Contract-Consideration-Procuring the presence and signature of a third per:
son

Negotiable instrument-Promissory note-s-Consideration-s-Suit against immedi-
ate endorsee-Necessity to be a holder for value

1. In a suit by a holder of a note against the immediate endorsee, the
holder must be a holder for value and the absence of consideration will be
a defence to the action.

2. Where one party has produced a third person at a second party's
place of business, and has been directly responsible for the signing of a
promissory note by that third person in favour of the second party for a
sum in excess of the value of goods purchased by the third party, there has
been consideration sufficient to support the endorsement of another promis-
sory note from the second party to the first party.

Revision

December 1, 1936. Creed C.J.: This is an application for re-
vision of the decree of the province judge, Blue Nile Province, in dis-
missing the plaintiff's claim.

The plaintiff in this action is the holder of a promissory note dated
September 9, 1935, which was drawn by one Abdel Aziz Wannan in
favour of the defendants for the sum of £E.36.500 m/ms payable at
sixty days, i.e., on November 20, 1935. On December 11, 1935, it
was endorsed by the defendants to the plaintiff. The defendants denied
liability alleging that no consideration moved from the plaintiff to the
defendants. The province judge dismissed the claim on June 25, 1936.

The plaintiff applies for revision of the decree on two grounds:
(1) "There is no need for me to be a holder for value and the
defendants as endorsees are liable to compensate me so far
as I am a bolder."

This ground of appeal may be dealt with at once. Absence of
consideration, if proved, is a valid defence to a claim on a promissory
note against an immediate party. The holder of a promissory note in

- Court: Creed C.l.; Bennett I.

order to render an immediate party liable on that note must be a
holder for value. On this point, therefore, the application fails.

(2) "The court has decided that I have not given value for the
bill of ££.36.500 m/ms, The value which I have given is
the bill of £ E.144.220 m/ms signed by my father. My
father was not bound to sign this bill. He signed it at my
request and I have paid him. The bill was a consideration
as to £E.107.720 m/ms for the goods delivered to me and
as to £E.36.500 m/rns for the bill of ££.36.500 m/rns."

The defendants on this point raised a preliminary question-that the
agreement as to the promissory note for £E.144.220 rn/rns and the
delivery of the paint was solely between them and the plaintiff's grand-
father, Sheikh Osman Zayad. It is desirable to state at once that, in
the view of this court, an agreement was made to which there were
three parties: (1) the defendants, (2) the grandfather of the plaintiff,
Sheikh Osman Zayad, and (3) the plaintiff. These three parties were
all present at the making of the agreement. Consideration moved both
from the second and from the third party to the defendants. The
second party, at the request of the third party and by agreement with
the defendants, signed a promissory note for the sum of £E.144.220
m/rns in favour of the defendants. The third party produced the
second party-a merchant of substance-at the defendants' place of
business, and was directly responsible for the second party signing the
promissory note for £E.144.220 m/rns in favour of the defendants,
and for the delivery of the same to the defendants. As the plaintiff
stated in the court below, "The consideration was my obtaining the
signature of Osman Zayad to the bill for £E.144.220 m/ms, which
was given to the defendants." It appears to this court that there were
true contractual relations between the first and second parties and that
consideration moved from the plaintiff to the defendants.

Whether or not the plaintiff gave consideration for the promissory
note of £E.36.500 m/ms depends upon the terms of this contract be-
tween the parties. The plaintiff alleges that the agreement was first,
that a promissory note for £E.144.220 m/ms signed by Sheikh Osman
Zayad should be handed over to the defendants; and second that on
the handing over of the promissory note the defendants should (a) de-
liver the goods and (b) endorse the promissory note for £E.36.500
m/rns to the plaintiff.

Plaintiff alleges that in fact the agreement was at once carried