56 N.Y. 22 | NY | 1874
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *24
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *25 This action is brought to recover the value of a promissory note. The plaintiff alleged, that it had been wrongfully converted by the defendants' testator to his own use. The action before the Code of Procedure, would have been in trover. It is now to be governed by the same rules, which would have governed that form of action.
The verdict of the jury in favor of the plaintiff establishes the fact, that he and his deceased partner were the rightful owners of the note. It also establishes the fact, that the testator wrongfully converted it to his own use. The possession of the note, upon the trial, by the defendants, is presumptive that it has never been paid by the makers.
The contention brought here is, that certain testimony offered by the defendants, was improperly rejected.
The defendants offered to prove that the note was altered by the plaintiffs, the payees therein named, after it was made and delivered to them, without the consent or authority or ratification of the makers; that the note was originally drawn *27 payable to the plaintiffs or order, and as thus drawn was signed by the makers; that it was altered by erasing the words "to the order of," and inserting the words "or bearer." This testimony was excluded. We think that this was error. It was competent upon the question of the value of the note, and thus upon the question of the damages.
In an action of this kind, the amount appearing to be unpaid upon the note, of principal and interest at the time of the conversion, and the interest upon that aggregate from thence to the trial, is prima facie the measure of damages. (Mercer v.Jones, 3 Camp., 477; Evans v. Kymer, 1 Barn. Adol., 528;Decker v. Matthews,
Then, does the alteration of which proof was offered make this note void? Every material alteration of a note, made by the holder after its execution, without the authority of the maker, and certainly if with fraudulent intent, avoids it. Every alteration is held to be material, which will change the legal liability of the maker, or which may work to his prejudice. (2 East Cr. Law, 855.) The alteration made in this note would not change the legal liability of the maker, by making it any more negotiable, nor increasing the amount of it, nor accelerating nor retarding the time of the payment of it, nor changing the place of its payment. These are commonly the effects of the alterations generally brought to notice. If the bearer of the note should be its lawful owner, it is as easy for the maker to pay it to him as to the payees, or an indorsee of the payees. But it is then the risk of the maker, whether the bearer is the real owner. The makers signed and delivered a note payable to the plaintiffs or order. The note altered so as to be payable to them or bearer, comes to the makers for payment. It has not the indorsement of the payees upon it, directing its payment, either in particular to a person named, or in general to any person; it has not that proof of having been transferred by them. It may have left the possession and ownership of the payees, in the due course of business. It may not have done so, but have been gotten from them surreptitiously, and under such circumstances as not to pass their title to it, and have then been altered so as to read "to bearer." In the latter case, the *30 makers, if they pay it, are to assume the burden of contesting at some time afterward, if called upon by the payees for payment, whether or not the alteration was made by the payees while the note was in their possession, and duly passed away. If not able to maintain that it was, they are liable again for its amount. So that an alteration from "or order," to "or bearer," does become material, in that it may prejudice the makers, by putting them to this risk. Akin to this was the alteration in Rex v. Birket (Russell Ryan, 251), of a special indorsement upon a bill, to a general one. That was held to be a fraudulent alteration, and that an indictment for forgery would lie. Of less moment, but of some moment, is the consideration that a note to the payee or order, does not leave his hands save with his indorsement. It then becomes, in the hands of the maker, after payment, a voucher, and evidence of discharge of the indebtedness which is the consideration for it.
It is suggested that the offer of proof made by the defendants does not cover the case which they sought to make, in that there is no offer to show that the alteration was made with fraudulent intention. It does not need, in such case, to make express proof of that intent. If a note be altered in a material part, without authority, after execution, that avoids the note. It is not of moment whether it be done with fraudulent intent, save as the existence of such intention affects the right to resort to the original indebtedness; and then the fact of the unauthorized material alteration, is a matter for the consideration of the jury, in determining the question of fraudulent intention. We are of the opinion that the alteration named in the offer was a material one; that the act being proved, it showed that the note was void; and if the jury had found therefrom, and from any other circumstances shown to them, that it was done with fraudulent intent, the note would have been unavailable in a resort to the original indebtedness. Hence the note would have been valueless.
The plaintiff was not, however, precluded from further progress; he had the right after the offered proof had been *31 received in evidence, to rebut the inference of fraudulent intention, or to show a justification or excuse for the act. Sometimes an alteration in a note, seemingly material, and such as may prima facie render it void, is innocent and does not vitiate the instrument. So it is, when it is done to correct a mistake in penning the note, or to make it express the real bargain of the parties, or to give the proper legal form to their contract. In such case the payee has a right to enforce it. Again, if the alteration was made without fraudulent intention, the payee may resort to the original indebtedness, if that was independent of the note and has not been discharged by the execution of it, and pursue the maker upon that. (Clute v.Small, 17 Wend., 238; Meyer v. Huneke,* decided in this court 20th January, 1874.) But to have such resort he must be able to produce and surrender the note. Hence its real value is not destroyed by the alteration. Its worth is as much, as the original independent indebtedness was worth at the time of the conversion. The damages of the plaintiff are that amount, if nothing else has intervened. Of course, the same rule as to interest applies. We see no reason, either, why the plaintiffs may not show a readiness on the part of the makers to waive, or in other words to ratify, the alteration, and to admit the note to be a valid obligation against them. We do not think, however, that there is in the facts of this case, that which will ground a presumption, that they are willing or likely so to do.
The defendants also offered to prove that their testator took the necessary and proper steps to present the note for payment, but that it was not paid, and that the makers resided at the place in which the bank was situated at which the note was made payable. This proof was excluded. We think that this was error. Proof of the inability of the maker to pay his note affects its value. Evidence tending to show inability is given, when it is testified that there is neglect or refusal, to pay it according to its terms. We think that Brown v. Montgomery *32
(
The testimony offered was admissible under the pleadings. There is a general denial, in the answer, of all the allegations of the complaint not specifically admitted. This denial applies to the allegations of the liability of the testator, and of the amount of the damages sustained by the plaintiff. (Quin v. Lloyd,
A majority of the court differ from me, and are of the opinion that the evidence offered, that another note, made at the same time, by the same parties, of the same tenor and date of the one converted, for the same consideration, payable at a different time of payment, was owned by the plaintiff and his deceased partner, and was by them altered in the same particular, after it came into their hands, without the authority, consent or ratification of the makers, and was transferred by the payees, was properly excluded. Though it is permissible, on an issue of forgery of a note, for the purpose of showing fraudulent intention, to give evidence of the possession and uttering of other like forged notes (Rex v. Wylie, 4 Bos. Pull., 92;Rankin v. Blackwell, 2 Johns. Cases, 198), the majority of the court think that that rule is not applicable to this case.
A majority of the court are of the same opinion as to the offer to prove that the other note was sued by the transferrees of it against the makers, was defended by them on the ground of the alteration, that judgment was rendered in their favor in the action, and that Booth Flint had notice of the suit and furnished affidavits to be used on a motion for a new trial. Judicial records are sometimes admitted, in favor of strangers to them, against parties to them. It is on the ground that they are, or contain, solemn admissions or declarations of the party sought to be affected in the action on trial. This rule, it is now held, does not apply in this case, and that the general rule applicable here is, that a record in another *34 action cannot be admitted save for and against parties or privies to it; it being then received on the principle of estoppel; to which it is essential that it should be mutual.
The testimony from the testator, on his cross-examination, as to his knowledge or information as to the responsibility of the makers of the note, was properly received. It was quite pertinent upon the issue, of whether the note was sold to him absolutely, or was lodged with him as collateral security for a loan of $500.
The judgment-roll in the action of Craig (the testator) against Flint (the deceased partner), was properly excluded from evidence; it was res inter alios acta, as to Booth, the survivor.
For the reasons given, the judgment should be reversed, and a new trial granted, with costs to abide the event.
All concur except CHURCH, Ch. J., dissenting, and ALLEN, J., not voting.
Judgment reversed.