ecivet for and it feceived from che

ulder.

[Reported in 6 Dowling & Ryland, 120.]

ASSUMPSIT by the indorsee against the acceptor of a bill of ex change. Plea, non assumpsit. At the trial before Abbott, C. J., at the Middlesex sittings after last term, after the plaintiff had proved the usual prima facie case, the defence set up was, first, that the defendant had accepted the bill without consideration; and, second, that it had been deposited by the defendant in the hands of a person named Crozar for the defendant's personal benefit, but had wrongfully been indorsed to the plaintiff. The facts proved in evidence for the defendant were these: The defendant had placed the bill in the hands of Crozar for the purpose of getting it discounted and delivering the money over to him, De Witts. Crozar had become indebted to the plaintiff for goods sold and delivered, and after becoming bankrupt went abroad with the bill in question in his possession. The plaintiff, who was ignorant of the fact of Crozar having committed an act of bankruptcy, followed him to Paris in order to obtain payment of the goods which he had sold, and there obtained from him the bill in question in satisfaction of the debt. Under these circumstances, the Lord Chief Justice was of opinion that the plaintiff had no title to sue upon the bill. His lordship said that, if the plaintiff had sold Crozar the goods upon the credit of the bill, it would have made a difference, and would have entitled him to recover; but, inasmuch as the goods had been originally furnished to Crozar upon his own personal credit, the action must fail, it appearing in evidence that the bill had been given to the latter, not for his own benefit, but for the benefit of the defendant from whom he received it. The plaintiff was

therefore nonsuited.

1 Although the doctrine of "purchase for value without notice" is pre-eminently s doctrine of the courts of equity, and even in the courts of common law is not collfined to cases governed by the law-merchant, it has nevertheless acquired such prominence in its application to the transfer of negotiable securities that it has seemed expedient to make the subjects of "Value" and "Notice" special topics in this

collection of cases.

ED.

F. Pollock now moved for a rule to show cause why a new trial should not be granted on the ground that the learned judge had erroneously ruled the point at Nisi Prius. He contended that, if the plaintiff could not maintain this action, it would be carrying. the doctrine of Gill v. Cubitt to an unreasonable extent, and to an extent highly prejudicial to the interests of commerce. He insisted that the plaintiff must be considered as a bona fide holder for valuable consideration, inasmuch as he received it in payment of a debt justly due and owing to him, and therefore whether the acceptance was, merely for accommodation, fraudulently paid away, or even stolen by Crozai, could make no difference as to his legal title to sue the acceptor.

ABBOTT, C. J. The facts of this case lie in a very narrow compass. It must be admitted that the bill was accepted by the defendant with. out value. Crozar had it at one time from the defendant, with direc tions to pay it over to a third person for the use of the latter. He contrives to get it back again into his own hands, and he runs away from this country in debt. He is pursued by the plaintiff, to whom he owes money. The plaintiff finds him out in Paris, and gets from him all the securities he can, and among others this bill. It cannot be denied that, if the bill was accepted for value, the plaintiff could never have recovered upon it, because, Crozar being at that time a bankrupt, it would have passed to his assignees. Can it be said that this bill, which is of no value, inasmuch as it passed from the defendant without consideration, and he being unlawfully deprived of it, the plaintiff has a right to sue upon it and place himself in a better situation than the man of whom he received it? It appears to me that it would be contrary to the first principles of natural justice to say that this plaintiff is a bona fide holder for value.

HOLROYD, J. I agree that if this bill had been delivered to a bona fide holder for valuable consideration, and a person ignorant of the circumstances under which it had been obtained by Crozar, he might Bue the acceptor, notwithstanding any want of consideration received by him. But the argument goes a great deal farther, for it assumes

1 Barwell v. Ward, 1 Atk. 260; Batson v. Goodwin, 12 Mod. 50; Pinkerton v. Adams, 2 Esp. 611; Thomason v. Frere, 10 East, 418; Willis v. Freeman, 12 East, 656; Smith v. Chandler, 3 Gray, 392 (semble), accord.

Conf. Willis v. Bank of England, 4 A. & E. 21.

By the English Bankruptcy Act, 32 & 33 Vict. c. 71, § 17, the property of the bankrupt vests in the registrar "immediately upon the order of adjudication being made;" by the United States Bankrupt Law, U. S. Rev. St. § 5044, the bankrupt's property vests in the assignee from the time of petition filed. Accordingly, even a purchaser for value without notice can acquire no title, to negotiable paper trans ferred by a bankrupt after these respective dates. In re Lake, 3 Biss. 204 · 6 B. R. B. C.- - ED.

2 Bayley, J., was absent.

that Crozar was not a bankrupt at the time plaintiff received the hill Now at that time Crozar, assuming that he had possessed himself of the bill rightfully, had no authority to transfer a right to the plaintiff by indorsement. The plaintiff cannot be in a better situation than the person from whom he derived title. Assuming that the assignees might have recovered it, it is clear that the plaintiff had no title, be cause at that time the property in the bill, if Crozar had any, vesteil in the assignees.1

LITTLEDALE, J., concurred.

part debt is

Rule:efused.

Consideration POIRIER AND ANOTHER v. MORRIS AND Others. t make one a IN THE QUEEN'S BENCH, MAY 3, 1853. holder for value)

[Reported in 1 Weekly Reporter, 349.8]

The

mer

THIS was an action on a foreign bill of exchange. The cause was tried before Lord Campbell at the sittings after Michaelmas term, and a verdict taken for the plaintiffs subject to a special case. plaintiffs were merchants residing in Paris, the defendants chants in London. From the case it appeared that a firm of Hovey, Williams, & Co., of Boston, in America, who were correspondents of the plaintiffs, had also correspondents in London carrying on business under the name of Coates & Co. In 1847, in consequence of Hovey & Co. having remitted to Coates & Co. bills of exchange which they had negotiated, C. & Co. had in their hands a sum of money amount. ing to £738 13s. The plaintiffs having written to Hovey & Co. requesting a remittance of money on their account, J. Chandler, a partner in the firm of Hovey & Co., wrote to the plaintiffs, informing them that he had written to C. & Co., London, requesting them to negotiate certain bills in their hands belonging to Hovey & Co., and from the proceeds to remit to the plaintiffs the sum of 20,000 francs, which, when received, they (the plaintiffs) were to place to the account of H. & Co. On the 28th October, Chandler again wrote to the plaintiffs, saying, "I have requested C. & Co. to make you remittance, which they will do in a few days." Chandier had also written to C. & Co. requesting them to remit the 20,000 francs to the

1 "The assignees had got possession of the bill from the plaintiffs; but, finding they had no title or it against the defendant, had returned it." Ry. & M. 212, s. c., re ported on another point. - ED.

a

2 De la Chaumette v. Bank of England, 9 B. & C. 208, 217 (semble); Cranch v.

White, 1 B. N. C. 414, accord.

See Vallance v. Siddel, 2 Nev. & P. 78; Foster v. Pearson, 1 C. M. & R. 849, 851;

plaintiffs on the 29th October, 1847. C. & Co. in their own name purchased in the ordinary way, through their brokers, the bill on which this action was brought. The bill was drawn by the defendants on A. Dassier, of Paris, for 19,478 francs, payable to the order of the plaintiffs five days after date. The price of this bill and the brokerage amounted to £738 13s. 1d. This bill was handed over to C. & Co. on the same day, and was to be paid for according to the custom of merchants in the city of London on the next foreign post-day, which in this case would be on the 2d of November. Coates & Co. wrote to the plaintiffs on the 29th, enclosing them the bill in question. On the 1st November (the bill being then unpaid), C. & Co. became bankrupts. The bill never was accepted, and this action was brought by the plaintiffs against the defendants as drawers. The defendants, in consequence of C. & Co.'s bankruptcy, had never received any value for the bill. Chandler's letters were objected to on the trial as inadmissible. The questions for the opinion of this court were as to the admissibility of these letters of Chandler's, and, if so, whether upon the facts the plaintiffs were entitled to recover in this action against the defendants.

Bramwell, Q. C., and Ashland, for the plaintiffs.

Crowder, Q. C., and Briggs, for the defendants.

LORD CAMPBELL, C. J. I am of opinion that when this bill was dishonored Poirier & Co. had a right of action upon it against the defendants as the drawers, which right they have retained down to the present time, because, if they once had a right, nothing had been done between the plaintiffs and defendants to alter that right. We must then see what interest Poirier & Co. obtained in the bill when they received it, whether there was a consideration for it. I think that there was. The plaintiffs were creditors of H. & Co.; they pressed for a remittance; H. & Co. say they shall have a remittance, and they direct this remittance to be made through C. & Co., who were the debtors of H. & Co. When this bill was received by the plaintiffs on the 30th October, they became the bona fide holders of the bill for value on account of the debt due to the plaintiffs from H. & Co.: there was, therefore, a good consideration for the bill. The plaintiffs were entitled, if the bill had been accepted by the drawee; and they had a right to sue the defendants as drawers, although Dassier refused to accept it. Now, there is nothing to distinguish this from the cases where a creditor receives a negotiable security as security for a debt due, and such an antecedent debt being held to be sufficient consideration to make him a bona fide holder of the bill; the plaintiffs have therefore a right of action on this bill. I think that H. & Co. could have sued the defendants on this bill: there was a

good consideration as between H. & Co. and Coates & Co. The latter are not to be considered merely as the agents of H. & Co. in the sense contended; for they were merchants in London, and were correspondents of H. & Co., and, having funds in their hands of H. belonging to H. & Co., they are to remit to P. & Co. the plaintiffs. C. & Co. never acted as the servants of H. & Co., and the defendants could have had no remedy against them on the bill, as they gave no author. ity to C. & Co. to pledge their credit: the credit in this case was clearly given by the defendants to Coates & Co., they looked upon them as their debtors, and they had no remedy against H. & Co., although they may have been in fact the principals of C. & Co. The defendants ran the risk of C. & Co. becoming insolvent before the second foreign post-day, and therefore in every point of view the plaintiffs are entitled to recover upon this bill.

WIGHTMAN, J. I am of the same opinion. H. & Co., being mer chants in America, and C. & Co., being their correspondents in Lon don, are to dispose of certain funds the produce of certain bills in their hands, and the balance is to be remitted to the plaintiffs in Paris. Chandler, in pursuance of these instructions, writes to the plaintiffs, and tells them that Coates & Co. will make them a remittance in a few days. For that purpose, Coates & Co. purchase in the ordinary course of business a bill drawn by the defendants payable to the plaintiffs' order. In this transaction, C. & Co. act only as principals with the defendants, and in that view of the case there can be no doubt that H. & Co. could not have been made liable on the failure of C. & Co.; nor would they be bound as the principals of C. & Co. in any question between them and the defendants. But it is quite clear that the defendants intended to give credit for payment of the bill to C. & Co. according to the usage of merchants. C. & Co. had no authority to pledge the credit of H. & Co. on this bill, H. & Co. hav ing already funds in C. & Co.'s hands: the plaintiffs became holders of this bill for value, as it was sent to the plaintiffs on account of the debt due to them, and for payment of which they had pressed. The right to sue on the original debt was not suspended, but they were entitled to hold the bill if they thought fit: if that be so, whatever may have been the relation between the defendants and H. & Co., and C. & Co., who were the mere agents of H. & Co., the plaintiffs could sue as holders for value, and it does not appear that they have done any thing inconsistent with this subsequent to the date of the receipt of the bill. The plaintiffs held the bill, it may be, as collateral security only, but at all events for value.

ERLE, J. The plaintiffs on the receipt of this bill became bona fide holders for value with all rights incident to that character.

We have