Mechanics' American Nat. Bank v. Helmbacher
| Decision Date | 06 February 1918 |
| Docket Number | No. 2125.,2125. |
| Citation | 201 S.W. 383,199 Mo. App. 173 |
| Parties | MECHANICS' AMERICAN NAT. BANK v. HELMBACHER. |
| Court | Missouri Court of Appeals |
Appeal from Circuit Court, Scott County; Frank Kelly, Judge.
Suit by the Mechanics' American National Bank against M. Helmbacher. From a judgment for defendant, plaintiff appeals. Judgment affirmed.
Leahy, Saunders & Barth, of St. Louis, for appellant. Gallivan & Finch, of New Madrid, and Oliver & Oliver, of Cape Girardeau, for respondent.
This is a suit on a promissory note for $1,500, dated May 28, 1915, payable on or before January 1, 1916, interest at 8 per cent. This note is as follows:
Upon trial, before the court and a jury, judgment below was for the defendant, and plaintiff appealed.
The payee of the note as originally written was C. D. West. Plaintiff claims to be the holder in due course, for value, and without notice of any infirmities. The defense is that since the signing and delivery of said note it has been materially altered, mutilated, and changed in this manner: (1) That the relation of the parties to the instrument has been materially changed by inserting after the name of the payee, C. D. West, the word "trustee" without the knowledge or consent of the defendant; (2) that the end of the note has been cut off, thereby cutting off "Payable a" in said note, and inserting "Bk of" over "Oran, Mo.," and it is claimed this changed the place of payment; (3) and that some memorandum or writing has been cut off the end of said note, which memorandum or writing rendered said note nonnegotiable; (4) that the note was executed on condition that certain merchandise and other property, including some real estate, assigned by Dirnberger to C. D. West as trustee for the benefit of creditors, would be returned to Dirnberger, and that this property was not returned, and that there was therefore no consideration for the note.
It seems that Dirnberger, who had been conducting a grocery store, had not prospered, and was being pressed by creditors. In this situation he made an assignment, and C. D. West, adjuster for the Credit Men's Association of St. Louis, was made the assignee. The defendant signed the note with Dirnberger as accommodation maker. The note was filled out by defendant at his residence on a blank form taken from his blank note book at which time it was signed by Dirnberger and defendant, and was delivered to Dirnberger. A blank from defendant's note book was introduced at the trial, and by comparison the portion cut off clearly appears from the photographic copies in the record. Shortly thereafter Dirnberger delivered the note to H. E. Robocker, credit manager of Adam Roth Grocery Company. Robocker soon thereafter delivered the note to West, who on June 5, 1915, discounted the same at plaintiff bank, and the proceeds were deposited to his credit as trustee for Dirnberger, and paid out to the creditors of Dirnberger. Robocker testified that when he received the note from Dirnberger it was in the same condition as at the trial, except the "Bk of" was not on it, and it did not then, of course, bear the indorsement of C. D. West, trustee. C. L. Allen, assistant cashier of plaintiff bank, testified that when he discounted the note for his bank it was in the same condition as at the trial. West testified that he did not think that "Bk of" was written on the note when he received it from Robocker, but that the word "trustee" was in the note when he received it. It is conceded that the word "trustee" was written, and that the end of the note was cut off and "Bk of" inserted, after defendant signed the note, and all this without his knowledge or consent. Two questions arise upon this record: (1) Is plaintiff a holder in due course? (2) Did the addition of "trustee" and "Bk of" and cutting off "Payable a" under the circumstances so change the relation of the parties and the place of payment as to amount to a material alteration? The statute (section 10022, R. S. 1909) defines a "holder in due course" as follows:
"A holder in due course is a holder who has taken the instrument under the following conditions: (1) That it is complete and regular upon its face; (2) that he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact; (3) that he took it in good faith and for value; (4) that at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it."
The presumption is in favor of the integrity of a negotiable promissory note; but if the note on its face appears to be in different handwriting, written at different times and in different ink, this destroys the presumption of integrity. Exchange Bank v. Robinson, 185 Mo. App. loc. cit. 586, 172 S. W. 628, and cases there cited. An analogous principle is approved in Collison v. Norman, 191 S. W. loc. cit. 62; Carson v. Lumber Co., 192 S. W. loc. cit. 1021. In Beavers v. Bank, 177 Mo. App. loc. cit. 108, 163 S. W. 532, the court says:
"It is true that by the Negotiable Instruments Act (section 10022, Revised Statutes 1909) the holder in due course of a negotiable instrument is one who takes such instrument complete and regular on its face, before due, in good faith, for value and without notice, at the time it was negotiated, `of any infirmity in the instrument or defect in the title of the person negotiating it,' and that by section 10026, to constitute notice of such infirmity or defect actual knowledge must exist or knowledge of such facts as will make the act of taking the instrument amount to bad faith."
The note sued on by the most casual inspection shows that the word "trustee" and "Bk of" were written in this note in a different handwriting, and in different ink to that in which the balance of the note was written in ("Bk of" was in pencil), and the evidence shows conclusively that these additions were made at a different time to that when the balance of the note was written. Also it is apparent that not less than an inch had been cut off the end, severing about midway the time-honored picture of an Indian in full regalia mounted on his charger; and it appears that some writing was in this operation severed from the back of this note, as there was left on the back a loop or dot in ink of some letter or character which the shears did not include; perchance to have included this loop or dot would have invaded too deeply the face of the note. While it is true that by the statute the indorsee must have actual knowledge of infirmities in order to take him out of the class of holder in due course or such facts must appear as to make the taking of the note amount to bad faith, yet it would be shallow reason to permit an indorsee to shut his eyes to things apparent on the face of the instrument, and seek security in the mere assertion that he did not know. The uniform negotiable instrument law now adopted in most every state was not intended to make the game of hide and seek less difficult, but was intended to render more certain the rights, on the one hand, and obligations, on the other, of the parties, whether makers, indorsers, or indorsees.
The appellate courts of our state, so far as we are able to ascertain, have not determined any case in which sections 10094 and 10095, R. S. 1909, have been in question (the subject of these sections is material alterations), but other jurisdictions have had identical sections under consideration. In Berks County Trust Co. v. Lyte, 250 Pa. 543, 95 Atl. 719, Lyte signed a note as accommodation maker for one Lansinger. The note was payable to the order of themselves. Both indorsed the note, and plaintiff discounted it for value. Lansinger, after Lyte had signed and indorsed the note, without the knowledge or consent of Lyte, changed the place of payment. This change was made with no intention to defraud or deceive, but was made because Lansinger had no Berks County Trust Company blank note, and was made apparently to accommodate the trust company to whom he was selling the note. Lansinger advised plaintiff that he had made the change when he negotiated the note. Lyte rested his defense upon this change. Pennsylvania's statute in this respect is the same as our section 10094, R. S. 1909, which is as follows:
Section 10095 must necessarily be considered in connection with section 10094, as they relate to the same subject—material alterations. Section 10095, R. S. 1909, is as follows:
"Any alteration which changes: (1) The date; (2) the sum payable, either for principal or interest; (3) the time or place of payment; (4) the number or relation of the parties; (5) the medium of currency in which payment is to be made, or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration."
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