18. When two or more sureties contract severally, the creditor § 142 by releasing one does not discharge the others; but when the creditor

releases one of two or more sureties who have contracted jointly and Principal severally, the others are discharged, the joint suretyship of the others and surety. being part of the consideration of the contract of each: Ward v. National Bank of New Zealand, 8 App. Cas. at p. 764 (1883).

19. The discharge of one of two makers of a joint and several promissory note on part payment, does not discharge the other from his liability for the balance: Stephens v. Hughes, 1 T. L. R. 415 (1885).

20. "An absolute discharge given to the acceptor discharges him from all liability on the bill. But a discharge with the reservation of the rights of the sureties, the indorsers, only discharges the acceptor from his liability to the person giving the discharge ": per Lopes, L. J. in Jones v. Whittaker, 3 T. L. R. 723 (1887).

21. A holder may covenant not to sue the maker and reserve his rights against an indorser even though the note is made by a firm and indorsed by members of the firm individually: Bank v. Meloon, 183 Mass. 66 (1903).

Faneuil Hall

53 V., c.

3. A renunciation must be in writing, unless Writing. the bill is delivered up to the acceptor. 33, s. 61 (1). Imp. Act, s. 62 (1).

In England an express renunciation by parol was formerly sufficient: Dingwall v. Dunster, 1 Dougl. 247 (1779), Whatley v. Tricker, 1 Camp. 35 (1807); Foster v. Dawber, 6 Ex. at p. 851 (1851). The clause making a writing necessary was inserted in the Imperial Act from the Scotch law.

A verbal renunciation and delivery of a note to a devisee of the maker is not a discharge of the note, as the devisee does not represent the testator: Edwards v. Walters, [1896] 2 Ch. 157.

due

4. Nothing in this section shall affect the rights Holder in of a holder in due course without notice of renunciation.

53 V., c. 33, s. 61.

Imp. Act, s. 62 (2).

As the section relates only to bills at or after maturity, and a holder in due course must have acquired the bill before it was overdue, the latter date could not possibly affect him. He might, however, but for this sub-section, have been affected as to a bill acquired at maturity, that is on the last day of grace of a time bill, or as to a demand bill which had not been in circulation an unreasonable length of time.

course.

$ 143

143. Where a bill is intentionally cancelled by

Cancella the holder or his agent, and the cancellation is apparent thereon, the bill is discharged.

tion of bill.

Of any

2. In like manner, any party liable on a bill may signature. be discharged by the intentional cancellation of his signature by the holder or his agent.

Discharge

of

3. In such case, any endorser who would have endorser had a right of recourse against the party whose signature is cancelled is also discharged. c. 33, s. 62 (1) (2). Imp. Act, s. 63 (1) (2).

53 V.,

The usual made of cancelling a bill is by writing "paid or "discharged" upon it, or mutilating or cancelling the signature of the party primarily liable, or tearing the bill. It is a question of fact.

As to striking out indorsements, see ante p. 213. Prior parties are not released by the cancellation of a signature: Barthe v. Armstrong, 5 R. L. 213 (1869); Biggs v. Wood, 2 Man. 272 (1885).

When a bill, produced at the trial, has the defendant's signature erased, the plaintiff cannot recover without evidence that it was done by mistake: Peel v. Kingsmill, 7 U. C. Q. B. 364 (1850); Isaacs v. Grothe, 29 N. B. 420 (1890); Knight y. Clements, 8 A. & E. 215 (1838); Clifford v. Parker, 2 M. & Gr. 909 (1841).

The surrender of a bill by the bank holding it to the acceptor, with the word "Paid" stamped on it, is a complete discharge of the drawer, and it cannot afterwards be used by the bank in support of a claim against the latter, because the acceptor has since become insolvent: Tessier v. Banque Nationale, Q. R. 28 S. C. 140 (1906).

For a discussion of the principle of the section,, see Scholey v. Ramsbottom, 2 Camp. 485 (1810); Ralli v. Dennistoun, 6 Ex. 483 (1851); Ingham v. Primrose, 7 C. B. N. S. 82 (1859); Baxendale v. Bennett, 3 Q. B. D. at p. 532 (1878); Yglesias v. River Plate Bank, 3 C. P. D. 60 (1877).

No consideration is necessary to support a discharge under this section: McCormick v. Shea, 99 N. Y. Supp. 467 (1906).

cellation.

144. A cancellation made unintentionally, or § 144 under a mistake, or without the authority of the Unintenholder, is inoperative: Provided that where a bill tional canor any signature thereon appears to have been cancelled, the burden of proof lies on the party Burden of who alleges that the cancellation was made unin- proof. tentionally, or under a mistake, or without authority. 53 V., c. 33, s. 62 (3). Imp. Act, s. 63 (3).

The usage in London in such a case is to return the bill with the words "Cancelled by mistake" written upon it: Byles, p. 268.

If a banker cancel a bill by mistake, without any want of due care, he does not incur any liability; but if there is negligence, and any loss result therefrom, he may be held liable: Novelli v. Rossi, 2 B. & Ad. 757 (1831); Warwick v. Rogers, 5 M. & Gr. 340, 373 (1843); Prince v. Oriental Bank, 3 App. Cas, 325 (1878); Bank of Scotland v. Dominion Bank, Toronto, [1891] A. C. 592. See also Raper v. Birkbeck, 15 East, 17 (1812); Wilkinson v. Johnson, 3 B. & C. 428 (1824).

of bill.

145. Where a bill or acceptance is materially Alteration altered without the assent of all parties liable on the bill, the bill is voided, except as against a party who has himself made, authorized, or assented to the alteration and subsequent endorsers: Provided that where a bill has been materially Holder in 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 tenor. 53 V., c. 33, s. 63 (1). Imp. Act, s. 64 (1).

The first clause is in accordance with the old law. Subsubsequent endorsers are held liable because endorsers are estopped from denying the prior signatures, and that it is a valid bill, and they assumed the liability indicated by the bill as altered: sec. 133.

due

course.

§ 145

of bill.

It has been laid down that an alteration is material which in any way alters the operation of the bill and the Alteration liabilities of the parties, whether the change be prejudicial or beneficial, or which would alter its effect if used for business purposes: Gardner v. Walsh, 5 E. & B. at p. 89 (1855), Suffell v. Bank of England, 9 Q. B. D. at pp. 568, 574 (1882). Whether an alteration is material or not, is a question of law: Re Commercial Bank, 10 Man. 174 (1894); Pickup v. Northern Bank, 9 W. L. R. (Man.) at p. 177 (1908); Vance v. Lowther, 1 Ex. D. 176 (1876).

The alteration need not be in the body of the bill or note. Adding in the corner Interest at 6 per cent." is a material alteration, as it is part of the contract which is to be collected from all within the four corners of the instrument. It is not the same as a memorandum of the place of payment in the corner, which by mercantile usage may be inserted for convenience: Warrington v. Early, 2 E. & B. 763 (1853).

The proviso was inserted in the English bill in committee, and is intended to modify the rigor of the common law, which voided the bill entirely, even in the hands of an innocent holder. For a definition of a holder in due course, see section 56.

In England before the Act alteration even by a stranger made a bill void: Davidson v. Cooper, 11 M. & W. 799 (1843). The Act provides for a case of cancellation without authority of the holder: sec. 144; but has made no provision as to alteration without authority. In the United States the English rule on this point was not followed: Jeffrey v. Rosenfeld, 179 Mass. 506 (1901); 2 Daniel, § 1373 a.

ILLUSTRATIONS.

1. Defendant indorsed a note for the accommodation of the makers. They afterwards inserted the words "with interest at 10 per cent." without his knowledge. He was held not liable on the note to a bona fide holder for value: Halcrow v. Kelly, 28 U. C. C. P. 551 (1878).

2. Where indorsers subsequently assented to the addition of the words "with interest at 7 per cent." they were held liable: Fitch v. Kelly, 44 U. C. Q. B. 578 (1879).

3. Where a note was payable to P. or bearer, and after being § 145 negotiated, the name P. was written, but not by him, below the signature of the makers, and without their knowledge, the note was held to be void: Reid v. Humphrey, 6 Ont. A. R. 403 (1881).

4. Two notes were given for patent rights, and the maker indorsed on them the words "the within notes not to be sold." The payee cut from one note the portion of these words, but without defacing it. On the other he erased the word "not." Plaintiff noticed the erasure when buying the notes, and gave much less than their value for them. Held, that he was not an innocent holder and the notes were void: Swaisland v. Davidson, 3 O. R. 320 (1882).

5. Two persons signed a promissory note commencing "I promise to pay to bearer." It was discounted by plaintiff for the holder, on the latter agreeing to become responsible for the note, and signing below the makers. It was held that he was not an indorser, but was liable as a surety, and that the note was not voided as against any of the parties. Mersman v. Werges, 112 U. S. 139 (1884) approved; Kinnard v. Tewsley, 27 O. R. 398 (1896).

6. Where the name of one of the makers of a note was not signed by him or with his authority, and this not being apparent, the plaintiff as a holder for value was held entitled to recover as if this name had never been on the note: Cunningham v. Peterson, 29 O. R. 346 (1898).

7. A note is voided by the insertion of the words " 'jointly and severally," even although the holder erases the words before the objecting makers become aware of the change: Banque Provinciale v. Arnoldi, 2 O. L. R. 624 (1901).

8. The words "Extended to Nov. 28, '02," written by the secretary of the plaintiff company on the corner of a note, and not assented to by defendants, will void the note: Mutual Life v. McLaughlin, 36 C. L. J. 630 (1903). Contra, Drexler v. Smith, 30 Fed. R. 754 (1887).

9. A cheque for $5 was accepted by the Bank of Hamilton, then raised by the drawer to $500, and deposited with the Imperial Bank which passed it through the clearing house, and the next day it was paid by the Bank of Hamilton. The following morning the Bank of Hamilton discovered the forgery and claimed $495 from the Imperial Bank. Held, in all the Courts, that it was entitled to recover: Imperial Bank v. Bank of Hamilton, [1903] A. C. 49.

10. When the maker of a note signed it with a blank before the sum, both in the body of the note and in the margin, and the amount was increased, he was, on the ground of negligence, held liable to an innocent holder for the larger sum: Dorwin v. Thomson, 13 L. C. J. 262 (1869); Young v. Grote, 4 Bing. 253 (1827); Marcussen v. Birkbeck Bank, 5 T. L. R. 646 (1889). Overruled; see No. 19 below.

11. Where the material alteration was a forgery, it could not be ratified, nor would a subsequent assent be a compliance with the section: Hébert v. Banque Nationale, 40 S. C. Can. 458 (1908).

By material alteration.