Opinion
November Term, 1902.
In each case judgment reversed, new trial ordered, without costs to either party.
When the plaintiff's testimony was closed it appeared, considering the pleadings and proofs together, that as to Joseph S. Lesser, he having admitted the making of the note in the form in which it was sued upon and as produced upon the trial, the plaintiff was entitled to judgment as against him. With respect to Morris Lesser, we have the statement of Straat to the effect that when purchased by the plaintiff the condition of the note was the same as it was when produced upon the trial. There was, however, the testimony of Joseph S. Lesser that the words "with interest" were not in the note when it was delivered to Hirsch, and that of Hirsch to the effect that those words were written in the note by himself in Mr. Sugerman's office, who was the one, according to his testimony, that told him to insert them in the note. Who Sugerman was does not appear from any testimony given upon the trial nor from the record, although we have not overlooked the statement in the defendant's brief — which, however, is not proof of the fact and cannot be considered — that Sugerman was the president of the plaintiff association. Upon this condition of the record, therefore, there was as to Morris Lesser a question for the jury as to whether or not the note was received in due course. If it was, then, under the Negotiable Instruments Law, the plaintiff was entitled to recover according to the original tenor of the note. With respect to Joseph S. Lesser, although he admitted the note and claimed that there was a diversion, this was a matter of defense which he was required to establish, together with the fact that the plaintiff had notice of such diversion, and, instead of the complaint being dismissed as to him, he should have been required to enter upon the affirmative defense pleaded in his answer. The fact clearly appears, however, and is not disputed, that the error which crept in upon the trial was in not drawing the court's attention to the provision of the Negotiable Instruments Law which changed the old rule as to the voiding of a note in case it is altered. The provision referred to is section 205, which provides that "where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided except as against a party who has himself made, authorized or assented to the alteration and subsequent indorsers. But when an instrument has been materially altered and is in the hands of a holder in due course, not a party to the alteration, he may enforce payment thereof according to its original tenor." The case, therefore, having been tried upon a wrong theory of law, which accounts for the disposition made by the learned trial judge, we think that there should be a new trial, without costs. Our conclusion is that the judgments appealed from should be reversed and new trials ordered, without costs to either party. Van Brunt, P.J., Patterson, McLaughlin and Laughlin, JJ., concurred.