Capital Bank v. Armstrong

Decision Date31 January 1876
Citation62 Mo. 59
PartiesCAPITAL BANK, Appellant, v. D. H. ARMSTRONG, et al., Respondents.
CourtMissouri Supreme Court

Appeal from St. Louis Circuit Court.

A. M. Gardener, with S. Knox, for Appellant, cited Nedecker et al. vs. Cochran, Am. Law Reg., Nov. 1875, p. 697; Chapman vs. Rose, 56 N. Y., 137; Seybel vs. Nat. Currency Bk., 54 N. Y., 288; Bank vs. McCoy. 69 Penn. St., 204; Zimmerman vs. Rote, 75 Penn., 188; Woolfolk vs. Bank of America, 10 Bush, [Ky.] 517; Phelan vs. Moss, 67 Penn. St., [17 P. F. Smith], 59; Garrand vs. Haddan, 67 Penn. St. [17 P. F. Smith], 82; Trigg vs. Taylor, 27 Mo., 248; Young vs. Grote, 4 Bingh., 253; Bank of Commonwealth vs. Curry, 2 Dana, 142; Muskgrove vs. Eldred, 9 Wall. 544; Mich. Ins. Co. vs. Leavenworth, 30 Vt., 11; Nebecker vs. Cutsinger, 48 Ind., 436; Rumbolt vs. Eddy, 34 Iowa. 440; Lake vs. Reed, 29 Iowa, 258; Swift vs. Tyson, 16 Pet., 1; Goodman vs. Symonds, 20 How., 452; Magee vs. Badger, 34 N. Y., 247; Dow's Ex'rs vs. Spenny's Ex'rs, 29 Mo., 386; Bank of U. S. vs. Dunn, 6 Pet., 51; Walton vs. Sutton, 1 Dun & East, Term R. 296; Churchill vs. Suter, 4 Mass., 156; Houghton vs. Page, 1 N. H., 60; Coleman vs. Wise, 2 John., 165.Dryden & Dryden, with whom was A. Reese, for Respondents, cited Trigg vs. Taylor, 27 Mo., 245; Hascall vs. Champoin, 30 Mo., 136; Britton vs. Dierker, 46 Mo., 591; Hood vs. Steele, 6 Wall., 80; Wash. S. Bank vs. Ecky, 51 Mo., 273; 8 Mo., 335; Cheaton vs. Chambless, 6 Rand, 86; Carroll vs. Paul's adm'r, 16 Mo., 241-2; Fine vs. St. Louis Schools, 30 Mo., 176; Anderson vs. Kinchelor, 30 Id., 525; Rose vs. Spies, 44 Id., 23.

SHERWOOD, Judge, delivered the opinion of the court.

Action on two promissory notes, made by defendant, Murdock, under the name and style of Murdock & Dickson, dated respectively, September 15th and 17th, 1873, each for $5000, the first payable 90 days, and the second 60 days after date, to the order of defendant, Armstrong, and by him endorsed in blank. The notes are precisely alike with the above noted exceptions, and the following is a copy of one of them, as presented in the court below.

$5000.

St. Louis, Sept. 17 th, 1873.

Sixty days after date we promise to pay to the order of David H. Armstrong, Five Thousand Dollars, at Capital

With interest at 10 per cent. per annum after maturity.

Bank, St. Louis, Mo. Value received.

No.
Murdock & Dickson.

Due

The petition contained two counts, each based on one of the notes. The notes were printed forms, but had no blanks for the rate of interest. With the exception of the words in these notes, which I have italicized, the residue were in print. By consent of parties, the original notes are before us, and it is plain to even casual observation, that the entire line in reference to interest, was written with ink of a different color, from that with which the legitimate blanks of the notes were filled. And the interest clauses in addition to that are written above the line, and in such a way as to be obvious to inspection.

Judgment by default was taken against Murdock.

Armstrong answered, admitting the genuineness of his endorsement; but alleging as special matters of defense, that the notes had been altered without his knowledge, authority, or consent, by inserting therein the words: “With Int. at 10 per cent. per annum after maturity.”

The reply of the plaintiff denied the new matter contained in the answer.

There was a trial by jury, resulting in a verdict and judgment for the defendant.

There was some conflict of testimony, but the evidence tended strongly to establish the defendant's allegation that the notes had been subjected to an unauthorized alteration by Osborne, the book keeper of Murdock, at the request of the latter, after they had been put into circulation.

And there was testimony tending to show that the alleged alteration took place, after the notes had passed into the hands of the plaintiff, and while the notes were in the custody of its cashier; and that the act was done in the presence of that officer; and there was testimony of a contrary effect. And there was testimony also, tending to show that the defendant had never seen the notes after endorsing them, until suit brought; and there was testimony of an opposite character, to the effect that defendant had seen and examined one or both of the notes; and that some weeks thereafter he had promised to pay them, remarking that the bank was amply secured, and was getting ten per cent. interest for its money.

The court refused all the instructions asked on behalf of the plaintiff, ten in number, and gave the following instructions on the part of the defendant:

“1st. The court instructs the jury that if they believe from the evidence in the cause that the promissory note, dated 13th September, 1873, read and shown to the jury in the case, was made by the defendant Murdock, and endorsed by the defendant, Armstrong, and delivered by him to his co-defendant, Murdock, for the purpose of enabling Murdock, the maker, to raise money thereon for his own use; and if they shall further believe from the evidence that after the defendant Armstrong had so endorsed and delivered said note to said Murdock, the words and figures, “with interest at 10 per cent. per annum after maturity,” now appearing in said note, were written therein without the knowledge, consent or authority of the defendant Armstrong, by said Murdock, or by any agent or clerk of his, whether done in the presence of any officer or agent of plaintiff, or not, and whether with or without the knowledge of the plaintiff, the verdict should be for the defendant Armstrong on the second count.”

“2d. The court instructs the jury that if they believe from the evidence in this case that the promissory note, dated 17th September, 1873, read and shown to the jury in this case, was made by the defendant Murdock, and endorsed by the defendant Armstrong, and delivered by him to his co-defendant Murdock for the purpose of enabling the maker to raise money thereon for his own use; and if they shall further believe that after the defendant Armstrong had so endorsed and delivered said note to said Murdock, the words and figures “with interest at 10 per cent. per annum after maturity,” now appearing in said note, were written therein, and with out the knowledge, consent or authority of the defendant Armstrong, by said Murdock or by any agent or clerk of his, whether done in the presence of any officer or agent of the plaintiff or not, whether with or without the knowledge of the plaintiff, the verdict of the jury should be for the defendant Armstrong on the first count.”

“3d. The court instructs the jury that if they believe from the evidence that the provisions as to interest now contained in the notes read in evidence, and now sued on, were not contained in them at the time they were made by Murdock & Dickson, and endorsed and delivered by defendant Armstrong to defendant Murdock, but were inserted afterwards; then the burden of proof is not upon defendant, Armstrong, to prove that said provisions were so inserted without his authority; but it is upon the plaintiff to prove that they were so inserted with his authority; and that, therefore, if they believe from the evidence in the case that said provisions were not contained in said notes at the time of their said endorsement and delivery by Armstrong to Murdock, but were inserted afterwards; then, unless the plaintiff has further established to their satisfaction, by a preponderance of the evidence in the case, that said provisions were so inserted by the direction, or with the authority of Armstrong, they should find against the plaintiff and for the defendant Armstrong.

This case, in many of its essential incidents, is like that of Evans vs. Foreman (60 Mo., 449) decided at our last term at St. Joseph, in which numerous authorities were discussed. There the plea non est factum set forth special matter, to the effect that the defendant had signed the note as surety, and that after issue the instrument received an unauthorized alteration by the addition thereto of the words: “After due 10 per cent.” The reply alleged that the note, by mistake, was not drawn in accordance with the intention of the parties; that correction was made in conformity to such intention, and that defendant, when made aware of it, ratified the act. The evidence offered on either side tended to support the respective allegations of the pleadings; and we, applying the principles deduced, more especially from the authorities of our own State and those of Pennsylvania, gave approval to instructions “embodying the theory that though the surety gave no prior authorization to the addition of the words, “after due 10 per cent.,” yet, if having full knowledge of the alteration, he yielded assent thereto, this would be equally as binding as if consented to in the first instance; and that in the absence of any such ratification, the note as to him was void.”

But the marked and striking difference between that case and the one at bar is this, that in the former the subject of subsequent assent was directly put in issue by the pleadings, pointedly presented in the evidence, and distinctly called to the attention of the jury in the instructions asked on behalf of both parties litigant. On the contrary, in the case before us no such issue was raised or point made, in either of the above specified modes. But this case, as is conspicuously apparent from the pleadings and evidence, and from the instructions asked on either side, was committed to the hands of the jury on the sole inquiry whether the interest clauses “were inserted in said notes by the authority,” or “with the knowledge or consent of said Armstrong.”

As this was the single theory on which the cause was tried, it is quite too late to raise the objection here, for the first time, that the 3d instruction given for the defendant is faulty in failing to instruct the jury on the point of...

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