Wyckoff v. Johnson

• Citation: 48 N.W. 837,2 S.D. 91
• Parties: Wyckoff v. Johnson.
• Decision Date: 28 May 1891
• Court: South Dakota Supreme Court

48 N.W. 837

2 S.D. 91

Wyckoff v. Johnson.

Supreme Court of South Dakota

May 28, 1891

Syllabus by the Court.

1. The plaintiff, who sued as receiver of a national bank complained upon a promissory note, describing it, alleged to have been made and delivered to the bank by defendant. Defendant answered that he made a note of the tenor of the one described in the complaint, which, since its delivery to the payee, (said bank,) had been, without his knowledge or consent, and at the instigation of said bank, materially altered; that the note so altered was the note sued on, but by reason of said alteration it was not his note; and that he never made or delivered it. Held, that this did not constitute a denial of the making of the note which plaintiff alleged as his cause of action.

2. Upon the trial it was conceded the alteration was made by the cashier of the bank, but plaintiff insisted that such act of the cashier was unauthorized by and did not bind the bank. Held, that defendant was entitled to show by the books of the bank that the note had been carried on the books of the bank as a discount for the amount to which it had been so altered as evidence tending to show an adoption or ratification by the bank of such alteration; and that the knowledge of the cashier as to the condition of the discounts of the bank was the knowledge of the bank. Held, further, that, although in the absence of fraud plaintiff might, notwithstanding the alteration, recover on the original consideration, still when he undertook to do so defendant was entitled to show any defense he might have made to an action on the original contract; and the refusal of the court to allow defendant to prove the entire contract upon which the indebtedness rested and any contemporaneous agreement between the parties, which became a part thereof, was error.

3. A principal cannot avail himself of the unauthorized act of his agent, so far as it is advantageous to him, and repudiate its obligation.

Appeal from circuit court, Lake county.

Palmer & Rogde, for appellant. McMartin & Carland, for respondent.

KELLAM P. J.

In this action the complaint alleges the organization of the Madison National Bank under the "national bank act," the appointment of respondent as its receiver, and the assumption of his duties as such; that defendant (appellant) made and delivered his promissory note to said bank for $1,000 and interest; and that the note was due and entirely unpaid. The answer denied the appointment of plaintiff as receiver, and then proceeded as follows: "Third. And, answering the fourth paragraph of said complaint, defendant alleges that for the consideration hereinafter stated, and upon the condition hereinafter named, but not otherwise, this defendant, on the 10th day of March, A. D. 1888, made his promissory note, partly in print and partly in writing whereby and wherein he promised to pay to said bank or order one thousand dollars, on or before March 10, 1889, with interest thereon from date of said note till paid, at the rate of ten per cent. per annum. That shortly after the making and delivery of said note some one, at the instigation of said bank, the payee of said note, or by its direction and without defendant's knowledge or consent, fraudulently and corruptly altered said note in one or more material points thereof, to-wit, in the upper left-hand margin thereof the payee erased the figures '$1,000,' for which said note was given, and substituted '$1,060,' thereby making it to appear that said note was given for the sum of $1,060, instead of $1,000. And, further, in the body of said note, immediately after the words 'one thousand,' said payee wrote and added to said words 'one thousand' the word 'sixty,' thereby fraudulently making it to appear that said note was given for the payment of one thousand and sixty dollars, instead of one thousand dollars, as was intended by and between the parties to said note. That the note so altered and changed is the identical note sued on in this action, and defendant never has ratified or offered to pay said note in any manner; and by reason of said alteration defendant alleges that the note sued on in this action is not his note, and he never made or delivered said note to the payee therein named, or to any person whomsoever. Fourth. Defendant alleges that said note as actually given by him was so made and delivered to the officers of said Madison National Bank in payment of certificate No. 49, issued by said bank, and calling for ten (10) shares of the capital stock of said bank of one hundred dollars each, for which ten shares of stock defendant agreed to pay said bank one thousand dollars on the 10th day of March, 1889, and interest thereon at ten per cent. per annum. That at or about the due-day of said note defendant discovered that plaintiff had fraudulently altered his note as aforesaid, and therefore, and because of said fraud so practiced upon him, he duly offered to return to said bank the ten shares of stock so purchased of said bank, and then and there duly demanded a surrender of his said note which had been previously altered as aforesaid. That the plaintiff and said bank then and ever since refused, and still refuse, to surrender said note to this defendant. That defendant will produce said certificate No. 49 into court for the use of and surrender to plaintiff. That the plaintiff had full notice of the said alterations of said note ever since prior to January 1, 1889." The action coming to trial, plaintiff introduced, over defendant's objection, his certificate of appointment as receiver by the comptroller of the currency, and rested. Defendant's counsel then asked the court to direct a verdict for defendant, for the reason that plaintiff had proved no cause of action; that the answer denied that the note sued on was the note executed by the defendant, thus putting the burden of proof on plaintiff; and, as he had introduced no evidence upon that question, he had made no proof that entitled him to judgment. The motion was denied, and, we think, properly.

The note sued on and described in the complaint was the note as originally made for $1,000,--not as it was after alteration and this note for $1,000, as it was originally, and as made the cause of action in the complaint, defendant did not deny making, but admitted, and then pleaded facts in avoidance, to-wit, a material and unauthorized alteration. It is true the answer alleges that "by reason of said alteration defendant alleges that the note sued on in this action is not his note, and he never made or delivered said...