First National Bank v. Ford

• Decision Date: 17 July 1923
• Docket Number: 1057
• Citation: 216 P. 691,30 Wyo. 110
• Parties: FIRST NATIONAL BANK v. FORD
• Court: Wyoming Supreme Court

216 P. 691

30 Wyo. 110

FIRST NATIONAL BANK v. FORD

No. 1057

Supreme Court of Wyoming

July 17, 1923

APPEAL from the District Court, Goshen County; HON. WM. C. MENTZER Judge.

Action by First National Bank of Morrill against John B. Ford to recover on a promissory note. There was judgment for plaintiff and defendant appeals.

Affirmed.

Reid and Moore, and Kinkead, Ellery and Henderson for appellant.

The court erred in its instruction to the jury that the burden of proving alleged alterations in the note was upon defendant under a general denial plaintiff was required to establish all allegations of its petition; a defendant may by separate defenses, both deny and avoid. (Wyo. Co. v. Lumber Co., 25 Wyo. 158.) The burden of proof was at all times upon respondent. (2 C. J. 1267; Daniel Neg. Ins. T. S. 6 ed 1421; Behles v. Duffy, 159 N.W. 838.) There is a distinction between burden of proof and burden of evidence. (22 C. J. 67-76; Jones Ev. 177; 8 C. J. 998; Trust Co. v. Siefke, 39 N.E. 358.) Even where alteration is alleged, but not apparent from the instrument the burden of proving the identity and genuineness of the instrument is upon defendant. (Eggman v. Nutter, 155 Ill.App. 390; Stitgel v. Miller, 157 Ill.App. 401; Tilton v. Trapp, 183 Ill.App. 530; in re Skinner's Will, 152 N.W. 172; Brown v. Tourtelotte, 50 P. 185; Consumers Co. v. Jennings, 42 S.E. 879; Comstock v. Smith, 26 Mich. 305; Klein v. Bank, 61 S.W. 572; Thompson v. Kelsey, 68 S.W. 518; Wright v. Bank, 124 P. 478; Threshing Co. v. Peterson, 33 P. 470.) The court erred in instructing the jury that defendant was required to establish an alteration of the note by more than a preponderance of evidence. (23 C. J. 12; Cartney v. R. R. Co., 78 A. 771; Youmans v. Moore, 74 S.E. 710; 23 C. J. 24; 1 R. C. L. 1047.) The admission of respondent's exhibit (c) was erroneous, there being no independent proof of agency. (Jones Ev. 255-261; 22 C. J. 376-401.) The court erred in permitting the cross-examination of appellant as to the Gifford letter, the contents being self-serving. (Jones Ev. 218; 22 C. J. 220; Huston v. Johnson, 151 N.W. 774; Seevers v. Co., 138 N.W. 793; Bank v. Taber, 145 P. 1090; Mining Co. v. Iron Wks. Co., 111 P. 553; Thrusk v. Fullhart, 210 F. 1.) The court erred in permitting the cross-examination of appellant as to the Metz notes, and the re-direct examination of the witness Gifford as to conversation between the witness and another in appellant's absence. The court erred in refusing appellant's requested instruction that respondent was only a nominal plaintiff; that respondent agreed to accept the Metz car at $ 300.00 was shown by the weight of the evidence, and accounts for the alteration, raising the amount of appellant's note $ 300.00 after failure to realize on the Metz car.

John L. Sawyer and Morrow and Morrow for respondent.

Defendant admitted the execution of the note; the burden of proving its alteration was on defendant. (Bank v. Liewer, 187 F. 16; U. S. v. Linn, 1 How. 104; Smith v. U.S. 69 U.S. 219; Sturm v. Boker, 150 U.S. 312; Murray v. Lardner, 17 L. ed. 857; Leske v. Baumgart, 99 Neb. 479.) The fact that alteration may be shown under general denial does not alter the rule. (Bodine v. Berg, 40 L. R. A. (N. S.) 69; Tharp v. Jamison, 39 L. R. A. (N. S.) 100.) There is a clear distinction between cases where the defense is fraudulent alteration and where the defense is forgery; (Brown v. Tourtellotte, 50 P. 185.) The court's instruction that defendant was required to establish alteration by clear and convincing proof is supported by the weight of authority. (2 C. J. 1288.) In Illinois the rule requires proof beyond a reasonable doubt where the act would constitute a criminal offense. (Waggoner v. Clarke, 127 N.E. 436.) More than a preponderance of evidence is required to establish fraud. (12 R. C. L. 436; 20 Cyc. 120; Cahm v. Ins. Co., 4 Wyo. 419.) The circumstances and evidence show that the Metz car was not taken as a credit but under an agreement to dispose of it for appellant; the notes taken from the purchaser of the Metz car were made to appellant. The correspondence relating to the Metz car transaction was material. (7 Enc. Ev. 149-151.)

BLUME, Justice. POTTER, Ch. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is an action brought by First National Bank of Morrill, as plaintiff, against John B. Ford, as defendant, on a promissory note dated June 9, 1917, due in six months, payable to the Gifford Motor Co. for $ 450.00. The petition is in the usual form. The defendant filed an answer denying that he ever executed a note to the Gifford Motor Company for $ 450.00, but that the note sued on is a forgery; that on June 9, 1917, he executed to the Gifford Motor Company his promissory note for $ 150.00; that if the signature on the note in suit is his genuine signature, the note was fraudulently altered and forged to the sum of $ 450.00, without the knowledge or consent of defendant. The plaintiff filed a reply denying the allegations of the answer. At the outset of the case it was apparently agreed that at the time of the commencement of the action, plaintiff held the note as collateral security for a debt of the Gifford Motor Co., but that since that time the debt had been paid. The case was accordingly tried on the theory that the plaintiff was only the nominal plaintiff. The case was tried to a jury which returned a verdict for the plaintiff for the amount claimed, judgment was entered on the verdict, and the case is here on direct appeal.

Upon the trial of the case the defendant admitted that he signed the note in question, but claimed that it was given for only $ 150.00. The note introduced shows no alteration apparent on its face. The court instructed the jury in instruction No. 1 that they were the sole judges of the facts; in instruction No. 2, that the defendant having admitted his signature to the note, the only question of fact for them to determine was whether the note was originally given for $ 150.00 or $ 450.00; if the former they should find for the defendant, if the latter, for the plaintiff. The third instruction, and the last of substance, told the jury as follows:

"The court instructs the jury that the burden of proving that said note was altered so as to raise the amount thereof from $ 150.00 to $ 450.00 is upon the defendant, and these facts must be established by clear and convincing proof in order to constitute a defense to plaintiff's action."

1. Defendant complains that the burden of proof of showing the alteration contended for was, by the third instruction of the court, imposed on him. It is stated in 1 R. C. L. 1041:

"There seems to be no dissent from the rule that where no alteration is apparent on the face of the instrument, the burden of proving that there has in fact been an alteration is on the party alleging it."

In the note in 86 Am. St. Rep. 128, the author says:

"Among the almost innumerable decisions, and the conflict of authorities upon the subject of presumptions arising from alterations apparent upon the face of the instrument, there seems to be but one principle upon which the authorities are in harmony. This is, that where an alteration in an instrument is alleged to have been made, and such alteration is not apparent upon the face of the instrument, the burden of showing that the latter has been altered is upon the party who alleges it."

The rule is stated more cautiously, though not analyzed, in 2 C. J. 1267. In addition to the cases cited in these authorities, sustaining the rule mentioned, see also: Wagler v. Tobin, 104 Kan. 211, 178 P. 751; Central Trust Co. v. Kendall, 202 Ill.App. 294; Wicker v. Jones, 159 N.C. 102; 74 S.E. 801, 40 L.R.A. (N.S.) 69, Ann. Cas. 1914B 1083; Arnold v. Wood, 127 Ark. 234; 191 S.W. 960; Craig v. National City Bank, 26 Ga.App. 128, 105 S.E. 632; Daniels, Neg. Inst. (6th Ed.) Sec. 1421. In the case of Williamsburgh Sav. Bank v. The Town of Solon, 136 N.Y. 465, 32 N.E. 1058, the court said:

"Where the alteration is visible on the face of the instrument the paper discredits itself and the holder should explain. But where the change simply makes the bond perfect in accordance with its own express terms and apparent purpose there is nothing for the holder to explain. The burden falls on the adversary to prove an alteration such as will effect the instrument and he must show the facts on which he relies. That is both the reasonable and the settled rule."

If by the burden of proof above mentioned is not simply meant the burden to go forward with the evidence, and we think it is not, then clearly the statements referred to, that the authorities in a case like that at bar are harmonious, are not, as pointed out by counsel for defendant borne out by the facts, for it is held in a number of cases involving instruments showing no alterations apparent on their face, at least so far as the opinions disclose, that though the proof of signature and the introduction of the note in evidence raises a presumption of the validity of the whole document and make a prima facie case for plaintiff, compelling the defendant to go forward with the evidence, the burden of proof, nevertheless, where the execution of the instrument is denied, as here, remains upon plaintiff to satisfy the jury, upon the whole evidence, that the instrument introduced is the identical instrument executed by defendant and that no alterations have been made therein. The Farmers' Loan & Trust Co., v. Siefke, 144 N.Y. 354, 39 N.E. 358; Foss v. McRae, 105 Me. 140, 73 A. 827; Eggman v. Nutter, 155 Ill.App. 390; Yost & Cook v. The Minneapolis Harv. Works, 41 Ill.App. 556; Eherenkrook v. Webber, 100 Mich. 314, 58 N.W. 665, 60 N.W. 761; Simpson v. Davis, 119 Mass. 269, 20 Am. Rep....