ I promise to pay,” at “ my mill, in this place.”
    And when we consider that the words I promise to pay .at my mill, are only in the singular, and then find the note .signed in the singular “ Almon Rany,” and then below, in the plural, “Rany Bros.,” two things are apparent, at least, prima facie, — that it is the promise of Almon Rany; and that Rany Bros, are sureties or guarantors for him.
    "We claim, first, that the putting the name Rany Bros, to the note, by one member of that firm, ■ without authority from his co-partner, and without any consideration, to bind either partner, was not an alteration of the note, from the fact that it did not bind either of the new parties, and therefore was a mere nullity, and therefore did not affect the prior parties, or make the instrument operate any differently as to them.
    And, second, even though binding upon the new parties, still neither the original contract, nor the prior parties are affected by it, for the reason that such new signatures to a several note after maturity, still leaves it several, and the contract and the liability of the original parties j ust as before.
    There may be more reason for holding a different doctrine in case of a joint or joint and several note, but where it is simply several, we submit that both reason and authority are with our proposition.
    See Cobb v. Titus, 10 N. Y. 198, 202; Brownell v. Winnie, 29 N. Y. 400, 408 ; Chitty on Bills, 188 ; Stone v. White, 8 Gray, 589; Hughes v. Littlefield 18 Maine, 400, 402; Miller v. Reed, 27 Penn. St. 244; McCaughey v. Smith, 27 N. Y. 39, 41; Muir v. Demaree, 12 Wend. 468.
    2. But even if the addition of the words, “Rany Bros.,” was, in law, a material alteration of the note, and made with the consent of the plaintiff, the note was not thereby vitiated as to the prior parties, if made under the circumstances, and with the motive and intent supposed by the charge of the court. 2 Parsons on Bills, 569 to 571; Masters v. Mil
      
      ler, 4 Term Rep. 320; Nevins v. Delgrand, 15 Mass. 436 ; Adams et al v. Frye, 3 Metc. 103 ; Smith v. Dunham, 8 Pick. 246 ; Ames v. Colburn, 11 Gray, 390 ; Clute et al v. Small, 17 Wend. 238 ; Bowers v. Jewell, 2 N. H. 543; Thornton v. Appleton et al. 29 Maine, 298; Beaman’s Admr. v. Russell, 20 Vt. 205; Montgomery R. R. Co. v. Hurst, 9 Ala. 513; 1 Greenl. Ev. §§ 564, 568 ; Cole v. Hills, 44 N. H. 227 ; Huntington and McIntire v. Finch & Co. 3 Ohio St. 445 ; 1 Smith’s Lead. Cas. pt. 2 (6 Am. ed.) 1165 ; Fullerton v. Sturges, 4 Ohio St. 529 ; Roper v. Birkbeck, 15 East, 17 ; Seymour & Co. v. Mickey, 15 Ohio St. 515; Bamberger Com. &c. Ins. Co., 15 C. B. 693; Granite Railway Co. v. Bacon, 15 Pick. 239 ; Bouzer v. Rendell, 31 Ind. 128 ; Murray v. Graham, 29 Iowa, 520.
    
      B. F. Hoffman, also, for defendant in error:
    The note, as written, was several in two respects, to wit: “ I promise to pay,” &c.“ at my mill,” &c. signed individually by Almon Eany on the face, and by Wallace and Park severally on the bach, before delivery, thus making them sureties to Almon Eany.
    The placing of this character “Eany Bros.” under the signature of Almon Eany, long afterwards, without consideration, under mere proffer of additional security, with no bad intent, or intent to affect or injure the other signers in any respect, did not constitute a change or alteration of the previous contract, in fact or in law. Brownell v. Winnie, 29 N. Y. 400 ; Stone v. White, 8 Gray, 589 ; Thornton v. Appleton, 16 Maine, 298 ; Greenl. Ev. 607, § 566.
    A material alteration of a note by the holder does not discharge a prior party, necessarily, unless fraudulent. 1. Greenl. Ev. §§ 564-568 ; 20 Vt. 211; 3 Mich. 103, 107, 8 ; 11 Gray, 390 ; 3 Penn. St. 388 ; 29 Maine, 298 ; 17 Wend. 238 ; 3 Ohio St. 445, 447, 450 ; 4 Ohio St. 535 ; 15 Ohio St. 522.
    When the holder of a note, after delivery, procures another person to sign it, it is not such a material alteration as to discharge the prior parties. 18 Maine, 400 ; 12 Wend. 468 ; 8 Gray, 589 ; 27 N. Y. 39 ; 29 N. Y. 400 ; 31 Barb. 241 ; 10 N. Y. 198.
   White, J.

This case is before us on error to tbe charge of the court as to the effect of the alleged alteration of the note, or the liability of the plaintiffs in error, who were the defendants below. The alteration consisted in adding, by the procurement or with the consent of the plaintiff, who was the payee, the name of an additional party as maker, after the note had been delivered as a perfect instrument against the original signers.

In passing on the correctness of the charge, it is important to ascertain the character of the note before the alleged alteration, and the relation to it of the original parties.

Leaving out of view the defence of Park and Wallace that they signed upon the agreement that they were only to become bound as accommodation indorsers, which must have been found against them by the jury, the three held the relation to the note of original makers, Almon Rany being the principal, and Park and Wallace his sureties. Seymore v. Mickey, 15 Ohio St. 515 ; Same v. Same, 10 Ohio St. 283.

The question as to the character of the note, has reference to whether it was joint as well as several. It is claimed on behalf of Jewell, the plaintiff below, that it was only the several note of the parties, and that the addition of another maker in no way affected its legal character. The ground of this claim is that the pronoun “I,” is used in the body of the note ; and, it is said, that this makes it the note of each signer, but not the j oint note of all. The opinion in Brownell v. Winnie, (29 N. Y. R. 408,) is cited as sustaining this claim.

We cannot assent to this view. The language “I promise,” &c., makes the note the joint or united as well as the several contract of all the signers. The pronoun represents the signers collectively as well as severally. The contention in the earlier cases was that such a note was joint only, but we have found no case in which such a note has been declared not to be joint, except that of Brownell v. Winnie, supra. Marsh v. Ward, Peake’s R. 130 ; Clerk v. Blackstock, 1 Holt’s N. P. 474; Hemmenway v. Stone, 7 Mass. 58 ; Ladd v. Baker, 6 Foster, 76 ; Story on Prom. Notes, § 57; Byles on Bills, p. 6.

There is nothing in the pleadings or the bill of exceptions indicating that the addition of the name of u Rany Bros.” was made for any other purpose than of adding an additional maker to the note. The charge assumes that to have been the character of the addition ; for it states that the putting the name on the note after delivery, wasamatorial alteration.

If the object had been to guaranty payment, or to furnish additional security otherwise than by becoming or assuming to become a joint maker, there could be no objection to the accomplishment of such object. The new agreement, in such case, would be a collateral one, and it would leave the integrity of the original note unaffected. Nor do we suppose the case would be altered, if, in giving such security, the new party should, by mistake or inadvertence, sign the note in such way as to indicate, prima facie, that he was an original promisor, the real intention being otherwise. Such a case would fall within the principle decided in Ex parte Yates, 2 De Gex and J. 191.

In regard to what is said in the note as to the place of payment, we consider the stipulation as having no other effect upon the obligations of the parties than as specifying the place of payment. The meaning would be the same, if, in speaking of the mill, the name of the owner had been used instead of the possessive pronoun “ my.”

It is a general rule of law, that the unauthorized material alteration of a written instrument by the holder, or with his consent, .vitiates it as to non-consenting parties. The policy of the rule is to preserve the integrity of legal instruments by taking away the temptation of tampering with them.

But it is contended that the adding the name of an additional maker to a promissory note, although the instrument may at the time be held as a valid subsisting obligation against the other makers, does not constitute a material alteration. We are unable to accede to this position.

The question directly arose in Gardner v. Walsh, (5 El. & Bl. 84) and was there fully considered ; and it was held by the court, (overruling Calton v. Simpson, 8 A. & E. 136,). that the addition of the name of another as maker was a material alteration, and, if made after the note was issued, would avoid it. In the opinion in that case it is said : “If, after the note is a perfect instrument, according to the intention of the parties, as the joint and several promissory note-of the defendant and Elizabeth Barton, and after it had been completed, issued and negotiated,’ the plaintiffs, without the consent of the defendant, had caused it to be signed by Alice Clarke, as a joint and several maker, along with the-defendant and Elizabeth Barton, according to principle and authority, he is discharged from his liability upon it. There would be no difficulty in showing that, under certain circumstances which might have supervened, this alteration might have been prejudicial to the defendant. But we conceive that he is discharged from his liability, if the altered instrument, supposing it to be genuine, would operate differently from the original instrument, whether the alteration be or be not to his prejudice.”

The decision is but the application of the general principle in regard to the alteration of instruments, to the particular mode of changing their legal meaning and effect by-adding new parties without the consent of those originally bound. The principle is directed not against the mode but the fact of alteration.

The case of Gardner v. Walsh, has generally been followed both in this country and in England. 1 Smith’s L. C., Master v. Miller, notes, p. 956 ; Addison on Contracts, 812 ; 2 Pars, on Notes and Bills, 556 ; Thompson on Bills, &c., 112 ; Henry v. Coats, 17 Ind. R. 162 ; Bowers’ adm’r v. Briggs, 20 Id. 139; Hall’s adm’r v. Henry, 19 Iowa R. 521; Chadwick v. Eastman, 53 Maine R. 12 ; Shipp’s adm’r v. Suggett’s adm’r, 9 B. Monroe, 8 ; Chappell v. Spencer, 23 Barb. R. 584.

The case last named is said by counsel of the defendant in error to have been overruled by the cases of Cobb v. Titus, (10 N. Y. 199,) and by Brownell v. Winnie, supra. In each of these cases the action was against the new signer; and the case of Cobb v. Titus was decided several years before the case of Chappell v. Spencer.

The case of McCaughey v. Smith, (27 N. Y. 39,) is more nearly in point. In that case the action was against the indorser of a note to which the name of a new party, apparently as maker, had been added after the defendant’s indorsement and without his consent. The decision was by a divided court, five of the judges concurring and three dissenting. In the opinion of the majority, speaking to the point of the effect of an alteration, it is said: “It is certainly the result of the later authorities that the addition of another maker to a note, made by one or more parties, is a material alteration of the contract. Instead of being the several or the joint obligation of the original pai'ty or parties, it becomes the joint or joint and several ■ undertaking of different contractors. It is not material whether the change be prejudicial or the contrary; it is sufficient that it is material.” Gardner v. Walsh, and Chappell v. Spencer, are cited as supporting the doctrine. The opinion then proceeds to state that “there is a difference between the present case and these however, which must not be lost sight of;” and while the rule is not controverted, it is declared not to be applicable, in the opinion of the majority of the judges, to the case then before the court.

The rule applies of course only where the name of the new party is added in the character of maker.

Such an addition gives a different legal character to the instrument. The defendants might, by the altered condition of the note now in question, have been subjected to change of jurisdiction in the event of any litigation arising in relation to it between the parties. 9 B. Monroe, 7.

In regard to the suggestion of counsel that Rany Bros, were not bound, and the further observation that the adding of their names imposed no more legal liability upon prior parties than if their names had been forged to the note, we may remark, that no alteration, whether it amounts to forgery or not, is, in fact, binding upon the non-consenting parties. If the legal operation of the instrument in its altered condition is different from the one they executed, it is sufficient for them to say of the contract evidenced by the altered instrument, into this we never entered.

The charge in the present case assumed that the adding of the name of the new party materially altered the note, but made its legal effect depend on what the plaintiff at the time conceived to be its effect, and on what he then designed as to the future use of the note. This of course involved what he conceived to be the legal character of the note before the alteration. The effect of a material alteration is thus made to depend, not upon the actual fact as to the character of the instrument before and after the alteration, but upon the conceptions and design of the holder at the time of the alteration. If the parties intended to do what they have apparently done, added a new party to the note in the character of maker, its vitiating effect cannot be avoided by the conceptions of the plaintiff as to the character of the act, nor by his design in respect to the future use of the note.

Judgment reversed and cause remanded for a new trial.

Soott, C. J., and Welch, Day, and McIlvaine, JJ., concurred.