1866 AGRA AND MASTERMAN'S BANK V. LEIGHTON. to the amount of 84427., discounted by the plaintiffs on the 11th of May, were also placed to his credit, this being the sum of 80007. referred to in the affidavit; and it also appeared that at this date (11th of May) there was a balance on the accounts of about 100%. in favour of the plaintiffs, which was increased to 4707. at the closing of the account three days later. On the 29th of August the following order was made upon the summons: "No order upon payment into court, or security for 30007. in six weeks;" and the two actions were consolidated. (1) On the 9th of October a summons was taken out by the defendant, to vary this order by striking out so much of it as required payment or security, or to extend the time limited. This summons was adjourned into court, and M'Intyre, in this term (Nov. 8), obtained a rule nisi in the terms of the summons. On the 25th of October the plaintiffs delivered their declaration in the consolidated action, declaring upon the bills as drawn by the Blakeley Ordnance Company upon the defendant to their own order, and indorsed by that company to the plaintiffs. To this the defendant pleaded, first, denial of acceptance, second, denial of indorsement, on which the plaintiffs joined issue; and also the following pleas : Third plea. That whilst the bills were in the hands of the plaintiffs, as holders, one T. A. Blakeley paid to the plaintiffs the full amount due to them in respect of the bills, and became entitled to become the holder of them, yet the plaintiffs did not deliver the bills to him, but are now suing on them without his authority, or the authority of any other person entitled to maintain an action upon the bills, or either of them. Demurrer and joinder. Fourth plea. On equitable grounds, that the bills were, and each of them was, accepted for the price of certain goods to be sold to, and shipped for and on account of the defendant, to Japan, and on the faith that the shipment of such goods had then been completed by the Blakeley Ordnance Company; that after the acceptance of the bills, and before the same or either of them became due, the company refused to complete the shipment, and only shipped the same summonses being taken out, and orders made, in both. (1) The proceedings at chambers had in fact taken place in both actions, MASTERMAN'S BANK v. LEIGHTON. certain of the goods, and that the defendant only received and 1860 accepted a certain portion of the last-mentioned goods, amounting AGRA AND in price and value to 12007.; that by reason of the non-completion of the shipment, the goods actually shipped became useless to the defendant, who gave notice to the company that he would not accept and receive the residue of the goods so shipped; that except as aforesaid there never was any value or consideration for the acceptance or payment of the bills, or either of them, by the defendant; that whilst the bills were in the hands of the plaintiffs, as holders, one T. A. Blakeley, as agent of the company, paid to the plaintiffs the full amount due to them in respect of the bills, and the company then became entitled to be the holders of the bills, and the plaintiffs have since held them, without any value or consideration whatever; and as to the sum of 12007., the price and value of the goods accepted and received by him from the company, the defendant pleaded a set-off of equal amount against the company. Demurrer and joinder. Nov. 19. The rule and the demurrers came on to be argued together. Cohen (Coleridge, Q.C., with him), in support of the demurrers. First, as to the fourth plea. It amounts to no more than a statement of a partial failure of consideration, which cannot be pleaded to an action on a bill of exchange: Byles on Bills, pp. 119, 120, 8th edit. The statements of the plea must be taken strictly, and so taken they only shew a breach of contract, for which the defendant is entitled to recover unliquidated damages. He cannot repudiate the contract, for he has accepted part of the goods under it, and for these he is liable according to its terms; the drawer's performance has only been defective, not wholly wanting, and the rule cited therefore applies. This being so, his defence is not mended by being pleaded equitably, for equity here follows the rules of law: Glennie v. Imri. (1) This objection applies to the whole plea; but that part of it which relates to the set-off is open to this further objection. The defendant's contention must be, that the plaintiffs, having been paid the full amount of the bills (1) 3 Y. & C. 436. 1866 by the company, hold the bills as trustees for them, and are now AGRA AND suing in that character; but in that case the set-off, which is a debt from the company, the cestuis que trustent, is not between the parties to the action. MASTERMAN'S BANK V. LEIGHTON. [CHANNELL, B. This is precisely the converse case to Cochrane v. Green (1), where a defendant was allowed to set-off a demand due from the plaintiff to the defendant through the defendant's trustee.] The third plea is clearly bad on the authority of Jones v. Broadhurst (2), which shews that satisfaction by the drawer furnishes no defence to the acceptor, whose contract with the indorsee is entirely distinct and separate. It does not aver that the payment was made at the request or on behalf of the defendant (3), nor that there was in the payment any privity between him and Blakeley (4), nor that the payment was on any contract that the bill should be delivered up (5); nor does it even say that the plaintiffs are suing against the will or contrary to the order of Blakeley, but only that they are suing "without his authority." All that appears is, that some stranger has paid the amount of the bills to the plaintiffs, who may be now suing (consistently with the plea) as trustees for him. Sir George Honyman, Q.C. (M‘Intyre with him), in support of the pleas. As to the fourth plea, the failure of consideration is plainly such that it would be a good defence in an action against the defendant by the company; for it is stated by the plea, and admitted by the demurrer, that by reason of the non-completion of the shipment, the goods shipped became valueless to him. It is true that of what was shipped the defendant took part; but that only makes him liable to pay for the goods taken, and does not waive his right to insist on the total failure of consideration which had already occurred. The case, therefore, differs from the case of Glennie v. Imri (6), where that which the plaintiff complained of in his bill was, a defect in the quality of the goods supplied, which was only matter of a cross action. But it is also distinguishable from that case on the ground that, even admitting the consideration not to (1) 9 C. B. (N.S.) 448; 30 L. J. (C.P.) 97. ¡(2) 9 C. B. 173. (3) 9 C. B. at p. 179. (4) 9 C. B. at p. 180. (6) 3 Y. & C. 436. have totally failed, the sum to be deducted is a definite sum. For the plea says that the goods taken amounted in value and price to 12007.; but this is the only part of the consideration that has been performed; and if the sum of 12007. is deducted from the total amount of the contract, it leaves a definite residue to be deducted from the sum due on the contract. It therefore falls within the exception included in the statement of the rule in Bayley on Bills, p. 505, 6th ed.—that "the partial failure of consideration will constitute no defence, if the quantum to be deducted on that account be matter, not of definite computation, but of unliquidated damages." The third plea is also good. The statement is here made which was wanting in the plea in Jones v. Broadhurst (1), that Blakeley became entitled to become the holder of the bills, and that the plaintiffs are suing without the authority of any person entitled to maintain an action upon the bills. This statement is inconsistent with the notion that the bills have been left in the hands of the plaintiffs in order that they might sue upon them. Cohen, in reply, cited Moggridge v. Jones. (2) The Court then directed that the rule should be argued. Honyman, Q.C., was not called upon. BRAMWELL, B. This rule must be made absolute. The intention of the Bills of Exchange Act was, that where there was no pretence for a defence, the party sued should not be allowed to defend, and the holder should have judgment as of course; but that, if the defendant had a real, Į do not say good, defence, he should have leave to appear and set it up. As cases, however, sometimes occur where an apparently real defence is shewn, but its sincerity is doubtful, there the defendant is let in to defend only on the terms of his bringing the money into court. Now I cannot say that there is here no pretence for a defence; on the contrary, I think there is a good pretence. I do not say that the defence is well founded, but it raises a fair question between the parties. But, further, it often happens that a man comes in before the judge, and shews a good defence as between the parties to the bill, and also states his belief, from certain circumstances of more or less credit, that the plaintiff (2) 14 East, 486. (1) 9 C. B. 173; see p. 182. 1866 AGRA AND MASTERMAN'S BANK v. LEIGHTON. 1866 AGRA AND MASTERMAN'S BANK c. LEIGHTON. is not a holder for value; afterwards the plaintiff comes and shews that belief to be groundless. In such a case the leave to appear is rescinded, because it appears that the leave was originally given to him on a supposed state of facts which is shewn to be erroneous. Now, if the plaintiffs had shewn that they were holders for value, we ought to have rescinded the order for leave to appear, or made it conditional; but to my mind they do not shew that there is no question on this point. For on the accounts it appears that on the 23rd December they discounted these bills for 60007. for Blakeley, and, on the bills being dishonoured, debited his account with the amount. Now certainly that was not payment; but afterwards Blakeley discounts bills with them to the extent of 80007., which at that time very nearly balanced the accounts between them. There were subsequent drawings to a small amount, resulting in a balance against Blakeley of about 4707.; but that is all. If that is so, there is, on the one hand, a fair question whether the defendant has a good defence against Blakeley; on the other hand, as it appears that the plaintiffs have no claim against Blakeley, their interest and Blakeley's in this sum are the same, and it is not clear that they have any right of recourse against the defendant; for if the old dishonoured bills ought to have been handed over to Blakeley, the plaintiffs can have no claim upon them against the defendant. At all events, this is not a case of the kind intended by the act, that is, a case where there is no real question between the parties. CHANNELL, B. I am of the same opinion. I do not understand that the Bills of Exchange Act requires or authorizes the judge to try the merits of the action; it requires leave to appear to be specially granted to the defendant only in order to prevent vexatious and unfounded defences. Now, on the affidavits before the judge, the leave to appear was originally well granted, the defendant stating facts not inconsistent with a good defence on the merits. The question, therefore, is, whether the leave originally given ought to remain, or whether it ought to be rescinded, or allowed to stand on terms. The effect of the order appealed from was to clog it with a condition; and, on the best consideration I can give to the question, I think there is no sufficient reason for imposing that |