Ward v. Hackett
| Decision Date | 10 January 1883 |
| Parties | Albert L. Ward v. Samuel Hackett and others |
| Court | Minnesota Supreme Court |
Appeal by defendants Elwis and Rice from an order of the district court for Martin county, Dickinson, J., presiding, refusing a new trial, after a verdict for plaintiff.
The action was on a promissory note as follows:
It was agreed that, as between the defendants, Hackett was the principal debtor, and the others were sureties for him, and plaintiff knew this when he took the note. The other material facts are stated in the opinion.
Order affirmed.
Andrew C. Dunn, for appellants, cited 2 Daniel on Neg. Inst. 384, 399; 2 Parsons on Notes and Bills, 550-562; 6 Wait's Act. & Def. 486; Greenfield Savings Bank v. Stowell, 123 Mass. 196; Draper v. Wood, 112 Mass. 315; Wood v. Steele, 6 Wall. 80; Fay v. Smith, 1 Allen, 477; Goodman v. Eastman, 4 N.H. 455; Blakey v. Johnson, 13 Bush, (Ky.) 197; Bank of United States v. Russel, 3 Yeates, 391; Aldrich v. Smith, 37 Mich. 468; Savings Bank v. Shaffer, 9 Neb. 1; Britton v. Dierker, 46 Mo. 591; Heffner v. Wenrich, 32 Pa. St. 423; Waterman v. Vose, 43 Me. 504; Lisle v. Rogers, 18 B. Mon. (Ky.) 528; McGrath v. Clark, 56 N.Y. 34; Worrall v. Gheen, 39 Pa. St. 388; Holmes v. Trumper, 22 Mich. 427; O'Neale v. Long, 4 Cranch, 60; McCramer v. Thompson, 21 Iowa 244; Angle v. N.W. Mut. Life Ins. Co. 92 U.S. 330; Haskell v. Champion, 30 Mo. 136; Hamilton v. Hooper, 46 Iowa 515; Dickerman v. Miner, 43 Iowa 508; Crockett v. Thomason, 5 Sneed, (Tenn.) 341; Ivory v. Michael, 33 Mo. 398; Goodspeed v. Cutler, 75 Ill. 534; Schnewind v. Hacket, 54 Ind. 248; Wallace v. Jewell, 21 Ohio St. 163; Hall v. McHenry, 19 Iowa 521; Lunt v. Silver, 5 Mo.App. 186; Gardner v. Walsh, 5 El. & Bl. 83.
Blaisdell & Higgins and Warner & Stevens, for respondent.
Defendant Elwis signed a negotiable promissory note as surety for defendant Hackett, and delivered it to Hackett, upon condition that he should not deliver it to plaintiff, the payee, until he procured the signature of one Johnson as co-surety. Hackett failed to get Johnson's signature, but, without the knowledge or consent of Elwis, got defendant Rice to sign it, and then delivered it to plaintiff, who took it in the ordinary course of business for a valuable consideration, without any notice of the facts hereinbefore stated and now set up by way of defence. Elwis now claims that he is not liable -- First, because the note was delivered without Johnson's signature, contrary to the condition upon which he signed it and left it with Hackett; second, that the addition of the name of Rice to the note, without his knowledge or consent, amounted to a material alteration of the instrument, which discharged him. These two questions we will consider in the order named.
1. The form of the note, when Elwis signed it and gave it to Hackett, was such that it was apparently complete. There was nothing on the face of the paper indicating that any other co-surety was expected to become a party to the instrument, and no fact was brought to the knowledge of the plaintiff, before he accepted the note, calculated to put him on his guard, or which should have induced inquiry. Elwis by his acts clothed Hackett with apparent authority to launch the note as it then was. The surety having thus placed the instrument, perfect on its face, in the hands of the proper person to pass it to the payee, the law justly holds that, as against the payee who takes it in good faith, for value, without any notice of this condition, the apparent authority with which the surety has clothed his principal shall be regarded as the real authority, and in such case the condition shall not avail the surety. This is too well settled to require discussion. Brandt on Suretyship, § 354, and cases cited.
2. The second point is more important. It has been very fully and ably argued by appellant, but, unfortunately for us, the respondent has not deemed it necessary to discuss the question at any considerable length. The position of appellant is that the fact of Hackett's obtaining the name of another surety upon the note, without his knowledge or consent, although done before the note was delivered to plaintiff, amounted to a material alteration of the instrument, which discharged him, even although plaintiff had no notice of the facts when he took the note. If this be the law, we are satisfied its announcement would be a surprise to the business and commercial world. It would render commercial paper a very uncertain and unsafe subject with which to deal. But we have carefully examined all of the numerous cases cited by appellant, and do not find one that goes far enough to sustain him. Many of these cases hold that a material alteration of a note made by one of the promisors before its delivery, without the knowledge of the other promisor, makes the note void as against such other promisor, although the payee have no notice of the alteration when he takes the note. Such is doubtless the law. But, upon examination, these will all be found to be cases where the body of the note or the contract itself was changed, as by alteration of the date, rate of interest, or amount of the note. And the reason given why, in such cases, the party is discharged, is the self-evident one that the contract is no longer the one he made. Numerous cases are also cited to the effect that the addition of a new party to a note, without the consent of the other parties, is a material alteration of the instrument. But these will be found to be cases where the new name was obtained after the note was fully issued and delivered to the payee, and at his instance or with his knowledge. We have been referred to no case, and have found none, going so far as to hold, where a surety signs a promissory note and intrusts it to his principal, and the principal, while the instrument is still inchoate and has not become effectual as a contract by delivery, procures an additional signer, that this would be a material alteration and release the first surety. Two of the cases cited might, at first sight, seem to favor such a doctrine, but, upon examination, will be found not to sustain it, even if the payee knew, when he took the note, the circumstances under which the additional signature was obtained.
The case of Haskell v. Champion, 30 Mo. 136, was one where, at the instance of the payee, the names of new principal obligors were substituted in place of the original one, by changing the individual signature of one partner into the firm signature, thus attempting to make a party surety for persons for whom he had never agreed to be responsible.
The case of Hall v. McHenry, 19 Iowa 521, contains dicta by some of the judges which go farther than any decision we have found. In that case the name of the additional surety was obtained before delivery of the note, but at the instance and for the benefit of the payee. After the note was delivered, the payee cut off the name of this additional surety, without the knowledge or consent of the first surety. Wright, J., who delivered the opinion of the court, while admitting that he had found no authority to that effect, argues that thus adding a new surety, even before delivery of the note, would amount to a material alteration of the instrument, which would discharge the original surety, provided the payee knew, when he took the note, of the circumstances under which the additional name was added. He then states that the court was not agreed on this proposition, and then proceeds to decide the case upon another point, to wit, that cutting the additional name off the note was a material alteration, which discharged the original surety.
The rule that a material alteration of a contract avoids it had...
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