Washington Finance Corp. v. Glass

Citations

• 74 Wash. 653
• 134 P. 480
• 1913 Wash. LEXIS 2108

Syllabus

<p>Alteration op Instruments — Materiality — Bills and Notes— Indorsements — Reduction op Amount. Tbe indorsement upon tbe back of a note, offered for discount to a bank, of a fictitious payment, reducing the amount of the principal sum, as a condition precedent to discount or delivery to the original payee, without the knowledge of an accommodation maker, is a material alteration, within the negotiable instruments act, Rem. & Bal. Code, §§ 3514, 3515, providing that a promissory note is avoided by a material alteration without consent of all the parties, and that any alteration is material which changes . . . the sum payable ... or which alters the effect of the instrument in any respect; and it is immaterial that the change was to the advantage of the maker.</p> <p>Same — Time op Alteration — Bills and Notes — Execution. An indorsement of a fictitious payment on the back of a note offered for discount, reducing the amount of the principal sum, as a condition precedent to discount or negotiation, is not made after “execution” of the note, and is therefore a material alteration, although the note had been signed, since it had not been delivered, and execution requires both signature and delivery of a note meeting all the requirements of the negotiable instruments act, Rem. & Bal. Code, § 3392.</p> <p>Bills and Notes — Bona Fide Purchasers — Holder in Due Course —Actual Notice — Participation in Alteration. A bank to whom a note was offered for discount, is not a holder in due course without notice of a material alteration, within the negotiable instruments act, Rem. & Bal. Code, § 3514, where it was a party to and participated in the alteration by insisting upon the indorsement of a fictitious payment reducing the principal sum, as a condition to acceptance and discount.</p>