sections in immediate connection therewith. That Court alone can give leave to make the process available either against the property or the goods of the debtor.

ERLE, C. J.-As the rule asks for costs, it must be discharged with Rule accordingly.

costs.

*HOGG v. SKEEN and VINCENT. Jan. 19. [*426

1. To an action by an endorsee against A. and B. as the acceptors of a bill of exchange, B. having suffered judgment by default, A. pleaded that he did not accept the bill. At the trial, it was proved that A. and B. were partners, and that the bill had been accepted by B. in fraud of the partnership articles, without the knowledge of A., and for his own private purposes:Held, that this cast upon the plaintiff the burthen of showing that he gave value for the bill. 2. Musgrave v. Drake, 5 Q. B. 185, Dav. & Mer. 347, distinguished.

THIS was an action by the endorsee of a bill of exchange against the acceptors.

Vincent, one of the defendants, suffered judgment by default. The other defendant, Skeen, pleaded that he did not accept the bill.

At the trial before Willes, J., at the sittings in London after last Trinity Term, it appeared that the bill was accepted by Vincent in the name of the firm, but without authority from his partner, and in violation of the terms of the articles of partnership, which were produced. There was no evidence that the plaintiff had notice of the partnership deed or that the bill was not accepted for the purposes of the firm and the only evidence that he gave value for the bill, was, the statement of his attorney that he gave Vincent a check for the amount of the bill (which was 387. 17s. 6d.) less 15s. for discount. The check, however, was not produced; and the plaintiff was not present to explain the transaction. It did not appear that the plaintiff had ever had any other dealing with the firm.

On the part of the plaintiff it was submitted, that, to negative his right to recover upon the bill, it was incumbent on the defendant to show affirmatively that the plaintiff knew, or had reason to suspect, that it was drawn in fraud of the partnership, and that he took it without value.

The learned Judge left it to the jury to say whether or not the plaintiff had given value for the bill. They found for the defendant.

C. Pollock, in pursuance of leave reserved to him at the trial, subject to the condition that the matter *should not go beyond this Court, in Michaelmas Term last, obtained a rule to show cause [*427 why the verdict should not be entered for the plaintiff, on the ground that, there being no evidence as to notice to the plaintiff or want of consideration, the plaintiff was entitled to the verdict; or for a new trial, on the ground that the verdict was against the evidence. He referred to Musgrave v. Drake, 5 Q. B. 185, Dav. & Mer. 347.

Griffits now showed cause.-It is clear that Vincent had no right to accept bills in violation of the partnership deed: and the question whether the plaintiff had given value was a question for the jury, and that is disposed of by their finding. On the subject of notice, it is laid down in Byles on Bills, 8th edit. 113, that "a wilful and fraudulent abstinence from inquiry into the circumstances (and it has even been said by the Court of Queen's Bench that gross negligence may be

evidence of fraud-Goodman v. Harvey, 4 Ad. & E. 870 (E. C. L. R. vol. 31), 6 N. & M. 372 (E. C. L. R. vol. 36), where they are known to be such as to invite inquiry, will (if a jury think that the abstinence from inquiry arose from a belief or suspicion that inquiry would disclose a vice in the bill) amount to general or implicit notice,"-citing Oakley v. Ooddeen, Guild. C. P. Nov. 1861, Jones v. Smith, 1 Hare 55, Ware v. Lord Egmont, 4 De Gex, M'N. & G. 473, and The Attorney General v. Stephens, 6 De Gex, M'N. & G. 111. [KEATING, J.-That question does not arise here. The jury have negatived value. ERLE, Ĉ. J.-The bill is shown to be tainted with illegality: and the jury have found that the plaintiff gave no value. We must hear what can be said in support of the rule.

C. Pollock. The acceptance was proved: and the plaintiff's attorney proved that a check was given for the amount of the bill less the discount. On the *part of the defendant, it was proved that the *428] acceptance of the bill by Vincent was in fraud of the partnership articles: but there was no evidence upon the defendant's case of the circumstances under which the plaintiff received the bill. Musgrave v. Drake is precisely in point. That was an action by an endorsee against the acceptors of a bill of exchange. One of the defendants suffered judgment by default. The others pleaded that they did not accept. It was proved that all the defendants were partners, and that the defendant who had suffered judgment by default had accepted the bill in the name of the firm, in fraud of the partnership, and not for partnership purposes: and it was held that such proof, without evidence of knowledge on the part of the plaintiff, did not, under this issue, oblige the plaintiff to prove the circumstances under which the bill was endorsed to him. In giving the judgment of the Court, Lord Denman said: "We have taken pains to ascertain what, as understood in the other Courts, would be the course at Nisi Prius on the trial of such an issue as this. We find that the other Courts agree in our view; which is this. Where issue is joined on a plea of non accepit, and the proof offered of the acceptance, is, the signature of the partner competent to bind the firm, then, though the defendants show that this signature was a fraudulent act on the part of such partner, yet, if the proof does not affect the plaintiff with knowledge of the fraud, that does not put the plaintiff to an answer, nor make it necessary for him to give any explanation or account of the transaction." A distinction is there made between a transaction which is altogether fraudulent, and an acceptance which is a violation of the contract of partnership. [WILLES, J.-The case turned upon a point of pleading: no question was reserved. KEATING, J.-In Byles on *429] Bills, 44, note (u), it is said that *"the case of Grant v. Hawkes, Chitty on Bills (10th edit.) 42, does not appear to have been brought to the notice of the Court."] Grant v. Hawkes is only to be found in Chitty on Bills, and as Byles, J., observes, it is distinguishable. The question as to the amount of evidence required to put the plaintiff to proof that he has given value for the bill, was much discussed in Smith v. Braine, 16 Q. B. 244 (E. C. L. R. vol. 71). But here the acceptance was in the ordinary name of the firm; and there was nothing upon the face of it to excite suspicion. Then, as to the evidence. All that the defendant proved, was that the bill was accepted in violation of the partnership articles entered into between.

him and Vincent and without his consent. There was nothing to show that the plaintiff took it out of the ordinary course of business. [WILLES, J.-It did not appear that the plaintiff had had any previous dealings with the firm. Unless he showed that he had given value for the bill, therefore, he could have no title.] The only defect in the plaintiff's case was, that he had not the check in Court which his attorney swore was given for the bill. That clearly was not enough to justify the jury in coming to a conclusion which almost amounts to a perverse verdict.

ERLE, C. J.-I am of opinion that this rule should be discharged. The action is brought by the holder of a bill of exchange against the acceptors: and there is a plea of non accepit by one of the defendants; the other having suffered judgment by default. The evidence was, that Skeen and Vincent were partners, and that the bill in question was, in fraud of the partnership articles, accepted by Vincent in the name of the firm, and not for partnership purposes. The question is whether that cast upon the plaintiff the burthen of proving that he had given value for the bill. I consider it to have been established by a long course of precedents, that, on proof being given [*430 that the bill is tainted with fraud in its inception, the burthen is thrown upon the party who seeks to enforce payment, to show that he gave value for the bill. And this I consider to be a most salutary rule, for the prevention of fraud and wrong against an innocent party. Mr. Pollock has relied on the case of Musgrave v. Drake, 5 Q. B. 185 (E. C. L. R. vol. 48), Dav. & Mer. 347, where the bill was tainted with this particular description of fraud. There the action was, as here, by the endorsee against the acceptors, and, under a plea of non accepit, it was proved that the defendants were partners, and that one of them (who had suffered judgment by default) had accepted the bill in the name of the firm, in fraud of the partnership deed, and not for partnership purposes: and the Court of Queen's Bench held that such proof, without evidence of knowledge on the part of the plaintiff, did not, under the issue on non accepit, oblige the plaintiff to prove the circumstances under which the bill was endorsed to him. The judgment, however, proceeds entirely on the effect of that plea: the Court do not affect to raise a doubt as to that which I have stated to be the rule of law upon the subject. At that period, there had been great variation of opinion amongst the Judges as to what was put in issue by that particular form of plea: and the judg ment was not properly the judgment of the Court of Queen's Bench. It begins with a recital of a talk with the other Judges: and we know from experience that on such casual conversations with reference to some particular matter, there is always great danger of the real point in issue being lost sight of. Speaking for myself, I must say I should have placed more reliance on that case if it had been the unassisted judgment of the Court of Queen's Bench. Lord Denman gives the result of the conference thus:-*"Where issue is joined on a [*431 plea of non accepit, and the proof offered of the acceptance, is, the signature of the partner competent to bind the firm," which is not the case here," then, though the defendants show that this signature was a fraudulent act on the part of such partner, yet, if the proof does not affect the plaintiff with knowledge of the fraud, that does not put the

plaintiff to an answer, nor make it necessary for him to give any explanation or account of the transaction." The effect of that judg ment, as my Brother Willes suggested, is, merely to settle the point of pleading, and not in any way to interfere with the ordinary rule of law, that, wherever it is shown that the instrument is tainted with fraud, the party who seeks to enforce his remedy upon it must show that he received it for value. As to that part of the rule which seeks to set aside the verdict on the ground that it is against the evidence, having consulted my Brother Willes, I find that he is not dissatisfied. That part of the rule, therefore, also fails.

WILLIAMS, J.-The principles which affect this case, as to the necessity for the plaintiff's showing that he gave value for the bill, where the defendant has made out a primâ facie case of fraud in its inception, are so familiar that it was impossible for Mr. Pollock to have made any show of argument, but for the case of Musgrave v. Drake, 5 Q. B. 185, Dav. & Mer. 347. I entirely agree with my Lord that the question there involved was a question of pleading only. The Court assume, that, if the plaintiff had no knowledge of the signature being in fraud of the other partners, the fact of his having given value for the bill was not material, not being involved in the issue on non accepit; but they seem to say it would have been otherwise if the plaintiff had been affected with the knowledge of the *fraud, *132] because, under those circumstances, one partner has not primâ facie authority to accept bills in the name of the firm, as against one who has notice or knowledge of the fraud. No question, however, arises here as to the form of the pleadings.

KEATING, J.-I am of the same opinion, and for the same reasons. WILLES, J.-I am of the same opinion. As to the case of Musgrave v. Drake, 5 Q. B. 185, Dav. & Mer. 347, I think it right to say that I think it distinguishable from the present case. That appears to have been the simple case of a partner who primâ facie had authority to accept bills in the name of the firm of which he was a member, accepting a bill in the partnership name in fraud of his partners and for his own private purposes: and I cannot help thinking that the Court of Queen's Bench, in its desire to narrow the issue, for the sake of convenience, omitted to consider what would be the effect of their decision upon the general law upon the subject. I am satisfied that that Court would not have come to the conclusion they there did in a case like this, where the partner who accepted the bill in the name of the firm never could have had authority so to accept. But, I disclaim proceeding upon that distinction, because, treating Musgrave v. Drake as a decision upon a question of pleading, I cannot assent to the principle there laid down. The reason why, in the case of a partnership, a party is bound by an acceptance which is not his own, but that of his copartner, is a reason founded on the law of estoppel in pais. Having consented to the exercise by another of an apparent authority to accept bills so as to bind him (even though such authority has been fraudulently exercised), as against a person who has taken the bill bona fide and without notice of the fraud, the acceptor is *433] estopped from denying the acceptance. Therefore, on a plea denying the acceptance, it seems to me to be a contradiction to say that you may go into the question whether he is estopped or not by reason of

the holder of the bill being a holder without notice, but that you cannot go into the question of estoppel by reason of the party having given no value for the bill. The defendant must, I think, be at liberty to go into the one question, if he may into the other. Musgrave v. Drake shows that he may go into the one inquiry. If that be so, the question. resolves itself into a question upon whom is cast the burthen of proof. I would only add a reference to Byles on Bills, where the learned author lays it down with his usual distinctness, that, where the bill is infected with fraud or illegality in its inception, the holder must show that he gave value. As to the burthen of proof, the rule is laid down clearly at p. 111:As soon as it appears to the jury by the defendant's evidence that the bill was originally infected with fraud or illegality, then it is plain that the original holder's title being destroyed, the title of every subsequent holder which reposes on that foundation and no other, falls with it. Hence, it appears that the plaintiff, the transferree, can then have no title till he shows that he or some other holder under whom he claims gave value for the bill,"-citing Smith v. Martin, 9 M. & W. 304,† Bailey v. Bidwell, 13 M. &. W. 73,† and Harvey v. Towers, 6 Exch. 656.† "Therefore, where the question is thus raised whether the transferree be a holder for value, it is not for the defendant to prove the absence of value, but for the plaintiff, the transferree, to prove value given either by himself or by some under whom he claims." I would also refer to the way in which the learned author deals with the case of Musgrave v. Drake. At p. 44, he says: "The proper *mode of raising the defence of unauthorized and frau[*434 dulent acceptance by one partner, and notice to the plaintiff, is, by a traverse of the acceptance,-Jones v. Corbett, 2 Q. B. 828; Grout v. Enthoven, 1 Exch. 382.† If the defendants show that the bill was circulated in violation of partnership articles, it has been held that they will thereby put the plaintiff to prove that he gave value for it,-Grant v. Hawkes, Chitty 42. But it seems from a recent decision in the Court of Queen's Bench, after conference with the Judges of the other Courts, that, in order to maintain the action, where it appears that one partner has accepted in fraud of his copartners, where issue is taken on the acceptance, it is not necessary for the plaintiff to prove that he gave value, but the defendants must affect the plaintiff with notice of the fraud, or otherwise impeach his title,"-Musgrave v. Drake. And in the note he adds: "The case of Grant v. Hawkes, however, does not appear to have been brought to the notice of the Court, though, perhaps, distinguishable." The learned author puts the words "where issue is taken on the acceptance" in italics, from which it appears that he treats it as a question of pleading, or as an exception to the general rule, by reason of its being narrowed by the form of the issue. As to the other part of the rule, it was entirely a matter for the consideration of the jury: and I cannot say that I am dissatisfied with the verdict.

Rule discharged.