Union Oil Co. v. Mercantile Refining Co.

BURNETT, J.

The action is upon a bond given to secure the payment by the Mercantile Refining Company to the plaintiff of the consideration for oil furnished by the latter to the former. Plaintiff had judgment, from which and the order denying their motion for a new trial certain of the sureties have appealed.

The main controversy in the cause grows out of the fact that an alteration was made in the bond after it had been signed, but before it was delivered to and accepted by plaintiff. The change was made by one of the sureties—not an appellant—who added the word “severally” making the bond in form “joint and several” instead of “joint” as before the additiojn.

Assuming that the aforesaid interpolation changed the legal effect cjf the instrument, and therefore constitutes a material alteration, and that it was made without the knowledge or conseni of the appellants, then the rule is as stated by them: “It either rendered the instrument absolutely null and void if the changes were made with the knowledge, express or implied, of the plaintiff, or else left the bond, as it was originally execute’¡a, a joint obligation, if the words inserted in it were interim ,d by a stranger to the bond, or

without any fault or without; the knowledge of the plaintiff.”

In

Walsh

v.

Hunt,

120 Cal. 53, [52 Pac. 117], the supreme court <ijcelares: “The general rule undoubtedly is, as con

[770]

tended by appellant, that any material alteration in the contract avoids it, even in the hands of innocent holders, and prevents recovery upon it to any extent. But this rule has application to cases where such alteration has been made by the payee or party seeking to enforce it. By the later authorities the rule does not apply in casés where the alteration is by a stranger to the contract, and it is now the settled doctrine, in this country, at least, that such an act by a stranger without the privity of the grantee or obligee, does not avoid the contract in its entirety, even though it be without the knowledge or consent of the party to be bound, but amounts to a spoliation merely, which will not prevent a recovery upon the contract in accordance with its original terms, where those terms can be ascertained. ■ And this is obviously upon the principle that the act of a mere interloper without the privity of the parties should not be permitted to defeat a contract to the extent that it would otherwise be valid and binding. And an agent without authority is in this sense held "to be a stranger to the transaction.”