Swartz v. Bank of Haileyville
| Citation | 1934 OK 433,169 Okla. 22,35 P.2d 701 |
| Decision Date | 11 September 1934 |
| Docket Number | Case Number: 22427 |
| Parties | SWARTZ v. BANK OF HAILEYVILLE. |
| Court | Supreme Court of Oklahoma |
¶0 1. Alteration of Instruments--Statutory Provision.
2. Same--Party Consenting to Alteration Made Without Fraudulent Intent Bound by Instrument.
The law does not permit one who has designedly made a material alteration in the negotiable instrument to recover on the original consideration, but, if the alteration of the instrument is made without fraudulent intention and one of the parties, having knowledge of such change, consents thereto, such person shall be bound by the instrument. See R. C. L. vol. 1, sec. 36, p. 1005; section 68, p. 1033; Joplin-Erie Oil Co. v. Buckwaller (Kan.) 205 P. 343; Holyfields v. Harrington (Kan.) 115 P. 546.
3. Same--Alteration of Note by Changing Name of Payee Made by Agent of Holder in Due Course Without Authority Held Mere Spoliation--Alteration in Note Held to Have Been Ratified by Maker.
Where a bank becomes the owner and holder of a promissory note in good faith and in due course, and which note, prior to the time said bank became the owner and holder thereof, was altered by changing the name of the payee of said note, apparently by an agent of said bank without authority, said alteration is only a spoliation and does not affect the instrument's validity; and where it also appears that the maker of said note thereafter ratified said note by acknowledging the indebtedness evidenced by said note and requested said bank, as owner and holder of the same, for an extension of time for payment of same, held, the maker of said note is liable.
4. Same--Judgment Against Maker of Note Sustained.
Record examined. Judgment affirmed.
Appeal from District Court, Le Flore County; D. C. McCurtain, Judge.
Action by the Bank of Haileyville against H. H. Swartz. Judgment for plaintiff, and defendant appeals. Affirmed.
Varner & Varner, for plaintiff in error.
A. H. Keil and Counts & Counts, for defendant in error.
¶1 This action involves the question of a change or alteration of a negotiable instrument. The Bank of Haileyville as plaintiff, defendant in error herein, instituted an action against H. H. Swartz, plaintiff in error, to recover on a promissory note.
¶2 Plaintiff alleged three counts, all based upon the same cause of action. The first count contains allegations to the effect that on June 13, 1926, the defendant, H. H. Swartz, for a valuable consideration, executed and delivered to G. W. Barr his promissory negotiable note for $ 309.40, due six months after date; that thereafter said Barr, for a valuable consideration, indorsed and delivered said note to plaintiff; that on August 17, 1926, plaintiff notified defendant that it was the holder and owner of said note; that on March 13, 1927, defendant executed a promissory note for $ 332.60, due six months after date, in lieu of said note of $ 309.40 to plaintiff; that on February 14, 1928, defendant made a payment of $ 25 on said renewal note, which payment was applied as interest and extended the payment of said note to November 15, 1927. The plaintiff prayed judgment on said note for the amount of the balance due thereon.
¶3 In count 2, plaintiff, in addition to the allegations in count 1, concerning the execution and delivery of said original note to G. W. Barr, subsequently indorsed and delivered to plaintiff, and the notification to the defendant that the plaintiff was the owner and holder of said note, alleged that on March 13, 1927, said Barr, acting for and on behalf of plaintiff, went to the defendant and procured from him a renewal note in payment of said former note held by plaintiff. This renewal note was described as being dated March 13, 1927, for $ 302.60, due six months after date and payable to plaintiff. In this count plaintiff also alleged said Barr delivered said renewal note to plaintiff, and that the plaintiff thereupon delivered the original note executed by defendant on June 13, 1926, to said Barr for and on behalf of said defendant. In this count it was also alleged that defendant had denied the execution of said renewal note, and it was averred that, if the same was not in fact executed by the defendant, the original note for $ 309.40, dated June 13, 1926, was still unpaid; judgment was prayed for in the amount due on the original note less the payment of $ 25 made on February 14, 1928.
¶4 In the third cause of action, plaintiff, in addition to certain allegations contained in counts 1 and 2, concerning the execution and delivery of the note, subsequent indorsement, delivery, and notice that the plaintiff was the owner and holder of the note, alleged that on March 13, 1927, the said G. W. Barr, acting for and on behalf of the plaintiff, went to the defendant and procured from him a renewal note in payment of said former note which was held by plaintiff; that said renewal note was executed upon the printed form belonging to said G. W. Barr in which G. W. Barr was named as payee; that at the time of the execution of said renewal note, or immediately thereafter, the said G. W. Barr altered the same by striking out the words "G. W. Barr, Associate General Agent," and inserting therein the word "The Bank of Haileyville, Oklahoma"; that plaintiff did not know whether such alteration was made with or without the knowledge and consent of said defendant; that, at the time of the execution of said note, the defendant knew that the plaintiff was the owner and holder of said original note for $ 309.40, dated June 13, 1926, made payable to G. W. Barr and indorsed by him to the plaintiff; that at that time there was due to the plaintiff the sum of $ 332.60, and that, if said note was altered, it was done without the knowledge and consent of the plaintiff and accepted by plaintiff as genuine for a good and valuable consideration before maturity thereof; that plaintiff is the holder in due course; that, if said note was altered, after the execution thereof and without the knowledge and consent of defendant, then the defendant subsequently ratified the same by promising to pay the same, by subsequently paying the plaintiff the sum of $ 25 on February 14, 1928, and by thereafter requesting further extension of time for payment of said note. Plaintiff prayed judgment in the sum of $ 332.60 on this third cause of action with interest and attorney's fees.
¶5 Defendant filed an answer denying generally the allegations in each of the causes of action set forth in plaintiff's petition and admitted the execution of the note on June 13, 1926, to G. W. Barr. Defendant...
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