Court Opinion

ID: 7984429
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:24:03.198147+00
Date Added: 2024-06-11T16:35:09.134996
License: Public Domain

Simrall, J.,
delivered the opinion of the court.
To the bill brought by R P. Bay, to enforce an agricultural mortgage, executed to him by Shrader, the latter set up three defenses :
First. A material alteration of the note sought to be collected, by reason whereof it became void.
Second. That Bay did not deliver all the houses and tenements on the leasehold premises, according to his contract, and in consequence of his failure the defendant did not realize as much crop as he would had he got the houses.
Third. The note of Bay, purchased from Mitchell, is set up, by way of counterclaim as offset against his demand.
The Chancellor concurring that the first defense had been established, decreed that the note and mortgage be canceled.
*329We have recently held, that if the defendant, in his answer relies for any cause, upon the voidness of the instrument relied upon by the complainant for recovery, he cannot have affirmative relief of cancellation, unless he makes his- answer a cross bill. But if it be shown that such instrument, from whatever cause, cannot support a right of recovery, the chancery court can do no more, in such state of the pleadings, than to refuse a decree, enforcing the instrument and dismissing the bill. The effect of such decree, dismissing the bill, on final hearing, on the merits, is conclusive upon the parties, on all the matters properly put in issue. If the chancery court was right, therefore, in its conclusion, that the promissory note had been altered by the complainant, or with his privity, it erred. in the form of the decree pronounced.
The answer and the proof leave it in uncertainty and doubt, as to the time of pleading the indorsement on the back of the note, and of its erasure. The legal consequence of the alteration of a memorandum or indorsement on the back of the paper depends very much on its character. It is laid down by Parsons' Bills and Notes, vol. 2, 544, that words written on the back of the note are no part of the body thereof, prima facie, but are presumed to be done after the note is completed. . And hence an erasure need not be explained in pursuing a remedy solely on the body of the note. The test of the materiality of such memoranda or indorsement on the back of the instrument is, the time and the intent and purpose of it. If made before or at the time of the execution of the instrument, it may be parcel of it, and may control the obligation in some important particular.
In the early case of Brooke v. Smith, Moor, 679, which was debt upon an obligation to save harmless certain lands from all incumbrances made by the obligor, upon the back, was a memorandum, that the condition should not extend, to an extent of a statute acknowledged by the obligor to a certain person. Here the memorandum was parcel of the condition — being a written *330explanation of the intent of the parties — and limiting the operation of the' condition. There are many cases to the same point. Steadman v. Purchase, 6 D. & E., 737; Burgh v. Preston, 8 D. & E. 483; Jones v. Fales, 4 Mass, 245; Hartley v. Wilkinson, 4 S. & M., 25; Leeds v. Lancashire, 2 Com., p. 205; Fletcher v. Blodgett, 16 Vermont, 26; Springfield Bank v. Merrick, 14 Mass., 322. If such memoranda are at the foot or on the back of the note or other instrument, when executed, they constitute a part of the contract. But being disconnected from the body of the instrument to which the maker’s name is signed, it forms no original part of it, until shown to have been upon it when executed.
In this case the words written on the back of the note and •signed by Bay, which have been erased, by lines drawn across them, are to the effect that two hundred and fifty dollars are to be paid January 1, 1872, and the like sum January 1, 1873. If that indorsement was made before the note was signed, it would operate, to divide the note into two payments, and would change the body of the paper, which made the entire $500 fall due January 1st, 1872.
Shrader, in his testimony, gives this account: “After arriving at the magistrate’s office, Bay proposed to write out two notes for .-$500 each, so that the notes would correspond with our written agreement, then he proposed to indorse on the back of the notes that he would wait for the $250 until the first of January, 1873, which he did.” The agreement referred to is dated the 7th of .June, 1871, by which Bay sold out to Shrader his interest in the lease of the Bichland plantation, for the time and on the conditions therein specified, also the use of his teams, wagons, etc., for fjj>500, payable January 1st, 1872, and $500 January 1st, 1873. The evidence is that the two notes of $500 each, were given at the same time with the mortgage, in August, 1871, but were dated so as to correspond with the agreement of purchase, June 7th, 1871. There was no stipulation in this agreement for mort*331gage security. But doubt was expressed in it, whether Bay could hold for the five years, and provision was made, that if the lease failed, deduction should be made from the last instalment. Bay was not examined as a.witness, and the only evidence about the alteration of the contract comes from Shrader himself. There was a pending dispute between Shrader and Bay, because of the refusal of the latter to surrender possession of some houses, and there is testimony that serious damage resulted to Shrader from that cause. The execution of the mortgage and notes in August, seems to have been intended by the parties, to be a settlement of their differences, Shrader to secure his debt, and Bay to divide the first note into equal installments, by indorsing a writing on the back of it to that effect. The fair reading of Shrader’s testimony is that such was the understanding, and that the indorsement was made before the execution, and constituted a parcel of the contract. The fact that Bay did not testify and deny this explanation of the matter by the other party, would warrant the deduction that he acqueisced in it.
The most of the margin of the paper upon which the indorsement was written has been torn off, but the name of Bay still appears upon it, is signed to it, with lines of erasure drawn across.
We do not think this paper can be made the foundation of a right to recover, nor do we think, without a cross bill, that the defendant could ask for positive affirmative relief.
It has been more than once held in this court, that if the defendant seeks more than a defeat of th'e relief sought by the complainant on the mortgage, or other instruments, the foundation of his claim — -suchas a cancellation of it or them — so as to set them entirely aside, and thereby prevent the possibility of future annoyance therefrom, be can only obtain such relief by a cross bill.
So much of the decree, therefore, as directs and orders that the “ said mortgage be canceled as to the said cotton seized,” “and that the said note be canceled,” is reversed and set aside; but *332that the said decree, in each and every other particular, is affirmed.