CHAPTER II. ALTERATION AND LOSS OF WRITTEN INSTRUMENT. Alteration of written contract by promisee-by a stranger-by PAGE 572 Material alterations-immaterial alterations 574 Effect of alteration as between the parties-alterations in bills of 575 Effect as to past operation of instrument-party producing in- Loss of written instrument-loss of bill or note-relief against 578 580 PART IV. written contract by promisee. Ir a contract under seal is altered in a material part by the Alteration of promisee, without the consent of the promiser, as by interlineation, addition, erasure, or drawing a pen through a line or a word, it is so far avoided by the alteration, that the promisee is deprived of all benefit of it, as ground either of action or of defence (a). And the same rule applies to contracts in writing not under seal (¿). Any alteration of a written instrument, not authenticated by both parties, may create a difficulty of proof and thereby prejudice the remedy; but the above rule assigns to an alteration by the promisee the definite penalty of forfeiture of his rights under the instrument; with the object, it is said, of deterring parties from attempting fraud by such means (c). Hence also such alteration avoids a contract, though the original words of the contract remain legible (d). It sometimes happens that one instrument carries out several distinct objects, which might be contained in separate instruments. Where this is the case, it would seem that (a) Pigot's case, 11 Co. 27 a; Shep pard's Touchstone, 68. (b) Master v. Miller, 4 T. R. 320; 2 H. Bl. 140; 1 Sm. L. C. 747. (c) Kenyon, C. J., Master v. Miller, 4 T. R. 329. (d) Pigot's case, 11 Co. 27 a. alteration in one particular should not invalidate the instrument so СНАР. ІІ. far as it deals with other distinct matters (e). If a deed or contract in writing be altered in a material part by Alteration by a stranger to the contract, whilst the instrument is in the custody a stranger. of the promisee, though without his knowledge, it is thereby avoided as to his rights under it; upon the principle that “ a party who has the custody of an instrument made for his benefit is bound to preserve it in its original state" (f); and he is equally affected by an alteration made while the instrument is in the custody of an agent holding it for him (g). Where a guarantee was given to a banking company by some of the directors, and was materially altered by the secretary whilst in his possession, it was held that the possession of the secretary was that of the bank as against the individual directors, and that they were discharged by the alteration (). But an alteration by a stranger whilst the instrument is not in the custody of a party or of his agent does not affect the validity, beyond creating a difficulty of proving its original condi tion (). Thus where an award duly made and signed by the umpire, and notified to the parties as ready for delivery, was afterwards altered by the umpire in the sum awarded; it was held that the alteration by the umpire after his authority had ceased was the same as if made by a stranger, and the award remained good for the original sum (j). A contract is not affected by an alteration caused by mere acci- Alteration by dent; but the party claiming under it must prove the accident and accident. the original state of the instrument; as in the case of the seal of a deed being torn off by a child, or eaten off by rats (k).—So an Mistake. alteration may be explained to have been made by mistake, without any intention of affecting the contract: as where the indorsement of a bill was struck out by mistake (7); or the acceptance was cancelled by mistake (m). But an alteration intentionally made by one party without consent of the other, under a mistake only as to (e) See Powell v. Edmunds, 12 East, 6; Collins v. Prosser, 1 B. & C. 682; Roots v. Dormer, 4 B. & Ad. 77; Harrison v. Seymour, L. R. 1 C. P. 518; 35 L. J. C. P. 264. (f) Davidson v. Cooper, 13 M. & W. 343; 13 L. J. Ex. 276. (g) Pattinson v. Luckley, L. R. 10 Ex. 330; 44 L. J. Ex. 180. (h) Bank of Hindustan v. Smith, 36 L. J. C. P. 241. (i) Waugh v. Bussell, 5 Taunt. 707. (m) Raper v. Birkbeck, 15 East, 17; PART IV. Material . alterations. Immaterial alterations. the legal effect of the instrument, will avoid it; though made in furtherance of the supposed intention (). The alteration must in all cases be material in order to avoid the rights of parties (o). A material alteration is one which affects the contract or any rights or remedies under it; or which affects the use of the instrument for its proper purpose (p): as an alteration in a sale note of goods by the seller adding a stipulation, that damaged goods should be taken at an allowance by valuation (7) ; or by the buyer adding to a sale of goods "by sample" the words "of their own manufacture," such alteration being material whether the words referred to the bulk of the goods, or to the sample only (r); an alteration of a written contract by adding a seal to the signature so as to make it appear to be a contract under seal (s). A deed of composition between a debtor and the creditors named in the schedule was held to be materially altered by the addition of the schedule after execution (t). But a like deed, purporting to include as parties all the creditors, and duly executed by a majority sufficient to bind all, was held not to be materially altered by the addition of names of creditors in the schedule, as the addition was within the terms of the deed (u). In policies of insurance, an alteration by inserting a new subject of insurance (); or by altering the time of sailing warranted (x); or by altering the port of destination (y), is material, and discharges the underwriters who subscribed before the alteration was made. Alterations or additions which only express what the law would otherwise imply as to the effect or construction of the instrument are immaterial to the validity: as adding to a promissory note which expressed no time for payment the words "on demand "(); or altering a general indorsement into a special indorsement in favour of the holder (a). The addition of a mere description to a (n) Bank of Hindustan v. Smith, 36 L. J. C. P. 241. (0) Collins v. Prosser, 1 B. & C. 682; Aldous v. Cornwell, L. R. 3 Q. B. 573; 37 L. J. Q. B. 201. (p) Suffell v. Bk. of England, 9 Q. B. (9) Powell v. Dirett, 15 East, 29. (s) Davidson v. Cooper, 13 M. & W. (t) Sellin v. Price, L. R. 2 Ex. 189; 36 L. J. Ex. 93; see ante, p. 89. (u) Wood v. Slack, L. R. 3 Q. B. 379; 37 L. J. Q. B. 130. See Ex p. Milne, 22 Q. B. D. 685; 58 L. J. Q. B. 333. (v) Langhorn v. Cologan, 4 Taunt. 330. (x) Fairlie v. Christie, 7 Taunt. 416. (y) Laird v. Robertson, 4 Bro. P. C. 488; 2 E. R. 333; Campbell v. Christie, 2 Stark. 64. (2) Aldous v. Cornwell, L. R. 3 Q. B. 573; 37 L. J. Q. B. 201. (a) Clark v. Piggott, 1 Salk. 126; 12 Mod. 193; see Hirschfield v. Smith, L. R. 1 C. P. 340; 35 L. J. C. P. 177. party, as that of "sheriff" in a bond given to a person as sheriff, is immaterial (). The insertion of a word which has manifestly been omitted, and which the construction of the instrument requires to be read in, is immaterial (c); and the correction of a name or number which is obviously necessary in the application of the instrument (d); and the addition of a word in explanation which adds nothing to, nor alters the meaning (e). In the case of a tenancy from year to year upon the terms of a written agreement for a lease, in which it appeared that the term of years had been altered from seven to fourteen; it was held that the agreement was admissible to prove the terms of the tenancy without explaining the alteration, because it was immaterial to the tenancy from year to year (f). CHAP. II. alteration The alteration, as regards the party who made it or is responsible Effect of for it, vitiates the instrument altogether; and "it is no answer to as between the objection to say that the alteration is not made in respect of the the parties. duty of the breach of which the plaintiff complains" (g). "If a deed contains divers distinct and absolute covenants, if any of the covenants are altered by addition, interlineation, or rasure, this misfeasance ex post facto avoids the whole deed; for although they are several covenants, yet it is but one deed. If two are bound in a bond, and afterwards the seal of one of them is broken off, this misfeasance ex post facto avoids the whole deed against both" (h). But where by the same deed several persons bind themselves severally, and not jointly, it is the same as several deeds written in one and the same piece of parchment, and the breaking off the seal of one avoids that obligation only without affecting the others (i). The rights of a party who is not responsible for the alteration are not affected by it; except that the alteration or erasure may cause difficulty in proving the original state of the instrument and explaining the alteration (k). The alteration of a negotiable instrument, as a bill of exchange, Alterations in bills of promissory note, cheque, or bank note avoids the instrument in the exchange. hands of a subsequent holder, as against prior parties, though he (b) Pigot's case, 11 Co. 26 b. (c) Waugh v. Bussell, 5 Taunt. 707. (d) Trew v. Burton, 1 C. & M. 533; 2 L. J. Ex. 236; Hutchins v. Scott, 2 M. & W. 809; 6 L. J. Ex. 186; Re Howgate and Osborn, (1902) 1 Ch. 451; 71 L. J. C. 279. (e) Sanderson v. Symonds, 1 B. & B. 426. (f) Falmouth v. Roberts, 9 M. & W. (g) Maule, J., Mollett v. Wackerbarth, PART IV. Bills of Act. Material alterations. took it for value and bona fide and without notice of the alteration (7). His remedy is confined to recovering the consideration for the bill, as between himself and the party from whom he received it; and each prior holder in succession has a similar remedy until the party is reached through whose fraud or laches the alteration was made (m). The party responsible for the alteration cannot recover against his indorser, even the consideration paid, because he has destroyed the remedies of the latter against prior parties; "by altering the bill in a material part he makes it his own as against the prior parties, and causes it to operate as a satisfaction of the debt for which it was originally given" (n). But as between original parties to the instrument the alteration would not extinguish a debt or liability on account of which it was given; because the party primarily liable, having no remedies over, is not prejudiced (0). By the Bills of Exchange Act, 1882, s. 64 (1), “ Where a bill or acceptance is materially altered without the assent of all parties. liable on the bill, the bill is avoided except as against a party who has himself made, authorised, or assented to the alteration, and subsequent indorsers. Provided that, where a bill has been materially altered, but the alteration is not apparent, and the bill is in the hands of a holder in due course, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it according to its original tenour."-(2)" In particular the following alterations are material, namely, any alteration of the date (p), the sum payable (9), the time of payment (r), the place of payment, and where a bill has been accepted generally, the addition of the place of payment without the acceptor's assent" (8).— The following alterations have also been held material in avoiding a bill or note: the insertion of a special rate of interest (1), insert (1) Bills of Exchange Act, 1882, s. 64; Master v. Miller, 4 T. R. 320; 2 H. Bl. 140; 1 Sm. L. C. 747; Tance v. Lowther, 1 Ex. D. 176; 45 L. J. Ex. 200; Suffell v. Bank of England, 9 Q. B. D. 555; 51 L. J. Q. B. 401. (m) Per cur. Burchfield v. Moore, 3 E. & B. 687; 23 L. J. Q. B. 261. (n) Per cur. Alderson v. Langdale, 3 B. & Ad. 663. (0) Atkinson v. Hawdon, 2 A. & E. 628; 4 L. J. K. B. 85; see Sloman v. Cox, 1 C. M. & R. 471. (p) Master v. Miller, 4 T. R. 320; 2 H. Bl. 140; 1 Sm. L. C. 747; Vance v. Lowther, 1 Ex. D. 176; 45 L. J. Ex. 200. And see Jacob v. Hart, 6 M. & S. 142; Brutt v. Picard, Ry. & M. 37. (q) Hall v. Fuller, 5 B. & C. 750. See Scholfield v. Londesborough, (1896) A. C. 514; 65 L. J. Q. B. 593. (r) Hirschman v. Budd, L. R. 8 Ex. 171; 42 L. J. Ex. 113. (s) Tidmarsh v. Grover, 1 M. & S. 735; Cowie v. Halsall, 4 B. & Ald. 197; Calvert v. Baker, 4 M. & W. 417; 8 L. J. Ex. 40; Burchfield v. Moore, 3 E. & B. 683; 23 L. J. Q. B. 261. And see sect. 63, as to cancellation of bills. (t) Warrington v. Early, 2 E. & B. 763; 23 L. J. Q. B. 47. |