CHAPTER

X.

Remedy of agent

parliament, 1 Vict. c. 10 (continued by 4 Vict. c. 14), was passed to obviate the inconvenience.

But a note given for the amount of an attorney's bill not delivered pursuant to 6 & 7 Vict. c. 73, is good (x).

If a person be employed to make an illegal contract, and against principal. at the request of his principal discharges a claim made on such a contract, the agent can recover from the principal the money so paid on his account (y).

Notice of fraudulent or illegal consideration.

Illegality of consideration when judgment recovered.

Illegality of part of the consideration.

Renewal of bill given on illegal consideration.

It is no defence that the plaintiff being a transferee of a bill or note had notice of a fraudulent or illegal consideration, if he can deduce title from a prior party not shown to have had any such notice (z).

A judgment recovered by default will not be set aside, on the ground of illegality in the consideration, unless the defendant can affect the plaintiff with knowledge of that fact but the Court has permitted him to try that in an issue (a).

If part of the consideration of a bill or note be fraudulent or illegal, the instrument is vitiated altogether (b). Where parties have woven a web of fraud or wrong, it is said to be no part of the duty of Courts of Justice to unravel the threads.

If a bill originally given upon an illegal consideration be renewed, the renewed bill is also void (c), unless the amount be reduced by excluding so much of the consideration for the original bill as was illegal (d).

(x) Jeffreys v. Evans, 14 M.
& W. 210.

(y) Knight v. Cambers, 24 L.
J., C. P. 121; 15 Com. B. 562,
S. C.; Knight v. Fitch, 24 L. J.,
C. P. 122; 15 Com. B. 500, S. C.;
Rosewarne v. Billing, 33 L. J.,
C. P. 55; 15 Com. B., N. S. 316,
S. C.

(z) Masters v. Ibberson, 18 L.
J., C. P. 348; 8 C. B. 100, S. C.

(a) George v. Stanley, 4 Taunt. 683; Davison v. Franklin, 1 B. & Ad. 142.

(b) Robinson v. Bland, 2 Burr. 1077; Scott v. Gilmore, 3 Taunt. 226; Crookshanks v. Rose, 5 Car.

& P. 19; 1 M. & Rob. 100, S. C.;
Story on Promissory Notes, s. 190;
Williams v. Bulmore, 33 L. J.,
Ch. 461.

(c) Chapman v. Black, 2 B. & Ald. 588; Wynne v. Callender, 1 Russ. 293; Preston v. Jackson, 2 Stark. 237.

(d) Ibid.; and see Hubner v. Richardson, Bayley, 6th ed. 527. In some cases, where there has been a change of parties, the defendant must plead the whole agreement on which the renewed bill was given. Boulton v. Coghlan, 1 Bing. N. C. 640. In others, where the parties are the same, it

And if a bill or note be originally without any consideration, and it is given up, another bill between the same parties being substituted for it, the giving up of the first bill is po consideration for the second, but both are alike void for want of consideration (e).

is sufficient to plead the illegality attaching to the original bill without mentioning the substitution. Hay v. Ayling, 20 L. J., Q. B. 171; 16 Q. B. 423, S. C.

(e) Southall v. Rigg, 11 C. B. 481. It has, however, been held that bills accepted subsequently

to the passing of the 17 & 18 Vict.
c. 90, abolishing the usury laws,
in renewal of bills accepted before
that act, are not without considera-
tion. Fight v. Reed, 32 L. J.,
Exch. 265; 1 Hurl. & Colt. 703,
S. C.; Martin, B., dissentiente.

CHAPTER

X.

B.

L

IN examining the subject of the transfer of bills and Division of the notes, let us consider, first, what bills are transferable; subject. secondly, the modes of transfer; thirdly, the nature and extent of an indorser's liability; fourthly, the rights of an indorsee; fifthly, the liability of a person transferring by delivery; sixthly, the rights of a transferee by delivery; seventhly, transfer under peculiar circumstances; eighthly, and lastly, when a Court of Equity will restrain a transfer.

First, as to what bills are transferable (a). We have WHAT BILLS already seen, that a bill or note which does not contain a TRANSFERdirection or promise to pay to the order of the payee, or to ABLE. bearer, is not transferable; that is, not so as to charge the drawer or acceptor by an assignment of the right of action.

negotiable.

But if, nevertheless, the payee do indorse a bill not ne- Effect of indorsegotiable, he is liable on his indorsement to his indorsee (b). ment of a bill not For every indorser of a bill is in the nature of a new drawer (c). If the bill, however, were not originally negotiable, it seems to have been considered by the Court of Common Pleas, that the first drawing exhausts the stamp,

(a) See the observations on the Assignability of Bills, ante, p. 2.

(b) Hill v. Lewis, 1 Salk. 132; Smallwood v. Vernon, 1 Stra. 478; Grinnell v. Herbert, 5 Ad. & E. 436; Burmester v. Hogarth, 11 M. & W. 97; Penny v. Innes, 1 C., M. & R. 439; 5 Tyr. 107, S. C. But see Plimley v. Westley, infra, where the Court seemed to think

that the stamp laws might inter-
pose an obstacle.

(c) And therefore a blank in-
dorsement on a bill not negotiable
has been held to operate as the
drawing of a bill payable to
bearer. Matthews v. Bloxam, 33
L. J., Q. B. 209. See Allen v.
Walker, 2 M. & W. 317; 5 Dowl.
460.

CHAPTER
XI.

Of a note not negotiable.

Subsequent insertion of words creating negotiability.

MODES OF
TRANSFER.

and that the indorsee cannot acquire a right, without a new stamp (d), which cannot by law be impressed. If the declaration on a bill indorsed in blank but not originally negotiable, or not indorsed by the payee, state that the defendant, the indorser, drew and indorsed the bill, payable to his order, it will upon evidence be open to the double objection, that the same act is treated both as a drawing and an indorsement, which it cannot be, and that the bill is described as made payable to order, whereas the effect of the blank indorsement is to make it payable to bearer (e).

But the indorsement of a note (whether originally negotiable or not), by one to whom it has not been transferred, will not make the indorser liable on his indorsement (ƒ). For though every indorser of a bill may be treated, without inconvenience, as a new drawer or maker (for in that character he still requires notice of dishonour), yet an indorser of a note cannot be treated as a drawer or maker of the note, without altering his situation for the worst, and depriving him of the right to notice of dishonour.

The words or to his order or to bearer, if omitted by mistake, may be afterwards inserted, without vitiating the instrument either at common law or under the Stamp Act (g).

Whether a bill or note be negotiable or not is a question of law (h).

Secondly, as to the modes of transfer. We have observed, that a bill or note, if payable to order, is not transferable, except by indorsement; but that, if payable to bearer, it is transferable by mere delivery (i).

(d) Plimley v. Westley, 2 Bing. N. C. 249; 2 Scott, 423; 1 Hodges, 324, S. C., which however was the case of a note.

(e) Burmester v. Hogarth, 11 M. & W. 97.

(f) Grinnell v. Herbert, 5 A. & E. 436; 6 N. & M. 723, S. C.; but see Story on Promissory Notes, s. 138.

(g) Kershaw v. Cox, 3 Esp. 246. See the Chapter on ALTERA

TION.

(h) Grant v. Vaughan, 3 Burr.

(i) It is conceived, that if an agent, a banker for example, hold a bill transferable by delivery, a direction given to him by the owner to hold it for another, is a sufficient transfer by delivery. And that if the owner make over a bill transferable by delivery, by deed, and perhaps by any valid written or verbal contract, without actually delivering the bill, the deed amounts to delivery in law, and the transferer holds it as agent of the transferee.