Alexander v. Buckwalter

Opinion by Rice, P. J., This was an action of assumpsit brought by a bona fide purchaser for value before maturity of a promissory note against the maker. The note was drawn upon a printed blank, which, before being filled, was in this form: — 137 — When the note came into the plaintiff’s hands it read as follows : The defendant set up two defenses : first, that the signature to the note is a forgery; second, that, if he executed the note, it was altered after it left bis hands, and without his authority, by the insertion of the words, “ or bearer.” As to the second defense the learned judge instructed the jury as follows: “ Secondly, if Buckwalter signed a note, and you find this to be the — 138 — note that he signed, but you also find that, after it was signed and delivered, it was altered by inserting the words ‘ or bearer ’ in the note, then we say to you that that is such a material change in the note as would render it void as against Buckwalter, and your verdict, in such case, must be for the defendant.” Unquestionably the alteration above alluded to was a material one, and as there is no evidence that after the note was delivered to the payee the defendant authorized it to be made, no exception could be taken to the instructions, if the action had been brought by the payee. Were they correct in an action by a bona fide holder for value ? Clearly not, if the facts warranted the application of the equitable principle that where one of two innocent persons must suffer loss by reason of the fraud or deceit of another, the loss should fall upon him by whose act or omission the wrongdoer has been enabled to commit, the fraud. This principle has been successfully invoked by bona fide purchasers for valué of commercial paper, alleged to have been altered after execution by the maker. It was distinctly recognized and applied by this court in the recent case of Howie v. Lewis, 14 Pa. Superior Ct. 282, where a judgment note was given containing the clause “ this note shall be subject to the same rules governing commercial paper as to equities.” A leading case is Garrard v. Haddan, 67 Pa. 82. It .appeared in that case that Garrard signed a printed note, in the blank of which was written “ one hundred,” leaving a space between that and “ dollars ” which was in print, and this, after delivery, was filled with “ fifty ” in the same hand and ink. It was held that Garrard was liable for the full face of the note as altered to a bona fide holder for value. Where a negotiable note on a printed blank was signed after there was written on the margin words to the effect that it was given for a patent and was not to be paid until a specified profit was made, and after delivery by the maker this marginal writing was cut off, and as thus mutilated the note came into the hands of a bona fide indorsee for value without notice, it was held in an action by him against the maker, that, as there was nothing on the face of the note to indicate that it was not in the same condition as when issued, the plaintiff was not affected by the alleged alteration of the paper: Zimmerman v. Rote, 75 Pa. 188. The court said: “It is the duty of the maker of the note to guard not only himself but — 139 — the public against frauds and alterations, by refusing to sign negotiable paper made in such a form as to admit of fraudulent practices upon them, with ease and without ready detection.” The paper sued upon in Brown v. Reed, 79 Pa. 370, was part of a contract so skilfully arranged that by cutting off a portion on the right end there was left a negotiable note. It was held, that whether there was negligence in the maker in executing such a paper was for the jury, but it was impliedly held that if they found from the evidence that the line of demarcation between the two parts was so clear and distinct and gave the instrument so unusual an appearance as ought to have arrested the attention of any prudent man, the maker would be liable to a bona fide holder who took it in the usual course of business before maturity. In Leas v. Walls, 101 Pa. 57, the instrument was a printed blank note with an open space for the insertion of the amount, the word “ dollars ” being printed at the end of the space. The successful alteration of the amount from eight to eighty was made possible by the maker’s omission to completely score out the blank. Whether or not he was negligent in not beginning the scroll so close to the word “ eight ” that not even a single letter could be inserted, was held to be a question for the jury. It is thus seen that the question is not, whether the maker so drew the paper as to make it possible to alter it without detection, but whether he failed to use ordinary care and precaution to protect not only himself but the public against a fraudulent alteration of the instrument. It is a question of negligence, to be determined by the court if the facts are not in dispute, and but one reasonable inference can be drawn from them, as in Garrard v. Haddan, or to be submitted to the jury with proper instructions, if there be doubt as -to the facts or as to the inferences to be drawn from them, as in Brown v. Reed. The Pennsylvania cases upon the subject differ in that regard only. They all teach one principle, which has been declared to be, “ that, if the maker of a bill, note or check issues it in such a condition that it may be easily altered without detection, he is liable to a bona fide holder who takes it in the usual course of business before maturity. The maker ought surely not to be discharged from his obligation by reason or on account of his own negligence in executing and issuing a note that invited — 140 — tampering with: ” Mr. Justice Sharswood in Brown v. Reed, supra. In considering the applicability of this principle to the case at bar, it is to be borne in mind, first, that the note was in precisely the same condition when it came into the plaintiff’s hands as it was when it left the defendant’s hands — -assuming that this is the note he signed — with the single exception, alleged by the defendant, that the words “ or bearer ” had been inserted in the meantime; also, that ample space was left for the insertion of these words, upon the same line and without crowding, after the name of the payee. As was said in Garrard v. Haddan, so it may be said of this note, there was no difference in the handwriting between the words added and those which preceded them, no difference in the ink, and no crowd-of words, but it cannot be said in this case, as it could in that, that there was nothing to put a prudent man on inquiry or to raise a suspicion that all was not right. On the contrary a prudent man would have seen that if the blanks had been properly filled the note would have been payable to order, at a certain bank, whereas rvhen it came to the plaintiff’s hands it was a note payable to bearer at the house of the maker. As part of this alteration consisted of erasures and an interlineation, he had no right to assume, either as a matter of law, or as a matter of common prudence, that the note was in the same condition as to the terms of its negotiability as when it left the maker’s hands. “ Where the defense to a suit on a negotiable promissory note is that it was altered in a material part after it was signed and delivered by the maker, and the alteration is not so far apparent on an inspection of the paper as to raise a suspicion of its purity, the burden of proof rests on the defendant. If, however, there is an apparent alteration, the burden of proving that it was lawfully made or that the paper is in the same condition as when it was issued, rests on the party offering it; and the court will refuse to receive it in evidence until some explanation of the apparent alteration has been made. The quantity and character of proof required to carry the question to the jury must depend upon the circumstances of each particular case:” Gettysburg Nat. Bank v. Gage, 4 Pa. Superior Ct. 505; Simpson v. Stackhouse, 9 Pa. 186; Hill v. Cooley, 46 Pa. 259; Hartley v. Corboy, 150 Pa. 23; Gettysburg Nat. Bank v. Chisolm, 169 Pa. 564; Citizens Nat. Bank — 141 — v. Williams, 174 Pa. 66. Presumably tbe plaintiff knew this rule of law, and in taking a paper, blemished as this was, without inquiry of the maker, he took the.chances of being able to prove to the satisfaction of a jury that the alteration of the paper from a note payable to order, to a note payable to bearer, was lawfully made, or that as to its negotiability, it was in the same condition as when it was issued. If the defendant was negligent, so also was the plaintiff. To extend the rule under consideration, so as to protect one who was willing to take such chances, would be contrary to sound principle, and would be warranted by no authoritative precedent that has been called to our attention, or that we have been able to find. The fourth, fifth, seventh and ninth assignments of error are overruled. The genuineness of the signature to the note was in issue. The plaintiff in his first and third points impliedly admitted this to be so, and invited the submission of the question to the jury. Under the defendant’s testimony the court could not have done otherwise. The credibility of the defendant, and the effect of his testimony, if believed, were for the jury to determine. If they believed him, they were justified in finding that the signature was a forgery. We agree with the plaintiff’s counsel that it would have been entirely proper for the court to call the jury’s attention to the personal interest of the defendant and to the argumentative character of some portions of his testimony. But we cannot say that his omission to do so is ground for reversal. “ That a judge does not make all the remarks of which the nature of the case may admit is not invariably ground for reversal. If such were the rule few judgments would be affirmed, for there are few cases in which something in addition, that might have- been appropriately said, could not be suggested:” Wetherill v. Erwin, 12 Pa. Superior Ct. 259. The first, second and eighth assignments are overruled. The testimony which is quoted in the eleventh, twelfth and thirteenth assignments was not admitted for the purpose of proving a parol agreement or condition between the maker and the payee, nor in his charge did the learned judge permit the jury to give it that effect. The defendant admitted that he signed a note, but contended that the words “order of” and “ Farmers National Bank of Lancaster ” were crossed off, and the words, “ To be paid at H. L. Buckwalter’s house ” were — 142 — interlined at his request before the note was signed. This was in entire harmony with the testimony of O’Brien, the payee, which was introduced by the plaintiff. So far as the testimony objected to related to these alterations, it certainly did not harm but helped the plaintiff’s case. But the defendant went further, and swore that in the note he signed, the words “ without defalcation for value received ” were also crossed off. These two witnesses, A. K. Barrand and Mrs. Wenger, testified that at the very time that the note prepared by O’Brien was being changed to conform to the defendant’s wishes, he insisted that this last mentioned change-should be made. The testimony was to some extent corroborative of the defendant’s allegation that the note produced on the trial was not the note he signed, and being part of the res gestee was admissible. Moreover, the plaintiff had introduced the testimony of O’Brien, the payee, as to certain requests and suggestions made by the defendant at the execution of the note with regard to what should be left out and what should be put in the same. This furnishes an additional reason for permitting the defendant to show all that was said at that time with regard to the same matter. The eleventh, twelfth and thirteenth assignments are overruled. Though the presumption that a witness has testified to the truth may be removed by proof that he has testified differently upon a former trial of the same case, still it belongs to the jury to weigh such evidence and to determine the credibility of the witness. According to the better reasoning and the weight of authority, the maxim “ falsus in uno, falsus in omnibus,” which is supposed to apply here, is a rule of permission, and not a mandatory one to be laid down by the court as binding the jury without regard to the corroborating circumstances. We think, therefore, that the court committed no error in its answer to the plaintiff’s second point. The sixth assignment is overruled. In the portion of the charge which is the subject of the third assignment of error, the court correctly stated the substance of Alderman Halbach’s testimony, and, whilst the learned judge might well have omitted any reference to what the defendant’s counsel said at the hearing, it is to be.observed that he did not misstate what Alderman Halbach had testified to upon that subject. Notwithstanding the very earnest and zealous argument — 143 — of the plaintiff’s counsel in support of this assignment, we are- of opinion that it cannot be sustained. It is therefore overruled. None of the assignments of error being sustained, the judgment is affirmed.