CONSIDERATION FOR BILL OF EX CHANGE. There must be a valuable consideration for a contract not under seal, though it is not necessary that the considera tion be stated in writing.
The Bills of Exchange Act, 1882, Section 3, s.s. 4, enacts that a bill is not invalid by reason " that it does not specify the value given, or that any value has been given therefor." The words " for value received " are very commonly used as the last words in the body of a bill of exchange, but a bill is quite valid without any such words.
The word " sterling " was at one time usually written after the amount, but it is now very rarely met with on inland bills.
By Section 27 : " I Valuable consideration for a bill may be constituted by " (a) Any consideration sufficient to support a simple con tract ; " (b) An antecedent debt or lia bility. Such a debt or liability is deemed valuable consideration whether the bill is payable on demand or at a future time." Where a person signs a bill as drawer, acceptor, or indorser, without receiving value therefor, he is an accommodation party. (See ACCONIMODATION BILL.) Where a cheque is given as a gift, the receiver cannot sue the giver thereon, because of the absence of consideration.
" Natural love and affection," though a good consideration in a contract under seal, is not sufficient to support a simple contract, as in a bill of exchange. The consideration must have some actual value, though the extent of that value may, in reality, be very small.
Mr. Justice Lush said (in Currie v. ?Visa,
1875, L.R. 10 Ex. 162) : " A valuable con sideration in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsi bility given, suffered, or undertaken by the other." The title of a person who negotiates a bill is defective if he obtained the bill for an illegal consideration (Section 29, s.s. 2).
Where a consideration is affected with fraud or illegality, that would form a good defence against an " immediate party " see IMMEDIATE PARTIES), but not against a remote party who is a holder in due course, that is, one who took the bill fo value, in good faith and without knowledge of any defect in the tith'. (See HOLDER IN DUE COURSE.) A bill, or cheque. given for a wagering or gaming debt, cannot be sued upon by a holder who took it with knowledge of the illegal consideration, but a holder in due course. who took it without such knowledge, can sue upon it.
It has also been decided in 3loulis v. Owen (1907. 1 K.B. 746), that even when a cheque is drawn in a foreign country on a banker in this country, for a consideration which is legal in the country where it is drawn, but illegal in this country, the action on the cheque fails. This was a decision of the Court of Appeal, and Lord Justice Fletcher Moulton disagreed with the finding of the other two Lord Justices. (See BILL OF EXCHANGE.)