Facts of the Case
- D accepted a bill of exchange that was drawn in London.
- The bill was later altered by an endorsee in collusion with the drawer, changing the place of drawing from London to America.
- The alteration was made without the consent of D, the acceptor.
- The question arises whether D remains liable on the altered bill.
Issues in the Case
- Does a material alteration to a bill of exchange discharge the acceptor?
- Can an alteration made without the consent of the acceptor bind him?
- Is changing the place of drawing considered a material alteration?
Principles Associated With It
- Under Section 87 of the Negotiable Instruments Act, any material alteration to a negotiable instrument renders it void as against any party who did not consent to the alteration.
- Changing the place of drawing is a material alteration, as it affects the legal character and possibly the governing law of the instrument.
- An acceptor is not liable on a materially altered bill unless he has either consented or authorized the alteration.
- Collusion between the endorsee and drawer does not bind the acceptor unless he was a party to the alteration.
Judgement
- Since the place of drawing was altered from London to America without D’s consent, the alteration is material and unauthorized.
- D is not liable on the altered bill, as per Section 87.
- The bill is void against D, and he cannot be compelled to honour the altered terms.
- Therefore, D’s liability on the bill ceases due to the material alteration.