Snyder v. Van Doren
| Decision Date | 22 April 1879 |
| Citation | 1 N.W. 285,46 Wis. 602 |
| Parties | SNYDER v. VAN DOREN, imp |
| Court | Wisconsin Supreme Court |
APPEAL from the Circuit Court for Winnebago County.
Action on a promissory note of A. J. Van Doren, J. D. Van Doren, and I. O. Van Doren. Plaintiff had a verdict and judgment against all the defendants; and the defendant I. O. Van Doren appealed from the judgment.
The facts upon which the question of the appellant's liability turned, are stated in the opinion.
Judgment affirmed.
H. B Jackson, for the appellant:
1. Any material alteration of a note, whether for the better or for the worse, terminates the liability of the maker not consenting to it. Master v. Miller, 4 Term, 320; S C., 1 Smith's L C., 6th Am. ed., Pt. 2, 141. Such for example is the effect of an alteration in the time of payment, whether it shorten or extend the time. Smith v Weld, 2 Pa. St., 54; Low v. Merrill, 1 Pinney, 340. The addition of the name of a third person as maker is such an alteration of the note as will vitiate it. Gardner v. Walsh, 5 El. & Bl., 82; S. C., 32 Eng. L. & E., 162; Chappell v. Spencer, 23 Barb., 584; McCaughey v. Smith, 27 N. Y., 41-44, and cases there cited; Bowers' Adm'r v. Brigg, 20 Ind., 139; Bank of Limestone v. Penick, 5 Mon., 25; Chitty on Bills, ed. of 1854, p. 215; Byles on Bills, Law Lib., 4th Series, vol. 46, p. 247; Story on Prom. Notes, § 408 a, and note. If, after the completion of the note, J. D. Van Doren had removed his own name as maker, making the note that of the appellant only, it would hardly be contended that this was not a material alteration. But it is no less an alteration of a note to add the name of a joint maker, than to remove one. The utmost extent of authority to bind appellant, vested in any one by his signing the blank note with J. D. Van Doren and intrusting it to him, was to fill up the ordinary blanks left unfilled, so as to make it a perfect joint note of the two signers. He never consented, therefore, to be one of three obligors to any amount, for any purpose, or under any circumstances; and he cannot be charged with any such joint obligation without his consent. He could not be so charged even if his objection to a third joint obligor were a mere whim. But one willing to be a joint obligor with A., may reasonably be unwilling to be a joint obligor with A. and B. If he pay the note, A. may be compelled by the law of contribution to pay him back one-half the amount, in the one case; while in the other case A. can be compelled to pay only one-third, and he is forced to look to B. for the other third. 2. It is immaterial when or by whom the alteration was made, provided it was without appellant's consent. "A material alteration in commercial paper destroys the nonconsenting party's liability, although the alteration was made before the paper came into the payee's hands, and was not known to him." 2 Parsons on Con., 6th ed., 716; Wood v. Steele, 6 Wall., 81, 83; Holland v. Hatch, 11 Ind., 497; Schwalm v. McIntyre, 17 Wis. 232; Rounsavell v. Pease, 45 id., 506.
For the respondent, there was a brief by Finch & Barber, and oral argument by Mr. Barber:
1. The signing of a blank note, such as was shown in this case, imports a grant of authority to the holder to fill the note out for any sum, and with any terms as to time, place and conditions of payment. And although the parties so signing may prescribe limits to the holder, a bona fide transferee from him, who takes the instrument in ignorance of such limitation of his authority, may recover upon it, although in filling it out the authority has been exceeded. 1 Daniel on Neg. Inst., § 142; Story on Bills, § 222; Parsons on Bills, 109; Russel v. Langstaffe, 2 Doug., 514; Mich. Ins. Co. v. Leavenworth, 30 Vt., 11; President, etc., v. Kimball, 10 Cush., 373; Ives v. Farmers' Bank, 2 Allen, 236; Redlich v. Doll, 54 N. Y., 238; Schryver v. Hawkes, 22 Ohio St., 308; Orrick v. Colston, 7 Gratt., 189; Bank of Pittsburgh v. Neal, 22 How., U.S., 107; Davidson v. Lanier, 4 Wall., 457. 2. The appellant cannot escape liability on the ground that the addition of the name of A. J. Van Doren was a material alteration of the note. (1) It is now settled that the addition of a name to a note or bill is not a material alteration. 2 Daniel on Neg. Inst., §§ 1388-9; Parsons on N. & B., 559; Brownell v. Winnie, 29 N. Y., 400; McCaughey v. Smith, 27 id., 39; Miller v. Finley, 26 Mich., 249. (2) The name was added before delivery. It was not in fact an alteration, because the appellant, by signing a note in blank for the purpose of enabling his brother to negotiate it, authorized him to take any steps necessary to that end. (3) The appellant, by his carelessness in executing the note and putting it in circulation in such form as to give the holder an opportunity to add another name, is estopped from urging the alleged defect as against the plaintiff, who took the instrument in ignorance of the alteration, if there was one. 2 Daniel, § 1405; Van Duzer v. Howe, 21 N. Y., 538; Garrard v. Hadden, 67 Pa. St., 82.
This action is brought to recover the amount of a promissory note bearing date June 5, 1875, payable to the plaintiff or bearer, two years after date, with interest at ten per cent. per annum. The note on its face purports to be signed by all the defendants in the following order:
A. J. VAN DOREN
J. D. VAN DOREN
I. O. VAN DOREN.
The note is the joint note of the makers.
The evidence shows that the appellant, I. O. Van Doren, and J. D. Van Doren, signed the note in blank something over a year before the date of the same. The note when signed by the appellant was a printed form, blank as to date, amount, time of payment, rate of interest and payee, and there was also a blank to be filled for the purpose of making it a joint or several note. The evidence also shows that the note was so signed in blank by the appellant for the purpose of enabling J. D. Van Doren to raise money on the same for his own use, and that the appellant was simply an accommodation maker. It also shows that before the note was negotiated or delivered to the plaintiff, it was filled up and signed as it appeared at the trial; and for the purposes of this case it must be held that the plaintiff knew that the name of A. J. Van Doren was not signed to the note at the time it was signed by the appellant and J. D. Van Doren. The evidence also shows that there was no express authority given by the appellant that the note might be so signed before the same was negotiated.
Upon this evidence the learned counsel for the appellant insists that there can be no recovery against the appellant. Counsel admits that, by signing the note in blank for the accommodation of J. D. Van Doren, the appellant authorized him to add the date, amount, time of payment, rate of interest and name of payee, to make it a joint and several or joint or several note, and to make it negotiable or otherwise; but denies that by so doing he authorized him to procure any third person or persons to sign the same as joint or several makers with him.
The real question to be determined in this case is, whether a person who signs a note in blank as maker, for the accommodation of the person to whom he delivers it, must be held, as between him and a bona fide holder for value, to have impliedly authorized the person to whom the same is delivered, to have the same signed by another party or parties as joint makers with him. We think, both upon principle and authority, that the person for whose accommodation such note is signed, may, before the same is negotiated by him, procure the same to be so signed by another person or persons, without vitiating such note in the hands of a bona fide holder. If the party signing the note in blank expressly stipulates that the same shall not be signed by any other person, there is probably no doubt but that the note would be void in the hands of any one who took the same so signed by another, knowing that the accommodation maker had expressly stipulated against such further signature.
We think the rule is, that a party who signs a note in blank makes the person to whom it is delivered for negotiation his agent, not only for the purpose of filling the blanks in the note, but to do any other thing necessary to make the note so signed accomplish the purpose for which it was intended, with the limitation that he shall not insert in such note any contract or stipulation not usually found in a promissory note. It was not even argued by the learned counsel for the appellant, that in such case the party holding the note could not, for the purpose of negotiating the same, have it indorsed by a third person or persons, or have a third person guaranty the payment of the same by a written guaranty on the back thereof; and it seems to us that if he may do that, there is no objection to his accomplishing the game purpose by having such third person sign the same as a joint or several maker.
It is not a question of alteration of the note, but a question of implied agency on the part of the holder. The note in the hands of the holder, before negotiation by him, is not a binding contract between him and the accommodation maker. To have any validity as a contract, it must be negotiated by the holder; and until such negotiation takes place, the contract is imperfect, and may be filled up and perfected in any manner, by such holder, which is not inconsistent with the implied agency given by the accommodation maker. There can be no doubt that the holder might fill up the same with an amount, date and time of payment, and then alter the same in either of these respects before he negotiated the same, without vitiating the note in the hands of a bona fide holder. The person to whom the same...
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