$ 27.

Where the holder of a bill has a lien on it, arising either from contract or by implication of law, he is deemed to be a holder for value to the extent of the sum for which he has a lien (g).

(a.) This section does not seem to alter the common law of Scotland, which does not require valuable consideration, adequate or inadequate, to support a bill or other obligation, Bell's Prin. 8, 63; Law v. Humphreys, 20th July, 1876, 3 R. 1192. Non-onerosity of itself is not a sufficient defence, because a person may grant a bill from goodwill, or in fulfilment of some moral obligation. The plea of no value is, however, relevant; (1) where there was no intention to grant an obligation-e.g., where an acceptance has been obtained by fraud, or force, and fear. If the bill be in the hands of the person who has so obtained it, the bill is invalid; if it have been indorsed to a third party, he has not the presumption of value, but must prove that value was given for it, before he can recover on it from the person whose signature has been obtained by fraud or violence; (2) where the consideration has failed-e.g., where a bill is given for a special purpose, which cannot be carried out, or on condition that it shall only be used on the occurrence of an event, which does not happen, or in payment of the price of goods, which are not delivered, Carrick v. Mills, 7th March, 1828, 6 Sh. 735; Fortune v. Luke, 9th December, 1831, 10 Sh. 115; Agra and Masterman's Bank v. Leighton, L. R. 2, Ex. 56; or where it is given in consideration of the holder giving delay in enforcing an obligation which is afterwards found to be invalid, Macdonald v. Union Bank, 29th March, 1864, 2 M. 963; (3) where the bill is an accommodation bill; (4) where the bill is given for an immoral or illegal consideration—e.g., if given as the price of a crime, Lord Lovat v. Fraser, 8th February, 1745, Mor. 9557; or for a breach of morality, Hamilton v. Main, 3rd June, 1823, 2 Sh. 356; or as an indemnity to magistrates in case of a debtor escaping from prison, Shoolbred v. Osborne, 18th June, 1789, Mor. 9468; or in restraint of marriage, or for procuring a marriage, Thomson v. M'Kaile,

14th Feb. 1770, Mor. 9519; or for the sale of offices connected with the administration of justice, or in the gift of the crown, &c., 49 Geo. III. c. 126; or for a wager, O'Connell v. Russell, 25th Nov. 1864, 3 M. 89; or for the price of spirits consumed on the premises, unless bonâ fide contracted at one time to the amount of twenty shillings, 24 Geo. II. c. 40, 25 & 26 Vict. c. 40, I. Bell's Com. 320; or for the price of smuggled goods, I. Bell's Com. 327; or for an illegal preference or collusive agreement for concurring, facilitating, or obtaining a bankrupt's discharge, 19 & 20 Vict. c. 79, § 150; (5) where the bill either at common law or by force of statute is reducible at the instance of the granter's creditors, vide note (a) on § 97.

In these cases, if it be shown that the holder, though not an original party, has not given value for the bill, he cannot enforce it; but see subsection (2).

(b.) Consideration in Scotland has been held to exist where a bill was given in security of a promise of marriage, the marriage not having taken place, Calder v. Provan, 12th Jan. 1744, 1 Pat. Ap. 359; where it was given in satisfaction of a debt due by a friend of the granter, Allan v. Galli, 5th June, 1829, 7 Sh. 706; or to obtain delay in enforcing an obligation, Macdonald v. Union Bank, 29th March, 1864, 2 M. 963; or as a return for professional services, Young v. Sheridan, 24th Feb. 1837, 15 Sh. 664; or in security of past or future advances, Glen v. National Bank, 14th Dec. 1849, 12 D. 353; or for goods consigned for sale, but not sold at the date of the maturity of the bill, Gibson v. Rutherglen, 18th July, 1842, 1 Bell, Ap. 519; or by a discharged bankrupt for the amount of a debt due before sequestration, Clark v. Clark, 5th Jan. 1869, 7 M. 335. If it be proved that value has only been given to the extent of a part of the sum in a bill, it will be restricted to that sum, Broch v. Newlands, 11th Nov. 1863, 2 M. 71.

By the law of England a bill must be granted for value. The consideration for a simple contract may be any right, interest, profit, or benefit, accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other, Currie v. Misa, L. R. 10, Ex. 153,

$ 27.

$ 27.

vide, p. 162. The consideration must be real, Wade v. Simeon, 2 M. Gr. and S., C. B. Reports, 548. It may be either executory or executed, but not past, vide cases in Anson on Contract, pp. 69-99. An illegal consideration renders a contract invalid. See also Pollock on the Law of Contract, pp. 8, 179-201.

(c.) In England doubts were entertained whether, where a bill payable on demand was given in payment of an existing debt, that amounted to consideration. It was settled, that in the case of a bill payable after date there was consideration, because the creditor, by taking a bill payable at a future time, agreed to suspend his other remedies against his debtor, and so gave valuable consideration; but it was argued that where a bill payable on demand was taken, no consideration was given, because the creditor in the debt did not thereby bind himself to forbear demanding payment. In Currie v. Misa, L. R. 10, Ex. 153, the defender purchased bills from a customer of the plaintiff, and in payment therefor the customer drew upon the defendant for the amount of the bills, a bill, payable on demand, which he put into his overdrawn account with the plaintiff. The plaintiff presented it to the defendant, and the defendant gave a cheque on his own banker against delivery of the bill. Before the cheque was paid the customer suspended payment, and the bills he had sold to the defendant became worthless. The defendant accordingly stopped payment of the cheque. The banker then sued him on the cheque, and was met by the defence that the cheque could not be sued on, as he had given no consideration for it. It was held in the Exchequer Chamber, Lord Coleridge dissenting, that there was consideration, because when the defendant gave the defendant the cheque he was indebted to the customer for the amount of the bill for which the customer had drawn the draft payable on demand on him. This subsection now finally settles the question by providing that there is no distinction between a bill payable on demand and one payable at a future time as to the consideration necessary in England to support it.

(d.) In suspending a charge on a bill, or in defending an

action on it, it is necessary to aver that neither the holder nor any prior holder gave value for the bill.

(e.) Vide § 2.

(f.) It is not necessary that a bill bear "value received," whether value has been given or not. A statement of the particular value given-e.g., the discharge of an accountmay be inserted, and does not invalidate the bill, vide § 3 (3).

(g.) A lien requires possession. By implication of law, bankers and factors have a lien over bills and notes in their possession for any balance due to them by their constituent. The bills must, however, have been deposited with the banker or factor in that capacity; and if deposited with a factor, there is no lien for an account due by the constituent to the factor in his capacity of banker. This lien does not extend to bills deposited for a special purpose, nor is there a general lien where a special lien has been stipulated, II. Bell's Com. 111, 112.

$27.

tion bill or

28. (1.) An accommodation party to a bill is a Accommodaperson who has signed a bill as drawer, acceptor, or in- party. dorser without receiving value (a) therefor, and for the purpose of lending his name to some other person (b.)

(2.) An accommodation party is liable on the bill to a holder for value; and it is immaterial whether, when such holder took the bill, he knew such party to be an accommodation party or not (c).

(a.) Vide § 27.

(b.) In an accommodation bill the accommodation party may be the drawer, the acceptor, or an indorser, and the rights of the parties liable on such a bill, inter se, will be regulated by the real nature of the transaction between them, and not by the order of their names on the bill, but primâ facie the parties will be held to be entitled to relief, as if the bill had

been drawn and indorsed for value. The acceptor of a bill for which it is proved or admitted that no value was given, will be liable, in action on the bill to relieve the drawer or an indorser who has paid the bill, unless he prove that the bill was accepted for the accommodation of the drawer or indorser, M'Gregor v. Gibson, 19th Feb. 1831, 9 Sh. 483. Where the acceptor and an indorser are both accommodation parties, it is presumed, until the contrary is proved, that the indorser, who has retired the bill at maturity, is entitled to full relief from the acceptor, Beveridge v. Liddell, 14th Jan. 1852, 14 D. 328, but in England it is held that in such a case each is liable to relieve the other to the extent of one-half, Reynolds v. Wheeler, 30 L. J., C. P. 326. Joint accommodation acceptors are primâ facie entitled to claim a proportional sum from each of their co-acceptors, Laing v. Anderson, 27th June, 1827, 5 Sh. 851. These presumptions, formerly could only be redargued by the writ or oath of the party accommodated, but parole proof is now competent, vide § 100.

(c.) It is competent for an accommodation party to prove by parole, vide § 100, that he received no value, and signed truly for the accommodation of some other person. It is presumed that the acceptor has received value, vide § 30 (1), whether the bill bears to have been granted for value or not, but in any case he is liable to a holder for value, as defined in § 27 (2), whose rights are the same, as if the bill represented a real transaction. He is not deprived of his rights by knowledge that any party to it was an accommodation party, whether he become a holder of the bill before or after its maturity, but if he is not a holder in due course he becomes liable to other defences. Where the holder is not a holder for value as defined in § 27 (2) an accommodation party can set up the defence of no value. In certain cases the holder of an accommodation bill is relieved from the duty of presentment for payment, vide § 46 (2 c, d) and of giving notice of dishonour, vide § 50 (2 c, d) and the necessity of taking a protest, vide § 51 (9). The holder will not be relieved from the duty of strict negotiation, by the bill bearing to be for the accommodation of any of the parties to it, unless he