Ewin against Lancaster
| Jurisdiction | England & Wales |
| Judgment Date | 29 May 1865 |
| Date | 29 May 1865 |
| Court | Court of the Queen's Bench |
English Reports Citation: 122 E.R. 1306
IN THE QUEEN'S BENCH
S. C. 12 L. T. 632; 13 W. R. 857. Referred to, Oriental Financial Corporation v. Overend, 1871-74, L. R. 7 Ch. 145 (n); L. R. 7 H. L. 348.
[571] cases argued and determined in the queen's bench, in trinity term, XXVIII. victoria. The Judges who usually sat in Bane in this Term were: Cockburn C.J., Crompton J., Blackburn J., Shoe J. EwiN against lancaster. Monday, May 29th, 1865.-Accommodation acceptance, Discharge of acceptor. Equitable defence.-The holder of bills of exchange accepted for the accommodation of B., the drawer, after they became due entered into an agreement with B. that, in consideration of B. giving him a freehold mortgage for these bills and other debts, [he would deliver up the bills to be cancelled, and gave up his claim on all parties. The mortgage security was given accordingly. At the time of the agreement the holder knew that the acceptances were accommodation acceptances. In an action by the holder against the acceptor: held, that the acceptor was discharged, and had a defence on equitable grounds. [S. C. 12 L, T. 632; 13 W. E. 857. Referred to, Oriental Financial Corporation v. Overend, 1871-74, L. E. 7 Ch. 145 (n); L. E. 7 H. L. 348.] Declaration by the plaintiff as indorsee of three bills of exchange payable three months after date, for 501., 1001. and 501. respectively, drawn in 1863 by [572] Burtwell on the defendant, accepted by the defendant and endorsed by Burtwell to the plaintiff. Plea. That the defendant accepted the bills for the accommodation of Burtwell, and that there was no consideration for such acceptance, whereof the plaintiff had notice. Issue. a*S.73, EWIN t'. LANCASTER 1307 On the trial, before Cockburn C.J., at Guildhall, at the Sittings after Hilary Term, it appeared that, after the bills become due, there was an agreement between the plaintiff and Burtwell, the drawer, that, in consideration of his giving to the plaintiff a freehold mortgage for these bills and other debts, the plaintiff would deliver up the bills to be cancelled and give up his claim on all parties. The mortgage security was given accordingly; but it contained no release of the acceptor nor was his name mentioned in it. The Lord Chief Justice left three questions to the jury : First. Were the three acceptances accommodation acceptances 1 Second. Was it known to the plaintiff at the time he took the mortgage security from Burtwell that they were accommodation acceptances 1 Third. Was it agreed between the plaintiff and Burtwell that on the mortgage security being given the liability of the defendant should be discharged 1 The jury answered the above questions in the affirmative, and the Lord Chief Justice directed the verdict to be entered for the plaintiff, with leave to move to enter the verdict for the defendant, power being reserved to the Court to amend the plea if necessary. E573] In Easter Term, Robinson Serjt. obtained a rule nisi accordingly; against which Montagu Chambers and C. F. Day shewed cause.-In Fentum v, Pocock (5 Taunt. 192) it was held that the inverted relation of principal and surety between the drawer and acceptor of an accommodation bill subsists only as between themselves. [Crompton J. That case has been virtually overruled with reference to the equitable relation of the parties*] If, in pursuance of the power reserved to the Court, it is to be considered that a plea on equitable grounds is put on the record, there remains the question whether it is sufficient that the plaintiff knew that the acceptances were accommodation acceptances ^subsequently to the time of taking them. In Fenlum v. Pocock Mansfield C.J. said, p. 196, " One might find here a very important distinction between this case and the case decided by Lord Ellenborough namely, that here the person taking the bill did not, at the time when he took it, know that it was an accommodation bill; and if he did not then know it, what does it signify what came to his knowledge afterwards, if he took the bill for a valuable consideration'!" In Harrison v. Ocurtauld (3 B. & Ad. 36) it was held that the acceptor of an accommodation bill was liable to the indorsee, who had given a release to the assignees of the acceptor, who had become bankrupt, the iudorsee having at that time, but not when hejtook the bill, knowledge that it was an accommodation acceptance. Strong v. Foster (17 C. B. 201) and Pooley v. Harradine (7 E. & B. 431) were actions on prorais-[574]-3ory notes, and the circumstances were special. Here the plaintiff bought the bills of exchange with power to make any bargain with any party to the bills and without prejudice to hia right against the acceptor, and he cannot be deprived of that right by a notice...
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