Builders' Lime & Cement Co. v. Weimer
| Decision Date | 18 February 1915 |
| Docket Number | No. 29892.,29892. |
| Citation | 151 N.W. 100,170 Iowa 444 |
| Court | Iowa Supreme Court |
| Parties | BUILDERS' LIME & CEMENT CO. v. WEIMER. |
OPINION TEXT STARTS HERE
Appeal from District Court, Scott County; M. F. Donegan, Judge.
This action is on a note in words following:
+--------------------------+
¦“$2,500.00.¦Feb. 1, 1907. ¦
+--------------------------+
Six months after date we promise to pay to the order of Mueller Lumber Company, or bearer, twenty-five hundred and no/100 dollars at Iowa National Bank of Davenport, Iowa. Value received, with interest at the rate of 6% per annum.
[Signed] Concrete Construction Company,
By Cecil E. Bryan, President.
No. ______. Due ______.
A. W. Weimer.
On back:
Concrete Const. Co.,
By Cecil E. Bryan, Pres.
Cecil E. Bryan.
J. S. Wilbert.”
The defendant Weimer, answering, alleged that he signed his name as surety following Wm. Weimer and Brown to enable the Concrete Construction Company to purchase lumber of the payee to enable it to complete certain contracts; that the payee refused to to take the note; and that thereafter the Concrete Construction Company fraudulently obliterated the words “order of” in said note and inserted, after the words “Mueller Lumber Company,” the words “or bearer,” in said note, and for this reason he is not liable thereon. For reply, plaintiff alleged that said Weimer was a joint maker, denied any alteration, and averred, if any there was, it was made by defendants or their agent, and was without the knowledge of plaintiff, and the cause was submitted on findings of fact made by the trial court as follows:
(1) That the note sued on, plaintiff's Exhibit A, was signed by the defendant A. W. Weimer on the face thereof.
(2) That at the time the defendant signed said note it read payable “to the order of Mueller Lumber Company.”
(3) That after said note had been signed by the defendant, A. W. Weimer, it was left in the possession of the Concrete Construction Company, by being left in the possession of Cecil E. Bryan, president of said company.
(4) That after said note had been signed by the defendant A. W. Weimer, and left in the possession of said Cecil E. Bryan, the words “order of” were stricken out by being crossed out in ink, and the words “or bearer” were inserted on the face of said note immediately after the words “Mueller Lumber Company.”
(5) That the said change in said note was made by said Cecil E. Bryan and without the knowledge or consent of the said defendant A. W. Weimer.
(6) That after said change had been made in said note it was indorsed on the back thereof as follows:
“Concrete Const. Co.,
By Cecil E. Bryan, Pres.
Cecil E. Bryan.
J. Wilbert.”
(7) That after said note had been changed and indorsed as set out in findings 4 and 6 above, and before maturity, it was delivered to and accepted by the plaintiff Builders' Lime & Cement Company, in part payment of an indebtedness owing to said plaintiff by the Concrete Construction Company for material furnished.
(8) That at the time said note was delivered to and accepted by plaintiff said plaintiff released and delivered to said Concrete Construction Company an order for $2,000, which said company had previously given plaintiff upon the principal contractor of the Hotel Davenport building.
(9) That, at the time said note was delivered to and accepted by plaintiff, said plaintiff had no knowledge nor information that said note had been changed in any manner after being signed by the defendant A. W. Weimer, or the other signers on the face thereof.
As conclusions of law, the court found the alteration material that plaintiff was holder in due course and entitled to enforce payment according to the original tenor of the note. Judgment was entered accordingly. Defendant A. W. Weimer appeals. Reversed.
Cook & Balluff, of Davenport, for appellant.
J. A. Hanley and Lane & Waterman, all of Davenport, for appellee.
[1] The note when signed by defendant Weimer, he being the last to sign, was payable to the order of the Mueller Lumber Company, and thereafter was changed by erasing “order of” therein, and inserting after the name of the payee the words “or bearer.” This was done without defendant's consent before its delivery, by Bryan, president of the Concrete Construction Company, the first signer, and the latter, Bryan and Wilbert, indorsed the same, and thereafter the note was delivered to the plaintiff for a valuable consideration and accepted without knowledge of the alteration. Any fraudulent alteration which has the effect of changing the negotiability of the instrument altered is material and avoids the instrument. Section 3060a125, Code Supp. Thus the fraudulent addition of the words “or order” or “or bearer” after the name of the payee, or the substitution of one of these phrases for the other, is material and vitiates the bill or note in which this is done. Needles v. Shaffer, 60 Iowa, 65, 14 N. W. 129;Croswell v. Labree, 81 Me. 44, 16 Atl. 331, 10 Am. St. Rep. 238; McCauley v. Gordon, 64 Ga. 221, 37 Am. Rep. 68; Walton Plow Co. v. Campbell, 35 Neb. 173, 52 N. W. 883, 16 L. R. A. 468;Booth v. Powers, 56 N. Y. 22;Haines v. Dennett, 11 N. H. 180. Contra, see Weaver v. Bromley, 65 Mich. 212, 31 N. W. 839. Such is the law with relation to alterations of a promissory note after delivery, and the rule is the same with respect to such alterations before delivery when made by the principal or payee without the consent of the surety or sureties signing accommodation paper in so far as these affect the rights of sureties. Bell v. Mahin, 69 Iowa, 408, 29 N. W. 331;Draper v. Wood, 112 Mass. 315, 17 Am. Rep. 92;McGrath v. Clark, 56 N. Y. 34, 15 Am. Rep. 372; 2 Daniels on Negotiable Insts. § 373a.
[2][3][4] They may insist on being held only on the strict terms of the contract. But there is not enough in the record before us to warrant the conclusion that Weimer signed as surety. The circumstance that the consideration passed to the Concrete Construction Company did not necessarily render him such, or prove that he was so liable. He must then be treated as one of the makers. If, as such, he intrusted the note with a comaker, and the latter altered the instrument before delivery, and it has passed into the hands of a holder in due course, the latter takes it freed from the infirmity on the theory that, whenever one of two innocent parties must suffer by the acts of a third, he who has enabled such third person to occasion the loss must sustain it. Manifestly, this doctrine does not apply to the original parties to the instrument, for then in that situation the minds of the parties can never be said to have met, for the payee or person receiving the instrument has taken it in its...
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