Young v. Baker
| Citation | 64 N.E. 54,29 Ind.App. 130 |
| Decision Date | 23 May 1902 |
| Docket Number | 3,605 |
| Parties | YOUNG ET AL. v. BAKER ET AL |
| Court | Indiana Appellate Court |
From Knox Circuit Court; G. W. Shaw, Judge.
Action by William Baker against Marshall Young and others on a promissory note. From a judgment for plaintiff, defendants appeal.
Reversed.
W. A Cullop, for appellants.
L. A Meyer, B. M. Willoughby and J. M. House, for appellee.
OPINION
The appellee's complaint was in three paragraphs, each of which was founded upon a promissory note, identical, except as to the time of payment; the first of the series being of the tenor following: Each paragraph contained the averment that the payees, who were made defendants, indorsed said notes to the plaintiff before maturity, and for a valuable consideration. The appellants answered the complaint in two paragraphs. (1) Setting up that they did not execute the notes sued on, or either of them. This paragraph was verified and is sufficient as a plea of non est factum. Swales v. Grubbs, 126 Ind. 106, 25 N.E. 877. (2) General denial. No reply was filed. The cause was submitted to the court for trial. A general finding was made for the plaintiff, and a judgment rendered against the appellant for $ 1,309.67, from which this appeal is taken. Their motion for a new trial upon the ground, (1) that the finding is contrary to law, (2) that the finding is not supported by sufficient evidence, was overruled. Such action of the court is assigned for error. The evidence is in the record. It is not conflicting.
The notes were admitted in evidence without proof of appellants' signatures in the first instance, and without objection. The proof was supplied at a later time. Appellants were not harmed by the failure to make preliminary proof of signatures, the authenticity of which is admitted. It is shown by the uncontradicted evidence of the appellants that the words "The First National" and "Vincennes, Indiana" were not in the notes when they were signed, and that they did not authorize anyone to insert them thereafter. One appellant testified that he asked Gilligan, the agent selling the horse, "where the note was payable," and he said it would probably be sent to Vincennes; another appellant testified that he asked Gilligan where the notes were payable, and he said he supposed it would be at Bicknell. Appellant Sprinkle testified: "I asked where the notes were to be payable, and he said 'never mind Mr. Sprinkle; I will attend to that.'" Part of the appellants testified that they supposed they saw the word "bank" in the notes, and two of them testified that there was a blank space after the word "at" and before the word "bank," and also a blank space after the word "bank." Neither the extent of the space nor its appearance is mentioned. The other appellants have not at any time made any statement or request, given any direction, or had any information as to the notes being made payable at any place. There was no agreement that they were to be made payable at a bank. Appellee testified that he purchased the notes before maturity, paying for them a sum stated, that they were then in the same condition as at the time of the trial, and that he had no knowledge of any alteration. It is not shown whether there was or was not anything on the face of the notes when he purchased them to suggest an alteration. The notes, when executed, were not payable at a bank in Indiana; they were payable generally; and it was the duty of the makers to seek them and pay them when due to the holders. King v. Finch, 60 Ind. 420; Gale v. Corey, 112 Ind. 39, 13 N.E. 108. They were negotiable by statute. §§ 7515, 7516 Burns 1901, §§ 5501, 5502 Horner 1901. The assignee would have taken them subject to whatever defense or set-off the makers had, before notice of the assignment, against the original payee or assignor. § 7517 Burns 1901, § 5503 Horner 1901. The notes sued upon were payable at a bank in this State, and negotiable by the law merchant; a bona fide purchaser before maturity without notice taking them free from equities between makers and payee. § 7520 Burns 1901, § 5506 Horner 1901. The alteration, making them payable in bank instead of generally, was therefore a material one. Pope v. Branch Co. Savings Bank, 23 Ind.App. 210, 54 N.E. 835; McCoy v. Lockwood, 71 Ind. 319; Ballard v. Franklin Life Ins. Co., 81 Ind. 239; Shanks v. Albert, 47 Ind. 461; Light v. Killinger, 16 Ind.App. 102, 59 Am. St. 313, 44 N.E. 760.
The material and unauthorized alteration of a promissory note renders it invalid in the hands of the bona fide holder as well as in those of the payee. Wood v. Steele, 6 Wall. 80, 18 L.Ed. 725; Cronkhite v. Nebeker, 81 Ind. 319, 42 Am. Rep. 127; 2 Am. & Eng. Ency. of Law (2d ed.), p. 193; Dietz v. Harder, 72 Ind. 208; Bowman v. Mitchell, 79 Ind. 84; Collier v. Waugh, 64 Ind. 456; Hert v. Oehler, 80 Ind. 83; Citizens Bank v. Adams, 91 Ind. 280, 285. Appellee tendered an issue based upon notes payable at the First National Bank of Vincennes, Indiana. Failing to establish the execution of such notes, and it being affirmatively shown that they were not executed by the appellants, the finding should have been against him.
It is, however, claimed by him that the payee named in the notes had been authorized, as an agent of the makers, to insert the name of the bank. In order to avoid confusion, and to determine the legal questions involved with clearness and accuracy, the proposition stated will be first considered as though it arose between the makers of the note and the payee, leaving the questions as to the right of the indorsee out of consideration at this time. The general proposition, to which there does not seem to be any dissent, is that a person who delivers a note for use with blanks unfilled, the filling of which is necessary to complete the instrument and render it operative, is thereby given implied authority to make such insertions as are necessary to form a complete and enforceable contract. Good Roads, etc., Co. v. Moore, 25 Ind.App. 479, 58 N.E. 540; Angle v. North-Western, etc., Ins. Co., 92 U.S. 330, 23 L.Ed. 556; Gothrupt v. Williamson, 61 Ind. 599; Armstrong v. Harshman, 61 Ind. 52, 28 Am. Rep. 665; Holland v. Hatch, 11 Ind. 497, 71 Am. Dec. 363; Spitler v. James, 32 Ind. 202, 2 Am. Rep. 334; Emmons v. Meeker, 55 Ind. 321; Brown v. First Nat. Bank, 115 Ind. 572, 18 N.E. 56; De Pauw v. Bank, 126 Ind. 553, 10 L. R. A. 46, 25 N.E. 705.
It is also equally well settled that the payee can not take from or add to a contract already complete in its terms any material condition, no matter how many blanks may have been left, contrary to the intention of the parties. Good Roads, etc., Co. v. Moore, supra; Angle v. Northwestern, etc., Ins. Co., supra; McCoy v. Lockwood, 71 Ind. 319; Pope v. Branch Co. Savings Bank, 23 Ind.App. 210, 54 N.E. 835; De Pauw v. Bank, supra. The notes as executed by appellants were complete. They contained the date, time of payment, amount, rate of interest, and were payable generally. It lacked nothing to make a complete and perfect contract. The mere fact that the form used was such that a different contract might have been made upon it could confer no implied authority upon the payee to act as the agent of the maker, and, thus acting, to create a different instrument more favorable to himself than the one actually signed. Casto v. Evinger, 17 Ind.App. 298, 300, 46 N.E. 648; Coburn v. Webb, 56 Ind. 96, 26 Am. Rep. 15; Palmer v. Poor, 121 Ind. 135, 6 L. R. A. 469, 22 N.E. 984; McCoy v. Lockwood, 71 Ind. 319; Burrows v. Klunk, 70 Md. 451, 17 A. 378, 3 L. R. A. 576, 14 Am. St. 371.
In Marshall v. Drescher, 68 Ind. 359, the principal authority relied upon by appellee, the words "The First National Bank of Spencer, Indiana" were inserted after the printed word "at." The action was brought by an innocent purchaser for value, who had no notice of the alteration. A judgment in his favor was affirmed, the reason therefor being stated by the court in the following language: "We think the finding shows that the note was valid in the hands of the payee, notwithstanding the alteration, and, being so valid, was valid in the hands of the appellee, whether he had notice of the alteration or not."
One finding of fact was that the maker of the note directed the payee at the time to leave it at the bank named. The opinion further states that "The payee had implied authority from the condition of the note, and from the statement of the maker to leave it 'at the First National Bank of Spencer' for payment, to fill up the blank in the note as he did." The authorities cited relate to the right of a bona fide holder for value to recover upon notes negligently executed, except the case of Gothrupt v. Williamson, 61 Ind. 599, where the question was between the payee and the maker; the note having been left blank as to amount, to whom payable, and where payable, and being therefore an incomplete instrument. The substance of the decision in Marshall v. Drescher, supra, is that the facts proved, as a matter of fact, establish the agency of the payee to make the insertion for the makers. The presence of a blank space was, in that case, as it is in the case at bar, one circumstance...
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Young v. Baker
...29 Ind.App. 13064 N.E. 54YOUNG et al.v.BAKER et al.Appellate Court of Indiana.May 23, Appeal from circuit court, Knox county; George W. Shaw, Judge. Action by William Baker and others against Marshall Young and others, as the makers and payees of a promissory note. From a judgment in favor ......