Stokes v. Winslow

Per curiam. — This was an action on a bill of exchange payable to hearer, and the only question is whether upon such an instru [520] ment, a failure of consideration between the drawer and payee can be set up in an action by the plaintiff, who was not the payee but became the “ bearer” of the bill, against the acceptor. It is held in Tillman v. Ailles, 5 S. & M. 373, that upon an instrument of this character, there is a separate and direct contract between the parties primarily liable on the paper, and whoever may become the holder of it, and that such paper is not within the principle of the statute of 1822, in relation to the assignment and indorsement of instruments of writing for the payment of money; and consequently, the party who becomes the bearer of it in good faith, without notice, and for a valuable consideration, is entitled to recover in an action upon it, notwithstanding any failure of consideration, &c., between the original parties to the instrument. This principle has recently been fully recognized in the case of Craig v. The City of Vicksburg, ante, 216. The judgment here is in opposition to this view, and is reversed, and the cause remanded for a new trial.