Hayes v. Wagner

Mr. Presiding- Justice Sears delivered the opinion of the court. The principal question presented upon this appeal relates to the effect of the alterations made in the instrument sued upon. It is uncontroverted that these changes were made by defendant in error’s manager and about a month after the writing was signed by E. W. Wagner and by defendant in error. That the changes were in matters material, is beyond question. The contract price and date of completion were changed. We have then to determine if these changes invalidated the instrument. The general rule is well established that if a party to a written executory contract makes alterations in material portions of it, he is thereby precluded from using it to enforce its provisions against the other party to it who has not consented to such alteration. Gillett v. Sweat, 1 Gil. 475; Gardiner v. Harback, 21 Ill. 129; Kelly v. Trumble, 74 Ill. 428; Burwell v. Orr, 84 Ill. 465; Bishop on Contracts, Sec. 746; Pigot’s Case, 11 Coke, 26; Angle v. N. W. Mut. Life Ins. Co., 92 U. S. 330; Hunt v. Gray, 35 N. J. L. 227; Marshall v. Gougler, 10 Serg. & R. 163; Fay v. Smith, 1 Allen, 477; Davidson v. Cooper, 13 M. & W. 342. In Gardiner v. Harback, supra, the court said: “ The law will not tolerate such changes in the evidence the parties have provided of the terms of their contract, and if so made, annexes as a penalty the release of the other party from all obligation under the contract.” It has been held that it is not necessary to show fraudulent intent in making the alterations in order to prevent the use in evidence of an instrument so altered. Marshall v. Gougler, supra; Fay v. Smith, supra. And it has been held upon very good authority, that if the alteration in some material respect be made by mistake of the party holding it, yet the writing is thereby rendered invalid, and relief as against such mistake can only be obtained through a court of equity. Hunt v. Gray, supra. But the rule does not seem to have been carried to this extent in case of mistake by the Pennsylvania Court in Marshall v. Gougler, supra. The policy of the rule is to prevent the unauthorized changing of the written evidence of contracts, and is enforced strictly against those who violate it. In Wallace v. Jewell, 21 Ohio St. 163, the court thus announces the rule: ‘‘ It is a general rule of law that the unauthorized material alteration of a written instrument by the holder, or with his consent, vitiates it as to non-consenting parties. The policy of the rule is to preserve the integrity of legal instruments by taking away the temptation of tampering with them.” Restoration of the writing to its original form after such unauthorized material alteration, will not avail to give it force. Cotton v. Edwards, 32 Ky. (2 Dana) 106; City Bank v. Richmond, 121 Mass. 110; Newell v. Mayberry, 3 Leigh, 250; Wood v. Steel, 6 Wall. 80. In the case last cited, the court said ; “ To prevent and punish such tampering the law does not permit the plaintiff to fall back upon the contract as it was originally. In pursuance of a stern but wise policy, it annuls the instrument as to the party sought to be wronged.” We are therefore of opinion that the admitted alterations by defendant in error, being in respects which are material, are such as invalidate the writing, if they were made without authority or consent on the part of plaintiff in error. The Illinois decisions cited by defendant in error’s counsel, do not sustain their contention that the rule in Illinois is other than above indicated. In Knoles v. Hill, 25 Ill. 288, and in Carr v. Welch, 46 Ill. 88, the alleged alterations consisted only in writings upon the paper upon which the instrument was written, and which were held not to constitute any change or alteration whatever in the instrument itself. In Reed v. Kemp, 16 Ill. 445, and in Ryan v. Buck, 148 Ill. 349, the alterations were held not to be material. In the latter case the court said : “ On this record, if the change amounted in law to a material alteration, all the makers were discharged; if immaterial, the obligation of the sureties is in no way changed.” Defendant in error endeavors to avoid the effect of the alterations here in question by the theory that the contract was merely used as a paper upon which to note memoranda for a new contract, which was to take the place of the contract sued upon. With this theory of a memorandum, is the contention that E. W. Wagner, acting for plaintiff in error, as well as himself, consented to the alterations. We are not impressed with any force in the memorandum theory as aiding this recovery nor with the contention that the evidence in this record establishes consent to the alterations. That this instrument, representing large interests, should have been used as a piece of blank paper for the purpose of setting down and preserving memoranda, is scarcely credible, when the inserting of the memoranda is accompanied by a marking out of material parts of the writing. That this use of the instrument is consistent with an intent to preserve it in its original form for the enforcement of the terms and conditions thus obliterated, is difficult to believe. Nor does the testimony of R. G. Wagner, the manager of defendant in error, who made the alterations, conduce to such belief. He testified : u Whether the contract was added to or not, I would have insisted on the change in the contract as to time. It didn’t enter my head that I would have to keep the contract as a matter of protection. When he asked me for this copy, having made memoranda on it, I thought it best to keep it for comparison. The making, of the memoranda had nothing further to do with it, except that I could not make a comparison with the other contracts when they came back.” It is apparent, we think, from this evidence, that R. G. Wagner did not regard the instrument which he had altered as of any future consequence except as a reference by which to measure the accuracy of the new contract which was to be written and executed. If the instrument was made into a mere memorandum, then in becoming a memorandum of a new contract it ceased to be evidence of the old contract, and it does not sustain the recovery had upon it. The recovery was not upon the altered terms as the basis of a new engagement, but upon the original terms with the alterations disregarded. It may be that E. G. Wagner in thus marking out a part of the written agreement and substituting other and different terms, was acting in perfect good faith, and with no intent to do any wrong to plaintiff in error. But when he so far relied upon the expectancy of obtaining a new contract as to obliterate parts of the old one, he deprived defendant in error of any right to enforce the provisions of the latter by use of the instrument thus altered. The evidence does not support the contention that E. W. Wagner consented to these changes. E. G. Wagner very frankly states that E. W. Wagner insisted upon submitting the new terms of the proposed agreement as to time of completion to plaintiff in error. Sangdahl, the other witness upon this matter, testified to the same effect. But if the consent of E. W. Wagner had been established, and if it be assumed that he had authority to bind plaintiff in error by such consent, yet it is difficult to see how it could aid this recovery. The consent must have been either to the alteration and consequent abandonment of the old con tract and a substitution of the new one with its altered terms, in lieu of it, in which event the recovery here upon the abandoned contract could not be maintained, or it was a consent to the mutilation and consequent abandonment of the old contract merely in contemplation of making a new contract, which was never made. That there was an agreement that the instrument might be thus mutilated, and yet continue to be a valid contract, not in its changed form, but in its original form, is neither credible nor supported by any evidence. We are of opinion that it was error to permit the jury to base a verdict for defendant in error upon the instrument thus altered, disregarding the alterations, and giving force to it as in its original form. The question is presented in argument, and doubtless will be raised upon another trial, as to the right of defendant in error to rely upon the unaltered duplicate in the possession of plaintiff in error as a basis of recovery for breach of its conditions, and in spite of the fact of an unauthorized alteration of the duplicate kept by defendant in error, which renders it incompetent. Many of the authorities by which the rule above considered is established, hold in terms that the unauthorized alteration not only precludes use in evidence of the writing thus altered, but as well that it defeats a recovery upon the contract evidenced by the writing. Upon examination such decisions are found to have been for the most part, if not altogether, in cases where the alteration was with fraudulent intent, or where no other means of establishing the contract were presented save the mutilated writing. When the alteration is not made with fraudulent intent, although it be such as to destroy the writing as evidence, it has been held that the engagement of the parties may be otherwise established and enforced. Vogel v. Pepper, 34 Ill. 100; Atkinson v. Howdom, 2 Ad. & El. 628; Clute v. Small, 17 Wend. 238; Booth v. Powers, 56 N. Y. 22; Merrick v. Boury, 4 Oh. St. 60. In Vogel v. Pepper, supra, the court said: “ There is a conflict of opinion regarding the existence of a right of action on an instrument which has been altered bv a stranger; but whatever may be considered as the correct rule in that regard, we are unable to perceive any good reason why such an alteration should cancel a debt, of which the instrument was merely evidence. * * * A material alteration of an instrument fraudulently made by its holder, justly deprives the wrongdoer of all rights by virtue of it. The identity of the instrument is thereby destroyed, and courts will not assist persons who have been guilty of a fraud, to carry out the transaction wherein it was perpetrated. A party who voluntarily and fraudulently destroys the evidence of a debt agreed upon by the parties, ought not to be allowed to supply its place by other evidence.” In Clute v. Small, supra, the rule was announced, and in Booth v. Powers, supra, by the same court re-affirmed, that the test by which the right to resort to other proof to enforce a recovery after the claimant has destroyed his own written evidence of the contract, by altering it, should depend upon the intent, whether innocent or fraudulent, in altering the writing. If in the case here it should be determined that the alterations xvere made by defendant in error with fraudulent intent, doubtless all his rights under the contract, whether evidenced by the mutilated duplicate introduced in evidence or by the unchanged duplicate held by plaintiff in error, would be lost. But if it be determined that these alterations were made innocently and without any fraudulent intent whatever, then, while the effect of the alterations is to destroy the writing thus changed as evidence upon which to enforce the contract, yet we are of opinion that it would not operate to preclude a recovery based upon other proof, as, for instance, the duplicate held by plaintiff in error. In such case of material and unauthorized alteration by the holder, done without fraudulent intent, it would seem that the requirements of rule have been met when the altered writing is rejected as evidence. Resort to unchanged duplicates has been permitted in similar cases. Lewis v. Payn, 8 Cowen, 71; Jones v. Hoard, 59 Ark. 42. And as applied to the executory provisions of leases, executed in duplicate, see 1 Taylor on Landlord & T. (8th Ed.), Sec. 165. And this resort to a duplicate is sanctioned in one of the cases cited, although the alteration was fraudulent, an extent to which the Illinois decisions would not seem to warrant us in going. If, therefore, it should be determined by a jury that the engagement here in question was entered into by E. W. Wagner, with authority to thereby bind plaintiff in error; that the alterations made by R. G-. Wagner were made without fraudulent intent, and that the contract is established by proof of the unchanged duplicate held by plaintiff in error, we are of opinion that a recovery might be had for breach. The measure of damages as announced by the instructions of-the trial court is, we think, correct. That it is the better practice to amend the pleadings upon discontinuing as to certain defendants is beyond question, and this may be done before another trial. There was a very decided conflict in the evidence as to whether E. W. Wagner was represented to defendant in error’s manager as a copartner of plaintiff in error. Therefore the instruction given by the court was erroneous, in that it assumed that E. W. Wagner was a copartner, or was in some ivay authorized to bind plaintiff in error by his assent. The propriety of proceeding to judgment against plaintiff in error before E. W. Wagner, his co-defendant, has been reached by process, provided the joint liability of the two is established, is settled by the recent decision of the Supreme Court in Sherburn v. Hyde, 185 Ill. 580. It is not necessary to consider other questions raised by reason of the conclusion reached. Because of the error in the instruction noted, and because of the admission of the altered writing as a basis of recovery, the judgment is reversed and the cause is remanded. Beversed and remanded.