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as to con

If a man seek to enforce a simple contract, he must, in Presumption pleading, aver that it was made on good consideration, and sideration on must substantiate that allegation by proof. But to this rule bills and bills and notes are an exception. It is never necessary to notes. aver consideration for any engagement on a bill or note, or

XI.

CHAPTER to prove the existence of such consideration, unless a presumption against it be raised by the evidence of the adverse party, or unless it appear that injustice will be done to the defendant, or that the law will be violated, if the plaintiff recover. In the case of other simple contracts, the law presumes that there was no consideration till a consideration appear; in the case of contracts on bills or notes, a consideration is presumed till the contrary appear, or at least appear probable (a).

When burden of proof shifted.

In the case of

Every holder of a bill or note is, primâ facie, a holder in due course, and therefore is presumed to be among other things a holder for value; but if in an action on a bill or note it is admitted or proved that the acceptance or making, issue, or subsequent negotiation is affected with fraud, duress, or illegality, the burden of proof is shifted, and those presumptions no longer exist, unless the holder prove that subsequently to the alleged fraud he or some one through whom he derives title gave value in good faith. Hence the defendant is not permitted to put the plaintiff on proof of the consideration which the plaintiff gave for the bill, unless the defendant can make out a primâ facie case against him, by showing that the bill was obtained from the defendant, or from some intermediate party, by undue means, as by fraud or force (b) (or that it was lost) (c), or that it was originally infected with illegality.

It was formerly held, that the defendant could call on the an accommo. plaintiff to prove consideration, by showing the bill to be

dation bill.

(a) Code, s. 30. To obtain the usual decree in a creditor's suit it is not sufficient for the plaintiff to put in an acceptance of the testator proved as an exhibit. Quære, whether any evidence should be given of the consideration. Keaton v. Lynch, 1 Y. & Col. N. S. 437. And where an account is directed by a Court of Equity to be taken of dealings between an attorney and his client, it is not sufficient that the attorney produce bills and notes given by the client to him, he must prove the consideration. Jones v. Thomas, 2 Y. & Col. 498.

(b) As to a note obtained by duress of goods, see Kearns v. Durell, 6 C. B. 596. The distinction seems to be between a

payment, or a transaction in the nature of payment, which is void for duress of goods, and a contract, which cannot be so avoided. As to compulsion in the nature of duress of land, see Close v. Phipps, 7 M. & G. 586. See also Atkinson v. Denby, 30 L. J., Exch. 361; 7 N. & M. 934.

(c) Harvey v. Towers, 6 Exch. 656; Mather v. Lord Maidstone, 26 L. J., C. P. 58; 1 C. B., N. S. 273. But a wager which is not prohibited, but only void under 8 & 9 Vict. c. 109, has been held not to be such an illegality of consideration as will change the burthen of proof. Fitch v. Jones, 5 E. & B. 238. Loss of a bill is not specified in s. 30 (2).

an accommodation bill, or that the defendant received no value (d). But it is now definitely settled, after consideration by all the judges, that mere absence of consideration received by the defendant will not entitle him to call on the plaintiff to prove the consideration which the plaintiff gave. "There is," says Lord Abinger, delivering the judgment of the Court of Exchequer, "a substantial distinction between bills given for accommodation only, and cases of fraud, inasmuch as in the former case it is to be presumed that money has been obtained upon the bill. If a man comes

into Court without any suspicion of fraud, but only as the holder of an accommodation bill, it may fairly be presumed that he is a holder for value. The proof of its being an accommodation bill is no evidence of the want of consideration in the holder. If the defendant says, 'I lent my name to the drawer for the purpose of his raising money upon the bill, the probability is that money was obtained upon the bill.' Unless, therefore, the bill be connected with some fraud, and a suspicion of fraud be raised from its being shown that something has been done with it of an illegal nature, as that it has been clandestinely taken away, or has been lost or stolen (in which cases the holder must

(d) See Heath v. Sansom, 2 B. & Ad. 291; Duncan v. Scott, 1 Camp. 100: Grant v. Vaughan, 3 Burr. 1516; King v. Milsom, 2 Camp. 5; Paterson v. Hardacre, 4 Taunt. 114; Thomas v. Newton, 2 C. & P. 606; De la Chaumetic v. Bank of England, 9 B. & C. 208; Bassett v. Dodgin, 10 Bing. 40; 3 M. & Scott, 417; Simpson v. Clarke, 2 C., M. & R. 342; 1 Gale, 237. It was formerly necessary, in order to enable the defendant to put the plaintiff on proof of consideration, that the defendant should have given the plaintiff notice to prove consideration. Paterson v. Hardacre, 4 Taunt. 114; Bayley, 6th ed. 474, 500. It is now, however, settled, that notice to prove consideration is not necessary; Mann v. Lent, 1 M. & M. 240; 10 B. & C. 877; Heath v. Sansom, 2 B. & Ad. 291; Bailey v. Bidwell, 13 M. & W. 75; and it is now seldom given. It was, however, before the new rules, often prudent to give notice: "For it is,' says Lord Tenterden, " matter

of comment if no notice were
given, or if it were not given at a
reasonable time." Mann v. Lent,
1 M. & M. 240; 10 B. & C. 877.
It was formerly held that where
the consideration given by the
plaintiff was disputed, and a no-
tice to that effect had been given,
the plaintiff must go into his
whole case in the first instance,
and could not reserve the proof
of consideration as an answer to
the defendant's case. Delauney v.
Mitchell, 1 Stark. 439; Humbert
v. Ruding, Chitty, 9th ed. 651;
Spocner v. Gardiner, R. & M.,
N. P. C. 86; Best, C.J., in C. P.
But now, in all the Courts, the
plaintiff is allowed to prove the
handwriting and make out a
prima facie case, and afterwards,
in answer to the defendant's case,
to prove consideration. R. & M.
255 n. If, however, he call wit-
nesses to prove the consideration
in the first instance, he will not
be allowed, after the defendant's
case has closed, to call other wit-
nesses for the same purpose. See
Browne v. Murray, R. & M. 254.

CHAPTER

XI.

CHAPTER show that he gave value in good faith for it), the onus probandi is cast upon the defendant" (e).

XI.

Rules of pleading.

An accommodation party to a bill or note is liable to a holder for value, with or without notice of the fact; even though he take it after due, as absence of consideration does not constitute one of those defects in the title of a party negotiating, which extend to the title of subsequent transferees when the bill is negotiated after it is due (ƒ).

If the defendant plead that the note was made on an illegal consideration, and that the plaintiff gave no value, and the plaintiff put the whole plea in issue, it will be sufficient for the defendant to prove the illegality, which will cast on the plaintiff the burthen of proving consideration (g). And in a case of fraud the defendant will equally cast the burthen of proving consideration on the plaintiff by proving so much of the plea as alleges that he, the defendant, was defrauded of the bill (h).

But the defendant is in all cases at liberty to show affirmatively, by his own witnesses, absence or failure of consideration, where on the issues raised that would be a defence.

(e) Mills v. Barber, 1 M. & W.
425; 5 Dowl. 77; 2 Gale, 5;
Percival v. Frampton, 2 C., M. &
R. 180; 3 Dowl. 748; Whittaker
v. Edmunds, 1 M. & R. 366;
1 Ad. & E. 638; Jacob v. Hun-
gate, 1 M. & R. 445; Clarke v.
Holmes, 2 F. & F. 75. It .has
been held by the Court of Ex-
chequer that a mere admission
on record is not sufficient to put
the plaintiff on proof that he is
a holder for value, but that the
presumption against his title must
be raised by evidence before the
jury. Edmonds v. Groves, 2 M.
& W. 642; 5 Dowl. 775; and
see Smith v. Martin, 9 M. & W.
304;
Fearn v. Filica, 7 M. & G.
513. The Court of Queen's Bench,
however, have held otherwise.
Bingham v. Stanley, 1 G. & D.
23; 2 Q. B. 117; Robins v.
Maidstone, 4 Q. B. 815.

(f) Code, ss. 28 (2), 29 (2),
30 (2). An accommodation party
to a bill or note is one who has
signed either as acceptor or
maker, drawer, or indorser, with-

out value, and for the purpose of lending his name to some other person. Such a signature binds the signer to a holder for value, but it is not necessary that the holder should himself have given value, for if at any time value has been given for the bill or note, the holder is a holder for value against all parties prior to such time. Sect. 27 (2). The Code apparently makes no difference in the burden of proof in the case of an accommodation bill, hence it lies on the defendant to show that the plaintiff gave no value.

(g) Bailey v. Bidwell, 13 M. & W. 73. And see Harvey v. Towers, 6 Exch. 656.

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CHAPTER
XI.

The common phrase "bona fide holder for value,” means holder for real value, in contradistinction to a holder for apparent or pretended value, but does not exclude the pos- Holder in due sibility of notice of any fraud, illegality, or other vice course. affecting the title; for a man may really give part or the whole value for a bill or note, though he have full notice of the fraud or illegality of the original consideration (i). He may think that the vice in the original concoction of the bill or note cannot be proved, or will not be set up as a defence, or he may rely on the solvency of other parties to the instrument. The expression "holder in due course," has been substituted by the Code for the former cumbrous phrase of "bona fide holder for value without notice before due." A holder in due course is one who has taken a bill or note, regular and complete on its face, in good faith and for value, before it was due, and without notice of any previous dishonour, or of any defect in the title of the person negotiating it. The title of the negotiator being defective within the meaning of the above when he obtained the bill or note, or the acceptance or making thereof, by fraud, duress, or other unlawful means, or for an illegal consideration, or when he negotiated it in breach of faith, or under such circumstances as amount to a fraud ().

Every holder is prima facie a holder in due course, and it lies upon the defendant to show that he is not, or, at all events, to rebut this presumption.

The rights of a holder in due course are laid down as follows in the Code.

By sect. 38 he can sue all parties to the bill or note. As between themselves the prior parties are principals and the subsequent parties sureties, but as regards him on due presentment and notice of dishonour (or excuse of the same) they are all liable pari passu, and he may enforce payment against any one at pleasure. He is free from any defect of title of prior parties (such as, for example, fraudulent signing name of firm by one partner, illegal consideration, &c.); and personal defences among themselves (such as, for example, conditional delivery, agreement not to sue, &c.).

(i) Uther v. Rich, 10 A. & E. 784; Smith v. Martin, 9 M. & W. 307.

(k) Code, s. 29. The title of a holder in due course chures as against all prior parties to such holder in due course, in favour of

an innocent transferee, whether
for value or not. A lien, whether
by express contract or by impli-
cation of law, constitutes the
holder under it a holder for value
pro tanto.
Sect. 27 (3).

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