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acceptor must be absolute and unconditional. In Crawford v. Muir, 29th Oct. 1873, 1 R. 91; 2 R., H. L. 148; L. R. 2, Sc. Ap. 456, the holder of a bill, which had been dishonoured at maturity, granted a release to the acceptor as follows: "Received from A. B. the sum of £20 in full of all claims competent to me against the acceptors, all which are hereby renounced and discharged, reserving entire my claims against any obligants other than the acceptors, presently bound to me along with the said acceptors." The Lord Chancellor, Lord Cairns, in delivering the judgment of the House of Lords said, "There is no doubt that by proper and apt instrument, it is competent for the holder of a security of this kind to agree with the principal debtor, not to enforce his remedies against the principal debtor, and if he does that in an instrument, which at the same time reserves his rights against those who are liable in the second degree, there will be no discharge of the persons so liable. The test which has been applied to all these cases is this: Has that which has been done towards the principal debtor been a transaction of this kind, that it will entitle the principal debtor, if he should be sued for contribution or indemnity by the surety, to come to the creditor and say, "You have discharged me completely and entirely from the debt, but I am now sued by a person who was surety, and that is inconsistent with the discharge I have received from you." If, on looking at the discharge, you find that there is nothing inconsistent in it, with a proceeding by the surety afterwards against the principal debtor, then the surety is not in any way discharged." The test laid down by Lord Cairns seems to be fully applicable to the determination of the question under this section, namely, whether the discharge is absolute and unconditional. If it is so expressed, the discharge of the acceptor will discharge the other obligants on the bill, but not if this test shows that the discharge to the acceptor merely amounts to a promise on the part of the holder not to sue him, under reservation of his right to proceed against the drawer and prior indorsers. They are not cut out of their claim of relief against the acceptor by such a discharge as was given in Muir v. Crawford, and are therefore liable to the holder.

(d.) Vide §§ 2 and 90 (1).

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(e.) Vide $$ 54, 55, and 56.

(f.) Vide § 29.

(g.) The Act does not define notice, but the notice required is not so precise as is required in the case of notice of dishonour. It is accordingly not necessary that the notice be given by, or on behalf of, any party to the bill, nor that it shall be a direct intimation of the renunciation. It is sufficient, if, from any source, before he takes the bill, the holder in due course has knowledge that the bill has been discharged, or that the liability of any particular party has been discharged. In this case he will not only be without recourse against the person whose liability has been discharged, but he is also barred from enforcing the bill against the parties who are discharged by the renunciation of the holder's right against any of the other parties-e.g., by the unconditional discharge of an acceptor who has not paid in full.

63. (1.) Where a bill is intentionally cancelled by Cancellation. the holder (a) or his agent, and the cancellation is apparent thereon, the bill is discharged.

(2.) In like manner any party liable (b) on a bill 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 recourse against the party whose signature is cancelled, is also discharged.

(3.) A cancellation made unintentionally, or under a mistake, or without the authority of the holder (a), 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 (c).

§ 63.

Alteration of bill.

(c.) Cancellation affects a holder in due course, provided that it be apparent on the bill, because he has thereby notice of the discharge.

"Agent" means an agent of the holder having authority, express or implied, to make the cancellation. Where a bill appears to have been cancelled, summary diligence is incompetent, even though the holder proves that it was made unintentionally, vide note on § 98. By cancellation of the bill, the drawer is discharged of all liability on the bill, but the drawer is not thereby necessarily put in the same position as if the bill had been paid at maturity. In Yglesias v. River Plate Bank, 3 C. P., Div. 60 and 330, the plaintiff obtained from the defendants an advance of £15,000 upon the security of goods then in transit consigned to S., and also of six bills drawn by the plaintiff upon, and accepted by, S. against the shipment. The plaintiff gave the bank a cheque for £2500 and requested them not to sell, and authorised the bank to hold the cheque as collateral security for payment of the bills, to be returned when the bills were paid. Two of the bills were paid, the other bills were then dishonoured, and the plaintiff authorised the bank to sell the goods on non-payment of the bills, and held himself responsible for the deficiency. The bank sued S., and ultimately an arrangement was entered into, by which they cancelled his acceptances and sold the goods. The plaintiff, the drawer, sued the bank for return of the £2500, on the ground that the cancellation of the acceptances was a discharge of the bill, and therefore operated payment to their amount. It was held that the plaintiff was on this state of facts the principal debtor, and that he was not entitled to treat these cancelled acceptances as a payment, though he was discharged from liability on the bills.

64. (1.) Where a bill or acceptance (a) is materially altered without the assent of all parties liable on the bill, the bill is avoided (b), except as against a party

who has himself made, authorised, or assented to the alteration, and subsequent indorsers (c).

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 (d).

(2.) In particular the following alterations are material, namely, any alteration of the date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment without the acceptor's assent (e).

(a.) A bill may be altered before issue-i.e., before the first delivery of a bill or note complete in form to a person, who takes it as a holder, vide § 2, because till delivery in order that it may take effect as a bill, there is no completed contract on the bill, vide § 21. Where a bill wanting in any material particular is delivered, the person in possession has a primâ facie authority to fill up the omission in any way he thinks fit, vide § 20, but the want of a material particular and consequent incompleteness of a delivered bill in form will not entitle the holder to alter a material part of the bill, because there is already a completed contract on the bill, and the alteration makes a new contract. Where there is a material alteration of the bill after issue, or after delivery of a bill wanting in material point, the new contract in the bill cannot be sued on because it is unstamped, see 33 & 34 Vict. c. 97, Appendix. Bowman v. Nicol, 5 Durnford and East, T. R. 547, 1 Ross, L. C. 698; Home v. Purves, 7th July, 1836, 14 Sh. 898. Where a bill is drawn payable to a third party, delivery of the acceptance to the drawer is not the issue of the

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bill, the drawer is not a holder of the bill, vide § 2, and has no right of action against the acceptor on the bill, and till delivery of the acceptance to the payee there is no completed contract between the acceptor and the payee; the acceptance in such a case may be altered, because the Stamp Act does not apply to an uncompleted contract.

(b.) Where a material alteration is made before issue, and assented to by all parties liable on the bill-e.g., the holder and the acceptor, in the case of a bill payable to a third party, the new contract is valid under this section, but after issue the Stamp Act, vide supra, prevents any material alteration being made, even with the assent of all parties; but if the parties liable have assented they are apparently liable on the bill as unaltered, because this Act declares that a bill materially altered shall be avoided, except against those parties thereto who have assented; and the Stamp Act cannot apparently be pleaded, because the original bill being still in force, it cannot be objected that it is not properly stamped. The bill, as altered, cannot be sued on, and it is pars judicis to notice the want of the Stamp.

(c.) Where the parties liable have not assented, the bill is avoided, not discharged, and the holder can sue on the original debt.

(d.) In such a case the objection that the bill is not stamped cannot be stated against a holder in due course, because his right is to the bill as unaltered.

Besides the alterations stated in this subsection, the following alterations are material :—The substitution of one drawer for another, Fleming v. Scott, 1st July, 1823, 2 Sh. 446; the alteration of the name of an indorsee, M'Ara v. Watson, 3rd June, 1823, 2 Sh. 360; the erasure of the name of the acceptor and writing another above it, M'Ewan v. Graham, 21st Nov. 1833, 12 Sh. 110; an alteration in the consideration, Knill v. Williams, 10 East. 431.

(e.) A bill is not materially altered where a mere correction is made, Brutt v. Picard, R. and M. 37, nor where a note is added, which does not change the effect of a bill, but merely explains it-e.g., the addition of the words jointly and severally to the acceptance of a Scotch bill was held not to avoid it,