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.
If the maker of a negotiable instrument has executed it in such form as to make it easy to alter it so that the alteration cannot be detected by a transferee, some courts hold that in such cases the maker is estopped from setting up such alteration as a discharge or from denying that he executed the instrument in its altered form. This principle applies most clearly when blanks are left which the maker does not fill out at all,1 such as a blank for the date,2 or fur the place of payment,3 or a blank for the interest.4 In such cases it is possible to explain the decision on the theory that whatever the secret intention of the maker as to such blank, he must be presumed as to a bona fide holder to have given authority to fill in such blanks. This principle, however, has been applied by some courts to cases where the maker has inserted some appropriate words in the blank in question, but has done it so negligently that it is possible to add words in the residue of the blank, materially changing the legal effect of the instrument.5 These cases rest on an application of principles of estoppel. Other courts have held that the maker is not liable, even to a bona fide holder, where he has inserted words in blanks so negligently that an opportunity is given to insert other words,6 even if in a non-negotiable note.7 Other cases of alteration have been considered by the courts with the same difference of opinion. In some courts the maker is held though the contract has been materially altered, if he made such alteration possible by his negligence.8
227; Consumers' Ice Co. v. Jennings, 100 Va. 719; 42 S. E. 879.
11 For insurance assessments. Rambousek v. Mystic Toilers, 119 la. 263; 93 N. W. 277. Receipt for payment for land. Bradley v. Lumber Co., 105 Wis. 245; 81 N. W. 394.
12 Consumers' Ice Co. v. Jennings, 100 Va. 719; 42 S. E. 870.
1 Croswell v. Labree, 81 Me. 44; 10 Am. St. Rep. 238' 16 Atl. 331; Long v. Mason, 84 N C. 15.
2 Maguire v. Eichmeier, 109 la. 301; 80 N. W. 395; Warder, etc., Co. v. Willyard, 46 Minn. 531; 24 Am. St. Rep. 250; 49 N. W. 300.
3 Keene v. Weeks & Aldrieli, 19 R. I. 309; 33 Atl. 446.
4 Cass County v. Bank, 9 N. D. 263; 83 N. W. 12.
5 Wolferman v. Bell. 6 Wash. 84; 36 Am. St. Rep. 126; 32 Pac. 1017.
1 Porter v. Hardy. 10 N. D 551; 88 N, W. 458.
2 First State Savings Bank v. Webster, 121 Mich. 149; 79 N. W. 1068.
3 Cason v. Bank, 97 Ky. 487; 53 Am. St. Rep. 418; 31 S. W. 40.
4 Weidman v. Symes, 120 Mick. 657; 77 Am. St. Rep. 603; 79 N. W. 894.
5 Young v. Grote, 4 Bing. 253; Merritt v. Boyden, 191 111. 136; 85 Am. St. Rep. 246; 60 N. E. 907; Seibel v. Vaugkan, 69 111. 257; Harvey v. Smith, 55 111. 224; Lowden v. Bank, 38 Kan. 533; 16 Pac. 748; Blakey v. Johnson, 13 Bush. (Ky.) 197; 26 Am. Rep. 254; Scotland County Nat. Bank v. O'Connel, 23 Mo. App. 165; Brown v. Reed, 79 Pa. 370; 21 Am. Rep. 75; Garrard v. Haddan, 67 Pa. 82; 5 Am. Rep. 412; Johnston Harvester Co. v. McLean, 57 Wis. 258; 46 Am. Rep. 39; 15 N. W. 177.
6 Schofield v. Londesborough
(1896), App. Cas. 514; (1895), 1 Q. B. 536 (referring in the opinion in the lower court to Young v. Grote, 4 Bing. 253, as a " fount of bad argument) ; Fordyce v. Kosminski, 49 Ark. 40; 4 Am. St. Rep. 18; 3 S. W. 892; Conger v. Crabtree, 88 la. 436; 45 Am. St. Rep. 249; 55 N. W. 335; Knoxville Nat. Bank v. Clark, 51 la. 264; 33 Am. Rep. 129; 1 N. W. 491; Burrows v. Klunk, 70 Md. 451; 14 Am. St. Rep. 371; 3 L. R. A. 576; 17 Atl. 378; Greenfield Savings Bank v. Stowell, 123 Mass. 196; 25 Am. Rep. 67; Holmes v. Trumper, 22 Mich. 427; 7 Am. Rep. 661; Simmons v. Atkinson, etc., Co., 69 Miss. 862; 23 L. R. A. 599; 12 So. 263; Middaugh v. Elliott, 61 Mo. App. 601.
7 Searles v. Seipp, 6 S. D. 472; 61 N. W. 804.
8 Phelan v. Ross, 67 Pa. St. 59; Garrard v. Hadden, 67 Pa. St. 82.
Thus if the maker signs a contract with a part thereof written on the margin so that it can be removed without apparently changing the note ;9 or if he signs a contract so drawn that part of it can be cut off and a promissory note left by such removal ;10 or if he signs a note written in part in lead-pencil so that it can be easily erased,11 and it is found as a fact that he was negligent in so signing such contract he is liable to a bona fide holder. In other courts the maker's negligence in writing a condition of a note on a stub, which was afterwards removed,12 or in writing part of the contract below the maker's signature so that it can readily be removed,13 does not make him liable.