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§ 53

Consider

ation.

signed by him after maturity, without any consideration moving directly to such third person, or any agreement to extend the time for payment, such third person is not liable thereon: Ryan v. McKerral, 15 O. R. 460 (1888); Stack v. Dowd, 15 Q. L. R. 331 (1907).

17. Notes given to an insurance company for premiums subsequently earned, are given for a valuable consideration and are valid: Wood v. Shaw, 3 L. C. J. 169 (1858).

18. A promissory note was given as an indemnity to a party assuming a liability for a third person. Held, that the payee could sue on the note as soon as troubled, and before paying the debt for which he had become liable: Perry v. Milne, 5 L. C. J. 121 (1861).

19. A dying man signed several cheques payable to the order of certain friends, and delivered them to his private secretary for the respective payees as parting gifts. He died before they were presented. Held, that the payees were entitled to payment of the cheques Colvile v. Flanagan, 8 L. C. J. 225 (1864).

20. A note given to a new firm, after the dissolution of the old, in satisfaction of a guarantee given to the old for advances made by them, was held to have been given in error and without consideration, and therefore void: Henault v. Thomas, 1 R. L. 706 (1868).

21. Where a tenant was partly deprived of the use of the premises by works carried on by the corporation of Quebec, but at the end of the year gave his landlord a note for the full amount of the rent, there was sufficient consideration for the note, although the landlord was suing the corporation for damages to the leased premises: Motz v. Holiwell, 1 Q. L. R. 64 (1875).

22. On a sale of the stock of an insolvent made by the assignee, nominally to a third party, who in reality purchased for the insolvent, he accepted in part payment a note of the latter; held, that there was consideration for the note: Lemieux v. Bourassa, 1 Dorion, 305 (1881).

23. A promissory note given for consideration erroneously believed to be good in law, is not valid: Riel v. McEwen, Ramsay. A. C. 82 (1881).

24. Where an I. O. U., made to represent the value of a share in a business purchased by the plaintiff, was indorsed and transferred to the plaintiff by the vendor, the plaintiff could not sue the vendor thereon, while at the same time he retained the share acquired by him in the business, which was represented by the I. O. U.; Cridiford v. Bulmer, M. L. R. 4 Q. B. 293 (1886).

25. A note given for a patent which is not a new and useful invention is void for want of consideration: Almour v. Cable, Ramsay, A. C. 87 (1886).

26. Want of consideration being established and there being no § 53 evidence of the fact of a gift to bring the case within Colvile v. Flanagan, supra, No. 19, the note was held void: Molleur v. Roy, Consider31 L. C. J. 99 (1887).

27. A draft made by B. & Co. through their agent D., given to a bank in payment of another draft by W. on S. in favour of D. (subsequently dishonored by S.) discounted by the bank to pay a note due by reason of a transaction by which B. & Co. never profited, and of which they were ignorant, is without consideration, and no action lies against B. & Co.: Union Bank v. Bryant, 17 Q. L. R. 93 (1891).

28. A note for the premium of a fire policy under the mistaken idea that the maker was the owner of the property, is without consideration, the policy itself being null: Assurance Mutuelle v. Lemay, Q. R. 12 S. C. 232 (1896).

29. Notes given in part for the costs of a qui tam action settled without the consent of the Crown or the Court, are void pro tanto, the consideration being illegal: Laprès v. Massé, Q. R. 19 S. C. 275 (1901).

30. Where a note was given as part payment of a purchase of land under a verbal agreement of sale, the plaintiff cannot recover for want of consideration: Black v. Gesner, 3 N. S. (2 Thomson) 157 (1847).

31. Where a note was given on a verbal purchase of land of which the defendant took possession, held to be for a good consideration: Gray v. Whitman, 3 N. S. (2 Thomson) 157 (1857).

32. A purely moral consideration (affection and regard) does not constitute sufficient consideration for a promissory note: Baker v. Read, 7 N. S. (1 G. & O.) 199 (1868); Holliday v. Atkinson, 5 B. & C. 501 (1826).

33. A note was given in part payment of land when the deed was executed by plaintiff and his wife, and delivered; but plaintiff's wife was to go before a J. P. to be examined separate and apart from her husband, which she refused to do. Held, that the delivery of the deed was a good consideration, and parol evidence of an agreement to vary the terms of the note should not have been received: Graham v. Graham, 11 N. S. (2 R. & C.) 265 (1877).

34. C. made an assignment under the Insolvent Act. One of the debts due him was by a woman whom he subsequently married. After her marriage the assignee induced her to give a note, the husband signing as a surety: Held, that there was no consideration for her giving the note: McDaniel v. McMillan, 11 N. S. (2 R. & C.) 405 (1876).

35. A deed of land was made by a father to one of his sons, who, at the father's request, gave his promissory notes payable to the other brothers respectively, the arrangement being for the purpose of distributing the estate of the father without a will.

ation.

53

Consider. ation.

Held, that the payees could not recover on the notes for want of consideration moving from them to the maker: Forsyth v. Forsyth, 13 N. S. (1 R. & G.) 380 (1880).

36. A., who was indebted to plaintiffs, sold defendant a threshing machine, and took his note, which at A.'s request was made payable to plaintiffs. A. sent plaintiffs the note, but they knew nothing of the transaction for which it was given. Held, that they could not recover on the note for want of consideration moving from them to defendant: Cossitt v. Cook, 17 N. S. (5 R. & G.) 84 (1884).

37. An agreement to forbear for thirty days is a good consideration for an acceptance: Lyons v. Donkin, 23 N. S. 258 (1891). See also Hubley v. Morash, 27 N. S. 281 (1894), and McGregor v. McKenzie, 30 N. S. 214 (1897).

38. A promissory note given in satisfaction of a claim for damages for an assault on plaintiff's minor son is binding: Hubley v. Morash, 27 N. S. 281 (1894).

39. Defendant gave his note to the city for arrears of rent on condition of his getting a lease on the same terms as the previous lessee. There was no power to lease except by auction. Held, that the defendant was not liable on the note: City of Fredericton v. Lucas, 8 N. B. (3 Allen) 583 (1857).

40. A note given to a brother of a deceased intestate by the person who received the estate, on the ground that if the deceased had left a will, he would have left his brother the amount of the note, is void for want of consideration: McCarroll v. Reardon, 9 N. B. (4 Allen) 261 (1859).

41. A note given by A. to his son-in-law B. by way of advancement to B.'s wife held void for want of consideration: Thomas v. McLeod, 12 N. B. (1 Han.) 588 (1869).

42. A note was given by a son in payment of his father's debt. Held, that it was not invalid for want of consideration: Street v. Quinton, 18 N. B. 567 (1879).

43. Release from imprisonment for non-payment of a fine and costs is a good consideration for a note for the amount of the fine and costs: Proctor v. Parker, 12 Man. 528 (1899).

44. Cross acceptances for mutual accommodation are respectively considerations for each other: Cowley v. Dunlop, 7 T. R. 565 (1798); Newman v. Frost, 52 N. Y. 424 (1873); Milius v. Kauffman, 127 N. Y. St. 669 (1905). Also an exchange of cheques : Matlock v. Scheuerman, 93 Pac. R. (Oregon) 823 (1908).

45. A note for the price of land may be binding on the maker, although the contract is not binding on account of the Statute of Frauds: Jones v. Jones, 6 M. & W. 84 (1840).

46. A debt represented to be due, but not really due, is not a sufficient consideration: Southall v. Rigg, 11 C. B. 418 (1851); nor is the giving up of a void note: Coward v. Hughes, 1 K. & J. 443 (1855).

§ 53

47. A promise to give up a bill thought to be invalid is a sufficient consideration: Smith v. Smith, 13 C. B. N. S. 418 (1863). So is the bona fide compromise of a disputed claim, although it Considerafterwards appears that the claim was wholly unfounded: Callisher ation. v. Bischoffsheim, L. R. 5 Q. B. 449 (1870).

48. The voluntary gift of a sum of money is not a valid consideration: Hill v. Wilson, L. R. 8 Ch. at p. 894 (1873).

49. An agreement to pay a debt within three years is no consideration for giving a note payable on demand: Stott v. Fairlamb, 52 L. J. Q. B. 420, per Denman, J. (1883).

50. Actual forbearance from suing a third party is a good consideration for a note, although there was no contract to forbear: Crears v. Hunter, 19 Q. B. D. 341 (1887). Followed in Creelman v. Stewart, 28 N. S. 185 (1896).

51. The manager of a bank stole certain securities which he negotiated. He subsequently obtained them from the purchasers by fraud and returned them to the bank. Held, that the bank was a holder for value: London and County Bank v. London and River Plate Bank. 21 Q. B. D. 535 (1888).

52. A note made merely in renewal of a prior note which was without consideration is void for want of consideration: Edwards v. Chancellor, 52 J. P. 454 (1888).

53. A promissory note given for a mere moral obligation is not binding, but where the maker had made payments thereon, and afterwards became a lunatic, the Court recognized it as a debt of honor to be paid out of the estate: In re Whittaker, 42 Ch. D. 119 (1889).

54. Where a promise to pay £200 was supposed to be enforceable though not in fact so, a promissory note given to postpone payment of such sum was given for a good consideration: Kingsford v. Oxenden, 7 T. L. R. 565 (1891).

55. An undertaking by a bank to give a customer credit on his general account for a cheque deposited, is a sufficient consideration to constitute the bank a holder for value: Royal Bank v. Tottenham, [1894] 2 Q. B. 715.

56. A pre-existing debt is a good consideration for a promissory note payable on demand for a larger amount than the debt due: Haslam v. Williams, 14 N. S. W. R. (Law) 110 (1893).

57. The accomplishment of the objects of an educational institution held to be sufficient consideration for a note: Wesleyan Seminary v. Fisher, 4 Mich. 515 (1857); Roche v. Roanoke Seminary, 56 Ind. 198 (1877).

58. A note given in settlement of a civil suit for damages against the maker's brother, is founded upon sufficient consideration: Smith v. Richards, 29 Conn. 232 (1860).

§ 53

Consideration.

59. When A. is indebted to B. and B. to C., and A. gives his note, in extinguishment of both debts, to C., there is sufficient consideration: Outhwite v. Porter, 13 Mich. 533 (1865).

60. An agreement not to bring suit on the debt or on other liability of one person is a valid consideration for the commercial paper of another: Randolph v. Peck, 1 Hun 138 (1874); Abbott v. Fisher. 124 Mass. 414 (1878); Milius v. Kauffman, 104 App. Div. 442, 127 N. Y. St. 669 (1905).

61. Subscriptions for stock in an incorporated company are a sufficient consideration for a note: Chetlain v. Republic Life Ins. Co., 86 Ill. 220 (1877).

62. Mere forbearance, without an agreement to forbear, is not a sufficient consideration for a note: Manter v. Churchill, 127 Mass. 31 (1870); Smith v. Bibber, 82 Me. 34 (1889). But see No. 50, supra.

63. The compromise of a claim, which the party putting it forward knew was unfounded and illegal, is not a sufficient consideration: Ormsbee v. Howe, 54 Vt. 182 (1881).

64. The gift of the donor's own note as a donatio mortis causa is not valid as his representatives may prove that it was without consideration: Baskett v. Haskell, 107 U. S. 602 (1882).

65. The consideration for the acceptance of drafts which were given for the future delivery of coal, does not fail by reason of the non-delivery thereof, since a promise to deliver is a sufficient consideration for the acceptance: Tradesmen's Nat. Bank v. Curtis. 167 N. Y. 194 (1901).

66. An antecedent debt is value even though the bill is transferred merely as collateral security for such debt: Payne v. Zell, 98 Va. 294, 36 S. E. R. 379 (1900).

Total Failure of Consideration.-Every party whose signature appears on a bill or note is presumed to have become a party to it for valuable consideration, but he may prove the contrary. If a total failure of consideration be proved, it is a good defence if the plaintiff and defendant are immediate parties, that is, if they contracted directly with each other, or even if they are remote parties, provided value has not been given for the bill. A total failure of consideration has the same effect upon the liability of the parties as an original want of consideration.

ILLUSTRATIONS.

1. A. being seized in fee of lands, made jointly with B. a lease to C., taking notes from C. for the rent. The day after the execution of the lease A. died intestate, and then B. died and his executors sued C. on the notes. Held, that they could not recover, the consideration having wholly failed: Merwin v. Gates, 1 Rob. & Jos. Dig. 529 (1837).

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