Gemara

If between the text and the witnesses there is a smudge of ink, the document is Pasul. Perhaps the witnesses signed under the smudge and did not intend to testify about the text.

163b (R. Yochanan): Two blank lines between the text and the witnesses invalid a document, but even one blank line between the witnesses and the validation disqualifies it.

Question: Presumably, we are concerned lest he cut off the top (the document and witnesses) and write a document and forge signatures in the blank line (and it will have a validation of Beis Din below it)!

R. Yochanan must say that a one-line document that includes the signatures is valid.

Summation of question: Also when there is one blank line between the text and the witnesses, perhaps he will cut off the top, and write a document in the blank line (and it will have signatures underneath)!

Answer: R. Yochanan must say that a one-line document in which the signatures are underneath is invalid (we do not learn from the bottom line).

Question: Perhaps when he writes the document in the blank line (above the witnesses), he will also forge signatures in that line. He will say that he wanted to have extra witnesses, therefore there are also signatures underneath!

Answer: In such a case, it must be validated from the witnesses in the same line as the document.

Rishonim

The Rif brings the Gemara verbatim.

Hagahos Chavos Ya'ir (1): We did not enact to Machshir a one line document in which the witnesses signed underneath, and disqualify when witnesses left a blank line, for witnesses are not so proficient to sign without leaving any space. Beis Din is proficient.

Rambam (Hilchos Malveh 27:4): A one-line document that includes the signatures is Kosher.

Magid Mishneh: The Rashba says in the name of Tosfos that we learn from here that witnesses must sign at the beginning of the line, so there is no room to write a document in the margin. If such a document were written, it would (seem to) be a Kosher document. Since there is concern for this forgery, this disqualifies the document. If the first witness left room in the margin, the second witness should sign under him. Now the bearer cannot write a new document with witnesses all in one line.

Rambam (5): If a document is in one line, and the signatures are in the second line, it is Pasul. Perhaps witnesses signed one line below a Kosher document, and the bearer cut off the document and wrote this document in the bkl, and the witnesses are signed underneath it. Similarly, if a document and two signatures are in one line, and two more witnesses are in the second line, and he says that he wanted to have extra witnesses, we validate it only from the witnesses in the top line. Perhaps in the bkl between the original Kosher document and the witnesses he wrote a document and forged signatures.

Hagahos Maimoniyos (Hilchos Gerushin 1:3, citing Sefer ha'Terumos): Witnesses must sign at the beginning of the line, so the there is no room to write a document in the margin. Witnesses should sign one under the other, lest there be room in the margin to write 'Ploni borrowed a Maneh (100 Zuz) from Almoni.' Even if they sign one under the other, if there is room the bearer could write 'I signed below owe a Maneh to Ploni', and the witness will be signed afterwards! The only solution is to leave a small margin. One should finish the last line of the document to the end. Some do so by elongating the letters.

Rosh (10:2): The Sugya disqualifies any document that could be used to swindle, even if no fraud was done, for it is unlike Chachamim's enactment. Witnesses must sign at the beginning of the line, so there is no room to write a document in the margin. If there were room, and they signed in one line, the bearer could cut off the document, and write what he wants to the side. His new document has the text and witnesses all in one line. We accept such documents! If there is a margin, one may dirty it with ink. We are concerned lest witnesses signed (only) on an ink smudge only when it is between the text and the signatures, like the concern lest witnesses signed on a greeting under the document (176a). Alternatively, witnesses may sign one under the other (even if there is space to the side). Even though the bearer could write 'I owe 100 to you' to the side, and (it will look as if) one witness signed on it, we are concerned only when the bearer can forge a document that can be used to force others to pay. We are not concerned if he can force the witness to pay, for the witness caused his own loss. However, if one may join two documents, each of which was signed by one witness, we must disqualify a document with space next to the witnesses.

Rosh (10:10): R. Yochanan holds that one blank line between the witnesses and the validation disqualifies the validation. Since there is no problem between the document and the witnesses, we disqualify only from the problem and below.

Poskim

Shulchan Aruch (CM 45:11): Witnesses must be meticulous when they sign, that if there is blank parchment in front of their signatures, that they not sign one after the other in one line. Perhaps the bearer will write what he wants, cut off the top, and he will have a document with signatures in one line.

Beis Yosef (DH Kosvu ha'Tosfos): Tosfos (163b DH Shitah) says that even if witnesses signed and left much blank parchment at the beginning (of the line - Bach), perhaps the document is Kosher. We disqualify only when a part essential to the document can be used to forge.

Shach (19): It seems that the reason to be Machshir is because one could cut off the margin if it is not essential to the document.

Darchei Moshe (3): The Rosh, Tur and Mordechai (643) disqualify.

Tashbatz (1:6, cited in Hagahos Tur ha'Shalem 87): The custom is to have a big margin in Kesuvos. It should be filled with pictures or stanzas or verses. However, it is better not to write verses.

SMA (24): We are concerned even when they signed under the beginning of the text lines, if there is a big margin.

Shulchan Aruch (ibid): Rather, they should smudge the blank parchment with ink. We say that witnesses signed (only) on the smudge only when it is between the text and the witnesses.

SMA (25): There is no reason for witnesses to testify that the area was smudged (and the lender did not erase`anything there), for the lender could cut off the margin without any suspicion, if he desired.

Shulchan Aruch (ibid): If witnesses began to sign in the middle of a line, and the blank parchment before their signatures was cut off, it is Pasul. Perhaps an unfavorable clause for the bearer or a Tanai was written there, and he cut it off.

SMA (26): We do not learn from the last line to help the bearer, but we learn from it to weaken him (44:1, Nimukei Yosef 76b DH Masnisin).

Shulchan Aruch (ibid): However, if Sharir v'Kayam was written at the end of the line above it is Kosher, if the witnesses signed one under the other.

Shach (20): The Rosh, Tur and Shulchan Aruch say that if Sharir v'Kayam was written at the end of the line above it is Kosher. Perhaps an unfavorable clause for the bearer was written after Sharir v'Kayam! The Bach (12) says that since it is rare to write more than one Sharir v'Kayam, we are not concerned for this, even if there is a Re'usa (problem). This is wrong. Also, perhaps there was an unfavorable clause after Sharir v'Kayam without a second Sharir v'Kayam! Rather, the Rosh, Tur and Shulchan Aruch discuss nowadays that we learn from the last line since we (always) write Sharir v'Kayam. They hold that based on Gemara law, we do not learn even to weaken the bearer from the last line, like the Rashbam (Sof 161b) says. Likewise, nowadays we do not learn at all from what is after Sharir v'Kayam. The Rema (42:5 and 44:1) holds that we learn from the last to weaken the bearer. If so, he should have commented here also (to disagree with the Mechaber (below) who is Machshir if Sharir v'Kayam was written at the end of the line)!

Gra (22): The Shulchan Aruch is difficult. If there is no Sharir v'Kayam, in any case (nowadays) it is Pasul!

Shulchan Aruch (ibid): If they signed one after the other, it is Pasul. Perhaps a Kosher document was written in one line with the witnesses, and he cut off the text, and wrote the current document in the blank parchment above.

SMA (27): This teaches that one should not make a document with the witnesses in one line if there is blank parchment above. He must smudge the blank parchment or cut it off. (If the margin is cut off before the witnesses,) since we see a problem (they did not sign at the beginning of the line), we are concerned (lest they also left blank parchment above, and the lender added text).