Sec. 145. due course. He can recover £500. When holder of void bill can sue on (Scholfield v. Londesborough, [1895] 1 Q.B. 536; S.C. [1896] A.C. 514.) A cheque for $5 is taken by the drawer to his bank and certified by it. The drawer afterwards fraudulently alters the cheque to one for $500, thereby largely overdrawing his account, and negotiates it to a holder in due course. The cheque is presented and paid. Next day the fraud is discovered, and the bank gives notice to the holder. The bank can recover $495 from the holder. (Imperial Bank v. Bank of Hamilton, [1903] A.C. 49; cf. notes to sec. 50.) The holder of a bill which has been avoided by a material alteration cannot sue on the consideration in respect of which the consider-it was negotiated to him (Alderson v. Langdale, 1832, 3 B. & Ad. 660), ation. Material. Date. Sum. Time. Adding places. (1) unless the bill was negotiated to him after the alteration was made, and he was not privy to the alteration. (Burchfield v. Moore, 1854, 23 L.J.Q.B. 261; cf. Cundy v. Marriott, 1831, 1 B. & Ad. 696); (2) or unless, although the bill was altered while in his custody or under his control, he did not intend to commit a fraud by the alteration, and the party sued would not have had any remedy over on the bill, if it had not been altered. (Atkinson v. Hawdon, 1835, 2 A. & E. 628; Sutton v. Toomer, 1827, 7 B. & C. 416; Alderson v. Langdale, 1832, 3 B. & Ad. 660.) Where a bill appears to have been altered, or there are marks of erasure on it, the onus is on the party seeking to enforce the bill to shew that it is not avoided thereby. (Knight v. Clements, 1838, 8 A. & E. 215; Clifford v. Parker, 1841, 2 M. & Gr. 909; Tatum v. Catomore, 1851, 16 Q.B. at p. 746; Cariss v. Tattersall, 1841, 2 M. & Gr. 890.) 146. In particular any alteration,- (b) of the sum payable; (c) of the time of payment; (d) of the place of payment; (e) by the addition of a place of payment without the acceptor's assent where a bill has been accepted generally; is a material alteration. 53 V., c. 33, s. 63. Eng. s. 64. As to the cases in which material alteration will make a bill Sec. 146. void, see sec. 145. Sec. 146 is not exhaustive. An alteration is material which in any way alters the opera- What is material tion of the bill and the liabilities of the parties, whether the alteration. change be prejudicial or beneficial (Gardner v. Walsh, 1855, 5 E. & B. 83, 89; Boulton v. Langmuir, 1897, 24 A.R. 618; cf. Suffell v. Bank of England, 1882, 9 Q.B.D. 555, 568, 574-575). The materiality of an alteration is a question of law (Vance v. Lowther, 1876, 1 Ex. D. 176), and must be considered with reference to the contract itself and not with reference to the surrounding circumstances. (Re Commercial Bank, Banque d' Hochelaga's Case, 1894, 10 Man. R. 171.) The following have been held to be material alterations in a bill: 1. An alteration of the date so as to postpone (as well as one to accelerate) the time of payment. (Outhwaite v. Luntley, 1815, 4 Camp. 179; Hirschman v. Budd, 1873, L.R. 8 Ex. 171.) 2. An alteration of the date of a cheque payable on demand. (Vance v. Lowther, 1876, 1 Ex. D. 176; Beltz v. Molsons Bank, 1876, 40 U.C.R. 253; Boulton v. Langmuir, 1897, 24 A.R. 618, although the effect is to make less interest payable. The conversion of a bill payable after date into one payable after sight. (Long v. Moore, 1790, 3 Esp. 155n.) But an alteration to correct a manifest error was held to be immaterial. (Cf. Merchants Bank v. Stirling. 1880. 1 R. & G. (N.S.) 439, an accommodation note dated "6th, 1875" changed to "8th June, 1875," the 6th of June being a Sunday.) 3. The superscription upon the face of the bill and over an endorsement of a particular rate of exchange. (Hirschfeld v. Smith, 1866, L.R. 1 C.P. 340.) 4. The addition of a new maker's name to a joint and several note. (Gardner v. Walsh, 1855, 5 E. & B. 83; Carrique v. Beaty, 1897, 24 A.R. 302.) 5. An alteration of the place of payment, or an addition of a place of payment, without the acceptor's consent. (Tidmarsh v. Grover, 1813, 1 M. & S. 735; Burchfield v. Moore, 1854, 3 E. & B. 683; McQueen v. McIntyre, 1879, 30 C.P. 426.) Quære, if the acceptor consents: see sec. 146. See Walter v. Cubley, 1833, 2 Cr. & M. 151; Mason v. Bradley, 1843, 11 M. & W. at p. 594: Gibb v. Mather, 1832, 2 Cr. & M. at p. 262; Saul v. Jones, 1858, 28 L.J.Q.B. 37. Material alteration. Sec. 146. Material alteration. Immaterial alteration. 6. An alteration in the number of a Bank of England note. (Suffell v. Bank of England, 1882, 9 Q.B.D. 555; Leeds Bank v. Walker, 1883, 11 Q.B.D. 84.) 7. An alteration in the crossing of a cheque. (Sec. 170, overriding Simmonds v. Taylor, 1858, 27 L.J.C.P. 248.) 8. The substitution of a particular consideration for the words "value received.' (Knill v. Williams, 1809, 10 East, 431.) 9. The alteration of the sum payable. (Hamelin v. Bruck, 1846, 9 Q.B. 306.) 10. The alteration of the time of payment. (Westloh v. Brown, 1878, 43 U.C.R. 402.) 11. The alteration of a specified rate of interest. (Sutton v. Toomer, 1827, 7 B. & C. 416.) The alteration of a bill payable "with lawful interest" by adding the words "interest at six per cent." (Warrington v. Early, 1853, 23 L.J.Q.B. 47.) The insertion of a rate of interest in a clause providing for interest but with the rate left blank would be authorized by sec. 31. In Fitch v. Kelly, 1879, 44 U.C.R. 578, it was held that there was sufficient evidence to shew that the note was altered (by the addition of the words "with interest at seven per cent.") to conform to the original intention of the parties, and that the endorsers subsequently agreed to it. 12. The conversion of a joint note into a joint and several note. (Perring v. Hone, 1826, 4 Bing. 28; Banque Provinciale v. Arnoldi, 1901, 2 O.L.R. 624.) 13. The intentional erasure of the name of a joint and several maker. (Nicholson v. Revill, 1836, 4 A. & E. 675.) 14. The alteration of marked cheque by the drawer's making it payable to bearer instead of to order. (Re Commercial Bank, Banque d' Hochelaga's Case, 1894, 10 Man. R. 171.) The following alterations have been held to be immaterial. 1. Conversion of a bill or cheque payable to bearer into one payable to order. (Attwood v. Griffin, 1826, 2 C. & P. 368.) 2. The conversion of a blank endorsement into a special endorsement. (Hirschfeld v. Smith, 1866, L.R. 1 C.P. 340; sec. 67.) 3. The alteration in the name of the firm to which a bill is addressed so as to correspond with the name in which it is ac cepted, being the true name of the firm. (Farquhar v. Southey, Sec. 146. 1826, 1 M. & M. 14.) Immaterial 4. The addition to a promissory note, in which no time of alteration. payment is expressed, of the words "on demand," which are implied by law. (Aldous v. Cornwall, 1868, L.R. 3 Q.B. 573; cf. sec. 23.) 5. Striking out the word "order" in a bill payable "to order of A. B." (Decroix v. Meyer, 1890, 25 Q.B.D. 343; S.C., [1891] A.C. 520; cf. sec. 22.) 6. The alteration of the marginal figures. (Garrard v. Lewis, 1882, 10 Q.B.D. 30; cf. sec. 28.) 7. The addition of an erroneous due date. Peet, 1857, 26 L.J. Ex. 314.) (Fanshawe v. 8. The insertion of the words "pour aval" over a signature on the back of a note, the person having signed above the payee and as a guarantor. (Abbott v. Wurtele, 1894, Q.R. 6 S.C. 204.) Acceptance for honour supra protest. CHAPTER XLVII. ACCEPTANCE AND PAYMENT FOR HONOUR. The sections relating to acceptance supra protest do not apply to promissory notes: see sec. 186. A bill may be accepted (sec. 147)), or paid (sec. 153), supra protest for the honour of any person liable on the bill, or for the honour of the person for whose account the bill is drawn. The last mentioned person is commonly called the "third account." Acceptance and Payment for Honour. 147. Where a bill of exchange has been protested for dishonour by non-acceptance, or protested for better security, and is not overdue, any person, not being a party already liable thereon, may, with the consent of the holder, intervene and accept the bill supra protest, for the honour of any party liable thereon, or for the honour of the person for whose account the bill is drawn. 53 V., c. 33, s. 64. Eng. s. 65. As to dishonour by non-acceptance, see sec. 81, and as to protest generally see secs. 113 and 114. As to protest for better security, see sec. 116. As to the liability of the acceptor for honour, see sec. 152. The holder may refuse to allow an acceptance for honour. He may desire to exercise his immediate right of recourse against the drawer and endorsers (sec. 82). If a referee in case of need is named in the bill, it is in the option of the holder to resort to him or not, as the holder may think fit (sec, 33). As to the form of acceptance for honour, see sec. 151. Acceptance for honour is an exception to the general rule that no one can become a party to a bill qua acceptor who is not a proper drawee, or in other words, an addressee. (Steele v. McKinlay, 1880, 5 App. Cas. 779, 4 R.C. at p. 232; cf. notes to sec. 131.) |