Mississippi. The change was made, too, after the maker had signed and delivered the note and without his knowledge or consent. Manifestly the holder of the note was in such case unauthorized to change the place of pay. ment, and, as it was done in such a way as #99 blanks in a note as was done in that execut- | payment the name of a bank in the state of ed by Cason, the court, Judge Pryor writing, said: "Where one signs a paper in blank, or partly in blank, when so written when signed and delivered as to show upon its face that a blank is left to fill up as to amount, or where payable, there is an implied authority to the holder to fill up the blanks in accord- to mutilate the instrument, it was apparent ance with the general character of the instru- | that the alteration could have been, and was, ment, and, when this is done by the payee, it known to any subsequent holder of the note. is not such an alteration as will invalidate | Obviously this court could but hold that the the paper as to one who takes it for value alteration made the note void; and, while without notice. the court did say in the opinion that the alteration "subjected the paper to the laws of the state of Mississippi when the persons making the note payable in the state of Tennessee may be presumed to have contracted with reference to the laws of that state," it was in substance admitted that the legal effect would have been the same, if the alteration had made the note payable at some other bank in the state of Tennessee. We may also add that the maker of a note may by his own laches make it possible for another to so alter it as to wholly change the terms and meaning, and yet compel him to pay it to an innocent holder. The estoppel arising from such negligence was applied by this court in the case of Blakey v. Johnson, 13 Bush, 197, 26 Am. Rep. 254, to a surety who had signed a note for his principal, negligently leaving a space above the signature of the principal, in which the alteration was written; and, notwithstanding the rule that a surety can only be bound by the very terms of his contract, he was held liable on the note to the payee, who was without knowledge of the alteration, because, but for his negligence in leaving the unnecessary blank space, the alteration could not have been suc cessfully made. Mr. Daniel, in his work on Negotiable Instruments, says: "# * Where after the word 'at' a blank was left and it was filled and made payable at an unauthorized place, it was held that the word 'at' implied that the blank space succeeding it might be filled before the note should be delivered with a designated place of payment." 2 Daniel, Nego. Instr. §§ 1405, 1406. In Kitchin, etc., v. Place, 41 Barb. (N. Y.) 466, the maker of a promissory note was sued. He denied liability upon the ground that the note had been materially altered after its execution without his knowledge or consent by the filling of a blank space after the word "at" with words designating a place of payment. It was held that the holder of the note had implied authority to thus fill the blank. In Redlich v. Doll, 54 N. Y. 234, 13 Am. Rep. 573, the note as executed contained a blank space following the word "at." The note was delivered by the maker to the payee with the agreement that the note should not be negotiated, but the latter in violation of the agreement filled the blank with a place of payment and negotiated the paper. The court held the maker liable to a bona fide holder for value. We do not think the fact that the place of payment inserted is fixed in another state would make any difference in the relations of the parties to the note. It may be true that the maker of a note would not contem-said: "There is a general principle which plate that the place of payment would be pervades the universal law merchant respectfixed in another state, but by leaving a blank ing alterations, a principle necessary to the for the addition of the place of payment and protection of the innocent and prudent from thereby authorizing the holder of the note the negligence and fraud of others. That is, to insert it the authority conferred to fill the when the drawer of the bill, or maker of the blank would be broad enough to give him as note, has himself by careless execution of great a right to make the note payable in the instrument left room for any alteration some other state, as in this. We do not to be made, either by insertion or erasure, think the case of Mitchell v. Reid's Ex'r, without defacing it or exciting the suspicion etc., 106 S. W. 833, 32 Ky. Law Rep. 683, sus- of a careful man, he will be liable upon it tains the view of the law presented by ap- to any bona fide holder without notice when pellee's learned counsel. It is true that in the opportunity which he has afforded has that case the holder of the note by an addi- been embraced and the instrument filled up tion made it payable in another state than with a larger amount, or different terms than the one in which the note was executed, and those which it bore when he signed it. The that this court held that the maker thereof true principle applicable to such cases is that was by the alteration released from liability the party who puts his paper in circulation on the note, but the alteration in that case invites the public to receive it of any one was made by striking from the note with a having it in possession with apparent title, pen the name of the bank in Tennessee, at and he is estopped to urge an actual defect which it was made payable by the maker, in that which, through his act, ostensibly has In discussing the doctrine under which the surety was thus held liable, the court, by Judge Cofer, quoting with approval from Daniel on Negotiable Instruments, § 1405, nishes the only criterion by which a stranger | ny only contradicted Rinkliff's statement that to whom it is offered can test its character, the money paid by appellee to Thompson, and, when that inspection reveals nothing to Wilson & Co. in satisfaction of his note was, arouse the suspicions of a prudent man, he in turn, paid appellant by them, and did not will not be permitted to suffer when there in any sense disprove the payment of the has been actual alteration." Garrard v. Had- note by appellee to Thompson, Wilson & Co., den, 67 Pa. 83, 5 Am. Rep. 412; Visher v. as testified by appellee and Rinkliff without Webster, 8 Cal. 109; Rainbolt v. Eddy, 34 contradiction. Anderson having accepted for Iowa, 440, 11 Am. Rep. 152; Harvey v. Smith, appellant the assignment of the note with 55 Ill. 224. the understanding that it would be paid to Thompson, Wilson & Co. by appellee, and that Thompson, Wilson & Co. would pay appellant at its Cincinnati office the money received from appellee, by that arrangement made Thompson, Wilson & Co. its agent to receive from appellee what it paid on the note, and, if Thompson, Wilson & Co. failed to pay appellant what they received of appellee in satisfaction of the note, the loss cannot fall on appellee, but must be borne by appellant. In our opinion appellee was not released from liability upon the note on account of the insertion therein of appellant's Cincinnati office as the place at which it was to be paid, but because of the arrangement he made with Thompson, Wilson & Co. for paying the note, which was communicated to appellant's agent, Anderson, when the note was assigned to appellant; and also because he paid the note under the arrangement referred to. In other words, both appellee and Rinkliff, Thompson, Wilson & Co.'s agent, testified, The above undisputed facts demonstrate in substance, that, when appellee execut- that appellant took the note with notice of ed the note, it was with the understand-the arrangement by which it was to be paid, ing between them that appellee would make and that appellee, though ignorant of the weekly payments thereon to Thompson, Wil- assignment of the note, paid it to appellant, son & Co. until the note was fully discharged. the assignee, through Thompson, Wilson & Rinkliff testified that when he for Thomp- Co., in view of which it would be manifestson, Wilson & Co. assigned and delivered the ly unjust to compel him to pay it again. We note to appellant's agent, Anderson, he in- are aware that the trial court, after propformed him of the arrangement by which erly admitting the testimony as to the payappellee was to pay the note. Both appellee ment by appellee of the note under the arand Rinkliff also testified that appellee com- rangement referred to, following the introplied with this agreement by paying the whole duction of all the evidence erroneously exof the note in installments on or before its cluded it from the consideration of the jury, maturity, which payments were all made to and submitted the case to them under a sinThompson, Wilson & Co., and were by that gle instruction upon, what we think, was an company, according to Rinkliff's testimony, improper issue, viz., whether the place of paysent or paid to appellant at Cincinnati. ment was inserted in the note without appellee's consent and with the knowledge and approval of appellant, yet as it is patent that the verdict of the jury was correct, and such as the admitted facts in respect to the payment by appellee of the note would have authorized the court to peremptorily instruct them to find, justice requires that it be undisturbed. | Wherefore the judgment is affirmed. It is conceded that possession of the note passed to appellant by its assignment, which, of course, carried with it the right to appellant to transfer it to its Cincinnati office. And, though appellant acquired the note with the understanding that it was to be paid Thompson, Wilson & Co. by appellee, the latter were to pay the money received of appellee to appellant at its Cincinnati office, which as between the assignor and assignee made that the ultimate place of payment; and for this reason appellant's office in that city was inserted in the blank space in the note as the place of payment. The insertion in the note of the place of payment did not invalidate the note, impose any additional risk or burden upon appellee, or release him from liability. He was, however, discharged as stated by his payment of the note to appellant through Thompson, Wilson & Co. Anderson, appellant's agent, did not deny that the arrangement by which appellee's note was to be paid was communicated to him by Rinkliff when he received the note from the latter, nor did he deny that appellee paid the note as agreed, or that such payments were Paducah, Ky., not sent or paid appellant by Thompson, Wil. ... after date son & Co. as received. It is true that Don- to pay to the order of nelly, appellant's bookkeeper, testified that dollars at NUNN, C. J. (dissenting). This action was instituted by appellant to recover of appellee the sum of $4,000 with interest, as evidenced by a promissory note. The note in its form when this suit was instituted was as follows: "$4000. Paducah, Ky., Feby. 19, 1907. "Four months after date I promise to pay to the order of Thompson, Wilson & Co. four thousand dollars at office of Diamond Distilleries Company, Cincinnati, Ohio, value re ceived. S. B. Gott." It was executed on a blank, printed form which was as follows: "$. 66 ...... ...... .... ..........., 1907. promise ...... When appellee signed and executed the questions were: Was the alteration materinote it was as follows: al? This was conceded. Was appellant present, or did he authorize or consent to the change? This was negatived by the testimony, and was without contradiction. This left the only question to be determined: Did the appellant or its agent either direct or make the alteration, or was it or its agent present when the alteration was made, and consented to and approved it? If it or its agent was present and did either one of these things, the effect upon its right to recover is the same. "$4000.00. Paducah, Ky., Feby. 19, 1907. "Four months after date I promise to pay to the order of Thompson, Wilson & Co. four thousand dollars at ......, value received. S. B. Gott." Thus it will be seen that all the blank spaces in the printed form were filled when the note was executed, except the last one which follows the word "at.” Appellee alleged that the note had been materially altered without his knowledge or consent after he signed and delivered it to the payee, by adding, immediately after the printed word "at," these words: "office of Diamond Distilleries Company, Cincinnati, Ohio." This alteration was shown by the evidence without any contradiction to have been made without the knowledge or consent of appellee and with the knowledge and consent of appellant's managing agent in the absence of appellee. It was further shown without contradiction that appellee, in accordance with an agreement with the payee of the note, Thompson, Wilson & Co., made weekly payments to them on the note from its date until he had paid the claim before its maturity, and of this agreement appellant's managing agent was apprised at the time he took the note from Thompson, Wilson & Co. as collateral. In Appellant concedes that the alteration of the note was material, but contends that appellee cannot avail himself of it as a defense, for the reason that he executed the note with a blank space, and that the holder had the implied authority to fill it with the words used, and cites many decisions of this and other states showing that, when one signs a paper in blank and delivers it to another, the person who thus signs and delivers such a paper makes the one to whom it is delivered his agent with implied authority to fill the blank. This is conceded to be the law, but that question is not involved on this appeal. The note was not signed in blank nor delivered to one as agent with either expressed or implied power to do anything whatever to complete the transaction. the case at bar a complete instrument—a plain note of hand-was signed and delivered to a creditor, evidencing the amount of his debt and the date of its payment. As executed by the appellee, the note showed that it was made in Paducah, that it was a Kentucky contract, and was to be governed by the laws of this state. The date of the note, the amount, when to be paid, and the name of the payee were all given. In fact, there was nothing to be added to make it a complete and binding contract. The note as executed is evidence of the fact that it was to be paid in the city of Paducah, where the parties to it then and had long resided; and there was nothing in the face of it to indicate to any reasonable mind that appellee, the maker, had constituted the payee, either expressly or impliedly, his agent to add anything to it to complete the transaction. On the contrary, the blank space rather indicated the contrary to any person who understood the transaction and situation of the parties to it. Certainly there was nothing that would indicate to a reasonable mind that appellee had authorized the payee to change the place of payment from Paducah to another state or foreign country. If the alteration of the note had been made by the payee without the knowledge or approval of ap The lower court gave only one instruction to the jury, which is as follows: "You will find for the plaintiff $4,000, the amount of the note sued on, with interest thereon from July 20, 1907, unless you shall believe from the evidence in this case that the words 'office Diamond Distilleries Company, Cincinnati, O.,' were inserted in said note without the consent of defendant, and with the knowledge and consent or approval of the plaintiff or its agent, and, if you shall so believe from the evidence in this case, then you will find for the defendant." Appellant asked only one instruction, and it was refused, which is as follows: "The jury will find for the plaintiff unless they believe from the evidence that the plaintiff, or its authorized agent, directed or made the alteration complained of by inserting the words 'office Diamond Distilleries Company, Cincinnati, Ohio.'" It will be observed that both instructions mean in substance the same. The court's instruction used the words "and with the knowledge and consent or approval of the plaintiff or its agent," while the one of fered used these words, "that the plaintiff or its authorized agent directed or made the alteration complained of," etc. There is no difference in the language of the two instruc-pellant or its agent, the rights of the parties tions in so far as the legal aspect of the would have been different. In addition to case is concerned. It was immaterial wheth- the face of the note showing that it was to er plaintiff or its agent made, directed, con- be paid in Paducah, appellant's agent was sented to, or approved the alteration. The one informed at the time that there was an expression or the other had the same legal agreement between the payor and payee that maturity by weekly payments by the maker | covery under such state of facts. to the payee. We quote from the testimony of John G. Rinkliff, a stockholder and manager of Thompson, Wilson & Co., which shows that appellant's managing agent was informed of this fact. He testified as follows: "Q. At the time that the words, 'office of the Diamond Distilleries Company, Cincinnati, Ohio,' were put on that note, where was you? A. I forget whether I was at the Palmer House or at our office one or two of the places. I was with Mr. Anderson, the representative of the Diamond Distilleries Company, at the time. Q. And you were with Mr. Anderson? A. Yes; and we discussed the matter.' I told him Mr. Gott owed us this money, and that he could have that as a collateral, and Mr. Gott would be paying off the indebtedness, and I would be taking up his paper as he would pay me. I says: "The best way to do is to put it in here, payable at the office of the Diamond 'Distilleries Company, at Cincinnati, so as not to have the paper thrown down here on these banks.' * * * A. As I said awhile ago, we owed the Diamond Distilleries Company $12,000 or $13,000 when that arrangement was made, and when we went into bankruptcy we only owed them $6,000, and made the agreement with Anderson we was to pay- (Objected to by plaintiff.) Q. Made an agreement you was to pay how? A. So much every week, and Mr. Gott was to pay me every week some money, and I told Mr. Anderson he would be paying me on that right straight along and I would be taking up his paper." Appel lant's counsel cite the case of Cason v. Grant County Deposit Bank, 97 Ky. 487, 31 S. W. 40, 17 Ky. Law Rep. 344, 53 Am. St. Rep. 418, as a case in point which authorizes appellant to recover in the case at bar. That case is unlike the case before us. In that case the note was executed by Cason to one Siddons, who filled the blank spaces and assigned the note to the bank for value. The bank had no knowledge or information as to any private agreement between Cason and Siddons as to the place of payment, nor did it know when the alteration was made, and therefore did not approve it with the knowledge that the change had been made. The following quotations from that opinion will show that it cannot apply to the case at bar, to wit: "Where one signs a paper in blank or partly in blank when so written when signed and delivered as to show upon its face that a blank is left to fill up as to amount, or where payable, there is an implied authority to the holder to fill up the blank in accordance with the general character of the instrument, and, when this is done by the payee, it is not such an alteration as will invalidate the paper as to one who takes it for value without notice of its infirmity." In the same opinion the court quotes with approval from Mr. Daniel's work on Negotiable Instruments, as follows: ""That when the drawer of a bill or the maker of a note has himself by careless execution of the instrument left room for any alteration to be made, either by insertion or erasure, without defacing it, or exciting the suspicions of a careful man, he will be liable upon it to any bona fide holder without notice, when the opportunity which he has afforded has been embraced.' ” For these reasons, I dissent from the opinion, but concur in the affirmance. We cannot understand upon what principle appellant should be permitted to make appellee pay this note the second time, when it was present when the alteration was made In the case at bar appellant had full knowland approved it, and the note on its face edge of the manner, time, and place of payshows that it was a complete and binding ment, as understood by the parties to the obligation; that it needed no additional paper, when it took the note as collateral, words to make it complete, and the blank | and appellee is entitled to make the same despace, under the circumstances, was suffi- fenses against it in the hands of appellant, as cient to put appellant's agent on inquiry, and he would be entitled to make if it were in he would have learned just what he was the hands of the original payee. told; that is, that it was the understanding and agreement between the payor and payee that the note was to be paid in Paducah by weekly payments, which was complied with by appellee to the latter without any knowledge on his part of the assignment of the note to appellant. It would not be right to allow appellant to recover on this note when it knew these facts, especially when it is evident from the testimony that it kept silent with reference to the assignment and received appellee's money which was paid to it through Thompson, Wilson & Co. as per the agreement testified to by Rinkliff, and their debt by this and other means was reduced from $13,000 to $6.000. We have not been able to find any statute or opinion by any court authorizing a re MOORE v. SHANNON. (Court of Appeals of Kentucky. March 16, 1910.) 1. SALES (§ 440*)-ACTION FOR BREACH OF WARRANTY-EVIDENCE-ADMISSIBILITY. Where, in an action for breach of warranty of a horse sold by defendant, defendant denied the warranty, and the evidence on the issue was conflicting, evidence that plaintiff. since buying the horse, had bought an automobile. and relating to his use of horses since the purchase of the automobile, was admissible as affecting his interest and good faith. [Ed. Note.-For other cases, see Sales, Dec. Dig. § 440.*1 2 SALES (440*)-ACTION FOR BREACH OF J. F. Stewart, C. L. Miller, and Zerfoss & WARRANTY-EVIDENCE-ADMISSIBILITY. Weakley, for appellant. M. S. Burns, W. D. O'Neal, Jr., W. T. Cain, and A. O. Carter, for appellee. Where, in an action by a buyer of a horse for breach of warranty, the buyer claimed that the horse was worthless, evidence that he could have sold the horse at a substantial price was admissible to show that it was not worthless and as a circumstance bearing on its value. [Ed. Note.-For other cases, see Sales, Cent. Dig. § 1261-1276; Dec. Dig. § 440.*] He bad CLAY, C. Appellant, A. H. Moore, instituted this action against appellee, E. E. Shannon, to recover damages for a breach of warranty of a horse which he purchased of appellee. The jury returned a verdict in favor of appellee, and A. H. Moore appeals. The facts are as follows: Appellant is a practicing physician, and resides in Ashland. known appellee all his life. Learning that appellee had a horse for sale, appellant notified appellee to have the horse in Louisa on a certain day. On that day appellant, in company with his brother, went to Louisa. Appellee had the horse brought out so that appellant and his brother could examine him. When the horse was brought out, his right eye was inflamed. Appellant asked appellee what was the matter with the horse's eye, and the latter replied that it had gotten sawdust in its eye a day or two before. From this point on the evidence is conflicting. According to appellant and his witnesses, appellee said that he would guarantee and insure the horse's eye to get sound and well. According to the testimony of appellee and his witnesses, he said: "I will guarantee the horse to be as sound as a dollar except its eye, and it shows for itself." Appellant gave appellee a check for $230 in payment for the horse. He claims that this was done with the understanding that appellee would insure and guarantee the horse's eye to get sound 6. TRIAL (§ 252*)-ACTION FOR BREACH OF and well. Appellee denied that the check WARRANTY-EVIDENCE-INSTRUCTIONS. was given with any such understanding. Appellant claims that after he bought the horse and took him home, his eye continued to get worse; that at the time he testified the horse was practically worthless. During the cross sary for the buyer to show that when the seller made the warranty that he knew it to be untrue, for though he believed the warranty to be true, still if it was false the verdict should be for the buyer, was erroneous because of the absence of evidence on which to base it. Where, in an action for breach of warranty in the sale of a horse, the sole issue was whether the warranty was made, and there was no claim that the seller did not know the condition of the horse or that he made representations in regard to its condition which he did not know to be untrue, an instruction that it was not neces-examination of appellant, appellee's attorney asked him to state whether or not, since he had bought the horse, he had bought an automobile. Appellant replied that he had. Appellee's attorney then asked him the following question: "Since you have bought the antomobile, you do not have as much use for the horse as you had when you bought the horse?" Appellant answered: "Well, I do not know whether or not I have as much use for him as I did, but I used two horses most of the time before I got the automobile; I kept them pretty busy." This and other testimony along the same lines was objected to. Appellant was also asked if a man by the name of Wright did not call at his office and offer to buy the horse. Appellant replied that Appeal from Circuit Court, Lawrence Wright did not make him any offer, but that County. he (appellant) made Wright an offer and the latter refused to take him up. Other questions along the same line were asked. This testimony was also objected to. "To be officially reported." Action by A. H. Moore against E. E. Shannon. From a judgment for defendant, plaintf appeals. Reversed and remanded. It is urgently insisted that the court erred 3. DEPOSITIONS (§ 56*)-NOTICE-SUFFICIENCY. 4. APPEAL AND ERROR (§ 1056*)—Harmless ERROR-ERRONEOUS EXCLUSION OF DEPOSI TIONS. Where the successful party had the greater number of witnesses, the exclusion of a deposition taken by the adverse party containing testimony which, considered with the other testimony of the adverse party, might have caused the jury to return a verdict for the adverse party, was prejudicial. (Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 4187-4193; Dec. Dig. 8 1056.*] 5. APPEAL AND ERROR (§ 179*)-EXCLUSION OF DEPOSITIONS-REVIEW. Where the court deemed the notice to take a deposition insufficient when passing on exceptions to the notice before trial, it was not necessary to offer the deposition in evidence and require the court a second time to pass on the question to have the error reviewable on appeal. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 1137-1140; Dec. Dig. 179.*] [Ed. Note.-For other cases, see Trial, Cent. Dig. $$ 505, 596-612; Dec. Dig. § 252.*] 7. SALES (8 437*)-ACTION FOR BREACH OF WARRANTY-ISSUES, PROOF, AND VARIANCE. A petition in an action for breach of warranty in the sale of a horse, which alleges that the seller warranted the horse and that its right eye was sound, is supported by evidence that the seller guaranteed that the eye of the horse would get well and sound. . [Ed. Note. For other cases, see Sales, Dec. Dig. 437.*] |