(52 Okl. 759) whether or not the court determined the HODGSON et al. v. WINNE MORTGAGE (Syllabus by the Court.) Where, from an examination of the entire record, it is impossible to ascertain whether the question raised and argued in this court was passed upon by the trial court in refusing to rescind a contract, the cause will be affirmed. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 4450-4453; Dec. Dig. 1133.] Commissioners' Opinion, Division No. 3. Error from District Court, Beckham County; G. A. Brown, Judge. Action by Ira Hodgson and another against J. G. Winne and another, a partnership doing business as Winne & Winne, and others. Judgment for defendants, and plaintiffs bring error. Affirmed. Dudley B. Madden, of Walters, and Geo. D. Sailor, of Sayre, for plaintiffs in error. T. Reginald Wise, of Sayre, for defendants in error. An examination of the record discloses that no request was made for special findings of fact, and the decree is silent as to why the court refused to rescind the contract. It is just as probable to suppose that the court refused to rescind the contract because of a failure to act promptly, upon discovering the facts which would entitle the plaintiffs to rescind, as it is to suppose that the judgment of the court was predicated upon a finding that the plaintiffs had failed to make a proper tender before instituting the suit. The record does not present the question which is argued in the briefs by the plaintiffs, and the cause should therefore be affirmed. PER CURIAM. Adopted in whole. (54 Okl. 146) GERMAN-AMERICAN BANK. HENNIS et al. (No. 4682.) (Supreme Court of Oklahoma. June 22, 1915. (Syllabus by the Court.) 1010-FINDINGS OF Where a case is tried by the court without the intervention of a jury, upon controverted questions of fact, and there is evidence reasonably tending to support the findings of the trial court, such findings will not be disturbed on the weight of the evidence. Error, Cent. Dig. § 3979-3982, 4024; Dec. Dig. [Ed. Note.-For other cases, see Appeal and 1010.] RITTENHOUSE, C. On September 15, 1907, Ira Hodgson and Mary Hodgson made, executed, and delivered their certain promis-1. sory note of $1,000 with interest, to the Winne Mortgage Company, secured by a real estate mortgage. About 30 days subsequent to the delivery thereof, the plaintiff received $500, this being the extent of the money received from the mortgagee. After waiting about seven months and endeavoring to procure the balance due on the loan of $500, this suit was instituted, asking that the note and mortgage be rescinded on the ground of a partial failure of consideration, and pleading an offer to do and perform full and complete equity in the premises. An answer was filed, denying the allegations of the petition, and asking the foreclosure of the mortgage. Upon trial the court refused to rescind the contract, and ordered that the defendant recover of and from the plaintiff's the sum of $693.10, with interest, attorney's fees, and costs of suit, and that the mortgage be foreclosed to satisfy such sums. It is apparent that the court deducted from the face of the loan the $500 which had not been received by the plaintiffs, and rendered judgment for the amount received under the contract, together with interest and attorney's fees. It is contended in this court that under the law and uncontroverted evi 2. BILLS AND NOTES 378-BONA FIDE PURCHASER-ALTERATION. Under sections 3592, 3593, Wilson's Rev. & Ann. St. 1903, where a negotiable promissory ed and delivered, and the payee alters same by note under date of December 2, 1905, is executerasing the name of one of the makers, which is without the consent of the comakers, and thereafter for value and without notice assigns same, such note is void in the hands of such assignee as against all of the comakers. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. §§ 985-992; Dec. Dig. 378.] Commissioners' Opinion, Division No. 4. Error from District Court, Kiowa County; James R. Tolbert, Judge. Action by the German-American Bank against W. J. Hennis and others. Judgment for defendants, and plaintiff brings error. Affirmed. Morse & Standeven and W. A. Phelps, all of Hobart, for plaintiff in error. George L. Zink and Joseph H. Cline, both of Hobart, for defendants in error. dence, the plaintiffs were entitled to a decree in their favor, rescinding and canceling the note and mortgage, and, having offered in their petition to do equity, a tender of the amount received under the contract is not WATTS, C. This case was appealed from necessary to be made before the institution the district court of Kiowa county, where of the suit. We have carefully examined the plaintiff in error was plaintiff, and dethe entire record in an effort to ascertain fendants in error were defendants. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes The petition states that on December 2, 1 rect amount due, if defendants were liable, 1905, defendants for valuable consideration and if there had been any change in the note made, executed, and delivered to McLaughlin plaintiffs did not make it and had no noBros. their certain joint and several negoti- tice of same. At the conclusion of the eviable promissory note, whereby they agreed to dence parties agreed to the discharge of the pay to McLaughlin Bros. or their order the jury and the submission of the case to the sum of $1,200, September 1, 1909, interest court upon both question of law and fact. at 6 per cent. before maturity, 10 per cent. thereafter until paid; that defendants had made various payments reducing the note to $1,000; that the note for valuable consideration and before maturity and without notice had been indorsed and transferred to plaintiff; that demand for payment had been made and refused, praying judgment, etc. Copy of note is attached to petition, viz.: Protested for nonpayment Sept. 1, 1909. Com. expires Nov. 27, 1909. Indorsements on note: Recd. $66 on within note Dec. 2, 05. McLaughlin Bros. No. 1436. German-American Bank, a Corporation, Plaintiff, v. W. J. Hennis et al., De fendant. Petition. Defendants answered by general denial, but admitted the execution of the note and various payments, but alleged that after execution of the note and delivery thereof the payees, McLaughlin Bros., disfigured, erased, and removed from the note the name of Bell Izor, one of the makers, praying that plaintiff take nothing and for judgment for cost. To the answer plaintiff replied by general denial to new matter. The case was called for trial May 4, 1911, jury was impaneled, and the evidence taken. Parties stipulated that if there was an alteration of the note, that defendants did not authorize or consent thereto; that defendants executed and delivered the note to the payees, which was transferred to plaintiff before maturity for value without notice of any equities; that payments shown on note were made by defendants; that demand for payment had been made and refused; that $1.227.28 and interest from September 1, 1909, at the rate of 10 per cent. was the cor The case was taken under advisement until August 31, 1912, on which date the trial court found for the defendants, and rendered judgment in their favor for cost. Motion for new trial was overruled, exception taken, and plaintiff appeals and urges a reversal of the judgment for the following reasons: "First. The alleged erasure of Bell Izor's name was made before the note was executed and delivered by the makers to the payees therein. "Second. The plaintiff in error was and is the bona fide holder and owner of the note before maturity for value and without any notice whatever of any existing equities, and is entitled to recover.' With counsel's first contention we cannot agree. Evidence in plaintiff's behalf consists of the note in question and the stipulation of attorneys. Defendants' several witnesses unquestionably sustain their answer as to the time the name of Izor was erased, and the trial court properly so found. [1] We therefore apply the settled rule of this court: "Where a cause is tried without the intervention of a jury, upon controverted questions of fact, and there is evidence reasonably tending to support the findings of the trial court, such findings will not be disturbed on the weight of the evidence, and, when the finding is general, it includes all facts necessary to support the claims of the party in whose favor the judgment is rendered, and upon appeal this court will not review the evidence if it reasonably tends to support the issues upon which such finding is made, to determine the sufficiency thereof. Hunter Realty Co. et al. v. Spencer [21 Okl. 155] 95 Pac. 757 [17 L. R. A. (N. S.) 622]; Lookabaugh v. Bowmaker [21 Okl. 489] 96 Pac. 651; Saxon v. White [21 Okl. 194] 95 Pac. 783; Brewer v. Black, 5 Okl. 57, 47 Pac. 1089; Meyer Bros. Drug Co. v. Kelley, 5 Okl. 118, 47 Pac. 1065; Craggs et al. v. Earls, 8 Okl. 462, 58 Pac. 637; Vandenberg v. Walton Lumber Co., 19 Okl. 169, 92 Pac. 149; Gaffney v. Cline et al., 19 Okl. 197, 91 Pac. 855; Dunlap v. Stannard, 19 Okl. 232, 91 Pac. 845." McCann v. McCann et al., 24 Ókl. 271, 103 Pac. 697. [2] Upon the second proposition counsel contend that notwithstanding the name of Izor was erased after the delivery of the note, it was without the knowledge of the plaintiff, the assignee, and if at all, while the property of McLaughlin Bros., the payee, and for this reason plaintiff should recover. We do not think that is the law governing the case. In fifth edition, 2 Daniel on Negotiable Instruments, it is said: "Any change in the terms of a written contract which varies its original legal effect and it imports, or to its force as a matter of evioperation, whether in respect to the obligation dence, when made by any party to the contract, is an alteration thereof. * * And the effect of such alteration is to nullify and destroy the altered instrument as a legal obligation"citing Mersman v. Werges, 112 U. S. 141, 5 Sup. Ct. 65, 28 L. Ed. 641; Wood v. Steele, * 6 Wall, 80, 18 L. Ed. 725; Angle v. N. W. Ins. [fore. If the change enlarges or lessens the liaCo., 92 U. S. 330, 23 L. Ed. 556; Greenfield bility, it is material, and vitiates the contract.' Sav. Bank v. Stowell, 123 Mass. 196, 25 Am. In the above case the rate of interest was Rep. 67; Eckert v. Louis, 84 Ind. 101, citing the text; Adair v. England, 58 Iowa, 316, 12 changed from "ten" to "eight" per cent. by N. W. 277, citing the text; Kulb v. United the payee, and thereafter indorsed to the States, 18 Ct. Cl. 565, citing the text; Hodge Commonwealth National Bank, who claimed et al. v. Farmers' Bank of Frankfort, 7 Ind. App. 94, 34 N. E. 123, quoting the text; Green to hold without notice of the alteration. The v. Beckner, 3 Ind. App. 39, 29 N. E. 172; Mid- authorities supporting our view are very nudaugh v. Elliott, 61 Mo. App. 601. merous, and it will be unnecessary to add additional citations. The cases cited by counsel for the plaintiff do not involve a material alteration of an instrument as in the case at bar, and the one by Judge Hayes, supra, but equities of a nature not analogous to the instant case. The same author also defines an alteration: "Section 1375. In what alteration consists. The alteration may consist in changing (1) its date, or (2) the time or (3) place of payment, or (4) the amount of principal, or (5) interest to be paid, or (6) the medium or currency in which payment is to be made, or (7) the number or the relation of the parties, or in (8) the character and effect of the instrument as matter of obligation or evidence." * * Therefore finding that the alleged errors are not well taken, we recommend that the judgment of the trial court be affirmed. PER CURIAM. Adopted in whole. VORIS v. BIRDSALL et al. (No. 5277.) "Section 1387. In the seventh place, as to the parties to a bill or note, any change in the personality, number, or relations of the parties is, as a general rule, a material alteration. When there are several makers or cosureties, the addition of another maker or cosurety constitutes a material alteration; for the addition of another maker destroys the integrity of the original contract; and the addition of another cosurety changes the right of the sureties in re-(Supreme Court of Oklahoma. Nov. 30, 1915.) spect to the proportion of contribution for which each is liable to the others. And the erasure of the name of one of two drawers or makers, * is likewise a material alteration"-citing Mason v. Bradley, 11 M. & W. 590; Gillett v. Sweat, 1 Gilman (6 Ill.) 475; Callandar v. Kirkpatrick (Scotch case); Thomp-issory notes in payment of a stallion, the notes son on Bills (Wilson's Ed.) 112. * Volume 3, Randolph on Commercial Paper, lays down the following rule: (Syllabus by the Court.) 1. ALTERATION OF INSTRUMENTS 20-EFFECT-INDORSEMENT OF FICTITIOUS Credit. Where, after the execution of three prom are left with two of the makers for delivery to the payee, and before or at the time of such delivery such notes are materially altered without the knowledge or consent of the other makers, by indorsing a fictitious credit of $350 thereon, two makers and the payee, such alteration will avoid the notes as to the makers not participating in the alteration. "Section 1748. In like manner, the consent of all is necessary to the erasure of any one mak-in pursuance of a secret agreement between the er"-citing Barrington v. Bank, 14 Serg. & R. (Pa.) 405. "The cutting off of the name of a joint maker renders the note void"-citing Piercy's Heirs v. Piercy, 5 W. Va. 199; Gillett v. Sweat, 1 Gilman (6 Ill.) 475; McCramer v Thompson, 21 Iowa, 244; Broughton v. West, 8 Ga. 248. Ogden on Negotiable Instruments, is as follows: 188, "The general rule as to whether or not the alteration of a bill or note would operate as a discharge of the instrument depends upon the effect produced upon the instrument by such alteration. * If it is a material alteration it is held to be a discharge of the instrument as to all parties liable except as to the party who has himself made, authorized, or assented to the alteration." In Commonwealth National Bank of Dallas v. Baughman, 27 Okl. 175, 11 Pac. 332, upon the question of bona fide holder without notice of an alteration, Judge Hayes said: "A material alteration of a note by the payee or holder without the consent of the maker avoids it against the maker, even in the hands of a bona fide holder, without notice of such alteration"-citing Overton v. Matthews et al., 35 Ark. 146, 37 Am. Rep. 9; Horn v. Newton City Bank, 32 Kan. 518, 4 Pac. 1022. Further quoting: "Whether an alteration is material does not depend upon whether it increases or reduces the maker's liability. The test is whether the instrument, after the alteration, expresses the same contract; whether it will have the same operation and effect after the alteration as be [Ed. Note.-For other cases, see Alteration of Instruments, Cent. Dig. §8 158-189; Dec. Dig. 20.] 2. ALTERATION OF INSTRUMENTS RIALITY OF ALTERATION-TEST. 5—Mate The test as to whether the alteration of a note is material, depends, not upon whether it increases or reduces the makers' liability, but upon whether the note will have the same operation and effect after the alteration as it had before. [Ed. Note.-For other cases, see Alteration of Instruments, Cent. Dig. §§ 18-29; Dec. Dig. 5.] 3. BILLS AND NOTES 378-MATERIAL ALTERATION-BONA FIDE Holder. Prior to the adoption of sections 4174, 4175, Rev. Laws 1910, a material alteration of a note, without the consent of the makers, renders it void as against the makers not consenting to the alteration, even in the hands of a bona fide holder without notice of such alteration. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. §§ 985-992; Dec. Dig. 378.] 4. BILLS AND NOTES 146-NEGOTIABLE INSTRUMENT ACT-APPLICATION. The provisions of the Negotiable Instruments Act of June 11, 1909 (Laws 1911, c. 24), do not apply to negotiable instruments made and delivered prior to the adoption of that act. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. § 361; Dec. Dig. 146.] For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 153 P.-43 Commissioners' Opinion, Division No. 3. Error from District Court, Beaver County; R. H. Loofbourrow, Judge. Action by E. C. Voris against Charles N. Birdsall and others. Judgment for defendants, and plaintiff brings error. Affirmed in part. Grant Stanley, of Oklahoma City, for plaintiff in error. Dickson, Rush & Dickson, of Beaver, for defendants in error. the amount of the notes, to the same extent as if the indorsement had appeared as an interlineation on the face of the notes. In construing the operation and effect of an instrument such as the one under consideration in this case, it is necessary to take into consideration, not only the face of the paper, but any indorsements thereon, as has been said by Daniel on Negotiable Instruments (6th Ed.) § 151: "It seems that the purport of the instrument is not only to be collected from the four corners,' but from 'the eight corners,' a memorandum on the back, affecting its operation, being regarded the same as if written on its face. * In Johnston, Rec'r v. May et al., 76 Ind. 293, the court, discussing a similar indorsement to the one under consideration, says: RITTENHOUSE, C. On December 11, 1907, the defendants made, executed, and delivered their three certain promissory notes to R. F. Dygert, which were indorsed by him and subsequently indorsed by L. W. Cochran. This action was brought by E. C. Voris, who claims to be the owner and holder thereof in due course. It is contended by the defend"We need not argue for the purpose of showants that these notes, amounting to $2,100, material alteration, for that is manifest; and ing that such an alteration of the note was a were made in payment of a certain stallion; the facts found by the court show that this that in order to effect the sale of said animal alteration was made in the absence and without to these defendants the said R. F. Dygert en- the authority of the appellee, and without his tered into a secret agreement with the de-note and the payee thereof, or one of them, beknowledge or consent, by the principal in the fendants Charles N. Birdsall and Hugh Har-fore or at the time of its delivery. Under the die, whereby it was agreed that if they decisions of this court, such an alteration will would join the other defendants as joint pur-ery thereon from the appellee." Portage Counvitiate and avoid the note, and prevent a recovchasers of said stallion, jointly executing ty Branch Bank v. Gustavus Lane, 8 Ohio St. with them the notes in controversy and there- 405; Polo Mfg. Co. v. Parr et al., 8 Neb. 379, 1 by inducing the other defendants to sign the N. W. 312, 30 Am. Rep. 830. same, that he would, prior to the delivery of the notes, secretly and without the knowledge of the other defendants herein, indorse upon each of said notes a credit of $100 as having been paid by the defendant Charles N. Birdsall, and upon the note falling due September 1, 1911, a credit of $50 as having been paid by Hugh Hardie. In pursuance of this agreement, said defendants executed the notes in controversy, and before or at the time of the delivery of said notes, R. F. Dygert did enter the credits agreed upon without the knowledge or consent of the other defendants. [2] It is immaterial that the effect of the alteration was to reduce the amount of the makers' liability. The test as to whether the alteration of a note is material, depends, not upon whether it increases or reduces the makers' liability, but upon whether the note will have the same operation and effect after the alteration as it had before. Commonwealth National Bank v. Baughman, 27 Okl. 175, 111 Pac. 332; Citizens' State Bank v. Grant, 152 Pac. 1082 (No. 4948); GermanAmerican Bank v. Hennis et al., 153 Pac. 671 (No. 4682). [3] The next inquiry is: "What effect does a material alteration have upon the notes while in the hands of a bona fide holder in due course?" This is thoroughly discussed in Commonwealth National Bank v. Baughman, supra, Citizens' State Bank v. Grant, supra, and German-American Bank v. Hennis et al., supra, wherein it was held that prior to the adoption of sections 4174, 4175, Rev. Laws 1910, the material alteration of a note by the payee without the consent of the maker avoids it against the maker even in the hands of a holder without notice of such alteration. [1] The question now before this court is: "Does the indorsement of the fictitious credits before or at the time of delivery to the payee constitute a material alteration of the notes in question?" We think it does. R. F. - Dygert entered into a secret agreement with two of the makers of these notes, whereby it was agreed that the notes should evidence a consideration of $2,100, while, in fact, the actual consideration would be $1,750. This was not the amount the defendants agreed to pay for the stallion and for which they executed their notes, and to the extent of the credits, which amounted to $350, which were [4] It is next contended that the court indorsed prior to or at the time of the deliv- should have instructed the jury under the ery of the notes to the payee, the notes were Negotiable Instruments Act of June 11, 1909. altered without the knowledge or consent of These notes were executed and delivered the makers, except the two mentioned. There prior to the adoption of that act, and this can be no doubt that when the payee and court has held in Adams v. Thurmond, 149 the two defendants, who were parties to this Pac. 1143, and American National Bank v. secret agreement, indorsed the pretended pay-Halsell, 43 Okl. 126, 140 Pac. 399, that a ments of $350 on the note before or at the time of the delivery thereof to the payee, their acts constituted a material alteration of note made prior to the passage of that act would be construed under the law in force at the time of the execution and delivery there of. The court properly refused the requested with a brief, and we are authorized to reinstructions. verse the case under rule 25 (137 Pac. xi) of this court. However, we find merit in plaintiff in error's contention, which perhaps explains the above dereliction. Under the issues Patrick bought from Ballew and others a lease covering certain school lands. The written contract provided that the rental for 1910 had been paid, which Patrick alleges he afterwards found to be false and untrue; that he was forced to pay the rental of $240, and was damaged accordingly. Patrick's evidence in support of nonpayment by Ballew and others is as follows: We have examined the other assignments of error referred to in the brief, and find that the errors complained of are not prejudicial. We therefore conclude that the notes under consideration were materially altered by the act of the payee and the defendants Birdsall and Hardie, which alterations were made before or at the time of the delivery of the notes to the payee, without the consent of the makers, C. M. Smith, F. B. Golding, J. A. Yates, B. B. Brown, and E. C.. Murray; that said notes are void as against them in the hands of a bona fide holder with- "Q. How do you know the rent for 1910 had out notice of such alteration, and the cause not been paid at the time the contract was signis as to these defendants affirmed. The de-fice. Q. Have you those letters with you? A. ed? A. From letters I had from the land offendants Charles N. Birdsall and Hugh Har- No, sir; and I don't think I could produce die having consented to the alteration, and them. Q. Is that your only information on that the record showing that the plaintiff is a subject? A. No, sir; I have the contract, and bona fide holder for value, before maturity I have my notes for that. Q. The note you in due course, the judgment as to these two signed after the making of the contract? A. Yes, sir; and a letter." defendants is reversed and remanded, with instructions to the trial court to render judgment against them for the amount due on said notes. PER CURIAM. Adopted in whole. (52 Okl. 725) BALLEW v. PATRICK. (No. 5116.) (Supreme Court of Oklahoma. Dec. 7, 1915.) (Syllabus by the Court.) APPEAL AND ERROR 1050 GROUND FOR evidence, moved to strike, demurred to PatBallew objected to the introduction of the rick's evidence, moved for judgment, etc., all of which was denied, and timely exceptions saved and presented here for review. It is patent that the evidence was incompetent, because of its secondary nature. The issue was material, and the court should have sustained the several objections. As was said in Terry v. Creed, 28 Okl. 857, 115 Pac. 1022: "Appellate courts reluctantly disturb the verdicts of a jury that have been approved by the Where plaintiff offers incompetent evidence trial court; but it is the well-settled rule of on a material issue, which is met by timely ob- this jurisdiction that if there is no evidence reajection and exception, and there is no other evi- sonably tending to establish a material issue dence reasonably tending to establish the mate-the court, which they must have found in submitted to the jury under the instructions of rial issue submitted to the jury under the in- favor of the prevailing party in order to return structions of the court, which the jury must the verdict returned, the verdict will be set have found in favor of the prevailing party in order to return the verdict returned, the verdict 114 Pac. 695; Hassell v. Morgan et al., 27 aside. Howard et al. v. Farrar, 28 Okl. 490, and judgment will be set aside and new trial Okl. 453, 112 Pac. 969; Puls v. Casey, 18 Okl. granted. Okl. 359, 78 Pac. 90." 142, 92 Pac. 388; Meierholtz v. Territory, 14 [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 1068, 1069, 4153-4157, 4166; Dec. Dig. 1050.] Commissioners' Opinion, Division No. 4. Error from County Court, Blaine County; George Ferguson, Judge. Action by H. A. Patrick against T. J. Ballew and others. Judgment for plaintiff, and defendant Ballew brings error. Reversed, and new trial granted. L. H. Hampton of Pauls Valley, for plaintiff in error. C. F. Dyer, of Geary, for defendant in error. WATTS, C. The defendant in error filed Competent, the best evidence to prove the facts in issue was available to defendant in error, and it was his duty to have procured and tendered same. Therefore, for the reasons given, the judgment of the trial court should be reversed, and new trial granted. PER CURIAM. Adopted in whole. (52 Okl. 782) COMANCHE MERCANTILE CO. v. McCALL CO. (No. 5474.) (Supreme Court of Oklahoma. Dec. 7, 1915.) LETTER-PROOF OF GENUINENESS. suit against the plaintiff in error, Ballew, and others, to recover damages for breach of contract. No service other than on Ballew. Issues were joined between Patrick and Ballew, and verdict of the jury and A letter not in response to a letter previously sent to the alleged writer is not admissible judgment were for the former. Ballew ap-in evidence until its authenticity has been established either by proof of the handwriting or Defendant in error has not favored us by other proof establishing its genuineness. peals. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |