Holmes v. Trumper

• Decision Date: 18 April 1871
• Citation: 22 Mich. 427
• Court: Michigan Supreme Court
• Parties: William D. Holmes v. Jacob Trumper

22 Mich. 427

William D. Holmes v. Jacob Trumper

Supreme Court of Michigan

April 18, 1871

Submitted on Briefs January 11, 1871.

Error to Washtenaw circuit.

The facts are sufficiently stated in the opinion.

Judgment affirmed, with costs.

E. D Kinne, for plaintiff in error, cited Young v. Grote 4 Bingham 253; Isnard v. Torres and Marquez, 10 La. An., 103; Worrall v. Gheen, 39 Penn. St.; 8 Cal. 109.

D. Cramer, for defendant in error, as to the force of filling blanks left in commercial and other papers, cited: 8 Cal. 109; 3 Barb. 374; 19 Johns. 391; 6 Mass. 519; 2 N. H., 543.

If the note as sued was a forgery on the defendant or payor it could not be collected, and that it was so, vide 2 Wharton Cr. Law, §§ 1426, 1433; 4 Mass. 53; 39 Penn. St., 388.

The putting in words making a different rate of interest is fatal: 7 B. and C., 416; 22 Mis. 596; 43 Me. 504.

An alteration in the sum of the note, not shown to have been made before the execution or with the privity of the promisor, is material and renders the note void: 1 N. H., 95; 13 N. H., 385; 3 Conn. 230; 11 Conn. 531; 2 Johns. Cases, 198.

All that is necessary to operate as a material alteration is that it should vary the legal meaning of the paper, and make the new meaning obligatory, and vary the rights and interests, duties or obligations of either of the parties: 5 Mass. 540; 1 N. H., 45; 1 R. I., 398.

As to the general effect of alteration in paper: 15 Johns. 293; 3 Met. 103; 11 N. H., 365; 22 Mo. 596.

An instrument, altered as this was in a material point, without the consent of the maker, is void in the hands of an innocent holder, and cannot be recovered upon: 25 Eng. L. and E., 123; 3 Barb. 374; 24 Wend. 374; Chitty on Bills, 182, and note.

OPINION

Christiancy J.:

This was an action brought by Holmes against Trumper upon a promissory note signed by the latter, which note was partly printed and partly in writing, a printed blank having been used.

The following is a copy of the body of the note as it appeared upon the trial, the portions in italics being printed and the other portions written, viz.:

"$ 400.

"One year after date I promise to pay to Lyman Terry or bearer, four hundred dollars, at the First National bank of Ann Arbor, value received, with interest at 10 per cent.

[Signed] "Jacob Trumper."

There was evidence on the part of the defendant tending to show that the note had been altered after it was made and delivered to the payee by adding, after the printed word "at," in the last line, the figures and words "10 per cent," and (as is to be fairly inferred from the whole record and the argument, though not expressly stated), that this alteration was made without the knowledge or consent of the maker.

It was conceded on the trial that the plaintiff was a bona fide holder of the note before due, and the only question in the case is whether the wrongful alteration of the note by the payee or any subsequent holder (for such was the only inference, there being no evidence showing by whom the alteration was made), rendered the note void in the hands of the plaintiff or constituted a defense as against him in favor of the maker.

Without extrinsic evidence of authority to make the alteration, it is too clear to require the citation of authority, that unless the note, as signed, can be treated as a note given in blank, so far as relates to the rate of interest, giving the payee or holder the right to fill the blank by inserting the rate, the alteration must be treated as a forgery, since it is one which, if valid, would enlarge the liability of the maker.

We are entirely satisfied that this note when signed without the addition of the words "10 per cent" was, notwithstanding the word "at," in legal effect, a complete and valid note, drawing the legal rate of interest at seven per cent, and that the word "at," at the end of the printed form, might readily be overlooked by the signer or disregarded as of no consequence if noticed at all, and that there was, therefore, no such blank left in it as would warrant the payee or holder, without further evidence of assent, to insert a different rate of interest. See Warrington v. Early, 2 Ellis and Blackb., 763; Waterman v. Vose, 43 Me. 504.

The case, which may be regarded as coming nearest to supporting the implied authority to insert the special rate in this case, is that of Visher v. Webster, 8 Cal. 109. But whatever may be the authority of that case and that of Fisher v. Dennis, 6 Cal. 577, upon which it is based, we do not think it would authorize the alteration in the present case.

The note in that case, as signed, was in the following form:

"One day after date, we jointly and severally promise to pay Messrs. A. N. Fisher & Co., or order, the sum of seven hundred and eight 71-100 dollars for value received, with interest, monthly, at the rate of per cent per annum, per month, until final payment."

The alteration consisted in filling this blank with the word "five." Such a blank in the body of the note would clearly indicate to any one that it was intended to be filled, and the fact that it was payable monthly could not well be overlooked. But in the case before us the insertion of the words "10 per cent," at the end of the note after the single printed word "at," can hardly be called the filling a blank at all, and though it is urged that leaving the printed word "at" at the close of the note was calculated to facilitate the forgery, by inducing in other parties the belief of the genuineness of the words added, yet it may be said with at least equal force, on the other hand, that to those looking at the note after the alteration critically enough to notice the printed word "at," the printed form of the note itself might well excite suspicion that the form was specially got up by the payee to render the forgery more easy, and that the words "10 per cent," added at the end, were rather calculated to increase than to allay the suspicion of their genuineness; since, if the note was got up and printed only with the intention of leaving a blank for the insertion of the rate, the words "per cent" might just as well, and much more naturally would have been, printed after a small blank following the word "at." Even the name of the payee was printed in the note. Would the payee, in honestly getting up such a note, have it printed without printing also the words "per cent," which would in all cases be the same, whatever the rate? These considerations are not conclusive, it is true, but they are not without weight.

We think the courts have gone quite far enough in sustaining instruments executed in blank, and the implied authority to fill them up, and we are not disposed to take a step in advance in that direction.

The counsel for the plaintiff in error fully admits the general rule, that an alteration having this effect thus to increase the maker's liability, renders the note void as against the maker, even in the hands of a bona fide holder for value. But he insists that, though it may be a forgery, the peculiar facts of this case bring it within a principle which constitutes an exception to the general rule; that the maker was guilty of negligence in leaving a blank apparently intended for the insertion of the rate per cent unfilled, and without drawing a line through the blank or erasing the word "at," to indicate that it was not to be filled, and that he thereby invited and facilitated the forgery in a manner calculated to impose upon innocent parties, and that he must, therefore, as between him and such innocent parties, be held to pay the note, in its altered form, in the same manner as if it had been originally so drawn, on the principle that, "where one of two innocent parties must suffer by the fault of a third, he shall sustain the loss who put it in the power of the third to occasion it;" or, as expressed by the Louisiana court, in Isnard v. Torres et al., 10 La.Ann. 103, "Where one of two parties, neither of whom has acted dishonestly, must suffer, he shall suffer who, by his own act, has occasioned the confidence and consequent injury of the other."

This principle is one of quite general application, and, where properly understood and limited, it is one of manifest equity; but it has many limitations and qualifications. Whether the present case falls within it or constitutes an exception, is a question of some nicety, requiring considerable accuracy of discrimination for its solution, and upon which unanimity of decision could perhaps hardly be expected, and we accordingly find that able courts have arrived at opposite conclusions upon it. But upon principle and the weight of authority, we think the liability of the maker upon the note, as altered, cannot be maintained. The general principle that, "where one of the two innocent parties must suffer," etc., upon which the plaintiff in error relies, as stated by us in Burson v Huntington, decided at the last October term, is one which, in its application, is mainly confined to cases where the third person, whose act or default has occasioned the loss, has been in some sense or to some extent, the agent of the party who is made to sustain the loss, or when the latter, by his acts or negligence, has authorized the other party to consider him as such, and in all the cases ...