Gleason v. Hamilton

Hardin, P. J.

Evidence given before the circuit and before the special term satisfactorily establishes the fact that the plaintiff had no knowledge of the making of the alleged alteration prior to the commencement of this action; and that such alteration and addition were made without his personal request or procurement, and without any fraudulent intent on his part. The evidence and findings are entirely satisfactory that the plaintiff did not and does not rely upon the disputed words to cover the indebtedness for which the mortgage is sought to be enforced. Under such circumstances, if it be assumed that the alteration or additional clause was inserted by Doheny without an original authority from the defendant or a reacknowledgment of the execution of the instrument by her after the words were inserted, ought the mortgage, as first drawn, to be destroyed, or held for naught? Clearly the plaintiff never intended any fraud, nor consciously consented to any destruction of the instrument which gave him a lien on the defendant’s property as it was first drawn and executed. Notwithstanding the additional words or alterations, the instrument as first drawn was still legible, and its meaning and purport ascertainable, and the added words should be treated “the same as if the alteration had been made by a mere stranger without the privity or consent of the party interested.” Henfree v. Bromley, 6 East, 309. The case last cited was referred to approvingly in Rees v. Overbaugh, 6 Cow. 746 . In the latter case the instrument from which the seals were torn had been left with Jackson for safe-keeping, and it was said by the court in the course of the opinion that “hehad no power to cancel the contract, or to interfere in any other way with the plaintiff’s right to recover the remaining balance of $500. In tearing the seals from the agreement, therefore, he did not act as the authorized agent of the plaintiff, but as a stranger.” The latter case was quoted approvingly by Andrews, J., in Casoni v. Jerome, 58 N. Y. 321 , in which case it was held that the insertion in a bond by a clerk in the surrogate’s court of words unauthorized did not “relieve the obligors from liability under it as originally executed.” In Martin v. Insurance Co., 101 N. Y. *107 498 , 5 N. E. Rep. 338, Ruger, C. J., said: “The rule is well established that an alteration of a contract under which a plaintiff claims, made by the defendant or some third party, without the plaintiff’s consent, and while the contract is not in plaintiff’s hands, has no effect, and the contract will remain as it originally stood, provided the nature and extent of the alteration can be clearly ascertained, and it can be seen what the contract was at the time it was executed.” In Bigelow v. Stilphen, 35 Vt. 521 , the plaintiff’s agent received defendant’s note for goods. The agent, without the knowledge or assent of either party, so changed the note as to make it joint and several, and payable with interest; and when an action was brought upon the note it was held that its principals could recover upon it as it stood before the alteration took place. In the course of the opinion in that case it was said: “Clearly it is not just that a man should be deprived of an honest debt, or have the evidence of it destroyed for all beneficial purposes in consequence of misconduct of a stranger, to whose act he did not assent, and of which he had no knowledge; ” and it adds: “It is the intent that gives the act its character, and avoids the instrument, and it is difficult to understand why a man who has done no wrong, nor consented that any should be done, should be punished to the extent of the amount of his demand by having his claim canceled by operation of law, solely because another has been guilty of an act for which he ought to be punished." Public policy does not require any such rule.” And in Robertson v. Hay, 91 Pa. St. 242, it was held that the alterations of a mortgage were to be deemed as those of a stranger, although the alterations were made by Gill, who, as agent and attorney of the party, had possession of it. Similar doctrine was held in Hunt v. Gray, 35 N. J. Law, 227; and in Nickerson v. Swett, 135 Mass. 514 . Appellant calls our attention to Rogers v. Vosburgh, 87 N. Y. 228 . That was a case where the answer alleged “that, after the making and delivery of the note, and before the commencement of this action, the note was materially altered by the plaintiff without the knowledge or consent of defendants,” etc., and it was held that it was error to strike out the answer as sham and frivolous. We think the case does not aid the appellant. And Benedict v. Cowden, 49 N. Y. 396 , cited by the appellant, was a case where it was held the material alteration of a note took place by severance of a memorandum from the note, which was an essential part of it. We see nothing in the ease aiding the appellant.

Our attention is called to Waring v. Smyth, 2 Barb. Ch. 119 . In that case it appeared that Waring, the mortgagee, “ was guilty of the improper acts of altering a bond and mortgage,” and therefore he could not foreclose the mortgage, nor could his assignee have any relief to which the assignor would not have been entitled. In that case, however, it was asserted that “an alteration by a stranger without the privity or consent of the party interested will not render the deed void where the contents of the same as it originally existed can be ascertained.” Appellant calls our attention to Marcy v. Dunlap, 5 Lans. 365 . When the mortgage in that case was delivered, it did not describe the defendant’s property. Subsequently the description was changed, and in an action to reform the mortgage by changing the description from “lot 26” to “lot H,” and for a foreclosure thereof, it was held that the mortgage was vitiated, and was incapable of being enforced by the plaintiffs. The case differs widely from the one before us. In the course of the opinion, however, it seems to be stated that the modern cases hold that, if the alteration is the act of amere stranger, while the deed or mortgage is out of the possession of the grantee or mortgagee, and without his knowledge or consent, it does not work a destruction of it. When the mortgage was acknowledged by the defendant it contained a clause to the effect “that the said party of the first part, in consideration of the sum of $30,000, has sold, and by these presents does grant and convey, to the said party of the second part,” etc.; and the further clause that “this grant is intended as a security for the payment *108 ■of any and all notes made by the El Oro Mining Company, and in lorsed by William T. Hamilton and William N. Thompson, and now held and owned by the party of the second part, and of any and all renewals of said notes; and also to secure said second party from all loss by reason of his liability as indorser upon any and all notes made by said El Oro Mining Company, and indorsed by said Hamilton and Thompson, and any and all renewals thereof. ” The lien given to the plaintiff by the mortgage secured the indebtedness mentioned in the language we have just quoted. That indebtedness has not been discharged, and it is equitable that the mortgage should remain to the extent ■of $30,000 as collateral to such indebtedness. In the event of that indebtedness being discharged, or a portion of it discharged, it may be claimed in behalf of the defendant that the lien as originally created should cease or be restricted to the amount remaining unpaid on that indebtedness. No such question, however, seems to have been presented at the special term, or provided for in the formal judgment which was entered. Perhaps the defendant, if the mortgage is held in virtue of the views already expressed, would be entitled to have the judgment qualified in that respect. We may afford her an ■opportunity to have the judgment modified by an insertion of such additional provision, if she should 'be so advised. In the corroboration of the views already expressed it may be observed that on the 17th of March, 1885, the defendant and the plaintiff entered into stipulations by an instrument under seal, acknowledged on that day before the same notary who took the acknowledgment to the mortgage. In that instrument, which related to the indebtedness of the El Oro Mining Company, held by the plaintiff, and upon which the husband of defendant was liable, it was agreed, among other things, that, “as long as the whole of the net proceeds of said mine are applied to the payment of said paper monthly, provided such monthly payments amount to $5,000 each, ” no proceedings were to be taken to enforce the payment of the commercial paper of the mining company; and in that instrument it was further provided, viz.: “It is agreed by the subscribers, W. T. Hamilton and F. M. Hamilton, that all property and security held by said Gleason or the said Third National Bank as collateral to the indebtedness or liability of said W. T. Hamilton to said bank or said Gleason shall be held, and the same is hereby pledged to said Gleason, as security for the payment of said notes so to be purchased by him, except as hereinafter provided.” “(5) Upon the completion of the' purchase of said notes by said Gleason in the manner aforesaid the 25 bonds of said mining company, and the stock of the Onondaga Iron Company, now held as collateral to said notes, shall be held as collateral, first, to a certain other $30,000 note of the Morris Bun Coal Company, on which said Hamilton and Lynch are liable as indorsers, and, after said last-mentioned note is paid, then said securities shall be held as collateral to the other indebtedness of said W. T. Hamilton to said Gleason or said bank. ” It may be said with considerable force that the effect of these stipulations on the part of the ■defendant with the plaintiff tend to support the position stated above, that the plaintiff is entitled to hold the mortgage as originally drawn until the indebtedness specified in the original draft of the mortgage is paid. Surely when the instrument of March 17, 1885, was executed by the defendant, the plaintiff held the mortgage in suit as a security, and it was embraced within the expression: “All property and security held by said Gleason * * * as collateral to the indebtedness or liability of said W. T. Hamilton to said bank or said Gleason, * * * and the same is hereby pledged to said Gleason as security for the payment of said notes.”

2. It was insisted upon the trial at the circuit and at the special term and in the argument before us “that the disputed clause was inserted in the mortgage with the knowledge and consent of the defendant;” and the special term found “ that said clause was written in said mortgage with the knowledge and consent of the defendant, Fannie M. Hamilton, and after the same was writ *109 ten therein she assented to the same, and consented that it should form a part of said mortgage. ” However, it is insisted on behalf of the appellant that the finding is unsupported by evidence, and that the same is against the evidence in the case. Mr. Doheny, who was called as a witness in behalf of the defendant, testified that the mortgage was prepared in behalf of the plaintiff in his office under his supervision. He testifies: “It came back to me executed the day that it was drawn, as I remember it; and at that time the clause referred to was not in the mortgage. Some time after it came back to me this clause was written in. * * * I returned it to Mr. Hamilton, calling his attention to the interlineations, and asking for are-execution of it. * * * My recollection is that he took the mortgage, and went down to Mr. Hamilton’s office, two floors below our own, and called his attention to some language in the addition that had been made, to the fact that we had put it in, and asked that the mortgage be re-executed; and I can tell you, if you wish, what I think his reply was. He said that John [the notary] would go over and take Mrs. Hamilton’s acknowledgment just as soon as he could.” “A few days after that,” the witness continues, “I went upstairs, and found the mortgage in my office. I think I found it on my table in my room, but I am not sure about that. I was also the attorney for Mr. Hamilton at this time in various matters.” In the course of the examination of the defendant it appeared that she had authorized her husband to transact business for her in respect to the matters involved, and inquired into in this action. She testified: “He managed everything. He had everything;” and she added that he represented her in all transactions relating to her property. Iieeffe, the notary, was called, and while giving his testimony on the subject of whether the mortgage was reacknowledged or not, and in answer to the question whether he took a reacknowledgment, he says, “I don’t think I did;” and, when asked whether he would swear positively, he says, “I don’t think I did;” and, upon the question being put to him again, viz.: “Question. Wil] you swear positively that you did not? •Answer. Ho, I would not swear positively that I didn’t. I took a great many acknowledgments about this time. ” And when this witness was asked if he did not, some time after the mortgage bears date, meet Mr. Doheny, and inform him as too second acknowledgment from Mrs. Hamilton, and that .the mortgage had been left in Doheny’s office, his answer was: “I don’t remember any such conversation.” He was then asked: “Do you swear that such a conversation did not take place? Answer. Ho, I have no recollection of any such conversation.” And the further question was put to him: “Will you swear you didn’t have such a conversation? Answer. I won’t swear positively that I didn’t or that I did. I have no recollection of any such conversation. To the best of my recollection, I didn’t.” When the witness, William T. Hamilton, the husband of the defendant, was upon the stand, he detailed the circumstances attending the execution of the mortgage, his knowledge thereof, and his conversation with his wife in respect thereto. He admits that Mr. Doheny afterwards called upon him, and said that he “ wanted to add a word to that mortgage;” and he adds, “There were several conversations of the same kind,—similar. ” On the 11th of Hovember, 1884, the defendant executed a power of attorney to her husband, which was acknowledged on the 19th of Hovember, wherein she appointed her husband her attorney, with authority as follows: “Forme and in my name, place, and stead to conduct, carry on, transact, and exercise the general control and supervision over all of the property, business, and interests of whatever kind and wheresoever situated that I now or may hereafter own, hold, claim, or be interested in, and to make, execute, sign, seal, and deliver for me and in my name all bills, bonds, deeds, mortgages, notes, leases, specialties, or other instruments in writing whatever, which shall be necessary to the proper conducting, carrying on, and transacting the business aforesaid, and to do and perform all and every act and deed of whatever name or nature, *110 in any wise appertaining to said business, property, or interests, binding me as firmly and irrevocably by such deed or performance as if I were myself present thereto consenting, hereby ratifying, confirming, and allowing whatever my said attorney shall lawfully do in the premises.” This power seems to be very broad, giving him power to execute mortgages and to transact any and all kinds of business for her in respect to all property she then owned or might thereafter own, hold, claim, or be interested in. The evidence abundantly shows that she was interested in the mining company, and that she was affected by its credit, standing, and indebtedness. It is not overlooked that she as a witness, and her husband as a witness, gave evidence tending to indicate that the mortgage was not reaclmowledged after the clause in question was inserted therein. However, with all the evidence to which reference has been made before the jury and before the special term, we are not prepared to say that the finding of the jury, or the finding of the court, that the additional clause in the mortgage was inserted without her assent or subsequent ratification, which is equivalent to original authority, is unsupported. If her agent assented to it, she assented to it. It may not be said that the finding is unsupported by evidence tending to sustain it. As to whether the evidence given by her and given by her husband was sufficient to countervail the evidence to which reference has been made or not was a question for the jury and for the trial judge. He saw all the witnesses, heard all the circumstances we have alluded to, and many others. He witnessed the searching cross-examinations, and saw the bearing of the witnesses under the same; and when we give to his finding of fact such influence as we think we should, with his better opportunities to judge of the same, we are not prepared to say the finding of fact made at the special term is contrary to the weight of evidence. We do not therefore feel called upon to disturb it. The court was authorized to “set aside the findings of the jury, or use some of them, and to make the finding which is now brought in question.” Ham mond v. Morgan, 101 N. Y. 186 , 4 N. E. Rep. 328; Acker v. Leland, 109 N. Y. 11 , 15 N. E. Rep. 743.

3. numerous exceptions were taken during the progress of the trial before the jury, and apparently were renewed at the special term, and numerous exceptions were taken to the findings of fact and law as made by the trial court, and to the refusals to find, and they have been largely discussed by the appellant before us. We have looked at them. This is an equity action, and section 1003 applies; and in that section it is provided; “An error in the admission or exclusion of evidence, or in any other ruling or direction of the judge, upon the trial, may, in the discretion of the court which reviews it, be disregarded, if that court is of the.opinion that substantial justice does not require that a new trial should be granted.” The views already expressed, if adopted, seem to warrant the conclusion “that substantial justice does not require that a new trial should be granted.” We forbear an extended examination of the exceptions, and we are of the opinion that the orders and conclusions reached at the special term should be sustained. Order affirmed.

Judgment affirmed, with costs. All concur.