Bowen v. Laird

• Decision Date: 08 May 1906
• Docket Number: 20,800
• Citation: 77 N.E. 852,166 Ind. 421
• Parties: Bowen v. Laird
• Court: Indiana Supreme Court

77 N.E. 852

166 Ind. 421

Bowen v. Laird

No. 20,800

Supreme Court of Indiana

May 8, 1906

From Superior Court of Tippecanoe County; Henry H. Vinton, Judge.

Action by Abner T. Bowen against Leonard Laird. From a judgment for defendant, plaintiff appeals. Transferred from Appellate Court under § 1337u Burns 1901, Acts 1901, p. 590.

Reversed.

L. D Boyd, G. W. Julien and Everett & Everett, for appellant.

Wilson & Quinn, for appellee.

OPINION

Hadley, J.

Action by appellant, a bona fide indorsee, on a promissory note purporting to be payable at a bank. Answer, first, the general denial; second, non est factum. Reply to second paragraph of answer, admitting that the defendant did not execute the note in form as sued on, but alleging that he did execute a note in words, figures, blank space and line as follows:

"Otterbein, Indiana, October 21, 1890.

One year after date, I promise to pay to the order of Bernard & Hunter, $ 144 at -----, value received. Interest at eight per cent per annum after due until paid.

Leonard Laird."

That when the defendant executed the note to the plaintiff's indorser there was a long blank line and blank space after the word "at," as indicated above, that extended nearly the full length of the note, and before maturity, and before the same was indorsed to the plaintiff, the words "First National Bank, LaFayette, Indiana," were, by someone unknown to plaintiff, written upon said blank line after the word "at," the same being the note sued on; that when the note was delivered to the payees the defendant knew that the same was not a complete instrument, and that it could not be made a complete instrument until said blank line was filled out as aforesaid, and the defendant knowing that the same was not complete, and that it might be easily filled as it now reads and sold as commercial paper, negligently executed and delivered the same to said Bernard & Hunter; that the added words were written in the same handwriting and with the same colored ink as the other written parts of said note, and after said words were inserted the note was a completed instrument, and nothing appearing on the face, or other parts of the note, to discredit it, or to indicate that the same had been changed, or written at different times, the plaintiff, without knowledge of the subsequent filling of said blank, and without any reason to believe that it had been changed after its execution, in good faith purchased it from Bernard & Hunter, before maturity, in the usual course of business, and for full value, and without notice of any infirmity. To this reply the defendant's demurrer was sustained, and the plaintiff refusing to plead further judgment was rendered against him for costs, and he appealed.

There is nothing in the point that the court improperly entertained the reply to the answer of non est factum because the answer of non est factum closed the issue. It is true that a reply is not required to such a plea, but it is equally true that a reply may be filed in a proper case. Such an answer may be successfully avoided by facts which preclude the defendant from making such plea against the plaintiff. Here the reply to the second paragraph of answer rests wholly upon the principles of estoppel, and it was at least proper caution, if not necessary to reply, to make the facts set up available. Brickley v. Edwards (1892), 131 Ind. 3, 30 N.E. 708.

Was the insertion of the words "First National Bank of LaFayette, Indiana," on the blank line immediately following the word "at," by someone before its assignment, and without express authority from the maker, such an alteration of the note as will render it void in the hands of an innocent holder for value? There is no doubt but that the insertion of the words was a material alteration, which invalidated the instrument in the hands of the payee, effecting, as the words did, a complete change in the character of the note. Gillaspie v. Kelley (1872), 41 Ind. 158, 13 Am. Rep. 318.

But the rule seems to be well established that if a person signs and delivers a paper in blank, or partly in blank, as to date, payee, where payable, and the like, and which shows upon its face that such blanks must be filled to complete the paper in accordance with the general character of the instrument, the filling of such blank by the payee, with words and figures, appropriate and adequate to supply the deficiency, is not such an alteration as will invalidate the paper, as to one who takes it for value, and without notice, provided, the insertions leave the note fair upon its face, and without marks or evidence to arouse the suspicion of a cautious man. Gillaspie v. Kelley, supra; Marshall v. Drescher (1879), 68 Ind. 359; Gothrupt v. Williamson (1878), 61 Ind. 599; Cornell v. Nebeker (1877), 58 Ind. 425; Winter v. Pool (1894), 104 Ala. 580, 16 So. 543; Redlich v. Doll (1873), 54 N.Y. 234, 13 Am. Rep. 573; Cason v. Grant County Deposit Bank (1895), 97 Ky. 487, 31 S.W. 40, 53 Am. St. 418; Rainbolt v. Eddy (1872), 34 Iowa 440, 11 Am. Rep. 152; Weidman v. Symes (1899), 120 Mich. 657, 79 N.W. 894, 77 Am. St. 603; Wessell & Co. v. Glenn (1884), 108 Pa. 104; Canon v. Grigsby (1886), 116 Ill. 151, 5 N.E. 362, 56 Am. Rep. 769; Johnston Harvester Co. v. McLean (1883), 57 Wis. 258, 15 N.W. 177, 46 Am. Rep. 39; Lowden v. Schoharie County Nat. Bank (1888), 38 Kan. 533, 16 P. 748; 2 Cyc. Law and Proc., 163; 2 Am. and Eng. Ency. Law (2d ed.), 256.

Concerning the general subject the test of Mr. Daniel (2 Daniel Negotiable Inst. [5th ed.], § 1405) has been quoted approvingly by the highest court of at least five of the states, as follows: "When the drawer of the bill or the maker of the 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, and the instrument filled up with a larger amount or different terms than those which it bore at the time he signed it. * * * The inspection of the paper itself furnishes the only criterion by which a stranger to whom it is offered can test its character, and when the inspection reveals nothing to arouse the suspicions of a prudent man, he will not be permitted to suffer when there...