§ 3. WANT OF CONTRACT: ALTERATION: FORGERY:

ESTOPPEL.

Another case of want of contract arises where there has been a material, unauthorized alteration of the instrument to which the defendant gave his signature. The authorities in general declare that to alter the terms, written or printed, of a negotiable note, bill, or cheque, after the defendant's signature was written to it, is to destroy its validity against him, even in the hands of a bona fide. holder for value. The reason is plain. The altered instrument is not the one he signed; and the identity of the one signed has been destroyed.1

A material alteration within the meaning of the rule stated may be defined thus: Any alteration (1) changing the legal effect of the instrument, (2) made with such intent, or being a final act, (3) without consent, (4) by a party to it, or by one in lawful possession of it, is a material alteration. The divisions of the definition as here given will serve as the basis of an analysis of the subject.

First, then, of alterations 'changing the legal effect of the instrument.' It was at one time considered, and it is still occasionally intimated, that a fraudulent alteration, material or not, would destroy the instrument, because perhaps of the wrongful intent; 2 but that doctrine has

1 Wade v. Withington, 1 Allen, 561; Draper v Ward, 112 Mass. 315, Aldrich v. Smith, 37 Mich. 468.

2 Pigot's Case, 11 Coke, 27 a, comment on 2d resolution. The word 'fraudulent' is not used there; but in its application to immaterial alterations, the language must, it seems, be understood as referring to a fraudulent intent. 'If the obligee himself,' as Coke comments in the passage referred to, 'alters the deed . . . although it is in words not material, yet the deed is void.'

Cit. Nat. Bk of Balt, & Williams, 174 Pa. 66 S.c. 35 KR. Ann, 464 note_

been generally abandoned. An immaterial alteration then cannot, by the current of authority, have the effect to prevent recovery upon the paper. For example: the plaintiff is holder for value, and the defendant, maker of a promissory note sued upon, which does not state any time of payment. The plaintiff afterwards writes in the words 6 on demand,' without the defendant's consent and with fraudulent intent. The plaintiff is entitled to recover notwithstanding the alteration, the note being originally payable on demand in legal effect.1 Again: The plaintiff is holder for value of an instrument made by the defendant, promising to pay a certain sum of money, upon a condition expressed therein, to a person named. The payee afterwards writes in the words 'or bearer' without the defendant's consent. The defendant's liability remains unchanged; the contract, being incapable of negotiability as it was executed, could not be made negotiable by adding the words in question.2

A like case would be made where, after a change of law not governing the instrument in question, an alteration in it is made expressing no more than what was embraced in the law by which the instrument was governed.3 Another case of the kind would arise where an alteration was made conforming to the true intention of the parties, correcting a mistake in the writing.4 So to add the words 'with grace' to paper entitled by law to grace, or 'without grace' to paper not entitled to grace; and so to add the legal rate of interest, as 'at six per cent,' after the words

1 Aldous v. Cornwell, L. R. 3 Q. B. 573, overruling Pigot's Case, 2d resolution. See Goodenow v. Curtis, 33 Mich. 505; Curtis v. Goodenow, 24 Mich. 18. But see Bridges v. Winters, 42 Miss. 135.

2 Goodenow v. Curtis, and Curtis v. Goodenow, supra.

3 Bridges v. Winters, 42 Miss. 135.

4 McRaven v. Crisler, 53 Miss. 542; Clute ». Small, 17 Wend. 238; Hervey v. Harvey, 15 Maine, 357. But see Miller v. Gilleland, 19 Penn. St. 119, by a divided court.

'with interest,' such additions are immaterial; they have no effect upon the validity of the instrument. In such cases it makes no difference whether the defendant has consented to the alteration or not; and so of all other cases in which the alteration is immaterial.

It would be difficult to show what alterations are such as to change the legal effect of the instrument, in any other way than by specific cases. And then, too, it should be remembered that we are dealing with but part of the definition, and that all the other parts of it must also be met to make a material alteration. In other words, though in a particular case the alteration appears to change the legal effect of the instrument, it may appear that it was not 'made with such intent, or being a final act,' or one of the other facts may be wanting to make it material.

The following are some of the cases in which the alteration changes, or appears to change, the legal effect of the instrument: An alteration of the date of the instrument; 1 changing I promise' to 'we promise,' for such change would convert a several, or a joint and several, into a joint promise; 2 the addition of an interest clause to an instrument completed without it, as for example, to bear legal interest,' or 'interest payable annually' or 'semi-annually,' 'quarterly' or otherwise; 5 striking out the words 'after maturity' where interest is made so payable; changing the name of the payee; changing 'to the order of A' to Wall 80,

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1 Vance . Lowther, 1 Ex. D. 176; Wood v. Steele, Britton v. Dierker, 46 Mo. 591; Emmons v. Meeker, 55 Ind. 321; Kennedy v. Lancaster Bank, 18 Penn. St. 347.

2 Humphreys v. Gwillow, 13 N. H. 385.

8 Holmes v. Trumper, 22 Mich. 427; L. C. 544; Glover v. Robbins, 49 Ala. 219. As to filling blanks in such cases, see infra.

4 Lochnane v. Emmerson, 11 Bush, 69.

5 Marsh v. Griffin, 42 Iowa, 403, Blakey v. Johnson, 13 Bush, 197, Lamar v. Brown, 56 Ala. 157.

6 Brooks v. Allen, 62 Ind. 401.

Stoddard v. Penniman, 108 Mass. 366; s. c. 113 Mass. 386.

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'to A or bearer;' adding the words 'payable at the Bank of S,' though it seems that an acceptor may make a bill payable at no designated place payable at any particular place he will within the town in which by law it is payable; adding another name to that of the maker of a note, though the case appears to be different where another surety is added, upon delivery, to a note or bill already executed by a surety; adding an attestation clause, for that produces a possible and probable change in the evidence of execution, proof of the signature of the attesting witness proving the execution."

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'Made with such intent, or being a final act.' It may be that the alteration was the result of an accident, as where the intention was to make the change in another instrument; or it may be due to mistake in regard to the terms of agreement, or in computation of amount, or in some other particular. When that is the case, it seems that the identity of the instrument is not destroyed. If the new words have been added merely, they may in principle be struck out by the one who added them on discovering the

1 Union Bank v. Roberts, 45 Wis. 373.

2 Southwark Bank v. Gross, 35 Penn. St. 80; Nazro v. Fuller, 24 Wend. 374; Whitesides v. Northern Bank, 10 Bush, 501; Burchfield v. Moore, 3 El. & B. 683.

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5 Troy Bank v. Lauman, 19 N. Y. 477. See Todd v. Bank of Kentucky, 3 Bush, 626; Whitesides v. Northern Bank, supra; of the right of an accommodation acceptor of a bill payable generally to designate a particular place of payment.

4 Hamilton v. Hooper, 46 Iowa, 515; Lunt v. Silver, 5 Mo. App. 186; Haskell v. Champion, 30 Mo. 136; Crandall v. First Nat. Bank, 61 Ind. 349; Wallace v. Jewell, 21 Ohio St. 163; Gardner v. Walsh, 5 El. & B. 83.

5 Crandall v. First Nat. Bank, supra; Keith v. Goodwin, 31 Vt. 268, distinguishing Gardner v. Walsh, supra, and like cases, on the ground that the addition was made after the instrument had been delivered. 6 Adams v. Frye, 3 Met. 103.

facts; or if they are written over an erasure of the original words, and the original words cannot well be restored, they may stand, and the explanation be given at the trial.1

The right to make such correction appears to be limited to the person who made the change, including possibly his agents and personal representatives. After the paper has passed from his hands it is too late, for his indorsee will have taken the paper as altered, and the only right he can have is upon the altered paper. He did not take it as it stood originally, and hence cannot restore it to its original form even where that would be physically practicable. The alteration has been allowed to stand by the party who made it, and so has permanently changed the paper; it has become a final act.' Nor would it make any difference, it seems, that the party who made the alteration did not discover his mistake until after he had transferred the instrument; after transferring it, his rights over it are gone.

The difference between material alterations made by mistake, and alterations made with intent to change the legal effect of the instrument, is plain; in the case of mistake, the object of the act is to restore the writing to the terms agreed upon; in the case of intelligent intention to change, the object is to destroy the writing as evidence of the terms actually agreed upon. That will serve to explain some of the apparent contradictions of the authorities. Thus, it is laid down that a material alteration by a party will destroy the instrument whether it was fraudulent or not; 2 and it is also laid down that a material alteration will not destroy the instrument if it was not fraudulent. Both statements are true. The case usually

1 Compare Horst v. Wagner, 43 Iowa, 373; Krause v. Meyer, 32 Iowa, 566.

2 Draper v. Ward, supra.

8 Kountz v. Kennedy, 63 Penn. St. 187.