But absence of consideration moving from the plaintiff, proved by the defendant, or otherwise affirmatively established, may in some cases be prima facie evidence of notice to the plaintiff of fraud or illegality. v. Haslar, 23 Q. B. D. 345; 58 L. T. 432. The Code, s. 30 (2) clearly recognizes the distinction between negotiable instruments and other chattels pointed out by Lord Ellenborough in King v. Milson, 2 Camp. 5; 11 R. R. 646, that a presumption both as to bona fides and value exists in favour of every holder. In Bailey v. Bidwell, 13 M. & W. 73, Parke, B. explains why, when fraud or illegality is proved by the defence, the burden of proof as to value is thrown on the holder, viz., to rebut the presumption of his being a mere tool in the hands of the defrauding party, who, conscious of his own inability to sue, would put the bill into the hands of some one else to do so, under colour of a transfer. Cresswell, J., in Raphael v. Bank of England, 25 L. J., C. P. 33; 17 C. B. 174; cites this judgment as meaning that full value was proof of bona fides. In May v. Chapman, 16 M. & W. 355, Parke, B., laid down that "wilfully shutting the eyes to the means of knowledge was equivalent to express notice of the fraud. And this dictum is cited by Lord Blackburn in Jones v. Gordon, 2 App. Ca. 628, as seeming to show that the onus of proof both as to value and notice was shifted, though his lordship considered that point still undecided. The expression "in good faith" is also used in the Code as to payments, ss. 59 -60, 79-80, 82; as to insertion of date, s. 12; and is defined as being "in fact honestly," s. 90. It may be worthy of notice that the whole of sub-s. 29 (b) has not been incorporated with s. 30 (2), but part, and part only. In Tatam v. Haslar, supra, Lord Field directed the jury that if the plaintiff really and truly advanced the value alleged, he was a bona fide holder for value, and the onus of proof was on the defendant to invalidate his title. Lord Field in effect held that no substantial change in the law had been made by the Code. But this ruling was commented on in the Divisional Court as "being too favourable to the plaintiff," the Code having settled against him the question put as still open by Lord Blackburn in Jones v. Gordon, that when fraud was proved, the holder must show that he gave value honestly and without notice of it. In Oakeley v. Bolton, 5 Times L. R. 60, Lord Esher, M. R., delivering the judgment of the Court of Appeal, laid down that on fraud being proved by the defence, the plaintiff must not only show that he gave value, but gave it honestly. This the plaintiff may easily enough prove in his own case, but if the party giving the value relied on be dead, or otherwise unavailable as a witness, less evidence may suffice to satisfy the onus as to proof of bona fides. On this point we have been favoured with the following from the same eminent authority. "What is sufficient evidence," says Lord Esher, "that the holder who shows that he gave value, did so honestly, is another question. If the plaintiff (or party giving the value relied on) can be called, no jury would I think be satisfied unless he is called, to say that he had no knowledge of the fraud. But if he be dead, or cannot be called, proof of his having given full value would of itself be strong evidence of bona fides and ignorance of the fraud, there being no evidence of any suspicious circumstances." CHAPTER Plaintiff may stand on a prior title. What amounts to notice. Particular or explicit notice. General or implicit notice. Abstinence Although notice to the plaintiff himself be established, that alone will not destroy his right to recover, if he can make a further independent title under any intermediate holder who gave value, and had not notice. Notice of illegality or fraud is either particular or general. Particular or explicit notice is where the holder had notice of the particular facts avoiding the bill. But notice of the facts more or less in detail is not necessary in order to invalidate his title. It is sufficient if he had general notice. General or implicit notice is where the holder had notice that there was some illegality or some fraud vitiating the bill, though he may not have been apprised of its precise nature. Thus, if when he took the bill he were told in express terms that there was something wrong about it, without being told what the vice was, or if it can be collected by a jury from circumstances fairly warranting such an inference, that he knew, or believed, or thought, that the bill was tainted with illegality or fraud, such a general or implicit notice will equally destroy his title (7). A wilful and fraudulent abstinence from inquiry into the from inquiry. circumstances (7), where they are known to be such as to invite inquiry, will (if a jury think that the abstinence from inquiry arose from a belief or suspicion that inquiry would disclose a vice in the bill) amount to general or implicit notice (8). Gross negligence not equivalent to notice. Notice to an agent. But mere negligence, however gross, not amounting to wilful or fraudulent blindness and abstinence from inquiry, will not of itself amount to notice, though it may be evidence of it (t). Where the holder in taking a bill employs an agent, though the principal be unaffected with notice to himself personally, yet notice to the agent so employed, whether explicit or implicit, is notice to his principal the holder (u). (a) Oakeley v. Ooddeen, 2 F. & F. 656. () And it has even been said by the Court of Queen's Bench that gross negligence may be evidence of fraud. Goodman v. Harvey, 4 Ad. & E. 870. ($) Oakeley v. Ooddeen, supra ; and see Jones v. Smith, 1 Hare, 55; Ware v. Lord Egmont, 4 De G., M. & G. 473; Attorney- & G. 111. (t) Goodman v. Harvey, supra; Jones v. Gordon, 2 App. Ca. 628 : and see the remarks of Lord Herschell in Simmon's case,[1892] App. Ca. at p. 221. (u) Oakeley v. Ooddeen, supra. XI. Perhaps, however, the rule may be subject to this qualifi- CHAPTER But wherever the agent's conduct amounts to fraud, it is conceived that the innocent principal who takes the benefit of the agent's fraudulent act is civilly responsible for the agent's fraud (z). It would seem, on general principles, that the payment of no bill of exchange, promissory note or cheque, given by the maker or acceptor to the payee, as a gift inter vivos, can be enforced by action at the suit of the donee against the donor (a). Thus, where a bill of exchange was accepted by the defendant, as a present to the payee, who indorsed it to the plaintiff for a small sum advanced to him, Lord Ellenborough heid, that the plaintiff was only entitled to recover so much as he had advanced on the bill (b). The effect of a gift of a negotiable instrument, payable to bearer, or indorsed by the donor in blank, should seem on principle to be this. As between the donor and the donee, the donor cannot recover the bill back or receive the amount from prior parties (c), but the donee himself cannot sue the donor upon it. As between the donee and the other prior parties to the bill, they are liable to him. If the bill be not transferable, or be payable to order and not indorsed, it is conceived that the effect of the gift of it is to vest the legal property in the paper and the beneficial interest in 948. The payee of a voluntary (b) Nash v. Brown, Chitty, (c) Milnes v. Dawson, 5 Exch. 948. as to same person See to two companie see Fenwick, Jure [902] ICh. 50%. Gift, inter ricos, of a bill or note. CHAPTER Nature of the consideration. debt. the money in the donee (d); who, however, must recover from prior parties in the donor's name. any Valuable consideration for a bill may be constituted by consideration sufficient to support a simple contract : or by an antecedent debt or liability, and that whether the bill be payable on demand or at a future time; a lien, also, whether arising from contract or from implication of law, makes the holder a holder for value pro tanto. Where value has at any time been given for a bill, the holder is a holder for value as regards the acceptor and all parties to the bill prior to such time. It may suffice to observe here, for the sake of the unprofessional reader, that a consideration is, in general, either some detriment to the plaintiff, sustained for the sake or at the instance of the defendant, or some benefit to the defendant moving from plaintiff (e). Natural affection is not a sufficient consideration to support a simple contract (f). If a man give his acceptance to another, that will be a good consideration for a promise, or for another bill or acceptance, though such first acceptance is, after all, unpaid (g). And, therefore, cross acceptances for mutual accommodation are respectively considerations for each other (h). Pre-existing A pre-existing debt due to the holder of a negotiable instrument is a good consideration, whether the instrument be payable on demand or not, as much as is a fresh advance (i). This had been doubted unless the bill or note were payable at a future time, in which case the holder (d) See Barton v. Gainer, 27 L. J., Exch. 390; 3 H. & N. 387, as to the effect of a gift of a specialty. (e) Code, s. 27. It is not necessary that the consideration should move to the defendant personally; if it moves to a third person, by his desire or acquiescence, that is sufficient. Therefore, the debt of a third person is a good consideration to support a contract on a bill payable at a future day. Sowerby V. Butcher, 2 C. & M. 368; 4 Tyr. 320; vide post. Past gratuitous services and future services, which the payee was under no contract to render, do not form a sufficient consideration would be in the same situation as if he had made fresh advances on the instrument (k); for the remedy for the previous debt is suspended till maturity of the bill or note (1). CHAPTER XI. A fluctuating balance may form a consideration for a Fluctuating bill (m). Where a banker's acceptances for his customer balance. exceeded the cash balance in his hands, and accommodation acceptances were deposited by the customer with the banker as a collateral security, it was held that, whenever the acceptances exceeded the cash balance, the bankers held the collateral bills for value (n). Where bills or notes are deposited as a security for the balance of an account current, the successive balances form a shifting consideration for the bill. Thus, where A. and Co., bankers in the country, being pressed by the plaintiffs B. and Co., bankers in town, to whom they are indebted, to send up any bills that they can procure, transmit for account an accommodation bill accepted by the defendant; when the bill becomes due the balance is in favour of A. and Co., but the bill is not withdrawn, and afterwards the balance between the houses turns considerably in favour of B. and Co., the plaintiffs, and is so when A. and Co. become bankrupts, B. and Co. are entitled to recover against the defendant, the accommodation acceptor (0). (k) See Percival v. Frampton, 2 C., M. & R. 180; 3 Dowl. 748; Foster v. Pearson, 1 C., M. & R. 849; 5 Tyr. 255; but see De la Chaumette v. Bank of England, 9 B. & C. 208; 32 R. R. 643 ; Vallance v. Siddel, 6 Ad. & E. 932; 2 N. & P. 78; Poirier v. Morris, 2 E. & B. 89; see In re Carew, 31 Beav. 39. (1) In America the judicial decisions on this important point vary in different States. But the SUPREME COURT of the United States has gone the full length of holding that the taker of a note for a pre-existing debt has all the rights of a holder for a new consideration. Swift v. Tyson, 16 Peters, 1. See the state of the American authorities, Byles on Bills, 6th Amer. edition, pp. 199 et seq. (m) Pease v. Hirst, 10 B. & C. 122; 5 M. & Ry. 88 ; 34 R. R. 343 ; Collenridge v. Farquharson, 1 Stark. 259; Richards v. Macey, (n) Bosanquet v. Dudman, 1 (0) Atwood v. Crowdie, 1 Stark. customer's account. Ex parte |