defense, although good at law, would not be available if the bill came into the hands of a bona fide purchaser before maturity.168 So, an injunction will be granted, at the suit of a state, to restrain the transfer of bonds which have been negotiated by its agent without authority, or upon unauthorized terms.169 So, where a note is given for land conveyed with a fraudulent and worthless warranty of title, an injunction against the transfer of the note will be granted on a bill of quia timet.170 So, where a note has been delivered for a special purpose, its diversion may be prevented by injunction against an indorsee after maturity.171 In like manner, a surety may obtain an injunction against the transfer of a usurious. note, although the principal cannot be joined as a co-complainant without his consent.172 And where a note comes into the possession of a fraudulent holder, and is allowed as a claim against the estate. of the deceased maker without opportunity to the rightful owner to prove his title, an injunction will be granted against payment by the administrator until the question of title is determined.173 But an injunction against the transfer of a note, with a notice of lis pendens and a decree for surrender of the note, will not affect a subsequent purchaser without notice.174

Injunction against Suit.

§ 1688. A court of equity may also restrain the bringing of an action upon a bill, or the setting up of a legal defense to such action.175 Thus, it will enjoin the customer of a bank from bringing

168 Bromley v. Holland, 7 Ves. 20; Jervis v. White, Id. 413; De Vries v. Shumate, 53 Md. 211; Hullhorst v. Scharner, 15 Neb. 57, 17 N. W. 259; Dickenson v. Investment Co., 93 Va. 498, 25 S. E. 548. As to proper parties in such action, see Foley v. Carlon, Younge, 373.

169 Delafield v. State of Illinois, 2 Hill (N. Y.) 159, affirming S Paige (N. Y.) 527.

170 Johnston v. Powell, 34 Tex. 528. But not in such case against a bona fide holder. Kittridge v. Batchelder, 47 Vt. 64.

171 Atlantic De Laine Co. v. Tredick, 5 R. I. 171.

172 Morse v. Hovey, 9 Paige (N. Y.) 197.

173 McKinney v. Curtiss, 60 Mich. 611, 27 N. W. 691.

174 Durant v. Iowa Co., 1 Woolw. 69, Fed. Cas. No. 4,189. And an injunction against the payee after transfer by him will not bind his transferee. Morrison v. Bean, 25 Tex. Supp. 442.

175 Byles, Bills, 421; Glyn v. Soares, 3 Mylne & K. 450; Hodgson v. Mur

177

suit against the bank on its refusal to pay his check after he has procured bills to be discounted largely exceeding his deposits, and is in failing circumstances.176 So, a bona fide holder will be restrained from bringing suit at the instance of a payee whose indorsement has been forged, and the cancellation of the bill will be decreed. But where the bill is payable to a married woman, and her indorsement is forged by her husband, in whose possession the bill was at the time, equity will not interfere in her behalf to restrain a subsequent holder from bringing suit against the acceptor.178 A holder with notice will, however, be restrained from suit against the acceptor after failure of the consideration and insolvency of the payee.179 But if a note is given by A. to B., at the request and for the benefit of C., who thereupon, in consideration of it, gives his note to A., an injunction will not be granted against a suit on the latter note on the ground that the former has not been paid.180

An injunction against payment will not prevent recovery of judgment upon a bill.181 And an injunction may be refused against the collection of a note, on the ground of misrepresentation as to the consideration, and of an agreement to pay in certain installments, until after judgment is rendered, and the execution be then stayed.182 But, where there has been default on an agreement to credit certain payments, an injunction will be granted against the entry of judg

ray, 2 Sim. 515; Hood v. Aston, 1 Russ. 412: Kidson v. Dilworth, 5 Price, 564. Thus, it may enforce an equitable estoppel by restraining a legal defense. Hackettstown Nat. Bank v. Ming, 52 N. J. Eq. 157, 27 Atl. 920. Or it may enjoin an action at law on a note obtained by fraud. Hodson v. Glass Co., 156 I. 397, 40 N. E. 971. Or on a note given in renewal of other notes which had been satisfied. Baker v. Hawkins, 14 R. I. 359.

176 Agra, etc., Bank v. Hoffman, 34 Law J. Ch. 285.

177 Esdaile v. La Nauze, 1 Younge & C. Exch. 394; Jones v. Lane, 3 Younge & C. Exch. 281. But not in behalf of an acceptor who alleges that he accepted the bill on the strength of a forged collateral bill of lading, if the holder undertakes to surrender the bill in case of an adverse judgment at law. Thiedemann v. Goldschmidt, 1 De Gex, F. & J. 4.

178 Dawson v. Prince, 2 De Gex & J. 41.

ment for the whole amount.183 But in a bill to enjoin a sale under a judgment the court will not pass upon the consideration of the note on which the judgment was founded.184 And it will not set aside a judgment at law suffered by a married woman to avoid her note for coverture.185

186

§ 1689. An injunction will not be granted to the maker of a note to restrain a suit against him by the payee, on the ground that the note was a mere memorandum of the sale of goods by the maker as the payee's agent, for which goods the maker had, for convenience, taken the purchaser's note to himself, the payee of the original note agreeing to use it only as a memorandum.1 So, where an action is brought on an acceptance given for goods purchased, and the acceptor claims that he has been fraudulently deceived, an injunction will not be granted to restrain a suit on the acceptance and for an accounting, inasmuch as a court of equity will not adjust an account between debts, on the one side, and a claim for damages, on the other.18 And an injunction will not be granted, on account of fraud by the payee upon the maker, to restrain an action by a bona fide holder.1 188 But one who is not a "bona fide holder" in the commercial sense of the term is not entitled to the same protection.189 Where a defendant would be entitled to relief on equitable grounds against a judgment, if it were obtained, he is now allowed, in England, in an action at law, to plead the facts entitling him to such relief.190 But an equitable plea is only allowed where full justice can be done in a court of law in the suit pending.191 After such plea, and an adverse verdict upon it, the defendant cannot have relief on the same grounds in equity.19

183 Hentig v. Sweet, 27 Kan. 172.

184 Garrison v. Cobb, 106 Ind. 245, 6 N. E. 332. 185 Wilson v. Coolidge, 42 Mich. 112, 3 N. W. 285.

186 Anthony v. Valentine, 130 Mass. 119.

187 Glennie v. Imri, 3 Younge & C. Exch. 436.

188 Dougherty v. Scudder, 17 N. J. Eq. 248. Or against a bona fide pledgee for fraudulent diversion by the payee. Bond v. Wiltse, 12 Wis. 683.

189 Farrington v. Bank, 24 Barb. (N. Y.) 554.

190 17 & 18 Vict. c. 125, § 4.

191 Wodehouse v. Farebrother, 5 El. & Bl. 277; Wood v. Miners' Co., 17 C. B. 561; Drain v. Harvey, Id. 257.

192 Terrell v. Higgs, 26 Law J. Ch. 837. But see Byles, Bills, 421; Evans v. Bremridge, 25 Law J. Ch. 334; Prothero v. Phelps, Id. 105.

On the other hand, relief will not be refused in equity because the complainant has a technical defense at law on other grounds, such as the statute of limitations.1

193

Bill for Discovery.

§ 1690. A complainant might formerly file a bill in equity for discovery, in aid of an action at law, upon a bill of exchange or for its proceeds.194 And where discovery is necessary, as in the case of an alteration made by mistake, to sustain a recovery on the bill as originally drawn, a bill in equity will lie.195 And such action may be brought for a discovery and further remedy, although the remedy subsequent to discovery is perfect at law.196 A defendant in an action at law, seeking a discovery for the purpose of establishing a defense, should set out his expected defense.197 And a bill cannot be filed for discovery on a charge of crime.198 And the necessity for a bill of discovery is now obviated in England, as well as in many of the United States, by the power of interrogating the other party in a suit at law. 199

193 Hastings v. Belden, 55 Vt. 273.

194 Byles, Bills, 421; Thomas v. Tyler, 3 Younge & C. Exch. 255; Wilkinson v. L'Eaugier, 2 Younge & C. Exch. 366.

195 Lewis v. Schenck, 18 N. J. Eq. 459.

196 E. g. where the note is diverted from the payee's executor and indorsed by another person of the payee's name. Pearce v. Creswick, 2 Hare, 286. 197 Deas v. Harvie, 2 Barb. Ch. (N. Y.) 448.

198 Fleming v. St. John, 2 Sim. 181; Whitmore v. Francis, 8 Price, 616, 2 Sim. 182, note.

199 17 & 18 Vict. c. 125, § 51; Whateley v. Crowter, 5 El. & Bl. 709.

(2403)

§ 1691. The owner of a bill which is lost should at once give notice personally to the parties liable upon it, to prevent their taking it up without due inquiry.200 And some statutes require such notice to be given immediately.201 It is also required, in Louisiana, that proof be made, not only of the loss of a bill, but of public advertisement of the loss, in order to support a recovery on it as a lost instrument.202 And, if the note contains a written promise by the indorser to pay notwithstanding his discharge, the loss of the promise as well as of the note must be advertised.203 But it is, in general, sufficient if due advertisement appears from all the evidence in the case.204 And, if the bill has been absolutely destroyed, it is not necessary to allege an advertisement of the loss.205

200 Byles, Bills, 379; Chit. Bills, 289; 2 Daniel, Neg. Inst. 467; 1 Edw. Bills & N. § 434; 2 Pars. Notes & B. 255. And a verdict found against the loser on the ground that he gave no notice of the loss for more than a week will not be disturbed. Beckwith v. Corral, 3 Bing. 444, 11 Moore, 335.

201 ARGENTINE REPUBLIC (Code Com. art. 886); BELGIUM (Code Nap.); BRAZIL (Code Com. art. 389); CHILI (Code Com. art. 708); FRANCE (Code Com. art. 153); GENEVA (Code Nap.); GREECE (Code Nap.); HAYTI (Code Nap. § 150); ITALY (Code Com. art. 239); PERU (Code Com. art. 462); SAN DOMINGO (Code Nap.); TURKEY (Code Nap. § 110); URUGUAY (Code Com. art. 903).

202 Lewis v. Splane, 2 La. Ann. 754.

203 New Orleans & C. R. Co. v. Armstrong, 2 La. Ann. 829. 204 Peace v. Head, 12 La. Ann. 582.

205 Beebe v. McNeill, 8 La. Ann. 130.