the Quebec courts have been conflicting, and where a party § 61. to a bill occupying the relation of a surety, has been released by the mere giving of time, notwithstanding Article 1961 of the Code, it is not usually clear from the report whether this is on account of there having been a novation, or on account of the provision making the law of England as to bills and notes applicable, where the law of the province or the Code has no express provision.

As to the effect of the conflict between the law of Quebec and that of other provinces, see notes on section 71, and on section 8 of the amending Act of 1891.

ILLUSTRATIONS.

1. Time given to the maker of a note, discharges an indorser: Vankoughnet v. Mills, 5 Grant, 653 (1856); Arthur v. Lier, 8 U. C. C. P. 180 (1858); Farrell v. Oshawa Mfg. Co. 9 U. C. C. P. 239 (1859); Bedell v. Eaton, 4 N. B. (2 Kerr) 217 (1843).

2. The holder of a note gave time to two makers who were the principal debtors, without the consent of a third maker who was surety for them. The latter was held not liable to a plaintiff who received the note after maturity with notice: Perley v. Loney, 17 U. C. Q. B. 279 (1858); Shepley v. Hurd, 3 Ont. A. R. 549 (1879); Davidson v. Bartlett, 1 U. C. Q. B. 50 (1844), overruled; Greenough v. McClelland, 2 El. & El. 424 (1860).

3. Mere delay, or indulgence, or even negligence, is not enough where there is no binding agreement to give time : Thompson v. McDonald, 17 U. C. Q. B. 304 (1858); Wilson v. Brown, 6 Ont. A. R. 87 (1881); Berthelot v. Aylwin, 2 Rev. de Leg. 31 (1819); Merchants' Bank v. Whitfield, 2 Dorion, 157 (1881); Philpot v. Briant, 4 Bing. 717 (1828); Goring v. Edwards, 6 Bing. at p. 99 (1829); Black v. Ottoman Bank, 15 Moore P. C. at p. 484 (1862); Carter v. White, 25 Ch. D. at p. 672 (1883); Hay v. Powrie, 13 Sess. Cas. 777 (1886).

4. A reserve of the rights of the holder against the parties who apparently occupy the relation of sureties, prevents a

§ 61. discharge of the latter: Bank of Upper Canada v. Jardine, 9 U. C. C. P. 332 (1859); Canadian Bank of Commerce v. Northwood, 14 O. R. 207 (1887); Muir v. Crawford, L. R. 2 Sc. App. 456 (1875).

5. When the holders of a note gave time to an indorser, knowing that the maker had signed the note for his accommodation the maker was discharged: Bank of Upper Canada v. Ockermann, 15 U. C. C. P. 363 (1865); ex parte Webster, De Gex, 414 (1847); Bailey v. Edwards, 4 B. & S. 761 (1864).

6. A mother gave her son a note for his accommodation. The holder, who was aware of the facts, took two renewal notes from the son without the mother's knowledge. Held, that she was released: Devanney v. Brownlee, 8 Ont. A. R. 355 (1883). See Healey v. Dobson, 8 O. R. 691 (1885).

7. Where a bank gave up notes to a principal debtor and took forged renewals in their place, the surety was released: Merchants' Bank v. McKay, 15 S. C. Can. 672 (1888).

8. An indorsement of the payment of interest on a note up to a date beyond, is evidence of an extension of time of payment to such date, and discharges a surety: Ryan v. McKerrall, 15 O. R. 460 (1888).

9. Delay granted to the maker of a note does not liberate the indorser Massue v. Crebassa, 7 L. C. J. 211 (1863). Contra, St. Aubin v. Fortin, 3 Rev. de Leg. 243 (1845); Desrosiers v. Guerin, 21 L. C. J. 96 (1876); Carslake v. Wyatt, 2 Stephens' Dig. 112 (1877); Banque Ville Marie v. Mallette, 33 L. C. J. 8 (1888): Pelletier v. Brosseau, M. L. R. 6 S. C. 331 (1890).

10. Where the holder accepted a composition from and released an indorser for whose accommodation the note was made, not knowing that it was for his accommodation, the maker is not discharged: Banque Nationale v. Betournay, 18 R. L. 175 (1887).

11. A creditor took from a debtor a sight bill accepted by a third party and instead of collecting it, took a renewal. The acceptor failed before the renewal matured. Held, that the

original debtor was discharged: O'Brien v. Semple, M. L. R. § 61. 3 Q. B. 55 (1887).

12. An indorser was released before maturity by the bank which held the note at maturity. Held, that the plaintiff who took it when overdue, cannot recover from the indorser: McLeod v. Carman, 12 N. B. (1 Han.) 592 (1869).

13. Taking a renewal bill payable on demand, is a giving of time as well as one payable at a fixed future time: Currie v. Misa, L. R. 10 Ex. at pp. 163, 164 (1875).

14. When two or more sureties contract severally, the creditor by releasing one does not discharge the others; but when the creditor releases one of two or more sureties who have contracted jointly and severally, the others are discharged, the joint suretyship of the others being part of the consideration of the contract of each: Ward v. National Bank of New Zealand, 8 App. Cas. at p. 764 (1883).

15. 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).

16. 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).

•

tion of bill.

62. Where a bill is intentionally cancelled by Cancella the holder or his agent, and the cancellation is apparent thereon, the bill is discharged:

signature.

2. In like manner, any party liable on a bill of any may be discharged by the intentional cancellation of his signature by the holder or his agent. In such case, any indorser who would have had a right of

§ 62. recourse against the party whose signature is cancelled is also discharged. Imp. Act, s. 63 (1) (2).

Erroneous cancellation.

As to striking out indorsements, see ante p. 221, and section 59, ss. 2 (b). Prior parties are not released by the cancellation of a signature: Barthe v. Armstrong, 5 R. L. 213 (1869); Biggs v. Wood, 2 Man. L. R. 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); Issacs v. Grothe, 10 C. L. T. (N. B.) 194 (1890); Knight v. Clements, 8 A. & E. 215 (1838); Clifford v. Parker, 2 M. & Gr. 909 (1841).

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); Yglesias v. River Plate Bank, 3 C. P. D. 60 (1877).

3. A cancellation made unintentionally, or under a mistake, or without the authority of the holder, is inoperative; but where a bill or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally, or under a mistake, or without authority. 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. 263.

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. § 62.
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.

63. 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 indorsers:

Provided, that where a bill has been materially Proviso. 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: Imp. Act, s. 64 (1)

The first clause is in accordance with the old law. Subsequent indorsers are held liable because an indorser is estopped from denying the prior signatures, and that it is a valid bill: section 55, s-s. 2.

It has been laid down that 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, 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: Vance v. Lowther, 1 Ex. D. 176 (1876).

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 29.