23 Ind. App. 267 | Ind. Ct. App. | 1899
Appellee sued appellant and one Elwood Moore upon three promissory notes. A joint answer in two paragraphs was filed. The first was a general denial, and the second a plea of non est factum. A trial by jury resulted in a general verdict against both of the defendants below. The jury also answered interrogatories submitted to them upon special questions of fact. Appellant alone moved for a new trial, which was overruled, and judgment was rendered on the verdict. The overruling of the motion for a new trial is the only error assigned. The facts upon which the decision of the case must rest are fairly stated by the jury in their answers to interrogatories, and are as follows: That prior to the execution of the notes sued on, appellant and Elwood Moore had executed and delivered to appellee a certain note; that after its maturity, suit was brought upon it; that there was then due thereon $159.35; that pending said action, the same was compromised on the terms that appellant and Elwood Moore should execute the three notes in suit, aggregating the amount due on the original note, the latter notes to hear eight per cent, interest and to become due in one, two, and three years from date; that the notes sued on were executed in pursuance to that agreement; that appellant and Elwood Moore each signed the notes in suit; that when they signed them the rate of interest was not specified; that the figure “8” was written in the notes at the request of the appellee after they were signed; that the alteration by inserting the figure “8” was made without the knowledge of appellant, and that such alteration was made in accordance with an agreement made prior thereto between appellant and appellee. While these are the facts specially found, there are other material facts which appear from the evidence that
The question presented for decision, therefore, is simply this: Where an agreement is made that notes shall be executed bearing eight per cent, interest, and the principal and surety sign them in blank, as to the rate of interest, can the rate of interest be inserted in the notes in conformity with the agreement between the parties, in the presence and with the consent of the principal and payee, and without the knowledge and consent of the surety, and the latter be bound?
If the insertion of the rate of interest is a material alteration of the instrument', within the meaning of the law, then the surety is released, unless the agreement that the notes should bear the rate of interest inserted changes the rule.
In the ease before us, however, the notes in question were perfect instruments when signed by appellant. He knew, as is shown by the evidence, which is uncontradicted on this point, that no rate of interest was specified when he signed the note. This, however, would not in any sense affect their validity, for under the statute any promise in writing to pay money, where no rate of interest is fixed by the writing itself, such promise shall bear six per cent, interest. §7043 Burns 1894.
In Palmer v. Poor, 121 Ind. 135, 6 L. R. A. 469, it was held that where a note had been altered after it had been signed, by inserting the figure “8” before the words “per cent, interest,” without* the knowledge or consent of the maker, wás such a material alteration that a recovery could not be had. Elliott, C. J., in rendering the opinion of the court, said: “The alteration in the note was a. material one, * * *. ‘It is a material alteration,’ says Mr. Randolph, ‘to add an interest clause, even without any fraud on the holder’s part/ 3 Randolph Com. Paper, §1756.” Continuing the learned judge said: “This conclusion is fully sustained by the decided eases,” citing Hert v. Oehler, 80 Ind. 83; Bowman v. Mitchell, 79 Ind. 84, and cases cited; Schnewind v.
"When the notes in suit were signed by appellant^ and cam© to the possession and knowledge of appellee, they were complete and perfect instruments in all respects. If appellee desired to change the contract as expressed by the notes, it was his duty to treat with appellant as one of the parties to the contract, and secure his assent thereto. DePauw v. Bank of Salem, 126 Ind. 551, 10 L. R. A. 46.
Mr. Daniel on Negotiable Instruments, §1385, says: “In the fifth place, as to interest, any addition of words making the bill or note bear interest when it originally did not, or changing the time when interest should run, or varying the percentage of interest, is of the same character as if it changed the principal.” The author cites many authorities in support of the rule. From the authorities, we are led to the conclusion that the verdict was not sustained by sufficient evidence, and was contrary to law, and hence will not support á judgment against appellant. This conclusion makes it unnecessary to decide other questions discussed.
The judgment is reversed, and the court below is directed to sustain appellant’s motion for a new trial.