Eaton v. Delay

• Court: North Dakota Supreme Court
• Writing for the Court: CHRISTIANSON
• Citation: Eaton v. Delay, 32 N. D. 328, 155 N. W. 644 (N.D. 1915)
• Decision Date: 22 December 1915
• Parties: EATON v. DELAY et al.

32 N.D. 328

155 N.W. 644

EATON

v.DELAY et al.

Supreme Court of North Dakota.

Dec. 22, 1915.

On Petition for Rehearing.

Syllabus by the Court.

Under the negotiable instruments law in force in this state, any change or addition which changes the date; the sum payable, either for principal or interest; the time or place of payment; the number or the relations of the parties;the medium or currency in which payment is to be made; adds a place of payment where no place of payment is specified; or alters the effect of the instrument in any respect-is a “material alteration.” Section 7010, Comp. Laws 1913.

A promissory note is not materially altered, where the holder at or after the maturity thereof writes in its margin the words “May 1st 1913,” as a reference memorandum of a promise made by him to the principal maker, at the time the words were written, to extend the time of payment from December 1, 1912, to May 1, 1913.

Appeal from District Court, Ramsey County; Buttz, Judge.

Action by John Eaton against Ed Delay and others. From judgment for defendants, plaintiff appeals. Reversed.

R. Goer, of Devils Lake, and J. B. Wineman, of Grand Forks (Miller & Zuger, of Bismarck, on oral argument), for appellant. Flynn & Traynor, of Devils Lake, for respondents.

CHRISTIANSON, J.

The plaintiff, at the solicitation of the defendant Delay, agreed to loan him $575, upon the condition that the joint promissory note of the three defendants Delay, Jones, and Dunn for that amount be executed and delivered to the plaintiff. The note was executed and delivered, and the defendant Delay received from the plaintiff the full amount of the loan agreed upon. The note as delivered to plaintiff was in words, figures, and form as follows:

+-----------------------------------------------------------------------------+
                ¦Lindgren                                                                     ¦
                +-----------------------------------------------------------------------------¦
                ¦$575.00                                                                      ¦
                +-----------------------------------------------------------------------------¦
                ¦Extended to                             ¦                                    ¦
                +----------------------------------------+------------------------------------¦
                ¦Extended to                             ¦                                    ¦
                +----------------------------------------+------------------------------------¦
                ¦Extended to                             ¦                                    ¦
                +----------------------------------------+------------------------------------¦
                ¦Extended to                             ¦                                    ¦
                +----------------------------------------+------------------------------------¦
                ¦No.                                     ¦                                    ¦
                +-----------------------------------------------------------------------------¦
                ¦Devils Lake, North Dakota,                                                   ¦
                +-----------------------------------------------------------------------------¦
                ¦March 26, 1912.                                                              ¦
                +-----------------------------------------------------------------------------¦
                ¦December 1, 1912 (without grace) after date I promise to pay to the order of ¦
                ¦John Eaton five hundred seventy-five & no/00 dollars with interest at the    ¦
                ¦rate of twelve per cent. per annum (payable annually) until paid.            ¦
                +-----------------------------------------------------------------------------¦
                ¦Payable at the First National Bank of Devils Lake, North Dakota. Value       ¦
                ¦received.                                                                    ¦
                +-----------------------------------------------------------------------------¦
                ¦                                        ¦Ed Delay.                           ¦
                +----------------------------------------+------------------------------------¦
                ¦P. O. Address                           ¦Ed Jones.                           ¦
                +----------------------------------------+------------------------------------¦
                ¦                                        ¦P. S. Dunn.                         ¦
                +-----------------------------------------------------------------------------+
                

About December 1, 1912, at the request of the defendant Delay, the plaintiff agreed to extend the time of payment to May 1, 1913. The defendant Delay thereafter paid the interest due on the note up to December 1, 1912, such interest payment being received by plaintiff on December 4, 1912. About this time (the record fails to disclose the exact date), plaintiff inserted in the margin of the note a notation of the extension. The note with this notation added is in words, figures, and form as follows:

+-----------------------------------------------------------------------------+
                ¦$575.00                                                                      ¦
                +-----------------------------------------------------------------------------¦
                ¦Extended to May 1st 1913  .                                                  ¦
                +-----------------------------------------------------------------------------¦
                ¦Extended to                             ¦                                    ¦
                +----------------------------------------+------------------------------------¦
                ¦Extended to                             ¦                                    ¦
                +----------------------------------------+------------------------------------¦
                ¦Extended to                             ¦                                    ¦
                +----------------------------------------+------------------------------------¦
                ¦No                                      ¦                                    ¦
                +-----------------------------------------------------------------------------¦
                ¦Devils Lake, North Dakota,                                                   ¦
                +-----------------------------------------------------------------------------¦
                ¦March 26, 1912.                                                              ¦
                +-----------------------------------------------------------------------------¦
                ¦December 1, 1912 (without grace) after date I promise to pay to the order of ¦
                ¦John Eaton five hundred seventy-five & no/00 dollars with interest at the    ¦
                ¦rate of twelve per cent. per annum (payable annually) until paid.            ¦
                +-----------------------------------------------------------------------------¦
                ¦Payable at the First National Bank of Devils Lake, North Dakota. Value       ¦
                ¦received.                                                                    ¦
                +-----------------------------------------------------------------------------¦
                ¦                                        ¦Ed Delay.                           ¦
                +----------------------------------------+------------------------------------¦
                ¦P. O. Address                           ¦Ed Jones.                           ¦
                +----------------------------------------+------------------------------------¦
                ¦                                        ¦P. S. Dunn.                         ¦
                +-----------------------------------------------------------------------------+
                

The note not being paid, the plaintiff on October 4, 1913, instituted this action. The complaint is in the usual form. The defendant Delay defaulted; but the defendants Jones and Dunn answered, asserting as a defense that they executed the note only as sureties for the accommodation of the defendant Delay, and in no other capacity; that the note was never presented to them for payment, and that on the day the note became due the plaintiff accepted a payment from the defendant Delay in the sum of $375, and agreed with said Delay to extend the balance due on said note until March 1, 1913; that shortly thereafter the defendant Delay paid the further sum of $45 in consideration of such extension, and that on or about March 1, 1913, the time of payment was again extended until September 1, 1913; that all of such extensions were granted without the knowledge or consent of the answering defendants. The cause came on for trial upon such pleadings. At the close of the testimony defendants' counsel moved for a directed verdict. The motion was denied, and after the denial of such motion defendants' counsel asked leave to amend the answer by inserting therein the defense that the note was materially altered by changing the time of payment thereof. This motion was granted. No further evidence was offered, nor was the motion for a directed verdict renewed after the answer was amended.

The court submitted the issues framed by the pleadings to the jury, and the jury returned a verdict in favor of the plaintiff for the full amount claimed by him. Subsequently defendants moved for judgment notwithstanding the verdict. This motion was granted, and this appeal is from the judgment thereafter entered in favor of the defendants Jones and Dunn.

Defendants' counsel no longer relies upon the defense interposed in the original answer, but concedes that under the decision of this court in First National Bank of McClusky v. Meyer, 30 N. D. 388, 152 N. W. 657, the defendants Jones and Dunn were primarily liable, and hence were not discharged by an extension of time of payment. The only defense relied upon by defendants' counsel on this appeal is the one presented by the amendment, viz., that the note was materially altered by plaintiff's inserting in the margin thereof the words “May 1st 1913”; and that such alteration avoided the note as against the defendants Jones and Dunn, under the provisions of section 7009, Compiled Laws 1913.

[1][2] A “material alteration,” under the negotiable instruments law, is:

“Any alteration which changes: (1) The date. (2) The sum payable, either for principal or interest. (3) The time or place of payment. (4) The number or the relations of the parties. (5) The medium or currency in which payment is to be made. Or which adds a...