E. T. 1846. Bramah v. Roberts (a); Lewis v. Reilly (b); Musgrave v. Drake (c); HOWARD ข. SHAW. Assuming that there was evidence to affect Levason with fraud in the formation of the Company and sale of the mines, still there was no evidence either to show that the defendant joined the Company or became a director, or passed his security to Levason in consequence of any fraudulent misrepresentation of Levason or any other person; and no evidence that he sustained any injury or damage thereby. General evidence of fraud goes for nothing. To constitute a valid defence in a Court of Law, it must be proved that the contract sought to be enforced was induced by a fraudulent representation, to which the plaintiff was a party or privy: 1 Storey's Equity, 165; Lessee Blackwood v. Gregg (m); Stevens v. Webb (n); Small v. Attwood (o); Mason v. Ditchbourne (p); Pothier by Evans, 19; Phillips v. Duke of Buckingham (q); Lowndes v. Lane (r). The defendant chose to judge for himself, had full knowledge or means of knowledge, and after that did not rescind the contract, but persevered in it, retained the property, derived a benefit from it, put it out of his power to return it and place the parties in statu quo; he is not, therefore, now entitled to rescind that contract for fraud; it is too late. It is a common error to suppose that a fraudulent contract is void; it is only voidable at the election of the person sought to be charged, and may be adopted or confirmed by him: Archer v. Bamford (s); Campbell v. Fleming (t); 1 Sug. V. & P. 390; Lovell v. Hicks (u); Fitzroy v. Gwillim (v); Cooper v. Garbett (w). The slightest consideration is sufficient in a Court of Law to sustain a negociable instrument, even where it is palpable to common HOWARD บ. SHAW. sense that none substantially exists; the party is left to his remedy E. T. 1846. elsewhere: Grant v. Welchman (a); Trickey v. Larne (b); Pillans Queen's Bench. v. Van Mierop (c); Poplewell v. Wilson (d); Quick v. Copleton (e). Even assuming fraud to the extent alleged, the notes are not without consideration. Levason had commenced actions of covenant against the grantees in the deeds of the 28th of February and 19th of November 1839, who were the trustees of the Company, to recover £15,000; the defendants in those actions could have no defence at law; and the defendant having executed the partnership deed, is bound at law by all its provisions. By that deed the Company bind themselves to indemnify the trustees and directors to the fullest extent out of the funds and property of the Company; it authorises the directors to carry out, enter into, ratify and confirm such contracts; and authorises them to pay out of the funds of the Company all costs incurred in any action on account of any contract entered into on behalf of the Company, or concerning their rights or interests. The defendant being interested in upholding the credit of the Company, in respect of his shares and office of director, and relying on the joint liability of his co-directors who joined him in the security, passed the notes in question as a compromise, by which Levason's demand was reduced, time gained, the actions at law stopped, and their probable costs avoided. Any one of these circumstances would constitute a sufficient consideration: Barber v. Fox (f); Coombs v. Ingram (g); Ridout v. Bristow (h); Sowerby v. Butcher (i); Edwards v. Bough (k); Smith v. Holmes (1); Longridge v. Darville (m); Bidwell v. Catton (n). A great mass of inadmissible evidence was received at the trial, consisting of conversations and admissions written, and verbal, by Levason and other persons, without a foundation having been laid by identifying Levason with the plaintiff. Strictly speaking, although sufficient evidence of the latter might have been ultimately given, we would be entitled to succeed in many of the exceptions; as, if when the exception is taken and the decision of the Judge called for, the foundation has not yet been laid, the evidence ought in strictness to be rejected. However, in this instance the defendant closed his HOWARD บ. E. T. 1846. case, without justifying, by subsequent evidence, the admissibility of Queen's Bench. his precedent evidence; such admissions therefore were, under the circumstances, wholly inadmissible, as amounting to no more than hearsay: Borough v. White (a); Beauchamp v. Parry (b); Phillips v. Cole (c); Bassett v. Dodgin (d); Peckham v. Potter (e); Spargo v. Brown (f). SHAW. Lastly, at the close of the plaintiff's rebutting case, there was no evidence to warrant the Judge leaving a question of fraud or mala fides in the plaintiff, to the jury. The sole question which should then have been left was, that of the consideration given by the plaintiff, with an explanation of the law as to the immateriality of the question of consideration. We submit the exceptions should be allowed and a venire de novo awarded. F. A. Fitzgerald and R. Holmes, contra. No action can be maintained on a fraudulent contract: Hill v. Gray (g); and if security be given it does not alter the law in that respect: Seddons v. Stratford (h); Lewis v. Cosgrave (i); Solomon v. Turner (k); Fleming v. Simpson (1). Where a party is induced to enter into a contract by misrepresentation, he may afterwards renounce it: Dobell v. Stephens (m); Early v. Garnett (n); Robinson v. Musgrave (o); Duke of Norfolk v. Worthy (p); Flight v. Booth (q); Haigh v. Delacour (r); Sugd. Vend. & Pur. 271; Pilmore v. Hood (s); Schneider v. Heath (t); Adamson v. Jarvis (u); Bell v. Gardner (v). Napier, in reply. The possession of a bill is good primâ facie title, and this is essential in a mercantile community. The law on this is now settled: Arbouin v. Anderson (w). Even notice of its being an accomodation bill only requires the holder to produce it; the presumption is, that it is for value: Governor and Company of the Bank of Ireland v. Beresford (a): but where there has been fraud in obtaining it, and it is shown that the indorsee had notice thereof at the time of the indorsement, then the presumption is rebutted: Brown v. Philpot (b); Bramah v. Roberts (c); Smith v. Martin (d); Uther v. Rich(e); when the fraud charged amounts to conspiracy, it must be proved as in a criminal prosecution: Thurtell v. Beaumont (f); Chalmers v. Shackell (g); the character of the defence shows that the defendant's case must fail unless plaintiff be involved as a co-conspirator; then the case of Phillips v. Cole (h) is an a fortiori one. The notes here were securities given to liquidate a demand, and there was no misrepresentation proved to have been made by Levason: Baker v. Walker (i); Longridge v. Dorville (k). On the question of fraud: Mitford Eq. Plead. 128, (4th ed.); Mason v. Ditchburne (l); Attwood v. Small (m): and where the contract is not repudiated, partial failure from fraud is no defence: Archer v. Bamford (n). Cur. ad. vult. E. T. 1846. HOWARD บ. SHAW. BLACKBURNE, C. J., delivered judgment. This is an action of assumpsit by the plaintiff, as indorsee of two promissory notes against the maker; each of those notes bears date the 20th of April 1841; one is the joint and several note of the defendant, and three other persons, namely, George Taylor, William Chappellow and John Elliott Hyndman; the other is the joint and several note of the defendant, of William Hodges, John Elliott Hyndman and Thomas Clouston, and both are payable to Lewis Levason, who indorsed them to the plaintiff. The makers of these notes were, at the time they bear date, directors of a joint stock Company, called the Talacre Coal Company, under a deed of copartnership bearing date the 3rd day of October, 1839. The plaintiff having rested on the proof of endorsement to him by Lewis Levason, proved a case which entitled him to a verdict, unless the defendant succeeded in impeaching that title. The defendant contends that he has sustained that impeachment, by evidence that April 28. HOWARD v. SHAW. E. T. 1846. there was no consideration given for these notes that they were Queen's Bench. obtained by fraud, and that he has disproved the consideration for which they were endorsed to the plaintiff. On the other hand, the plaintiff insists that those notes were made to Lewis Levason for valuable consideration; that no fraud is shown to have been practised by him in obtaining them; and further, that even though they were made without consideration, or were obtained by Levason by fraud, yet that the defendant having failed to affect him with notice of the facts invalidating the securities or implicating him in the fraud, he is still, as indorsee, entitled to recover, and was not bound to give any evidence of the consideration given for them. This short outline is sufficient to explain the course which I intend to pursue; which is, first to consider whether these notes were made without consideration, or obtained by means of any fraud, of which a Court of Law can take cognizance—in a word, to treat the case as if Lewis Levason was plaintiff; and secondly, to consider whether though Levason could not recover, the plaintiff has not a right to do so. The plaintiff's Counsel having, at the close of the defendant's case, required the learned Judge to direct the jury to find for the plaintiff for the various reasons stated, has in effect excepted to the opinion that there was evidence which, if believed, would warrant a verdict for the defendant; and it must be confessed, that if the matters so distinctly stated by the learned Judge in his charge were properly in issue, and supported by legal evidence, the charge would have been perfectly right, and the exception untenable. The grounds of the impeachment, as submitted to the jury, appear to be, that Levason, the payee of the notes, with a number of other persons, conspired to impose on the public by inducing the formation of a joint stock Company for the working of the Talacre coal mines, and to obtain for Levason a large sum of money for this utterly worthless property; that the defendant was not only duped and deceived by the fraud and falsehood of these conspirators, and so induced to become a member of the Company, but that in furtherance of the same plan, and by the same means, he was induced to sign these notes, for which he received no consideration, and which he signed under a false representation, that the Company of which he was a member was liable to pay Levason the purchase-money of the mines. The general exception, which insists that there was a total absence of evidence in support of this defence, involves in it an objection to the whole of the charge, was preceeded by several others, by which the plaintiff objected to the reception of evidence which was offered and received on the part of the defendant. |