Case Name: Marquis H. Moore, Appellant, v. Macon Savings Bank et al., Respondents
Court: Missouri Court of Appeals
Jurisdiction: Missouri
Decision Date: 1886-06-28
Citations: 22 Mo. App. 684
Docket Number: 
Parties: Marquis H. Moore, Appellant, v. Macon Savings Bank et al., Respondents.
Judges: 
Reporter: Missouri Appeal Reports
Volume: 22
Pages: 684–695

Head Matter:
Marquis H. Moore, Appellant, v. Macon Savings Bank et al., Respondents.
Kansas City Court of Appeals,
June 28, 1886.
.1. Principal and Surety — Alteration of Instrument — Case Adjudged. — An alteration of an instrument is something by which its meaning or language is changed, either in a material or immaterial particular. If what is written upon or erased from the paper, containing the instrument, have no tendency to produce this result, or to mislead any person, it cannot be said to be an alteration. .Morrill v. Otis, 12 N. H. 478). A valid parol agreement between the holder of a note and the principal in the note, without th<j surety’s consent, for the extension of the time of the payment (É the note will release the surety, because thereby the surety’s contract is changed. But the indorsement of such an agreement upo» the back of the note is not an alteration of the note itself; it does not purport to alter in any particular the meaning or language of the note. The indorsement on the instrument in this case was only a memorandum of the agreement between the plaintiff and the bank, and comes within the rule that if the new writing is a mere memorandum outside of the note, it is not an alteration, and the indorsement here is not alteration of the instrument.
■%.--Extension of Time — Consideration for Such Agreement-Case Adjudged. — In this state, an instrument drawing a specified rate of interest before maturity, draws the same rate after maturity. The agreement for extension of time, in this oase, was made after the maturity of the instrument, and the promise to pay the same rate of interest as that drawn by’ the instrument was not sufficient, without more, to support the agreement for an extension of time, since it was merely a promise to do what the principal was already bound to do. Nor was the allowance of compound interest on the instrument, every six months, in this ease, a sufficient con sideration to support the agreement; the undertaking to allow compound interest every six months was prohibited by statute, and was invalid. The agreement for extension was, therefore, invalid,- and the surety was not released thereby.
3. Practice — Pleading—Inconsistency.—A plea of general denial- and a plea of ratification are not inconsistent under our system of pleading, if both may be true. The plaintiff, in this case, could deny that the act done was an alteration or extension, and then • plead that the othe party acquiesced in and affirmed the act, whatever its effect or purport was.
Appeal from Adair Circuit Court, Hon. Andeew Ellison, Judge.
Reversed, and remanded.
Statement of case by the court.
This action was begun in March, 1882, in the Macon circuit court, and, on change of venue, was taken to the Adair circuit court.
This suit was brought upon the following written instrument.:
“[No. 4285.] Maoon, Mo., October 14, 1873.
“The National Savings Bank of Macon, Mo.
“Mr. H. M. Moore has deposited in this bank one thousand dollars, payable to himself, on the return of this certificate, sixty days after date, with interest at the rate of ten per cent, per annum for the time specified.
“ J. B. Melone, Cashier.
“$1,000.00. A. L. Shobteidge.”
The whole evidence showed that Melone, for the Macon Savings Bank, borrowed the money for sixty days, and that Shortridge signed the instrument as surety.
As shown by the evidence, the following may be stated as facts: When the note became due, or shortly thereafter, Moore called at the bank for his money. The bank wished to hold the money for a longer time, and Melone and Moore then made a new contract and agree ment, by which the bank was to keep the money for a longer time upon the payment, semi-annually, of ten per •cent, interest per annum. The plaintiff Moore testified that he made the new agreement and contract upon the express understanding and condition, agreed to by Melone, that Shortridge should not thereby be released .as surety. The new arrangement was then indorsed by Melone, in plaintiff’s presence, upon the back of the note in this manner:
“Compound interest to be allowed on the within every six months.
“ J. B. Melone, Cashier.”
There was evidence tending to show that Shortridge knew nothing of the new arrangement, or of its indorsement upon the note, until after the failure of the bank in 1882.
The court, of its own motion, instructed the jury as follows:
“It is admitted by plaintiff that Shortridge signed the instrument sued on as security.
“If, therefore, the jury believe, from the evidence, that some months after the instrument became due, to-wit: In September, 1874, following, the plaintiff Moore took this instrument to the bank for payment, and that then and there it was agreed by and between plaintiff Moore and Jas. B. Melone, cashier of the bank ; that the plaintiff Moore would permit the bank to keep the money for a longer or indefinite time, by the payment of ten per cent, interest thereon, to be compounded every six months, and thereupon the cashier of said bank indorsed upon said note the following language, or agreement, to-wit; “ Compound interest to be allowed on the within every six months.
“(Signed) J. B. Melone, Cashier.
“And that plaintiff Moore then and there put the instrument in his pocket, and kept it, never presenting it íor near seven years thereafter, and that the said Short-ridge, the seonrity, did hot know of said extension of ■time and change in the instrument, as indorsed thereon ■and consent thereto, then the jury will find a verdict for the defendant Shortridge.”
The jury found for defendant Shortridge. The bank •defendant made no defence.
Berry & Thompson and F. M. Harrington, for the- appellant.
I. The indorsement on the back of the note was a void collateral contract, forbidden bylaw; it did not bind the bank ; the cashier had no authority to make it, and was an unauthorized, executory contract to pay usury. It did not bind the bank, nor bind it to any extension of time of payment, and was no alteration of the original instrument. Rev. Stat., sect. 2728; Morse on Banks (2 Ed.) 11, 151; Stilwell v. Aaron, 69 Mo. 539; Henry v. Marksberry, 57 Mo. 399; Daniel on Neg. Inst. (2 Ed.) sect. 1312; Hunt v. Postlewaite, 28 Ia. 427; Lawrence v. Johnson, 64 Ill. 351; Field on Corp. 266; Angell & Ames on Corp. (9 Ed.) sect. 297.
II. The contract to pay interest compounded twice .a year was invalid. This cannot be done. If the time of payment was extended, there was no consideration for it. 2 Daniel on Neg. Inst., sects. 1318, 1322.
III. The time of extension must be definite and .fixed. 2 Daniel on Neg. Inst., sect. 1319; Stilwell v. Aaron, 69 Mo. supra; Bucklen v. Huff, 53 Ind. 474; Hays v. Wells, 34 Md. 512.
IV. The court improperly submitted to the jury an issue on the plea of non est factum. The answer is not verified by affidavit.
John F. Williams, with Sears & C-uthrie, for the .respondent.
I. Any alteration of a written instrument, after ■delivery, however immaterial in its nature, and however innocently made, without the consent of all the parties, vitiates the instrument in this state. Bank v. Fricke, 75 Mo. 178; Morrison v. Garth, 78 Mo. 434; Hord v. Taubman, 79 Mo. 101; Moore v. Hutchinson, 69 Mo. 429 ; German Bank v. Bunn, 69 Mo. 429; Capital Bank v. Armstrong, 62 Mo. 59; Frans v. Foreman, 60 Mo. 449 ; Haskell v. Champion, 30 Mo. 136.
II. The surety is only bonnd by the terms of his contract, and if these are varied without his consent, it is no longer his contract, and he is not bound by it. Bank v. Leavitt, 65 Mo. 562; Stilwell v. Aaron, 69 Mo. 539; Wild v. Howe, 74 Mo. 551; Newcomb v. Blakely, 1 Mo. App. 289.
III. The indorsement on the certificate was not usurious nor void, and was a good and valuable consideration. Compare sects. 2727 and 2728, Rev. Stat. ; Montang v. Rock, 10 Mo. 506; Farmers’, etc., Bank v. Harrison, 57 Mo. 503.
IV. But if the agreement were usurious, appellant cannot avail himself of it. The statute gives that right solely to a defendant. Rev. Stat., sect. 2727; Billington v. Wagoner, 33 N. Y. 31; Lemmon v. Whitman, 75 Ind. 318; Hamilton v. Prouty, 50 Wis. 592; Scott v. Harris, 76 N. C. 205. Even on a plea of usury by defendant (and there is no such plea in this case), the agreement, under the statute, is binding, for legal interest. But the promise to pay a legal rate, for an extension of time, without any payment of interest in advance, constitutes a good consideration, and will discharge. the surety. Brandt on Suretyship, etc., sect. 307; Wood v. Newkirk, 15 Ohio St. 295; Berry v. Pullen, 69 Me. 107; 31 Ohio St. 637.

Opinion:
Berry & Thompson and Harrington, on
motion for re-hearing.
I. The memorandum here is no part of the note, and is not to be construed in connection with the note, but independent of it.
II. The memorándum imports no change or alteration of the instrument. It was a new contract. But that sort of agreement was no agreement at all, whether written on the note or elsewhere. It was nothing, and effected nothing.
I.