Court Opinion

ID: 7137671
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:25:45.016773+00
Date Added: 2024-06-11T16:14:41.295726
License: Public Domain

Nunn, J.
(dissenting). This action was instituted by appellant to recover of appellee the sum of $4,000 with interest, as evidenced by a promissory note. The note in its form when this suit was instituted was as follows:
“$4,000.00. Paducah;, Ky., Peby. 19, 1907.
“Pour months after date I promise to pay to the order of Thompson, Wilson & Co.- four thousand dollars at office of Diamond Distilleries Company, Cincinnati, Ohio, value received. • -S. B. Gott.”
It was executed on a blank, printed form which was as follows:
*598“$............ Paducah, Ky.,...............1907.
‘ ‘.................after date...........promise to pay to the order of ..'........................ .......... dollars at ............................ value received. Due..............”
When appellee signed and executed the note it was as follows:
“4000.00. Paducai-i, Ky., Feby. 19, 1907.
“Four months after date I promise to pay to the order of Thompson, Wilson & Co. four thousand dollars at ......................................... .........., value received. S. B. G-ott.”
Thus it will be seen that all the blank Fpaces in the printed form were filled when the note was executed, except the last one which follows the word “at.”
Appellee alleged that the note had been materially altered without his knowledge or consent after he signed and delivered it to the payee, by adding, immediately after the printed word “at,” these words: “office of Diamond Distilleries Company, Cincinnati, Ohio.” This alteration was shown by the evidence without any contradiction to have been made without the knowledge or consent of appellee and with the knowledge and consent of appellant’s managing agent in the absence of appellee. It was further shown without contradiction that appellee, in accordance with an agreement with the payee of the note, Thompson, Wilson & Co., made weekly payments to them on the note from its date until he had paid the claim before its maturity, and of this agreement appellant’s managing agent was apprised at the time he took the note from Thompson, Wilson & Co. as collateral.
*599The lower court gave only one instruction to the jury, which is as follows: “You will find for the plaintiff $4,000, the amount of the note sued on, with interest thereon from July 20, 1907, unless you shall believe from the evidence in this case that the words ‘office Diamond Distilleries Company, Cincinnati, O.,’ were inserted in said note without the consent of defendant, and with the knowledge and consent or approval of the plaintiff or its agent, and, if you shall so believe from the evidence in this case, then you will find for the defendant.” Appellant asked only one instruction, and it was refused, which is as follows: “The jury will find for the plaintiff unless they believe from the evidence that the plaintiff, or its authorized agent, directed or made the alteration complained of by inserting the words ‘ office Diamond Distilleries Company, Cincinnati, Ohio.’ ” It will be observed that both instructions mean in substance the same. The court’s instruction used the words “and with the knowledge and consent or approval of the plaintiff or its agent,” while the one offered used these words, “that the plaintiff or its authorized agent directed or made the alteration complained of,” etc. There is no difference in the language of the two instructions in so far as the legal aspect of the case is concerned. It was immaterial whether plaintiff or its agent made, directed, consented to, or approved the alteration. The one expression or the other had the same legal effect as applied to the issue involved. The questions were: Was the alteration material? This was conceded. Was appellant present, or did he authorize or consent to the change? This was negatived by the testimony,'and was without contradiction. This left the only question to be determined: Did the appellant or its agent either *600direct- or make the alteration, or was it or its agent present when the alteration was made, and consented to and approved it? If it or its agent was present and did either one of these things, the effect npon its right to recover is the same.
Appellant concedes that the alteration of the note was material, but contends that appellee cannot avail himself of it as a defense, for the reason that he executed the note with a blank space, and that the holder had the implied authority to fill it with the words used, and cites many decisions of this and other states showing that, when one signs a paper in blank and delivers it to another, the person who thus signs and delivers such a paper makes the one to whom it is delivered his agent with implied authority to fill the blank. This is conceded to be the law, but that question is not involved on this appeal. The note was not signed in blank nor delivered to one as agent with either expressed or implied power to do anything whatever to complete the transaction. In the case at bar a complete instrument — a plain note of hand — was signed and delivered to a creditor, evidencing the amount of his debt and the date of its pajnnent. As executed by the appellee, the note showed that it was' made in Paducah, that it was a Kentucky contract, and was to be governed by the laws of this state. The date of the note, the amount, when to be paid, and the name of the payee were all given. In fact, there was nothing to be added to make it a complete and binding contract. The note as executed is evidence of the fact that it was to be paid in the city of Paducah, where'the parties to it then and had long resided; and there was nothing in the face of it to indicate to any reasonable mind that appellee, the maker, had constituted the- payee, *601either expressly or impliedly, his agent to add anything to it to complete the transaction. On the contrary, the blank space rather indicated the contrary to any person who understood the transaction and situation of the parties to it. Certainly there was nothing that would indicate to a reasonable mind that appellee had authorized the payee to change the place of payment from Paducah to another state or foreign country. If the alteration of the note had been made by the payee without the knowledge or approval of appellant or its agent, the rights of tlio parties would have been different. In addition to the face of the note showing that it was to be paid in Paducah, appellant’s agent was informed at the time that there was 'an agreement between the payor and payee that it was to be discharged by the date of its maturity by weekly payments by the maker to the payee.
"We quote from the testimony of John G; Rinkliff, a stockholder and manager of Thompson, Wilson & Co., which shows that appellant’s managing agent was informed of this fact. He testified as follows: “Q. At the time that the words, ‘office of the Diamond Distilleries Company, Cincinnati, Ohib,’ were put on that note, where was yon? A. I forget whether I was at the Palmer House or- at our office one or two of the places. I was with Mr. Anderson, the representative of the Diamond Distilleries Company, at the time. Q'. And yon were with Mr; Anderson? A. Yes; and we discussed the'matter. I told him Mr. Gott owed ns this money, and that he could have that as a collatéral, and Mr. Gott would be paying off the indebtedness, and I would be taking up his paper as he would pay me. Isays: '‘The best way to do is to put it in here, payable' at the office *602of tlie Diamond Distilleries Company, at Cincinnati, so as not to have the paper thrown down here on these banks.’ * * * A. As I said awhile ago, we owed the Diamond Distilleries Company '$12,000 or $13,000 when that arrangement was made, and when we went into bankruptcy we only owed them $6,000, and made the agreement with Anderson we was to pay-— (Objected to by plaintiff.) Q. Made an agreement you was to pay how? A. So much every week, and Mr. Gott was to pay me every week some money, and I told Mr. Anderson he would be paying me on that right straight along and I would be taking up his paper. ’ ’
We cannot understand upon what principle appellant should be permitted to make appellee pay this note the'second time; when it was present'when the alteration was made and approved it, and the note on its face shows that it was a complete and binding obligation; that it needed no additional words to make it complete, and the blank space, under the circumstances, was sufficient to put appellant’s agent on inquiry, and he would have learned just what he was told; that is, that it was the understanding and agreement between the payor and payee that the note was to be paid in Paducah by weekly payments, which was complied with by appellee to the latter without any knowledge on his part of the assignment of the note to appellant. It would not be right to allow appellant to recover on this note when it knew these facts, especially when it is evident from the testimony that it kept silent with reference to the assignment and received appellee’s money which was paid to it through Thompson, Wilson & Co. as per the agreement testified to by Rinkliff, and their debt by this and other means was reduced from $13,000 to $6,000.
*603We have not been able to find any statute or opinion by any court authorizing a recovery under such state of facts. Appellant’s counsel cite the case of Cason v. Grant County Deposit Bank, 97 Ky. 487, 31 S. W. 40, 17 Ky. Law Rep. 344, 53 Am. St. Rep. 418, as a case in point which authorizes appellant to recover in the case at bar. That case is unlike the case before us. In that case the note was executed by Cason to one Siddons, who filled the blank spaces and assigned the note to the bank for value. The bank had no knowledge or information as to any private agreement between Cason and Siddons as to the place of payment, nor did it know when the alteration was made, and therefore did not approve it with the knowledge that the change had been made. The following quotations from that opinion will show that it cannot apply to the case at bar, to wit: “Where one signs a paper in blank or partly in blank when so written when signed and delivered as to show upon its face that a blank is left to fill up as to amount, or where payable, there is an implied authority to the holder to fill up the blank in accordance with the general character of the instrument, and, when this is done by the payee, it is not such an alteration as will invalidate the paper as to one who takes it for value without notice of its infirmity.” In the same opinion the court quotes with approval from Mr. Daniel’s work on Negotiable Instruments, as follows: “ ‘That when the drawer of a bill or the maker of a note has himself by careless execution of the instrument left room for any alteration to be made, either by insertion or erasure, without defacing it, or exciting the suspicions of a careful man, he will be liable upon it to any bona fide holder without notice, when the opportunity which he has afforded has been embraced.’ ”
*604In the case at bar appellant bad full knowledge of the manner, time, and place of payment, as understood by the parties to the paper when it took the note as collateral, and appellee is entitled to make the same defenses against it in the hands of appellant, as he would be entitled to make if it were in the hands of the original payee.
For these reasons, I dissent from the opinion, but concur in the affirmance.