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ment, however, has not been repealed, as it was thought it might apply to “ drafts and orders,” which were not bills as defined by sect. 3 of the Bills of Exchange Act. It is to be noted that the 16 & 17 Vict. c. 59, was a Stamp Act which applied only to inland bills. Presumably, therefore, sect. 19 did not cover the case of a draft drawn abroad. There is no such limitation in the present section.
61. When the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is discharged.
Acceptor, the holder at maturity.
2. The maker of a note payable on demand dies, having appointed the holder as his executor. The note is not discharged unless the holder has assets available for the payment of it.?
As to “discharge,” see ante, p. 199. At common law, if the acceptor or maker became the administrator of the holder, the bill or note was not discharged ; 3 but if he became the executor of the holder, it was discharged.* Probably the words “in his own right" in the section negative the common law rule as to executors; cf. sect. 37, ante, p. 120.
The rule stated in the section is a deduction from the general principle that a present right and liability united in the same person cancel each other: “There is no principle,” says Best, C. J., " by which a man can be at the same time plaintiff and defendant.” 5 This mode of dis
1 Harmer v. Steele (1849), 4 Exch. 1, Ex. Ch. ; but this does not prejudice his right to contribution ; ibid. at p. 13; cf. Mainwaring v. Newman (1800), 2 B. & P. 120 ; Poster v. Ward (1883), 1 C. & E. 168, two firms with common partner ; Neale v. Turton (1827), 4 Bing. 149; see, too, Richards v. Richards (1831), 2 B. & Ad. 447, before the Married Women's Property Acts.
Lowe v. Peskett (1855), 16 C. B. 500; and qu. now in any case ? 3 Williams on Executors, 7th ed. p. 1313.
4 Freakley v. Fox (1829), 9 B. & C. 130 ; though he had to account for this amount as assets ; Williams on Executors, 7th ed. pp. 1310—1315.
5 Neale v. Turton (1827), 4 Bing. at p. 151, drawer suing on bill accepted by firm of which he was a member ; but qu. if the rule applies as between a partner and his firm, or two firms with a common partner, since the Judicature Acts. See Pollock on Partnership, 5th ed. pp. 20, 21.
charge is called in the civil law confusio, and is recognised & 61. in all countries whose law is founded on civil law : see, e.g., a to France, Nouguier, SS 1061-1065.
62. (1) When the holder of a bill at or after Express its maturity absolutely and unconditionally re- renunciation. nounces his rights against the acceptor the bill is discharged."
The renunciation must be in writing, unless the bill is delivered up to the acceptor.
(2) The liabilities of any party to a bill may in like manner be renounced by the holder before, at, or after its maturity, but nothing in this section shall affect the rights of a holder in due course without notice of the renunciation.3
ILLUSTRATIONS. 1. The holder of a bill at maturity tells the acceptor that he renounces all claims against him, and gives up the bill to him. The bill is discharged."
2. The holder of a bill before it matures writes to the first indorser that he renounces all claim against him. The first and subsequent indorsers are discharged as regards such holder. The drawer and acceptor are not.
3. The holder of a bill verbally agrees with the drawer that he will not exercise his right of recourse against him if a certain event takes place. The event happens. The drawer is not discharged, for this is merely an oral agreement to vary the effect of a bill as drawn, and not an absolute waiver of the drawer's liabilities.
4. The holder of a note payable on demand, being in a dying state, says that he wishes to forego the debt, and by his directions a memorandum is drawn up to the effect that the note is to be
i Dingwall v. Dunster (1779), 1 Dougl. 247, Lord Mansfield ; cf. Cook v. Lister (1863), 32 L. J. C. P. at p. 126, per Willes, J. ; Pothier, Nos. 175— 183.
Poster v. Dawber (1851), 6 Exch. 839, at pp. 851, 852, Parke, B.; Pothier, Nos. 175—183.
3 See “holder in due course detined by sect. 29; and see Ingham v. Primrose (1859), 7 C. B. N. S. 82.
4 Whatley v. Tricker (1807), 1 Camp. 35, and Poster v. Dawber, supra.
5 Pothier, Nos. 182, 183; Nouguier, SS 1048, 1049; cf. De la Torre v Barclay (1814), 1 Stark. 7. 6 Abrey v. Crux (1869), L. R. 5 C. P. 37.
destroyed as soon as it can be found. This is only the expression of an intention to cancel it, and does not operate as a renunciation.'
The words requiring the renunciation to be in writing were added in committee. They alter the English law, but bring it into accordance with Scotch law. At common law a contract cannot be discharged by accord without satisfaction. The special rule as to bills and notes partially reproduced in this section seems to have been consciously imported into the law merchant from French law.2 This mode of discharge is known in France as “ remise voluntaire," and is recognised in countries where the civil law is followed: see Nouguier, SS 1043—1052.
63. (1) Where a bill is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, the bill is discharged.
(2) In like manner any party liable on a bill 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 of recourse against the party whose signature is cancelled, is also discharged.
ILLUSTRATIONS. 1. The holder of a bill strikes out the acceptor's signature, intending to cancel it.
This is a waiver of the acceptance, and discharges the bill. Aliter if the cancellation be not apparent, and the bill be negotiated to a holder for value before maturity.4
2. B. accepts the first part of a foreign bill drawn in a set of two, and sends it, as directed, to a bank to be held at the disposition of the holder of the second. The drawer, who is the holder of the second part, failing to discount it, cancels it, and directs the bank to deliver up the first to B. B. gets the first part and cancels his
i Re George, Francis v. Bruce (1890), 44 Ch. D. 627 ; cf. Smith v. Gordon (1883), 1 C. & E. 105, before the Act; and Edwards v. Walters, W. N. 1896, p. 15, affirmed, W. N. 1896, p. 54, C. A., verbal renunciation insufficient.
? See per Parke, B., in Poster v. Dawber (1851), 6 Exch. at p. 852.
3 Cf. Sweeting v. Halse (1829), 9 B. & C. at p. 369 ; Yglesias v. River Plate Bank (1877), 3 C. P. D. 60.
4 Ingham v. Primrose (1859), 7 C. B. N. S. 82, and ante, p. 90.
acceptance. B. is discharged, and if the drawer subsequently issue a fresh second part, the holder cannot sue B.:
3. An agent is employed to collect a dishonoured bill. The acceptor offers to pay the amount without charges. The agent sends on this offer to his principal, but allows the bill to be cancelled before the offer is accepted. The principal refuses to agree to the offer. The agent is liable for any loss consequent on the unauthorised cancellation.?
(3) A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative ; but where a bill 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.3 64. (1) Where a bill or acceptance is mate- Alteration
of bill. rially altered without the assent of all parties liable on the bill, the bill is avoided,+ except as against a party who has himself made, authorized, or assented to the alteration, and subsequent indorsers.5 Provided that where a bill has been materially
altered, but the alteration is not apparent,
| Ralli v. Dennistoun (1831), 6 Excb. 483.
Ruper v. Birkbeck (1812), 15 East, 17, acceptance cancelled by referee in
* Master v. Miller (1793), 1 Smith, L. C. 7th ed. p. 871 and notes ; Burchfield v. Moore (1854), 23 L. J. Q. B. 261.
á Hamelin v. Bruck (1846), 9 Q. B. 306 ; cf. Langton v. Lazarus (1839), 5 M. & W. 629.
6 Seeholder in due course " defined by sect. 29, ante, p. 88.
bill as if it had not been altered, and may enforce payment of it according to its original tenour.
A bill is accepted for 5001. The stamp is sufficient to cover 4,0001. After acceptance the drawer fraudulently alters the amount to 3,5001., and the bill gets into the hands of a holder in due course.
He can recover 5007.1 The proviso was introduced in committee to mitigate the rigour of the common law rule in favour of a holder in due course. The proviso is not retrospective, and does not apply to Bank of Englaná notes.? At common law a material alteration, by whomsoever made, avoided and discharged the bill, except as against a party who made or assented to the alteration.4 Thus where a bill was altered by adding a place of payment without the acceptor's consent, and was subsequently indorsed to a holder in due course, it was laid down that the holder could not sue the indorser on the bill, for the instrument was discharged.5 He could only sue on the consideration. In America the rule is not quite so severe, and it is held that an alteration by a stranger, or, as it is called, “an act of spoliation,” does not avoid a bill.6
By sect. 97 (3), post, p. 283, the effect of the stamp laws is expressly preserved, and this saving appears considerably to cut down the effect of the proviso. Therefore, when any question of alteration arises two points have to be considered, viz. (1) does the alteration avoid the bill under the Act : (2) if not, does it avoid the bill under the stamp laws, by making it a new instrument requiring a fresh stamp? As regards the stamp laws, it is to be noted (a) that a bill may be altered at any time before issue,
Effect of stamp laws.
Schol field v. Londesborough, (1895) 1 Q. B. 536, C. A. 2 Leeds Bank v. Walker (1883), 11 Q. B. D. 84.
3 See Davidson v. Cooper (1843), 11 M. & W. at p. 799 ; affirmed 13 M. & W. 343, alteration by stranger. It is the duty of the holder to preserve the instrument intact.
4 Hamelin v. Bruck (1846), 9 Q. B. 306.
6 Parsons on Bills, Vol. II. p. 574 ; cf. U. S. v. Spalding (1822), 2 Mason, at p. 482, per Story, J. ; Dinsmore v. Duncan (1874), 57 New York R. at
7 Webber v. Maddocks (1811), 3 Camp. 1; Kennerly v. Nash (1816), 1