Case Name: McCaughey et al. v. Smith et al.
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1863-06
Citations: 27 N.Y. 39
Docket Number: 
Parties: McCaughey et al. v. Smith et al.
Judges: 
Reporter: New York Reports
Volume: 27
Pages: 39–44

Head Matter:
McCaughey et al. v. Smith et al.
The holders of a promissory note, without the knowledge or consent of the indorser, procured a third person to subscribe it for the purpose of adding to their security. The subscription was the same in form as if he had been an original maker. This is not such an alteration as to vitiate the note or discharge the indorser.
Appeal from the Supreme Court. Action upon a promissory note. The facts were as follows: When the note was presented to the referee,- on the trial, it was in these words and figures, viz.:
“ $200. Ninety days after date, for value received, I promise to pay to the order of Origen Smith two hundred dollars, at the office of W. C. Curry & Co., Erie, Pa. Westfield, June 22, 1859.
(Signed) “ W. H. Hungerford,
. “ Alfred Hall.”
(Indorsed) “ Origen Smith.”
But when the note was indorsed by Smith, the name, W. H-Hunger ford, was not signed to it; and the words, “ office of W. C. Curry & Co.” were not in it. A blank was left for the insertion of the place of payment; and the referee found that Smith authorized Hall to fill it in the manner he did, with the words, “ office of W. C. Curry & Co.” Hall delivered the note to the plaintiffs in exchange for goods they sold and delivered to him and Hungerford at or about the day of its date. Afterwards, and before the note became due, Hunger-ford, at the request of the plaintiffs, subscribed his name to the same, for the purpose of adding- the security of his name with that of Hall to the plaintiffs, and without any other intent, and without the knowledge or consent of the defendant, Smith. Smith was the only party to the note who defended the action. •
The referee decided , that the plaintiffs were entitled to recover the amount of the note. After judgment in their favor, Smith appealed to the court at general term in the eighth district, where the judgment was reversed, and a new trial ordered, costs to abide the event. The plaintiffs appealed to this court from the order granting a new trial. The case was submitted on printed briefs.
A. Dixon, for the appellants.
Kingsbury & Young, for the respondent

Opinion:
Emott, J.
The question of the manner or effect of the insertion of the place of payment is not before us. The referee has found, as a fact, that Smith indorsed the note, having no place of payment stated in it, and that it was to be filled up with the name of a bank in Erie, Pa., and it was so filled up with the name of a banking house at that place. There is no exception to this finding, and it disposes of the objection that the place of payment was inserted in the note without authority. So also the question of notice of non-payment of the note, if it was open to the defendant upon the present answer, is disposed of in the same way.
The main question in the case is the effect upon the indorser's liability of the addition of Hungerford's name to the note. 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 party 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. (Parsons on Bills and Notes, vol. 2, p. 556, Gardner v. Walsh, 5 El. & B., 82.) In the case of Chappell v. Spencer (23 Barb., 584), the doctrine was applied in its strictest form, to vitiate a negotiable note whose holder had added his name as joint maker, instead of indorsing it, upon negotiating and obtaining the money upon it.
There is a difference between the present case and these, however, which must not be lost sight- of. The referee finds in this case that the note was transferred .to the plaintiff for goods sold, in its original condition, as the note of Hall, indorsed by Smith, and as declared upon in the complaint. Afterwards Hungerford, at the request of the plaintiffs, for-the purpose of adding the security of his name, subscribed his name to the note. This made no alteration of the terms of the contract, of course, as to the amount, or time or place of payment. It was not adding a joint maker, because the note had been made and negotiated. It was subscribing to become security upon a note already made and negotiated. Hunger-ford was not named in the original contract, and was not a party to it: He made a new contract with the holders of the note, as security for the maker, after the contract of the maker was completed. I do not see how he could become a maker of a note already made and delivered. If he could be held at all, I think, it must have been by treating him as guarantor. If this were so, the case is out of the rule; for a guaranty of a note is not an alteration of it,'or of the maker's contract on it. I therefore disagree with the conclusion of the Supreme Court on this point.
I am led to the conclusion that the order for a new trial should be reversed.
Denio, Ch. J., Davies, Wright and Selden, Js., concurred, without passing upon the question as to the character of Hungerford's liability.