Pope v. Branch Cnty. Sav. Bank

• Decision Date: 02 November 1899
• Parties: POPE v. BRANCH COUNTY SAV. BANK.
• Court: Indiana Appellate Court

23 Ind.App. 210

54 N.E. 835

POPE

v.BRANCH COUNTY SAV. BANK.

Appellate Court of Indiana.

Nov. 2, 1899.

Appeal from circuit court, Elkhart county; I. D. Wilson, Judge.

Action by the Branch County Savings Bank against Alexander Pope upon a promissory note. From a judgment in favor of plaintiff, defendant appealed. Reversed.Van Fleet & Van Fleet, for appellant. O. T. Chamberlain and Perry L. Turner, for appellee.

COMSTOCK, C. J.

Appellee brought this action against appellant upon a promissory note alleged to have been executed by appellant to the order of Edwin A. Jones, who indorsed it in writing to Catherine Jones, who in turn indorsed it, before maturity, in writing, to appellee. The note was for $236.68, with interest and attorney's fees. Appellant answered by non est factum. No question is made upon the complaint or answer. The cause was tried by jury, and a verdict returned for appellee in the sum of $263.40. With the general verdict, answers to interrogatories were returned. The error assigned upon this appeal is the action of the court in overruling appellant's motion for a new trial.

It appears from the record that appellant and one Edwin A. Jones were formerly partners in business. Upon the dissolution of the partnership, appellant executed the note in suit to Jones for the balance supposed to be due him on account of obligations growing out of the partnership business. The note was subsequently assigned to the wife of Jones, and by her, as above stated, to appellee. Appellant claims that he refused to execute a note payable in bank; that the note he signed and delivered to Jones was “negotiable and payable at ----- Bank, Elkhart, Inda.,” and that after its execution it was changed by writing before the word “Bank” the words “First National.” This claim of appellant is sustained by the evidence.

The motion for a new trial contains ten reasons. Under the first and second, appellant complains of the verdict of the jury, and the finding on the eighth interrogatory submitted to them. As our view of the law requires the reversal of the judgment, and as the questions presented by these reasons for a new trial may not arise upon a second trial, we do not pass upon them.

The refusal of the court to submit to the jury the sixth interrogatory asked by appellant is the third reason stated in the motion for a new trial. This interrogatory is in the following language: “It is true, is it not, that after said Edwin A. Jones had thus filled up said blank, he, as agent of his wife, took said note to Coldwater, Michigan, and sold it to the plaintiff, and that at the time the plaintiff so purchased said note it clearly appeared that the words ‘First National,’ with which said blank was filled, were in a handwriting different from that of the remainder of said note?” This interrogatory called for several facts. It has been held by the supreme court that each interrogatory must present a single material fact involved in the issue. Town of Albion v. Hetrick, 90 Ind. 548;Rosser v. Barnes, 16 Ind. 502.

Interrogatory No. 7 asked by appellant, and refused, is subject to the same objection.

The fifth reason for a new trial questions the ruling of the court in giving to the jury the first instruction asked by the appellee. The instruction is in the following language: “This is an action by the plaintiff, the Branch County Savings Bank, against the defendant, upon a note, a copy of which is set out in the plaintiff's complaint. The only defense which the defendant pleads to this note is his sworn statement that he did not execute the note. The court instructs you that, if a fair preponderance of the evidence satisfies your minds that the defendant did execute the note sued upon, then you should find for the plaintiff in the sum of the principal and interest of said note, with a reasonable attorney's fee for the plaintiff's attorney.” The defendant answered by a plea of non est factum. This answer raised the question of the alteration of the note. Wiltfong v. Schafer, 121 Ind. 264, 23 N. E. 91. Two material questions were in issue: (1) Was there a material alteration? (2) Was appellee a bona fide purchaser? The evidence shows that there was a material alteration, after the execution of the note, without the knowledge or consent of appellant. There was, therefore, no execution of the note as sued upon. The burden then rested upon the appellee to show that it was a bona fide holder for value. Giberson v. Jolley, 120 Ind. 301, 22 N. E. 306;Palmer v. Poor, 121 Ind. 135, 22 N. E. 984;Bank v. Ruhl, 122 Ind. 279, 23 N. E. 766;Schmueckle v. Waters, 125 Ind. 265, 25 N. E. 281;Kain v. Bare, 4 Ind. App. 440, 31 N. E. 205;Bunting v. Mick, 5 Ind. App. 289, 31 N. E. 378, 1055. The evidence shows that the blank was fraudulently filled by Jones after the execution of the note, and against the express agreement of the parties. The only question raised by this instruction was whether appellee could recover notwithstanding the alteration. The question as to the good faith of appellee was taken from the consideration of the jury. It was a material question, and its omission from the instruction was erroneous, and was harmful to appellant.

The second instruction given at the request of appellee, and excepted to, is as follows: “The defendant claims that the note sued upon has been changed, since he signed it, by some one having inserted the words ‘First National’ before the word ‘Bank’ in said note. In other words, his claim is that the note, when signed by him, read, ‘Negotiable and payable at ----- Bank, Elkhart, Indiana;’ that a space about two inches wide before the word ‘Bank’ had no writing in it at the time he signed the note, and that the words ‘First National’ have been inserted in said space after he signed it and delivered it to Edwin A. Jones. The court instructs you that, if the defendant signed the note while the space in front of the word ‘Bank’ was vacant, and that the note, at the time he signed it, read, ‘Negotiable and payable at ----- Bank, Elkhart, Indiana,’ then the payee of the note, Edwin A. Jones, or any indorsee of the note, had a right to insert in said blank the name of any bank in Elkhart, Indiana.” This instruction, as does the first, takes from the consideration of the jury the question of good faith of the appellee. The undisputed evidence shows that after the execution of the note, and contrary to the express understanding of the parties, the blank was filled. A payee or indorsee having notice of the agreement of the parties cannot materially alter a note, contrary to the express agreement of the parties thereto. Counsel for appellee insist that this instruction was correct, and is in accord with the principle announced in Marshall v. Drescher, 68 Ind. 359. In that case the note was executed with the words “payable at” with a blank space after those words. The court found that the maker of the note did not intend to give his note payable in bank; that, after the note was executed, without the knowledge or consent of the maker, the payee inserted the words, after “payable at,” “the First National Bank at Spencer, Indiana,” and before it was due sold and transferred it to Morris, who sold and transferred it to the plaintiff. It does not appear that the intention of the maker not to give his note payable in bank was communicated to the payee. The court said: “The payee had implied authority from the conditions of the note and from the statement of the maker to leave it at the First National Bank at Spencer for payment to fill up the blank in the note as he did. We think the finding shows that the note was valid in the hands of the payee notwithstanding the alteration, and, being so valid, it was valid in the hands of the appellee, whether he had notice of the alteration or not.” There was no understanding that the note should not be payable in bank. The facts are widely different from those in the case at bar. In Palmer v. Poor, 121 Ind., at page 136, 22 N. E. 984, the court, in commenting upon Marshall v. Drescher, supra, said: “The circumstances were such as to create the implication that the holder of the note had authority to fill the blank left in the instrument, and it was upon this ground that the note there under consideration was held valid. The case of McCoy v. Lockwood, 71 Ind. 319, asserts the doctrine that a material alteration will avoid a note even in the hands of a bona fide indorsee, refers to the cases of Holland v. Hatch, 11 Ind. 497,Schnewind v. Hacket, 54 Ind. 248, and Collier v. Waugh, 64 Ind. 456, with approval, and denies that a note in the hands of a bona fide holder is enforceable where it was altered by writing in it a place of payment.”

The third instruction given at the request of appellee, and excepted to, is made the seventh reason for a new trial. It is as follows: “The court...