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valent for the promise made, showing that the promise is § 27. not made gratuitously ": Leake, p. 17. "A valuable consideration in the sense of the law, may consist either in some right, interest, profit, or benefit, accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered or undertaken by the other": Currie v. Misa, L. R. 10 Ex. 162 (1875). In the French law the In French word "cause," which takes the place of the English "consideration" has a wider meaning, and includes natural or moral obligations: Pothier on Obligations, Nos. 42, 43; Code Napoleon, Arts. 1108, 1131; 16 Laurent, 107-111; 24 Demolombe, p. 329. A mere moral obligation is not a sufficient consideration for a bill or note in England: Eastwood v. Kenyon, 11 A. & E. 438 (1840); but may be in Quebec: Lockerby v. O'Hara, Q. L. R. 7 S. C. 35 (1890).


The meaning of " sans cause seems in the French law to be confined to what in English law would be called total failure of consideration as distinguished from mere absence of consideration: 16 Laurent, 111-119; 24 Demolombe, p. 342. The civil code of Lower Canada has introduced the English "consideration" as a synonym for the French 66 cause." One of the requisites to the validity of a contract is, "a lawful cause or consideration": C. C. Art. 984. "A contract without a consideration, or with an unlawful consideration has no effect": C. C. Art. 989. The Privy Council has held in a case from Quebec, that there is no difference between French law and English law as to the necessity for a valuable consideration for the validity of a contract: McGreevy v. Russell, 56 L. T. N. S. 501 (1887).


As the subject of contract is within the jurisdiction of Provincial the local legislatures, the validity or invalidity of bills and notes on the question of consideration may vary in the different provinces, and where contracts on a bill or note, or rights in it, arise in more than one province, the application

§ 27. of the principles of international law will be required for their solution. See notes on sections 22 and 71.

“ (a) ”—“ An agreement containing a promise made by the one party, for a valid consideration, and agreed to by the other, creates a contract by force of the mere agreement without other formality. The contract so created is

a simple contract": Leake, p. 21.

"(b) "-Formerly in England it was doubted whether an antecedent debt was a valid consideration for a bill payable on demand, but it was settled in accordance with the rule laid down in this clause in Currie v. Misa, L. R. 10 Ex. 153 (1875).

For the law as to accommodation bills see section 28. As to bills tainted with illegal consideration, fraud, etc., see section 29, 8-8. 2.

Evidence as to consideration.-In Quebec under the code it was provided by article 2285, that when a bill or note contained the words " value received," value for the amount of it would be presumed to have been received on the bill or note and on the indorsements. The omission of these words did not render the instrument invalid, but threw upon the holder the onus of proving value: Duchesnay v. Evarts, 2 Rev. de Leg. 31 (1821); Hart v. Macpherson, Girouard, Lettres de Change, 66 (1848); Larocque v. Franklin Bank, 8 L. C. R. 328 (1858). These words were at one time considered necessary in England. In France the bill should state in what the value consists: Code de Com. Art. 110; but it has been held, that when a bill does not state the nature of the value, it is not on that account void, but the holder must prove what the value was: Cour de Cassation, 30th Aug., 1828.

Now every party whose signature appears on a bill or note is presumed to have become a party for value: sec

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tion 30. While oral evidence is not admissible to vary § 27.
the terms of the written contract between the parties, it is
admissible to impeach the consideration for the contract,
and notwithstanding the words "value received" or their
equivalent, the defendant may prove by parol the want or
failure of consideration, where, on the issues raised, that
would be a defence: Foster v. Jolly, 1 C. M. & R. at p. 708
(1835); Abrey v. Crux, L. R. 5 C. P. at p. 45 (1869);
Temple v. Jones, Ramsay A. C. 76 (1883); Taylor, § 1138.
See also notes on section 3, ante p. 51.


1. A debt due to a bankrupt estate is a good consideration for notes given to the trustees and assignees of the estate: Gates v. Crooks, Dra. 459 (1831).

2. A member of a joint stock company, not incorporated, lending, with the assent of the company, a sum of money out of the joint fund, to another member, and taking from him a note payable to himself individually, can recover on the note: Comer v. Thompson, 4 U. C. O. S. 256 (1836).

3. A guarantee endorsed on a note at the time of its execution in the following words: "We guarantee the payment of the written note," does not show a sufficient consideration for the promise, the case being within the Statute of Frauds: Lock v. Reid, 6 U. C. O. S. 295 (1842).

4. It is no defence to an action on a note to plead that it was given in payment of 200 hats and caps, and that they remained undelivered, without alleging that there was any default, neglect, or refusal on the part of the vendor: Anderson v. Jennings, 2 U. C. Q. B. 422 (1845).

5. Notes given to commissioners of a turnpike trust by the tenant, for rent on a lease beyond the powers of the commissioners cannot be collected, although the tenant was in possession for the full term of the lease: Ireland v. Guess, 3 U. C. Q. B. 220 (1847).

$ 27.

6. A note given by A. to B. for a debt due by C., upon a consideration of forbearance, and upon no privity shewn between A. and C., cannot be enforced: McGillivray v. Keefer, 4 U. C. Q. B. 456 (1848).

7. A defence that the note was made to the holder as a gratuity and that the maker never received any consideration for it, is good: Poulton v. Dolmage, 6 U. C. Q. B. 277 (1849).

8. A debt due by a third party, but not yet payable, may form a valid consideration for a note: Dickenson v. Clemow, 7 U. C. Q. B. 421 (1850).

9. A pre-existing debt is a good consideration in whole or in part for a note or bill: Gooderham v. Hutchison, 5 U. C. C. P. 241 (1856); Hillis v. Templeton, 7 U. C. L. J. 301 (1861); Evans v. Morley, 21 U. C. Q. B. 547 (1862); Canadian Bank of Commerce v. Gurley, 30 U. C. C. P. 583 (1880).

10. A note promising to pay to the Toronto Church Society or bearer £50 towards the support of a bishop to be appointed to a western diocese, held to be founded upon a sufficient consideration: Hammond v. Small, 16 U. C. Q. B. 371 (1858).

11. A note was made by the secretary of an insurance company in his own name for a loss, the policy being surrendered, and marked cancelled, and the note being payable three days after the loss would be payable according to the policy. Held, sufficient consideration: Armour v. Gates, 8 U. C. C. P. 548 (1859).

12. A pre-existing debt is a good consideration for a note, even although a mortgage on real estate had been taken to secure the same debt: Bank of Upper Canada v. Bartlett, 12 U. C. C. P. 238 (1862).

13. Defendant having endorsed a note for $1,250, to enable the maker to get as an additional advance the difference between that sum and the original loan of $918, advanced to him before the making of the note, which additional advance was, however, not made, it was held that defendant was not liable on the note for any sum: Greenwood v. Perry, 19 U. C. C. P. 403 (1869).

14. Value arising at any time during the currency of a note § 27. is sufficient: Blake v. Walsh, 29 U. C. Q. B. 541 (1870).

15. A note barred by the Statute of Limitations is a good consideration for a new note: Wright v. Wright, 6 Ont. P. R. 295 (1876).

16. A note payable on demand with interest held to be without consideration as to one of the makers, the note being for an old debt due by the other maker alone: Merchants' Bank v. Robinson: 8 Ont. P. R. 117 (1879).

17. When, after a note is completed, so far as the intention of the parties is concerned, it is signed by a third person, or is so 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).

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

19. 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).

20. 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: Colville v. Flanagan, 8 L. C. J. 225 (1864).

21. 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).

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