Waterman v. Vose

Tenney, C. J. The note in suit for the accommodation of Amaziah Nash, the maker, was written by Y ose, one of tbe firm of “ Yose & Joyce,” and signed by him with the name of the firm, without the words “ with interest.” In pursuance of a previous arrangement between Nash and the plaintiff, it was offered by Nash in payment of a yoke of oxen which he had agreed to purchase of the plaintiff; the latter insisting that the note should be on interest, these words were added by Nasb in the presence of the plaintiff without the knowledge or consent of the defendants. Whether Nash [510] signed the note at the time of its endorsement by the defendants, or afterwards, was a question on which Nash and Yose did not agree; and under the instructions it was not a material question. It was contended that the description of the note in the written- notice of its dishonor, was so defective, the words “ with interest ” being omitted, that the liability of the endorsers never became fixed. The jury were instructed that if they should find that the defendants, by said notice, might be presumed to know it referred to the note in suit, they might find it to be sufficient. This instruction was correct, on the authority of the case of Smith v. Whitney, 12 Mass., 6, in which a question similar in principle was submitted to the jury. If this question was for the court instead of the jury, we are; satisfied it was correctly settled, and the defendants wefe not prejudiced. The jury were instructed, that the addition of the words “ with interest,” to the note, after it was endorsed by the defendants, was a material alteration. But they were also instructed, substantially, that if the words were added without fraud, and without the knowledge of the defendants, before the note was delivered to the plaintiff, whether the maker signed his name at the time it was endorsed, or at the time the note was delivered, the alteration did not discharge the defendant’s liability. These instructions when applied to an alteration in an accommodation note or bill, made by the consent of the parties to be affected by it, are correct; but not so, when the alteration is not made with the knowledge and consent of such parties. In the case of Master v. Miller, 4 D. and E., 320, it was decided that the alteration of the date of the note avoids it, or a bill of exchange, by which the payment was accelerated, and after acceptance, and so effectually that even an innocent holder for a valuable consideration, cannot support an action upon it. In 1 Greenl. Ev., sec. 565, it is said, “ the grounds of this [511] doctrine is two-fold. The first is, that of public policy to prevent fraud, by not permitting a man to take tbe chance of committing a fraud without running the risk of losing by the event, when it is detected. The other is to ensure the identity of the instrument, and prevent the substitution of another, without the privity of the party concerned. The instrument derives its legal virtue from its being the sole repository of the agreement of the parties, solemnly adopted as such, and attested by the signature of the party engaging to perform it.” The law carefully guards the rights of sureties upon an instrument, whether the relation to the principal is shown b y his being surety in the technical sense of the term, endorser or otherwise. A promissory note, signed by principal and surety, or a note or bill endorsed for the accommodation of another party thereto, defines the liability intended to be assumed, and any alteration changing this liability without his consent will discharge him; such as the change of the date, the amount, the time or place of payment. It was held in Miller v. Stewart, 9 Wheat., 680, that the contract of surety is to be construed strictly, and is not to be extended beyond the fair scope of its terms. Judge Story, in delivering the opinion of the court in this case, says, “ nothing can be clearer, both upon principle and authority, than the doctrine that the liability of the surety is not to be extended beyond the terms of his contract. To the extent and in the manner, and under the circumstances pointed out in the obligation, he is bound, and no farther. It is not sufficient that he sustain no injury by a change in the contract, or that it may be even for his benefit. He has a right to stand upon the very terms of his contract, and if he does not assent to any variation of it, and a variation is made, it is fatal. This doctrine certainly does not fail to apply to a contract vdiich has been altered materially, after it has passed from the hands of the surety or endorser, though it has not been delivered to the party authorized to treat it as available. After a material alteration, it is not the contract the [512] party signed, and a negotiation first made after the alteration cannot make it his contract. The distinction in the instructions has no foundation in reason or in law. When a person puts his name to paper, which is full in form, for a certain sum payable at a certain time and place, for the accommodation of another, who is to become a party to the same, when it shall be negotiated, his liability is limited by the precise terms of that paper. An alteration after-wards, which is material, without his consent, will make it a contract which he never executed, and which it is manifest he never intended to execute, and it is a new contract, to which he can in no sense be treated as a party, and he cannot be bound by it. It bears no analogy to the case where one signs or endorses blank notes or bills, to be filled by the party to be accommodated, according to his discretion and supposed necessities. In England, under the stamp acts, a note or bill materially altered, even by consent of parties, without a new stamp, is void. And it has been said in English elementary treatises, that “ an accommodation bill is not issued so as to be incapable of alteration, until it comes into the hands of one entitled to treat it as an available security.” 2 Stark. Ev., 295, note (g.) This note, in the abstract, would seem to support the instructions which we are now considering. But the authority cited by Mr. Starkie will show that the alteration was by the consent of the party attempted to be charged; and the defence, that the contract was void, was upon the ground that every bill shall have a stamp, which was not upon the one in question after the alteration. But the court held that the bill not having become effectual before the alteration, it was not thereby a new contract. In this case the defendants assumed a liability for the sum of two hundred and sixty dollars, at the end of seven months, and no other. The alteration made the note for a larger sum at the same time. The instructions were not based upon the hypothesis that the alteration was with the consent of the defendants, and were unauthorized in law. [513] If the court should be of the opinion, that the alteration in the note in suit renders it void, it is proposed that the interest thereon should be remitted, so far as it accrued previous to the maturity of the note, and the plaintiff be allowed to strike from the same the added words. It is sufficient for this court, sitting as a Court of Law, to decide the questions of law raised at the trial, to say, that such a motion is not before it, and cannot be entertained. But it may not be improper to remark, that by the authorities referred to, the general proposition is, that written instruments, which are altered, in the legal sense of that term, are thereby made void, and to allow the note to be placed in the condition in which it was when endorsed, would annul one of the foundations on which the principle rests, to wit, “public policy,” to prevent fraud, by not permitting a man to take the chance of committing a fraud, without running any risk of losing by the event, when it is detected. Exceptions sustained, verdict set aside, and new trial granted.