The alteration of a written instrument by detaching memoranda which form a material part of the original contract, or by mutilating the instrument so as to remove material provisions, is a material altenation.1

The purpose of such mutilation is generally to cut what appears to be a negotiable instrument from the rest of the contract, the terms of which would prevent the instrument from being negotiable. Outside of questions of negotiability when the instrument is in the hands of a bona fide holder, the general principles of alteration apply. If the instrument is in the hands of one who is not a bona fide holder,2 or where the instrument is in the hands of one who has actual or conclusive knowledge of such alteration,3 the promisor may show the fact of such alteration. In cases of this sort the fact that a provision authorizes the detachment of the note, will not prevent the maker from showing the facts of the transaction as a defense against such note in the hands of such party.4

If the instrument is in the hands of a bona fide holder, and the maker has not been negligent, he may show the fact of such alteration,5 even if the note was separated from the rest of the contract by a perforated line.6 The fact that the contract refers to a "de-tnchable agreement" does not prevent the maker from showing that the detachable agreement, which was separated from the rest of the contract by a perforated line, was itself mutilated by cutting it along a dotted line which was not perforated, and that if the entire agreement below the perforated line had been detached, it would have been non-negotiable.7

1 Alabama. Payne v. Long, 121 Ala. 385, 25 So. 780.

Arkansas. White Sewing Murhine Co. v. Atkinson, 126 Ark. 204, l90 S. W. 111.

Illinois. Benjamin v. McConnell, 9 111. 536, 46 Am. Dec. 474.

Kentucky. Harrison v. Union Store Co., 179 Ky 672, 201 S. W. 31.

Massachusetts. Wheelock v. Freeman, 30 Mass. (13 Pick.) 165, 23 Am. Dec. 674.

Michigan. Wait v. Pomeroy, 20 Mich. 425, 4 Am. Pep. 395; First National Bank v. Carter, 138 Mich. 421, 101 N. W. 585; Toledo Scales Co. v. Gogo, 186 Mich. 442. 152 N. W. 1046; Stevens v. Venema. 202 Mich. 232, L. P. A. 1918F. 1145, 168 N. W. 531.

North Dakota. Stevens v. Barnes, - N. D. -, 175 N. W. 709.

South Dakota. Rochford v. McGee, 16 S. D.. 606, 102 Am. St. Rep. 719, 61 L. R. A. 335, 94 N. W. 695.

2 Stevens v. Venema, 202 Mich. 232, L. R. A. 1918F, 1145, 168 N. W. 531.

3 Stevens v. Venema, 202 Mich. 232, L. R. A. 1918F 1145, 168 N. W. 531.

4 Toledo Scale Co. v. Gogo, 186 Mich. 442, 152 N. W. 1046; Stevens v. Venema, 202 Mich. 232, L. R. A. 1918F, 1145, 168 N. W. 531.

5 Harrison v. Union Store Co., 179 Ky. 672, 201 S. W. 31; Rochford v. McGee, 16 S. D. 606, 102 Am. St. Rep. 719, 61 L. R. A 335, 94 N. W. 695.

6 Stevens v. Barnes, - N. D. -, 175 N. W. 709; Rochford v. McGee, 16 S. D. 606, 102 Am. St. Rep. 719, 61 L. R. A. 335, 94 N. W. 695.

The difficulties which arise in cases of this sort are found where the maker has been guilty of negligence, but where he did not know of the possibility of such alteration and did not assent thereto, and the note is in the hands of a bona fide holder for value. In some jurisdictions the maker is held to be liable to a bona fide holder, because of his negligence.8 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 he is liable to a bona fide holder if he was negligent in executing the instrument in such form.

In other jurisdictions the maker is not liable upon such altered instrument, even though he was negligent in executing it originally and though it is in the hands of a bona fide holder for value.11 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 or in accepting a bill of exchange with a copy of the contract under which it was given and which showed the consideration for such bill, glued upon such bill securely,14 does not make him liable upon the instrument as thus altered.15 If the agent of the adversary party accepts an order from the adversary party with certain provisions attached thereto, the principal is bound by such provisions, even though the agent.detached them before he forwarded the order.

7 Harrison v. Union Store Co., 170 Ky. 672, 201 S. W. 31.

It has even been held that detaching a note from an order is an alteration, although the order expressly author-izes the detaching of such note, and although the note is detached on the perforated line, which is placed there to permit such detaching. Stevens v. Barnes, - N. D. -, 176 N. W. 709.

8 Cornell v. Nebeker, 58 Ind. 425; Woollen v. Ulrich, 64 Ind. 120; Pratt v. Rounds, 160 Ky. 358; Zimmerman v. Rote, 75 Pa. St. 188; Brown v. Reed, 79 Pa. St. 370, 21 Am. Rep. 75.

9 Cornell v. Nebeker, 58 Ind. 425; Zimmerman v. Rote, 75 Pa. St. 188.

10 Woollen v. Ulrich, 64 Ind. 120; Brown v. Reed, 79 Pa. St 370, 21 Am. Rep. 75.

11 Bothell v. Schweitzer, 84 Neb. 271, 133 Am. St. Rep. 623, 22 L. R. A. (N. S.) 263, 120 N. W. 1129; Stephens v. Davis, 85 Tenn. 271, 2 S. W. 382.

12 Stephens v. Davis, 85 Tenn. 271, 2 S. W. 382.

13 Wait v. Pomeroy, 20 Mich. 425, 4 Am. Rep. 395.

14 Bothell v. Schweitzer, 84 Neb. 271, 133 Am. St. Rep. 623, 22 L. R. A. (N. S.) 263, 120 N. W. 1129.

15 White Sewing Machine Co. v. Atkinson, 126 Ark. 204, 190 S. W. 111.