Clinton D. Brownell v. Christopher Winnie

Clinton D. Brownell v. Christopher Winnie. The addition of the' name of another person to a several note, as maker, without the-knowledge or consent of the original signer, is not sucha material alteration as will avoid the note. Thus, where a note made by S., payable to W., or bearer, was delivered to W., who thereupon applied to the plaintiff to advance the money on it, and the plaintiff consented to do so, if he (W.) would sign his name to it, or become responsible to pay the same, whereupon W. signed his name to the note under that of S., and delivered the same to the plaintiff, who let him have the money thereon; field, that adding the name of W. to the note did not vitiate it. A county court, on appeal from a justice of the peace, has authority, under § 366 of the code, to modify the judgment, according to the justice of the case, without regard to technical errors. The general term of the supreme court has the same power, on appeal from a decision made at a special term. The court of appeals also possesses the same power. Appeal from a judgment' of the Supreme Court reversing judgments of the county court of Monroe, and of a justice of the peace. The action before the justice was on a note made by one Swinerton, to the order of the defendant Winnie, bearing date the 21st January, 1856, and was for the sum of $50, payable with interest on the 1st day of April then next. The complaint alleged that, after said note was made as aforesaid, it was delivered to said Winnie, and that after-wards,' and on, or about the 1st October, 1856, said Winnie applied to the plaintiff .to let him (Winnie) have the money on it. That the plaintiff consented to do so if he (W.) would sign his name to it, or become responsible to pay the same; and, thereupon,- .the defendant signed said note, and delivered the same to the plaintiff, who let W. have the money thereon; that $41 had been paid on said note, and the balance was still due thereon. The defendant, in his answer, denied the whole com-' plaint, set up the statute of limitations, payment, that the plaintiff .was not the owner, usury and want of consideration, as defenses. On the trial, the facts alleged in the complaint were substantially proved. The justice rendered judgment on the note' for $17.45 damages, and $1.37 costs. The defendant appealed to the county court, and that court affirmed the judgment of the justice. The defendant then appealed to the general term of the 7th district, .which court reversed both the judgments aforesaid, on the ground that adding the name of Winnie to the note after the note had become operative against Swinerton, without the consent of the latter, was such an alteration of it as avoided it, as against the parties. The plaintiff then appealed to this court. By computing interest on the $50 from 'the time the same was advanced by the plaintiff to Winnie, and allowing the payment of $41 which was made by Swinerton, the amount due from the defendant at the date of the judgment would be $14.31, instead of $17.48 allowed by the justice—$17.45 being the amount due on the note, computing interest from its date, after deducting the payment of $41 above mentioned. James S. Angle, for the appellant. I. The addition of Winnie’s name did not destroy the validity of the note as to Swinerton. 1. In addition to the cases referred to in the opinion of the supreme court, in Chappell v. Spencer, wq refer to the following: Muir v. Demaree (12 Wend. 468.) In that case the facts distinctly present the point as to whether such an addition destroys the validity of the' note as to the first signer. Burton v. Baker (31 Barb. 241), is also in point. (See opinion on pages 257, 258.) The case of Cobb v. Titus (10 N. Y. R. 198), we think fully disposes of the questioú. See opinion of the court at large, and especially on pages 201, 202. (See also Partridge v. Colby, 19 Barb. 248.) 2. Swinerton Tby his payment of $41 on the note in February, 1857, ratified, and affirmed the note as altered, and it certainly does not lie with Winnie to take advantage of his own wrong, and insist that the note shall be void as to Swinerton, when the latter himself affirms its validity. 8. The fact that Swinerton made a payment on this note after the alleged alteration, was sufficient evidence to warrant the justice in finding a ratification by him, and such finding by the justice was conclusive. II. The defendant made a second jioint in the. supreme court to the effect that in no event could Winnie be made liable beyond the $50, and the interest thereon from the time the plaintiff let him have the money, and that the justice erred in rendering judgment for an amount including interest from the date of the note. To this point we say: ,1. It is true that Winnie is liable only to the extent of the $50, and interest on it from the time of his signing (see Cobb v. Titus, supra); but he has not been made liable even up to that extent. After he signed and transferred the note to the plaintiff, the latter held a binding obligation against Swinerton for the payment of $50 and interest thereon from January 21, 1856, and the liability of Winnie on the same obligation for $50, and interest thereon from the time he signed and transferred it to the plaintiff. ■ The payment of Swinerton should be applied first to extinguish that part of the debt which was not guaranteed or secured by Winnie. (Clark v. Burdett, 2 Hall’s R. 197.) 2. The justice undoubtedly followed the true rule in computing interest and applying the.payment made by, Swinerton. The rule in such case is to apply the payment, in the first place, to the discharge of the interest due when the payment is made, and if the payment' exceed the interest, the.surplus goes towards extinguishing the principal. (State of Connecticut v. Jackson, 1 Johns. Ch. Rep. 17; Williams v. Houghtaling, 5 Cow. 86; French v. Kennedy, 7 Barb. 452.) 3. The defendant made no point of this kind before the justice, nor was the attention of the justice directed to it; but, on the contrary, it was expressly stipulated that the justice “ should compute the interestpn the note;” which, of course, meant that he should compute it according to the legal rule applicable to cases where partial payments have been made, as established by the cases cited above. If the attention of the justice had been directed to this question, it would have been avoided, and it cannot be raised on appeal. (Dunham v. Simmons, 3 Hill, 609.) The opinion of the court is in point, more than the head-note to the case indicates. In a case in this court (White v. Madison, 2 Am. Law Reg. new series, 663), where there was some question as to whether the proper rule of damages had been adopted in an action upon a premium note, Judge H. E. Selden, in giving the opinion of the court, says: ‘1 That possibly might be regarded as a proper measure of damages upon the breach of warranty; but-whether this be so or not, no question having been made before the jury as to the amount of the recovery, if the defendant was liable at all, none can be made now.” (See also Code, §§ 330, 366.) But admitting that the justice included in his computation the interest on $50 from 21st January, 1856, down to the time of the transfer to plaintiff, and that it was error for him to do so, the entire judgment ought not to be reversed, but only as to that item of interest, which by computation can readily be separated from the rest of the judgment. (Staats v. H. R. R. Co., 23 How. 463; Story v. N. Y. & H. R. R. Co., 2 Seld. 85; note, pages 86, 87. See particularly that part of the note and the cases cited on page 87.) The calculation of interest is a mere clerical act; and it may be computed by the court (Townsend v. Chase, 1 Cow. 115); and the error (if error there were), would be the interest on $50 from January 21 to October 1, of the same year— being $2.44. John Van Voorhis, Jr., for the respondent. I. The signing of the note by Winnie, without the knowledge or consent of Swinerton, was a material alteration and change of the original instrument, and of its legal effect. It ceased to be the instrument executed by Swinerton. He was no longer liable upon it. It became and was only valid as the several note of Winnie. (Pigot’s case, 11 Coke’s Rep. 27; O'Neale v. Long, 4 Cranch, 60; Speaker v. The United States, 9 Cranch, 28; Gardner v. Walsh, 32 Eng. Law & Eq. Rep. 162; Potter v. Baker, 4 Paige, 290-292; Master v. Miller, 4 T. R. 320; Clark v. Blackstock, Holt, 474; Perring v. Hone, 12 Moore, 135; 4 Bing. 28; Wheelock v. Freeman, 13 Pick. 165 to 168; Burton v. Baker, 31 Barb. 241; Chappell v. Spencer, 23 Barb. 584.) An alteration of a joint note, making it joint and several, or of a several note, making it joint, are material alterations, and the instrument requires a new stamp. (See Clark v. Blackstock cited above.) Such being the case, the note is void for usury. It was a direct loan to Winnie of $50, and an agreement to pay interest therefor for a period of more than eight months prior to the loan. It was not a sale of the note. Winnie could not sell his own note. (Burton v. Baker, 31 Barb. 255.) The.amount of excess taken by the plaintiff over the consideration received by Winnie and lawful interest was $3.12. This is the amount of usury allowed by the justice. The appellant’s counsel cites several cases to show that the undersign-. ing of the note by Winnie is not an alteration of it, and does not affect its validity. The case most relied on is Cobb v. Titus (10 N. Y. Rep. 198.). In that case the court of appeals affirmed the judgment of the supreme court— all the judges concurring “ for the reasons given by Allen, J., below.” Ho additional opinion was delivered in this court. The question now under consideration was not raised in the court below, or considered by the learned judge, and therefore it is respectfully submitted, was not decided by this court. The evidence is not given in the case, and it is fair to presume that the undersigning of O. W. Titus was with the consent of the original maker. For some reason, satisfactory to the appellant’s counsel, the point was not made, and, of course, would not be decided. Had the question been raised before the referee, doubtless there was an answer to it. In Burton v. Baker (supra), Pratt, J., after expressing the opinion that .“if the signing of the note by Goodwin as maker with Wilcox was without the consent of the latter, he would be discharged,” speaking of Cobb v. Titus, says: “ -The case, therefore, is directly in point; and although it does not appear that any point was taken in that case, that the first party was discharged by the second party signing,, yet the point was clearly in the case, and the decision could not have been made except upon the assumption that he was not discharged.” “If an important consideration has been over-looked in the court of appeals, I think we should leave it to that court to correct the error.” Neither was the point raised or passed upon in Muir v. Demaree (12 Wend. 468), nor in Partridge. v. Colby (19 Barb. 248), both of which are cited by the appellant. In the latter case both signers were sued, and the only póints raised by Nason, the second signer, were: 1. That his contract was several, and not joint, and therefore the action could not be maintained. 2. That not being sued as a guarantor, there could be no recovery. 3. That he was an endorser, and had not been charged as such. These points were overruled. The question as to whether the alteration vitiates the note was not suggested in either of these cases. At the time Swinerton paid the forty-one dollars he did not know of the alteration of his note, nor is there any evidence that he ever knew of it.. He can not be said to have ratified or affirmed the validity-of the note, after an alteration, of the existence of which he was ignorant. The fact that Swinerton made the payment shows simply that he supposed he was holden on the note, and excludes the idea that he knew of the alteration. He could not ratify what was unknown .to him. If the alteration discharged Swinerton and made the note the several note of Winnie, the rights of the parties to this action were fixed, an,d it was not in' the power of Swinerton afterwards to modify or change the legal effect of Winnie’s contract. Besides, the-plaintiff did not present his case to the justice upon any such theory. The fact that the forty-one dollars was paid by Swinerton was not proved by the plaintiff. It was drawn out by the defendant’s cross-examination. H. In any event, Winnie can not be held for more than fifty dollars, and interest thereon from the time the plaintiff let him have the money. This is conceded. (See appellant’s second point; Cobb v. Titus, and cases- there cited.) I. But it is claimed that he has not been made liable even up to that event. If Winnie is a surety or guarantor, then his undertaking- is that Swinerton shall pay on the note fifty dollars, and interest from the time of his signing, Octtober 1, 1856. And whatever Swinerton does pay goes to reduce Winnie’s undertaking to the full extent of such payment. (Marryatt v. White, 2 Stark. Rep. 101; Ross v. McLaughlin, 7 Gratt. 86; Hamer v. Kirkwood, 25 Miss. 95; Spier v. Houston, 4 Bligh N. S. 515; Dows v. Morewood, 10 Barb. S. C. Rep. 183; Stendale v. Hankinson, 1 Simons, 393; Burton v. Baker, 31 Barb. 256; Edwards on Bills, 218; 2 Parsons on Contracts, 145; Raikes v. Todd, 8 Adolph. & Ellis, 846.) Suppose Winnie had signed a guaranty that Swinerton should pay on the note fifty dollars, and interest from October 1, 1856, would the legal effect of the obligation be changed? In Burton v. Baker (31 Barb. 256), Pratt, J., speaking of a similar loan of money upon an undersigned note, says: “It would be an absolute undertaking on the part of the borrower that the lender should, at all events, be re-paid his money with legal interest, with the chances of receiving an additional sum depending on the responsibility of the maker of the transferred note.” The case of Clark v. Burdett, referred to by the appellant, does not sustain the proposition in support of which it is cited. Sureties are the favorites of the law. (8 Wend. 516.) 2. The defendant does not complain of an erroneous computation of interest by the justice. It was the duty of the court to compute interest, His error consists in allowing interest on the fifty dollars from January 21, 1856, when he should have allowed it only from October, 1856. He decided, as a matter of law, that the defendant was liable on the note to its full extent. He treated him as the original maker. 3. This court will render such judgment as the county court should have rendered. The county court could not correct the error of the court below. It could only affirm or reverse the judgment in whole or in part. (Code, sec. 366.) It has no power to modify. A judgment that consists of parts may be affirmed or reversed in part; but a judgment upon a single cause of action is indivisible. The county court should have reversed the judgment, It could not correct it. (Kasson v. Mills, 8 How. Hr. Rep. 377; Staats v. The Hudson River R. R. Co. 23 ib. 463.) When the justice renders judgment for the wrong amount, even by mistake or inadvertence, the appellate court has no power to correct the error. It can only reverse the judgment. (Hardy v. Seelye, 3 Abbott, 103.) [MAJORITY — Mullin, J.] Mullin, J. It has been too long and too well settled to be open for discussion that an alteration of a written contract in a material part, without the consent of the parties, discharges them from liability. TMs rule applies to bills and notes as well to all other species of contract. It was held in England, in Gardner v. Walsh (32 E. L. & Eq. Rep. 162), that the addition of the name of a person to a joint and several promissory note, signed by two as makers, without the knowledge and assent of one of them, was such a material alteration as avoided the note. The same principle was applied in this state, in Chappell v. Spencer (23 Barb. 584), and in Edwards on Bills, 681. In those cases, and in others which might be cited, the notes alleged to be altered were in terms joint and several. But I have found no case, and none has been cited, holding that a name added to a several note is such a material alteration as avoids it, and upon principle I can perceive no reason why it should be so held. A note written, “I promise to pay,” &c., can never be made a joint contract, however many names maybe added tó it. The law permits an action against the makers, as upon a joint or several contract, but the contract itself is not changed. The liability of the first signer is the same,' however many may be joined in the action with him. The note continues to be payable on the same day, at the same place, and to the same person, and for precisely the same amount, and if there are any other parts of the obligation which can be considered material in' the sense that an alteration in that respect vitiates the note, I am unable to comprehend it. Permitting parties to be united in the same action with a several maker does not change the con-' tract. If that were so, the law of 1831, which permitted all the parties to a bill or note to be united in the same action, would have been unconstitutional as impairing the obligation of existing contracts, or then every bill or note then in existence would have been rendered void, unless actions thereon were prosecuted under the previous law. But no one supposed it was not entirely competent for the . legislature to regulate the mode of enforcing such contracts by uniting such and so many of the parties in one action as it deemed proper. But it may be said that in the case of notes and bills, the contract, although in form several, yet when signed by two or more persons it may be sued upon as a joint or several paper, is a rule of law which becomes a part of the contract, and the contract is to be construed in reference to it. This consideration does not change it. It is still a several contract, and is joint only for the purpose of the remedy upon it. Again, if a several note is avoided by adding thereto the name of another as maker, without the consent of the first signer, who should be permitted to avail himself of the objection? Not the last signer, surely, for as to him the contract only takes effect from the day of transfer and to the amount he receives. His contract is not identical with that of the first maker, and signing by the second maker does not and can not vary the contract of the first. (Cobb v. Titus, 10 N. Y. 198, and cases cited.) Whatever rights the first maker may have to complain, the second can •have none. The case of Partridge v. Colby (19 Barb. 248), decides the question under consideration in accordance with the foregoing views. But that case was over-ruled by the case of Chappell v. Spencer, cited supra. Although that case has not been itself over-ruled, yet this court, in Cobb v. Titus, came to a conclusion wholly at war with that case, and must be understood as over-ruling it and the cases on which it rests. In Cobb v. Titus the note was made by Yiele, payable to Robert Titus, or order, and delivered to him for a valuable consideration. Titus applied to the plaintiff to raise the money upon it, who refused to let him have it unless he would get O. N. Titus to endorse or sign it as security. O. N. Titus did sign it as security, and the plaintiff paid therefor fifteen dollars less than its face. The note was on interest. Yiele and O. N. Titus were sued; the former permitted judgment to pass against him, and the latter defended. There was judgment for the plaintiff for the amount advanced on the note by the plaintiff, and the case came to this court on appeal. Justice Allen, in his opinion, which was adopted as the opinion of this court, says: “The note is none the less the several note of Yiele, and valid as such, because the defendant has subscribed his name to it as surety and thus become collaterally liable for its payment. A difficulty might arise in treating it as a joint note, but that is obviated in this case.” Although the point does not appear to have been distinctly presented in the case of Cobb v. Titus, that adding the name of 0.1ST. Titus was such an alteration of the note as avoided it; yet the court could not have decided the case, in favor of the validity of the note, without meeting and disposing of that question. It could not have been valid. against Yiele, as Justice Allen says it was, if the addition of the name of Titus rendered it void. The case of Cobb v. Titus was understood by. the supreme court in Burton v. Baker (31 Barb. 261), as holding that the addition of a maker did not vitiate the note, and such, it seems to me, should be the law; especially as between the holder and the last signer of the note. The judgment of the supreme court must be reversed, and that of the county court, and of the justice, affirmed. But as the plaintiff was only entitled to recover the money paid by him, and interest, deducting therefrom all payments made by the first signer, the judgment of the justice was for too much. Instead of being for seventeen dollars and forty-five cents damages, it should be for fourteen dollars and thirty-one cents; and unless the plaintiff will stipulate to allow this sum in reduction of the judgment, the judgment of the supreme court must be affirmed. The county court had authority, under § 366 of the code, to modify the judgment according to the justice of the case; without regard to technical errors. The general term has the same power. (Staats v. Hudson River R. R. Co. 23 How. Pr. 463; Fields v. Moul, 15 Abbot, 6.) This court has the same power. (Tillou v. Kingston M. Ins. Co., 1 Seld. 405; Chouteau v. Suydam, 21 N. Y. 179.) The judgment of the general term must be affirmed, unless the plaintiff will stipulate to deduct from the judgment of the justice the sum of three dollars and fourteen cents as of the day the judgment was rendered by the justice, in which event the judgment of the supreme court must be reversed, and that of the justice and of the county court affirmed as modified. / All the judges concurring, judgment accordingly.