Maldaner v. Smith

• Decision Date: 31 January 1899
• Citation: 102 Wis. 30,78 N.W. 140
• Parties: MALDANER v. SMITH ET AL.
• Court: Wisconsin Supreme Court

102 Wis. 30

78 N.W. 140

MALDANER

v.SMITH ET AL.

Supreme Court of Wisconsin.

Jan. 31, 1899.

Syllabus by the Judge.

1. The mere existence of an interlineation in a note raises no presumption of a fraudulent or unauthorized alteration. In the absence of some indication other than the interlineation itself, the presumption is that it was made before delivery of the paper.

2. Where an interlineation in a note exists, but the instrument appears to have been written all at the same time, by the same hand and with the same ink, the presumptions are against a forgery, and in the absence of clear and satisfactory evidence to the contrary such presumptions should prevail.

3. The incompetency of a party under section 4070, Rev. St., to testify as to personal transactions between himself and one whom he claims to have been the agent of the adverse party, is not removable by the examination of such party otherwise than as a witness at the instance of such adverse party and the introduction of such examination in evidence by such party in his own behalf.

4. The incompetency of a party to testify under section 4070, Rev. St., is removable only by the conduct of the adverse party in the manner indicated in such section. The door for such party to testify is closed by the statute against any effort of his to open it. The adverse party must open the door if opened at all.

5. The mere taking of a deposition does not make it evidence for either party. Though it may be offered by either, when offered it is the evidence of the party offering it, regardless of at whose instance it was taken.

Appeal from circuit court, Dodge county; James J. Dick, Judge.

Action by Arthur Maldaner against George W. Smith and others to foreclose a mortgage. Judgment for defendants. Plaintiff appeals. Reversed.

Action to foreclose a mortgage given to secure the payment of a note of $2,000 and the interest thereon. Defendant George W. Smith was the mortgagor and W. T. Rambusch the payee. Plaintiff became the owner of the note and mortgage for value before maturity, the title having been duly transferred by indorsement of the note and delivery of the same, with a proper assignment of the mortgage. The property passed first to Henry Maldaner. He subsequently died and his executors transferred the property to the plaintiff. The note was in form negotiable, but the words “or order,” at the proper place, were interlined, though there was nothing in the appearance of the note indicating that the interlineation was not made at the time it was signed or delivered to Rambusch. The complaint was in due and usual form. The maker of the note and his wife, Addie E. Smith, answered the complaint, admitting under oath the execution of the note, setting it out verbatim as it appeared when introduced in evidence in the case. At the opening of the trial the answer was amended so as to deny the execution of the note described in the complaint, but admit the execution of one similar in all respects, except as to the words “or order.” The effect of the answer was to deny the execution of a negotiable note. The answer further alleged that Rambusch was the agent of the owner of the note and mortgage up to the time it was fully paid, and that such payment was made to such agent without notice that he was not the owner of the note. The questions litigated were whether the note was negotiable when delivered to Rambusch, whether it was thereafter changed by interlining the words “or order,” and whether Rambusch received payments on the note from the maker, as agent for the owner. No payments were made except those admitted in the complaint, other than payments claimed to have been made to Rambusch as agent, which never reached the owner of the note and mortgage. When the note was offered in evidence the court ruled as a matter of law that it was incumbent on the plaintiff to satisfactorily explain by evidence aliunde the interlineation of the words “or order,” though there was nothing appearing on the face of the paper to cast suspicion upon it except the fact of the interlineation. It appeared to be all in the same handwriting and to have all been written at the same time, with the same ink. It was received in evidence upon the original answer being offered in evidence. The examination of George W. Smith at the instance of plaintiff, otherwise than as a witness under the statute, was received in evidence against objection. Such objection was particularly directed to that part of the examination relating to transactions between Smith and Rambusch, the latter having died before the trial. Upon the theory that the examination of Smith otherwise than as a witness, and its reception in evidence in his behalf, removed his incompetency to testify as to transactions between himself and the deceased Rambusch, he was permitted against objection to give such testimony, which included a relation of the making of various payments to the deceased, including the final payment, and of obtaining receipts therefor, and of the final surrender to Smith of what purported to be the note, but which was, in fact, a copy, with a portion torn out where the words “or order” occur in the original. The mortgage was not surrendered at the time the final payment was made, and no inquiry for the same was made, Smith being satisfied with the statement of Rambusch that he had destroyed the mortgage and satisfied it of record. There was no proof of payments other than those admitted in the complaint, except by the testimony of Smith, as before indicated. Smith testified that the words “or order” were not in the note when he signed it; that he then knew the significance of such words; that it was the first note he ever gave and he remembered that when he signed it he thought the omission of such words would prevent Rambusch from selling the note; that all payments were made to Rambusch without any demand being made therefor. He explained the circumstance of his signing the answer admitting the execution of the note with the words “or order” in it, by saying that he was hurried up and did not read the answer carefully. Charles H. Smith, a brother of the defendant George, corroborated the latter as to there being no interlineation in the note when it was executed. He said he had no object but that of curiosity in examining the note, and that nothing had occurred since its execution to call the subject to his attention; that when the note was made he had not the slightest interest in knowing the form of the note, or in remembering it. The court found that the instrument was nonnegotiable when delivered to Rambusch; that the words “or order” were interlined therein without the knowledge or consent of the maker, after such delivery; that it was fully paid to Rambusch according to its terms before the action was commenced, and without notice on the part of the maker of its transfer to a third person. As a conclusion of law the court found that both the note and mortgage were void and that defendants were entitled to judgment. Judgment was entered accordingly and plaintiff appealed, proper exceptions to the findings of fact having been filed to preserve for review the questions discussed and decided in the opinion.

Quarles, Spence & Quarles and George Lines, for appellant.

Malone & Bachhuber, for respondents.

MARSHALL, J. (after stating the facts).

The most important question for consideration on this appeal is, did the court err in finding that the words “or order” were interlined in the note after its delivery to Rambusch, and without the knowledge or consent of the maker? That being a question of fact, the determination of it by the trial court cannot be disturbed unless contrary to the clear preponderance of the evidence; but in reaching a conclusion, some rules which are well settled must be taken into consideration. First is the rule that he who alleges fraud must establish it by clear and satisfactory evidence. Only reasonable certainty of the existence of the fact is required, the same as in case of any other fact in a civil action. Nevertheless the presumption of innocence and fair dealing among men is so persuasive that a situation which violates it calls for evidence of a more clear and satisfactory character than one that does not involve moral turpitude or the commission of a criminal offense. Consistent with that idea, the rule is well recognized that where fraud, whether constituting a criminal offense or not, is alleged as the foundation of the action, but especially in case of the former, it must be established by clear and satisfactory evidence or there can be no recovery. The more serious the nature of the fraud charged, the more rigidly should that rule be applied. That is particularly applicable to the case before us, the charge of fraud involving the offense of forgery, a felonious crime under the statutes of this state. Second, is the rule that the mere fact that a note has a material interlineation raises no presumption that it was changed after delivery. In this the learned trial judge made a serious mistake. It is not the law that the mere existence of an interlineation in a writing raises a presumption that it has been fraudulently altered or altered at all since delivery. The presumption of honesty is by no means so easily overcome as that, and the burden of proof put upon the person claiming under such a paper to remove a suspicion of fraud cast upon it. That we deem to be so elementary that a citation of authority to sustain it is hardly necessary. It has often been so held by this court, as shown by numerous instances cited by appellant's counsel, to which others might be added. Williams v. Starr, 5 Wis. 534;Page v. Danaher, 43 Wis. 221;Gorden v. Robertson, 48 Wis. 493, 4 N. W. 579;Maxwell v. Hartmann, 50 Wis. 660, 8 N. W. 103;Rollins v. Humphrey, 98 Wis. 66, 73 N. W. 331;Prieger v. Insurance Co., 6 Wis. 89;Austin v. Austin, 45 Wis. 523. Mr. Jones, in his late work on...