them to the bankers for payment, but on Saturday the 17th he required the vendee to take back the notes, and to pay him the amount, which the latter refused. It was held that the vendor of the goods was guilty of laches, and had thereby made the notes his own, and that consequently, they operated in satisfaction of the debt. Per Holroyd J. "I think that under the circumstances of this case the plaintiff is not entitled to recover. The notes were paid by the plaintiff and received by the defendant as money, and having been paid and received as money, and both parties being innocent, and the notes being what they imported to be, it seems to me that they must, according to the case of Miller v. Race, (1 Burr. 452, post.) operate as payment. But without deciding that the plaintiff was debarred in the first instance, from electing to consider them either as negotiable instruments or as money, I think they operated as payment, and that the plaintiff, by not taking due steps to obtain payment, lost his right to return them to the party from whom he received them; for although bills and notes delivered as a satisfaction for a debt, do not in general operate as a satisfaction, unless they turn out to be valuable; yet the case is otherwise if due steps are not taken to obtain payment from the party who is in the first instance bound to pay them. The instruments in question are, in point of law, promissory notes, and therefore due diligence ought to have been used to obtain payment, and if payment had been refused, notice ought to have been given of that refusal. Now here the notes were not presented for payment. It is true that at the time that the plaintiff ought to have presented them for payment, the bankers had become insolvent, but that being so, the plaintiff ought then at all events to have given notice to the defendant that the bankers had become insolvent, and that he, the plaintiff, required him, the defendant, to pay them. Not having done so, I think the plaintiff is not entitled to recover." Camidge v. Allenby, 6 B. & C. 373.

In the foregoing case, the defendant was a party to the notes, for they were payable to the bearer on demand, and he was the holder of them, and when such notes are passed from hand to hand, the person taking them must trace his right through the former holder. Per Bayley, J. Id. 381. But, where the vendee is not a party to the bill, or where the action is brought against a person who has guaranteed the price of the goods, without becoming a party to the bill, such vendee or guarantee cannot, in general, insist upon want of notice, as a defence to an action brought for the value of the goods sold, or upon the guarantee. See post, Chapter IX.

Where a bill was delivered, in lieu of a note for a larger amount, on condition that the note should revive, in case the bill was not duly honored, and the party taking the bill neglected to present it on the day it became due, and the amount was tendered by the acceptor of that bill on the following day,

but refused; it was held, that the liability on the note was not revived, and that no action would lie upon it. Soward v. Palmer, 8 Taunt. 277.

Where a bill, given in payment for goods sold, and indorsed generally by the purchaser, has been lost before payment, the seller of the goods cannot recover against the purchaser, either upon the bill, or for the goods. Champion v. Terry, 3 B. & B. 295. But, where the seller drew a bill upon the purchaser, for the amount of the goods, and the purchaser accepted it, but it was lost before it was indorsed by the seller, who sued the purchaser for goods sold and delivered, it was held, that the former was entitled to recover, for the bill, not having been indorsed, could not affect the defendant, who was, therefore, liable in respect of the original demand. Rolt v. Watson, 4 Bingh. 273. and, see post, Chap. XV.

Of indorser-how discharged-by indulgence.] The indorser of a bill may be discharged, by the holder giving time to the acceptor. Anderson v. George, 1 Selw. N. P. 372. 4th edit. and see the cases, ante. So, where the holder discharges a a prior indorser, it is a discharge of all the subsequent indorsers. "It is true," says Lord Eldon, C. J. "the holder of a bill of exchange has his remedy against all the parties on a bill; but the holder has it not in his power to give time to a party on a bill, first liable, and afterwards to proceed against another; the holder may give time to his immediate indorsee; he may discharge him out of custody, at the same time that he is proceeding to execution against a prior indorser to him, or against the drawer or acceptor; but he cannot give time to, or discharge, the drawer or acceptor, and afterwards proceed against that indorser. Suppose the holder, a second indorsee, should give time to the payee, the first indorser, and take his warrant of attorney, payable at a future time, could he proceed, and take out immediate execution against his immediate indorser? I think not for if that indorser paid the money, he would have a right to resort immediately to his indorser, that is, to the payee, who had before had time from the holder. This is inconsistent." English v. Darley, 3 Esp. 50. 2 B. & P. 62. S. C. But where the holder of a bill sued an indorser, took him in execution, and discharged him on a letter of licence, it was held that he did not discharge a prior indorser. Hayling v. Mulhall, 2 W. Bl. 1235. 2 B. & P. 62. So, it is said by Mr. Justice Bayley, that the rule as to the discharge of a party by giving time, does not apply to a party lower down the bill. Claridge v. Dalton, 4 M. & S. 232. The several parties on a bill are chargeable in different order. The acceptor is first liable, and the indorsers in the order in which they stand on the bill; but the suing, or taking a security from one of the parties liable shall not discharge another who is liable prior to him in point of order. Per Lord Eldon, C. J. Smith v. Knox, 3 Esp. 47.

103

CHAPTER V.

OF THE CONSIDERATION OF BILLS AND NOTES.

In bills and notes a consideration is presumed.

Want of consideration.

In whole, or in part.

In cases of fraud.

What amounts to.

Between what parties a defence.

Illegality of consideration.

At common law.

By statute.

Whether it vitiates the bill, in part, or in toto.
Between what parties a defence.

Usury.

To make consideration usurious, there must be a
loan.

What will amount to usury in discounting a bill.
Receipt of commission for trouble not usurious.
Renewed bills, when usurious.

Between what parties usury will avoid a bill.
Gaming.

In bills and notes, a consideration is presumed.] In other simple contracts, it is necessary for the party who attempts to enforce them, to state and prove the consideration upon which they are founded; but in bills of exchange and promissory notes no consideration need be stated, nor, in general, proved; for they, prima facie, import a consideration. See Philliskirk v. Pluckwell, 2 M. & S. 395. Guichard v. Roberts, 1 W. Bl. 445. Though the defendant may, in some cases, compel the plaintiff to prove the consideration which he gave for the bill or note; vide post; and may himself shew that the consideration was a bad one. Vide post,and see Guichard v. Roberts, 1 W. Bl. 445.

So also, the indorsement of a bill or note, is, in itself, primá facie evidence of a good consideration between the indorser and indorsee. Wyatt v. Bulmer, 2 Esp. 538. Priddy v. Henbrey, 1 B. & C. 681. And, an acceptance is prima facie evidence, that the acceptor has assets in his hands. Anderson v. Cleveland, 13 East, 430, (n). Ex parte Heath, 2 Ves. & B. 241. Bickerdike v. Bollman, 1 T. R. 409. Gibson v. Minet, 1 H. Bl. 602.

Want of consideration—in whole or in part.] It has been already stated, that a bill or note imports a consideration, and, therefore, it is not necessary for the party who sues upon it, to give any evidence of consideration in the first instance. But, between certain parties, and under certain circumstances, which will be explained hereafter, the want, or illegality, of consideration, forms a defence.

In cases, in which the want of consideration is a good defence, such want of consideration is either total or partial. If total, the plaintiff's action is wholly defeated; if partial, it is only defeated pro tanto. In an action by the payee against the acceptor of a bill, it appeared that the defendant had accepted it for the accommodation of the plaintiff, except as to 101. which had been paid into court; and, on this evidence the plaintiff was nonsuited, Lord Ellenborough observing, that, as between these parties, it was an acceptance to the amount of 10l. only. Darnell v. Williams, 2 Stark. 166. So, in an action by the payee against the acceptors of a bill, it appeared that there was no consideration, except as to 54. 9s. which had been paid, and the plaintiff was nonsuited. Barber v. Backhouse, Peake, 61. Where the defendant accepted a bill, for the accommodation of Phillips & Co. for 4151. 17s. 6d. and P. & Co. indorsed it to the plaintiffs, their bankers, who knew that the bill was an accommodation bill; it was held, that the plaintiffs could only recover on this bill, 265l. 17s. 8d. the amount of the balance due to them from P. & Co. Jones v. Hibbert, 2 Stark. 304. See, also, Willis v. Freeman, 12 East, 656. post, Chap. VI. So, where the defendant had drawn a bill, for the accommodation of the acceptor, and the defence was, that the indorsee, knowing that circumstance, had not paid the full value for it; Lord Kenyon said, that where a bill of exchange is given for money really due from the drawee to the drawer, or is drawn in the regular course of business, in such case, the indorsee, though he has not given to the indorser the full amount of the bill, may yet recover the whole, and be the holder of the overplus, above the sum he has really paid, to the use of the indorser; but, where the bill is an accommodation one, and that known to the indorsee, and he pays but part of the amount, in such case he can only recover the sum he has actually paid for the bill. The plaintiff was

nonsuited on another ground. Wiffen v. Roberts, 1 Esp. 261. In an action on a promissory note, given by the defendant, as an apprentice fee with his son, to the plaintiff, it appeared, that, in consequence of no mention being made of the premium in the indentures, they were void; to the objection of want of consideration, it was answered, that the master had provided board and lodging for some time for the apprentice, which was, in itself, a sufficient consideration; but it was held that the consideration had wholly failed. Jackson v. Warwick, 7 T. R. 121. But where the indentures were voidable only, it was held, that there was a sufficient foundation to support the note, (the fee having been payable in cash, but the note having been taken as an indulgence) though the apprentice had been discharged by a magistrate, on proof that the master had enticed him to commit felony. Grant v. Welshman, 16 East, 207; and see Cuff v. Brown, 5 Price, 297.

Where a bill is given, for the price of goods sold under a fraud, there is no consideration, and the party taking the bill cannot recover on it. Thus, where the plaintiff, knowing of the unsoundness of a horse, sold it to the defendant with a warranty, who gave the plaintiff a banker's check for the price, though the plaintiff had refused to receive the horse back, and, therefore, as it was contended, the contract was not rescinded, yet it was held, that, as the transaction was a fraud, the plaintiff could not recover on the check. Lewis v. Cosgrave, 2 Taunt. 2. So, where in an action by the payee of a promissory note, against the maker, given for the price of certain pictures, it was alledged for the defendant, that the amount of the note greatly exceeded the value of the picture, Lord Ellenborough refused to admit evidence for the purpose of reducing the damages, by shewing that the picture was of an inferior value; but said, that if the defendant could, by the inadequacy of the value, and other circumstances, prove fraud on the part of the plaintiff, so as to shew that there was no contract at all, the evidence would be admissible. Solomon v. Turner, 1 Stark. 51; and see Ledger v. Ewer, Peake, 216, post.

Although a partial failure of consideration (where such is admissible) is an answer to the plaintiff's demand, pro tanto, yet it is only where the sum to be deducted is matter of definite computation, and not of unliquidated damages, that the defendant can avail himself of this defence. Thus, in an action by the drawer against the acceptor of a bill, the defence was, that the bill had been accepted for the price of some hams, bought by the defendant from the plaintiff, and that they were almost unmarketable. The sum for which they had been sold by the defendant was paid into court. Lord Ellenborough held, that, though where the consideration of a bill fails entirely, it will be a sufficient defence to an action on it by the original party, yet it is no defence where the consideration fails partially,