state of their affairs, and of their connexion with Smith, and the circumstances under which the present, with several other notes, as one transaction, came into their hands, collusion is inferred, or a contrivance appears, by which it was attempted to render the note available in the plaintiffs' hands, both parties knowing that it would not be so if it remained in the Helliwells'.

I should think it would establish mala fides; and that it could then be said of it, that the note was not obtained in the ordinary course of business fairly and bona fide, without any sinister object in the acquisition thereof; so that, under the whole evidence, I still think the bona fides of the transaction must be for the jury.

Without having the facts and conclusions of fact more distinctly ascertained or admitted, I do not see that the legal rule can be declared thereon, otherwise than hypothetically. Was it a fair honest transaction in the regular course of business, or was it out of the usual course, and with a view not only to secure the plaintiffs, but to favor the Helliwells at the expense of the defendant, and enable them to circumvent him, knowing the infirmity of the Helliwells' title as payees of the note?

The short statement of the transaction dated the 23rd of December 1854, headed, between the defendant and the Helliwells, was objected to at the trial as inadmissible against the plaintiffs, being res inter alios acta. I still think it was admissible for the only object with which it was read-namely, to shew the transaction as an act done, and as part of the res gestæ between the defendant and the Helliwells with a view to the question of fraud as between them, the immediate parties. It was not received as proof that the plaintiffs knew when the bill was given, or that the notes were received by the Helliwells a month after they bear date; there was no evidence that they were aware of its existence or contents.

Then as to the plaintiffs' knowledge of the fraud; I do not think the evidence proved that they knew the notes were made by the defendant to the Helliwells in payment for a bill of exchange, drawn on the 23rd of December 1854, although I still think enough appeared to render it a question for the

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jury, whether they did not know, or did not with good reason believe, that the consideration for the note was a sterling bill on Smith. Their large and varied dealings with the Helliwells, and the nature of their transactions as shewn by their books, Clarkson's and other evidence, tended, I think, to shew this, or to lead to this conclusion, although they might have supposed it was given for flour, or some other equally good consideration. But knowledge that it was given upon a bill transaction would not establish knowledge of fraud in such transaction, and they could not know whether the bill would be accepted or refused at the time they became the holders of the note-May v. Chapman (16 M. & W. 358), Fairclough v. Pavia (9 Ex. R. 690), Masters v. Ibbetson (8 C. B. 100), Berry v. Alderman (13 C. B. 674), Cumming v. Browne (9 East 506),—although the case of a bill of lading has a material leaning upon the present case.

It was there held that the property of goods passed by endorsement, and the delivery of the bill of lading by the consignee to another, bond fide for valuable consideration, and without collusion with the consignor, although the endorsee knew at the time that the consignor had not received money in payment, but had taken the consignee's acceptances payable at a future day not then arrived.

There remains the suggestion whether the defendant has precluded himself from objecting by retaining the bill and returning it, according to the principle of such cases as Street v. Brown (1 Taunt. 381), Lewis v. Cosgrove (2 Taunt 2), Deady v. Harrison (1 Star. 60), Archer v. Bamford (3 Star. 175), Campbell v. Fleming (1 A. & E. 40), Howden v. Haigh (11 A. & E. 1033), National Exchange Co. v. Drew (25 L. T. 223).

The third plea alleges that the defendant presented the bill to the Helliwells after its return, dishonored, and demanded payment, which was refused. The evidence was merely that

he gave notice of non-acceptance, and demanded restoration of the note. If it had appeared that after being aware of the facts now relied upon as invalidating the note, the defendant had acted upon the bill as a still subsisting negotiable security in his hands, he would have waived such

defence as if he had endorsed it over or dealt with it as a continuing security in his hands; but it does not appear that he did more than give notice to the drawers, and the demand of his own note implied a readiness to deliver up the bill. I do not think he was bound to deliver it back, leaving the promissory note outstanding. He had claims against the Helliwells for damages under our statute, in addition to the amount of the bill; and whether he could consistently put the bill in suit against the drawers, or claim damages under the statute, except under the bill, he might want it as evidence in an action of another form with a view to recovery of such damages, if recoverable otherwise than in an action upon the bill itself, as for deceit &c.

No question has been distinctly raised on this head, and I do not at present think there is much weight in it. The defendant's retention of the bill was dwelt upon as shewing that he still had his remedy upon it against the drawers, on whose credit he took it and made his promissory note in payment, not that such retention waived the fraud on their part, if fraud existed, which was denied.

Referring now to the several issues, it appears to me that, to defeat this action, the defendant must establish,

1st-That the note was fraudulently obtained from him by the Helliwells;

2nd-And that the plaintiffs took it as endorsees, knowing thereof, or without giving valuable consideration therefor, or not boni fide, but in bad faith.

The first plea alleges fraud, and the plaintiffs' knowledge thereof. The second plea alleges fraud, and that the endorsement to the plaintiff was without value. The third plea states a series of facts which may afford evidence of fraud, but which do not charge fraud in express terms; the plea however alleges want or failure of consideration, and knowledge of facts, which, if established, would prove that the plaintiffs did not become bona fide endorsees.

The fourth plea is similar to that of the third, except that it alleges fraud on the plaintiffs' part in obtaining the endorsement of the note from the Helliwells, of which (as between the plaintiffs and Helliwells) there was no proof.

The fifth is like the third, except that it denies any valuable consideration for the endorsement as between the plaintiffs and the Helliwells.

The sixth plea follows the third to the same extent as the fourth and fifth, and then alleges notice to the plaintiffs of the facts so specially stated. All the pleas are traversed and put in issue by the replication of de injuria.

The observations already made shew to what extent the evidence supported the facts and imputations contained in these pleas respectively, also wherein it formed matter for the jury to determine upon, and wherein it failed to support the pleas, and they need not be repeated.

1st. That there was evidence sufficient to go to the jury to show fraud in the Helliwells in obtaining the note in consideration of a bad or fraudulent bill of exchange.

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2nd. But not that the plaintiffs knew of such fraud when they became holders of the note by endorsement from the Helliwells.

3rd-That there was sufficient evidence to go to the jury that the plaintiffs had given value for this note by taking it on account of pre-existing debts exclusively, or on account partly of such debts and partly in consideration of new or additional advances.

4th-That there was evidence for the jury to determine whether the plaintiffs became such endorsees bona fide in relation to the defence set up and the facts stated in the third or sixth pleas. This rule is however made absolute on the third head last above mentioned, and the effect of the evidence as to the other points must depend upon the facts as they may hereafter appear at another trial.

MCLEAN, J., and RICHARDS, J., concurred.

Rule absolute.

REID V. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF HAMILTON.

Notice of action-Evidence under general issue.

Case, for wrongfully, negligently and carelessly digging and excavating streets in the City of Hamilton, adjoining plaintiff's close, and thereby injuring said close, &c. Plea, not guilty per statute.

Held, 1st, That a by-law should have been passed by the Corporation to sanction the act complained of (McLean J., dissenting.)

2nd., That when there is no by-law, and when the act complained of is done under the statute 13 & 14 Vic. ch. 15, the defendants are entitled to notice of action, coming as they do fully within the spirit of the protecting statute.

3rd., That if the defendants are liable for the tortious acts in the declaration complained of, they are entitled to give special matter in evidence under the general issue.

Writ issued 11th January, 1854. Declaration, 10th May, 1854.

First count states, that plaintiff before and at &c., was possessed of a close or parcel of land in the City of Hamilton, composed of lots numbers 26, 27, 28, 35, 36, and 37, in the survey of lots made by Peter Hunter Hamilton, bounded on the east by a street or highway called James Street, on the south by a street or highway called Robinson Street, and on the north by a street or highway called Duke Street; yet that defendants, wrongfully intending &c., to wit, on the 1st of August, 1853, wrongfully, and negligently, and carelessly, &c., dug and excavated the said streets adjoining said close, and so near the same, and also took and carried away therefrom the earth and soil so dug and excavated, in a negligent and careless and improper manner, and without leaving any sufficient or proper support to prevent the soil and earth of plaintiff's close from falling away from said close into and upon the said streets, or prevent the fences of plaintiff, standing on said close, from falling, and lowered thereby the said streets so much, that by reason thereof a quantity of soil and earth of plaintiffs' said close gave way and fell in and upon the said streets and was washed down and carried away, and whereby also said plaintiff's said fence surrounding said close fell, and plaintiff was thereby greatly incommoded &c., and obliged to build a stone wall to prevent the further falling of the earth &c., of the said close, and the value of said close hath been greatly diminished, &c.