Greenfield Savings Bank v. Stowell.

horse, wagon and harness of a country shop-keeper. Wilson v. Elliot, 7 Gray, 69. The court said: "In his business of a country store-keeper, the plaintiff had no work to do, which required to be wrought by the aid and instrumentality of tools and implements. In that respect his business bore no resemblance to the occupation or the necessities of the artisan, mechanic or actual cultivator of the soil." Cart-wheels, ox-yoke and bows, staple and cops and pin, of a farmer, as tools. Daily v. May, 5 Mass. 313. PARSONS, Ch. J., said: "Tools of a man's trade or occupation do not include implements of husbandry used by the husbandman in tilling his farm." A printer's paper and ink, as tools or implements of trade. Sallee v. Waters, 17 Ala. 482. A book-binder's machines, stove, desk, chairs, and other furniture, as implements of trade. Seeley v. Gwillim, 40 Conn. 106. The court said the furniture "being common to most kinds of business, caunot in any proper sense be said to be the tools of any particular trade." A cigar-maker's watch, used to time his workmen, as “an instrument used and kept by the debtor for the purpose of carrying on " his trade. Rothschild v. Boelter, 18 Minn. 361. "It is not kept or used for the purpose of carrying on his trade, i. e., to make cigars with, but for his own convenience in keeping the account between himself and those by whom he makes cigars. His workmen could make as many and as good cigars, if he were to keep their time, and 'regulate his duties,' whatever that may mean, by the sun." A single article, exceeding in value the amount of exemption, although all the debtor possesses. Waldo v. Gray, 14 Ill. 184. This was the case of a mare, exempt under another subdivision, but it illustrates the principle.

For an exhaustive and methodical treatment of this subject, see Thompson ou Homesteads and Exemptions, §§ 755–771.

GREENFIELD SAVINGS BANK V. STOWell.

Promissory note

(123 Mass. 196 )

Unauthorized alteration by one of several makers.

An alteration of a promissory note by one of several makers, not assented to by the other makers, by which the amount is increased by inserting words or figures in a blank space left in the printed form on which it is written, avoids the note as to other makers, even in the hands of a bona fide holder for value.*

A

CTION of contract on a promissory note. The facts appear in the opinion.

D. Aiken & C. C. Conant, for plaintiff.

C. Delano & G. M. Stearns, for defendants.

*See Draper v. Wood, 17 Am. Rep. 92, and note, 97, wherein the authorities are collated.

Greenfield Savings Bank v. Stowell.

GRAY, C. J. This action is brought upon a promissory note, signed by George W. Bardwell, Cyrus A. Stowell, Timothy D. Richardson and Charles Stowell, and appearing in its present condition, and alleged in the declaration, to be a note for $467. Cyrus A. Stowell and Timothy D. Richardson only defend the action.

It is agreed that the note is upon a blank printed form; that, as originally prepared and signed by Bardwell, and signed by the defendants at his request, it was a note for $67; and that Bardwell afterward, without the authority or knowledge or expectation of the defendants, fraudulently prefixed the figure "4" to the figures "67" and the words "four hundred and" to the words "sixty-seven," and in that form, and with no mark or indication of alteration, negotiated it to the plaintiff, who lent him $467 thereon.

The plaintiff contends that the defendants were negligent in signing the note with such blanks as enabled the fraudulent alterations to be made without danger of detection, and are therefore liable to an innocent holder for value upon the note as so altered. But after deliberate advisement, and careful examination of the authorities cited in the learned arguments at the bar, we are of opinion that this position cannot be maintained.

It is a general rule of our law, that a fraudulent and material alteration of a promissory note, without the consent of the party sought to be charged thereon, whether made before or after the delivery of the note, renders the contract wholly void as against him, even in the hands of one who takes it in good faith and without knowledge or reasonable notice of the alteration. Hall v. Fuller, 5 B. & C. 750; s. c., 8 D. & R. 464; Warrington v. Early, 2 El. & Bl. 763; Wood v. Steele, 6 Wall. 80; Angle v. Northwestern Ins. Co., 92 U. S. 330; Fay v. Smith, 1 Allen, 477; Draper v. Wood, 112 Mass. 315; s. c., 17 Am. Rep. 92; Citizens' National Bank v. Richmond, 121 id. 110.

If, indeed, a man indorses a blank form of note, and delivers it with the intention that the blank should be filled, he there by makes the person to whom he delivers it his agent, and is responsible for whatever date, sum or time of payment he may insert, to a bona fide indorsee. Russell v. Langstaffe, 2 Doug. 514; Violett v. Patton, 5 Cranch, 142. So, if he delivers the note with the date or sum in blank, he is held to authorize the blank to be filled up with any date or sum. Bank of Pittsburgh v. Neal, 22 How. 96;

Greenfield Savings Bank v. Stowell.

Androscoggin Bank v. Kimball, 10 Cush. 373; Abbott v. Rose, 62. Me. 194.

In an early case in this court, partners, one of whom had left their blank indorsements with their clerk for use in their business, were held liable to a bona fide holder upon one of such indorsements which had been obtained from the clerk by fraud, and Chief Justice PARSONS said that the objection that the note ought to be considered as a forgery of the names of the indorsers "would have great weight, if, when the indorsers put the name of the firm on the paper, they had not intended that something should afterward be written, to which the name should apply as an indorsement; for then the paper would have been delivered over unaccompanied by any trust or confidence;" but that the court "must consider a delivery by the clerk, who was intrusted with a power of using these indorsements (although his discretion was confined) as a delivery by one of the house; whether he was deceived, as in the present case, or had voluntarily exceeded his discretion, for the limitation imposed on his discretion was not known to any but to himself and to his principals." Putnam v. Sullivan, 4 Mass. 45, 53, 54.

The principal authorities in support of the plaintiff's position are in those countries whose jurisprudence is immediately derived from the civil law. Pothier was of opinion that if the mistake of a banker, in paying a bill for too large a sum, was induced by the fault of the drawer, in not taking care to write the bill in such a manner as to prevent fraudulent alteration, as, for instance, if he wrote the sum in figures to which a cipher was afterward added, the drawer should in such case be held to indemnify the banker for what he had lost by the fraudulent alteration which the drawer by his own fault had afforded opportunity to make. Pothier Contrat de Change, pt. 1, chap. 4, § 99. Similar views have been taken by courts in Scotland and in Louisiana in cases of promissory notes held by indorsees. Pagan v. Wylie and Grahame v. Gillespie, reported in 2 Morison's Dict. Dec. 1660, 1453, and more briefly in Ross on Bills & Notes. 194, 195; Isnard v. Torres, 10 La. Ann. 103.

In Young v. Grote, 4 Bing. 253; s. c., 12 Moore, 484, although Chief Justice BEST quoted with approval the opinion of Pothier, the point adjudged was much narrower, for in that case the drawer had left with his wife checks signed by himself in blank, and the

Greenfield Savings Bank v. Stowell.

fraudulent alteration was made by his clerk, who was directed by the wife to fill out the check; and, it having been found by an arbitrator that the maker had been guilty of gross negligence by causing his check to be delivered to his clerk in such a state that the latter could and did by the mere insertion of additional words make it appear to be his check for a larger sum, it was held by the court that he could not recover that sum from his banker, who had paid it.

The subsequent comments of eminent English judges upon Young v. Grote have limited the doctrine there laid down to the peculiar circumstances of that case.

In Roberts v. Tucker, 16 Q. B. 560; s. c., 15 Jur. 987; 20 L. J. (N. S.) Q. B. 270, bankers who had paid a bill upon a forged indorsement were held not to be entitled to recover the amount from their customer, the drawer. The judgment in the Exchequer Chamber was delivered orally by Baron PARKE, and his comments upon Young v. Grote are variously stated in the different reports. In 16 Q. B. 580 he is reported to have said: "This was in truth considering that the customer had by signing a blank cheque given authority to any person in whose hands it was to fill up the cheque in whatever way the blank permitted." But no such general statement appears in either of the other reports. In 15 Jur. 988, the words attributed to him are: "But in that case there was negligence in the drawing of the cheque itself, which was the authority given by the drawers to the bank." The report in the Law Journal is fuller and apparently more exact: "There the court held that the cheque was drawn in so negligent a way as to facilitate the forgery and to exonerate the banker from liability to his customer for paying the amount. They, in truth, consider that he, as it were, gave authority to the party to fill up the cheque in the way it was filled up." 20 L. J. (N. S.) Q. B. 273. This substantially accords with the latter statements of the same eminent judge, and of Lord CRANWORTH and of Chief Justice ERLE, in deliberately considered judgments, which put the decision in Young v. Grote upon the ground that the customer's negligence in the transaction had afforded opportunity for the fraud of his clerk, by which the bank was deceived. Bank of Ireland v. Evans Charities, 5 H. L. Cas. 389, 410, 413; Orr v. Union Bank of Scotland, 1 Macq. 513, 523; British Linen Co. v. Caledonian Ins. Co., 4 id. 107, 114; Ex parte Swan, 7 C. B. (N. S.) 400, 431, 433. See, also, Arnold v. Cheque Bank, 1 C. P. D. 578, 587, 588.

Greenfield Savings Bank v. Stowell.

In some of these cases, the negligence of the drawer was spoken of as creating an estoppel. But that view has been disposed of by Chief Justice COCKBURN, with his characteristic clearness and vigor, saying: "The case of Young v. Grote, on which so much reliance has been placed, and which is supposed to have established this doctrine of estoppel by reason of negligence, when it comes to be more closely examined, turns out to have been decided without reference to estoppel at all. Neither the counsel in arguing that case, nor the judges in deciding it, refer once to the doctrine of estoppel. The question arose on a disputed item in an account between a banker and his customer, which had been referred to arbitration, and the question raised by the arbitrator was on whom the loss which had arisen from payment of a check, in which, by the carelessness of the customer, an opportunity had been afforded for increasing the amount, should fall. It was held, not that the customer was estopped from denying that the check was a forgery, but that as the loss, which would otherwise fall on the banker, who had paid on a bad check, had been brought about by the negligence of the customer, the latter must sustain the loss. As the question arose on an account submitted to arbitration, the matter was decided without reference to any technicality, but I am disposed to think that technically looked at, the matter would stand thus: The customer would be entitled to recover from the banker the amount paid on such a check, the banker having no voucher to justify the payment; the banker, on the other hand, would be entitled to recover against the customer for the loss sustained through the negligence of the latter. Possibly,

to prevent circuity of action, the right of the banker to immunity in respect of the loss so brought about would afford him a defense in an action by the customer to recover the amounts." Swan v. North British Australasian Co., 2 H. & C. 175, 189, 190. And in Halifax Union v. Wheelwright, L. R., 10 Ex. 183, 192, which was very similar in its facts to Young v. Grote, and in which the alteration of certain drafts was made by a clerk intrusted with the duty of filling them up, the Court of Exchequer, after advisement, expressed the opinion that the ground assigned by Chief Justice COCKBURN, of avoiding circuity of action, was certainly the most exact ground.

The maker of a promissory note holds no such relation to the indorsees thereof as a customer does to his banker. The relation