| Miss. | Apr 15, 1892
delivered the opinion of the court.
The appellees sued the appellant on two promissory notes ■of like tenor, one of which is set out in the record, and'is as follows:
“ $100.00. Magnolia, Miss., April 30,1890.
“ September 1, 1890, after date, I promise to pay to the ■order of Camp & Ames, or bearer, one hundred dollars at Bank of Summit, Miss; Value received.
“ R. I. Simmons.”
The defendant pleaded that the notes had been materially .altered after .execution by him, in this, that the notes, as executed, were in form as follows:
“ $100.00. Magnolia, Miss., April 30, 1890.
“ September 1, 1890, after date, I promise to pay to the order of Camp & Ames..................................one hundred dollars at.....................................................................
Value received. R. I. Simmons.”
And that they had been altered by the insertion of the words “or bearer” after the words “ Camp & Ames,” and of the words “Bank of Summit, Miss.,” after the word “at.”
The defendant demurred to this replication, and his demurrer was overruled. This ruling of the court presents the first and principal error assigned.
The question presented is one upon which there'is direct and irreconcilable conflict in. the American authorities. Courts and text-writers' have, in very nearly equal numbers, ranged themselves upon opposite sides, and it is difficult, if not impossible, to determine which view is sustained by the greater number.
It is well settled that if one sign a negotiable instrument, leaving blanks to be filled by the payee, and deliver it to him, such payee is thereby made the agent of the -maker, and if he exceeds his authority, and inserts an unauthorized amount, the maker will be bound to an innocent holder. Johnson v. Blasdale, 1 Smed. & M., 17; Hemphill v. Bank, 6 Ib., 44; Davis v. Lee, 26 Miss., 505" court="Miss." date_filed="1853-12-15" href="https://app.midpage.ai/document/davis-v-lee-8256606?utm_source=webapp" opinion_id="8256606">26 Miss., 505; 1 Am. & Eng. Enc. L., 516.
The author of the article, “Alteration of Instruments,” in Am. & Eng. Ene. L., states the l’ule to be that “where one writes out a note or other instrument so as to leave spaces which can easily be filled without exciting suspicion and such note or other instrument is altered by filling, in these spaces, he will have to suffer the consequences of his negligence, and be liable to a bona fide holder for value on the altered instrument.” Yol. 1, p. 515.
Mr. Daniel prefers the rule as thus stated. 2 Danl. on Neg. Inst., § 1405.
The courts of New Hampshire, Massachusetts, Michigan, Iowa, Arkansas and also New York, have adopted the contrary rule. Goodman v. Horford, 4 N. H., 455; Bank v. Stowell, 123 Mass., 196" court="Mass." date_filed="1877-09-05" href="https://app.midpage.ai/document/greenfield-savings-bank-v-stowell-6418995?utm_source=webapp" opinion_id="6418995">123 Mass., 196; Holmes v. Trumper, 22 Mich., 427" court="Mich." date_filed="1871-04-18" href="https://app.midpage.ai/document/holmes-v-trumper-6635154?utm_source=webapp" opinion_id="6635154">22 Mich., 427; Bank v. Clarke, 51 Iowa, 264" court="Iowa" date_filed="1879-06-05" href="https://app.midpage.ai/document/knoxville-national-bank-v-clark-7098386?utm_source=webapp" opinion_id="7098386">51 Iowa, 264; McGrath v. Clark, 56 N.Y., 34" court="NY" date_filed="1874-02-10" href="https://app.midpage.ai/document/mcgrath-v--clark-3630626?utm_source=webapp" opinion_id="3630626">56 N. Y., 34; Fordyce v. Kosminski, 49 Ark., 40.
The rule' declaring liability upon the maker of an instrument thus altered first found expression in Young v. Grate, 4 Bing. (Eng.), 253. In that case a banker, having occasion to be absent, left with his wife some printed checks upon his banker signed by him in blank, to be filled up by her and drawn as his business might require. She delivered one of these checks to the clerk, to be filled for fifty pounds. The clerk filled out the check, beginning the word “fifty” with a small letter and in the middle of the blank line left for the same-, and showed it to the plaintiff’s wife, who directed him to draw the cash. Before presenting it to the banker, this clerk altered the check by inserting before the word “fifty” the words “three hundred and,” and then presented it to the banker and drew the larger sum. The plaintiff sued the
The English judges have found some difficulty in determining upon what precise principle the decision rests.
In Bank of Ireland v. Evans Charities, 5 H. L. Cases, the lord chancellor (Cranworth) said: “Now, the ease of Young v. Grate went upon the ground (whether correctly arrived at in point of fact is immaterial) that the plaintiff there was estopped from saying that he did not sign the check for three hundred and fifty pounds.”
In Swan v. North British Australasian Co., 2 Hurls. & Colt. (Exchq.), Lord Chief Justice Cockburn said: “The-case of Young v. Grate, on which so much reliance has been placed, and which is supposed to have established this doctrine of estoppel by reason of negligence, when it comes to be more closely examined, turns out to have been decided without reference to estoppel at all. Neither the counsel in arguing that case, nor the judges in deciding it, refer once to the doctrine of estoppel.”
Lord Cockburn thought that the case really rested upon the principle of avoiding a' circuity of action; that the banker, who was the depositary of his customer, while having no right to retain the fund, having no proper voucher for it, would be entitled to recover against the customer for the loss sustained through his negligence, and that this right to a cross action might be availed of in defense.
It seems to be clear that if an action may be maintained against the maker on the instrument, it must rest upon the theory that it is his instrument, or, though not his in fact, may be so treated by the holder. The mere fact that the holder has been deceived, and sustained injury by the alteration of the instrument, which alteration was made possible by the negligence of the maker, could not give a right of
. To make the instrument, as altered, that of the maker, it must be held that the payee, or other party by whom the alteration is made, is his agent, a proposition which has sometimes been advanced or suggested, but which has found but little support in adjudicated cases. Robarts v. Tucker, 16 Q. B., 560. There is certainly no expectation or intention on the part of the maker of a completed instrument that the person to whom it is delivered shall make any alteration thereof, nor does it ever occur that third persons act with reference, to the supposed authority of such person to act as agent of the maker. It certainly would .not be held that a negligently .drawn instrument constituted the payee the agent of the maker, to, change.its terms in favor of. one to whom such person, should exhibit, the instrument as the grant of his power, and should profess to act under it. The agency in these cases, if one exists - at all, must be a concealed one, unknown .and unsuspected by the world. The writing which creates the'agency, if exhibited, shows that none exists; it is a-valid agency .only so long as it is unknown.
The ground of the decision of Young v. Grate, given by Lord Cockburn in Swan v. North British Australasian Co., has been accepted by the English courts as the correct one. Halifax Union v. Wheelwright, L. R., 10 Ex., 183, and Swan v. North British Co., and Bank of Ireland v. Evans Charities, have been considered as shaking the authority of Young v. Grate, and Baxendale v. Bennett, L. R., 3 Q. B., 525.
But, upon whatever ground the liability of the maker is sought to be rested, we are of opinion that none can exist. The maker of a bill of exchange is not bound to act upon the supposition that forgery will be'committed merely because an opportunity is afforded by the character of the paper he puts out. In .no relation of life do men conduct their affairs as though crime will be committed whenever it may be. It c.auuot be negligence to do .that which can injure no one
The judgment is reversed, the demurrer to the replication sustained, and cause remanded.