Jeffrey v. Rosenfeld

• Decision Date: 07 September 1901
• Citation: 179 Mass. 506,61 N.E. 49
• Parties: JEFFREY et al. v. ROSENFELD.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

179 Mass. 506

61 N.E. 49

JEFFREY et al. v. ROSENFELD.

Supreme Judicial Court of Massachusetts, Middlesex

September 7, 1901

COUNSEL

J. B. Dixon, for plaintiffs.

John F Libby and Louis L. G. De Rochemont, for defendant.

OPINION

MORTON, J.

This is a bill in equity to restrain the foreclosure of a mortgage on the ground that, after the delivery of the mortgage and note, there was a material alteration of the note without the plaintiffs' assent. The nature of the alteration, or by whom it was made, is not set out, nor is it alleged that the alteration was fraudulent. There was a demurrer for want of equity, and on the grounds that the bill did not state a case that entitled the plaintiffs to relief, and that they had an adequate remedy at law. The demurrer was sustained, and the bill dismissed, and the plaintiffs appealed.

The defendant contends that the nature of the alleged alteration should have been specifically set forth. St. 1898, c. 533, § 125 (the negotiable instruments act), provides what alterations shall be deemed material, and it would seem, for that and other reasons, that, as matter of correct pleading, the bill should have described the alteration relied on, in order that the court might see whether, as matter of law, the alteration was a material alteration. But for the purposes of this case, we assume in favor of the plaintiffs, without deciding, that this defect, if relied on as a ground of demurrer, should have been particularly pointed out, and that it is not open to the defendant, when the cause of demurrer assigned is the general one of a want of equity, or that the bill does not state a case which entitles the plaintiffs to relief.

The question which has been chiefly argued relates to the effect of the alteration of the note upon the mortgage. The bill alleges that the mortgage was given to secure the payment of the note, but, for aught that appears, the transaction was the ordinary one of a loan of money secured by a note and mortgage. At any rate, there is nothing to show that the note and mortgage were not both given upon the same consideration and to secure the same debt, and there is no allegation that the debt has been paid or satisfied in any way. If the mortgage was given to secure the personal obligation created by the note, and nothing more, the allegations of the bill should have been more specific. There is no doubt that the effect of a material alteration of a note has been held to be different in some respects in England from what it has been held to be in this country. Thus it has been held there that a material alteration, even by a stranger, without the knowledge or assent of any of the parties to the note, will avoid it (Davidson v. Cooper, 11 Mees. & W. 778; Id., 13 Mees. & W. 343); and very likely it would be held under the bills of exchange act that the effect of such an alteration, by whomsoever made, would be to avoid the note as to all parties except those consenting to it and subsequent indorsers (Chalm. Bills Exch. [5th Ed.] 213, 214). But the law has been laid down differently in this commonwealth (Drum v. Drum, 133 Mass. 566), and, according to the weight of authority in this country, a material alteration of a note by a stranger, or a spoliation of it, as it is termed, will not avoid the note (Drum v. Drum, supra; 2 Daniel, Neg. Inst. [3d Ed.]§ 1373a; 2 Pars. Notes & B. [1st Ed.] 574; Norton, Bills & N. [2d Ed.] 234, 235; 1 Ames, Bills & N. 449). Whether, therefore, section 124 of the negotiable instruments act (St. 1898, c. 533), which is copied from section 64 of the bills of exchange act (St. 45 & 46 Vict. c. 61), should receive the same construction which that has received, or which it undoubtedly will receive, deserves serious consideration. The statute enancted in this state is the same, in substance and effect, as that drafted by the conference of commissioners on uniformity of laws which met at Detroit in 1895, and has already been enacted in 15 states (14 Harvard Law Rev. 241, Dec., 1900, by Prof. Ames); and although it is largely copied from the English act, and is in many of its provisions an almost, if not quite, verbatim copy of that act, it would seem not unreasonable to suppose that it was the intention of the framers of the American act that section 124 should be construed according to the law of this country, rather than that of England. But it is not necessary to pass upon that question now. In England, as in this country, except when an alteration is fraudulent, it does not cancel or extinguish the debt for which the note was given. Sutton v. Toomer, 7 Barn. & C. 416; Atkinson v. Hawden, 2 Adol. & E. 628; Byles, Bills (4th Am. Ed.) 257; 2 Am. & Eng. Enc. Law (2d Ed.) 200, 202; 2 Daniel, Neg. Inst. (3d Ed.) §§ 1410a, 1411; 2 Pars. Notes & B. (1st Ed.) 571, 572. And the cases are numerous in which it has been held that a party could recover upon the original consideration, notwithstanding there had been a material alteration of the written contract. Lee v. Butler, 167 Mass. 426, 46 N.E. 52; Nickerson v. Swett, 135 Mass. 514; Adams v. Frye, 3 Metc. 103; Smith v. Dunham, 8 Pick. 246; Milbery v. Storer, 75 Me. 69; Croswell v. Labree, 81 Me. 44, 16 A. 331; Keene v. Weeks, 19 R.I. 309, 33 A. 446. Following out this principle, it has been held in many cases that the material alteration of a mortgage note, if not fraudulent, will not avoid the nortgage. Elliott v. Blair, 47 Ill. 342; Vogle v. Ripper, 34 Ill. 100, 85 Am. Dec. 298; Clough v. Seay, 49 Iowa, 111; Gillette v. Smith, 18 Hun, 10; Cheek v. Nall, 112 N.C. 370, 17 S.E. 80; Heath v. Blake, 28 S.C. 406, 416, 5 S.E. 842; 2 Am. & Eng. Enc. Law (2d Ed.) 202; 2 Jones, Mortg. (3d Ed.) § 1215. It is true that in this...