
    Sturges & Hale v. E. G. Williams.
    When a note, payable generally, is made and indorsed in blank for the accommodation of the maker, and at the time of its discount is altered without the knowledge or consent of the indorser, by the .interlineation of a particular place of payment, such alteration is material and discharges the indorser.
    In error to the district court of Cuyahoga county.
    The record in this case shows the following state of facts:
    One Edward Bawson, presented, for discount, to the plaintiffs (who are bankers, doing business in the city of Cleveland), a note of the following tenor:
    “ $500. Cleveland, March 7,1853.
    “ Two months after this date, I promise to pay to E. G. Williams. *Esq., or order, five hundred dollars, value received.
    (Signed,) “ Edward Bawson.
    Indorsed: “ E. G. Wiliams.”
    
      This note was thus made and indorsed solely for the purpose of raising money for the use of Rawson.
    Pending the negotiation for the discount of this note at the office of Sturges & Hale, Rawson, in their presence, and with their knowledge, but in the absence of Williams, the indorser, and without his knowledge or consent, interlined in the body of the note, between the words “ order ” and “ five,” the clause “ payable at the office of Sturges & Hale,” and the note was thereupon discounted by the plaintiffs.
    All the parties resided in the city of Cleveland, and when the note matured it was presented at the office of Sturges & Hale for payment, protested for non-payment, and due notice thereof was given to Williams, the defendant.
    The plaintiffs having brought their action against Williams, the indorser, the court of common pleas, on the trial of the cause, charged the jury that the insertion of the words, “ payable at the office of Sturges & Hale,” upon the face of the note, by Rawson, the maker, was a material alteration of the contract, and if made without the knowledge or consent of Williams, operated to discharge him from liability.
    The verdict was for the defendant, and judgment accordingly. Upon petition in error, this judgment was affirmed by the district court, and the plaintiffs now ask that this judgment of affirmance may be reversed.
    
      B. P. Spalding, for plaintiffs, submitted the following points and authorities:
    1. The undertaking of defendant was not affected at all by the interlineation made in the note by Edward Rawson, the “ promissory debtor.” Sanderson et al. v. Judge, 2 H. *Bla. 510; Whitwell et al. v. Johnson, 17 Mass. 449; Huntington & McIntyre v. Finch & Co., 3 Ohio St. 445; 3 Esp. 57; 17 Johns. 248; 12 Mass. 171; 18 Johns. 315; 19 Ib. 391; 3 Met. 103; 2 Parsons on Contr. 226; Story on Prom. Notes, see. 236; 10 Conn. 192; Doe ex dem. Lewis et al v. Bingham, 4 Barn. & Ald. 672.
    2. The place of payment was interlined by the maker of the note himself, and before the instrument had become operative by the advancement of a dollar, as the consideration; in fact it was the inducement to the advancement of the money by plaintiffs. The defendant had previously indorsed the paper to give it character and currency, and had placed it in the hands of the makoi to be used according to his exigencies, in raising money.
    It was not known where the money would be raised, and it must have been a matter of indifference to the indorser where his friend, the maker of the note, should undertake to pay the amount when it became due. At all events, there was no express restriction imposed by the defendant as to the place of'payment, and he had oermitted the maker to take the note, bearing his (Williams’) indorsement, in blank, into the market, to be discounted for his own convenience.
    I claim that, under the circumstances, Edward Rawson, in negotiating with Sturges & Hale for an advancement of money upon the strength of the security which he offered, had a perfect right to stipulate as to the place where he would pay the note at its maturity. And if he could make a binding agreement in this respect, he could insert it in the note; for then the rights of the indorser could by no possibility be affected. See Wallace v. McConnell, 13 Pet. 150.
    3. The note was not made void by the alteration, even though it be considered a material alteration, for it was made by the party who alone could be affected by it, and is surely a valid note against him.' The defendant can only claim that “ presefatment and demand ” were not made according to the law of the contract.
    The facts found refute this claim.
    4. The alteration does not impair the validity of the note, in any respect, because it is not tinctured with fraud, and is not a material alteration. 1 Greenl. Ev., sec. 566; Huntington & McIntyre v. Finch & Co., 3 Ohio St. 445; 2 Parsons on Contr. 226; Martindale v. Follett, 1 New Hamp. 96; Bowers v. Jewell, 2 New Hamp. 545; 6 Mass. 521; Arnold v. Jones, 2 Rhode Island, 345.
    The very learned opinion of Chancellor Rent, pronounced in the court for the correction of errors, in New York, in Woodworth v. Bank of America, 19 Johns. 391, is commended to the attention of this court, as a lucid exposition of the whole law of the case.
    
      BE. Griswold, also for plaintiffs.
    
      Banney, Backus & Noble, for defendant, argued :
    Although the position of the defendant was that of an accommodation indorser, yet as he never owned the paper, and indorsed it before it was used, his agreement amounted to a conditional contract of suretyship, and entitled him to the benefit of the rules established for the protection of sureties (Clason v. Morris, 10 Johns. 538; Greenough v. Smead, 3 Ohio St. 422), one of which rules is, that a surety is only to be hold by the strict terms of the written obligation into which he has entered, and that it can not be changed in the least, without losing all remedies against him.
    By the contract into which the defendant entered he undertook to pay the amount of the note, upon condition, that the holder, when it matured, presented it to the maker and payment was refused, and he was immediately notified of the fact. These conditions, as was said by this court in Townsend v. The Lorain Bank of Elyria, 2 Ohio St. 360, “ are as clearly a part of this contract as though ^written'over its own signature.” Upon this contract, as he made it, he has the right to stand ; and before the plaintiffs show themselves entitled to recover, they must show themselves the holders of this contract, and that they have strictly complied with the conditions upon which he agreed to become liable. This they utterly failed to do. They never took the note upon which he agreed to become liable, but another and different one, cooked up between them and Rawson, the maker; and it is not pretended that they demanded payment of Rawson when the note which they did take.had matured. An indorser upon the note which they did take would have bound himself to pay the amount of the note upon condition that the maker had not funds at the office of Sturges & Hale to take it up when it matured, and he was duly notified of that fact. Unless therefore the contract to which the defendant did not assent, can be substituted for the one to which he did assent, he can not be made liable.
    But it is insisted that the alteration is in nowise material. Suppose the position were established, what is its legal significance? If any principle can be said to be established, it is that a surety can only be held by the strict terms of the contract into which he has entered, and that he is discharged if they are changed, whether the alteration is injurious to his interests or not. Ludlow v. Simond, 2 Caines Cas. —; Woodworth v. Bank of America, 19 Johns. 422. To every claim made upon him, upon such altered agreement, he may interpose the legal maxim, “ non hcec in fcederá veni.”
    
    But the position is not established, and can not be. While it is true that an alteration is immaterial which does not in any way change the legal effect of the contract, the converse of the proposition is equally true, that every alteration which, to any extent, varies the true terms of the original agreement, is, in the eye of the law, material. The effect of such an alteration can not be avoided by satisfying the court that the party might, consistently wi€h his ^interest, as well have bound himself to the substituted stipulation ; and for the plain reason that courts are only authorized to enforce the agreements which parties make, and can not make contracts for them.
    The substituted agreement entirely dispensed with one of the conditions upon the performance of which the defendant agreed to become responsible, to wit, the personal demand upon Rawson; and substituted in its place an obligation to pay the note, if Rawson, without any such demand, failed to have funds at the office of Sturges & Hale to take up the note. That such changes can be made, or such liberties taken, by the creditors and principal debtor, with the contract of an indorser occupying the position of a surety, behind his back and without his knowledge or consent, we think wholly unwarranted by any sound principle of law, and wo hazard nothing in saying, is wholly unsupported by any judicial decision, at this time, anywhere recognized as authority.
    But the materiality of such an alteration has been directly adjudicated. In Cowie v. Halsell, 6 Eng. Com. Law, 449, the Court of King’s Bench held, that the addition by the holder of a place of payment to the acceptance of a bill, made it void. This case is, in principle, exactly in point, and establishes the materiality of such an addition, and that it avoids the paper as against any party not assenting to the alteration. In that case the acceptor was discharged; but an indorser is no less a party to a bill or note; and if it is perfect when it leaves his hands, no material change can be made without effecting his discharge.
   Scott, J.

’ The alteration by which the defendant in this case claims to have been discharged, was made by interlining in the body of the note the words, “ payable at the office of Sturges & Hale.” Questions have frequently arisen upon the effect of a memorandum, made at the bottom or in the margin of a note, designating a place of ^payment, as to the point whether such memorandum forms a part of the contract, so as to constitute an alteration therein. But no such question arises here; for the alteration, whether material or not, was incorporated into the note, and made to constitute part of its terms.

The principal, if not the only questions which the case presents, are: Was the alteration a material one as to the indorser? And if so, was it unauthorized by him? If either of these questions can be properly answered in the negative, the defendant was not discharged by the alteration; but if both questions must be answered affirmatively, the alteration discharges him, upon clear and well-settled principles.

As to the first point then, it would seem clear, that if, by giving effect to the alteration, the contract of the indorser is substantially changed, then the alteration is material as to him. It is not necessary to the materiality of the alteration, that it be such as must necessarily prejudice the defendant, nor that the proof show him to have been in fact damnified by the change. Eor, occupying the position of a surety, he may insist on the very terms of his contract. And if these terms are substantially varied, without his consent, he may well say that the new contract is one into which he never entered.

Now, what was the contract of the indorser, as it stood when the note in question loft his hands? The note was- payable generally, and the indorsement was in blank. This indorsement, taken in connection with the contract of the maker, as shown by the face of the note, constituted, by force of the commercial law, a definite contract. Its terms were, substantially, that he, the indorser, would pay the amount of the note to the holder, if, at its maturity, upon demand made of the maker either personally, or at his domicil, or usual place of business, payment should be refused, and due notice of such dishonor should be given to the indorser.

*This contract could not have been made more definite and certain by reducing its terms to writing. Is it, then, substantially varied by the subsequent alteration? Had the indorser consented to making the note payable at the office of Sturges & Hale, or had such been its terms at the time of indorsement, his contract, by the same commercial law, would have been that he would pay to the holder the amount of the note, if, at maturity, upon demand made at the specified place, payment should be refused, and due notice of dishonor given. Indeed, the note having been negotiated to Sturges & Hale, the liability of the indorser would become fixed, if at its maturity, there were no funds of the maker in the hands of the holders applicable to its payment, and proper notice of dishonor were given. The effect of this alteration, then, is to dispense with the demand upon the maker personally, or at his residence or place of business, and thus to waive every thing calculated to call the attention of the maker to the subject, when the note matures.

Now, so far from its being true that this 'does not change the contract of the indorsor, its principle effect would seem to be upon that very contract. The demand of payment at maturity is necessary, only for the purpose of charging the indorser. The right of action against the maker is perfect without it.

But it is said that as the drawee of a bill of exchange, payable generally, may by special acceptance, payable at a particular place, make a demand at that place sufficient to bind the drawer, so, on the same principle, the accommodation indorser of a promissory note, payable generally, may be bound by a place of payment specially designated.by the maker, before negotiation. The analogy between the position of the parties to a bill of exchange, and the •corresponding parties to a promissory note, is not complete until ithe acceptance of the bill. The drawing of the bill must precede its acceptance; whilst the contract of indorsement *is jdosterior to the making of the note, and is made with reference to its 'terms already expressed on its face.

The right to make such alteration in, or addition to, the terms ■ of a note after indorsement, if conceded to the maker, might certfainly be so exercised as greatly to prejudice the indorser. If made payable at a distant point, without his knowledge, he might •ffind himself made liable by notice of dishonor, received days or •weeks after he had every reason to suppose the risk terminated. ,He might be willing to become surety for the prompt payment of ¡a note by the maker, provided his attention would be called to the ■.subject by a personal demand at maturity, but be unwilling to risk ¡its dishonor without such demand. At all events, he had a right to make his own contract, and insist on its terms. It was not com■petent for other interested parties, by á subsequent alteration of ■this written evidence, to vary his obligations without his consent, .although it may not appear that the change was in fact prejudicial •to him.

The decision of the Supreme Court of New York, in the case of Bank of America v. Woodworth, 18 Johns. 315, and the opinion of 'Chancellor Kent, in the same case, in the court of errors, 19 Johns. 391, seem to be strongly relied on by counsel for tbe plaintiffs. That was the case of a memorandum, made upon the margin of a note, designating the place of payment, which, it was held by the Supreme Court (Spencer, C. 3\), did not form any part of the contract, and therefore did not discharge the accommodation indorser, though made without his knowledge. But in the coui't of errors, it was held otherwise, as well upon principle as upon a review of the authorities, notwithstanding the able opinion of Chancellor Kent to the contrary; and this decision, made in 1821, has ever since remained the law of that state. We think it rests upon principles which can not be successfully controverted.

As to the unauthorized character of the alteration in this case, it may be sufficient to say, that it is admitted to have been made without the knowledge or -express consent *of the defendant, and as the note, when indorsed, was without blanks, full and perfect in all its parts, there is nothing apparent from which such consent can be inferred or presumed. The conditions upon which his liability depended, were material and important elements of his contract, and an unauthorized alteration, by which those conditions would be substantially modified, must operate to discharge him. And the fact that the plaintiffs would not, as their counsel claim, have consented to discount the note, without the alteration, only demonstrates more clearly the impropriety of subjecting the rights and obligations of a party, under his contract, to such modification as the convenience or interest of others may dictate.

Judgment of the district court affirmed.

Brinkerhoff, C. J., and Sutliff, Peck, and G-holson, JJ., concurred.  