ALTERATIONS. Where alterations are necessary in any of the books of a bank, they should be made carefully, the wrong entry being neatly ruled through, and the correct one written above or below it. Errors are not to be put right merely by the fresh figures being thickly written upon the top of the old ones. Some banks require that alterations in ledgers and other impor tant books be made in red ink. If a ledger entry has been posted into a wrong account, it is customary, when rectifying the mistake, to quote the folio of the correct account.
Bankers do not, as a rule, issue a deposit receipt, or draft, showing any alteration in an important part. Where a mistake has been made in drawing such a document. it is considered desirable to have a fresh one written, rather than to issue one to the public showing evidences of carelessness or inaccuracy.
All material alterations in a bill must be initialled or signed by all the parties liable on the bill. and all alterations in a cheque must be confirmed by each drawer. It is not sufficient. in the case of a limited com pany's cheque, if a material alteration is initialled only by the secretary, unless, of course, the banker has authority to accept the signature of the secretary alone.
With regard to alterations in a bill of exchange Section 64 of the Bills of Exchange Act, 1882. enacts : " (1) Where a bill or acceptance is materially altered without the assent of all parties liable on the bill, the bill is avoided except as against a party who has himself , made, authorised, or assented to the alteration, and subsequent indorsers " Provided that, " Where a bill has been materially altered, but the alteration is not apparent, and the bill is in the hands of a holder in clue course, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it according to its original tenor.
" (2) In particular the following altera tions are material, namely, any alteration of the date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment without the acceptor's assent." By Section 7S :—" A crossing authorised by this Act is a material part of the cheque ; it shall not be lawful for any person to obliterate or, except as authorised by this Act, to add to or alter the crossing."
The alterations authorised by the Bilk of Exchange Act, 1882, are :— Any holder may convert a blank indorse ment into a special indorsement (Section 34, s.s. 4).
Where a cheque is uncrossed, the holder may cross it generally or specially.
Where crossed generally, the holder may cross it specially.
Where crossed generally or specially, the holder may add the words " not negotiable." Where crossed specially, a banker to whom it is crossed may cross it specially to another banker for collection.
Where an uncrossed cheque, or a cheque crossed generally, is sent to a banker for collection, he may cross it specially to himself (Section 77).
Where a bill payable at a fixed period after (late is issued undated, or an accept ance of a bill payable at a fixed period after sight is undated, any holder may insert the true date (Section 12).
A cheque which is payable to " bearer " may be altered by the payee to " order," but an alteration of a cheque from " order " to " bearer " must be initialled by all the drawers, and of a bill by all parties liable thereon. In AMoos v. Cornwell (1868, L.R. 3 Q.B. 5731, where no time of pay ment was stated on a bill, it was held that the words " on demand " could be inserted.
In A delphi Bank v. Edwards (1SS2, 26 Sol. J. 3601. where the amount of a bill had been fraudulently altered by a holder, spaces having been left in drawing the bill, which enabled this to be done, Lord Justice Baggallay said : " It seems to me impossible to say that there was any duty on the part of the acceptor of the bill towards the party who might subsequently become the holder of the bill so to criticise, and so to examine the bill before he signed, as to put it out of the possibility of any additional words being afterwards inserted in it." This case was cited with approval in the well-known case of Scholfield v. Earl of Londesborough (1896, A.C. 5141, which may be said to have settled the law as to alterations in bills of exchange.