Lead Opinion

FROM MERRIMACK CIRCUIT COURT. Upon the facts found by the referee in this case, I am of opinion that his conclusions of law were correct, and that there should be judgment on the report accordingly is claimed by the plaintiff, in effect, that the note, and the condition written below it on the same piece of paper, are to be regarded as evidence of two distinct contracts, and treated as two separate instruments. I think that view cannot be sustained. The memorandum is entitled "Condition," and its first words are, "This note is given on the following conditions," etc. seems to me beyond all question, that the condition is one part of a single, entire contract, of which the note is the other; that the whole paper together must be treated as a single instrument, and that any division of it, whereby a negotiable promissory note, which had no legal existence before, was created, was such a material alteration as rendered the whole void; that it was, in fact, no less than a forgery, which would render the note thus brought into existence altogether void, even in the hands of a bona fide holder who paid a full consideration for it before maturity. The authorities, in this state and elsewhere, establishing the rule as to the effect of a fraudulent and material alteration or forgery of a negotiable promissory note, are too numerous and too familiar to require citation. My conclusion is, that the plaintiff cannot recover the $250 note, for both the reasons given by the referee. *Page 11

Concurrence Opinion

The note for $250, when issued by the defendant, was qualified by a condition annexed to it, and referring to it in such mode as to show that it was intended to remain attached to it so long as it was in force, and probably until it was detached by consent of the defendant. The payment of the note was then dependent upon a contingency, and therefore the note was not negotiable. Fletcher v. Blodgett, 16 Vt. 26; Fletcher v. Thompson, 55 N.H. 308, and cases there cited.

Independently, therefore, of the effect produced upon the note by a material alteration, it is enough for this case that the action cannot be maintained in the name of this plaintiff. When the note was issued by the defendant it was not negotiable, and could not be made so without his consent. It appears to have been altered by tearing off the condition after it came into the possession of the original payee. It is not, therefore, the note which the defendant gave. He has a right to say non in hoec foedera veni — I did not make this bargain. It is plain enough, in reason as well as in authority, that the indorsee in this case is in no better condition than the original payee. The maker of a negotiable note is bound by that note as he makes it, and against an innocent indorsee his defences are much restricted; but it is only the note which he actually made, and not a different note, which binds him in this way.

The case of Johnson v. Heagan, 23 Me. 329, is an authority to show that the removal of the written condition was a material alteration. It is not necessary, perhaps, to consider any further the effect of this alteration in avoiding the note. The cases Master v. Miller, 4 Term 320, 2 H. Bl. 141, Burchfield v. Moore, 25 Eng. L. Eq. 123, Gardner v. Walsh, 32 Eng. L. Eq. 162, Davidson v. Cooper, 11 M. W. 778, 18 id. 343, Powell v. Divett, 15 East 29, seem to show conclusively that the effect of such an alteration, made after the acceptance of the bill or giving the note, would be not only to avoid the note in the hands of an innocent indorsee, but also, if fraudulently done, to discharge the debt. Gibbs v. Linabury,22 Mich. 479; Benedict v. Cowden, 49 N.Y. 396.

Concurrence Opinion

The principle, that the fraudulent removal of a memorandum originally attached to a note and qualifying the contract, constitutes a material alteration and destroys the note, is well established. Benedict v. Cowden, 49 N.Y. 376, and authorities there cited. The plaintiff is entitled to recover the amount confessed, and costs to the date of the confession, and the defendant is entitled to recover costs since that time.

Judgment accordingly. *Page 12