Principles

·  Negotiable Instruments—Consideration—Absence of consideration—Good defence between immediate parties—Payment to third party may be consideration

In an action on a negotiable instrument, absence or failure of consideration moving from the plaintiff is a good defence where the parties were immediate parties to the instrument, i.e., drawer and acceptor, drawer (or maker of a note) and payee, or indorser and indorsee. Payment by a plaintiff to a third party made at the request of the defendant may be a good consideration moving from the plaintiff.

Judgment

       Abdel Mageed Imam J. September 10, 1963 : —After having heard the applicant’s advocate orally on the application and having read the record, I think this application should succeed

      Two points are considered (a) the question of lack of consideration; (b) the question of joinder. As for (a), it is clear that between immediate parties to a bill of exchange there must be consideration moving from the plaintiff to the defendant.

      “Between immediate parties—that is, between the drawer and acceptor, between the payee and drawer, between the payee and maker of a note, between the indorsee and indorser—the only consideration

is that which moved from the plaintiff to the defendant, and the absence or failure of this consideration is a good defence”:

      Byles, Bills of Exchange 148 (21st ed. 1955).

      The court below had correctly framed an issue on this point, but failed to adjudicate upon. This should now be done.

      As for (b), the joinder of Abdel Khalig may be relevant in connection with point (a) above, for there is evidence to show that the respondent had paid him some money. It should be investigated to see whether this was done on the request of applicant, for then it would be consideration moving from plaintiff to him. This should now be done for the purpose of reaching a fair decision in respect of this dispute.

      For the above reasons the application succeeds. The court is to adjudicate on the issue after hearing additional evidence if it so thinks fit and Abdel Khalig Mandeel is to be joined as co-defendant upon payment of the prescribed fees.