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my oil to forty cents. I have gotten along all right so far, but these notes (owing to the continued tightness in money) are bothering ine, and I should like very much to get them renewed; and with this in view I inclose you two new notes, which, if you feel that you can, I should like very much to have you indorse, and I will send you the others on the dates they are due. Please return the inclosed notes, indorsed or not, in the inclosed envelope. I don't think you would be running great risk, as I own twenty wells, against which there is only $1,700. I am sorry to bother you, and in any event will try not to do so again.” -To which Mr. Taylor replied, under date of January 7, 1890:

"B. F. Smith-Dear Sir: I have your letter of January 3rd. I was not aware that you had my notes for $2,000. Had I been, I should have de manded them long ago. I supposed they had been used and destroyed, or destroyed at least, long before now. Your using them at so late a date without notice to me is clearly a sufficient reason for my declining to go any further in this matter. I return the notes inclosed in your letter."

The following correspondence followed between Smith, the bank, and the defendant:

"Bradford, Pa., January 9th, 1891. H. L. Taylor, Esq.-Dear Sir: Yours of the 7th inst. at hand. There was no limit placed upon the time in which I was to use the notes referred to, and I had no reason to think that your confidence in my honesty had been lessened in any way. I expect to be able, after a little, to clear up my matters, so that you will be entirely released. However, I will be unable to attend to it at their maturity, January 12th and 19th, and would ask you to write the Bradford National Bank, waiving protest on same. I will have the matter cleared up just as soon as possible. I am egotiating the sale of a lease I am interested in in Forest county, which, if successful, will enable me to do so very soon. "Very truly,

B. F. Smith."

"Buffalo, N. Y., January 10th, 1891. "B. F. Smith, Esq.-Sir: I have your letter of yesterday, and in reply will say that I had confidence in your honesty, but not in your operations on the market. I loaned you my name at the time wholly for your accommodation, to be used, you said, in the purchase of some wells,-not for one or two years afterwards, but at that time, or very soon. The keeping of these notes, and using them so long afterwards to speculate in oil, without consent or notice, is a fraud on me to which I will not consent. If these notes are not paid the day they are due, I cannot answer for the consequences to you. Not having indorsed these notes for use at the time they were used, I shall not waive notice. I do not think I am holden for payment.

"H. L. Taylor."

“Bradford, Pa., March 23, 1891. "H. L. Taylor, Esq.-Dear Sir: Please let me hear from you in regard to two notes of B. F. Smith, indorsed by you, which are past due, and remain unpaid. One was protested January 12, and the other January 19. [Signed)

"S. P. Kennedy, Cashier."

"Buffalo, N. Y., March 24, 1891. "S. P. Kennedy, Cashier--Dear Sir: I have your favor of date yesterday. I supposed these notes had been paid or extended by Smith. He wrote me Jan. 3, saying he would arrange for them soon, and that he had twenty wells, against which there was only $1,700. On Jan. 9 he wrote me again, saying he would have the matter cleared up; that he was negotiating the sale of a lease in which he was interested in Forest county. I wish you would get him to secure these notes on his wells or something else, as it is in your line of business, and you are there to attend to it. I will send you the money when you want I should pay it, aud wish you would take the

matter in hand, and kindly look after the ultimate collection of the debt for me. I have no doubt Smith will make all the papers necessary, and pay all the costs necessary, if, as he says, he has the property he tells me about. (Signed]

"H. L. Taylor."

"Bradford, Pa., Sept. 10, 1891. "H. L. Taylor, Esq., Buffalo, N. Y.-Dear Sir: I expected to have been able to take up those two notes for $1,000 each at the Bradford National Bank, but the sale of property I was negotiating fell through, owing to the decline in oil, and I had bought the royalty in my wells, and have had that to pay for, and on these low prices that was all I could do. I dislike very much to ask you to renew them, but I have no other way left on this low market. I am ready now, or at any time, to secure the payment of these notes by a mortgage on my one half-interest in fourteen wells that I bought from P. T. Kennedy two years ago for $4,600, (for half,) and on which there is $1,500 still owing, and that is all there is against it. There are three boilers, fourteen engines, and everything in first-class condition. I feel in hopes that three months will tide us through to better prices, and that I can sell some property, and pay the notes. I have always paid 100 cents on the dollar, and will pay these notes. [Signed)

"B. F. Smith."

"Bradford, Pa., Sept. 11, 1891. “H. L. Taylor, Esq.-Dear Sir: Mr. B. F. Smith has not got his matter in shape yet, and would like three months more. We told him to write Foul, and, if satisfactory to you, it would be to us, as undoubtedly you prefer to have us carry it a short time longer than to take it up yourself. If satisfactory, please indorse note, and return to us, and we will cancel the others. We believe that he had explained his matters to you to show you how he stands, and is perfectly willing to give you a mortgage at any time. We know of one piece that he bought of Mr. P. T. Kennedy for $4,600, on which he only owes $1,500, and his other statements we have always found correct. (Signed]

“S. P. Kennedy."

"Buffalo, Sept. 12, 1891. "S. P. Kennedy, Cashier-Dear Sir: I have your very kind letter of yesterday, with inclosure of note, which I have indorsed, and return in this. I have written Mr. Smith, and have asked him to make a leasehold mort. gage on the property mentioned to you and him, to you, or to me, for you to hold for payment. (Signed]

"H. L. Taylor. "P. S. Will you kindly return to me the notes given, with your stamp upon them?

"H. L. T."

The note so indorsed was the one in suit, which was made by Smith, bearing date September, 1891, for $2,000, payable to defendant's order three months after date at plaintiff bank, and sent to the plaintiff to take up the two $1,000 notes aforesaid, which were canceled, and mailed to the defendant by the plaintiff, and Smith executed and sent to the defendant the mortgage on his oil property, as agreed. On receiving the notes thus returned, the defendant discovered the alteration in the figures "1888." He shortly thereafter returned the mortgage to Smith. He retained the canceled notes for about three months, and, after taking advice of his lawyers as to his liability upon the note in suit, he offered to return the two $1,000 notes to plaintiff, and repudiated his liability as indorser of the note in suit. These are all the facts which it is deemed necessary to state.

The court, among other things, charged the jury as follows: “As I have already suggested, if Mr. Taylor's version is the true one,that this note was dated in 1858, and thereafter, in the year 1890, Mr. Smith, without the consent and concurrence of Mr. Taylor, changed the date of the year 1888 to the year 1890,-that would constitute such an alteration of that instrument as would relieve Mr. Taylor from the obligation of the promise contained in and imposed by his indorsement upon these two promissory notes." —To which charge plaintiff's counsel duly excepted; and this exception presents one of the questions for our decision.

If the legal liability of the maker of commercial paper is changed in a material respect by a fraudulent alteration of his obligation, such alteration vitiates the instrument, and the question whether it is a material alteration or not is one of law for the court. Craw. ford v. Bank, 100 N. Y. 56, 2 N. E. 881. If the defendant has brought his defense within this rule of law, he is entitled to hold his verdict. When he indorsed the note in suit, he was fully aware of the time when the two $1,000 notes had been made payable by Smith. They were not made payable with interest. There is nowhere in the record an intimation that there was any restriction upon Smith as to the time he should make the notes payable. Had Smith dated them at any time within two or three months after the indorsements were made, and fixed the time they were to that they would fall due, respectively, on the days in January, 1891, mentioned, and procured plaintiff to discount them, Taylor's liability on them as indorser would not be questioned. How was the date, then, material to the defend. ant? Except to fix the times they were to fall due, it was not material whether they bore any date. The question in which he was interested was the time of payment; and that, as we have seen, he left entirely with Smith. He undoubtedly supposed that they would be dated and used some time along during the summer of 1888; but, as we have seen, he delivered his indorsement to Smith without fixing the time that the notes should be used, and, if Smith failed to carry out an understanding in that regard, as between an innocent holder of the notes for value and the defendant, the latter must suffer. “It is a general rule that an indorsement on a blank note, without sum, or date, or time of pay. ment, will bind the indorser for any sum, payable at any time, which the person to which the indorser intrusts it chooses to in. sert." Page v. Morrell, *42 N. Y. 118; Weyerhauser v. Dun, 100 N. Y. 154, 2 N. E. 274.

The court correctly charged the jury as follows: “If you find the notes had been changed, and that Taylor, at the time he indorsed this last note, knew of it, the plaintiff is entitled to recover; or, If he did not have actual knowledge of it, if he had knowledge of such a state of facts as would put him upon inquiry, then the plaintiff is entitled to recover."

The evidence, we think, established beyond any reasonable question that the defendant, when he indorsed the note in suit, was aware of every material fact touching the filling of the blanks

by Smith. He had information as to about the time they bore date, for, as we have seen, Smith wrote him that he used them in September, 1890, and that they would fall due on the 12th and 19th of January, 1891. It is true he did not know of the change of the figures "88" to "90." It must be assumed that he was sufficiently familiar with the rules of banking to know that the bank would probably require that the notes should bear some date before purchasing them; and the only reasonable inference a business man would draw, who had loaned his indorsement as the defendant did in this case, would be that the maker would date the paper at or about the time he desired to use it; and the defendant's letter to Smith under date of January 10, 1891, in which he says: “I loaned you my name at the time wholly for your accommodation, to be used, you said, in the purchase of some wells, -not for one or two years afterwards, but at that time, or very soon. The keeping of these notes, and using them so long afterwards to speculate in oil, without consent or notice, is a fraud on me to which I will not consent,”—shows that he so understood it. He must be held to have known that Smith had either dated the notes at the time he used them, or had left the figures "1888” in the notes, and had so filled the blanks as to make them payable in January, 1891. Being thus advised, he indorsed the note in suit, and received in exchange for it, from the plaintiff bank, the two $1,000 notes, stamped "Paid," and also received from Smith the collateral mortgage mentioned. All this is entirely uncontradicted, and yet the jury found that he indorsed the last note without being aware of the situation, and without having suficient information to put him upon inquiry to ascertain the real facts. Such finding was against the undisputed evidence of the defendant himself. After being informed of every material cir. cumstance relating to the alteration of the notes, the defendant consented to indorse the note in suit, delivered it to the plaintiff, required the return of the two notes canceled, and retained them for three months, and all this after he was informed of the use of the notes by Smith two years and more after the time he made the indorsements.

The plaintiff offered to show upon the trial that the mortgage referred to was ample indemnity for the defendant's indorsement, and further offered to show that Smith's financial condition had changed for the worse during the time the defendant was holding the two $1,000 notes. This evidence was excluded, and plaintiff duly excepted. This evidence would seem to have been material as bearing upon the defendant's right to repudiate his indorsement. It tended to show a good consideration for the note in suit. While he held these notes, the right of the plaintiff to proceed against Smith to collect the same was suspended. Place v. McIlvain, 38 N. Y. 99. For the reasons stated, the order appealed from should be reversed, and the verdict set aside, and a new trial granted, with costs to abide the event.

DWIGHT, P. J., concurs.

HAIGHT, J., not voting.

(75 Hun, 419.)


(Supreme Court, General Term, Fifth Department. January 18, 1894.) ESTOPPEL-IN PAIs.

Where a loan association denied that a member made a withdrawal application on a certain day, and at the suggestion of the association the member makes another application, he is not estopped afterwards to claim the right of withdrawal under the first application. Appeal from Monroe county court.

Action by Seligman Baer against Hudson Street Permanent Sav. ings & Loan Association. From a judgment in favor of plaintiff and from an order denying a motion for a new trial made on the minutes of the court, defendant apeals. Affirmed.

Argued before DWIGHT, P. J., and LEWIS and HAIGHT, JJ.
E. C. Werner, for appellant.
H. J. Stull, for respondent.

LEWIS, J. The defendant is a domestic corporation duly organized and incorporated under the laws of the state of New York. members pay in at stated periods dues. It is provided in its articles of asscciation that any of its members not having received a loan may at any time on written application to the board of directors draw from dues paid by him all or any part thereof, the same to be paid after all prior applications for loans and withdrawals have been satisfied. The plaintiff was on the 1st day of April, 1892, a member and shareholder of the defendant, and as such held shares of stock upon which there had accumulated at that time in dues and dividends the sum of $152. There was at the time of the commencement of the action that sum to his credit on the books of the defendant in dues paid in by him, exclusive of the dividends paid thereon. He had, prior to the 1st of April, 1892, received two loans from the defendant, but they had been paid up and canceled, and he had not received any other loan, so that he was entitled to with. draw from the association the amount of money claimed in his com. plaint if he did, as claimed by him, give the proper notice to defendant on the 1st day of April, 1892. That was the principal and main question litigated upon the trial. The plaintiff testified posi. tively to making such an application on that day at the office of the defendant. He testified that his application was entered upon the books of the association, pursuant to its rules and regulations, by a Mr. Hertel, one of the trustees, and that Hertel made the proper entry upon the books, and signed the plaintiff's name thereto, at his (plaintiff's) request. Other witnesses were called by the plaintiff, who gave evidence tending to corroborate his contention. Mr. Her tel was called as a witness of the defendant, and flatly contradicted the plaintiff's testimony. Other witnesses gave testimony tending to controvert the plaintiff's contention. The books of the defend. ant were produced at the trial, and upon an inspection thereof the plaintiff's application did not appear to be entered, but it did appear that an entry was made upon the books on the day that the

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