Dr. Ward's Medical Co. v. Wolleat
| Decision Date | 20 June 1924 |
| Docket Number | 23,959 |
| Citation | 199 N.W. 738,160 Minn. 21 |
| Parties | DR. WARD'S MEDICAL COMPANY v. J. L. WOLLEAT AND OTHERS |
| Court | Minnesota Supreme Court |
Action in the district court for Becker county to recover $1,173.67. The case was tried before Roeser, J., who at the close of the testimony denied plaintiff's motions for a directed verdict in its favor, and a jury which returned a verdict in favor of defendants. From an order denying its motion for judgment notwithstanding the verdict or for a new trial plaintiff appealed. Reversed.
Material alteration of instrument.
1. A material change or alteration of an instrument is one which causes it to speak a language different in legal effect from that which it originally spoke.
Legal effect of contract unchanged by insertion of correct amount.
2. A contract containing this language: "For the purpose of settling and determining the amount of the said indebtedness now due it is hereby mutually agreed between the parties hereto that there is now due the sum of Dollars, which sum the second party (Wolleat) hereby promises and agrees to pay said company during the term of this agreement, and payment of which is hereby so extended," and the correct amount of such existing indebtedness is inserted after the contract is executed, it is not a material alteration because it changes the evidentiary effect of the instrument. The contract as signed by defendants was complete and they agreed to pay the then existing indebtedness. The filling in of the correct amount in no way changed the legal effect of their contract.
No implied authority to fill blank.
3. The delivery of this particular contract with the blank space in it did not give implied authority to fill in the amount, and the circumstance did not create an agency for that purpose. One of the exceptions to the general rule excluding parol evidence to vary the terms of written instruments is to receive such evidence for the purpose of impeaching an instrument by showing the fact that an alteration was made therein.
Guarantors not estopped by language of contract.
4. The contract, containing the language above quoted with the blank, also contained this language: "which we have read and fully understand and which contains no blank spaces at the time we execute this agreement as a part of the same as sureties," was signed by the guarantors and it is held they were not estopped thereby from showing that the amount was filled in after execution and delivery.
When recital in contract is conclusive.
5. A recital in a contract is not conclusive unless it operates as a representation or warranty inducing the formation of the contract, or was itself the essence of the contract, or having been accepted and acted on in good faith resulted in consequences which it would be inequitable or unjust to disturb.
No estoppel by general recital.
6. A general recital is not an estoppel, though the recital of a particular fact is.
No estoppel in favor of the guilty.
7. An estoppel may be invoked by the innocent.
Johnston & Carman, for appellant.
Eric L Winje and M. J. Daly, for respondents.
Dr. Ward's Medical Company, plaintiff herein, made a contract with J. L. Wolleat agreeing to sell to him goods, extracts, etc., manufactured by it, as he might reasonably require for sale from time to time in certain territory. Later a renewal contract was made between the same parties, and at that time Wolleat was owing appellant $1,024.19 accruing under the first contract. Wolleat was party of the second part in the new contract and it now contains this language:
Respondents are guarantors for Wolleat and they signed a guaranty, printed on the back of the new contract, which is as follows:
"For and in consideration of one dollar to us severally in hand paid by the within named Company the receipt of which is hereby acknowledged, and the execution of the within agreement and the sale and delivery by it to the party of the second part of its goods and other articles, and the extension of the time of payment of the indebtedness now due from the party of the second part to said Company as therein provided we the undersigned sureties do hereby jointly and severally and unconditionally promise and guarantee the full and complete payment of said sum and indebtedness and for said goods and other articles and the prepaid freight, express or postal charges if any thereon at the time and place and in the manner in said agreement provided hereby fully assenting to said agreement and waiving notice of the failure of said second party to make reports and payments as provided in the said agreement, which we have read and fully understand, and which contains no blank spaces at the time we execute this agreement, as a part of the same, as sureties."
Plaintiff brought this action against Wolleat and also against respondents John F. Londeen and Peter Dalve to recover the $1,024.19 and also a balance due for merchandise sold under the new contract. Wolleat did not answer; the guarantors did. They allege that they did not know of any existing indebtedness, and that the original contract, when they signed their agreement, at the place where "one thousand twenty-four and 19/100 ($1024.19)" now appears as above set forth, was a blank line, and that these words and figures were later, and without authority, wrongfully written therein by plaintiff. This is denied in the reply. Against objections of plaintiff the answering defendants were permitted to introduce evidence in support of this allegation in their answer. The plaintiff's evidence was to the effect that this was filled in before execution. The court submitted this as one of the issues to the jury upon the theory that it, if made, was a material alteration. The jury found for the answering defendants, and from an order denying an alternative motion for judgment or for a new trial plaintiff appealed.
In the face of the verdict we must conclude that the alteration was made. Was it a material one? The amount was correctly stated.
The contract between the original parties, to which the guaranty related, contains certain prominent elements, namely, a provision to sell merchandise and manner of payment, also a promise "to pay the indebtedness now due from him to said company for goods and other articles heretofore sold and delivered to him as vendee f.o.b. cars to Winona, Minnesota, payment of which is hereby extended during the term of this agreement." This is a part of the contract which respondents guaranteed. Had it stopped there the liability of respondents could not be doubted. A material change or alteration of instrument is one which causes it to speak a language different in legal effect from that which it originally spoke. If the meaning of the instrument remains as it originally stood, the alteration is not material. Board v. Gray, 61 Minn. 242, 63 N.W. 635; 2 C.J. 1173; 1 R.C.L. 967; Board v. Greenleaf, 80 Minn. 242, 83 N.W. 157; J.R. Watkins Co. v. Powell, 93 Okla. 219, 220 P. 585.
Appellant was not content with this effective contract, but wisely and with good business economy, sought to save itself unnecessary expense incident to litigation, and hence, following this, we find a further provision which is inserted for an expressed purpose, and which, in this case we will assume was before the alteration in this language:
"For the purpose of settling and determining the amount of the said indebtedness now due it is hereby mutually agreed between the parties hereto that there is now due the sum of dollars, which sum the second party (Wolleat) hereby promises and agrees to pay said company during the term of this agreement, and payment of which is hereby so extended."
It is plain that this sentence in this contract was included for the very purpose of having the amount then due liquidated so that the contract itself would thereafter determine the amount of such existing indebtedness so that plaintiff would not thereafter have to produce its books and records and be annoyed by the inconvenience of having to prove its account.
The language hereinbefore set forth is quite sufficient to constitute an agreement to pay an indefinite amount of existing indebtedness, but under the contract appellant would, if necessary, have to prove that indebtedness and the amount thereof. What then is the effect, if any, of inserting the amount of that indebtedness? It is this....
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