As every simple contract must be supported by a consideration, it necessarily follows that negotiable instruments must as between the parties be so supported. But if the instrument is negotiated before maturity, and for value to a holder without notice of the want of consideration, the defense cannot be made against him.
Any consideration which will support a simple contract will support a negotiable instrument.68
A note is enforceable so far as consideration is concerned, whenever it is given upon any consideration that would be a consideration according to the general law of contracts. If the consideration fails the note would not be enforceable as between the parties, but we are not now assuming its failure. Thus, a note given for an executory consideration is based upon a legal consideration, and is enforceable as between the parties or in the hands of any holder.
66. Nego. Instru. Law, Article II.
67. Widger v. Baxter, 190 Mass. 130, 76 N. E. 509, 3 L. R. A. (new series) 436.
68. Nego. Instru. Law, SEC. 25.
Example 31. A gives this note for $100 in consideration that B will perform legal services for him. The note has legal consideration.
An antecedent or pre-existing debt is consideration.
If an indebtedness exists, and a note is given in consideration thereof, by way of renewal or security, the note is enforceable as being upon valid consideration.69
Consideration is presumed in a negotiable instrument, but as between the parties and as against any person not a holder in due course, the presumption may be overcome.
We have previously noted that it is a peculiarity of negotiable paper that in a suit thereon, a prima facie case is made out by a proof of the execution of the paper without showing what it was given for or whether anything was given; this being upon a presumption of fact that there is consideration, but it may be shown in rebuttal of the presumption that there is no consideration as against any one except a holder in due course.69a
69. Many, Blanc & Co. v. Krueger, 153 111. Ap. 327.
69a. On the question who has the burden of proof, where consideration is denied, the courts have differed, both prior to the adoption of the uniform law, and since its adoption. Bank v. Welch, 76 Ore. 272, 147 Pac. 534; Harney v. Lee, 175 111. Ap. 250.
Consideration need not be recited.
We have seen that it is not necessary to recite the consideration in the note, or to recite that there has been a consideration.
If one is a holder in due course, lack of consideration cannot be made a defense against him.
If there has been no transfer, want of consideration can be shown, but if the instrument is in the hands of a holder in due course want of consideration cannot be shown. That subject is developed fully elsewhere.