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seems that in an action against the acceptor, it is no defence that the plaintiff took the bill for illegal consideration. Flower v. Sadler, 10 Q. B. D. 572, 575; per Brett and Cotton, L. JJ.
Want of consideration-Onus probandi.] Sect. 27, ante, p. 343, defines valuable consideration and who is a holder for value.
Sect. 30. “(1.) Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value.
“ (2.) Every holder of a bill is primâ facie deemed to be a holder in due course" (vide sect. 29, ante, p. 343); “but if in an action on a bill it is admitted or proved that the acceptance, issue, or subsequent negotiation of the bill is affected with fraud, duress, or force and fear, or illegality, the burden of proof is shifted, unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill.”'
In a case alleged to fall within the latter part of sect. 30 (2), supra, the judge is not bound to decide whether fraud has been proved in order to throw this burden on the plaintiff, but only whether is any evidence of fraud for the jury. Harvey v. Towers, 5 Exch. 656; 20 L. J., Ex. 318; Berry v. Alderman, 14 C. B. 95; 23 L. J., C. P. 34. When the plea alleged that the bill was founded on a wager, and that the indorsements were without value, proof of a wager, void but not unlawful, was held to show only want of consideration and not illegality, and to raise no presumption that the plaintiff was not a bonâ fide holder for value; it lay on the defendant, therefore, to prove this. Fitch v. Jones, 5 E. & B. 238; 24 L. J., Q. B. 293. Where fraud or illegality, &c., is admitted or proved, the plaintiff must prove that value has been given, in good faith and without notice of the fraud. Tatam v. Haslar, 23 Q. B. D. 345.
In cases prior to the J. Acts and B. of Ex. Act, 1882, it was held that an admission of fraud or illegality on the record throws on the plaintiff the burthen of proof as to consideration, but not as to absence of notice of the fraud or illegality, though the reason of the distinction is not very clear. The cases in support of this proposition are collected ante, p. 78; but it is very doubtful if, especially having regard to the terms of sect. 30 (2), supra, they would now be followed.
In Hogg v. Skeen, 18 C. B., N. S. 426; 34 L. J., C. P. 153, some of the defendants, acceptors, pleaded non-acceptance: held that proof under this issue, that the acceptance was by one of the defendants, who had let judgment go by default, in fraud of the others, his partners, but without showing the plaintiff's privity, obliged the plaintiff to show that he gave value for the bill; in this case Musgrave v. Drake, 5 Q. B. 185, was distinguished. It would seem that Rules, 1883, 0. xix. r. 15, would require this defence to be specially pleaded. A bill was sent to the plaintiff by a clerk with a message, which, if delivered, would have shown that ihe plaintiff had such notice as would have made him not a bonâ fide holder for value; the bill was delivered, but the clerk was not called, and it was not proved whether the message had been given or not: held, in an action of trover, that the evidence was not sufficient to rebut the presumption that plaintiff was a bona fide holder. Middleton v. Barned, 4 Exch. 241.
Ilegality of consideration ; bona fides of holder.] See Defences in actions on simple contracts-Ilegality, post, pp. 635 et seq. See sect. 29 (2), ante, p 387, and sect. 30 (2), supra, and sect. 90, ante, p. 340. Where a stolen note was changed by the plaintiff, a money-changer, who had received notices a year previously of this and other stolen notes, and kept such notices filed in his office, but did not examine them, he was held entitled to recover. Raphael v. Bank of England, 17 C. B. 161; 25 L. J., C. P. 33; Bengal, Bank of v. Macleod, 7 Moo. P. C. 35. Gross negligence may, however, be evidence of mala fides, though not equivalent to it. Goodman v. Harvey, 4 Ad. & E. 870. Buying the bill at a considerable undervalue, with a wilful avoidance of inquiry about it, may be evidence of notice of fraud in the concoction of the bill. Jones v. Gordon, 2 Ap. Ca. 616, D. P.
Where the bill was given for money lost by gaming, or upon an usurious contract, or to secure money paid to induce a bankrupt’s creditors to sign his certificate, various statutes made it a void security, even in the hands of a bonâ fide holder ; but, by 5 & 6 Will. 4, c. 41, so much of the former statutes as made the securities void was repealed, and it was enacted that they should be deemed to have been given for an illegal consideration. This Act (except so much of sects. 1, 2, as relates to stat. 9 Anne, c. 19, which applies to gaming and betting) was repealed by the Stat. Law Rev. Act, 1874; its unrepealed provisions do not prevent the payee of a bill of exchange given him in repayment of gaming debts, paid by him at the request of the acceptor, from recovering thereon. Ex pte. Pyke, 8 Ch. D. 754, C. A. Before the repeal of 5 & 6 Will. 4, c. 41, the defendant accepted a bill of exchange to secure a loan at usurious interest; after the repeal, he accepted fresh bills for the amount of the loan and the usurious interest, and it was held (Martin, B., diss.) that there was good consideration for the new bills. Flight v. Reed, 1 H. & C. 703; 32 L.J., Ex. 265. In Rimini v. Van Praagh, infra, Cockburn, C. J., intimated that the judgment of Martin, B., in this case, was right. Where the defence was usury in the indorsement, the usury must have been proved; suspicion is not sufficient to put the plaintiff to proof of consideration ; thus, in an action by indorsee against one who had indorsed the bill for the accommodation of the drawer, it was shown that one J., a relation of the plaintiff, got the bill discounted for the drawer, and although it appeared that usurious discount was deducted by J., it was held that, whatever suspicion there might be against the plaintiff, this did not prove usury as against him. Bassett v. Dodgin, 10 Bing. 40. The earlier Bankruptcy Acts are now repealed, and the Bankruptcy Act, 1883 (46 & 47 Vict. c. 52), contains no provision avoiding a security given to induce a creditor to forbear opposing the bankrupt; the consideration, however, for such a security is illegal; vide post, Defences in actions on simple contracts—Illegality-Contract by bankrupt, post, p. 640. See Rimini v. Van Praagh, L. R., 8 Q. B. 1.
A promissory note given in consideration of the payee's forbearing to prosecute a charge of misdemeanor against the maker cannot be enforced. Clubb v. Hutson, 18 C. B., N. S. 414. See also Brook v. Hook, L. R., 6 Ex. 89.
Mere wagers, not made unlawful by any statutes against gaming, &c., are made void, by 8 & 9 Vict. c. 109, s. 18, which avoids all “contracts, parol or in writing, by way of gaming or wagering.” But, the Act does not in terms avoid a security given to pay a wager; it would, therefore, be only without consideration. See Fitch v. Jones, ante, p. 389, and Beeston v. Beeston, 1 Ex. D. 13.
On issue taken on a defence that a note was given for an illegal consideration, the plaintiff is not bound to produce the note as part of his
Read v. Gamble, 10 Ad. & E. 597, n. By sect. 30 (2), ante, p. 389, illegality in the concoction or transfer of a bill, as well as fraud, felony, &c., will, if proved, put the holder on proof of consideration. See cases cited ante, p. 388.
Agreement at variance with the bill.] The terms of a bill or note cannot be varied by oral evidence to contradict it, even as between original or immediate parties to it; yet, a contemporaneous memorandum in writing is admissible for that purpose, whether on the same or a separate paper. Leeds v. Lancashire, 2 Camp. 205; Bowerbank v. Monteiro, 4 Taunt. 844. The two together may thus form one agreement, and must be treated as such. The defence need not allege that the contemporaneous agreement was in writing; Young v. Austen, L. R., 4 C. P. 553; Corkling v. Massey, L. R., 8 C. P. 395; but, it will not be proved unless an agreement in writing is given in evidence in support of it at the trial. Young v. Austen, supra; Abrey v. Crux, L. R., 5 C. P. 37; Foquet v. Moor, infra. This is not, however, in accordance with what is laid down in the earlier cases, for it was formerly held that the plea must have shown that such contemporaneous agreement was in writing, or it would have been bad on general demurrer; Canham v. Barry, 15 C. B. 597; 24 L. J., C. P. 100; Foquet v. Moor, 7 Exch. 870, 875 ; 22 L. J., Ex. 35, 37, per Parke, B., and compare Capner v. Mincher, 13 M. & W. 704, with Fryer v. Andrews, 17 L. J., Ex. 25; if, moreover, the plaintiff took issue on a plea, which did not state that the agreement was in writing, the defendant formerly might at the trial have proved the plea by showing an oral agreement; Capner v. Mincher, supra.
În order that the agreement and promissory note may form one agreement, the agreement or memorandum must be between the same parties, and not merely collateral. Thus, in a suit by payee against maker, it is no answer that by an independent contemporary written agreement between the plaintiff on one side, and the defendant and others on the other side, it was agreed that the note should not be payable except in a certain contingency. Webb v. Spicer, 13 Q. B. 894; 3 H. L. C. 510. Where a plea alleged a subsequent agreement to vary a note, it could be supported only by proof of an agreement founded on good consideration. McManus v. Bark, L. R., • Ex. 65.
Payment.] Sect. 33. " · Where a bill purports to be indorsed conditionally the condition may be disregarded by the payer, and payment to the indorsee is valid whether the condition has been fulfilled or not."
Sect. 59.“ (1.) A bill is discharged by payment in due course by or on behalf of the drawee or acceptor.
Payment in due course' means payment made at or after the maturity of the bill to the holder thereof in good faith” (vide sect. 90, ante, p. 340) “' and without notice that his title to the bill is defective.
“ (2.) Subject to the provisions hereinafter contained, when a bill is paid by the drawer or an indorser it is not discharged; but “(a.) When a bill payable to, or to the order a third party is paid
by the drawer, the drawer may enforce payment thereof against
the acceptor, but may not re-issue the bill. “(6.) Where a bill is paid by an indorser, or where a bill payable to
drawer's order is paid by the drawer, the party paying it is remitted to his former rights as regards the acceptor or antecedent parties, and he may, if he thinks fit, strike out his own and subsequent
indorsements, and again negotiate the bill. “(3.) Where an accommodation bill is paid in due course by the party accommodated the bill is discharged.”
See sect. 60, post, p. 395, as to the payment by the banker on whom it is drawn, of a bill payable on demand.
Sect. 71 (3), ante, p. 345, relates to the payment of bills drawn in sets.
“(5.) When the acceptor of a bill drawn in a set pays it without requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereof.
“(6.) Subject to the preceding rules, where any one part of a bill drawn in a set is discharged by payment or otherwise, the whole bill is discharged."
Payment or satisfaction must be specially pleaded. For presumptive evidence in support of such plea, see the cases cited ante, pp. 36, 37. Payment of the exact sum due on a note by the defendant in full satisfaction of debt and damages is sufficient, and entitles the defendant to a verdict, and the jury are not bound to give interest, or even nominal damages, for the detention of the debt. Beaumont v. Greathead, 2 C. B. 494. This was an action of debt; but in an action by indorsee against acceptor, a plea, puis darrein continuance, that an earlier indorser had paid to plaintiff, then the holder, who accepted the full amount of the bill, and also interest thereon, in full satisfaction of the bill, and all moneys due in respect thereof, not mentioning damages or costs, was bad. Goodwin v. Cremer, 18 Q. B. 757; 22 L. J., Q. B. 30; see also Ash v. Pouppeville, L. R., 3 Q. B. 86. Satisfaction to one of several partners is a satisfaction to all. Jacaud v. French, 12 East, 317. And, payment by one, not sued, of several joint and several makers, is payment by the defendant. Beaumont v. Greathead, supra. So, renewal of a joint and several note by one of the makers, and payment of such renewed note, is payment by all of the first note. Thorne v. Smith, 10 C. B. 659; 20 L. J., Č. P. 71. But, the mere acceptance by the payee, from one of two joint and several makers of a note, of a mortgage and covenant to pay the amount of the note, is no defence to an action against the other; for the securities are not coextensive; and proof that the mortgage was given to secure the same debt does not prove that it was accepted in lieu and satisfaction of the note. Ansell v. Baker, 15 Q. B. 20.
A judgment and execution, without satisfaction, against a subsequent party to a bill, will be no discharge of a prior party; it is only an extinguishment between the parties to the judgment. Hayling v. Mullhall, 2 W. Bl. 1235; as explained in English v. Darley, 2 B. & P. 62. So, the acceptor was liable at the suit of an indorsee, although judgment had been obtained against the acceptor on the bill at the suit of a subsequent indorsee, and he had been taken in execution on that judgment. Woodward v. Pell, L. R., 4 Q. B. 55. But, a composition with the acceptor, and the taking of a third person's note as a security for it, operates as a satisfaction of the bill. English v. Darley, supra ; Lewis v. Jones, 4 B. & C. 506. Where the plaintiff paid money to A. for a bill accepted by a third party and indorsed in blank; the plaintiff intending to buy the bill and be the holder thereof, and A. believing he was paying the amount for the acceptor; the court held, that if the plaintiff did not make the payment in order to discharge the acceptor, nor by his expressions and conduct led A. so to suppose, he might recover on the bill. Lyon v. Maxwell, 18 L. T., N. S. 28; Ex. H. T. 1868. Where the first bill is “renewed by a second, no action can be maintained during the currency of the latter. Kendrick v. Lomax, 2 C. & J. 405. But, where the plaintiff held a bill accepted by defendant, who, when it became due, asked for time, and three months afterwards gave plaintiff another bill for the same amount, plaintiff telling him at the same time that something was due for interest, and continuing to hold the first bill; and the second bill was paid after it became due; it was held that the plaintiff was entitled to sue on the first bill to recover the interest. Lumley v. Musgrave, 4 N. C. 9. Where one of three partners, after a dissolution of partnership, undertook, by deed, to pay a partnership debt on two bills of exchange drawn by them, and the owner consented to take the separate notes of the one partner for the amount, reserving his right against all three, and retaining possession of the original bills; it was held that, the separate notes having proved unproductive, he might resort to his remedy against the other partners, and that the taking of the separate notes, and afterwards renewing them several times successively, did not amount to satisfaction of the joint debt. Bedford v. Deakin, 2 B. & A. 210. So, where, on a bill of exchange being dishonoured, the acceptor transmitted a new bill for a larger amount to the payee, but had not any communication with him respecting the first; and the payee discounted the second bill with the holder of the first, which he received back as part of the amount, and afterwards, for a valuable consideration, indorsed it to the plaintiff; it was held that the second bill was merely a collateral security, and that the receipt of it by the payee did not exonerate the drawer of the first. Pring v. Clarkson, 1 B. & C. 14; see also Adams v. Bingley, 1 M. & W. 192.
The principle of sect. 391 (2), ante, p. 391, applies to a part payment, and to cases in which the bill is not strictly an accommodation bill. Cook v. Lister, 13 C. B., N. S. 543; 32 L. J., C. P. 121. But, where an accommodation acceptor pleaded payment by the drawer in an action by an indorsee, proof that the drawer had handed a forged acceptance to the indorsee for the purpose of retiring the outstanding bill, and that the indorsee, being his banker, had credited the drawer for the amount in his banking account, was held insufficient to prove payment, the forged acceptance being, in fact, no payment at all. Bell v. Buckley, 11 Exch. 631; 25 L. J., Ex. 163. Payment by drawer, who is also payee, to the plaintiff himself, his indorsee, is no answer to an action against the acceptor for value, if the bill were left in the plaintiff's hand, to sue on it as trustee for the drawer; Williams v. James, 15 Q. B. 498 ; 19 L. J., Q. B. 445; nor, if he sue against the will of the drawer. Jones v. Broadhurst, 9 C. B. 173. If the acceptor discount his own acceptance for the drawer, this is not payment so as to bar an action on the bill against the drawer by a bona fide indorsee for value, who has taken under an indorsement by the acceptor. Attenborough v. Mackenzie, 25 L. J., Ex. 224.. “Retiring” a bill by acceptor is equivalent to payment, and stops the circulation ; but retiring by an indorsor only takes it out of circulation as regards himself, and he retains the same remedies as if he had paid his indorsee in due course. Elsam v. Denny, 15 C. B. 87; 23 L. J., C. P. 190.
On a defence of payment, neither the plaintiff nor the defendant is bound to produce the security ; and where a plea stated, by way of introduction to an allegation of payment, that the note was given in lieu of a former one, and the plaintiff replied de injuriâ generally, it was held enough to show payment without proving the superfluous introductory stateinent. Shearm v. Burnard, 10 Ad. & E. 593. But, if on a special defence of satisfaction, it become necessary for the defendant to prove the bill or note, he cannot give secondary evidence of it without having given notice to produce it. Goodered v. Armour, 3 Q. B. 956.
By sect. 24, ante, p. 347, a person claiming under a forged indorsement cannot give a discharge for the bill, except under sect. 60, post, p. 395, in the case of a banker.
Voluntary discharge and waiver.] Sect. 61. “When the acceptor of a bill is or becomes the holder of it at or after its maturity, in his own right, the bill is discharged.”
Sect. 62. “(1.) When the holder of a bill at or after its maturity absolutely and unconditionally renounces his rights against the acceptor, the bill is discharged.