Tyler v. First Nat. Bank

• Decision Date: 13 November 1912
• Citation: 150 Ky. 515,150 S.W. 665
• Parties: TYLER v. FIRST NAT. BANK OF WINSLOW. d
• Court: Kentucky Court of Appeals

150 S.W. 665

150 Ky. 515

TYLER v. FIRST NAT. BANK OF WINSLOW. d

Court of Appeals of Kentucky.

November 13, 1912

Appeal from Circuit Court, Jefferson County, Common Pleas Branch Third Division.

Action by the First National Bank of Winslow against Owen Tyler and another. Judgment for plaintiff, and Tyler appeals. Affirmed.

Trabue Doolan & Cox, of Louisville, for appellant.

J. C Dodd, of Louisville, for appellee.

SETTLE J.

Appellee First National Bank of Winslow, state of Indiana, brought suit in the court below on the following note: "Louisville, Ky. July 15th, 1909. $2,000.00. Four months after date, for value received, we or either of us promise to pay to the order of Joel Bailey, Pt., two thousand no-100 dollars; negotiable and payable at the Continental Bank of Louisville, Ky. And all the parties herewith waive protest, notice of protest, demand and notice of nonpayment of this paper, if not honored at maturity. Interest after maturity until paid. C. W. Dieruf, Owen Tyler, Surety." It appears from the averments of the petition, an entry on the back of the note, signed, "Joel Bailey, Pt. by G. A. Hurst, Cashier," and from the evidence as well, that it was indorsed to and became the property of the appellee.

Joel Bailey is the president of the First National Bank of Winslow, also of the Exchange Bank and the Evansville Security Company; the first being located at Winslow, Ind., and the last two at Evansville, in the same state. G. A. Hurst is the cashier of the First National Bank of Winslow. When executed, the note was mailed by the principal, Dieruf, to Joel Bailey, at Evansville, Ind., and it was not paid at maturity. On the trial in the court below a verdict was returned in favor of appellee against the makers for the amount thereof and interest. This appeal is prosecuted by the surety, Owen Tyler, from the judgment entered upon that verdict. The makers of the note filed separate answers each setting up the same defense. As Dieruf does not join in this appeal, further notice of what is contained in his answer is not required, but that of the appellant Tyler, as amended, after setting up his suretyship on the note, contains the following averments: "That at the time this defendant signed said paper (the note sued on) same was by its terms made payable to Joel Bailey as an individual merely and not as president of the plaintiff, and that the plaintiff was in no way known to this defendant in connection with said transaction, and the abbreviation, 'Pt.,' now appearing in the body of said note after the name, 'Joel Bailey,' upon which the plaintiff now relies to show the obligation payable to itself, did not appear in said note at the time same was signed by this defendant and by said C. W. Dieruf, or at the time same was delivered to the said Joel Bailey, and the said abbreviation or designation, 'Pt.,' was added to said note after the name of the payee, Joel Bailey, appearing therein, by the plaintiff herein, or at its instance by one of its officers, agents, or employés, and such addition was made after said note had been signed and delivered by the defendants herein, and especially after same had been signed and delivered by this defendant and without the knowledge or consent of this defendant, and in like manner the indorsement appearing on the back of said note as 'Joel Bailey, Pt. by G. A. Hurst, Cashier,' was made after the execution and delivery of said note, and was made not by said Joel Bailey, but by the cashier of the plaintiff." It was further, in substance, alleged in the answer that the letters, "Pt," added to the note is an abbreviation of and intended for the word "president," and constituted a material alteration thereof, which effected a complete change in the payee of the note and operated, in law, to discharge the makers, especially the appellant, Tyler, as surety, from liability thereon. The reply filed by appellee denied that there had been any alteration in the note after it was signed by the makers, alleged that it was executed to Joel Bailey as president of the appellee bank and was so understood by the makers, and that when received by Bailey, as president, it contained the letters, "Pt," following his name as they now appear therein. The reply contains the further averment that the note was sent by the makers to Bailey as president of the First National Bank of Winslow to be discounted by him for them, and the proceeds used in paying another note of the same amount, which they were owing to the Farmers' National Bank of Wadesville, Ind.; that Bailey, upon receiving the note, discounted it in the First National Bank of Winslow, as requested, and applied the proceeds to the payment of the $2,000 note in the Farmers' National Bank of Wadesville, as directed.

It was urged by appellant on the motion for a new trial, and now argued by his counsel, as grounds for the reversal of the judgment, (1) that the verdict of the jury was not sustained by sufficient evidence; (2) that the trial court erred in refusing an instruction offered on behalf of appellant and in giving the instructions which were submitted to the jury.

It was conceded by appellee on the trial in the court below (and such is the law) that, if the letters, "Pt," were added to the body of the note after it was signed by the makers, the alteration was a material one, and operated to release appellant from liability on the note, if the alteration was made without his knowledge or consent. Section 125, art. 8, Negotiable Instruments Statute (Laws 1904, c 102), declares what changes in or additions to a note will constitute a material alteration: "Any alteration which changes (1) the date, (2) the sum payable, either of principal or interest, (3) the time or place of payment, (4) the number or the relations 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." Section 124, art. 8, declares the effect of a material alteration: "Where a negotiable instrument is altered without the assent of all parties liable thereon it is avoided, except as against the party who has himself made, authorized or assented to the alteration, and subsequent indorsers. ***" In Jackson v. Cooper, 39 S.W. 39, 19 Ky. Law Rep. 9, it was held that the addition to the instrument of the word, "guardian," after the name of the payee therein, was a material alteration. I...