13 Ind. App. 80 | Ind. Ct. App. | 1894
The appellant was the plaintiff and the appellees the defendants in the court below. The complaint is in one paragraph, and alleges that on September 25, 1888, the defendants, at Lebanon, Indiana, executed to the plaintiff the following note:
*82 “$388.03. Lebanon, Ind., Sept. 25, 1888.
“Ninety clays after date, we promise to pay to the order of Kingan & Co., at the Meridian National Bank of Indianapolis, Ind.,' three hundred and eighty-eight and 03-100 dollars, with eight per cent, interest after maturity until paid, and five (5) per cent, attorney’s fees. Value received, without any relief from valuation or appraisement laws. And it is hereby understood that the drawers and endorsers severally waive presentment for payment, of protest and non-payment of this note.
“W. P. Silver,
“Due 24th Dec., 1888. “James Silver..”
The complaint further alleges that the note was procured from defendants by the plaintiff’s traveling salesman, one W. H. Nichols; that said salesman was not a general agent, and had no general authority to make settlements or take notes on plaintiff’s account, nor was that a part of his duties; that, being about to go to Lebanon, in the course of his duties as such traveling salesman, the plaintiff instructed him to procure for plaintiff from defendants a note on account of an indebtedness to plaintiff amounting to $388.03 ; that this agent accordingly procured the note sued upon; that after the execution of the note, the agent took it to another part of Lebanon, entirely away from and out of communication with defendants, or either of them, and there, while he was in the process of conveying the note to plaintiff, and without the authority or knowledge or consent of the plaintiff or of the defendants, or either of them he altered the note by striking out the words “after maturity,” and inserting the words “from date,” so as to make the note read, ‘ ‘ with eight (8) per cent, interest from date; ” that the agent then transmitted the note to plaintiff, but did not inform plaintiff of the alteration, nor'did plaintiff have any knowledge of it
The defendants separately demurred to the complaint for want of sufficient facts. The demurrers were sustained, to which ruling the plaintiff excepted, and electing to abide by its complaint final judgment on demurrer was rendered for the defendants.
The errors assigned are the rulings of the court in sustaining the separate demurrers to the complaint.
According to the allegations of the complaint, the note as originally executed, provided for “eight per cent, interest after maturity until paid.” It was altered or changed by striking out the words “after maturity” and the words “from date” inserted, so as to make it read “with eight per cent, interest from date.” This was a material alteration and so changed the terms of the note as to increase the obligations of the makers. A contract is an agreement and promise enforceable by law. In every express contract the minds of the contracting parties must come to and consent to the same stipulations and conditions. Such a contract rests primarily in mental processes, which are invisible and intangible. The parties may, at their option, put the terms of the contract in writing, and cause the same to be signed by the persons to be charged thereby. The
Custom required that the acts which marked the completion of certain kinds of contracts should be attended, with great solemnity and formality. The purpose was to preserve and perpetuate the evidence of the contract. In the execution of certain written instruments the formal requirements become of as much importance as the contract itself. Holmes Com. L. 261. A written instrument in the hands of an adverse party is easily susceptible of alteration, to the injury of the maker. Many written contracts are negotiable and perform important functions in commercial transactions. It is of the. highest importance to the commercial world, that they be preserved in their original state or condition. Public policy demands this for the prevention of frauds, and of loss to innocent persons. The most effectual means of preserving the integrity of such instruments is the rule that a material alteration destroys the instrument so that no recovery can be had upon it, either in its original or altered condition; and the rale that no recovery can be had upon the original consideration, if the change be made for a fraudulent purpose. The object of these rules is to enjoin the highest care upon the holder and to punish him with loss for his negligent or fraudulent conduct.
One of the early decisions of the English courts on the subject of the alteration of written instruments is that of Pigot’s case, decided by Sir Edward Coke, in the year 1614. Coke’s Rep., vol. 6, part. XI., p. 27.
Since the time of Pigot’s case we find in the books a multitude of adjudications bearing upon the subject of the alteration of notes and other written instruments. They are- not all consistent nor easily reconciled. But after all that has been said, -each case must stand much more on its own facts than upon the rules announced in any given case.
The rules announced in Pigot’s case have been modified in England; and they never did prevail in America to their full extent or in their original vigor. The rules that now prevail as we gather them from the decidéd cases are, (1) that the alteration of a note or written instrument in a material matter by a stranger, is but a spoliation and does not destroy it, and a recovery'may be had on it in its original condition. (2) If the plaintiff, the obligee or the holder, make an alteration in an immaterial matter, the alteration does not destroy the note, but a recovery lüuy be had on it in its original condition. (3) But if the alteration be in a material matter and be purposely or intentionally made by the plaintiff, the obligee or the holder, such alteration destroys the note or instrument, and no recovery can be had upon it in either its original or altered condition.
If the case at bar falls within this latter rule, then the demurrers were correctly sustained. The change in the note was not made by the plaintiff’s order or direction, but it entrusted certain 'business to another as its agent and such person made the alteration. If the alteration was made by the agent while in the transaction of the principal’s business and in the scope of his authority, then the act of the agent is the act of the principal. Qui facit per alium facit per se. The solution of this case depends upon the relation existing between Nichols and the plaintiff, at the time the alteration was made. If he was the plaintiff’s agent, and the act was within the scope of his authority, then his act must be deemed the act of the plaintiff and the law is with the defendants. If his position was that of a mere stranger to the note, then the law is with the plaintiff.
The appellees rely confidently upon the case of Eckert v. Louis, 81 Ind. 99, as furnishing a rule binding upon this court and as decisive of the question here involved. The facts of that case briefly are, that a note had been signed by a principal and his surety, and was by the principal delivered to the agent of the payees. In a short time after the delivery the note was altered in a material respect by the person to whom it had been delivered. Such change was made' in the presence of the principal and with his consent. But the change was. without the knowledge or consent of the surety. Suit was instituted against the surety alone on the note in its altered condition. The court held that there could be no recovery in such an action against the surety. It seems to us that the bare statement of the facts shows the correctness of the holding. The note was changed in a material respect, and yet the effort was to enforce
At the time Nichols made the alteration of the note, was he the agent or servant of the plaintiff in respect to
The terms “agent” and “servant” are so frequently used interchangeably in the adjudications that the reader is apt to conclude they mean the same thing. We think, however, that the history of the law bearing on this subject, shows that there is a difference between them. Agency in its legal sense always imports commercial dealings between two parties by and through the medium of another. An agent negotiates or treats with third parties in commercial matters for another.
It is difficult to understand this principle of liability unless we approach it from the side of history. It is in reality a survival of the ancient doctrine that the master or owner was liable for the act of his slave and for injuries committed by animals in his possession. The ancient idea was that the family of the master, including his slaves, his animals, and all other property, was a unity; and that the personality of the master affected all of his property; that as he was entitled to all the benefits of ownership he must accept the consequences flowing from injuries caused by his property. He might buy off the vengeance of the injured person or he might appease it by surrendering the injured property to the person aggrieved. In Roman law there was a class of actions known as noxal actions, which provided for this vicarious liability. The defendant had the option of surrendering the delinquent instead of paying damages. In ancient times the masses were
Even if it be conceded that Nichols was the agent of the plaintiff when he made the alteration, there is high authority sustaining the position that in doing so he exceeded his authority, and that his act would not be binding on his principal. An agent, to transact the business of the principal, is not clothed with authority to destroy the property of the principal or to violate a rule rule of public policy. Nickerson v. Swell, 135 Mass. 514; Gleason v. Hamilton, 138 N. Y. 353; Hunt v. Gray, 35 N. J. L. 227; Yeager, Exr., v. Musgrave, 28 W. Va. 90; Bigelow v. Stilphen, 35 Vt. 521.
As announcing a contrary rule the appellees cite and rely upon Hollingsworth v. Holbrook, 80 Iowa 151; Reynolds v. Witte, 138 S. C. (Shand,) 5; Bowser v. Cole, 74 Tex. 222. These cases seem to support appellees’ contention. We think the first rule is more in accordance with justice and right.
The change made in the note in this case was not only a material one, bnt, as it seems, one that could have been made only for a fraudulent purpose — that of increasing the obligations of the makers and inuring to the benefit of the holder. If the alteration was made for a fraudulent purpose and the act of Nichols be construed as the act of the plaintiff, then it would result in the plaintiff losing its debt entirely, for there can be no recovery upon the note in either its original or altered state, nor upon the original consideration, and the defendants would be forever released from paying the debt. No direct injury was done the defendants by the alteration of the note. The utmost that can be said is that a rule of public policy was violated. The doctrine of public policy, like the statute of frauds, should be invoked to prevent and not to perpetrate a fraud. A clear and unmistakable case of the violation of a rule of public policy should be made before the law will lend its aid to depriving one person of his property for the benefit of another.
Our conclusion is that Nichols, when he made the alteration of the note, stood in the relation to it of a stranger, and that his act was a mere spoliation.
In the consideration of this case we have been materially assisted by the oral argument and briefs of able counsel.
Judgment reversed at the cost of the appellees, with instructions to overrule the demurrer to the complaint.