president and secretary, was held to be their individual obligation. In 17 Banking Law Journal, 305-306, it was properly said that 'nine business men out of ten would regard such a note as that of the company' and it would hardly be an exaggeration to include the tenth man. * "')

CHAPTER 54.

CONSIDERATION FOR EXECUTION.

§ 433. Necessity for consideration.

§ 434. What may constitute consideration.

§ 435. Antecedent debt as consideration.

§ 436. Consideration presumed.

§ 437. Recital of consideration.

§ 438. Want of consideration and holder in due course.

§ § 433 to 438. (Nego. Instru., Secs. 42 to 47.)

Consideration.

Case 450. Uniform Negotiable Instruments Act, Sec. 6 and Secs. 24-29.

**

"(Sec. 6. (2)) The validity and negotiable character of an instrument are not affected by the fact that it does not specify the value given, or that any value has been given therefor."

"(Sec. 24.) Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value.

"(Sec. 25.) Value is any consideration sufficient to support a simple contract.

"2. An antecedent or pre-existing debt constitutes value and is deemed such, whether the instrument is payable on demand or at a future time.

"(Sec. 26.) Where value has at any time been given for the instrument, the holder is deemed a holder for value in respect to all parties who became such prior to that time.

"(Sec. 27.) Whether the holder has a lien on the instrument, arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien.

"(Sec. 28.) Absence or failure of consideration is a matter of defense as against any person not a holder in due course, and partial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise.

"(Sec. 29.) An accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser, for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party."

Question 450: (1) (1) A sues B on a negotiable promissory note for $1,000 given by B to A's order. He presents in evidence the note, proves its execution and delivery by B, and then rests his case. B then moves the court to nonsuit A on the ground that A has not made a case as he has not proved any consideration. Is this contention good?

(2) Suppose in fact there was no consideration. plead and prove this to defeat the suit?

Can B

(3) Suppose there was in fact no consideration but the note had been sold by the payee to C, a holder in due course. Can the defense be made by B against C?

(4) What is meant by the statement that an antecedent debt is value?

(5) A desires to borrow $500 from B. B is willing to loan the money but is unsatisfied with A's financial standing, whereupon A gets M to make a note to him, which A then indorses to B. M signs this note as a mere matter of friendship in order to enable B to get the money. B knows that M gets nothing for his act. A defaults, and B sues M. M pleads lack of consideration and knowledge thereof by B when A transferred the paper to him. Is the defense good? Why is this not a case of lack of consideration? What is M called?

(Note: On the question of the necessity of, and what constitutes consideration between transferror and transferee, see subject of Negotiation, post.)

§ 439. (Nego. Instru., Sec. 47a.) In general.

(Note: It seems logical to consider the formation of the contract of the acceptor when we are considering the general subject of the formation of the negotiable contract. The question "when must there be presentment for acceptance in order to charge drawer and indorsers" is treated later. Also, later, is treated the procedure which must follow upon dishonor by non-acceptance.

It seems, perhaps, superfluous to suggest, that the student should distinguish between the meaning of acceptance as here used and its more general meaning of receipt of a satisfactory delivery. For instance, suppose I owe you $100, and I say "Will you accept my draft on Callaghan & Co."? You are willing to take the draft and you present it to Callaghan & Company, and they say "we will accept this draft on us." The second acceptance is of course the acceptance referred to here, i. e., the contract of the drawee, by which he becomes bound on the instrument. The reason for calling attention to this distinction is that the editor has found a confusion in student's minds when approaching this subject.)

§ 440. (Nego. Instru., Sec. 48.) Definition of acceptance. Case 451. Negotiable Instruments Law, Sec. 132. "The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The ac

ceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money."

Question 451: Define acceptance.

Case 452. Ballen & Friedman v. Bank of Krenlin, 130 Pac. Rep. 539 (Okla.).

Facts: Suit by Mike Ballen & Dave Friedman, a partnership, against Bank of Krenlin. Plaintiff's case was that certain checks had been offered them as cash items and they had inquired of the defendant as the bank on which said checks were drawn, whether said checks were good, that the bank had responded that they were and that plaintiffs had therefore taken them. On demurrer to petition.

Point Involved: Whether an oral statement by the drawee of a check that the same is good, in response to an inquiry by one in whose favor such checks are drawn and who relies on the information before receiving them, gives the holder any right against the bank on the check. Generally, what constitutes an acceptance?

ROSSER, C.: "This transaction occurred after the act of March 20, 1909 (Laws 1909, c. 24), commonly called the Negotiable Instruments Law, had become the law in this state. Section 185 of that act is as follows: 'A check is a bill of exchange drawn on a bank on demand. Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange payable on demand apply to a check.' Section 132 of the act is as follows: 'The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee. It must not express that the drawee will perform his promise by any other means than the payment of money.'

"It is contended by the plaintiffs that, as they were informed, by the defendant's cashier, that the check was good and acted upon that information, the bank is estopped to deny liability, and is responsible for the