Mount Morris Bank v. Lawson

Van Wyck, J. The action is against the defendant as the maker of the promissory note sued upon and which is set out in full in the complaint as follows: [229] “$1,500. Mew Yobk, Mch. 21s#, 1890. “ Three months after date I promise to pay to the order of James Ritchie, fifteen hundred dollars at Mount Morris Bank, M. Y. city, with interest. Value received. “Mo.- Due. Robebt G. Lawson.” The defendant specifically admits in his answer that he made and delivered the note declared on in the complaint to James Ritchie, the payee named therein, but he alleges that when he so made and delivered the same it did not have the words “ with interest ” written thereon, and that he “charges said Ritchie or some one by his direction with writing ” these words thereon’after such delivery and without defendant’s knowledge or consent. This is a solemn admission by the defendant by his answer that he gave this note to Ritchie, the payee, for a valuable and legal consideration, for he does not in his answrer allege that it was given without such consideration. This note declared on purports to be for “ value received,” and being set out in the complaint is sufficient allegation of consideration (Prindle v. Caruthers, 15 N. Y. 426), and being specifically admitted by his answer, the defendant had no right to attack on the trial the validity of this note for ■ want of consideration, or for any other cause except for its ' unauthorized alteration, by adding “ wfith interest ” after it left his hands. So the judge w-as justified in ruling as matter of law at the trial and on the pleadings that the defendant at the time he delivered the note was liable to the payee thereof as upon a note given for valuable and legal consideration. And as plaintiff's proof showed beyond question and without contradiction that the bank plaintiff had, without notice of the alteration and -before maturity, duly discounted the note for one Ebert, to whom Ritchie, the payee, had duly indorsed the same, wras not the judge also justified in ruling that this defendant wras liable to this bank as such bona fide purchaser, because defendant was not an accommodation maker or other, surety, but the maker for valuable consideration, and without any defense as against the payee at the time that he delivered [230] the note to him ? Appellant’s contention is that the hank, although such bona fide holder, cannot recover against the maker for value for even the principal sum for which he was so liable to the payee, because the unauthorized addition of the words “ with interest ” was a material alteration of the note after he made and delivered the same. Appellant’s contention is made on the authority of the cases of Weyerhauser v. Dun, 100 N. Y. 154, and McGrath v. Clark, 56 id. 34, but in both of those cases the party sought to be held liable on the notes altered by adding the words “ with interest ” were accommodation indorsers and as such were sureties for the parties to whom they had delivered the same, and who, of course, never had a cause of action against such indorsers. In the Weyerhauser case the note, after Griggs had indorsed, was altered by adding “ with interest at ten per cent after maturity ” (the note was made and payable in Indiana), and the judge writing says: “ So far as Griggs is concerned, he stands simply as an accommodation indorser,” while in the McGrath case, Clark, the party sought to be charged, had indorsed a note payable to McGrath’s order, and delivered the same to the maker, who altered it by adding “ with interest,” and delivered it to McGrath, so Clark’s was an accommodation indorsement, and he a mere surety, and in no way liable to the maker. Appellant’s counsel fails to call attention to any reported case in this state which holds that a bona fide purchaser of a note cannot recover against a- maker or indorser for value, and who at the time of such making and indorsement was liable on the note to the party for whom he made or indorsed and delivered the same, even though the note after delivery had been altered by adding “ with interest.” • Of course the maker of a note for value, which was after delivery altered by adding “ with interest,” could not be held for such added interest, but he is liable to &bonafid,e purchaser for the amount for which he was originally lawfully liable to the payee from or through whom such purchaser buys the note. In the case of Susquehanna Bank v. Loomis, 85 N. Y. 210, a draft had been drawn by the Plainfield Bank on a [231] New York bank for twenty-five dollars, which had been raised to $1,200, and afterwards cashed by plaintiff, and the judge writing says : “ It must be conceded that the Plainfield Bank was at least entitled to have refunded to it (by the drawee who charged against it the full $1,200) the difference between the true sum for which the draft was issued and that to which the check had been altered.” And cites with apjn’oval the cases of Hall v. Fuller, 5 B. & C. 750, and Merchants’ Bank of N. Y. v. Exchange Bank of N. O., 16 La. 457. The action in the Hall case was assumpsit for money had and received by defendants (bankers) to the use of plaintiffs (merchants). It was shown that plaintiffs’ check of three pounds upon defendants had been fraudulently raised to £200 and otherwise altered, and when presented was paid and charged to plaintiffs. They sued to recover moneys deposited by them, and the bankers sought to retain for the amount so charged. It was contended by plaintiffs that they were entitled to the whole sum of £200, but the court ruled otherwise, saying, i- The bankers have paid more than the order authorized them to do, for by that they were directed to pay no more than £3,” and the judgment was limited to the excess. In the Merchants’ Bank case it appeared that the Bank of klobile drew a draft of $213.50 upon plaintiff, which was altered to $5,013.50, and then sold to defendant, who sent it forward to plaintiff for collection. The plaintiff paid it and passed the full amount to credit of defendant. When plaintiff afterwards discovered the forgery it sued defendant, and defendant was held liable for the difference between the true sum and that to which the check had been altered. The note in the case at bar -was at three months, and as the words “ with interest ” were added without defendant’s authority, and after he delivered the note, the judgment must be reduced by twenty-two dollars and fifty cents, the amount of the interest thus added, and, as so reduced, is affirmed, with costs. Ehrlich, Ch. J., and Fitzsimohs, J., concur. Judgment modified and, as modified, affirmed, with cqsts.