old cases (a) on the question, whether indebitatus assumpsit 12thly, of the words value would lie on a bill of exchange, in which it appears there was a received. distinction made between a bill importing to have been given for ralue received, and one not containing those words, and it was holden that in the first case the drawer was chargeable at common law, but in the latter on the custom only (b) yet it is now settled, that there is no such distinction, and that a bill need not contain the above words (c). However, to entitle the holder of an inland bill or note, for the payment of 201. or upwards, to recover interest and damages against the drawer and indorser, in [88] default of acceptance, or payment, it should contain the words, value received (d). And if a bill or note contain those words, an action of debt may be sustained by the payee, against the maker of each (e). These are distinctions, which render it inadvisable in all cases, to insert these words. It is said to have been decided, that to aid a variance, the words may be inserted at the time of the trial (f) (1). It has been considered, that when a bill of exchange is in this form, "Pay to F. G. B. or order 315, value received," and was subscribed by the drawer, it may be alleged in pleading to be a bill of exchange for value received by the drawer from the payee g). (a) Hodges v. Steward, Skin. 346.-Anonymous, 12 Mod. 345. (6) Beawes, pL 233.-Cramlington v. Evans, 1 Show, 5.—Vin, Ab. tit. Bills of Exchange, G. 2. (c) Same cases as supra, note 3. (d) 9 & 10 Wm. 3. c. 17.—3 & 4 Ann. c. 9. s. 4. See Appendix. (e) Bishop v. Young, 2 Bos. & Pul. 78. 81. (f) Bul. Ni. Pri. 275. sed qu. (g) Grant v. Da Costa, 3 M. & S. 351. Per Lord Ellenborough. It ap. pears to me that value received is capable of two interpretations, but the more natural one is, that the party who draws the bill should inform the drawee of a fact which he does not know, than one of which he must be well aware. The words "value received," are not at all material, they might be wholly omitted in the declaration, and there are several cases to that effect. The meaning of them here is, that the drawer informs the drawee that he draws upon him in favour of the payee, because he has received value of such payee. To tell him that he draws upon him because be the drawee has value in his hands, is to tell him nothing, therefore the first is the more probable interpretation. And per Bayley, J. the object of inserting the words value received, is to shew that it is not an accommoda. tion bill, but made on a valuable consideration given for it by the payee. (1) Where the terms for "value received" are inserted in a declaration a uote, whether they are material to be proved, depends on this consideration, whether they are descriptive of the note itself or only an avertent of the consideration of the indorsement or assignment of the instrument. If the former, and the words are not in the note, the variance is fatal; if the latter, then as the proof of a value is not material, the averment need not be proved. Wilson v. Codman's Ex. 3 Cranch, Rep. 198. Russe!! v. Ball, &c., 2 John. Rep. 50. Saxton v. Johnson, 10 John. Rep. 418. Of the consideration necessary. Want of consideration, when mate rial. [89] It may be proper under this head to take a concise view of the consideration on which a bill of exchange may be originally founded, or which may pass between the indorser and indorsee, &c. on the transfer of it; and in making this inquiry, it will be advisable to consider, when the validity of the bill will be affected by 1st. The want of consideration. 2dly. The illegality of it. It has already been observed (a), that in general, a contract not under seal, will be invalid, unless it be founded on a valuable consideration (b); and that it is *incumbent on the plaintiff, to state such consideration in his declaration, and to prove it on the trial, before he can call on the defendant for his defence. But in the case of bills of exchange, or promissory notes, it is not necessary for the plaintiff to state any consideration in his declaration, or to prove it in the first instance on the trial (c); unless where he brings an action as bearer of a bill transferable by delivery, and then only under suspicious circumstances, as where it has been made under duress, or lost, and the holder cannot give a reasonable account how he came by it, and has had due notice before the trial of the action, to prove the consideration which he gave for the instrument (d) (1). And whenever the holder has (a) Ante, 12, 13. (b) As to the distinction between good and valuable considerations, see 2 Bla. Com. 444-297. (c) Crawley Crowther, 2 Freem. 257. Per Lord Chancellor. It is now held, and the practice is so, that if a man gives a note for money, payable on demand, he need not prove any consideration, and see Trials Pais, 501.-Meredith v. Short, 1 Salk, 25.-2 Ld. Raym. 760. S. C. Bla. Com. 446.-Selw. N. P. 4th ed. 304. per (d) Duncan v. Scott, 1 Campb. Rep. 100. Indorsee against the drawer of a bill. It appeared that the defendant gave the bill while under duress abroad, and under a threat of personal violence and confiscation of his property, and that it was given without consideration. Lord Ellenborough held, that the defendant, not having been a free agent, when he drew the bill, it was incumbent on the plaintiff to give some evidence of consideration, and no such evidence being given, the plaintiff was nonsuited. Grant. Vaughan, 3 Burr. 1516. 1527. This was an action on a note payable to bearer, which had been lost, and came to plaintiff's hands for a valuable consideration. Lord Mansfield said it is but just and reasonable (1) The doctrine, that where a bill has been lost, or fraudulently, or feloniously obtained from the defendant, the holder who sues, must prove that he came to the bill upon a good consideration, seems entirely settled in England; but in a recent case it has received a very material qualification, viz. that the defendant will not be permitted to object to the want of such proof, unless he has given the plaintiff reasonable previous notice of the defence, so that the plaintiff may come to trial prepared to prove the consideration given by him for the bill. Patterson v. Hardacre, 4 Taunt. Rep. 114. given full value for the bill, before it was due, the defendant will Want of connot be at liberty to shew that he had received none, although the sideration, that if the bearer brings the action, he ought to entitle himself to it on a luable consideration, and strictly to prove his coming by it bona fide, and e Hinton's case, 2 Show. 235. King v. Milson, 2 Campb. Rep. 5. Per Lord Ellenborough. It would greatly impair the credit and impede the circulation of negotiable instruments, if persons holding them could, without strong evidence of fraud, be compelled, by any prior holder, to disclose the manner in which they received them.-See also Sir John Lawson v. Weston, 4 Esp. N. P. C. 56.— Bees r. Marquis of Headfort, 2 Campb. Rep. 274. S. P. Pattison v. Hardacre, 4 Taunt. 114, in which it was decided, that where a bill had been lost, or fraudulently or feloniously obtained from the defendant, the holder who sued, must prove that he came to the bill upon good consideration, but that the defendant would not be permitted to object to the want of such proof, unless he had given the plaintiff reasonable previous notice, that the plaintiff might come to trial prepared to prove his consideration. And the general principles upon this subject seem as fully admitted in the United States. It seems, indeed, at one time to have been doubted, whether the want of consideration could be set up even in an action between the original parties to a note; and it was then said, that all the cases cited were cases in which there was, not a want, but a failure of considera tion. Livingston v. Hastie, 2 Caines' Rep. 246, and see also the opinion of Livingston, J. in Baker v. Arnold, 3 Caines' Rep. 279. But it is now held that there is no difference in this respect between a want and a failure of consideration; and that each may be set up as a defence not only between the original parties, but also against a holder claiming by indorsement after the note has become due, or taking it with a knowledge of fraud or other equitable circumstances, entitling the maker to avail himself of the defence. Pearson v. Pearson, 7 John. Rep. 26. Store v. Wadley, 3 John. Rep. 124. Ten Eyck v. Vanderpool, 8 John. Rep. 120. Denniston v. Bacon, 10 John. Rep. 198. Woodhull v. Holmes, 10 John. Rep. 231. Frisbee v. Heffnagle, 11 John. Rep. 50. Thatcher v. Dinsmore, 5 Mass. Rep. 299. Warner v. Lynch, 5 John. Rep. 239. Bacon v. Arnold, 3 Caines' Rep. 279. Tappan v. Van Wagenen, 3 John. Rep. 465. Bayley v. Faber, 6. Mass. Rep. 451. And the want of consideration may in like manner be set up in an action by a second indorsee against his immediate indorser. Herrich v. Carman, 10 John. Rep. 224. But that a note was made for the accommodation of the maker, and without consideration, is no defence in an action by a bona fide holder for a valuable consideration against an indorser, although he had knowledge of the fact at the time he took the bill. Brown v. Mott, 7 John. Rep. 361. Nor if the action were against an acceptor for the accommodation of the drawer, would the like defence avail-ibid; nor, as it should seem, even if the holder took the bill after it was due. Ibid. But if the indorser of a promissory note prove that it was put into circulation fraudulently, he may call upon the holder he gave for it, and how it came into his hands. And the indorser is entitled to give such proof, in order to require such explanation from the holder. Holme v. Kursper, 5 Bi. Rep. 469. See also Ball v. Allen, 15 Mass. 433. See also Bramun v. He, 13 John. Rep. 52, and Olmstead v. Stewart, 13 John. Rep. 238. For further cases as to the effect of the indorsement of a bill after it becomes due, see the notes to Chap. IV.-see iii. p. 160, et seq. Ten A promissory note whereby A. "as administrator of P. B. deceased, VOL. I. L when materi al. Want of con- plaintiff knew that circumstance at the time he became the holder, sideration, *unless he also knew that the party, from whom he received it, was acting fraudulently (a). when mate rial. [ * 90 ] [ *91 ] And though when a bill of exchange has been given for a particular purpose, and that be known to the party taking it, then he cannot apply it to a different purpose; where a bill is given under no such restriction, but merely for the accommodation of the drawer or payee, and sent into the world, it is no answer to an action brought on such bill, that the defendant accepted it for the accommodation of the drawer, and that that fact was known to the holder; and in such case the latter, if he gave a bona fide consideration for it, is entitled to recover the amount, though he had full knowledge of the transaction (b). *Between the drawer and the acceptor, the drawer and the payee and his agent, and the indorsee and his immediate indorser, fraud, or the total want of consideration, may be questioned (c). (a) Collins v. Martin, 1 Bos. & Pul. 651. Per Eyre, C. J. No evidence want of consideration, or other ground, to impeach the apparent value received, was ever admitted in a case between an acceptor or drawer, and a third person holding the bill for value, and the rule is so strict that it will be presumed that he does hold for value until the contrary appear; the onus probandi lies on the defendant. If it can be proved that the holder gave no value for the bill, then indeed he is in privity with the first holder, and will be affected by every thing which would affect such first holder. This all proceeds upon the argumentum ad hominem, it is saying you have the title, but you shall not be heard in a court of justice, to enforce it ⚫ against good faith and conscience. 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, in which the property and possession may be in different persons. Morris v. Lee, K. B. Hil. 26 Geo. 3. In an action by the indorsee against the maker of a note thirteen years old, the defendant obtained a rule nisi, to set aside a judgment by default, on an affidavit by a third person, that he believed the defendant was swindled out of the note; an affidavit was made on the other side, that the plaintiff took the note bona fide, and gave a valuable consideration for it, and the court held, that however improperly it might have been obtained, a third person who took it fairly, and gave a consideration for it, was entitled to recover, and discharged the rule; see this case cited in Anonymous, 1 Com. Rep. 43. and Bayl. 233. Haly v. Lane, 2 Atk. 182. "Where there is a negotiable note, and it comes into the hands of a third or fourth indorsee, though some of the former indorsees might not pay a valuable consideration, yet if the last indorsee gave money for it, it is a good note as to him, unless there should be some fraud or equity against him appearing in the case. See also per Buller, J. in Lickbarrow and Mason, 2 T. R. 71.-Poth. pl. 118. 121.-Selw. N. P. 4th edit. 304. (b) Per Lord Eldon, in Smith v. Knox, 3 Esp. Rep. 47.-and see Charles v. Marsden, 1 Taunt. 224. and Popplewell v. Wilson, 1 Stra. 264. (c) Jefferies v. Austen, Stra. 647. In an action by the payee of a note against the maker, Eyre, C. J. allowed the defendant to prove that it was given as a reward, in case the plaintiff procured the defendant to be restor And though we have seen that a parol agreement to renew a bill, Want of con affords no defence to an action (a); yet if a bill or check be given when mate sideration, a verbal condition, which the drawer finds is to be broken or rial. eluded, he has a right to stop the payment and may defend an action thereon (b). In those cases also in which a defendant would be at liberty to insist upon a total want of consideration, he may shew that the consideration does not extend to all the money payable by the bill or note, and the plaintiff shall only recover for the residue (c). ed to an office, and the defendant was not restored, and on this proof the defendant had a verdict. Solomon. Turner, Bart. 1 Stark. 51. If a promissory note be given as the stipulated price of a picture, the maker cannot give the inadequacy of the consideration in evidence, with a view to diminish the damages, but may prove such circumstance as indicatory of fraud, in order to defeat the contract altogether; and see Ledger v. Ewer, Peake. 216.-Fleming v. Simpson, 1 Campb. 40. Richmond v. Heapy, 1 Stark. 202. If one of three partners undertake to provide for a bill of exchange drawn by the firm, upon and accepted by the defendant, the latter may, in an action at the suit of the three partners, give in evidence such undertaking as a defence to the action. Jackson v. Warwick, 7 T. R. 121. The defendant's son was apprenticed by indenture to the plaintiff, and the defendant gave the plaintiff a note for 101. as an apprentice fee; but this premium was not mentioned in the indentures, nor were they stamped pursuant to 8 Ann. c. 9. The son remanned part of his time and then absconded. In an action on the note, and the failure of consideration (the apprenticeship) being relied on as a defence, it was contended that the avoiding the indentures could not collaterally affect the note, and that at all events the consideration had not wholly failed, inasmuch as the plaintiff had maintained the apprentice during his stay. Lawrence, J. however, thought that the consideration was entire, and had wholly failed; he allowed a verdict to be taken for the plaintiff, with liberty to the defendant to move to enter a nonsuit. The court concurred in opinion with Lawrence, J. and directed a nonsuit to be entered; see Grant v. Welchman, 16 East. 207. (a) Ante, 61. (5) Wienbolt v. Spitter, 3 Campb. 376. (c) Bayl. 234, 5.-Barber v. Backhouse, Peake. 61. In an action on a bill of exchange by the payee, the defendant paid part of the money into court, and it appeared upon the trial that there was no consideration for the other part; Law, however, urged that the payment of the money into court admitted the bill was good for part, and if it was good for part it was good in toto; but Lord Kenyon declared himself clearly of a contrary opirion, upon which the jury found for the defendant, and this case being afterwards mentioned by Lord Kenyon in the course of argument, Law said he was perfectly satisfied with the decision. Ledger v. Ewer, Peakc. 216. In an action by the payee of a bill against the acceptor, the consideration appeared to be, that the plaintiff, had taken the defendant into partnership; but on the defendant's friends' advice he broke off the connection; there was evidence of fraud on the plaintiff's part in drawing the defendant into the engagement, which Lord Kenyon left to the jury; but he told them, if they were against the defendant on the evidence of fraud, they should take into consideration the damages the plaintiff had really sustained by the non-performance of the contract, and were not obliged to find the whole amount of the bill. The jury, however, found for the defendant. Wiffen v. Roberts, 1 Esp. Rep. 261. This was an action by the indorsee against the drawer of a bill of exchange accepted by one Yates. The de |