Eaton v. Ed. Delay

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

155 N.W. 644

32 N.D. 328

JOHN EATON v. ED. DELAY, Ed. Jones, and P. S. Dunn

Supreme Court of North Dakota

December 22, 1915

Appeal from a judgment of the District Court of Ramsey County Buttz, J. Plaintiff appeals.

Reversed.

R. Goer and J. B. Wineman, for appellant.

Miller & Zuger attorneys on oral argument.

The parties here signed the note as makers; they are absolutely liable, and required to pay it; they cannot afterwards be heard to assert the contrary. Wolstenholme v. Smith, 34 Utah 300, 97 P. 329; Rev. Codes 1905, § 6421; Comp Laws 1913, § 7004.

The signers were all principal debtors; none were mere sureties and none were discharged. A mere memorandum reference written in the margin of a promissory note, stating a future date for payment, is not a material alteration. Northern State Bank v. Bellamy, 19 N.D. 509, 31 L.R.A.(N.S.) 149, 125 N.W. 888; Dow v. Lillie, 26 N.D. 512, L.R.A.1915D 754, 144 N.W. 1082; Richards v. Market Exch. Bank Co. 81 Ohio St. 348, 26 L.R.A.(N.S.) 99, 90 N.E. 1000; Union Trust Co. v. McGinty, 212 Mass. 205, 98 N.E. 679, Ann. Cas. 1913C, 525; Vanderford v. Farmers' & M. Nat. Bank, 105 Md. 164, 10 L.R.A.(N.S.) 129, 66 A. 47; National Citizens' Bank v. Toplitz, 81 A.D. 593, 81 N.Y.S. 422, affirmed in 178 N.Y. 464, 71 N.E. 1; Cellers v. Meachem (Sellers v. Lyons) 49 Ore. 186, 10 L.R.A.(N.S.) 133, 89 P. 426, 13 Ann. Cas. 997; Murphy v. Panter, 62 Ore. 522, 125 P. 292; Wolstenholme v. Smith, 34 Utah 300, 97 P. 329; Bradley Engineering & Mfg. Co. v. Heyburn, 56 Wash. 628, 134 Am. St. Rep. 1127, 106 P. 170; Hunter v. Harris, 63 Ore. 505, 127 P. 786; Fritts v. Kirchdorfer, 136 Ky. 643, 124 S.W. 882; Lumbermen's Nat. Bank v. Campbell, 61 Ore. 123, 121 P. 427; 1 Bouvier's Law Dict. 155 under title "Alteration," and authorities cited; 2 Enc. Pl. & Pr. 142; 2 Am. & Eng. Enc. Law, 184.

The alteration mentioned by our statute means a physical alteration of the body of the note. Rev. Codes 1905, §§ 6426, 6427; Comp. Laws 1913, §§ 7009, 7010; Morrill v. Otis, 12 N.H. 472; Moore v. Macon Sav. Bank, 22 Mo.App. 684.

It must be such an alteration as changes the instrument. State Solicitors' Co. v. Savage, 39 Fla. 703, 23 So. 413; Cambridge Sav. Bank v. Hyde, 131 Mass. 77, 41 Am. Rep. 193.

The identity of the contract must be destroyed. Wade v. Withington, 1 Allen, 561; Com. v. Emigrant Industrial Sav. Bank, 98 Mass. 12, 93 Am. Dec. 126; Belknap v. National Bank, 100 Mass. 376, 97 Am. Dec. 105; Hewins v. Cargill, 67 Me. 554.

In this case the original note remained the same as before. Stone v. White, 8 Gray, 589; Drexler v. Smith, 30 F. 754; 2 Dan. Neg. Inst. PP 1373-1375; 1 Whart. Ev. P 565; 1 Greenl. Ev. PP 566-568; Cambridge Sav. Bank v. Hyde, 131 Mass. 77, 41 Am. Rep. 193.

Such a writing or memorandum as the one here before us is no part of the instrument; and, in any event, the holder may explain the same. Theopold v. Deike, 76 Minn. 121, 77 Am. St. Rep. 607, 78 N.W. 977.

The writing was a mere reference memorandum, forming no part of the instrument. J. I. Case Threshing Mach. Co. v. Ebbighausen, 11 N.D. 466, 92 N.W. 826; Wicker v. Jones, 159 N.C. 102, 40 L.R.A.(N.S.) 69, 74 S.E. 801, Ann. Cas. 1914B, 1083; Huff v. Cole, 45 Ind. 300; Burnham v. Gosnell, 47 Mo.App. 637; Hutches v. J. I. Case Threshing Mach. Co. Tex. Civ. App. , 35 S.W. 60; American Nat. Bank v. Bangs, 42 Mo. 450, 97 Am. Dec. 349; Iowa Valley State Bank v. Sigstad, 96 Iowa 491, 65 N.W. 407; Roberds v. Laney, Tex. Civ. App. , 165 S.W. 114; Hensler v. Watts, 113 Iowa 741, 84 N.W. 666; Prudden v. Nester, 103 Mich. 540, 61 N.W. 777; Reed v. Culp, 63 Kan. 595, 66 P. 616; Boutelle v. Carpenter, 182 Mass. 417, 65 N.E. 799; Wolferman v. Bell, 6 Wash. 84, 36 Am. St. Rep. 126, 32 P. 1017; Stroud v. Thomas, 139 Cal. 274, 96 Am. St. Rep. 111, 72 P. 1008; Lyndon Sav. Bank v. International Co. 78 Vt. 169, 112 Am. St. Rep. 900, 62 A. 50; Cass County v. American Exch. State Bank, 9 N.D. 263, 83 N.W. 12; Byers v. Harris, 67 Iowa 685, 25 N.W. 879; Fisherdick v. Hutton, 44 Neb. 122, 62 N.W. 488; Johnson v. Weber, 70 Neb. 467, 97 N.W. 585; Sawyer v. Campbell, 107 Iowa 397, 78 N.W. 56; Rouse v. Wooten, 140 N.C. 557, 111 Am. St. Rep. 875, 53 S.E. 430, 6 Ann. Cas. 280; Delaware County Trust, S.D. & Title Ins. Co. v. Haser, 199 Pa. 17, 85 Am. St. Rep. 763, 48 A. 694; Barnes v. Van Keuren, 31 Neb. 165, 47 N.W. 848.

Flynn & Traynor, for respondents.

There is a distinction between the words "discharge" and "avoid." We contend that the instrument was "avoided" as to the sureties. Rev. Codes 1905, §§ 6426, 6427; Comp. Laws 1913, §§ 7009, 7010.

When a negotiable instrument is materially altered without the assent of all parties liable thereon, it is "avoided," except as against a party who himself made, authorized, or assented to the alteration. Rev. Codes 1905, § 6426; Comp. Laws 1913, § 7009.

Any alteration which changes the time of payment, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration. Rev. Codes 1905, § 6427; Comp. Laws 1913, § 7010.

So far as the face of the note is concerned, the effect of the instrument as to the time of payment has been changed by the addition of the words, "extended to May 1st, 1913;" and the mere writing itself presumes a consideration. Rev. Codes 1905, § 5325, Comp. Laws 1913, § 5881; Corbett v. Clough, 8 S.D. 176, 65 N.W. 1074; Niblack v. Champeny, 10 S.D. 165, 72 N.W. 402.

The writing changes the time of payment, and is material. Rev. Codes 1905, §§ 6426, 6427, Comp. Laws 1913, §§ 7009, 7010; 8 Cyc. 29, note 92; 2 Am. & Eng. Enc. Law, p. 228; 1 Dan. Neg. Inst. §§ 149, 150; 2 Cyc. 208; Sanders v. Bagwell, 32 S.C. 238, 7 L.R.A. 743, 10 S.E. 946; Flanigan v. Phelps, 42 Minn. 186, 43 N.W. 1113; Warrington v. Early, 2 El. & Bl. 763, 23 L. J. Q. B. N. S. 47, 2 C. L. R. 398, 18 Jur. 42, 2 Week. Rep. 78.

A written instrument may be varied by a memorandum in the margin; and that the terms of such memorandum are entitled to the same efficacy as if they had been contained in the body of the instrument is well established. Tuckerman v. Hartwell, 14 Am. Dec. 225, note p. 232; Wheelock v. Freeman, 13 Pick. 165, 23 Am. Dec. 674; Sanders v. Bagwell, 32 S.C. 238, 7 L.R.A. 743, 10 S.E. 946; National Ulster County Bank v. Madden, 114 N.Y. 280, 11 Am. St. Rep. 633, 21 N.E. 408; Polo Mfg. Co. v. Parr, 8 Neb. 379, 30 Am. Rep. 830, 1 N.W. 312; Joyce, Defenses to Commercial Paper, §§ 154, 155, 179; 2 Cyc. 142; Pelton v. San Jacinto Lumber Co. 113 Cal. 21, 45 P. 12; 2 Dan. Neg. Inst. §§ 1373, 1377; Post v. Losey, 111 Ind. 74, 60 Am. Rep. 677, 12 N.E. 121; Washington Finance Corp. v. Glass, 74 Wash. 653, 46 L.R.A.(N.S.) 1043, 134 P. 480.

The law regards not the purpose or the effect of such a change. It is enough that the change results in bringing into existence a contract upon which the minds of the parties did not meet. 14 Harvard L. Rev. 241; Ames-Brewster Controversy, Brannan, Neg. Inst. Law, 2d ed. 162 et seq.

OPINION

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:

[SEE NOTE IN ORIGINAL]

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:

[SEE NOTE IN ORIGINAL]

The note not being paid, the plaintiff on October 4th, 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' coun...