The destruction or mutilation of an instrument is considered cancellation, and thus discharges the liability of all parties, only if it is done with the intention of eliminating obligation on the instrument.

Cancellation

The act of formally terminating or calling off a previously arranged event, agreement, or policy.

Destruction

The act of causing so much damage to something that it is beyond repair or no longer exists.

Obligation

A duty or commitment to act or perform in a certain way, often legally or socially binding.