Aldrich v. Smith

• Decision Date: 23 October 1877
• Citation: 37 Mich. 468
• Court: Michigan Supreme Court
• Parties: Moses V. Aldrich v. Alpheus G. Smith, William Glue and Charles H. Hackley

37 Mich. 468

Moses V. Aldrich v. Alpheus G. Smith, William Glue and Charles H. Hackley

Supreme Court of Michigan

October 23, 1877

Submitted October 18, 1877

Case made from Muskegon. (Wheeler, J.)

Assumpsit. Plaintiff brings error. Affirmed.

Judgment affirmed with costs.

Norris & Uhl for plaintiff, cited the following cases in which unauthorized indorsements did not affect the instrument Seymour v. Mickey 15 Ohio St. 515; Josselyn v. Ames 3 Mass 274; Nevins v. De Grand 15 Mass. 436; Tenney v. Prince 4 Pick. 385; Austin v. Boyd 24 Pick. 64; Riley v. Gerrish 9 Cush. 104; Mitchell v. Culver 7 Cow. 336. One who signs or indorses a bill or note, in blank, and intrusts it to another to raise money on it, gives the latter implied authority to fill the blanks. Gillaspie v. Kelley 41 Ind. 160; Holland v. Hatch 11 Ind. 497; Spitler v. James 32 Ind. 202; Rich v. Starbuck 51 Ind. 88; Goodman v. Simonds 20 How. 361; Mitchell v. Culver 7 Cow. 336 n.; Hance v. Miller 21 Ill. 636; Croskey v. Skinner 44 Ill. 321; Redlich v. Doll 54 N.Y. 234; Abbott v. Rose 62 Me. 194; Rogers v. Poston 1 Metc. (Ky.) 643. An alteration not apparent on inspection, and made before any one has legal claim upon the paper as holder or payee, and while in the hands of one of the promisors, is presumed to have been made by consent of the others. Eddy v. Bond 19 Me. 461; Munroe v. Eastman 31 Mich. 283; Sirrine v. Briggs Id. 443. An alteration by a stranger or by a party adversely interested will not defeat an instrument; there must be fraud by the holder. Fullerton v. Sturges 4 Ohio St. 529; Worrall v. Gheen 39 Pa.St. 388; Hunt v. Gray 35 N.J. 227; Murray v. Graham 29 Ia. 520; Collins v. Makepeace 13 Ind. 448; Henfree v. Bromley 6 East 310; Hall v. Fuller 5 B. & C. 750; Bigelow v. Stilphen 35 Vt. 521; Van Brunt v. Eoff 35 Barb. 501; United States v. Spalding 2 Mas. 478. If an alteration was honestly made, or can be reasonably accounted for as made under some mistake or with the supposed assent of the obligor, it should not avoid the obligation; but if fraudulently made, and with a view to gain any improper advantage, the fraudulent party should lose the right to enforce his original contract at law. Adams v. Frye 3 Met. 109. A bill or note must not be altered after issue, Gardner v. Walsh 85 E. C. L. 83, i. e. after it comes to one capable of enforcing it, Matson v. Booth 5 M. & S. 223; Spicer v. Burgess 1 C. M. & R. 129; Hudson v. Revett 5 Bing. 368; Downes v. Richardson 5 B. & Ald. 674; Bingham v. Reddy 5 Ben. 266; 2 Pars. on Notes and Bills 573; Byles on Bills 256. It is not a material alteration to insert the name of the payee where the name is left blank 2 Daniel on Negot. Inst. § 1403; 2 Pars on Notes & Bills 570, or to change a contract from several to joint where the remedy is not affected, Eddy v. Bond 19 Me. 461; or to interline the words "or either of us" in a note made by two. Miller v. Reed 27 Penn. St. 244.

Eggleston v. Kleinhans for defendants. Any alteration which changes the legal effect of a note (1 Greenl. Ev. § 565) or which may alter a promisor's liability without his consent, is material, 2 Pars. on Notes & Bills 564, as, changing the order of indorsements, Slagle v. Rust 4 Gratt. 274; or adding the name of another maker, Gardner v. Walsh 32 Eng. L. & Q. 162; Bank of Limestone v. Penick 5 T. B. Mon. 33; Pulliam v. Withers 8 Dana 98; Harper v. State 7 Blackf. 61. See Bradley v. Mann ante p. 1; Booth v. Powers 56 N.Y. 30; Mahaiwe Bank v. Douglass 31 Conn. 170; Portage Bank v. Lane 8 Ohio St. 405; Schwalm v. McIntyre 17 Wis. 232.

Campbell, J. Cooley, C. J. and Graves, J. concurred. Marston, J. did not sit in this case.

OPINION

Campbell, J.

In this case Aldrich sued Smith as maker and Glue and Hackley as joint endorsers of two notes which he had discounted for Smith purporting to be payable to the endorsers jointly, but which in fact when endorsed were payable only to the order of William Glue, the first endorser.

Smith had requested a discount from Aldrich on Glue's endorsement of his paper for the amount of these two notes some days before this paper was executed, which was declined. He then offered to procure Hackley's endorsement, and plaintiff agreed to make the discount. The parties all lived at Muskegon.

On the 23d of December, 1875, Smith drew up and signed these notes payable to Glue's order, and between this and the 25th Glue endorsed them. On the 25th Hackley endorsed them by signing his name under Glue's, with no knowledge of their destination except a supposition that they were to be discounted. On the 25th of December Smith without the knowledge of either endorser inserted Hackley's name after Glue's in the body of the notes, thus making them payable to the order of Glue and Hackley in the same blank space of the printed notes, which were all in his handwriting, and in this form negotiated them to Aldrich on the 27th of December.

Smith acted on the supposition that he was only supplying an oversight of Hackley's, and with no dishonest purpose. Neither endorser knew of the change till after the protest of the first note.

Upon this the court below held the endorsers discharged.

We have been strongly pressed with plaintiff's equities, but we are unable to distinguish this case from any others where the paper sued upon is not the paper which defendants signed. They were not parties personally to any dealing which made it wrongful or negligent conduct not to inform themselves that their contract had not been altered. It was complete when they signed it, and they had no reason to suppose it would be changed. All legal as well as business presumptions are that paper will not be tampered with, and plaintiff is in no worse condition from an honest than from a dishonest alteration made without his knowledge. Every one who takes negotiable paper in any shape whatever trusts to the express or implied assurance of genuineness given by the person from whom he receives it. That is one of the risks of dealing in such paper, and there is no reason whatever why he should be preferred to other...