inferring that the endorsee was acquainted with the fact of there being no valid consideration for the note. (a)

Nor does a note's being sold to an endorsee at his own risk render him liable in an action against the maker to the defence that the note was given without consideration or obtained from him by fraud. (b)

The assignee of a note not negotiable, takes it subject to all the equity between the original parties, existing at the time of the assignment, and notice to the maker. (c)]

The want of consideration, in toto or in part, cannot be insisted upon, if the plaintiff, or any intermediate party between him and the defendant, took the bill or note bonâ fide, and upon a valid consideration. (15)

Where it is so taken, it is no defence that the bill or note was originally accommodation paper, and known so to be. (16)

[(a) Perkins v. Challis, 1 N. Hamp. R. 254.]

[(b) Russel brought an action against the makers of à note. An endorsement by the payee ordered the contents to be paid to the plaintiff at his own risk, and continued, "I am not to be made liable to pay the same, as the note was taken without my knowledge, Z. Booth." It appeared that Booth objected to endorsing the note to Russel, as it had been taken by his partner, and he did not know for what it was taken. It was held that the defendants could not be permitted to show a want of consideration for the note or fraud in obtaining it, without showing that the endorsee was not a bonâ fide holder for a valuable consideration. Livingston J. giving the opinion of the court, said, "There is nothing disclosed in this case which would have rendered it proper to receive evidence, either of a want of a consideration, or of a fraud in obtaining it, to which the plaintiff was not himself a party." Russel v.. Ball, 2 Johns. R. 50.]

[(c) Chamberlain v. Gorham, 20 Johns. R. 144.]

(15) Morris v. Lee, B. R. H. 26 G. 3. In an action by the endorsee 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 bonâ 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. And see Com. 43. 1 Term. Rep. 40. 2 Term Rep. 71. 2 Atk. 182. Bull. Nisi Prius, 274. See also De Bras v. Forbes, 1 Esp. N. P. C. 117.

[See also Warren v. Lynch, 5 Johns. R. 239; and Perkins v. Challis, 1 N. Hamp. R. 254.]

(16) Smith v. Knox, 3 Esp. N. P. C. 46. In an action by the endorsee of the drawer of a bill against the acceptor, it was urged in defence

And to support the defence against a person who may be a bonâ fide holder for value, the plaintiff should be apprized before the trial that he will be required to shew from whom he took the bill or note, and on what consideration; otherwise that defence may be excluded. (17)

If a banker is under acceptance for a customer to an amount beyond the cash balance in his hands, every bill he holds of that customer's he is to be considered as holding for value. (18)

And it makes no difference, though he holds other collateral securities more than sufficient to cover the excess of his acceptances. (18)

[Where A. gives his note to B. for a consideration passing from B. to C.; a want or failure of consideration between B. and C. is no defence to an action on the note by B. against A. (a)

that this was an accommodation acceptance. But Lord Eldon said, if a person give a bill for a particular purpose, and that is known to the party taking the bill, as for example, to answer a particular demand, then the party taking the bill cannot apply it to a different purpose; but where a bill is given under no such restriction, but given merely for the accommodation of the drawer or payee, and that is sent into the world, it is no answer to an action brought on that bill, that the defendant accepted it for the accommodation of the drawer, and that that fact was known to the holder.

Charles v. Marsden, 1 Taunt. 224. Endorsees of the drawer of a bill against the acceptor. The defendant pleaded that he had accepted the bill for the accommodation of the drawer, without any consideration, and that after the bill became due it was endorsed to the plaintiffs, they knowing that it was an accommodation one. On special demurrer to the replication, the argument turned on the validity of the plea; and the whole court held, that there being no fraud or collusion alleged, the plea was bad, and gave judgment for the plaintiffs.

(17) See Paterson v. Hardacre, ante, p. 319.

(18) Bosanquet v. Dudman, 1 Stark. 1. Plaintiffs sued as endorsees of a bill, and it was made a question whether they were holders for value they had it from Clarkson and Co., for whom they were bankers, and they took this and many other securities to cover their advances and acceptances: they were under acceptances for Clarkson and Co. beyond the amount of the cash balance in their hands; and a question being put as to the amount of the acceptances and cash balance, and the value of the other securities, Lord Ellenborough said he should hold, that if the acceptances exceeded the cash balance, plaintiffs held all the collateral securities for value. The inquiry was dropped, and plaintiffs had a verdict.

[(a) Nickerson assigned an apprentice who was bound to him to E. Howard, and in part payment of the consideration W. B. Howard gave

And where A. gives his note to B. for a consideration passing from C. to A., a want or failure of consideration between C. and A. is no defence to an action on the note. (b) (c)]

his note to Nickerson. In an action on this note against the maker, it was held that the defendant could not set up as a defence that the assignment was invalid. Platt J. giving the opinion of the Court, said, "Whether the assignment was valid or not, it must be presumed that the note was made at the request of E. Howard; and as between him and the defendant it can never be material whether the assignment of the indenture passed any interest or not." Nickerson v. Howard, 19 Johns. R. 113.]

[(6) Ebenezer Clark, one of the heirs, and also the administrator of Seth Clark, gave a bond to Mrs. Sanger, another heir, conditioned that he should pay all the debts of the deceased, and should procure a decree of the judge of probate assigning her all the real estate of the deceased. Afterwards she and her husband released all her right in the said real estate to Ebenezer, and he by her request conveyed it to Cleveland by deed with warranty. And Cleveland gave two notes to Mrs. Sanger for the price, one of which he afterwards paid. And a memorandum was made on the bond by her agent, acknowledging the deed to Cleveland to be equivalent to procuring a decree of the judge of probate. In an action by Sanger and wife against Cleveland on the other note, it appeared that the land was afterwards sold by leave of court to pay the debts of Seth Clark, and purchased by Cleveland; and he claimed to have the amount paid by him deducted from the note. But it was held to be no defence, and judgment was given for the whole amount of the note. Sanger v. Cleveland, 10 Mass. R. 415.

Carmer gave his bond to Bartlett, for a certain sum, on payment of which Bartlett was to convey a certain parcel of land to him. Bartlett being indebted to Freligh, gave him the bond and authorized him to receive payment. Freligh received of Carmer as principal and Gaylord as surety, their joint and several note for the amount due Bartlett, and gave up the bond to Carmer. There was some evidence that Freligh, when he received the note, promised to give it up if Bartlett should refuse to consider the note as payment. Bartlett afterwards did refuse to consider the note as payment, and becoming bankrupt could give no title to the land. In an action on this note it was held that these facts were no defence. Spencer J. giving the opinion of the Court, said, “The giving the note by Carmer, and his taking possession of the bond under the authority given by Bartlett to Freligh, amounted in law to a payment. The agreement that Bartlett should allow the note as a payment, was in effect performed, since he could not legally disallow it; and his subsequent dissent, after he was thus concluded by the acts of his agent, was vain and idle. The subsequent bankruptcy of Bartlett cannot vary the case. If Carmer chose to part with his money before he acquired a title for the land, it was a want of caution on his part, for which he must blame himself." Parsons v. Gaylord, 3 Johns. R. 463.]

[(c) If the endorser of a note agree with the maker to pay it when it becomes due, this undertaking is a good consideration for a note from the maker to the endorser.

Cushing being an endorser on notes of Gore and Grafton for their accommodation, Grafton before the note became due gave the company's note to Cushing, to enable him to indemnify himself by an attach

Illegality in the consideration, either wholly or in part, is another ground of defence.

ment of property or otherwise; it being understood that Cushing was to take up and discharge the notes endorsed by him as they became due; and to hold the note then given as good only for the amount of the others which he should take up. There was no evidence however of any express promise by Cushing. Cushing brought an action immediately upon the note given him, and attached property, which was also subsequently attached by creditors whose demands were due before either of the notes endorsed by Cushing became due. It was held that Cushing might recover the amount of the notes endorsed by him with interest. Parker C. J. said, "When an endorser has either expressly or impliedly undertaken to pay the note by him endorsed, there can be no question that such an undertaking is a good and valuable consideration for a promissory note." Cushing v. Gore, 15 Mass. R. 69.

A submission to arbitration, is a good consideration for a note deposited with the arbitrators, on which they make an endorsement so as to leave the amount due on the note as their award.

Watrous being under arrest in an action of slander at the suit of Shepard, made a note to Shepard for $200, and delivered it to certain arbitrators who were to decide upon the subject in dispute between him and Shepard; and in consequence of this arrangement was discharged from custody. The arbitrators endorsed $100, and returned the note to Shepard. It was held that the note was given for a good consideration; and that in an action on it no evidence could be received to show that the plaintiff had no cause of action in the original suit. Shepard v. Watrous, 3 Cain. R. 166.

Where referees, having agreed on an award, wrote a note, which one of the parties to the submission signed with a surety, not knowing the amount for which the note was given, the body of the note being concealed from sight, and the parties also signed mutual receipts; it was held that there was a sufficient consideration for the note in any view of the case, either in the adjustment of the controversy by the receipts, or in the award itself. Page v. Pendergast, 2 N. Hamp. R. 233. Quære whether any such defence would be permitted in an action on the note between the original parties, as would be admissible in an action on the award. Ib.

A note accepted in satisfaction of a breach of covenants, is a bar to any future action on the covenants, although no release of such covenants be executed at the time of giving the note; and consequently the note is good, being given for a sufficient consideration. Moody v. Leavitt, 2 N. Hamp. R. 171.

In an action by a turnpike company declaring upon a note made by the defendant for $125, for five shares of the capital stock of the corporation, to be paid in such manner and proportion, and at such time and place, as the company should require, it was held that there was a sufficient consideration on the face of the note, and that the action was maintainable notwithstanding the statute remedy in case of non-payment, of a forfeiture of the shares and all previous payments. Goshen Turnpike Co. v. Hurtin, 9 Johns. R. 217. S. P. Dutchess Cotton Manufactory v. Davis, 14 Johns. R. 238.

Where A. agreed to serve B. for a year at a certain rate per day, and at the end of three months B. gave A. a note for his services for that

The (19) debt of a third person, or a debt barred by (20) the statute of limitations, by a discharge under an insolvent or fugitive act, by a (21) bankruptcy and certificate, or by a composition, is a good consideration; and so is an apprentice fee, though the apprenticeship is for less than seven years. (22)

[Where the act incorporating an insurance company required their capital stock to be invested in a certain manner, it was held that an action might be maintained against a stockholder on a note given to the company for a part of the stock held by him, although this was a different investment from that directed in the act of incorporation. (a) (b)]

time, and A. left B.'s service without his consent before the year was ended; it was held that A. might maintain an action against B. on the note, notwithstanding the original contract was entire, the note being pro tanto a change or modification of the original contract. Thorpe v. White, 13 Johns. R. 53.]

(19) Popplewell v. Wilson, Str. 264. A. gave a note to pay so much to B. for a debt due from C. to B.; and on error it was objected that the debt of a third person was no consideration; but the court thought otherwise, and the judgment was affirmed.

(20) Vide Lord Raym. 389. 6 Mod. 309. Burr. 2630. Blackst. 703. Cowp. 290.

(21) Trueman v. Fenton. Cowp. 544. Birch v. Sharland, 1 Term Rep. 715. Cowp. 290.

(22) See Grant v. Welchman, ante, p. 347.

[(a) The act incorporating the Un. Mar. & Fire Ins. Co. required that their capital stock should, within six months after payment, be invested in the funded debt of the United States or of this commonwealth, or in the stock of some incorporated banking company. Instead of such an investment, the company received notes of the several stockholders with collateral security for the payment of them. They from time to time renewed such notes either partially or in the whole. It was held that these facts did not eonstitute a defence to an action brought for the use of the company on a note given for a balance of instalments due from the defendant, as one of the stockholders.

The court said, "Whether for this misbehavior of the corporation the government might not seize their franchises, upon due process, is a question not now betore us. It does not lay in the mouth of a stockholder for this cause to avoid his contract, which, as between him and the company, was made on a sufficient consideration." Little v. Obrien, 9 Mass, R. 423.]

[(b) It has been held in Massachusetts that the sale of a license from the enemy to protect a ship from capture and condemnation, on a voyage to a neutral port, was a legal consideration for a note. Coolidge v. Inglee, 13 Mass. R. 410. But it has been since decided in the Supreme Court of the United States, that a contract for the purchase or sale of such a license was void on account of the illegality of the consideration. Patton v. Nicholson, 3 Wheat. R. 204.]