44 Neb. 622 | Neb. | 1895
This was an action brought by Erick Erickson in the district court of Burt county to restrain the defendants from the negotiation of a certain promissory note executed by the plaintiff and one Erick Munk, and for the cancellation of said note. From a decree in favor of the plaintiff, the defendants have prosecuted an appeal to this court.
The petition sets up two grounds for relief, namely, that the plaintiff was induced to sign the note as the surety for one Munk by the false and fraudulent representations of the latter, and that the note, after its execution, has been materially altered and changed by erasing the name of the original payee and inserting in lieu thereof the name of the First National Bank of Oakland, without the knowledge and consent of the plaintiff. The answer admits that the defendant bank purchased the note, and denies all other averments in the petition. The trial court found that the note had been materially altered, as alleged by the plaintiff, and its decision was placed upon that ground alone.
The proofs in the record show that one Erick Munk, an oculist of the city of Omaha, prior to the month of December, 1892, had made occasional professional visits to Oakland, and on the 2d day of said month he called upon the plaintiff in Oakland and induced him to sign a note as surety in the sum of $1,500, due in six months, and upon the representation of said Munk that he was about to purchase the half interest in the business of one Smith, an oculist and aurist of either Des Moines, Iowa, or Cincinnati, Ohio, and that the note was to be used for that purpose. The note was executed in blank as to the payee, it being agreed that Smith’s name should be inserted as the payee when his initials should be ascertained, which Mr. Munk subsequently did, by writing in the name of D. B.
It is urged that a partnership was formed between Erickson and Munk for the purpose of purchasing the business of Mr. Smith, and that by reason thereof Munk
It is conceded, and there is no doubt of it, that the fraudulent erasure of the name of the original payee of a. promissory note .after its execution by a party to the instrument and the substitution of another without the consent of the maker, is a material alteration. The doctrine is elementary. (Davis v. Bauer, 41 O. S., 257; German Bank v. Dunn, 62 Mo., 79; Stoddard v. Penniman, 108 Mass., 366; Patch v. Washburn, 16 Gray [Mass.], 82; Bell v. Mahin, 29 N. W. Rep. [Ia.], 331; Cumberland Bank v. Hall, 1 Halst. [N. J. Law.], 262.) It is equally as well settled that the material alteration of an instrument invalidates it as to the maker, who has not assented to or ratified the change, even in the hands of a bona fide holder for value. (See-cases cited above and Brown v. Strata, 6 Neb., 536; Savings Bank v. Shaffer, 9 Neb., 1; Davis v. Henry, 13 Neb., 497; Hurlbut v. Hall, 39 Neb., 889.) There can be no question that if suit were brought upon this note against the plaintiff he could avail himself of the defense that he had been discharged by the change of the instrument. The plaintiff having a complete defense at law, is he entitled to relief in equity? We think the answer can only be in the negative. It is a familiar doctrine of equity jurisdiction that the equitable powers of a court may be invoked by a person where the relief afforded at law is not plain or is inadequate, but where the aggrieved party has a full and complete remedy at law, equity will not interfere by injunction. In 10 Am. & Eng. Ency. Law, 792, the rule is correctly summarized in the following language: “ If in an action at law the plaintiff can obtain full and adequate relief, a suit in equity for an injunction cannot be maintained by him. . Nor can a defendant invoke the aid of a court of equity upon mere .legal grounds, because in such case his defense is available at law. To entitle the defendant to relief he must have
In Hullhorst v. Scharner, 15 Neb., 62, it is held that a. court of equity will enjoin the transfer of a negotiable note obtained by duress and fraud, and in Wilhelmson v. Bentley, 25 Neb., 473, it was ruled that where a negotiable note is-tainted with the vice of usury and the payee is about to-transfer the same to a bona fide purchaser, the maker may enjoin such transfer. These eases are not similar to the-one at bar, for the reason that the transfer of the notes in the cases mentioned, to an innocent purchaser for value before maturity, would have cut off all the defenses of the makers. In such cases the makers have the undoubted-right to take the initiative and enjoin the negotiation of the notes, since the remedy afforded at law was wholly inadequate. Where-a negotiable note is about to be transferred before due so as to cut off the defense of the maker, equity, at the suit of the latter, will enjoin the negotiation and order the instrument to be delivered up for cancellation; but otherwise if the note is non-negotiable. (Perrine v.
No authority has been cited in the briefs, nor after diligent search have we been able to find a single case, which holds that .a court of equity will assume jurisdiction to restrain the transfer or collection of a promissory note which has.been materially changed after its execution; but there .are numerous adjudications laying down the rule that equity will not interfere by injunction. (See Dorsey v. Monnett, 20 Atl. Rep. [Md.], 196; Northern Pacific R. Co. v. Cannon, 49 Fed. Rep., 517; Johnson v. Andrews, 28 Ga., 17; Globe Mutual Life Ins. Co. v. Reals, 79 N. Y., 202.)
The Ameritan Water-Works Co. v. Vennier, 18 N. Y. Sup., 379, was an action brought for the purpose, among others, of restraining the defendants from bringing actions upon, or transferring, certain promissory notes given by the plaintiff and payable upon demand, the plaintiff claiming the right to set-off or counter-claim the indebtedness of the defendants to it. It was held that a court of equity will not interfere by injunction, since the defense claimed .against the notes was as available at law as in equity.
Grand Chute v. Winegar, 15 Wall. [U. S.], 373, was a suit in equity by a municipal corporation to enjoin the obligee of certain bonds issued by the corporation from prosecuting suits on such bonds and to cancel the same, on the ground that the bonds were issued without authority .and in violation of law. Relief was denied because the plaintiff had a perfect and complete defense to the bonds at law.
It was held in Allerton v. Belden, 49 N. Y., 373, that the interposition of a court of equity may be sought when ■equitable relief exists against the note, unless, from the form of the note, the defense is not available at law. That was an action by an accommodation indorser of a note discounted at a usurious rate of interest to annul the note, suit being brought after the maturity of the instrument, it being
In Fowler v. Palmer, 62 N. Y., 533, it is held that an action cannot be maintained to cancel a note and to restrain the bringing of a suit thereon, or for selling or disposing’ of a promissory note past due, upon the ground that it has. been paid.
Town of Venice v. Woodruff, 62 N. Y., 462, was an action to have certain bonds delivered up and canceled, and to restrain the holders from transferring them. The bonds were void even in the hands of a bona fide holder. It was decided that the suit could not be maintained. In the opinion of the court it is said : “The cases in which a court of equity exercises its jurisdiction to decree the surrender and cancellation of written instruments are, in general, where the instrument has' been obtained by fraud, where a defense exists which would be cognizable only in a court of equity, where the instrument is negotiable, and by a transfer the transferee may acquire rights which the present
Upon principle we are constrained to hold that plaintiff is not entitled to enjoin the transfer or collection of the note.
It is argued that the remedy afforded at law is not so speedy as in equity, since he must wait the pleasure of the holders of the note to bring suit thereon before he can make his defense, and by that time the witnesses to prove the alteration of the instrument may have died or moved away. The fact that the bank has failed to bring an action ■upon the note and that the defense may be lost by reason of his witnesses being scattered, is insufficient to invoke the powers of equity. We are not aware of any authority which sustains an equitable action upon such ground, and it is not believed that any such can be found. The appellee has ample authority, under the provisions of sections 421 to 427 of the Code of Civil Procedure, to perpetuate the testimony of his witnesses, even before suit is brought
The decree of the district court is reversed and the action ^dismissed.
Reversed and dismissed.