This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The defense that the instrument was materially altered after the delivery, may be set up against a bona fide holder for value, where it is not the negligence of the maker that has made such alteration possible.1 If the negligence of the maker has made such alteration possible,2 as where he has left blanks in the instrument which have been filled so as to make an apparent contract different from the real contract entered into by the maker,3 or where he has written a material part of the contract on such a part of the paper that it can be detached from the rest of the paper easily and without chance of detection,4 he has been held liable to a bona fide holder on principles of estoppel. Some authorities, however, hold that even if the maker is negligent in giving opportunity for alteration, he is not liable in case of material alteration even to a bona fide holder.5 The ultimate view of the Iowa courts, however, seems to be that negligence on the part of the maker may estop him, in case an altered note passes to a bona fide holder, but that leaving a blank in a note is not negligence as a matter of law, but is merely a circumstance to be considered in determining the presence or absence of negligence.6
14 Bedell v. Herring, 77 Cal. 572; 11 Am. St. Rep. 307; 20 Pae. 129; Ruddell v. Fhalor, 72 Ind. 533; 37 Am. Rep. 177; Wright v. Flinn, 33 la. 159; Willard v. Nelson, 35 Neb. 651; 37 Am. St. Rep. 455; 53 N. W. 572; Ross v. Doland. 29 0. S. 473; Keller v. Schmidt, 104 Wis. 596; 80 N. W. 935.
15 Keller v. Schmidt, 104 Wis. 596: 80 X. W. 935.
16 Burrows v. Telegraph Co.. SO Minn. 499; 91 Am. St. Rep. 380; 58 L. R. A. 433: 90 N. W. 1111.
1 Exchange National Bank v. Bank, 58 Fed. 140; 22 L. R. A. 686; Fordyce v. Kosminski, 49 Ark. 40; 4 Am. St. Rep. 18; 3 S. W. 892; Young v. Baker, 29 Ind. App. 130; 64 X. E. 54; Simmons v. Lamp-ton Co., 69 Miss. 862; 23 L. R. A. 599; 12 So. 263; Erickson v. Bank, 44 Neb. 622; 28 L. R. A. 577; 62 N. W. 1078; Porter v. Hardy, 10 N. D. 551; 88 N. W. 458; Newman v. King, 54 O. S. 273; 56 Am. St. Rep. 705; 35 L. R. A. 471; 43 X. E. 683; Citizens' National Bank v. Williams, 174 Pa. St. 66; 35 L. R. A. 464; 34 Atl. 303.