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.
A change in the language of a written instrument after execution with the assent of all the parties thereto, operates as a discharge of the original contract and the substitution of a new contract therefor.1 One who has assented to an alteration can not take advantage thereof as a discharge of the instrument.2 If the parties have agreed upon a modification of the contract, a written contract is not discharged by the fact that the physical act of inserting such modification upon the written instrument is made by one of the parties in the absence of the other.3
2 Barton Savings Bank & Trust Co. v. Stephenson, 87 Vt 433, 51 L. R. A. (N.S.) 346, 89 Atl. 639.
3 Blakey v. Johnson, 76 Ky. (13 Bush.) 197, 26 Am. Rep. 254; Draper v. Wood, 112 Mass. 315, 17 Am. Rep. 92; Barton Savings Bank & Trust Co. v. Stephenson, 87 Vt. 433, 51 L. R. A. (N.S.) 346, 89 Atl. 639.
4 California. Pelton v. Lumber Co., 113 Cal. 21, 45 Pac. 12.
Connecticut. Aetna National Bank v. Winchester, 43 Conn. 391.
Massachusetts. Draper v. Wood, 112 Mass. 315, 17 Am. Rep. 92.
Michigan. Aldrich v. Smith, 37 Mich. 468, 26 Am. Rep. 536.
New Mexico. Ruby v. Talbott, 5 N. M. 251, 3 L. R. A. 724, 21 Pac. 72.
West Virginia. Ohio Valley Bank v. Lockwood, 13 W. Va. 392, 31 Am. Rep. 768. -
5 Pelton v. Lumber Co., 113 Cal 21, 45 Pac. 12.
1 Arkansas. Powell v. Fowler. 85 Ark. 451, 102 Am. St. Rep. 41, 108 S. W. 827.
Iowa. Mathias v. Leathers, 99 la. 18, 68 N. W. 449; Phillips v. Crips, 108 la. 605, 79 N. W. 373.
Kentucky. Huffman v. Hatcher, 178 Ky. 8, L. R. A 1918B, 484, 198 S. W. 236 (deed).
Massachusetta. Boston v. Benson, 66 Mass. (12 Cush.) 61.
Ohio. Wardlow v. List, 41 O. S. 414; Hecker v. Mahler, 64 O. S. 398, 60 N. E. 555.
Tennessee. Bryant v. Bank, 107 Tenn. 560, 64 S. W. 895.
Virginia. Schmelz v. Rix, 95 Va. 509, 28 S. E. 890.
Wisconsin. Kane v. Herman, 109 Wis. 33, 85 N. W. 140.
2 Hecker v. Mahler, 64 O. S. 398, 60 N. E. 555.
3 Wardlow v. List, 41 O. S. 414.
An alteration changing the amount of indebtedness with the consent of the parties,4 changing the rate of interest,5 or adding an agreement to a deed that a lien is retained to secure the purchase money notes,6 does not discharge the instrument.
Authority to make such alteration may be implied. An agreement to release certain guarantors gives implied authority to cancel their names from negotiable notes which might be transferred to bona fide holders.7
Assent to modification of one sort is not assent to other or further modification.8 A provision which authorizes a party to detach a certain non-negotiable contract from the original instrument, does not authorize him to detach a part thereof so as to leave a negotiable instrument.9
While the effect of the alteration of a deed with the assent of the parties thereto is not covered by the ordinary principles of contract law, since such instrument has created a property right, it may be observed that the effect of such alteration depends in part on the question of the effect of the surrender of the deed by the grantee to the grantor with the intention of reconveying such interest in land. Where such a transaction does not affect the title to the land, the act of the grantor in making the change with the consent of the grantee has no effect at law.10 The fact that the instrument is recorded thereafter does not affect the title.11 In some jurisdictions such a transaction is regarded as at least an agreement for the execution and delivery of the deed in its altered form, to which effect will be given in equity.12 The difficulties which arise where an attempt is made to give relief of this sort are difficulties which arise under the Statute of Frauds,13 rather than difficulties which arise out of alteration in the proper sense of the term.
4 Mathias v. Leathers, 99 la. 18, 68 N. W. 449.
5 Phillips v. Crips, 108 la. 605, 79 N. W. 373; Wardlow v. List, 41 O. S. 414.
6 Bryant v. Bank, 107 Tenn. 560, 64 S. W. 895.
7 Kane v. Herman, 109 Wis. 33, 35 N. W. 140.
8 Harrison v. Union Store Co., 179 Ky. 672, 201 S. W. 31.
9 Harrison v. Union Store Co., 179 Ky. 672, 201 S. W. 31.
lO Moelle v. Sherwood, 148 U. S. 21, 37 L. ed. 350 (at least as against a bona fide grantee without actual notice); Carr v. Frye, 225 Mass. 531, L. R. A. 1917E, 814, 114 N. E. 745.
11 Carr v. Frye, 225 Mass. 531, L. R. A. 1917E, 814, 114 N. E. 745.
12 Ely v. Brewer, 182 Ala. 396, G2 So. 712; Huffman v. Hatcher, 178 Ky. 8, L. R. A. 1918B, 484, 198 S. W. 236; Chezum v. McBride, 21 Wash. 558, 58 Pac. 1067.
13 See Sec. 1251 et aeq.
An alteration of a deed, followed by redelivery, has been held to be operative;14 but, as is indicated, such altered deed has been held to be ineffective, in the absence of re-execution, as against a subsequent bona fide grantee.15 As between the original parties, full effect has been given to such alteration, on the theory that the parties have avoided the first deed by mutual agreement and that the grantor has redelivered the deed in its altered form.16 Some of the cases may be reconciled by noting that if the alteration increases the interest of the grantee, a greater effect may be given to the redelivery than can be given in eases in which the alteration diminishes the interest of the grantee, since in the latter case the transaction by which a part of the original estate revested in the grantor, rests upon the oral agreement between the two parties.