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doubted seems strange, and we cannot help feeling that this, having been so held, should make us the more cautious in accepting the cases relating to negotiable instruments given as security for antecedent debts; the distinction in principle being by no means clear, at any rate, to our minds. So, with respect to notes given as collateral security for an existing debt, still greater inconsistency seems to prevail. Mr. Parsons states (1 Parsons on Con., 259) in a note, that in the following cases it is held, that where the transfer is merely for the sake of collateral security, there is no valid consideration, and the holder is not entitled to protection against the equities. Bay v. Coddington, (5 John. Ch. R. 54; S. C. 20 John. 637); Stalker v. McDonald, (6 Hill, N. Y. 93); Clark v. Ely, (2 Sand. Ch. 166); Mickles v. Colvin, (4 Barb. 304); Fenby v. Pritchard, (2 Sandf. 151); Young v. Lee, (18 Barb. 187, 2 Kern. 561); Kilpatrick v. Muirhead, (16 Penn. St. 123); Petrie v. Clark, (11 S. & R. 377); Bertrand v. Barkman, (8 Eng. 150); Jenness v. Bean, (10 N. H. 266); Williams v. Little, (11 N. H. 66); Prentice v. Zane, (2 Gratt. 262); Gibson v. Connor, (3 Geo. 47); Bramhall v. Beckett, (31 Me. 205); Allaire v. Hartshorn, (1 N. J. 665); Alexander v. Springfield Bank, (2 Met. (Ken.) 534). And he cites, as establishing a contrary doctrineSwift v. Tyson, (16 Pet. 15); Chicopee Bank v. Chapin, (8 Met. 40); Stevens v. Blanchard, (3 Cush, 168); Valette v. Mason, (1 Smith, Ind. 89, S. C., 1 Cart. 288); Pugh v. Durfee, (1 Blatch. 412); Atkinson v. Brooks, (26 Ver., Tex. 569); Greneaux v. Wheeler, (6 Texas, 515).

And he refers further, as to the sufficiency of the consideration afforded by a pre-existing debt, to Rutland Bank v. Buck, (5 Wend. 66); Grandin v. Le Roy, (2 Paige, 509); White v. Springfield Bank, (3 Sand. 222); Lathrop v. Morris, (5 Sand. 7); N. Y. M. I. W. v. Smith, (4 Duer, 362); Blanchard v. Stevens (3 Cush. 162); Pond v. Lockwood, (8 Ala, 669); Varnum v. Bellamy, (4 McLean, 87); King v. Doolittle, (1 Head, 77); and mentions that, in the Trustees of Iowa College v. Hill, (12 Iowa, 426), it was held that if one took a note as collateral security for an antecedent debt, he is nevertheless prima facie, but not conclusively, to be considered as holder for value, and it is on the defendant to show that he is not such a holder; that if it was taken as collateral security only, the plaintiff parting with nothing, giving no time, relinquishing no right, nor suffering damages or injury as the consideration, or in consequence of receiving it, he would not be such holder. In the text, Mr. Parsons thus sums up his view of the state of law, (Parsons on Contracts, 258): "On the ground that negotiable paper is intended only for business purposes, and has its peculiar privileges only that it may more perfectly perform this function, it has been held that one who takes a negotiable note, even before its maturity, but only in payment of or as security

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for an antecedent debt, without giving for it any new consideration, does not take it in the way of business, and is not a bona fide holder; and that he therefore holds the note subject to all equitable defences. This doctrine rests upon adjudications and opinions of great weight; but it is also denied by very high authorities, indeed by the highest in this country, the Supreme Court of the United States, who have decided that a pre-existing debt of itself, and without any strengthening circumstances, is of itself a sufficient consideration. But it has nevertheless been held since that decision, by Courts entitled to great respect, that the doctrine of the Supreme Court is erroneous and untenable; and it must be admitted that the law on this subject is in a very unsettled state. But it may be supposed that in this country the authority of the Supreme Court will generally prevail." As against this, we have the authority of Swift . Tyson, (1 American Leading Cases, 334), where the principle is treated as settled the other way. It is there said "With regard to the question particularly discussed in Swift v. Tyson, the principle may now be considered as settled, that if the instrument is given merely as collateral security for an existing debt, the right of action on the original debt not being altered, it is not given for a valuable consideration, and is not discharged of equities; but if it is accepted in satisfaction and discharge, or extinguishment of the previous liability, or if a security be given up, or time be given, or other new consideration intervene, the person so receiving the instrument is a holder for value, and is not affected by previous equities." On the the other hand again, we find Mr. Chancellor Kent strongly leaning to the opposit view. In a note to the 3rd vol. of his Commentaries, p. 81, in speaking of a party obtaining a note as mere security, or in payment of an antecedent debt without parting with anything of value, he says: "Mr. Chancellor Walworth gave an elaborate discussion to this point, and he held that the decision of the Supreme Court of the United States, as delivered by Mr. Justice Story, in Swift v. Tyson, (16 Peters, 1), was not correct in the opinion, that a pre-existing debt was of itself, and without any other circumstances, a sufficient consideration to entitle the bona fide holder, without notice, to recover on the note, when it might not, as between the original parties, be valid. Mr. Justice Story's work on Promissory Notes, p. 215, note 1, repeats and sustains the decision in Swift v. Tyson and I am inclined to concur in that decision, as the plainer and better doctrine. The decision in Williams v. Little, (11 N. H. Rep. 66), is to the same effect, and Chief Justice Parker sustained the decision."

In the midst of this conflict of decisions and opinions, which it would be idle for us to attempt to reconcile-for they appear so

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opposite as to be wholly irreconcilable-we must determine this case wholly irrespective of American authorities on broad legal principles, aided by any English decisions bearing on the subject, from which light is to be obtained; for it is stated by Mr. Parsons that this question has not yet received a distinct adjudication in England; but a careful examination of the English cases will, we think, exhibit very clear expressions of opinions of Judges and Courts, showing a uniform tendency to one conclusion. In considering this question, it should be borne in mind that negotiable paper has some very peculiar privileges; that it is exempt from the ordinary rule respecting chattels personal, and that property in it may be transferred by a man who has none in it himself, to a person taking it bona fide and for a good consideration; and that it is the policy of the law, in view of the commercial advantages resulting from the negotiable quality of bills and notes, not to cloy, but rather to facilitate their negotiability; and therefore we find many anomalies admitted as part of the law merchant in respect of negotiable securities. Thus, the doctrine enunciated in Gill v. Cubitt, (3 B. & C. 466,) and Down v. Halling, (4 B. & C. 330,) that the negligence of a party taking a negotiable instrument fixes him with the defective title of the party giving it, has been expressly decided to be no longer law; and that gross negligence is of no avail except as evidence of fraud. Foster v. Pearson, (I C. M. & R. 849); Goodman v. Harvey, (4 A. & E. 870); Arbouin v. Anderson, (1 Q. B. 498-504). And Lord Brougham says, in The Bank of Bengal v. Fagan, (7 Moore, P. C. 72), that "It may be taken as also established, that whatever may have been the law laid down in Gill v. Cubitt, and Down v. Halling, and one or two other cases, and not abandoned, at least as far as the language went which the Court used in some subsequent cases, is now law no longer; and that the negligence of the party taking a negotiable instrument, does not fix him with the defective title of the party passing it to him." So, Collins v. Martin, (1 B. & P. 648), establishes the position that where A. deposits bills, indorsed in blank, with B. his banker, to be received when due, and the latter raises money on them by pledging them with C., another banker, and afterwards becomes bankrupt, A. cannot maintain trover against C. for the bills. It was admitted the bankers might have sold the bills, but argued that they could not pledge them; and the case of a factor pledging the property of his principal was urged as an authority, and it was said bankers had been considered as factors: but Eyre, C. J., said "In strict law, and with respect to third persons, bankers do not at all resemble factors; nor will the rule that factors cannot pledge, apply to the case of a banker pledging indorsed bills. That rule is grounded on the strict rule of property; the goods are not the factor's, and therefor he can

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not pledge them. He may sell them, because, though they are not his, he is intrusted to sell them for his principal; he manages the sale, but it is his principal who, through him, sells them. For the purpose of rendering bills of exchange negotiable, the right of property in them passes with the bills. Every holder with the bills takes the property, and his title is stamped upon the bills themselves. The property and the possession are inseparable. This was necessary to make them negotiable, and in this respect they differ essentially from goods of which the property and possession may be in different persons. The property passing with the possession, it is admitted that a banker who receives indorsed bills from his customers, to be got in when due, and carried to his account, may discount or sell them. Why may he not pledge them? Either is a breach of the confidence reposed in him. He may sell because the property is entrusted to him, and he may pledge for the same reason; for he who has the property has a disposing power, and the law has not limited it to be used in any particular manner." And in Wookey v. Pole, (4 B. & Ald. 1), bank notes, exchequer bills and bills of exchange were put on the same footing by Best, J., and he adopted the doctrine of Collins v. Martin, (1 B. & P. 648), that with respect to bills of exchange indorsed in blank, "property and possession are inseparable;" and Holroyd, J., says: "It has been long and fully settled, that bank notes or bills, drafts on bankers, bills of exchange and promissory notes, either payable to order or indorsed in blank, or payable to bearer, when taken bona fide, and for a valuable consideration, pass by delivery, and vest a right thereto in the transferee, without regard to the title or want of title in the person transferring them;" and the cases establishing this, he says, "have proceeded on the nature and effect of the instruments, which have been considered as distinguishable from goods." And after mentioning how, in the case of goods, property can only be transferred, he adds: "But the Courts have considered these instruments, either promises or orders for the payment of money, or instruments entitling the holder to a sum of money as being appendages to money, and following the nature of their principal." And after referring to observations of Lord Mansfield in Peacock v. Rhodes, (2 Doug. 636), and Miller v. Race, (1 Burr. 452), he says: "These authorities show, that not only money itself may pass, and the right to it may arise by currency alone, but farther, that these mercantile instruments, which entitle the bearer of them to money, may also pass, and the right to them may arise in the like manner, by currency or delivery. These decisions proceed upon the nature of the property (viz., money), to which such instruments give the right, and which is itself current; and the effect of the instruments which either give to their holders,

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merely as such, the right to receive the money, or specify them as the persons entitled to receive it." Bayley, J., though dissenting from the rest of the Court as to the application of the doctrine to exchequer bills, says: "The holder, bona fide, of a bank note or bill of exchange, has a good title against all the world, because in the case of bank notes, they are considered as money, and pass as such, and it is essential for the purposes of trade, that delivery should give a perfect title, and because in the case of bills of exchange, this is the law and custom of merchants." And Abbott, C. J., says: "I think this instrument (an exchequer bill) is of the same nature as notes and bills of exchange. Like them, it is neither valuable nor useful in itself, as goods and chattels, such as a horse, a book, a picture, or a pipe of wine, are; it is valuable only as entitling the holder to receive, at some future time, a certain sum of money, which is a value precisely of the same nature as the value of a note or bill. Notes and bills have been distinguished from goods in regard to their transfer, for the convenience of trade and commerce, and in regard to their being mercantile and commercial instruments, and by law negotiable."

The authorities at the present day, very clearly establish that the acceptance of a negotiable note or bill, for and on account of a debt, must be taken prima facie to be in satisfaction, until the note or bill becomes due and unpaid in the hands of the creditor, without his laches: the taking of the note or bill operating as a suspension of the creditor's remedy for the time it has to run, and amounting to an agreement not to sue for that time in consideration of the defendant giving the note or bill. So, the learned editor in a note to Holdipp . Otway, (2 Saund. 103), after stating that a covenant by an obligee of a bond not to sue for a certain time, cannot be pleaded in bar in an action on the bond, says: "In truth, then, this abeyance of the creditor's right to sue, seems an anomaly which the law has admitted, as in other instances, as part of the law-merchant, in respect of mercantile securities;" and adds that the difficulty of reconciling the doctrine with any principle is increased by the Courts having declined to apply it to the case of a debt due for rent, or on a specialty. Parke, B., delivering the judgment of the Exchequer Chamber in Ford v. Beech, (11 Q. B. 873), citing this note as an authority, says: "Neither is the decision in this case inconsistent with the several cases in which it has been held, that a party accepting a negotiable security payable in future for and on acconnt of an antecedent demand cannot, until such negotiable, security has become due and been dishonored, sue for such antecedent demand; because independently of the consideration of how far the acceptance of such negotiable security may be deemed payment for the time,