CHAPTER Separate instru ments. Innocent indorsee. The statutes exempting certain bills and notes from the Usury Laws. wards, upon learning the defect, took a substituted bill, such second bill was void (7). But, if the substituted security be for principal and legal interest only, expunging the bad part of the debt, it is good (m). And where a bill or note is given on a consideration, partly usurious and partly legal, the holder cannot recover even for the good part, though the whole amount of the bill should not be sufficient to cover that (n). It makes no difference that the contract is comprised in two separate instruments (o). Before the late statute, if the bill were tainted with usury in its inception, or if it was necessary for the holder to make title through any party guilty of usury (p), he could not recover, though he had no notice of the usury. But now, by the 58 Geo. 3, c. 93, no bill or note, though given for an usurious consideration, or upon an usurious contract, shall be void in the hands of an indorsee for value, unless he had notice at the time of taking the bill that it had been given for an usurious consideration (q). The 3 & 4 Will. 4, c. 98, s. 7, exempts from the operation of the Usury Laws bills and notes not having more than three months to run. It seems that a bill or note good within this act is not invalidated by being part of a real security (r). On this statute it has been decided that a warrant of attorney given to secure a bill, which, but for the act, would (1) Chapman v. Black, 2 B. & Ald. 588; Amory v. Merryweather, 2 B. & C. 573; 4 D. & R. 86, S. C. (m) Preston v. Jackson, 2 Stark. 237; Barnes v. Hedley, 1 Camp. 157-180, d.; 2 Taunt. 184, S. C. (n) Harrison v. Hannel, 5 Taunt. 780; 1 Marsh. 349, S. C. (0) Roberts v. Trenayne, Cro. Jac. 507; White v. Wright, 3 B. & C. 273; 5 D. & R. 10, S. C. (p) Lowes v. Mazzaredo, 1 Stark. 385. (q) This statute does not apply to a note in the hands of a party who has taken it in payment of an antecedent debt; see also 5 & 6 Will. 4, c. 41; Vallance v. Siddel, 6 Ad. & Ell. 932; 2 N. & P. 78, S. C. In an action brought before the passing of this act, but tried after, the defendant may avail himself of 9 Anne, c. 14, and is entitled to a nonsuit if he prove the bill to be given for a gaming consideration. Hitchcock v. Way, 6 Ad. & Ell. 943; 2 Nev. & P. 72, S. C. (r) Clack v. Sainsbury, 11 C. B. 695; Nixon v. Phillips, 7 Exch. 188; Semple v. Cornwall, 10 Exch. 617; Ex parte Warrington, 3 De Gex, M. & G. 159; 22 L. J., Bank. 33, S. C.; Langton v. Haynes, 25 L. J., Exch. 319; 1 H. & N. 366, S. C. have been usurious, is within the protection of the statute (s). The act applies to a note payable to A. or order on demand, and given for money lent on an agreement to pay 51. over and above all lawful interest for the loan during such time as A. should forbear, and give day of payment for the same (t). The 1 Vict. c. 80, a temporary act, exempted from the operation of the Usury Laws bills and notes not having more than twelve months to run. The 2 & 3 Vict. c. 37, exempts from the operation of the Usury Laws bills and notes not having more than twelve months to run, and all contracts (u) for the loan of money above the sum of ten pounds, providing that the act shall not extend to loans on landed security (x). But a loan of money on security of a lease, a warrant of attorney, and a promissory note, are not protected (y). The question is, on what security was the money lent? If on a mortgage, and the bill were taken afterwards, there is no valid loan; if on a bill, and the mortgage were taken afterwards, there is a good debt (z). Where a party borrowed a sum of 6,7007. on the security of a mortgage and a promissory note, which was discounted by the lender at five per cent., so that the interest to be paid was more than five per cent. on the sum actually advanced, the mortgage was held valid, the jury finding that the primary object of the parties was the discounting of the note (a). The discount (8) Connop v. Meaks, 4 Nev. & Man. 302; 2 Ad. & E. 326, S. C.; Lane v. Horlock, 25 L. J. Chan. 253; 5 H. L. Cas. 580, S. C. (t) Vallance v. Siddel, supra, note (q). (u) Thibault v. Gibson, 12 M. & W. 88. (a) So that, as the law recently stood, persons who have security to offer, and require no protection, were protected; but those who had no security to offer, and therefore most needed protection, were unprotected. (y) Berrington v. Collis, 5 Bing. N. C. 332; 7 Scott, 302, S. C. As to renewals and agreements to give bills at a future time, see Holt v. Miers, 5 M. & W. 168; King v. Braddon, 10 Ad. & E. 675; 2 Per. & D. 546, S. C. (z) Downes v. Garbutt, 12 L. J., Q. B. 269; 2 Dowl. N. S. 939; S. C.; Fussell v. Daniel, 10 Exch. 581; and see Hodgkinson v. Wyatt, 4 Q. B. 749; Follett v. Moore, 19 L. J., Exch. 6; 4 Exch. 410, S. C.; Ex parte Warrington, 3 De Gex, M. & G. 159; 22 L. J., Bank. 33, S. C. But see Langton v. Haynes, 25 L. J., Exch. 319; 1 H. & N. 366, S. C. (a) This transaction was before the statute 2 & 3 Vict. c. 37. Doe v. King, 12 L. J., Exch. 320; 11 M. & W. 333, S. C. Quære whether an advance on the deposit of a policy of insurance, though the insurance company have real securities, and though the assured be a member of the company, is a loan secured by an interest in land. March v. The Attorney-General, 5 Beavan, 433. CHAPTER XXIII. CHAPTER Total repeal of the Usury Laws. Pleading. of bills is not illegal, though the amount be secured by a warrant of attorney, which may become a charge on land (b). The statute 2 & 3 Vict. c. 37 (c), is not disabling or retrospective, and therefore if a real security be given for the amount of bills discounted at more than five per cent. before the statute, under the 1 Vict. c. 80, the real security is not tainted with usury (d). But now the statute 17 & 18 Vict. c. 90, sweeps away the Usury Laws altogether. And it has been held, that bills accepted since the repeal, in renewal of usurious bills accepted before the repeal, are not without consideration (e). In a declaration or plea, grounded on the statute of 12 Anne, stat. 2, c. 16, it is not necessary to negative the exception introduced by the 2 & 3 Vict. c. 37. The exception must come from the other side (ƒ). And in stating that exception it lies on the party introducing it to aver not only that the contract was after the passing of the statute of Victoria, but that it did not relate to land (g). (b) Lane v. Horlock, 16 L. J., Q. B. 87; Lane v. Horlock, 25 L. J., Chan. 253; 5 H. L. Cas. 580, S. C. (c) This act was extended by the 4 & 5 Vict. c. 54, to the 1st January, 1844; by 6 & 7 Vict. c. 45, to the 1st January, 1846; by the 8 & 9 Vict. c. 102, to the 1st January, 1851, and by 13 & 14 Vict. c. 56, to 1st January, 1856. (d) Bell v. Coleman, 15 L. J. C. P. 2; 2 C. B. 268, S. C. (e) Flight v. Read, 32 L. J. 265; 1 H. & C. 703, S. C. (f) Thibault v. Gibson, 12 M. & W. 88. (g) Washbourne v. Burrows, 16 L. J., Exch. 266; 1 Exch. 107, S. C. tion at common IN treating of the alteration of a negotiable instrument, Effect of alterawe will consider the effect of alteration; first, at common law. law; and, secondly, under the Stamp Acts. First, at common law. If a deed, well and sufficiently of deeds. made in its creation, shall be afterwards altered by rasure, interlining, addition, drawing a line through the words, though they be still legible, or by writing new letters upon the old in any material place or part of it, either by the party that hath the deed, or any other whomsoever, unless the alteration be by him who is bound by the deed (for he shall not take advantage of his own wrong), or by his consent, the deed has lost its force and is become void (a). And by a recent solemn decision, a deed, bill of exchange, promissory note, guarantie, or any other executory written contract, is avoided by an alteration in a material part, made while it is in the custody of the plaintiffs, although that alteration be by a stranger (b). For a person who has the custody of an instrument is bound to preserve it in its integrity. And as it would be avoided by his fraud in (a) Sheppard's Touchstone, 68. And a deed is not it seems vacated at common law, if the alteration, though material, were with the consent of all the parties. Markham v. Gonaston, Cro. Eliz. 627; Zouch v. Clay, 2 Lev. 35; Com. Dig. Fait, F. 1. (b) Davidson v. Cooper, 11 M. & W. 778; affirmed in error, 13 M. & W. 343; Bank of Hin- It is held in America that an CHAPTER Of bills and notes. altering it himself, so it shall be avoided by his laches in suffering another to alter it. The rules relating to alteration or rasure of deeds apply (at least for the most part) to other written contracts, and to bills and notes. Thus, where a bill was drawn payable to A. B., and whilst in his possession the date was altered, and the bill was subsequently indorsed to the plaintiffs for value, it was held that they could not recover against the acceptor. "It seems admitted," says Ashhurst, J., "that if this had been a deed, the alteration would have vitiated it. Now, I cannot see any reason why the principle on which a deed would have been avoided, should not extend to a case of a bill of exchange. There is no magic in parchment or wax, and the principle to be extracted from the cases is, that any alteration avoids the contract. If A. B. had brought this action, he could not have recovered, because he must suffer from any alteration of the bill whilst in his custody; the same objection must hold against the plaintiffs, who derive title from him" (c). So, where the drawer, without the consent of the acceptor, added to the acceptance the words Payable at Mr. B.'s, Chiswell Street," it was held that this was a material alteration, discharging the acceptor (d). And the same point has been repeatedly decided since the 1 & 2 Geo. 4, c. 78. "Suppose," says Abbott, C. J., "a bill so altered to be indorsed to a person ignorant of the alteration; his right to sue his indorser would, as the bill appears, be complete, upon default made where the bill is payable; whereas, in truth, the acceptor, not having in reality undertaken to pay there, would have committed no default by such non-payment. I am of opinion, therefore, that the alteration is in a material part of the bill, and the acceptor is, in consequence, discharged" (e). 66 But it has been held by the same learned Judge (ƒ), and (c) Master v. Miller, 4 T. R. 320; in error, 2 H. Bl. 140, S. C. (d) Corie v. Halsall, 4 B. & Al. 197; 3 Stark. 36, S. C. (e) M'Intosh v. Haydon, R. & M. 362; Desbrowe v. Weatherby, 1 M. & Rob. 438; 6 C. & P. 758, S. C.; Taylor v. Moseley, 1 M. & Rob. 439, n.; Semple v. Cole, 8 L. J., Exch. 155. These decisions have been recently under review and confirmed by the Court of Queen's Bench in Burchfield v. Moore, 23 L. J., Q. B. 261; 3 E. & B. 683, S. C.; Gardner v. Walsh, 5 E. & B. 83. (f) Stevens v. Lloyd, M. & M. 292; and see Jacobs v. Hart, 6 M. & S. 142; Walter v. Cubley, 2 C. & M. 151; but in Walter v. Cubley, the attention of the Court was not drawn to Gibb v. Mather, 8 Bing. 221; 1 Moore & S. 387; 2 C. & J. 254, S. C. Would not the alteration have been material in an action against the drawer? Stevens v. Lloyd, M. & M. 292; and if so, was not the legal effect of the instrument altered? |