Material Alteration Discharges.

§ 1742. The material alteration of a bill by a party discharges all parties not consenting to it.24 And it is sufficient to show that the bill has been materially altered without any allegation or proof of fraud.25 If the alteration is material and beneficial to the holder, fraud will be presumed as against him.26 And where payment is made by mistake on an altered bill, from which the party paying had been discharged by the alteration, he may recover the payment so made.27 If it is altered designedly by the owner, it will be rendered void even without fraud on his part.28 A material alteration makes a new contract, and discharges both maker 2o and surety. So, the drawer and indorser will be discharged, if the bill is altered before acceptance, although the acceptance may be valid. So, if it is al tered by the acceptor, and the payee fails to return it to the drawer.32

31

30

Immaterial Alteration.

§ 1743. An alteration, to effect the discharge of any party, must be in a material part of the instrument. If it does not vary the meaning of the paper, it is immaterial who made it.33 And although

24 Benj. Chalm. Dig. art. 244; Chit. Bills, 208; 2 Daniel, Neg. Inst. 383; 1 Edw. Bills & N. § 244; Master v. Miller, 2 H. Bl. 140; Hood's Appeal (Pa. Sup.) 7 Atl. 137; Presbury v. Michael, 33 Mo. 542; Mackay v. Dodge, 5 Ala. 388; Dietz v. Harder, 72 Ind. 208; Monroe v. Paddock, 75 Ind. 422; Bowman v. Mitchell, 79 Ind. 84: Batchelder v. White, 80 Va. 103; Northern Bank v. Farmers' Bank, 18 B. Mon. (Ky.) 506.

25 Eckert v. Pickel, 59 Iowa, 545.

26 Huntington v. Finch, 3 Ohio St. 445.

27 Fraker v. Little, 24 Kan. 598.

28 Vanauken v. Hornbeck, 14 N. J. Law, 178; First Nat. Bank of Springfield v. Fricke, 75 Mo. 178.

29 Chism v. Toomer, 27 Ark. 108; Lee v. Starbird, 55 Me. 491; Pankey v. Mitchell, 1 Ill. 383.

30 Bethune v. Dozier, 10 Ga. 235; Mackay v. Dodge, 5 Ala. 388; Ide v. Churchill, 14 Ohio St. 372; Johnston v. May, 76 Ind. 293.

31 Bathe v. Taylor, 15 East, 412.

82 Paton v. Winter, 1 Taunt. 420.

83 Chit. Bills, 211; Earl of Falmouth v. Roberts, 9 Mees. & W. 469.

made without consent, and after the bill is complete and delivered, it will not invalidate it. So, if words are inserted which the law necessarily implies, it will not affect the validity of the bill; 35 or, if a writing in pencil is retraced in ink, it will not be material. 36 But any alteration which changes the operation of the bill and the liability of the parties will be material, whether the change is prejudicial or not.37 The materiality of an alteration is a question of law for the court to determine.3 38

Addition of Maker.

§ 1744. The addition of another maker after the execution of the note is a material alteration, and discharges those who have already signed it, whether the note is a joint note,40 or joint and several.11

39

34 Humphreys v. Crane, 5 Cal. 173. Either at common law or under the English Stamp Acts. Chit. Bills, 211; 1 Edw. Bills & N. § 259; Sanderson v. Symonds, 1 Brod. & B. 426; Walter v. Cubley, 2 Cromp. & M. 151.

35 Chit. Bills, 212; Doe v. Houghton, 1 Man. & R. 208.

36 Reed v. Roark, 14 Tex. 329. Although in so doing the payee inadvertently changed the spelling of the maker's name. Dunn v. Clements, 52 N. C. 58.

37 Benj. Chalm. Dig. art. 247; 1 Edw. Bills & N. § 247; 2 Pars. Notes & B. 551, 564; Gardner v. Walsh, 5 El. & Bl. 83; Craighead v. McLoney, 99 Pa. St. 211; Herrick v. Baldwin, 17 Minn. 209 (Gil. 183). The test is not whether it reduces a party's liability, but whether it is the same note. Johnston v. May, 76 Ind. 293.

38 Benj. Chalm. Dig. art. 247; Chit. Bills, 208; Vance v. Lowther, 1 Exch. Div. 176; Bowers v. Jewell, 2 N. H. 543; Hill v. Calvin, 4 How. (Miss.) 231; Overton v. Matthews, 35 Ark. 146; Fisherdick v. Hutton, 44 Neb. 122, 62 N. W. 488; Winkles v. Guenther, 98 Ga. 472, 25 S. E. 527. But in Moye v. Herndon, 30 Miss. 110, both the fact of the alteration and its materiality were left to the jury.

39 Nicholson v. Combs, 90 Ind. 515; Singleton v. McQuerry, 85 Ky. 41, 2 S. W. 652; Hamilton v. Hooper, 46 Iowa, 515; Dickerman v. Miner, 43 Iowa, 508; Sullivan v. Rudisill, 63 Iowa, 158, 18 N. W. 856; Browning v. Gosnell, 91 Iowa, 448, 59 N. W. 340; First Nat. Bank of Butte v. Weidenbeck, 87 Fed. 271; Heath v. Blake, 28 S. C. 406, 5 S. E. 842; Ford v. Bank (Tex. Civ. App.) 34 S. W. 684; Bank of Limestone v. Penick, 5 T. B. Mon. (Ky.) 31; Harper v. Stroud, 41 Tex. 636; Lunt v. Silver, 5 Mo. App. 186; including sureties,

40 Wallace v. Jewell, 21 Ohio St. 163.

41 Benj. Chalm. Dig. art. 247; Gardner v. Walsh, 5 El. & Bl. 83; Shipp's Adm'r v. Suggett's Adm'r, 9 B. Mon. (Ky.) 5. But see, contra, Miller v. Finley, 26 Mich. 249.

And, although a note signed by A. is joint and several in its terms, the maker will be discharged by the subsequent insertion over his signature of the words, "for A. & B." 42 So, the original maker will be discharged, where an additional maker is afterwards procured from another county for the purpose of bringing the note within the jurisdiction of the courts of that county.43 But the new maker will be liable, although the others are discharged. And where the addition completes the original contract, and does not vary the contract of the original maker, the latter remains liable.*5 So, where the signature is that of a married woman, and it is not binding on her without a separate estate, it will be immaterial, in the absence of proof on the defendant's part that she has such estate. 46

44

And where one maker signs a printed blank, and delivers it to his eo-maker, to be negotiated for the accommodation of the latter, the addition of another maker by such co-maker will not discharge the accommodation maker.*7 So, an accommodation indorser will not be discharged, where the maker procures the signature of an additional maker, and erases it again before issuing the note. So, an accommodation maker, by the addition of the signature of the accommodated payee below his own.49

48

McVean v. Scott, 46 Barb. (N. Y.) 379; and indorsers, Henry v. Coats, 17 Ind. 161. But see, contra, in the absence of fraud, Montgomery R. Co. v. Hurst, 9 Ala. 513; Rudulph v. Brewer, 96 Ala. 189, 11 South. 314; Union Banking Co. v. Martin's Estate (Mich.) 71 N. W. 867; Crandall v. Bank, 61 Ind. 349. 42 Chadwick v. Eastman, 53 Me. 12.

43 Bowers' Adm'r v. Briggs, 20 Ind. 139.

44 Dickerman v. Miner, 43 Iowa, 508; Hamilton v. Hooper, 46 Iowa, 515; Hochmark v. Richler, 16 Colo. 263, 26 Pac. 818. But not as joint maker. Howe v. Taggart, 133 Mass. 284.

45 Where a new signature is added before the note is negotiated, Brownell r. Winnie, 29 N. Y. 400; Card v. Miller, 1 Hun (N. Y.) 504; Favorite v. Stidham, 84 Ind. 423; Snyder v. Van Doren, 46 Wis. 602, 1 N. W. 285. So, where the new party becomes a surety or guarantor, and his signature makes a new and independent contract as to him. Stone v. White, 8 Gray (Mass.) 589; McCaughey v. Smith. 27 N. Y. 39.

46 Williams v. Jensen, 75 Mo. 681.

47 Snyder v. Van Doren, 46 Wis. 602, 1 N. W. 285.

48 Whitmore v. Nickerson, 125 Mass. 496.

49 Geddes v. Blackmore, 132 Ind. 551, 32 N. E. 567; Babcock v. Murray, 58 Minn. 385, 59 N. W. 1038; Denick v. Hubbard, 27 Hun (N. Y.) 347.

Addition of Surety.

51

§ 1745. Where the signature of another is added as surety for the maker without his consent, it will discharge his liability, unless it was done in pursuance of the original agreement.50 And such addition has been held to discharge the original surety, although the new surety may not be liable (on account of fraud upon him),52 and although his name may afterwards be cut off before suit is brought.53 So, where two sureties named in a bond do not sign it, and two others sign who are not named, it will discharge an original surety, who delivered the bond to his principal to be executed by the sureties named in it. But the addition of another surety to a joint and several note after its execution, by consent of all parties, will not preclude an original surety who has paid the bill from recovering against its principal.55

56

Where a surety is added without the consent of the other party, he will still be liable. And, where the signature of a new surety is added to a demand note some months after its execution, it has been held to constitute a new contract as to him, and not an alteration of the original note." And such signature has been held not to be a material alteration,58 and not to discharge the principal debtor, who could not be prejudiced by it.59 And the alteration of a note by the addition of a surety's name is, in like manner, no discharge of a collateral mortgage given by such surety.

50 Byles, Bills, 326; Chit. Bills, 215; Clark v. Blackstock, Holt, 474; Ex parte White, 2 Deac. & C. 334. But see, contra, Barnes v. Van Keuren, 31 Neb. 165, 47 N. W. 848; Royse v. Bank, 50 Neb. 16, 69 N. W. 301.

51 Berryman v. Manker, 56 Iowa, 150, 9 N. W. 103. But see, contra, Graham v. Rush, 73 Iowa, 451, 35 N. W. 518; Anderson v. Bellenger, 87 Ala. 334, 6 South. 82; Ward v. Hackett, 30 Minn. 150, 14 N. W. 578.

52 Conger v. Bean, 58 Iowa, 321, 12 N. W. 284.

53 Hall's Adm'x v. McHenry, 19 Iowa, 521.

54 Hall v. Smith, 14 Bush (Ky.) 604.

55 Chit. Bills, 216; Catton v. Simpson, 8 Adol. & E. 136.

56 Dodge v. Pringle, 29 Law J. Exch. 115.

Stone v. White, 8 Gray (Mass.) 589.

58 Robbins v. Brooks, 42 Mich, 62, 3 N. W. 256; Ward v. Hackett, 30 Minn. 150, 14 N. W. 578.

59 Miller v. Finley, 26 Mich. 249; Nelson v. White, 61 Ind. 139.

co Mersman v. Werges, 112 U. S. 139, 5 Sup. Ct..65, reversing 3 Fed. 378.

Other Signatures Added.

64

§ 1746. An indorser will not be discharged by the addition of a third party as acceptor; 1 or, in pursuance of the original intention, by the addition of another and prior indorser.62 So, if the payee of a note, intending to negotiate it, signs his name under that of the maker, it will not be a material alteration or discharge the surety.63 But where he wrote his name under that of the maker, with the word "Surety," it was held to be a material alteration. If, however, he signs it in that place by inadvertence, intending to be a guarantor, it will not render the note void. The payee's signature placed under that of the maker will be held to be a mere indorsement, if it is so intended. And the maker will not be discharged, although the note is payable to bearer, and the signature so placed was erased by the payee on taking up the note.67

65

Qualification of Signature.

68

§ 1747. Where A. and B. sign a bill in their joint name (although they are not partners), the subsequent addition of their individual signatures under their joint signature, after acceptance, will not be a material alteration to discharge the acceptor. So, it is not a material alteration to add the word "Agent" to a maker's signature, since his liability is not thereby altered. Still less to retouch the signature or to make a cross after the signature. But it is ma

61 Smith v. Lockridge, 8 Bush (Ky.) 423.

€2 London & P. Bank v. Roberts, 22 Wkly. Rep. 402.

71

63 Bowser v. Rendell, 31 Ind. 128; Denick v. Hubbard, 27 Hun (N. Y.) 347. 64 Chappell v. Spencer, 23 Barb. (N. Y.) 584.

65 Although it might do so, if the note were payable to the maker's order.

Cason v. Wallace, 4 Bush (Ky.) 388.

66 Ex parte Yates, 2 De Gex & J. 191.

67 Muir v. Demaree, 12 Wend. (N. Y.) 468.

68 Blair v. Bank, 11 Humph. (Tenn.) 84.

69 Manufacturers' & Merchants' Bank v. Follett, 11 R. I. 92.

70 United States Nat. Bank v. National Park Bank, 59 Hun, 495, 13 N. Y. Supp. 411.

71 King v. Rea, 13 Colo. 69, 21 Pac. 1081.