Opinion
No. 7193.
November 6, 1953.
APPEAL FROM THE CIRCUIT COURT, POLK COUNTY, JAMES P. HAWKINS, J.
E. C. Hamlin, A. T. Parrish, Springfield, for appellants.
John B. Newberry, Springfield, for respondent.
Action to recover $600 alleged to have been wrongfully collected on a promissory note. The cause was tried before the court resulting in a directed judgment for plaintiffs. The court sustained a motion for new trial, set aside the judgment for plaintiffs and rendered judgment for defendant. Plaintiffs appealed.
The petition pleads fraud by misrepresentation of ownership of the note in question and that the note has been materially altered, making it void.
The amended answer, permitted by the court to conform with the evidence, denies the allegations of the petition and pleads ratification.
The evidence shows Jewell Mayfield, plaintiff, was the daughter of I.E. Stoops, deceased; that plaintiffs executed and delivered to I. E. Stoops their promissory note, in the sum of $600, dated ____ day of April, 1951, payable to I. E. Stoops and due one year after date. The consideration for the note was a loan made to plaintiffs.
The evidence shows that I. E. Stoops prepared the note, prior to its signing, using an indelible pencil; that the note was signed in plaintiffs' home on Sunday.
The defendant, Bertha Stoops, is the wife of I. E. Stoops, deceased. She testified that the alterations set out in plaintiffs' petition were inserted in the note by I. E. Stoops shortly before his death, at his home in Springfield, Missouri. She gave this testimony:
"Q. How come him to put that in there? A. Well, he had a dream, and he was warned, I think, of his death, the way I figured it, and he began to get all of his papers ready; and that is the only reason I know that he put it in there.
"Q. What did he do; did he discuss the note with you and want to fix it so you would get the note, is that what you want to tell the Court? A. That's right, yes."
Plaintiff, Jewell Mayfield, testified that the alterations placed in the note were not in her father's handwriting but she offered an expert witness, M. M. Wickizer, an employee of the Union National Bank of Springfield, who gave it as his opinion that the alterations complained of were in the handwriting of her father.
Plaintiff, Ernie Mayfield, testified that he was acquainted with his father-in-law's signature and did not believe that the alterations were in his handwriting. He gave this testimony:
"Q. How come you to go to pay it? Did you receive a letter from anybody in regard to the note? A. Yes, I received a letter from Mr. Newberry.
"Q. Can you state to the Court about what the contents of that letter was? A. Well, he just said it was due and I would have to pay it or he would sue me.
"Q. Did the letter say anything about who owned the note at that time, that you remember? A. Well, it said Bertha and I.E. Stoops.
"Q. Now then, after you got the letter, what did you do in regard to the note? A. Well, I just went up there, I studied about it a few days and went up there and paid it.
"Q. Now, when did you first discover that the words and wife Bertha' had been inserted in the note? A. Well, not until after I had done left his office."
The evidence shows that Mrs. Mayfield was not present when the note was paid.
On cross-examination, plaintiff testified:
"Q. And didn't I hand you the note? A. I just glanced at the note, and I had it in my mind to pay it when I come up there.
"Q. And you did look at the note before you paid it? A. Yes, I seen the note."
The witness testified that he got a receipt when he paid the note and the note marked with the word "cancelled" written across it and he testified that what he meant by not knowing that the words, "and wife Bertha" were on there, was that he didn't discover that these words were not in Mr. Stoops' handwriting until after he had left the office. He gave this testimony:
"Q. You knew it was on there, though, when you paid it? A. Yes, I knowed it was on there, but I just figured that he had signed it over there some way or other."
The trial court stated in his judgment that he sustained the motion for new trial and rendered judgment for defendant on the basis of paragraph 3 of the motion for new trial, which reads:
"That, as a matter of law, under the evidence offered by plaintiff defendant was entitled to a verdict and that plaintiffs failed to prove a cause of action upon which any relief could have or should have been granted by the Court."
In this opinion we will refer to appellants as plaintiffs and to respondent as defendant, being the positions they occupied in the lower court.
The only question involved in this case is the sufficiency of the evidence to support the judgment for plaintiffs.
Under assignments of error and points of authority in plaintiffs' brief, we find that only abstract propositions of law are stated.
Plaintiffs first state that by the insertion of the date "24th" in the note sued on and by the insertion of the words, "and wife Bertha" as payee in the note, the note was rendered void under sections 401.124 and 401.125 RSMo 1949, V.A.M.S.
These sections of the Negotiable Instruments Law merely provide that where a negotiable instrument is materially altered without the assent of all the parties liable thereon, it is avoided, except as against a party who, himself, has assented to the alteration. There can be no question in this case but what the alterations made in the note at issue were material and would avoid the note unless the alterations were ratified by plaintiffs. In other words, there isn't any dispute in this case as to the law cited by plaintiffs.
Plaintiffs, in their assignments of error, state:
"* * * The evidence in this case is conclusively in favor of plaintiffs, and there is no evidence in the case that will or could support the grounds set out in number three of the new trial motion, * * * but was conclusive that the note had been altered without the consent of the makers. * * *"
To support this assertion, plaintiffs cite First Nat. Bank of Campbell v. Bristol, Mo.App., 35 S.W.2d 999. We find nothing in this case in point for plaintiffs' contention.
Plaintiffs cite Westinghouse Electric Supply Co. v. Binger, Mo.App., 212 S.W.2d 445, 447. This citation is on the question of fraud. We hold that there is no evidence in this case justifying the consideration of fraud so the case is not in point on any issue in this case.
Under this first assignment of error plaintiffs contend that the trial court erred in entering judgment for defendant after the granting of a new trial, for the case was then reopened for another trial and additional testimony could have been offered and plaintiffs could have field a reply to defendant's amended answer.
This statement of law is incorrect. Under section 510.290 RSMo 1949. V.A.M.S., it is provided:
"* * * If a verdict was returned the court may allow the judgment to stand or may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed. * * *"
In commenting upon this section of the law, Carr, in Vol. I of Carr Missouri Civil Procedure, page 867, Sec. 812 states this principle of law:
"Under the prior practice if a demurrer to the evidence at the close of all the evidence was overruled the trial court realizing on motion for new trial that error had been committed in so doing could not then sustain the demurrer to the evidence and enter judgment contrary to the verdict. The trial court's only authority was to grant a new trial and re-try the case. Under the beneficial provisions of Code Sec. 113 the trial court, either on motion for new trial or on motion to set aside the verdict and judgment (treated as a motion for new trial under Missouri Supreme Court Rules 3.23 and 3.24), if the evidence is insufficient to sustain the verdict, is not required to grant a new trial (with the attending delay and extra expense) but may enter a judgment for the opposite party notwithstanding the contrary verdict."
It will be seen that under our new practice, the trial court, in the case at bar, had the right to grant a new trial because of the insufficiency of the evidence and then, to avoid the expense of another trial, had the right to enter judgment for defendant. Supreme Court Rule 3.25; Section 510.330 RSMo 1949, V.A.M.S.
The last named section reads as follows:
"* * * On a motion for a new trial in an action tried without a jury, the court may open the judgment if one has been entered, take additional testimony, amend findings of fact or make new findings, and direct the entry of a new judgment. * * *"
The other authorities cited by plaintiffs are under the old Civil Code and are not, now, the law.
The trial court, in the case at bar, has based its judgment upon the fact that plaintiff, Ernie Mayfield, subsequently ratified the promissory note sued on by paying it after having full knowledge of the alterations made and doing such acts as evidencing an intention to treat the note, as altered, valid.
Under the evidence in this case it is clear that Jewell Mayfield, one of the plaintiffs, is not bound by the acts of ratification shown in evidence on the part of her husband. She was not present and had no knowledge of the conditions of the note when paid.
It is held in 3 C.J.S., Alteration of Instruments § 75, pages 981 and 982:
"A ratification by one of several parties to an instrument as originally written binds him only, however, and not those who do not assent."
We hold, however, that under the evidence plaintiff, Jewell Mayfield, cannot recover because there is no evidence that she paid any part of the indebtedness represented by said note. All the testimony shows that the note was paid by plaintiff, Ernie Mayfield.
The law is stated in 3 C.J.S., Alteration of Instruments, § 77, subsection (a), page 983, as follows:
"As to what constitutes ratification of an altered instrument, no general rule can be laid down, as it is a matter that depends entirely upon the facts in each particular case. * * * but any acts or conduct, with full knowledge of the facts, on the part of the person affected, which shows an intention to recognize the validity of the instrument, will be sufficient.
"* * * Also acquiescence is taken as a ratification when, after knowledge of the change, the party causes or permits action to be taken with reference to the instrument which necessarily imports a recognition by him of the validity of the instrument, or which should estop him from denying such liability."
In 3 C.J.S., Alteration of Instruments, § 77, subsection (e), page 984, the law is stated:
"By making payment of principal or interest, with knowledge of an alteration, a party is held to ratify the instrument as altered; * * *"
3 C.J.S., Alteration of Instruments, § 78, subsection (a), page 985, states the law:
"In order that any acts of a party may be construed as a ratification of an alteration, the particular act must be done with full knowledge of the alteration. * * *"
In 2 Am.Jur. p. 627, Sec. 40, the law is stated:
"It is well settled that an instrument will not be vitiated by an alteration therein, however material, made by one of the parties thereto, if made with the knowledge and assent of the party or parties sought to be charged thereon, and in accordance with the general proposition that an act which may be authorized or consented to in limine may be effectually ratified after it has been performed, it is equally well established that a material alteration in an instrument may be ratified and adopted subsequently by any person affected by it, except in cases where the alteration amounts to forgery; such subsequent ratification of the alteration will have the same effect as, and be in all respects equivalent to, assent to the alteration previously given, or to an original authority granted. * * *" First National Bank of Trenton v. Gay, 63 Mo. 33.
Under the law in Missouri, it is held that a subsequent ratification must be made with full knowledge of the facts.
The theory upon which a material alteration avoids recovery under a contract is that the alteration makes a new contract to which the parties have not assented. There is no reason why one cannot ratify a change in a contract and bind himself to the new terms thereof. To constitute ratification, where there has been a material alteration therein, it must be shown that such act was done with full knowledge of the alteration. 2 Am.Jur. p. 628, Sec. 41.
Under the facts in the case at bar, defendant's attorney, by letter, notified plaintiffs that defendant held the note, executed by them, to I. E. Stoops, and claimed to be the owner thereof with the demand for payment.
Plaintiff, Ernie Mayfield, stated that after he received the notice, informing him that the note was payable to Stoops and defendant, he studied over the matter for a while and then went to defendant's attorney's office and, there, demanded to see the note, which was handed to him.
On cross-examination, plaintiff testified that he saw the note in its changed condition and that defendant's name was written in as payee; that he had the note in his hand and, after seeing it, paid the same, took a receipt for the payment thereof and the note was delivered to him with the word "cancelled" written across it.
We find that the trial court was justified in finding from the evidence, that the note was paid by plaintiffs with full knowledge of the alterations made therein. Plaintiffs executed the note. They knew that the payee was I. E. Stoops and when the material change of inserting an additional payee was brought to the attention of Ernie Mayfield, before he paid it, he certainly would be charged with knowledge of the changed conditions therein. There is a failure of proof that the insertion of the changes claimed in the note were forged. True enough, the plaintiffs testified that, in their opinion, the alterations pleaded in the petition were not made in the handwriting of deceased Stoops, yet, their expert witness testified that, in his opinion, it was in the deceased's handwriting.
Judgment affirmed.
VANDEVENTER, P.J., and BLAIR, J., concur.