Decatur Bank v. Spence

ORMOND, J. It has frequently been held by this, as well as other courts, that when one intrusts another with his signature to a note in blank, upon an agreement between them, that it is to be filled up with a certain amount, or to be used in a particular mode, and this contract is violated, either by the insertion of a larger amount, or by using the instrument 802 in a way not contemplated by the party signing it, if the person receiving it is ignorant of the fraud which has been committed, and gives a valuable consideration for the paper, he may recover upon it. This principle has been so frequently decided in this court, that it is only necessary to refer to the cases in which the rule is expounded. See Roberts v. Adams, 8 Porter, 297; Herbert v. Huie, 1 Ala. 18; Huntington & Sims v. The Branch Bank at Mobile, 3 Ala. 186; Leary v. Nance, 5 Ala. 370. This p.inciple is not directly controverted by the defendant’s counsel, but he insists that the bank took the paper as collateral security merely, and is not entitled to recover from the deféndat, upon whom a fraud has been practised, by the abuse of his confidence, although the bank was not privy to, or participating in it. Upon what consideration the Bank received the note, whether in satisfaction of the judgment, or as a condition of delaying payment, or as collateral security, we are not informed by the record. Nor could the jury have entered upon such an inquiry, if such had been the proof, as they were instructed by the court, that if the agreement between Scales and the defendant was violated, by the insertion of a larger sum than was stipulated between them, the Bank could not recover on the note, though ignorant of this secret agreement. This charge rendered any inquiry into the consideration paid for the note, by the Bank, entirely useless; and the charge being clearly erroneous, the judgment must be reversed and the cause remanded'..