Fulmer v. Seitz.

Ryan & Moody, 381; Richards v. Richards, 2 Barn. & Ald. 447; Roffey v. Greenwell, 10 Ad. & Ell. 222; Powell v. Guy, 3 Dev. & Batt. 70; Kilgore v. Powers, 5 Blackf. 22; Billingsly v. Cahoon, 7 Ind. 184; Cooley v. Rose, 3 Mass. 221; Kennerly v. Nash, 1 Stark. 368. The alteration being in accordance with the original agree ment of the parties, their consent might reasonably be implied thereto, and such an alteration would not make the note void. 2 Parsons on Notes, 570; Clute & Bailey v. Small, 17 Wend. 238; Boyd v. Brotherson, 10 id. 93; Jacob v. Hart, 6 Maule & Selw. 142; Chitty on Bills, 206-209; Kershaw v. Cox, 3 Esp. 246; Brutt v. Picard, Ry. & Moo. 37; Arnold v. Stedman, 45 Penn. 189; Kountz v. Kennedy, 63 id. 187.

H. Green (with whom was W. W. Schuyler), for defendants in error. The alteration of an instrument avoids it without regard to the motive. Marshall v. Gougler, 10 Serg. & Rawle, 164; Beary v. Haines, 4 Whart. 20; Henning v. Werkheiser, 4 Penn. St. 518. The onus of showing a lawful alteration is on the holder. Simpson v. Stackhouse, 9 Penn. St. 186; Kennedy v. Lancaster Co. Bank, 18 id. 347; Miller v. Gilleland, 19 id. 119; Paine v. Edsell, id. 178; Southwark Bank v. Gross, 35 id. 80; Hill v. Cooley, 46 id. 259; Neff v. Horner, 63 id. 327; Warrington v. Early, 2 Ell. & Black. 763; Dewey v. Reed, 40 Barb. 16; Woodworth v. Bank, 19 Johns. 391; Sutton v. Toomer, 7 B. & C. 416; 2 Parsons on Bills, 549. Unless expressed otherwise in the note, interest commences from maturity. Kennerly v. Nash, 1 Stark. 368; 2 Parsons on Bills, 392; Daggett v. Pratt, 15 Mass. 177; Ludwick v. Huntziner, 5 W. & S. 51, Warrington v. Early, supra; Miller v. Gilleland, supra. It is immaterial what kind of understanding the defendants may have had as to what their contract was. The only question is what was the contract. Kennedy v. Lancaster Co. Bank, supra; Perring v. Hone, 4 Bing. 28; Clute v. Small, 17 Wend. 238. The change having been made, without the consent of the sureties, they are discharged. Theob. on Principal and Surety, §§ 152-166; Hibbs v. Rue, 4 Penn. St. 350; Uhler v. Applegate, 26 id. 140. As to the refusal to strike out the altered words. Neff v. Horner, supra.

AGNEW, J. (After disposing of a question of evidence.) The third and fourth assignments involve the principal question in the cause. According to the plaintiff's testimony, about two months

Fulmer v. Seitz.

after the note in suit was delivered to him, George Seitz came to his house. He mentioned to Seitz that the note was non-interest bearing, and Seitz said: "You just add the words 'Int. payable semiannually,' and it will be all right." He did so, in Seitz's presence. He also states that the agreement between him and Seitz, at the time of making the loan was, that Seitz should pay him 12 per cent interest, and that, in two or three weeks after the note was given, Seitz handed him $240, the bonus part of the interest or six per cent on $4,000, the principal of the loan. The alteration of the note, by the addition of interest, was a conceded voluntary act on part of the plaintiff, though not fraudulent or wrongful as to George Seitz, the principal, and the question is, whether this act avoided the note as to the sureties. The case is, we think, ruled by Neff v. Horner, 63 Penn. St. 327, 3 Am. R. 555, which is in turn supported by the additional authorities cited by the defendants in error in this case. There is no difference between this case and that, excepting that, if any thing, this is stronger against the plaintiff than that. There, the alteration was made by the principal defendant himself, stating, at the same time, that he was authorized to make the alteration by the defendants; while here, the alteration was made by the plaintiff himself, and the principal defendant merely said it would be right, but did not say he was authorized to have it done. The grounds for the decision in Neff v. Horner are stated in the opinion, and need not be repeated here. But it is supposed that the case of Kountz v. Kennedy, 63 Penn. St. 187, 3 Am. R. 541, is opposed to this view, and it is cited as authority against it.

That case is a very close one, and was decided doubtingly on its peculiar circumstances. One of our number expressly dissented, and I gave my own assent with hesitation. The case differs from Neff v. Horner and this case, in several material respects. There, the plaintiff did not sue for or claim the interest under the alteration. Here, and in Neff v. Horner, he did. In Kountz v. Kennedy, the evidence showed that the alteration was evidently the result of a misapprehension, and as soon as the plaintiff discovered that the indorser had not authorized it, he had it taken out so as not to deface the note. As between him and Hunt, the drawer of the note, there was no difference of understanding, the latter having agreed to pay interest, and the note being altered to that effect by his clerk, when the plaintiff discovered that it did not correspond with their understanding. The plaintiff never made any claim of interest

Fulmer v. Seitz.

against the indorser, and had acted without a suspicion even of intended fraud. It was therefore held that the indorser was not affected by any thing which had been done, the alteration being innocent and the correction being made immediately, as soon as it was discovered that he had not assented to the change. In the present case, the parties to the note were all drawers, and stood in the same precise relation to it, so that the alteration as to the prin cipal was an alteration of the direct contract to pay the note of each and every one who signed it; and on this contract the plaintiff brought his suit and insisted on his right to recover interest against all. Failing to show his right to recover against them, because of his failure to prove their assent to the alteration, he fell directly within the rule of policy which forbids the recovery of any thing upon the altered instrument. These reasons furnish an answer also to the alleged error in refusing the plaintiff permission to strike out of the note and out of the narr. the added words, "Int. payable semi-annually." One who makes a voluntary and unauthorized alteration of a written contract, and insists upon it by going to trial to recover upon the altered state of the instrument, has no locus pænitentiæ, which, on his failure to establish his right to recover, will enable him to undo the wrong at the trial, and to stand as one who has made an innocent mistake, and never has insisted upon his right to enforce it.

The sixth, seventh and eighth errors may be considered together. There is no evidence that the loan itself was made to all the drawers of the note directly either as principals or sureties, or that any undertaking was assumed by the sureties, other than the promise contained in the note itself. Nor did they receive any of the money lent by the plaintiff. Their liability arose, therefore, wholly upon. the note, and not upon any express or implied promise, outside of it, to repay the money lent. It is evident, therefore, there was no ground upon which the court could submit to the jury the right of the plaintiff to recover jointly from all of the defendants the money lent, independently of the instrument by which the sureties bound themselves to pay it, and on that, as an altered writing, we have seen there can be no recovery. Upon the whole case we discover no error, and the judgment is, therefore,

Affirmed.

NOTE.-See Wallace v. Jewell, ante, p. 48; also Holmes v. Trumper, 7 Am. R. 661 and note, p. 669.-REP.

Eilbert v. Finkbeiner.

EILBERT, plaintiff in error, v. FINKBEINER

(68 Penn. St. 243.)

Promissory note—indorsement —parol evidence— guaranty.

Defendant put his name on the back of a negotiable promissory note, the payee not having indorsed it, and subsequently wrote letters to the payee stating that if the maker did not pay the note he (defendant) would pay it. In an action by the payee, held, that although, in the absence of legal evidence, the position of defendant was that of second indorser, yet the letters were admissible in evidence to prove that the agreement upon which the indorsement was made was a guaranty that the note should be paid to the payee (See note, p. 178.)

ACTION on a promissory note by Gottlieb Eilbert against Michael Finkbeiner. The note was as follows:

"$100.

PHILADELPHIA, July 19, 1867. "Six months after date I promise to pay, to the order of Gottlieb Eilbert, one hundred dollars, value received, with eight per cent interest.

(Indorsed)

"HENRY FINKEBINER, "No. 1340 Girard avenue, Philadelphia, Pa. "MICHAEL FINKBEINER."

At the trial, plaintiff offered letters written to him by defendant which contained promises to pay the note not pay it. These letters were excluded. were excluded, but they are not material. Plaintiff took out a writ of error.

if Henry (his son) did Other offers of evidence Verdict for defendant.

R. J. Jones (with whom was H. S. Hartraft), for plaintiff in error.

E. J. Fox, for defendant in error.

SHARSWOOD, J. Nobody ever doubted that when a man puts his name on the back of negotiable paper before the payee has indorsed it, he means to pledge, in some shape, his responsibility for the payment of it. Kyner v. Shower, 13 Penn. St. 446. This court finally

Eilbert v. Finkbeiner.

settled that, in the absence of legal evidence of any different contract, he assumes the position of a second indorser; and that, to render his engagement binding as to any holder of the note, the implied condition that the payee shall indorse before him must be complied with so as to give him recourse against such payee. Schafer v. The Farmers and Mechanics' Bank, 59 Penn. St. 144. Prior to January 1, 1856, when the act of April 26, 1855 (Pamph. Laws, 308) went into effect, it could have been shown by parol evidence that the intention of the irregular indorser was to guarantee the payment of the note to the payee. Leech v. Hill, 4 Watts, 448; Taylor v. McCune, 11 Penn. St. 460. The act of 1855, by providing that no action shall be brought "whereby to charge the defendant upon any special promise to answer for the debt or default of another, unless the agreement upon which such action shall be brought or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person by him authorized," made parol evidence of such a guaranty unlawful. Jack v. Morrison, 49 Penn. St. 113. But surely under the statute a memorandum in writing signed by the party is admissible to show that the agreement upon which the indorsement was made was a guaranty that the note should be paid to the payee; and not that the payee should stand between the indorser and ultimate responsiblity. Now the letters which were offered in evidence and rejected by the court were clearly of this character. They were addressed to Eilbert the payee, and acknowledged the writer's liability to him on the loan which he had made to his son Henry, the maker of the note, on July 19, 1867, which is its date; so that the identity of the transaction referred to with the note in suit is beyond all doubt. He promises to pay if Henry does not. Had these letters been addressed to a subsequent holder, it might have been supposed that the acknowledgment of liability was a mistake in law, since without Eilbert's indorsement he would not be liable to such subsequent holder. But the acknowledgment here being to Eilbert, the payee, there could have been no mistake. He admits a liability to Eilbert, the payee, himself, which is entirely inconsistent with the notion that he had put his name on the back of the note upon condition that Eilbert should take the position of first indorser. Moreover, these letters contain a promise to pay upon the consideration of forbearance not to cause any further costs; and, as an independent original contract would have been admissible under the special declaration, and would have Vol. VIII. 23