Hodge v. Farmers' Bank of Frankfort
| Decision Date | 23 May 1893 |
| Citation | 7 Ind.App. 94,34 N.E. 123 |
| Parties | HODGE et al. v. FARMERS' BANK OF FRANKFORT. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Appeal from circuit court, Boone county; J. A. Abbott, Judge.
Suit by the Farmers' Bank of Frankfort against John Hodge, Gard, and others Verdict directed against Hodge and Gard, who appeal. Reversed.
Bayless & Guenther, M. Bristow, Asa H. Boulden, and C. M. Zion, for appellants. C. S. Wesner, for appellee.
The appellee sued the appellants Hodge and Gard, together with Lewis C. Riley and James H. and H. Droneberger, upon a promissory note. It is alleged in the complaint that the defendants “executed to plaintiff their promissory note, payable to David A. Coulter, cashier of the Farmers' Bank, for two thousand dollars,” etc. Gard, Hodge, and Riley filed sworn answers of non est factum. Gard also answered, affirmatively, that he was surety, as appellee knew, and that the time of payment was extended three months, upon payment of interest in advance, without his knowledge or consent. To this answer a demurrer was sustained. Upon the trial the court instructed the jury to return a verdict against Hodge and Gard, who now appeal. Upon the correctness of this instruction depend the rights of the parties.
An instruction to return a verdict in favor of one of the parties can only be justified when there is no evidence which would sustain a different verdict. Weis v. City of Madison, 75 Ind. 241; Purcell v. English, 86 Ind. 34; Overton v. Railroad Co., 1 Ind. App. 436, 27 N. E. Rep. 651. The facts, as disclosed by the evidence, are about as follows: John Hodge, at the request of James H. Droneberger, signed a blank note, upon appellee's ordinary printed form, payable at its bank, and intrusted it to Droneberger. The name of Lewis C. Riley was next added to the note. It was afterwards presented by Droneberger to Gard for his signature. Gard signed it, but at the same time filled in the date, amount, and name of payee, making the note apparently complete in all respects, except that by oversight he omitted the word “days” after “sixty.” As he filled out the note it was made payable to “David Coulter,” and a line was drawn through the blank space after “Coulter,” leaving then no blank space in that part of the note left for the payee's name. Droneberger then took the note, and presented it to David Coulter, at the appellee's bank, of which he was the cashier. He looked at it, and said: Whereupon Droneberger told him to add “cashier” to his name, which he did. Droneberger then signed his firm's name to the note, and Coulter, for the bank, discounted the note, and placed the proceeds to the firm's credit in bank. The alteration of the note was made without the knowledge or authority of any of the makers, except Droneberger. The Dronebergers were principals on the note, as the appellee knew. There were personal dealings between Coulter and the Dronebergers aggregating several thousand dollars. In addition to these facts, which are undisputed, Hodge testified that the note was to be for only $1,000, and that this amount was written in figures in the upper left-hand corner, and that Droneberger told him the money was to be obtained from David Coulter. By the verdict of the jury, Riley was held not liable. Hodge and Gard are in somewhat different positions with respect to the alteration, in that, when Hodge signed the note, the payee's name was left blank, while Gard filled it in when he signed. For the purposes of this investigation, however, they are upon an equality. The blank for the payee's name had been filled in by Gard, in accordance with the understanding between Hodge and Droneberger, as testified to by Hodge; the note being, in this form, -apparently perfect and complete,-presented to Coulter by the principal. Coulter was thus advised as to the purpose of Hodge. Droneberger had no actual authority from Hodge to make or authorize the alteration. Neither was he at this time clothed with any apparent authority to so do, because there was no blank space wherein the matter was appropriate to make the instrument complete. It is true that if a surety intrusts to his principal a negotiable note, signed by himself, but left blank in part, and incomplete, the principal may fill such blanks with appropriate matter, and the surety will be bound thereby, in the hands of an innocent holder, even though the principal, in filling the blanks, exceeds his authority. De Pauw v. Bank, 126 Ind. 553, 25 N. E. Rep. 705, and 26 N. E. Rep. 151; Geddes v. Blackmore, (Ind. Sup.) 32 N. E. Rep. 567. Here, however, there was no blank to be filled when the alteration was made, and the power to fill blanks does not include alterations or additions to a completed instrument. Cronkhite v. Nebeker, 81 Ind. 319. Notice to the payee, of the limitations of the principal's authority, prevents him from taking advantage of this rule. Wagner v. Diedrich, 50 Mo. 484. The presence of the name of the payee in the note, when presented to him, was notice to him that it was the design of those who had signed it to make the note payable to the payee named therein. The following cases are authorities upon the principle here involved. Angle v. Insurance Co., 92 U. S. 330;Hagler v. State, (Neb.)47 N. W. Rep. 692;Dair v. U. S., 16 Wall. 1;Pawling v. U. S., 4 Cranch, 219;State v. Craig, 58 Iowa, 238, 12 N. W. Rep. 301. A surety is released by a material alteration of the body of a note made by the payee, with knowledge of the suretyship, without the surety's consent, and after it has been signed by the surety, and is apparently complete. Coburn v. Webb, 56 Ind. 96;Johnston v. May, 76 Ind. 293;Schnewind v. Hacket, 54 Ind. 248. In Eckert v. Louis, 84 Ind. 99, this language is quoted from Daniel, Neg. Inst. § 1373:
The real controversy in this case arises upon the question as to the materiality of the alteration. The appellee, if we understand his position a right, claims that the addition of the word “cashier” did not in any way affect the note, because it was a mere descriptive appellation, and, so far as its legal force was concerned, neither added to nor detracted from the name already there. In support of their position, counsel cite and rely upon several Indiana cases wherein it is held that contracts signed by individuals, with the word “agent” or “trustees” of a certain church or order, are to be considered as individual contracts, and not the contracts of the body of which the signers are such agents or officers. Hayes v. Matthews, 63 Ind. 412;Hays v. Crutcher, 54 Ind. 260;Williams v. Bank, 83 Ind. 237;McClellan v. Robe, 93 Ind. 298;Second Baptist Church v. Furber, 109 Ind. 492, 10 N. E. Rep. 118. While these cases so hold, it is fully recognized by our supreme court that, as to banks, the act of the cashier is the act of the bank, and that a bank may sue upon a note payable to its cashier, as such, just as though it were payable to it by its corporate name. This principle was enunciated in the early case of Bank v. Wheeler, 21 Ind. 90, where a bill was indorsed to “ and by “ In a suit by the indorsee, holding under this indorsement, it was held that the bank of which he was cashier was liable upon it. In Dutch v. Boyd, 81 Ind. 146, the court decides that “paper made payable or indorsed to the cashier of a bank is, in legal effect, payable to the bank itself.” In Nave v. Bank, 87 Ind. 204, it is held that a note made payable to A. B., “cashier of 1st Nat'l Bank,” may be sued on by the bank, as payee, without any indorsement, upon an allegation that A. B. was cashier of plaintiff's bank. “It is well settled...
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