$322. "Value received"-Consideration not expressed or expressed-Rebutting presumption.-In the absence of a statute to the contrary, the use of words "value received" is not essential to a bill of exchange, check, promissory note, or commercial paper generally; and even though a consideration is not expressed by these or other words, the rule that such paper imports a consideration applies. If the words "value received" are expressed, while it is declared that they add nothing more than the law implies, 42 yet 41 Salazar v. Taylor, 18 Colo. 538, 541, 33 Pac. 369; Kendall v. Galvin, 15 Maine 131, 32 Am. Dec. 141; Noyes v. Gilman, 65 Maine 589 (holding that an order operating as an assignment of a note need not contain the words "value received"); Dean v. Carruth, 108 Mass. 242 (note "is evidence under the hand of the promisor of a contract made upon a good consideration, even if the words 'value received' are omitted"); Taylor v. Newman, 77 Mo. 257; Clarke v. Marlow, 20 Mont. 249, 50 Pac. 713 (declaring that all commercial paper at common law imports a consideration, though none is expressed by the words value received or other words, citing Hatch v. Trayes, 11 Adol. & E. 702; Edw. Bills & N., § 202; Randolph Com. Paper, § 178, and adding: "Having no statute in Montana requiring the use of the expression 'value received' it is not essential. Story on Prom. Notes, § 51"). Martin v. Stone, 67 N. H. 367, 29 Atl. 845. (Citing Story on Prom. Notes, § 51; 1 Daniels Negot. Inst. § 108). Carnwright v. Gray, 127 N. Y. 92, 27 N. E. 835, 12 L. R. A. 845, 24 Am. St. 424 (holding that an instrument which is a promissory note within the statute-1 Rev. Stat. 768, which is a substantial reenactment of the statute of 3 & 4 Anne, ch. 9-imports a consideration and the words "value received" need not appear upon the face of the note; case affirms Carnwright v. Gray, 57 Hun 518, 33 N. Y. St. 98, 11 N. Y. S. 278); Underhill v. Phillips, 10 Hun (N. Y.) 591; Kramer v. Kramer, 90 App. Div. 176, 86 N. Y. S. 129 ("Value received" in a note imports a consideration); Bruyn v. Russell, 60 Hun 280, 14 N. Y. S. 591, 38 N. Y. St. 50; Kinsman v. Birdsall, 2 E. D. Smith (N. Y.) 395 (declaring that the omission of the words "value recieved" does not alter the legal effect of a promissory note. Hubble v. Fogartie, 3 Rich. (S. Car.) 413, 45 Am. Dec. 775. (It is nevertheless a valid instrument importing a consideration. Presumptively it was given for a sufficient consideration.) Moses v. Lawrence County Bank, 149 U. S. 298, 37 L. ed. 743, 13 Sup. Ct. 900 ("every negotiable promissory note, even if not purporting to be for 'value received,' imports a consideration, and the indorsement of such a note is itself prima facie evidence of having been made for value"); Laraway v. Harvey, Rap. Jud. Quebec, 14 C. S. 97 (rule applied to checks and other negotiable instruments, citing Taylor on Ev., No. 178; 2 Daniel on Negot. Inst. 1643; 3 Phillips on Ev., p. 426; Civil Code Arts. 2285, 2351, 2353, and quoting 3 Kent's Com., p. 77). Examine Hart v. Harrison Wire Co., 91 Mo. 414, 4 S. W. 123, under Rev. Stat., $ 547, requiring note to be "expressed to be for value received." See New York Negot. Inst. Law, §§ 330, 331. 42 Carnwright v. Gray, 127 N. Y. 92, 27 N. E. 835, 12 L. R. A. 845, 24 Am. St. 424. they raise a presumption of a valuable and legal consideration;43 for the law attributes so much force to a formal written contract and to the words "value received" as to presume in the absence of proof that there was a valuable consideration for the promise.11 This presumption may, however, be rebutted by proof.45 So, where 43 Thompson v. Armstrong, 5 Ala. 383 (the general rule was asserted and the words "value received" were expressed); Richardson v. Comstock, 21 Ark. 69 (note expresses "value received"); Waldrip v. Black, 74 Cal. 409, 16 Pac. 226 (indorsement for value received by payee to surety together with latter's possession of note raises. in absence of evidence to the contrary, the presumption of payment of value); Raymond v. Sellick, 10 Conn. 480; Mascolo v. Montesanto, 61 Conn. 50, 23 Atl. 714, 29 Am. St. 170; MacFarlane v. Lowell, 9 Hawaiian 438, 440; Hoyt v. Jaffray, 29 Ill. 104 (value received is evidence of sufficient consideration to support assumpsit); Cotton v. Graham, 84 Ky. 672, 2 S. W. 647 (there was also the expressed consideration of love and affection); Bourne v. Ward, 51 Maine 191 (declaring that where a note contains the words "value received" or words of equivalent import, the note itself will be evidence prima facie of the consideration. The note here was nonnegotiable and did not contain the words "value received"); Greeley V. Greeley, 119 Maine 264, 110 Atl. 637; Huntington v. Shute, 180 Mass. 371, 62 N. E. 380, 91 Am. St. 309 (holding that the production of a note with the words "value received," with the admission of proof of the signature, makes a prima facie case; but the decision is principally as to burden of proof); Conrad Seipp Brew. Co. v. McKittrick, 86 Mich. 191, 48 N. W. 1086 (note was a judgment note and not a promissory note, and it was held that the expression "value received" was sufficient prima facie to show an adequate consideration); Priedman v. Johnson, 21 Minn. 12; Odiorne v. Odiorne, 5 N. H. 315; Child v. Moore, 6 N. H. 33 (holding that order for the payment of money expressed to be for "value received" is prima facie evidence that the drawer has received the amount of money or the money's worth); Bruyn v. Russell, 52 Hun 17, 22 N. Y. St. 374, 4 N. Y. S. 784 (in this case, however, plaintiff attempted to establish affirmatively the consideration); Bruyn v. Russell, 60 Hun 280, 38 N. Y. St. 50, 14 N. Y. S. 591; Jerome v. Whitney, 7 Johns. (N. Y.) 321 (a nonnegotiable note); Daugherty v. Salt, 227 N. Y. 200, 125 N. E. 94, revg. 170 N. Y. S. 1076; Lasher v. Rivenburgh, 191 App. Div. 676, 181 N. Y. S. 818; Stronach v. Bledsoe, 85 N. Car. 473; Messmore v. Morrison, 172 Pa. St. 300, 34 Atl. 45 (a promissory note, under statute); Redding v. Redding, 69 Vt. 500, 38 Atl. 230; National Loan & Inv. Co. v. Rockland, 94 Fed. 335; Halliday v. Atkinson, 5 Barn. & Cr. 501, 11 Eng. C. L. 558. See Bond v. Stockdale Dow. & Ry. 140, 16 Eng. C. L. 278. In the following cases the words "value received" were used and the consideration was in question, but the effect of the words was not discussed. Hill v. Buckminster, 22 Mass. (5 Pick.) 391; Fink v. Chambers, 95 Mich. 508, 55 N. W. 375; Harwood v. Brown, 23 Mo. App. 69; Schoonmaker v. Roosa, 17 Johns. (N. Y.) 301; Loffland v. Russell. Wright (Ohio) 438. 44 Parish v. Stone, 14 Pick. (Mass.) 198, 25 Am. Dec. 378. 45 Halliday v. Atkinson, 5 Barn. & a nonnegotiable note contains the recital, "for value received." it imports a sufficient consideration.46 Under the Negotiable Instru-ments Act, a presumption of consideration arises regardless of the use or absence of the words "value received," and such presumption is not destroyed by plaintiff's attempt, but failure, to show the true consideration of the instrument, although the defendant claims want of consideration.47 Cr. 501, 11 Eng. C. L. 558. See Martin v. Stone, 67 N. H. 367, 39 Atl. 845; Bruyn v. Russell, 60 Hun 280, 282, 38 N. Y. St. 50, 14 N. Y. S. 591; Sawyer v. McLouth, 46 Barb. (N. Y.) 350; Campbell v. Cormac, 90 N. Car. 491; Cheuvront v. Bee, 44 W. Va. 103, 28 S. E. 751; Laraway v. Harvey, Rap. Jud. Quebec, 14 C. S. 97; Bond v. Stockdale, 7 Dow. & Ry. 140, 16 Eng. C. L. 278, and examine cases cited under the sections herein as to want of consideration. 46 Owens v. Blackburn, 161 App. Div. 827, 146 N. Y. S. 966, 161 App. Div. 830, 146 N. Y. S. 969; First Nat. Bank v. Hawkins, 73 Ore. 186, 144 Pac. 131. 47 Lasher v. Rivenburgh, 191 App. Div. 676, 181 N. Y. S. 818. CHAPTER 10 ADEQUACY OR SUFFICIENCY OF CONSIDERATION Section 325. Inadequate or insufficient consideration distinguished from want or failure of consideration. 326. 327. Sufficient if consideration is benefit or injury. Distinction between valuable consideration other than money and a money consideration.. 328. Slight consideration-Purchasing paper at under-value. 329. Adequacy in value unnecessary-Joint note. 330. Inadequacy or insufficiency of consideration-Rule as to inquiry into Renewals and extensions-Fraud. 331. Sufficiency of consideration-Illustrations. 332. Sufficiency of consideration-Illustrations, continued. 333. Sufficiency of consideration-Further illustrations. 334. Compromise, settlement or relinquishment note. 335. Compromise, settlement or relinquishment note-Unfounded or illegal claim. 336. Compromise of forgery claim. § 325. Inadequate or insufficient consideration distinguished from want or failure of consideration. As between the parties to commercial paper, the undertaking must be supported by a good, sufficient or valuable consideration; and the rule applies to secondary undertakings, such as indorsements, as well as to the primary undertaking. But as to purchasers in due course, without knowledge that the instrument was not supported by a consideration, the want of consideration is no defense.2 A distinction is to be observed between inadequacy of consideration which does not in law constitute a defense and a want or failure of consideration, 1 State Sav. Bank v. Osborn, 188 Iowa 168, 175 N. W. 964. 2 Commercial Security Co. v. Modesto Drug Co., 43 Cal. App. 162, 184 Pac. 964. which, as appears elsewhere herein,3 is a defense, or a defense pro tanto in an action between the parties. A large number of the decisions, however, fail to make this distinction but use the terms, adequate or inadequate consideration, sufficient or insufficient consideration, and want or failure of considerations, as if they were all synonymous, or at least as if they were much the same. § 326. Sufficient if consideration is a benefit or injury.Courts both of law and equity refuse to disturb contracts on grounds. of mere inadequacy, whether the consideration is of benefit to the promisor or of detriment to the promisee. Nor is it necessary that the consideration of a note be equal to the pecuniary value of the obligation. It is a general rule that the consideration to support a promise may be either a benefit accruing to the purchaser or a loss or disadvantage to the promisee. So a consideration emanating from some injury or inconvenience to the one party, or from some benefit to the other party is a valuable consideration. But to give a consideration value sufficient for the support of a promise, it must be either such as deprived the person to whom the promise was made of a right which he before possessed, or else conferred upon the other party a benefit which he could not otherwise have had." Thus the forbearance or suspension of a legal right is a 5 Caldwell v. Ruddy, 2 Idaho 5. 1 Pac. 339; Webb v. Rolla Produce Co. (Mo. App.), 234 S. W. 1068; Western Surety Co. v. Walter, 43 S. Dak. 38. 177 N. W. 804. A note given to procure funds with which to promote a proposed corporation, and to be used by it, and not by the maker, is based on a good consideration. Hale v. Gardiner, 186 Cal. 661, 200 Pac. 598. 6 Wilbur v. Griffins, 56 Cal. App. 668. 206 Pac. 112. 7 Boatwright v. Scheuer, Wise & Co., 11 Ala. App. 420, 66 So. 819; Zadek v. Forcheimer, 16 Ala. App. 347, 77 So. 941; Mulcahy v. Gagliardo, 39 Cal. App. 458, 179 Pac. 445; National Bank v. Whitney, 40 Cal. App. 276, 180 Pac. 845; McDaniel v. Akridge, 12 Ga. App. 79, 76 S. E. 755; Jordan v. First Nat. Bank, 19 Ga. App. 118, 91 S. E. 287; Ableman v. Haehnel, 57 Ind. App. 15, 103 N. E. 869; Thornton Nat. Bank v. Robertson, 89 Kans. 509, 132 Pac. 193; Doxy v. Exchange Bank of Perry, 19 Okla. 183, 92 Pac. 150; State v. Soliss (Okla.), 152 Pac. 1114; Fue v. Peoples Bank & Trust Co., 56 Okla. 738, 156 Pac. 683: Kendall v. Rossi. 35 R. I. 451, 87 Atl. 186, 45 L. R. A. (N. S.) 985; Harris v. Johnson, 75 Wash. 291, 134 Pac. 1048. The benefit is a sufficient consideration if conferred by a third person. Doxy v. Exchange Bank, 19 Okla. 183, 92 Pac. 150; Fue v. Peo |