Hanson v. Crawley

ALTERATION OF NOTE —DISCHARGE OF SURETY — WHETHER ADDITION TO CONTRACT PART OF ORIGINAL AGREEMENT*—CHARGE OF COURT.—Where a promissory note, payable in money generally, and dated in November, 1865, was signed by the principal and a security, and was delivered to the payee by the principal in the absence of the surety; but before the delivery, the principal, tq induce the payee to accept it, added on the note a memorandum, signed by himself, that it was to be “paid in gold, gold having been the consideration”: held, that whether the security was or was not released, depends upon whether or not the proof shows that the note was signed by him with the understanding it was to be paid in gold—since a mere reduction to writing, by the principal, of what was in fact the agreement of both the principal and security, at the time of the signing of the note, would not be a change of the contract. Held, further, that it was error in the Court to charge the jury that such a memorandum did not release the security, in the absence of proof that he signed the note with the understanding it was to be paid in gold.

Principal and surety. Novation, etc. Before Judge Robenson. Morgan Superior Court. November Term, 1869. Crawley sued Morrison, as maker, and Hanson, as security on the following paper: “$650 00. Twelve months after date, I promise to pay Robert Crawley, or bearer, six hundred and fifty dollars, for *value received of him, cash borrowed. November 17th, 1865. J. J. Morrison, J. F. Hanson, Security. “I agree to pay the above in gold, having received it in gold. J. J. Morrison.” Planson defended, on the ground that said italicised words were, by Morrison, added to the note after it was signed by Hanson, and 'that thereby the contract was so altered as to make the note payable in gold, without his knowledge or consent. The plaintiff lead in evidence the note and closed. Hanson testified that Crawley was not present when he signed said note, that he had no interest in the matter, and signed only as security, and that said italicised words were added to it afterwards, and he knew not that they had'been added, till this suit was brought. Morrison testified to the same, as to the making of the note and said addition, and stated that it was his impression that it was illegal to make a note payable in gold, and that he told Crawley so before it was delivered, but as he, Morrison, was to pay it in gold, he added said words to it at his (Morrison’s) own suggestion, and explained to Crawley why he made it, by telling him that he understood the Supreme Court had decided that a note payable in gold was void. In rebuttal, Crawley testified that the consideration of said note' was equivalent to gold, and the note was to be made payable in gold, that when Morrison presented it to him it had not the italicised words on it and he refused to accept it, because it was not payable in gold by its terms; Morrison then told him that he understood the Supreme Court had decided as aforesaid, and that, for that reason, the note was not drawn payable in gold, but that all parties understood that it was to be paid in gold,. and it would be; upon Crawley’s suggesting that all parties might die, Morrison wrote upon the margin said italicised words, to perpetuate the evidence of said understanding, and then Crawley accepted the *note. He further testified that afterwards in conversing about said note Hanson asked him if it was not a gold note and he said it was, and Hanson said it would be paid. In reply to this last, Hanson denied having such conversation. Certain other evidence was offered and rejected; for this see the motion for a new trial. The Court charged the jury as to the liability of sureties, told them what was novation, etc., that a change in the contract by Morrison and Crawley, without the consent of Hanson, released Hanson, but that if said italicised words were simply a memorandum, reciting the consideration - of the note and in what it was to be paid, then said words are not such a change of the nature or terms of the contract as would release the security, though made after he signed and without his knowledge or consent. The verdict was for the face of the note “in gold.” Hanson moved for a new trial, upon the grounds that the verdict was contrary to law, etc., because the Court refused to allow Hanson to testify as to whether he understood that the note was to be paid in gold or United States currency, and in rejecting a oart of Morrison’s testimony, in which he said Hanson must have known when he signed the note that it was payable in United States currency, because he was not told that it was to be paid in gold, that part of the agreement being solely between him (Morrison) and Crawley, and because the charge as to novation was irrelevant, and because the charge confined the jury to the contract between Crawley and Morrison to the exclusion of the contract with Hanson. The new trial was refused, and that is assigned as error.