accepted after breach, it is a good defence. Blake's case, 6 Rep. 43 b; Bullen and Leake on Pleading, 3rd ed., p. 479. The acceptance in satisfaction, as well as the agreement to accept, or the accord, must be shown. Bayley v. Homan, 3 N. Č. 920; Hardman v. Bellhouse, 9 M. & W. 596. It is not sufficient that the defendant was always ready and willing to carry out his part of the agreement. Collingbourne v. Mantell, 5 M. & W. 289; Wray v. Milestone, 5 M. & W. 21; Allies v. Probyn, 2 C. M. & R. 408.

Where a sum of money has been paid to the plaintiff in satisfaction of unliquidated damages, and a discharge, not under seal, in full signed, the question for the jury is whether the plaintiff's mind went with the terms of the paper he signed, and was he aware of its effect? If not, the discharge would not bind him; Rideal v. Gt. W. Ry. Co., 1 F. & F. 706; cor. Erle, C. J., cited by Mellish, L.J., in Lee v. Lancashire & Yorkshire Ry. Co., L. R., 6 Ch. 527, 537, where the cases are collected.

An acceptance of a less sum, in satisfaction of a debt of a larger liquidated amount is, by itself, no good accord; Cumber v. Wane, 1 Str. 426; Beer v. Foakes, 11 Q. B. D. 221, C. A.; but if there be some additional benefit or legal possibility of benefit to the creditor thrown in, it may be a discharge; see notes to Cumber v. Wane, in 1 Smith's L. C. Thus the acceptance of a negotiable security for a less amount, e.g., a cheque payable on demand, will be a good accord and satisfaction. Goddard v. O'Brien, 9 Q. B. D. 37. And on this ground, compositions with creditors, accepted by them, or by several of them under an agreement, are pleadable by way of accord; for in cases of doubtful solvency, the agreement of a creditor to give up a part in consideration that others will do so, is valid as against him, and will bind, although all the creditors have not consented. Norman v. Thompson, 4 Exch. 755. But if the agreement is signed only as an escrow, and on the understanding that certain others are to sign it, it is no accord unless the others also agree. Boyd v. Hind, 1 H. & N. 938; 26 L. J., Ex. 164, Ex. Ch., where Norman v. Thompson, supra, is corrected and explained. Where the demand is not liquidated, as where it is claimed on a quantum meruit, acceptance of a less sum in satisfaction is an answer. Cooper v. Parker, 15 C. B. 822; 24 L. J., C. P. 68.

An oral agreement to accept something as a satisfaction, followed by performance and acceptance, is a good defence by way of accord and satisfaction, notwithstanding that the substituted agreement is not in writing, and could not, therefore, have been enforced by reason of the Stat. of Frauds, s. 4. Lavery v. Turley, 6 H. & N. 239; 30 L. J., Ex. 49. But the mere acceptance of an invalid agreement in satisfaction would not be a defence. Case v. Barber, T. Raym. 450; Noble v. Ward, L. R., 2 Ex. 135, Ex. Ch., ante, P. 28.

As to a composition entered into by debtor with his creditors, under the Bankruptcy Act, 1883, vide post, Part III., sub tit., Action against debtor who has made a composition with his creditors.

An agreement to refer to arbitration is not an accord and satisfaction, nor will it oust the jurisdiction of the court, except where the reference is made by the contract itself, a condition precedent to the right of action. Scott v. Avery, 5 H. L. C. 811; 6 H. & N. 239; 25 L. J., Ex. 308; Elliott v. R. Erch. Assur. Co., L. R., 2 Ex. 237; Edwards v. Aberayron, &c. Insur. Soc., 1 Q. B. D. 563, Ex. Ch. ; Collins v. Locke, 4 Ap. Ca. 674, P. C.; and Dawson v. Fitzgerald, and Babbage v. Coulburn, cited ante, p. 315.

Alteration.

This defence was formerly raised under a denial of the contract, where the instrument was declared on in its altered form Waugh v. Bussell 5 Taunt.

707; Hirschman v. Budd, L. R., 8 Ex. 171; but where it was declared on in its unaltered form, or the altered part did not appear in the declaration, it was necessary specially to plead the alteration. Hemming v. Trenery, 9 Ad. & E. 926. In either case the defence must now be specially pleaded. Rules, 1883, O. xix., r. 15, ante, p. 283.

The leading case, Pigot's case, infra, on this defence, was decided on a deed, and so also were some other of the cases cited below, for the law is the same in the case of a deed and of a simple contract; Davidson v. Cooper, infra; and both kinds of contracts are therefore here considered together.

In Pigot's case, 11 Rep. 26 b, it was held (1) that an immaterial alteration by a stranger does not avoid a deed; but (2), if made by a party interested, the alteration will avoid it as against him, whether material or not; and (3) a material alteration by a stranger avoids it. Thus a guarantee was held to be avoided by alteration while in the hands of the plaintiff by attaching seals, so as apparently to make it a deed, without the defendant's knowledge or assent, although the plaintiff sued on it as a simple contract only; Davidson v. Cooper, 13 M. & W. 343, Ex. Ch.; and it will make no difference, that the rights of the parties, actually in dispute, are not thereby affected. Mollett v. Wackerbarth, 5 C. B. 181. But, an alteration, even though made by the plaintiff, which has no effect on the liability of either party, as stated in the contract, will not vitiate the instrument; Aldous v. Cornwell, L. R., 3 Q. B. 573, dissenting from the second resolution in Pigot's case, supra; unless it be proved, that the part altered, is material for the purposes for which the instrument was created, in which case the instrument will be avoided. Suffell v. Bank of England, 9 Q. B. D. 555, C. A., cited ante, p. 361. Obligee sued obligor on a bond conditioned for performance of covenants in a deed of sale to the defendant, of certain trees which defendant was to cut down before August, 1684. Plaintiff afterwards altered the deed in his possession by erasing 1684, and writing 1685: held no answer; for the erasure was in a place not material, and to the advantage of the defendant. Darcy v. Sharpe, 1 Leon. 282. În Adsetts v. Hives, 33 Beav. 52, it was held that a mortgage deed was not made void, by the fact that the date of the day of payment in the proviso for redemption, and the names of the tenants in the parcels, had been filled in by the mortgagee after the execution of the deed. See also Andrews v. Lawrence, 19 C. B., N. S. 768, Ex. Ch. It has also been denied that a material alteration by a stranger will avoid an instrument; see 2 Sugd. Powers, 193, citing Henfree v. Bromley, 6 East, 310; and Alderson, B., in Hutchins v. Scott, 2 M. & W. 814. This would probably depend on whether or no the plaintiff were the person responsible for the safe custody of the instrument. If he were so, then the alteration by a stranger would vitiate the instrument, though it was made without the knowledge of the plaintiff. Croockewit v. Fletcher, 1 H. & N. 893; 26 L. J., Ex. 153. See also Bank of Hindostan v. Smith, 36 L. J., C. P. 241. If, however, the alteration were made by a stranger at a time when the plaintiff was not responsible for its safe custody, it has never been held that it could be relied on as a defence.

As to the degree of diligence to be exercised by the person having the instrument in his custody there may be some doubt. It would seem from Shep. Touch. 69, Argoll v. Cheney, Palm. 402, and Bolton v. Carlisle, Bp. of, 2 H. Bl. 259, that he is not absolutely in the position of an insurer, and may show that the alterations arose from accident; but in Croockewit v. Fletcher, supra, Martin, B., makes use of language almost strong enough to make him so. The cancellation of the acceptance on a bill of exchange can be shown to have been done by mistake. Raper v. Birkbeck, 15 East, 17; Wilkinson v. Johnson, 3 B. & C. 428; Novelli v. Rossi, 2 B. & Ad. 757.

See further as to the effect of alteration, notes to Master v. Miller, 1 Smith's L. Cases. The alleged alterations cannot be proved by the declarations of a deceased attesting witness. Stobart v. Dryden, 1 M. & W. 615. Where a deed appears to have erasures and interlineations, the presumption is that they were made before execution. Doe d. Tatum v. Catomore, 16 Q. B. 745; 20 L. J., Q. B. 364. The rule is different in wills, vide ante, p. 135.

If both parties agree to an alteration, then, unless it be made simply for the purpose of correcting an error, the old contract is rescinded, and a new one substituted. The new agreement will in general require a fresh stamp, and if it is one that cannot be stamped after its execution, it cannot be used in evidence. Vide Stamps, ante, pp. 230, 231, 249, 250.

See cases on the effect of alteration as to bills and notes, p. 360, et seq.; as to bought and sold notes, pp. 480, 481. A material alteration does not avoid the instrument altogether, and where the plaintiff's claim arises on an instrument which the defendant has altered, the plaintiff must nevertheless sue on the instrument. Pattinson v. Luckley, L. R., 10 Ex. 330.

Bankruptcy.

See post, Part III., sub tit., Actions by and against Bankrupts.

See post, Part III., sub tit., Actions by and against married women.

Fraud.

The proof of fraud in the party seeking to enforce a contract is a good defence;, but it must be specially pleaded. Rules, 1883, O. xix., rr. 6, 15, ante, p. 283. And the allegation of fraud must be specific. Wallingford v. Mutual Society, Ap. Ca. 685, 697, per Ld. Selborne, C. As the law is the same whether the contract is under seal or not, the cases in reference to these two kinds of contract are for convenience here collected together. The fraud must be some concealment or deception, practised by the plaintiff with respect to the very transaction in question; the illegality of the transaction, by reason of usury or other causes, is not sufficient. Green v. Gosden, 3 M. & Gr. 446. Where a fraudulent representation constitutes the alleged fraud, it must be on a matter which, in a case of simple contract, was substantially the consideration for the agreement; per Erle, J., in Mallalieu v. Hodgson, 16 Q. B. 712; 20 L. J., Q. B. 339; Panama, &c. Mail Co. v. Kennedy, L. R., 2 Q. B. 580. But a false statement, to the defendant, of the state of accounts between the plaintiff and his debtor, will prove the allegation of fraud, in an action against the defendant as surety for the debtor; Stone v. Compton, 5 N. C. 142; but see Mason v. Ditchbourne, 1 M. & Rob. 460; 2 C. M. & R. 720, n.; D'Aranda v. Houston, 6 C. & P. 511; and Way v. Hearn, 13 C. B.,

Fraud.

591 N. S. 292; 32 L. J., C. P. 34; see further, ante, p. 434. Where a surety, being sued on his bond, pleads that it was procured by the fraud and collusion of the plaintiff and the principal, it is not enough to show fraud by the principal, unless the plaintiff was a party to it. Spencer v. Handley, 4 M. & Gr. 414. Where the owner of a house sued the defendant for not taking the house according to agreement, it was held (Ld. Abinger, C.B., dissentiente), that the plea of fraud was not supported by proof, that the plaintiff's agent had denied the existence of a nuisance, of which he, the agent, was ignorant, but which the plaintiff himself knew of; for though this was a misstatement, it was no fraud. Cornfoot v. Fowke, 6 M. & W. 358. But, generally, the fraud of the agent, in the course of his principal's business, is the fraud of the principal; per Parke, B., Murray v. Mann, 2 Exch. 538; Barwick v. English Joint Stock Bank, L. R., 2 Ex. 259, Ex. Ch.; Mackay v. Commercial Bank of New Brunswick, L. R., 5 P. C. 394; Swire v. Francis, 3 Ap. Ca. 106, P. C. See also W. Bank of Scotland v. Addie, L. R., 1 H. L. Sc. 145, and Central Ry. Co. of Venezuela v. Kisch, L. R., 2 H. L. 99. Any surreptitious dealing between one principal to a contract and the agent of the other principal is a fraud. Panama, &c. Telegraph Co. v. India Rubber, &c. Co., L. R., 10 Ch. 515. It seems that a fraudulent misrepresentation as to the effect of a deed, may be relied on as a defence to an action on the deed. Hirschfeld v. L. Brighton & S. C. Ry. Co., 2 Q. B. D. 1.

Fraud in this defence means moral fraud, and not merely an innocent misrepresentation. Moens v. Heyworth, 10 M. & W. 147 (dissentiente, Ld. Abinger); Panama, &c. Mail Co. v. Kennedy, ante, p. 590. But it should be observed, that where a contract is based on a statement made by the plaintiff, innocently, but which is in fact untrue, specific performance will not be ordered; New Brunswick & Canada Ry. Co. v. Muggeridge, 4 Drew. 686; 30 L. J., Ch. 242; and the defendant is entitled to have the contract set aside. Redgrave v. Hurd, 20 Ch. D. 1, C. A. See further cases cited ante, p. 297, et seq. If the plaintiff has fraudulently represented a fact to be true of which he knows nothing, and which is untrue, it will be a defence. Evans v. Edmonds, 13 C. B. 777; 22 L. J., C. P. 211; S. C. per Maule, J.; Behn v. Burness, 3 B. & S. 751; 32 L. J., Q. B. 204, Ex. Ch. See also Mostyn v. W. Mostyn Coal & Iron Co., 1 C. P. D. 145. See further generally, post, Action for Deceit. In an action by vendee of a term against vendor for not assigning, it is a defence that the defendants' term was not assignable except by consent of the lessor, who was willing to accept a respectable assignee, and that defendant was induced to make the agreement by the false and fraudulent representation of the plaintiff that one J. M., for whose benefit the purchase was made, was a respectable person, whereas he was not respectable. Canham v. Barry, 15 C. B. 597; 24 L. J., C. P.

100.

The fraud may consist, in permitting a party to labour under error. Thus, where the defendant erroneously supposed that a picture had been in the possession of an eminent collector, and purchased it from the agent of the plaintiff, who was aware of the defendant's error, but did not undeceive him, Ld. Ellenborough held that the sale was void, the price being probably enhanced by the error. Hill v. Gray, 1 Stark. 434. So, where a vendor knowingly permits the vendee to buy under a false representation by a stranger. Pilmore v. Hood, 5 N. C. 97. But, mere concealment by the plaintiff of a defect in a chattel, will not avoid the_contract, where he is under no obligation to divulge it. Smith v. Hughes, L. R., 6 Q. B. 597.

Where goods are falsely described as "the property of a gentleman deceased," or "to be sold by executors," it is fraud, for such property is likely to be sold without reserve; per Ld. Mansfield; Bexwell v. Christie, Cowp.

395. So where, at a sale by auction, the owner of the goods employs puffers to bid for him, and the buyer has no notice of such employment, it is a fraud, and the seller cannot recover the price. Crowder v. Austin, 3 Bing. 368; Wheeler v. Collier, M. & M. 126. The employment of a single puffer when the sale is to be to the highest bidder, is evidence of fraud. Green v. Baverstock, 14 C. B., N. S. 204; 32 L. J., C. P. 181. Now see 30 & 31 Vict. c. 48, ss. 4, 5, 6, ante, p. 299.

If the maker of a chattel make it with such a defect as to render it worthless, but the defect is patent, and the persons for whom it is made have an opportunity of inspecting it before it is delivered, the maker is not guilty of a fraud if he do not point out the defect. Horsfall v. Thomas, 1 H. & C. 90; 31 L. J., Ex. 322. See, however, observations on this case in Smith v. Hughes, L. R., 6 Q. B. 605, per Cockburn, C.J. Fraud will not avoid a contract whereby an estate in land has passed to the defendant, for the defendant must have disaffirmed the contract, in order to avail himself of the defence (see Dawes v. Harness, L. R., 10 C. P. 166), and he cannot by such disaffirmance revest the estate in the plaintiff. See Feret v. Hill, 15 C. B. 207; 23 L. J., C. P. 185.

A bribe given to an agent to induce him to enter into a contract on behalf of his principal, will render the contract so entered into voidable at the option of the principal. Smith v. Sorby, 3 Q. B. D. 552, n. See also Harrington v. Victoria Graving Dock Co., Id., 549, cited ante, p. 529. See further post, sub tit. Action for deceit and misrepresentation.

See as to concealment in the case of insurance, ante, p. 404, et seq.; in the case of a guarantee, p. 434. And see as to frauds by vendors, p. 297,

et seq.

As to frauds by companies or their directors, whereby persons have been induced to take shares, being a defence to an action for calls, see post, Part III., Actions by and against Companies.

Frauds, Statute of

The Rules, 1883, O. xix., r. 20, ante, p. 283, now require that the insufficiency of any contract by reason of the Stat. of Frauds, should be pleaded specially. Clarke v. Callow, 46 L. J., Q. B. 53, C. A. As to when such defence is admissible, vide ante, p. 285, et seq., and 468, et seq.

Illegality.

Where a contract is illegal or immoral, it cannot be enforced: but such defence must be specially pleaded. Potts v. Sparrow, 1 N. C. 594. So, a defence that the contract was a wagering one, and void by 8 & 9 Vict. c. 109, s. 18, ante, p. 550, must be pleaded specially. Varney v. Hickman, 5 C. B. 271. And see Rules, 1883, O. xix., r. 15, ante, p. 283.

The maxim, "In pari delicto potior est conditio defendentis," is important to be observed when the defence or reply raises a question of illegality. The true test for determining whether or not the plaintiff and the defendant were in pari delicto, is by considering whether plaintiff could make out his case, otherwise than through the medium and by the aid of, the illegal transaction, to which he was himself a party. Taylor v. Chester, L. R., 4 Q. B. 309, 314.

Some cases of illegality have been already noticed under the head of