First National Bank v. Greer

Opinion by

Williams, J.,

The defendants, for a consideration, entered into a written contract to guarantee to the plaintiff to the amount of fifteen hundred dollars, all notes of the House*216hold Mfg. Co. discounted by it. The clause in the agreement about which this dispute arises is as follows: “Provided, however,' that the said notes, obligations or evidences of indebtedness may be taken in-such form as the said First National Bank-of Swissvale, Pennsylvania, its successors or assigns may require, but shall be executed by the said Household Manufacturing Company, signed by its president and attested by its secretary and bear the corporate seal of the said corporation.”-

One of the two notes in suit, for $200, was made payable to three persons, the evidence being that they were respectively the treasurer, president and secretary of the corporation. The note was signed “The Household Manufacturing Co., by Geo. F. Sherman, President,” had the corporate seal affixed and was endorsed by the three payees. H. A. Keen added to his endorsement the abbreviation “Sec.” The other note, for $500, was made payable to “ourselves” and signed “Household Manufacturing Co., by George F. Sherman, Pres., W. H. Bridenthal”; the corporate seal was affixed and it was endorsed as follows: “Household Mfg. Co., W. H. Bridenthal, H. A. Keen, Secy.” The corporation received the proceeds of the notes and used them in its business but did not pay them at maturity.

The sole question in the case is as to whether the defendants are liable-under their agreement. They contend that they are not, because the notes were not executed in strict conformity with the terms of their guaranty, in that the signature of the president of the company was not attested by the secretary.

The evidence at the trial was that Sherman was the president, Bridenthal the treasurer, and Keen, the secretary of the Household Mfg. Co.; that Keen, the secretary, was present as such when the notes were executed by the president of the company and the. corporate seal affixed.

It may be conceded that an alteration of the contract by the principal without the consent of the surety is fatal *217to its validity as against the surety, but the alteration must be in some way material. A material alteration is defined by the Negotiable Instrument Act of May 16, 1901, P. L. 194, Sec. 125, as follows: “Any alteration which changes: The date, the sum payable either for principal or interest; the time or place of payment; the number or the relation of the parties; or which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect of the instrument in any respect, is a material alteration.”

The intent and meaning of the agreement of the defendants was that the Household Mfg. Co. should receive credit at the plaintiff bank. It seems also that they were trying to provide for the company’s notes and did not intend to include the notes of the individuals, Sherman, Bridenthal and Keen, from whom they had received the consideration for their contract to guarantee. Clearly there has been no change affecting their contractual rights and liabilities. The form of the evidence of indebtedness was to be such as the bank would require. It was the note, obligation or evidence of indebtedness of the Household Mfg. Co. that was guaranteed. These notes were signed by the company, by'its president and had the corporate seal affixed. Without more the company would be liable. This, however, was followed by proof that the company got the proceeds and that they were used in the company’s business. It was followed by the testimony of Keen, the secretary, who wrote his name on the back of each note as such officer, that he was present when the notes were executed, saw the president sign his name, saw the corporate seal affixed and signed his name to attest that fact. We conclude, therefore, that as there was no alteration which affected the liability of the guarantors in the slightest degree, the cases cited by the appellee do not apply, as they were all eases in which a material alteration had been made.

The judgment is reversed, and it is directed that judgment be entered on the verdict for the plaintiff below.