29 Iowa 520 | Iowa | 1870
Plaintiff let Graham have $7,000 in money, asv a loan, for five months. It is true a large part was in a certificate of deposit for gold in a bank at San Francisco, but it had ,a cash value ; he took it at this value, and no more : and to the parties, and for this transaction, it served all the purposes of money.
The note itself called for interest at ten per cent, but there was an agreement, at the time of the loan, that plaintiff was to receive interest at the rate of two per cent per month. The contract was hence usurious, and there can be no recovery beyond the principal sum loaned, without either interest or costs. Eev. § 1790. This proposition is scarcely controverted, and hence need not ■be further noticed.
When the note was signed by the • defendants it was a mere printed blank, there being neither date, payee, time of maturity, nor amount, but there was a place of payment— Citizen’s Bank of Des Moines ” — and this was not changed. Graham first signed it, and procured the other signatures and indorsement. There was some talk as to the amount for which the note was to be made, and as to when it would probably be negotiated, but of all this plaintiff had no knowledge whatever. The note was intrusted to Graham, and he filled the blanks and obtained the money, and in doing this he violated no agreement made with his co-defendants, certainly none of which plaintiff had the least notice.
Graham was the active party in making this loan, but all were alike principals, he acting for all. But, if by possibility, as between themselves, his co-defendants were sureties, plaintiff took the note ignorant of this fact, and, as to him, all our principals. Explanation is here necessary.
Under these circumstances, what are the legal rights
If the payee, however honest his motives, had, by his own,act undertaken to make this erasure, there would be little doubt as to its effect upon his rights. The policy of the law is, that the contract shall be kept entire and unmutilated—to thus the more certainly secure its integrity — and especially as against the act of the payee or holder, without stopping to enquire whether there has. been actual inquiry or fraud. Hall's Admrs. v. McHenry, 19 Iowa, 521, and cases there cited. ’
The general doctrine is, that an alteration of a note in a material part, after execution, made by one claiming a benefit under it, destroys the same as to him. Upon the instrument his right of action is gone. That this alteration in this case was material is, of course, most apparent, and is not denied. An alteration, however, by accident, mistake, or the act of a .stranger, will not destroy or extinguish the instrument. But the holder would have
Our opinion also is, that as plaintiff, after knowing that the alteration was made, brought suit upon the note in its changed condition, and claimed the benefit of it, he thereby admitted that it was made with his consent, though he was not present at the time of the erasure. But this implies, and is to be taken, as an admission only that he consented to it under the circumstances disclosed. And what are these ? As already shown, one of the makers, upon his motion, claiming to have authority to do so for all, drew his pen through the words. To this plaintiff yielded no express assent. All that can be claimed is, that he impliedly assented. There was no collusion, no fraud, no intention to injure. His assent was given because of the maker’s representation of his authority. There was a mistake, as to the payee, of fact, not of law. Suppose any one of these defendants had come to him, called his attention to the real contract, to these words, and stated that he was authorized to make the correction, producing a power of attorney to that effect, and that thereupon the erasure was made. It afterward turned out that the alleged power, without the knowledge of the attorney, in fact, was a forgery. Will any one claim, the plaintiff having acted in the
We know not that any case can be found like this in its facts. In principle, however, it seems to us that the rule is clear enough. As was said in United States v. Spaulding, 2 Maine, 476, “a doctrine so repugnant to common sense and justice, which inflicts on an innocent party all the losses occasioned by mistake, by accident, or by the wrongful act of third persons, ought to have the unequivocal support of unbroken authority before a court is bound to surrender its judgment to what deserves no better name than a technical quibble.” If this act is founded upon a mistake of fact, and not wrongful, there would, of course, be much less reason for visiting the innocent party with the consequences claimed by defendants. Then, again, Mr. Parsons (2 N. and B. 570 ), speaking of the right of a party to return an instrument to its original form, after alteration, and then maintain his claim under it as if it had never been altered, uses this language: “If the alteration was made fraudulently, or with illegal intention, or if the original terms, cannot certainly be restored, or if any party has become interested in the note or affected by it, or related to it, since the alteration, in such a way that the restoration will do any wrong to that party — in either of the cases we should say the party must abide by the alteration he made, and accept the consequences of making it. But, unless one of these reasons existed, we are not aware of any
And we are thus brought to the conclusion, giving to the testimony the most favorable view for the defendants, that the law is with plaintiff, and that the court below erred in its judgment. More especially is this so, when we remark that there is at least fair ground for ho] ding, upon the evidence, that Graham did, in fact, have authority to make the alteration of which his co-defendants now complain. Upon this aspect of the case, however, we will not dwell, as upon the other points we are clear that the case should be reversed and remanded for trial de novo. It is accordingly so ordered.
Eeversed.