GA Code § 11-3-407 (2021)
2021 Georgia Code|Title 11 - Commercial Code|Article 3 - Negotiable Instruments|Part 4 - Liability of Parties|§ 11-3-407. Alteration

  "Alteration" means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party; or (ii) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.   Except as provided in subsection (c) of this Code section, an alteration fraudulently made discharges a party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration. No other alteration discharges a party, and the instrument may be enforced according to its original terms.   A payor bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument (i) according to its original terms; or (ii) in the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed.     (Code 1981, §11-3-407, enacted by Ga. L. 1996, p. 1306, § 3.)   Cross references.   - Alteration of written contracts generally, § 13-4-1 et seq.   Law reviews.   - For article discussing parol evidence in the law of commercial paper, see 13 Ga. L. Rev. 53 (1978).   JUDICIAL DECISIONS   Editor's notes.   - In light of the similarity of the provisions, decisions under former Code 1933, § 14-907 and former Code Section 11-3-407 are included in the annotations for this section.   To discharge parties, alteration must change obligation.    - Absent alteration or change in obligation of promissory note, alteration does not operate to discharge parties from their obligations. Franco v. Bank of Forest Park, 118 Ga. App. 700, 165 S.E.2d 593 (1968) (decided under former Code Section11-3-407).   Material alteration.    - That is material which might become material, and any alteration which may in any event alter rights, duties, or obligations of person sought to be charged, is material in the legal sense. Cook v. Parks, 46 Ga. App. 749, 169 S.E. 208 (1933) (decided under former Code 1933, § 14-907).    If legal import and effect of instrument is in fact changed, it does not matter how trivial the change may be, or whether it may be beneficial or detrimental to party sought to be charged on contract, as where it changes evidence or mode of proof. Cook v. Parks, 46 Ga. App. 749, 169 S.E. 208 (1933) (decided under former Code 1933, § 14-907).    That alteration was fraudulently made for purpose of causing actual injury, or that it did bring about injury, is not the test of materiality. It is equally unimportant whether alteration was beneficial or injurious to party whom it is sought to charge on the instrument. The sole question is whether rights of promissor have been materially affected; whether effect of instrument is the same as when signed. Cook v. Parks, 46 Ga. App. 749, 169 S.E. 208 (1933) (decided under former Code 1933, § 14-907).    The only material change which discharges any party is one which is also fraudulent. Sewell v. Akins, 147 Ga. App. 454, 249 S.E.2d 274 (1978) (decided under former Code Section11-3-407).   Addition of attesting witness which extends liability or affects proof of execution.    - Where addition of attesting witness to instrument has effect of extending liability under statute of limitations, or of facilitating or interfering in any manner with proof of execution of instrument, procuring of a witness to sign as an attesting witness after execution of instrument, without consent of maker, is material and constitutes an alteration. Cook v. Parks, 46 Ga. App. 749, 169 S.E. 208 (1933) (decided under former Code 1933, § 14-907).   Addition of names of a comaker and witness.    - Both addition of name of a comaker and name of an official witness to a negotiable instrument containing a bill of sale to secure a debt, would be material alterations as to defendant maker, if made without defendant's consent. Williams v. F.S. Royster Guano Co., 67 Ga. App. 711, 21 S.E.2d 349 (1942) (decided under former Code 1933, § 14-907).   Confidential relationship irrelevant.    - Under theory that contract's completion was unauthorized and fraudulent, confidential relationship of parties is irrelevant. First Am. Bank v. Bishop, 244 Ga. 317, 260 S.E.2d 49 (1979) (decided under former Code Section11-3-407).    If a writing is signed with blanks left to be filled in  by the other party, the person signing is bound by it. Massey-Ferguson Credit Corp. v. Wiley, 655 F. Supp. 655 (M.D. Ga. 1987) (decided under former Code Section 11-3-407).   RESEARCH REFERENCES   Am. Jur. 2d.   - 4 Am. Jur. 2d, Alteration of Instruments, §§ 3, 10, 26, 29, 42, 71. 11 Am. Jur. 2d, Bills and Notes, §§ 120, 121. 12 Am. Jur. 2d, Bills and Notes, § 563.   C.J.S.   - 3A C.J.S., Alteration of Instruments, § 4 et seq. 10 C.J.S., Bills and Notes, §§ 33, 197.   U.L.A.   - Uniform Commercial Code (U.L.A.) § 3-407.   ALR.    - Rights and liabilities of bank with respect to certified check or draft fraudulently altered, 22 A.L.R. 1157.    Necessity of endorsement by all payees before maturity to make a transferee a bona fide holder, 25 A.L.R. 163.    Burden of proof as to alteration not apparent on face of instrument, 31 A.L.R. 1455.    Detachment of paper used to conceal the nature or terms of a bill or note which one signed or endorsed, as an alteration, 34 A.L.R. 532.    Memoranda or notations on paper as affecting one's character as a holder in due course, 34 A.L.R. 1377.    Liability of party to commercial paper so drawn as to be easily alterable as to amount, 39 A.L.R. 1380.    Alteration of note before delivery to payee as affecting parties who do not personally consent, 44 A.L.R. 1244.    Erasing endorsement of payment as an alteration of instrument, 44 A.L.R. 1540.    Notation or memorandum on bill or note as notice, 56 A.L.R. 1373.    Memorandum on negotiable instrument as an alteration, 96 A.L.R. 1102.    Addition of maker or other obligor to commercial paper as material alteration discharging nonconsenting party, 119 A.L.R. 898.    Material alteration which avoids note, as affecting debt for which note was given, or security therefor, 127 A.L.R. 343.    Rule regarding material alteration of instrument as affected by attempt at restoration of instrument to its original condition or effect, 155 A.L.R. 1217.    Deception as to character of paper signed as defense as against bona fide holder of negotiable paper, 160 A.L.R. 1295.    Alteration in check or other instrument of name of branch of bank as material, 174 A.L.R. 299.    Invalid instrument as subject of forgery, 174 A.L.R. 1300.   Rights and liabilities of drawee bank, as to persons other than drawer, with respect to uncertified paid check which was altered, 75 A.L.R.2d 611.   Rights of one who acquires lost or stolen traveler's checks, 42 A.L.R.3d 846.   What constitutes "fraudulent and material" alteration of negotiable instrument under UCC § 3-407(2)(a), 88 A.L.R.3d 905.