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with the assent of the party liable after him, the latter is precluded from afterwards objecting to it. Clark &c. v. Devlin, 3 Bos. & Pul. 363.
And 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. The endorsee's discharging the drawer, cannot discharge the acceptor who is liable prior to him. This is so, notwithstanding the bill may have been accepted without any consideration. Smith v. Knox, 3 Esp. 46.
There is one case-a case at nisi prius-in which Lord Ellenborough seems to have thought that the bill being an accommodation bill within the knoweledge of all the parties, the acceptor could only be considered a surety for the drawer. Laxton v. Peat, 2 Camp. 185. On this ground he held that the drawer was not discharged by time given to the acceptor. Collott &c. v. Haigh, 3 Camp. 281. Very soon grave doubts were expressed whether Laxton v. Peat could be law. Except in this case, said Mansfield, C. J., it never was known that any thing passing between the other parties could discharge an acceptor. Raggett v. Armore, 4 Taunt. 730. He repeats that the case of Laxton v. Peat certainly is the first in which it was ever supposed that the acceptor of a bill was not the first person, and the last person, compellable to pay that bill to the holder of it, and that anything could discharge the acceptor except payment or a release. Fentum v. Pocock &c. 5 Taunt. 192, 1 Eng. Com. Law Rep. 72. In this case the court of common pleas differed from Lord Ellenborough. They could not consider the acceptor of an accommodation bill in the light of a surety for the payment by the drawer, and would not say that he was discharged by indulgence shewn to the drawer. Mansfield, C. J. adverted to the circumstance that here the person taking this bill did not, at the time when he took it, know that it was an accommodation bill, and if he did not then know it, it did not signify what came to his knowledge afterwards if he took the bill for a valuable consideration; but he then added: "It is better not to rest this case upon that foundation, for, as it appears to me, if the holder had known, in the clearest manner, at the time of his taking the bill, that it was merely an accommodation bill, it would make no manner of difference; for he who accepts a bill, whether for value or to serve a friend, makes himself in all events liable as acceptor, and nothing can discharge him but payment or release." The rule of Fentum v. Pocock, has been followed. Harrison v. Courtauld, 3 Barn. & Adol. 20, 23 Eng. Com. Law Rep. 25.
In the United States Larton v. Peat, is disapproved. The court of appeals of Maryland has pronounced it not law. Clopper's adm'r v. Union Bank, 7 Har. & J. 101. The supreme court of Pennsylvania has repeatedly approved Fentum v. Pocock, and applied the rule alike to an accommodation maker of a note and an accommodation acceptor of a bill. White v. Hopkins, 3 W. & S. 101.
The maker of a promissory note, like the acceptor of a bill, stands in the light of a principal; the endorsers of a surety. Mallet v. Thompson, 5 Esp. 178; Carstairs &c. v. Rolleston
c. 5 Taunt. 551, 1 Eng. Com. Law Rep. 184; Price v. Edmunds, 10 Barn. & Cress. 578, 21 Eng. Com. Law Rep. 135; Nichols &c. v. Norris, 3 Barn. & Adol. 41, 23 Eng. Com. Law Rep. 28; Perfect &c. v. Musgrave, 6 Price 111; Smith v. James, 2 El. & Black. 50, note, 75 Eng. Com. Law Rep. Time given the endorser will not discharge the maker. Bank of Montgomery Co. v. Walker, 9 S. & R. 239.
In Pennsylvania and Virginia, it matters not that the holders, when they discounted the note, knew it was for the accommodation of the endorser. The man who draws a note, for the purpose of negotiation, must stand to it. Having placed himself in the situation of principal, he shall not afterwards escape by alleging that he was but a surety. S. C., 12 S. & R. 382; Lewis v. Hanchman, 2 Barr 416; Hansbrough v. Gray, 3 Grat. 355.
In England a similar doctrine prevails. "The bona fide holder of a bill or note," says Lord Campbell, "cannot be prejudiced in the rights which he prima facie has, according to the terms of the instrument, by knowledge subsequently communicated to him after he has become the holder of it, or even by knowledge which he has at the time when he takes it, if there is no evidence of a special agreement at the time. when he takes it, to affect the rights and liabilities of the parties. Manley v. Boycot, 2 El. & Black. 56, 75 Eng. Com. Law Rep. 56, 18 Eng. Law & Eq. 51.
14. Effect of want of consideration as between the immediate parties. Rule generally as to the holder. Under what circumstances he may be affected.
From what was said on a former page (p. 141, 2), it will be understood that in an action by the payee against the maker of a promissory note, he may shew that it was given upon a consideration which has failed. Jefferies v. Austin, 1 Str. 674; 8 Man. Gr. & Scott 870. As between the immediate parties to a bill or negotiable note, and an immediate VOL. II.-16
endorser and endorsee, such bill or note has no peculiar character distinguishing it from any other contract. It is open to all objections to the consideration or want of consideration, and all set offs and equities between those parties which would be available in other contracts not founded on a deed. Green, J. in Gilliat v. Lynch, 2 Leigh 503; Barker v. Prentiss, 6 Mass. 432; Pierson v. Pierson, 7 Johns. 28; Herrick v. Carman, 10 Id. 225; Schoonmaker v. Roosa &c. 17 Id. 301.
The case is not materially different when the suit is by an endorsee whose title is through a special endorsement by the payee in these terms: "Pay T. W., Esq. or order for our use" the endorsee appearing to have no property, unless as a mere factor, the same facts may be given in evidence against him as against the principal. Wilson v. Holmes, 5 Mass. 543; Lloyd &c. v. Sigourney, 3 Younge & J. 229.
And when cases arise under statutes against usury or gaming, declaring certain acts illegal, and contracts, securities, &c. founded on them void, the original taint in such cases adheres to the paper in whose soever hands it may come; it is void; and the defence may be set up as well against the innocent holder as the usurer or gambler himself. Carr, J. in Taylor v. Beck, 3 Rand. 323; Powell v. Waters, 17 Johns. 181; Unger v. Boas, 1 Harris 601.
If a bill or note be made for the purpose of raising money upon it, and be discounted at a higher premium than the legal rate of interest, and there be no party who, had it not been discounted, could maintain a suit on it when it becomes mature, then such discounting of the bill would be usurious and the bill would be void. Munn v. Commission Co. 15 Johns. 55; Knights v. Putnam, 3 Pick. 186; Whitworth v. Adams, 5 Rand. 348.
In Virginia, several of the judges have expressed the opinion that though a note be valid as between the maker and payee, yet if the payee endorse it for a usurious consideration no title passes by the endorsement, and no action can be maintained by the endorsee against the maker. Whitworth v. Adams, 5 Rand. 355, 378, 419.
In New York and Massachusetts, it has been decided that a bill free from usury in its concoction, and which is perfect and available to the party holding it, may be sold at a discount allowing the purchaser to pay less for it than it would amount to at the legal rate of interest for the time the bill has to run. Munn v. Commission Co. 15 Johns. 55; Knights v. Putnam, 3 Pick. 186; Crane v. Hendricks, 7 Wend. 569. The court would have to declare the endorsement void for usury, were it not able to say, that where a note for $1000,
is sold and endorsed on an advance of $900, the intent of the parties, endorsee and endorser, is, that the latter shall be holden for the $900 only. Cowen, J., 21 Wend. 597.
When there has been no fraud on the maker-when he is called upon to pay only what he has undertaken to pay, and is bound to pay,-it is decided in Massachusetts that he cannot defeat the action on the ground that a person, under whom the plaintiff claims, fraudulently obtained it from the payee. The plaintiff having a legal title, it is considered that payment to him would be a good discharge. Prouty v. Roberts, 6 Cush. 19.
Ever since the case of Collins v. Martin, 1 Bos. & Pul. 648, the rule of law has been that when a bill is payable to bearer any person who is the holder for value may sue upon it, whether the party from whom he has taken it had a title or not. Parke, B., 6 W. H. & G. 65.
If on the bill there be a blank endorsement, and the man who has the possession and appears to be the lawful holder delivers it to an innocent party, the assignment is good. Arbouin v. Anderson, 1 Adol. & El. N. S. 498, 41 Eng. Com. Law Rep. 642.
A man may have got possession of a bill by stealing it, yet if the bill was endorsed generally by a person competent to endorse it, the party to whom it is delivered for value and without notice has, notwithstanding any prior fraud, the right-as bona fide holder of the bill-to transfer the bill or sue upon it. Alderson, B. in Barber v. Richards, 6 W. H. & G. 66; Harvey v. Towers, Id. 660.
The possession of a bill or note, which is payable to bearer or endorsed in blank, is prima facie evidence of ownership; and also that the holder received it upon a valuable consideration paid therefor in the usual course of trade or business. Riddle v. Mandeville, 5 Cranch 332; Jackson v. Heath, 1 Bailey 355; Dean v. Hewet, 5 Wend. 257; Morton v. Rogers, 14 Wend. 580; Jarden v. Davis, 5 Whart. 338. The title of the holder is not allowed to be shaken on light grounds. Russell v. Bale &c. 2 Johns. 50; Evans v. Gee, 11 Peters 84. But where it appears that he has not given consideration for a bill or note, for which no consideration had been previously paid, he cannot recover upon it. 1 M. & W. 431.
15. How it is ascertained whether the paid a consideration for the paper. stances the onus is on him to prove
holder has or has not Under what circumthe fact.
When the plaintiff has shewn that the defendant never re
ceived any consideration for the bill or note, and has been tricked out of it by means of a gross fraud, the plaintiff has been required to prove what consideration he gave for it. Rees v. Headfort, 2 Camp. 574; King v. Milsom, Id. 5; Holme v. Karsper, 5 Binn. 469; Solomons v. Bank of England, 13 East 135, note; Woodhull v. Holmes, 10 Johns. 231; Munroe v. Cooper &c. 5 Pick. 412; Vallett v. Parker, 6 Wend. 621; Rogers v. Morton, 12 Wend. 487.
A practice grew up of giving a notice to the plaintiff, calling upon him to prove consideration. Paterson v. Hardacre, 4 Taunt. 114. The general course was, when such a notice had been given, for the plaintiff to adduce his proof in the first instance. 1 M. & W. 431.
Such notice was afterwards dispensed with. If the defendant shewed that there was originally no consideration for the bill, Lord Tenterden thought that threw it on the plaintiff to shew that value was given for it by him, or by his endorser. Thomas v. Newton, 2 C. & P. 606, 12 Eng. Com. Law Rep. 285. Again, in an action by the endorsee against the endorser of a note, where the defence was that the note had been discounted by a previous endorser for an usurious consideration, Lord Tenterden dispensed with the notice, saying the statute of 58 Geo. 3, c. 93, makes a note tainted with usury valid in the hands of a bona fide holder; and therefore the onus is upon the holder to prove he is such, otherwise the statute does not apply, and the note is void under the statute of Ann. Wyatt v. Campbell, 1 Moo. & Malk. 80, 22 Eng. Com. Law Rep. 257. Afterwards, in an action by the endorsee against the acceptor of a bill, where the defence was that the bill was originally an accommodation bill, and the notice was only given in the evening of the day on which the cause was to have been tried, Lord Tenterden said, it is matter of comment if no notice were given, or if it were not given in a reasonable time; but he did not think he ought on that ground to exclude the evidence, it being material to the issue. Mann v. Lent, 1 Moo. & Malk. 240, 22 Eng. Com. Law Rep. 301. It turned out that there was not a total failure of consideration for the bill, and that being so, the circumstances proved would not even constitute a defence in an action brought by the drawer against the acceptor; and consequently they were no answer to the action brought by the endorsee. S. C. 10 Barn. & Cress. 877, 21 Eng. Com. Law Rep. 190.
Subsequently, where a note was taken under such circumstances that the payee himself could not recover, and the holder, instead of suing his endorsers, who were solvent, and one of whom at least was known to him, brought his action against