NEGLIGENCE A QUESTION FOR THE JURY. 71

In Marcussen v. Birkbeck Bank (5 T. L. R. 179, 463, and 646, Journal XI. p. 403, on the new trial only), it was held that the defence that the drawer's negligence in drawing the cheque had misled the banker into paying the amount as altered ought to have been properly put before the jury, and that it was not, and that there must be a new trial.

On the new trial, Mathew, J., directed the jury that if a cheque was so carelessly drawn as to expose a banker, using reasonable care, to the risk of paying what was not intended, the banker was not liable. (Journal XI. p. 403.)

This trial was previous to Scholfield v. Londesborough.

It is submitted that there is nothing really conflicting in the authorities as they stand. It comes to this

(1) A drawer or other party to a negotiable instrument, who draws, accepts or indorses such instrument on which a certain amount has been filled in, is not, in the absence of negligence, liable to a holder in due course for any larger sum to which the original amount may be fraudulently altered subsequently to his signing the instrument.

(2) In the case of a banker and customer, the customer owes a duty to the banker to draw cheques in such a manner that they are not capable of any alteration of the amount without such alteration

72

THE RESULT OF THE AUTHORITIES.

being apparent, and if he neglect it, any loss occasioned by such negligence must be borne by him and not by the banker.

(3) In the case of parties to a bill or note, there is not the relation of mandant and mandatory, and (according to the latest authority in the House of Lords) no duty seems to be imposed on such parties not to be careless with regard to the form of the instrument (some of the judges below merely thought that there was no negligence on the facts), and consequently the failure to use reasonable care when signing a bill or note can entail no liability for the consequence of such carelessness.

Were the matter res integra, it might be useful to criticize the view that to hold a party to a negotiable instrument liable for the consequences of his carelessness is an anomaly in jurisprudence. Realizing, however, that such criticisms are now out of place in a practical treatise, we have omitted some observations on the principles involved contained in the first edition.

Where trustees under a paving act signed cheques, which had been drawn by the clerk to the clerk to the trust in such a manner as to be capable of alteration, it was held that they could not charge the clerk to the trust with negligence, if the cheques were altered, nor with his clerk's misconduct in altering them, for it was their duty not to sign

CANCELLATION OF CHEQUES.

73

cheques so drawn. (Whitmore v. Wilks, 3 Car. & P. 364).

55.-When a cheque is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, the cheque is discharged (d),

In like manner any party liable on a cheque may be discharged by the intentional cancellation of his signature by the holder or his agent. In such case any indorser who would have had a right or recourse against the party whose signature is cancelled, is also discharged.

A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but where a cheque or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority. (S. 63.)

This section is of little practical importance as regards cheques. It is not the practice to have many indorsements on a cheque, nor to look to the indorsers for payment. However, their legal

(d) If bankers pay a cancelled cheque drawn by a customer under circumstances which ought to have excited their suspicions and induced them to make inquiries before paying it, they cannot take credit for the amount (Scholey v. Ramsbottom, 2 Camp. 485).

74

MATERIAL ALTERATION.

position is like that of indorsers of a bill, and it is quite possible to release any one by cancellation of his name.

56.-Where a cheque is materially altered without the assent of all parties liable on the cheque, the cheque is avoided, except as against a party who has himself made, authorized, or assented to the alteration, and subsequent indorsers.

Provided that where a cheque has been materially altered, but the alteration is not apparent, and the cheque is in the hands of a holder in due course, such holder may avail himself of the cheque as if it had not been altered, and may enforce payment of it according to its original tenor. (S. 64 (1).)

The latter part of this sub-section covers the case of Scholfield v. Londesborough, 1896, A. C. p. 514, but it must be remembered that that decision turned on the fact that Londesborough had not been negligent. If a case like Young v. Grote, 4 Bing. 253, should arise to-morrow, and negligence were found as a fact against the customer, we do not think he could, as against his banker, rely on the words "according to its original tenor," if the banker without negligence had paid the cheque as altered.

57.-In particular the following alterations are

material, namely, any alteration of the date, the sum payable, the crossing, and the branch at which the cheque is payable. (SS. 64 (2) and 76.)

66

The word "apparent" was in Leeds Bank v. Walker, L. R. 11 Q. B. D. 84, construed to mean apparent to the bank, though not perhaps to an ordinary person," but this construction was not necessary to the judgment, which was that the latter part of s. 64 (1) did not apply to a Bank of England note.

To alter the date of a cheque to a subsequent date is a material alteration within this section. (Cf. Vance v. Lowther, 1 Ex. Div. 176.)

For a more exhaustive list of material alterations, the reader is referred to Chalmers' notes to this section and to Byles, Chap. XXI.

To forge or alter or knowingly utter, etc., any cheque or any indorsement or assignment of any cheque is a felony punishable with penal servitude for life. (24 & 25 Vict. c. 98, s. 22.)

To draw, sign or indorse a cheque without authority, or knowingly utter such a cheque, is a felony punishable with penal servitude for fourteen years. (24 & 25 Vict. c. 98, s. 23.)