
    Isaac J. Fullerton v. William Sturges.
    F. and others, sureties of 0., signed an instrument payable to S. or order, in blank as to the date, amount, and time of payment, but with a private agreement that it should not be filled for more than $1,000 or $1,500, and delivered it to C., the principal, to procure the discount. While in the hands of C., seals were affixed to the signatures by some one, without the knowledge or consent of the sureties; and, subsequently, the instrument was presented by C. to S., the payee, and filled up and discounted for the sum of $10,000. Held:
    
    1. That one who intrusts his name in blank to another, to procure a discount, is liable to the full extent to which such other may see fit to bind him, when the paper is taken in good faith, without notice, actual or constructive, that', the authority given has been exceeded.
    2. Such blank signature has the effect of a general letter of credit; and the rule is founded as well upon that principle of general jurisprudence which casts the loss, when one of two innocent persons must suffer, upon him who has put it in the power of another to do the injury, as also upon the rule *of the law of agency which makes the principal liable for the acts of his agent, in violation of his private instructions, when he has held the agent out as possessing more enlarged authority,
    3. The material alteration of a written instrument, made by a stranger, will not avoid it.
    4. To have that effect, the alteration must be made by, or with the privity of, one claiming a benefit under the instrument, and (to give application to the doctrine upon that subject) after the instrument has been delivered and taken effect.
    6. In such case, a remedy is denied, and the instrument is destroyed, as a punishment for the fraud of the party claiming a benefit under it.
    6. In this case, C. was the authorized agent of F., to fill up the paper and procure the discount, having no title to, or interest in, the paper; and although not authorized to affix seals to the signatures, and, therefore, incompetent to bind F. thereby, his attempt to do so can not affect S., the payee.
    
      1. Having fully executed and not exceeded his authority, by procuring the discount of the paper as a promissory note, his unauthorized act in affixing a seal may be treated as a nullity, and the instrument enforced in the manner and to the extent contemplated by the surety, as such promissory note.
    Error. Reserved in the district court of Perry county.
    The judgment in the court of common picas was for Sturges, a motion for a new trial made by defendants being overruled. The case was taken on error to the district court. The facts were submitted to the court in an agreed statement, as follows:
    
      “ Upon the trial of this cause, the parties, by consent, submitted the issue herein to the court in lieu of a jury, and the plaintiff then gave in evidence a paper, of which the following is a copy:
    $10,000. Thornville, Ohio, November 16, 1852.
    Six months after date, for value received, we or either of us promise to pay William Sturges or order, at his banking-house in .Zanesville, Ohio, ten thousand dollars. And vre hereby authorize and empower any attorney, of any court of record in the United States of America, at any time after the above sum becomes due, to appear in any court within the said United States of America, for us and in our names, and confess judgment in favor of the legal holder of this note, for the said amount, interest and costs, and to release all ^errors and the right of appeal, and waiving stay of execution on said judgment. Witness our hands and seals, this 16th day of November, 1852.
    (Signed,)
    James Culbertson, James Culbertson, I. W. Burkit, Jacob Burkit, David Zortman, Jeremiah Woodring, Solomon Zortman, Abraham S. Hoover, Wm. J. Fullerton, Elijah Foster, J. H. Mitchell, Jacob Goodin, seal. 'seal.' SEAL.' SEAL.’ SEAL." SEAL.' SEAL.’ SEAL.’ 'seal.' 'seal.' "seal.' SEAL.'
    .And rests his case. The defendant then proved that, when he -.signed the paper, there was a blank following the word ‘Nov.,’ in in the first line, and a second blank preceding the word ‘ months,’ in the second line, and a third blank preceding the word ‘thousand,’ in the fifth line, and a fourth blank, occupying parts of the tenth and eleventh lines, between the word ‘ for ’ and the word ‘ and,’ and a- fifth blank in the seventeenth line, between the word ‘ this ’ and the word ‘ day.’
    “ Defendant further proved, that the plaintiff was a banker in Zanesville, and that the said blanks were all filled by the plaintiff on said November 16, 1852, when he discounted the paper; so that, after filling said blanks, the paper read as above at largo set forth.
    “ The defendant then further proved, that when he signed the paper there was no seal on the same, and there were no seals on the ■same at the time when all the signatures of all the had been affixed, but that such seals, including the seal annexed to this defendant’s name, were added (the evidence did not show by whom) after the parties had signed the same, and without this defendant’s knowledge, authority, or consent, and before it came to the possession of the plaintiff.
    “ The defendant further proved, that he signed his name to said *paper in blank, and unsealed as aforesaid, at the request, and for the accommodation, of James Culbertson, whose name is first-signed to it; the said Culbertson being the principal, and all of the other parties his sureties thereon. Defendant further proved, that when the plaintiff received the instrument of writing from said James Culbertson, the plaintiff advanced to him a part of said ten thousand dollars in money, the residue of the consideration being something equal to money. The defendant further proved, that when he put his name to the paper, no one was present but the said James Culbertson, and that he told Culbertson that he would, not agree to become surety for more than a thousand or fifteen hundred dollars.
    
      “ No other evidence was given in the case. Upon this evidence being heard, the plaintiff’s counsel asked permission to give the-paper in evidence, under the second and third counts of his declaration, which was accordingly done.
    “ It is agreed, that the above statement contains all the evidence introduced upon each of the trials, at the March term, 1854, of the Perry common pleas, wherein William Sturges was plaintiff, and each of the above-named singers, except the two Culbertsons, were ■ defendants. March 16, 1854.”
    
      J. D. Maginnis, and Hunter & Finch, for plaintiff in error.
    
      Mr. Hunter, in argument, cited Master v. Miller, 4 Term, 320; Bank U. S. v. Russell and Boone, 3 Yates, 391; Woodworth v. Bank of America, 19 Johns. 391; Nargo and Green v. Fuller and Patterson, 24 Wend. 374; 1 Smith’s Lead. Cas., top page, 572, 598, 599 ; United States v. Linn, 1 Howard, 104; 8 Pick. 325 — as establishing that any material alteration, however insignificant, made by an intermediate party, as an indorser, etc., or while the instrument is in his hands, unexplained, renders it utterly void as between the1 holder and the maker, or any prior party.
    
      
      *C. B. Goddard, for defendant in error,
    cited 2 Parsons on ■Contracts, pt. 2, chap. 3, p. 223, sec. 8, “ of alteration; Truett v. Wainwright, 4 Gilman, 411; Waring v. Smith, 2 Barb. Ch. 119; Thornton v. Appleton, 29 Maine, 298; Arnold v. Jones, 2 Rhode Island, 345; Lambert and Pollard v. Carrol, Wright, 108; Selser v. Brock, 3 Ohio St. 302; Huntington & McIntyre v. Finch, Ib. 445.
   Ranney, J.

This was an action of debt. The declaration contained three counts. The first set out a single bill for ten thousand •dollars, dated November 16,1852, payable to the plaintiff below or order, at his banking-house in Zanesville, six months after the date thereof. The second counted upon the same instrument as a promissory note; and the third was the indebitatus count, for money had .and received, and money lent.

To the first of these counts, the defended pleaded non est factum, verified by affidavit; and to the two last, nil debet. The case was .submitted to the court, and from an agreed statement of the evidence, appended to the bill of exceptions, it appears that the instrument was signed by the defendant below and eleven others; one of whom, James Culbertson, was, as between him and the other signers, principal, and the others his sureties, although not so expressed on its face. That at the time the paper was signed by all the parties thereto, and, by the sureties, placed in the hands of Culbertson, it was in blank as to the date, amount, and time of payment, and had no seals affixed to the signatures thereon. That, after that time, and before it came to the possession of Sturges, seals were affixed to each of the signatures; but by whom, was not shown by the evidence. The defendant, Fullerton, further proved, that the seal affixed to his signature was done without his knowledge, authority, or consent; and that at the time he signed the paper, at the request •and for the accommodation of Culbertson, he informed the latter, that he would not agree to become his surety for more than a thousand or fifteen ^hundred dollars. In this condition the paper was presented to Sturges, by Culbertson, on the day it bears date; and the blanks being filled by the former, the same was discounted for the sum of ten thousand dollars.

As nothing in the case tended to show any notice to Sturges, that Culbertson, in directing the instrument to be filled up for that sum, was exceeding the authority given him by Fullerton, it is very clear that the violation of any private instructions, which the latter may Rave given to the former, as to the amount for which he was willing to become liable, could not have been used to prevent a recovery for the sum named in the paper.

No rule is better settled, or founded upon stronger reasons, than that which affirms the liability of one intrusting his name in blank to another, to the full extent to which such other may see fit to bind him, when the paper is taken in good faith and without notice, actual or implied, that the authority given has been exceeded, or the confidence reposed has been abused. It has the effect of a general letter of credit; and the rule is founded, not only upon that principle of general jurisprudence which casts the loss, when one of two equally innocent persons-must suffer, upon him who has put it in the power of another to do the injury, but also upon that rule of the law of agency, which makes the principal liable for the acts of his agent, notwithstanding his private instructions have been disregarded, when he has held the agent out as possessing a more enlarged authority. Those rules are indispensably necessary to prevent fraud and surprise upon third persons, and in their application to the usual course of dealing in commercial transactions, are to be considered as of vital importance. They are not questioned by the-learned counsel for the plaintiff in error; nor does he contend that there was anything in the case that should have prevented a recovery, from the fact that the instrument was filled up for a larger amount than had been agreed upon between Culbertson and Fullerton. But he insists that Culbertson must bo presumed to have added the seals, *after the paper was placed in his hands by the sureties, and that this effected a material alteration of the instrument ; and, being done without the knowledge or consent of Fullerton, avoids it in the hands of Sturges, notwithstanding he had no notice of the fact. . That the alteration was made without the knowledge or express consent of Fullerton, must be admitted; that it was made by Culbertson, after the paper came into his hands, and before its presentation to Sturges, is highly probable.

It is also very true, that affixing a seal to the name of a party to a written instrument, when its legal effect would be in some way thereby changed, unquestionably is, and has often been held to be, a material alteration. But it is wholly unnecessary to consider whether such an addition made to an instrument of the character of the one declared upon in this case, should, in this state, where it has the same effect, is subject to the same defenses, and barred in the same time, whether sealed or not, be deemed material. There has been no recovery had upon this paper as a sealed instrument. No evidence was given under that count of the declaration ; but the evidence was received and the recovery had upon the count describing it as a promissory note. That the plaintiff in error, by the paper he signed, fully authorized Culbertson to obtain a discount upon a promissory note, for the amount and in the manner he did, is unquestionable; and that this instrument, when deprived of the seals, is, in legal effect, a promissory note, is not doubted. The true question therefore is, has Sturges, under the circumstances, a right to treat this paper as and -for such an instrument as Fullerton authorized to be made; or is it avoided by the unauthorized addition of a seal, made by Culbertson or some other person, without the knowledge of Sturges and before it came to his hands ?

It certain ly binds Fullerton for no more than he authorized; it contains no stipulations, that Sturges had' not a right to suppose Culbertson authorized to make for Fullerton. Sturges committed *no fraud, and knew of no fraud. The instrument remains precisely as it came to his hands, without addition or diminution. This fact shows the entire inapplicability of most of the cases relating-to the alteration of written instruments. To give application to many of the doctrines they enforce, the alteration must have been made after the delivery of the instrument, and after it has taken effect, and by or with the privity of one claiming a benefit mnder it. The rule of the English courts, that a material alteration, made by a stranger, avoids the instrument, has been universally repudiated in this country. To have that effect, the alteration must be material and intentional, not by accident or mistake ; and by a party entitled to a benefit under the instrument, and not by a stranger, or one adversely interested. 1 Gall. 69 ; 14 Serg. & Rawle, 405; 8 Cow. 71; 1 Watts, 237. Fraud in the interested party lies at the foundation of the rule ; and as a punishment for his fraud, the law deprives him and all claiming under him of all remedy upon it.

The question in this case depends upon entirely different principles. Here is no fraud to be punished, for the party entitled to the benefit of the paper, and the only one ever having a legal interest in it, has neither done or intended any wrong. At the time the seals were affixed, there was no agreement to be altered, for none had been made; none perfect in either form or substance had even been written — much less delivered or taken effect.

Assuming Culbertson to have affixed the'seals, while the skeleton remained in his hands, it was done by one having no rights under the instrument, and, neither at that time or ever afterward, any remedy or right of action upon it. In respect to the custody, filling np, and ultimate delivery of the instrument to the payee, he was acting, not only for himself, but as the authorized agent of Fullerton ; clothed with apparent authority to bind Fullerton for any sum that he might see fit to insert, and to make the instrument perfect, in every respect, for the purposes’ intended, *where Fullerton had left it imperfect. He had no right to change what Fullerton had done for himself; but he had perfect anthority to supply what Fullerton had omitted. If he did - more than the authority given him by Fullerton seemed to authorize, he failed to bind him for such excess, even in favor of one who might in good faith take the paper.

But if he did it fraudulently, it is still but the fraud of Fullerton’s agent, acting outside of his authority, and, therefore, in the legal sense, a stranger to both him and Sturges. He is a stranger to Fullerton, because quoad the excess, he has acted without authority ; and he is a stranger to Sturges because, as between him and Fullerton, he has derived no title to the instrument through or from Culbertson. But it would indeed be singular that Sturges should be punished for the fraudulent or unauthorized act of Culbertson, for whom he was in nowise responsible, and of which he had no knowledge; rather than Fullerton, whose agent he was, and who had incautiously or negligently placed in his hands the means that enabled him to obtain the money. There is not a word in the case that points to any bad faith on the part of Sturges; and therefore nothing that could justify visiting him with the loss of his debt, as a penalty for his conduct. If he must lose, it is because Culbertson has exceeded the authority given by Fullerton, and, for that reason, failed to bind him. It is a simple question of agency, and a settled rule of the law of agency furnishes the solution. What Culbertson has done, is exactly what Sturges had a right to suppose him authorized to do, except the addition of the seal. But without the seal the instrument is perfect, and a frill execution of the power. When that is the case, and the party dealing with the agent has acted in his acts are so far as are authorized, and void only for tbe excess; provided tbe boundaries between tbe excess and the rightful execution are clearly distinguishable. The rule is thus stated'by Lord Coke: “Begularly, it is true that, where a man doth less than the commandment or authority cornmitted unto him, then the commandment *or authority being not pursued, the act is void. And where a man doeth that which he is authorized to do and more, there it is good for that which is warranted, and void for the rest.” Co. Litt. 258a.

The same principle is stated by Mr. Justice Story, and supported with a large number of authorities. Story on Agency, sec. 4G6, et ■seq. He says: “ "Where 'there is a complete execution of the authority, and something ex abundanti is added which is improper, ¡there the execution is good, and the excess only is void. But whore ithere is not a complete execution of a power, or where the boundaries between the excess and the rightful execution are not distinguishable, then the whole will, be void.” It is true' that most of the cases cited involved attempts by the agent to bind the principal ■to the performance of something more or less than was authorized; firat surely the application of the principle can not be more doubtful ■where the excess relates to a mere useless formality in the execution ¡of the instrument that evidences the contract, binding the principal ;to precisely what he had authorized the agent to do.

But the precise point has been adjudicated. It is impossible to ■distinguish the case from that of the United States v. Linn et al., 1 How. 104, decided by the Supreme Court of the United States ‘The action was brought upon the undertaking of Linn, as receiver ■of public moneys at Yandalia, Illinois. Duncan, one of his sureties, pleaded that, after he had signed the instrument and delivered it to Linn, to be trasmitted to the plaintiffs, it was, without his con¡sent, direction, or authority, materially altered by affixing a seal to ‘his signature. The court sustained a demurrer to this plea, because iit did not show that the seal was added with the knowledge, consent, or authority of the plaintiffs. The court say: “ The plea not alleging by whom the seals were affixed, it is open to two intondments. Either that this was made by the plaintiffs, which would make the instrument void, or that it was done by a stranger, which would not invalidate *it.” They then proceed to apply the .rule that requires the pleading to be construed most strongly against the party alleging it; and arrive at the conclusion, that if the plea ihad concluded with a verification, and the plaintiffs had replied that the affixing the seal was done without their knowledge, eonseht, or authority, and this state of the case had been sustained by the proof, it would not have avoided the instrument.

The plea in that case, contained precisely what the proof shows in this; what was reached by intendment there, is positively admitted here, namely, that the alteration was made without the knowledge, consent, or participation of the plaintiff; without which, we have the authority of that court for saying, the instrument is not avoided. The doctrine was carried still further, and, perhaps, to an unwarrantable length, in Truett v. Wainright, 4 Gil. 411; where the addition of a seal by an agent, to the signature of the party to a warrant of attorney, with the knowledge and at the request of the attorney of tho adverse party, was held not to vitiate the instrument. The court place the decision upon the ground that the instrument was sufficient without the seal, and could not be avoided by the unnecessary addition of it, without authority on the part of the agent.

The judgment must be affirmed.  