First Nat. Bank of Iowa City v. Dorsey

The appellant filed a sworn plea of non est factum. The plea could be properly construed only as averring that the note sued on had been fraudulently altered after its delivery to the agent of the Equitable Manufacturing Company by changing the amounts and dates of payment, and by entirely erasing therefrom the contract stipulation "The Equitable Manufacturing Company agrees to furnish a bond to protect C. W. Dorsey in this contract." The court in his charge authorized a verdict for appellee upon the finding by the jury of fraudulent alteration of the note as pleaded. Appellant first directed a general exception to the entire averment, which was by the court overruled, and next excepted to submitting the plea to the jury, as without evidence to support it, and further asked a peremptory instruction in favor of appellant, which was refused. All the assignments in respect to the questions can here be considered together for a ruling. Appellant makes the contention that the exception to the plea should be sustained, because it failed to allege that the appellant had knowledge or notice of the alleged alteration. The unauthorized alteration of a completed instrument by a material change in its terms, with intent to defraud, is forgery. Article 531, P. C. 1895 of Texas.

The alteration that would affect the legal validity of the instrument may consist in changing the time of payment and the amount of principal to be paid, or in extracting from it some material provision incorporated in it, as, is averred, was done in this instance. 2 Daniel on Neg. Instr. (5th Ed.) §§ 1375, 1384, 1391. As further illustrations: Morris v. Bank, 37 Tex. Civ. App. 97, 83 S.W. 36; Baldwin v. Bank, 104 Tex. 122,133 S.W. 864, 134 S.W. 1178; Otto v. Halff, 89 Tex. 384, 34 S.W. 910, 59 Am. St. Rep. 56. And the fraudulent alterations of a note so far alters its legal effect as that it cannot be sued on in its altered form, nor read in evidence to support an action, even when brought by a bona fide holder without notice. 2 Daniel Neg. Instr. (5th Ed.) § 1413; 3 Page on Contracts, § 1398; Otto v. Halff, supra; Adams v. Faircloth, 97 S.W. 507; Morris v. Bank, 37 Tex. Civ. App. 97, 83 S.W. 36. It is believed to be sufficient reason for overruling the objection to the plea that no party can enforce a negotiable instrument if it be not genuine. There was no error, further considered, in submitting the plea to the jury, unless, as claimed by appellant, there was no evidence warranting the issue. The appellee testified in accordance with his sworn plea. If the testimony of appellee be true (which was for the jury to say), there was a very material change in the note after he delivered it to the agent of appellant, and such alterations were made without his knowledge or authority. As a consequence of such evidence, the court was required to pass the question to the jury for decision by them. Assignments Nos. 1, 5, and 8 are therefore overruled.

Appellee pleaded failure of consideration of the note, and a conditional delivery to the agent of the payee. The pleas were excepted to, on the ground that they were not available defenses against a bona fide holder of the note without notice. The court overruled the exceptions. And appellee offered evidence in support of the pleas, which was objected to by appellant upon the same ground above stated. The objections were overruled by the court. But, when it came time for the court to instruct the jury, he peremptorily charged them that they should return a verdict for plaintiff, notwithstanding a failure of the consideration. So any error of the court in respect to the rulings mentioned was eliminated as an injury when the court, by a binding instruction, told the jury that such defense pleaded and proven could not at all avail the defendant, and that they must nevertheless find for the plaintiff Assignments Nos. 2, 3, 4, 6, and 7 are over ruled, as without injury warranting a reversal.

The judgment is affirmed.