Johnson v. Bank U. States

Chief Justice Robektson delivered the Opinion of the Court. To an action by petition and summons,'by the Bank of the United States against Joel Johnson, on a-promissory note for $5,000,- purporting to have been drawn by the said Joel■ to Richard M. Johnson “or order, negotia“ble and payable in the Bank of Washington, District “of Columbia,” and finally endorsed to the plaintiff, the defendant filed a special plea of non est factum, averring that the note was drawn and delivered by him to the said. Bichard,-in the City of Washington, without the words “or order” in it, and that afterwards the said Richard, without his knowledge or consent, but at the instance of certain - officers of the said-Bank of the United -States, altered it- by interlining those words, and that before that interlineation, the said note was not negotiable. The Circuit Judge having sustained a demurrer to that plea, the principal‘question presented for revision is, whether the facts pleaded constitute a legal bar to the action. According to the plea, the city of Washington was the place of the contract as well as ’-of payment, and therefore the local law of the District of Columbia ■ must determine the legal obligation of the note upon the facts as averred. And of that law we have no judicial knowl■edge; for, although Congress 'legislates for the District of Columbia, yet that legislation is altogether local; and moreover some of the ancient laws of Maryland and Virginia, equally local, are also still in force there. In the absence however, of sufficient proof to the contrary, we may presume that the mercantile branch of the modem common law of England, and perhaps the ■ statute of Anne, as to the negotiability of certain prom [311] issory notes, were in force in the District of Columbia, and constitute the law of this case. Any alteration in a deed, whether: material or immaterial, if made by one party to it without authority of the other; ‘ vitiates the deed. Same principle is applicable to bills of exchange. The parties to a deed, &c. may correct a mistake therein and make it what it was intended to be. Ever since Pigot’s case, {Coke) it has been-the .settled-doctrine of the common law that any alteration in a deed, whether material or .immaterial, if made by one party to it without the concurrence or authority ■ of the other party, will avoid the deed and sustain a plea of non est factum: 1st, because the alteration must affect the- question of identity, and 2d, because such an unauthorized act of a party having the custody of a- deed should be construed most strongly against himself, and if legalized, might facilitate injuries and irremediable frauds. The same conservative principle has been recognized as applicable to bills of exchange and promissory notes. In Masters et al. vs Miller (4th Term Rep. 320) Kenyon Ch. Jus. and Ashhurst Jus. said that the reason of the common law as to alterations of deeds by parties thereto, was equally applicable, to mercantile paper, and that it should even be more strictly applied to such paper, because, circulating from hand, it should therefore, be the more scrupulously guarded against alteration; and this seems still to be a leading and authoritative case in England. And although in Sanderson et al. vs Symonds (Brod. and Bing. 426, and 5 Eng. Com. Law Rep. 134,) the Court recognized -an exception as to policies of insurance, yet it clearly intimated that even an immaterial alteration by a party, might avoid a promissoi'y note or bill of exchange, according to the settled law of England, as established first in the case of Masters et al. vs Miller. The cases in which it has been adjudged in England, that an immeterial alteration of a bill or note does not render it illegal, and that even-a material alteration made by all'parties for correcting a mistake; will not invalidate-as a matter of course, bad reference to the stamp acts, and. were decided on that ground only. The-principle established by these cases, is, that an immaterial alteration did not-make an essentially new note which would be void, without a new stamp; and that even a material alteration by all parties for correcting a mistake, [312] was only making the bill or note what it was originally intended and understood to be, and that therefore the corrected paper was not invalidated by the omission to affix a new stamp: see Kershaw vs Cox (3 Espin. 246,) and Knill vs Williams, (10 East. 432.) The addition of the words or_ order or bearer in a promissory note; are material-*r A plea averring that the note sued on had been altered by adding therein the words “or order,” and thereby making it negotiable, when before such alteration it was negotiable without the consent of the drawer, is good as .a plea of non est factum. But we have seen no adjudged case in which it was ever decided that an action was maintainable on a bill or note against the drawe'r after even an immaterial alteration by the payer without the drawer’s authority. On the contrary the cases (and especially that of Masters et al vs Miller, supra) negative the assumption that such an altered bill or note is, as a bill or note, still obligatory, and they clearly import that if any action be still maintainable, it must be on an assumpsit implied by the receipt of a valuable consideration. ; statute Then, according to the common law and the statute of Anne, as thus expounded and applied, it would not be enquire whether the alledged alteration in material or immaterial, though under that alteration would be deemed material, because ^»a]»s*H®gotiable as bills of exchange, only such promissory ñptes as are, on their face, made expressly orto the payer or his “order.” IT, However, according to the local law of the District of Cdfftmbia, an immaterial alteration would not have invalidated the note, the plea avers that the note was not negotiable as executed and delivered to R. M. Johnson, and that, therefore, the interlineation of the words “or order” was a very material alteration, and, not judicially knowing that such was not the effect of the local law, we cannot decide that this averment is not true, and so, therefore, admitted to be by the demurrer. The plea seems, therefore, to be good, unless upon the face of the note the law might imply an authority to E. M. Johnson to make the alteration which was made; but, without knowing the local law of the case, we cannot decide whether there could have been any such implied authority. If the note was, as it purports on its face to be, a real transaction, there was under the statute of Anne, (if that were in force in the District of Columbia,) no such implied authority; and it is at least very [313] questionable whether the law could have implied any such authority even if there should be extraneous proof that the note was drawn as an accommodation paper; but this we cannot now decide for want of a sufficient knowledge of the local law operating on the question. Although a july trial be had on a general plea of non est factum, yet if the Court, on demurrer, rejected a special plea which was good, a new tri,al should be a- , the pretion being 'tó facts set thespecial were not . in evi- or if offerected by urt. Owsley (f Qoodloe for plaintiff; Hickey for defendants. The plea certainly imports that the alteration was made without the drawer’s authority, and we must take that to be true until the contrary shall be made to appear. It seems to us, therefore, that the facts as pleaded, constitute a prima facie bar to the action. But it has been argued that nevertheless we should not reverse the judgment, because there was a trial on a general plea of non est factum filed with the special plea, and under which general plea every fact averred in the special plea might have been proved; and that, therefore, as there is no bill of exceptions showing that the nlaintiff in error was not permitted on the trial facts, we cannot decide that the error ii demurrer was in fact prejudicial. But, as the Circuit Judge decided, or ed to have decided, on the demurrer, that ed in the special plea were insufficient to we should also presume that those same fore neither offered nor permitted to be proved oW'ihe general issue. It is, therefore, considered that the judgment of the Circuit Court be reversed and the cause remanded with in- structions to overrule the demurrer to the special plea of non est factum.