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and for this purpose “issue” means the first delivery of a

8 64. bill to a person who takes it as a holder for value, so as to be able to enforce payment thereof;' (b) that a bill may be altered for the purpose of correcting a mistake and bringing the instrument into accordance with the intention of the parties at the time of issue ; ; (c) that in any case where an adhesive stamp may be used* the bill may be re-stamped, and that the alteration abroad of a bill issued abroad does not affect it for stamp purposes in England. Subject to these qualifications, a material alteration after issue renders the bill a new instrument requiring a fresh stamp. The Courts would look with less favour on stamp objections than they did formerly, and possibly some of the older

cases may

be
open

to re-consideration. (2) In particular the following alterations are What alteramaterial, namely, any alteration of the date, the material. sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment without the acceptor's assent.

ILLUSTRATIONS. 1. The following are material:

A particular consideration is substituted for the words “value received ; ” 6 or the date of a bill payable at a fixed period after date is altered, and the time of payment thereby postponed? or acce

Stark. 452 ; Dorones v. Richardson (1822), 5 B. & Ald. 674 ; Sherrington v.
Jermyn (1828), 3 C. & P. 374 ; Wright v. Inshaw (1842), 1 D., N. S. 802,

i Čardwell v. Martin (1808), 9 East, 190 ; Downes v. Richardson (1822), 5 B. & Ald. 674 ; Ex parte Bignold (1836), 1 Deac. at p. 735.

. Cf. Ex parte White (1833), 2 Deac. & Ch. at pp. 358, 359 ; Hamelin v. Bruck (1846), 9 Q. B. at p. 310 ; London and Prov. Bank v. Roberts (1874), 22 W. R. 402.

3 Brutt v. Picard (1824), R. & M. 37, date ; Bradley v. Bardsley (1845), 14 M. & W. 873 ; Byrom v. Thompson (1839), 11 A. & E. 31 ; Cariss v. Tattersall (1841), 2 M. & Gr. 890.

4 Stamp Act, 1891, $ 34, post, p. 356.

5 Knill v. Williams (1809), 10 East, 431 ; cf. Suffell v. Bank of England (1882), 9 Q. B. D. at p. 574, per Cotton, L.J.

6 Knill v. Williams (1809), 10 East, 431 ; cf. Wright v. Inshaw (1842), 1 D., N. S. 802.

7 Outhwaite v. Luntley (1815), 4 Camp. 179 ; Hirschman v. Budd (1873), L. R. 8 Ex. 171 ; Société Générale v. Metropolitan Bank (1873), 21 W. R.

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lerated ;or a bill payable three months after date is converted into
a bill payable three months after sight;? or the date of a cheque
or bill payable on demand is altered ; 3 or the crossing of a cheque is
altered;+ or the sum payable is altered, e.g. from 1051. to 1001. ;:
or the specified rate of interest is altered, e.g., from 3 per cent. to 25
per cent. ; 6 or a bill payable “with lawful interest is altered by
adding the words “interest at six per cent. ;”; or a particular rate
of exchange is indorsed on a bill which does not authorize this to
be done;8 or a joint note is converted into a joint and several note;'
or a new maker is added to a joint and several note; 10 or the name
of a maker of a joint and several note is cut off," or intentionally
erased ; 2 or the place of payment is altered, e.g. a bill is accepted
payable at X. & Co.'s and Y. & Co. is substituted for X. & Co.;
or a place for payment is added without the acceptor's consent;
the number on a Bank of England note is altered.16

2. The following are immaterial :

A bill payable to Cs or bearer is converted into a bill payable to C. or order; 16 or an indorsement in blank is converted into a special indorsement ; 17 or the words “ on demand” are added to a note in which no time of payment is expressed ; or a bill addressed to Brown & Co., under the style of Brown, Smith & Co., is accepted by them as Brown & Co., and the address is afterwards altered to make it correspond with the acceptance; or an erroneous due date

13

or

18

19

1 Master v. Miller (1793), 2 H. Bl. 140, Ex. Ch. ; Walton v. Hastings (1815), 4 Camp. 223, stamp.

? Long v. Moore (1790), 3 Esp. 155, n.
3 Vance v. Lowther (1876), 1 Ex. D. 176.

4 See sect. 78, overriding Simmonds v. Taylor (1858), 27 L. J. C. P. 248, post, p. 256.

5 Cf. Hamelin v. Bruck (1846), 9 Q. B. 306.
6 Sutton v. Toomer (1827), 7 B. & C. 416.
7 Warrington v. Early (1853), 23 L. J. Q. B. 47.
8 Hirschfield v. Smith (1866), L. R. 1 C. P. 340.
9 Perring v. Hone (1826), 4 Bing. 28.

10 Gardner v. Talsh (1855), 5 E. & B. 83 ; cf. Clerk v. Blackstock (1816), Holt, N. P. 474.

1 Cf. Mason v. Bradley (1843), 11 M. & W. 590 ; Benedict v. Cowden (1872), 49 New York R. 396, cutting off condition written at bottom of note.

12 Nicholson v. Revill (1836), 4 A. & E. 675. 13 Tidmarsh v. Grover (1813), 1 M. & S. 735. 14 Calvert v. Baker (1838), 4 M. & W. 417 ; Burchfield v. Moore (1854), 23 L. J. Q. B. 261 ; cf. Hanbury v. Lovett (1868), 18 L. T. N. S. 366. Qu. if the acceptor consent; Walter v. Cubley (1833), 2 Cr. & M. 151 ; and cf. Mason v. Bradley (1843), 11 M. & W. at p. 594 ; but see Gibb v. Mother (1832), 2 Cr. & J. at p. 262; Saul v. Jones (1858), 28 L. J. Q. B. 37, which show that the position of the urawer and indorsers is altered.

15 Suffell v. Bank of England (1882), 9 Q. B. D. 555, C. A. ; Leeds Bank v. Walker (1883), 11 Q. B. D. 84.

16 Attwood v. Griffin (1826), 2 C. & P. 368. 17 See sect. 34 (4). 18 Aldvus v. Cornwell (1868), L. R. 3 Q. B. 573 ; see sect. 10, ante, p. 29. 19 Farquhar v. Southey (1826), M. & M. 14.

§ 64.

is added to a bill; 2 or the words “or order” are struck out by the acceptor in the case of a bill payable to “D. or order." 2

An alteration is material which in any way alters the operation of the bill and the liabilities of the parties, whether the change be prejudicial or beneficial ;3 and it may be that even this test is not wide enough. Any alteration,” says Brett, L. J.,“ seems to me material which would alter the business effect of the instrument, if used for any business purpose.". The materiality of an alteration is a question of law.5

Subject to two exceptions the holder of a bill, which has been avoided by a material alteration, cannot sue on the consideration in respect of which it was negotiated to him.6

Exception 1.-If the bill was negotiated to him after the alteration was made, and he was not privy to the alteration, he may sue on the consideration.

Exception 2.—If the bill was altered while in his custody or under his control, he can still recover, provided (a) that he did not intend to commit a fraud by the alteration, and (b) that the party sued would not have had any remedy over on the bill, if it had not been altered. For example :

1. A. sells goods to B., and draws a bill on him for the price payable to his own order. B. accepts. The bill is subsequently altered while in A.'s possession. A. can sue B. for the price of the goods though no action could be brought on the bill.

2. C. sells goods to A. A., to pay for the goods, indorses to C. a bill which he has drawn on, and which has been accepted by, a third person. The bill is altered while in C.'s hands. c. cannot sue A. for the price of the goods, for the alteration has deprived A. of his remedy on the bill against the acceptor. 10

8

| Fanshawe v. Peet (1857), 26 L. J. Ex. 314.

Decroi:c v. Meyer (1890), 25 Q. B. D. 343, C. A. 3 Gardner v. Walsh (1855), 5 E. & B. 83, at p. 89.

* Suffell v. Bank of Eng and (1882), 9 Q. B. D. 555, at p. 568 ; see the test suggested by Cotton, L. J., at pp. 574, 575.

ó Vance v. Lowther (1876), 1 Ex. D. 176.
6 Alderson v. Langdale (1832), 3 B. & Ad. 660.

7 Burchfield v. Moore (1854), 23 L. J. Q. B. 261 ; cf. Cundy v. Marriott (1831), 1 B. & Ad. 696.

& Parsons, v. ii., p. 572; Hunt v. Gray (1871), 10 Amer. R. 232.

9 Atkinson v. Hawdon (1835), 2 A. & E. 628 ; cf. Sutton v. Toomer (1827), 7 B. & C. 416, payee against maker of note.

10 Alderson v. Langdale (1832), 3 B. & Ad. 660 ; see by way of analogy the effect at common law of the loss of a bill, Crowe v. Clay (1854), 9 Exch.

§ 64.

Where a bill appears to have been altered, or there are marks of erasure on it, the party seeking to enforce the instrument is bound to give evidence to show that it is not avoided thereby. Cf. sect. 63 (3), ante, p. 213.

.

Principal and surety.

Discharge of Surety by Dealings with Principal. Where a relationship in the nature of principal and surety exists between the parties to a bill, or the parties to a bill transaction, and the holder having notice thereof enters into a binding agreement with the principal to give time to him, or, of his own act, discharges the principal, the surety or sureties are thereby discharged, unless the holder, in so doing, expressly reserves his rights against the surety or sureties, thereby preserving the remedy over.3

For the present purpose primâ facie the acceptor of a bill is the principal debtor, and the drawer and indorsers are, as regards him, sureties, and the drawer of a bill is the principal as regards the indorsers, and the first indorser is the principal as regards the second and subsequent indorsers, and so on in order; 4 but evidence for the present purpose is admissible to show the real relationship of the parties, and it is immaterial that the holder was ignorant of the relationship when he took the bill, provided he had notice thereof at the time of his dealings with the principal.”

ILLUSTRATIONS. 1. The holder of a bill takes from the acceptor in lieu of payment a new bill payable at a future day, to which the drawer and indorsers are not parties. This discharges the drawer and indorsers.

2. The holder of a bill for 2001. takes from the acceptor 1001. in full discharge of his claim, but expressly reserves his rights against

· Knight v. Clements (1838), 8 A. & E. 215 ; Clifford v. Parker (1841), 2 M. & Gr. 909; cf. Tatum v. Catomore (1851), 16 Q. B. at p. 746 ; see, e.g., Cariss v. Tattersall (1841), 2 M. & Gr. 890, as to what evidence suffices.

2 Oriental Corporation v. Overend (1871), L. R. 7 Ch. 142 ; affirmed (1874), L. R. 7 H. L. 348 ; cf. Netherlands Code, Arts. 198, 199.

3 Owen v. Homan (1853), 4 H. of L. Cas. 997 ; Muir v. Crawford (1875), L. R. 2 Sc. Ap. 456, H. L. ; Jones v. Whitaker, W. N. 1887, p. 132, C. A.

4 Cf. Cook v. Lister (1863), 32 L. J. C. P. at p. 127, per Willes, J.

5 Evin v. Lancaster (1865), 6 B. & S. at p. 577; Oriental Corp. v. Overend (1871), L. R. 7 Ch. 142 ; affirmed (1874), L. R. 7 H. L. 348.

6 Cf. Gould v. Robson (1807), 8 East, 576, and Petty v. Cooke (1871), L. R. 6 Q. B. at p. 794.

the drawer and indorsers (thereby preserving their rights against 8 64. the acceptor). The drawer and indorsers are not discharged. 3. The holder of a bill for 1001. accepts a composition of 108. in Principal an

surety. the pound from the acceptor under Bankruptcy Act, 1869, $$ 125, 126. The drawer and indorsers are only discharged to the extent of the sum received by the holder, for the acceptor is discharged by operation of law.

4. The holder of a dishonoured bill enters into a binding agreement to give time to the first indorser. This discharges the subsequent indorsers, but not the drawer or acceptor.3

5. The holder of a bill at the request of the acceptor delays presenting it for payment. The drawer is discharged. *

6. A bill is accepted by six joint acceptors. Three accept as sureties for the other three, who accept for the accommodation of the first indorser. The holder, knowing the facts, makes an arrangement with the first indorser. The acceptors are discharged.

7. A bill is accepted for the accommodation of the drawer and C. the indorser. The holder agrees to give time to C. the indorser. The acceptor is discharged.

8. C. is the holder of a joint and several note made by B. and X. X. signed merely to accommodate B., and as surety for him. C., knowing this, agrees for consideration to give time to B. X. is thereby discharged.

9. C. is the holder of a joint and several note made by B. and X. C. knows that X. signed as surety to accommodate B. B. pays C. It turns out afterwards that this payment was a fraudulent preference. C. refunds the money to B.'s trustees. X. is not discharged by B.'s payment.8

10. A bill is accepted for the accommodation of the drawer. After it is due the holder is informed of this and then agrees to give time to the drawer. The acceptor is discharged."

11. A bill drawn by A. and accepted by B. is discounted with C. C. subsequently discovers that the bill was drawn and accepted for the accommodation of X., who is not a party to the bill, but who

1 Muir v. Crawford (1875), L. R. 2 Sc. Ap. 456, H. L. ; Jones v. Whitaker, W. N. 1887, p. 132, C. A.

? Re Jacobs (1875), L. R. 10 Ch. 211 ; cf. Provincial Bank of Ireland v. Dunne (1878), Ir. L. R. 2 Q. B. D. 21 ; Yglesias v. River Plate Bank(1877), 3 C. P. D. 60 ; Netherlands Code, Arts. 198, 199.

3 Claridge v. Dalton (1815), 4 M. & S. at p. 232 ; Hall v. Cole (1836), 4 A. & E. 577.

4 Latham v. Chartered Bank of India (1874), L. R. 17 Eq. 205.
Ex parte Webster (1847), De Gex, 414.
6 Bailey v. Edwards (1864), 4 B. & S. 761.
7 Greenough v. M'Clelland (1860), 30 L. J. Q. B. 15, Ex. Ch.
8 Petty v. Cooke (1871), L. R. 6 Q. B. 790.

9 Ewin v. Lancaster (1865), 6_B. & S. 571 ; cf. Torrance v. Bank of British North America (1873), L. R. 5 P. C. at p. 252.

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