Hosmer, Ch. J.
Parol or simple contracts, in general, although in writing, will not be enforced, unless the plaintiff prove that they were made for a sufficient consideration. Rann & al. v. Hughes, 7 Term Rep. 350. n. But in respect to bills of exchange and promissory notes, the law is somewhat different.
It is an established rule, that in an action between the original parties to a bill or note, the consideration may be enquired into. The People v. Howell, 4 Johns. Rep. 296, 303. Pearson v. Pearson, 7 Johns. Rep. 26, 28. Schoonmaker v. Roosa & al. 17 Johns. Rep. 301. 304. Chitt. Bills 13. 5th Lond. ed. 2 [526]*526Phill. Ev. 11, And on the same principle, where the consideration is less than the amount of the bill or note, no recovery can be had beyond the sum actually paid. Bramin v. Hess, 13 Johns. Rep. 52. Brown v. Mott, 1 Johns. Rep. 361. Munn v. Commission Company, 15 Johns. Rep. 44. Chit. Bills 91. So if the holder claim by an indorsement after the note or bill has become due, or has taken it with a knowledge of fraud or other equitable circumstances, entitling the maker to avail himself of the defence, this is equally provable as a want or failure of consideration. Chitt. Bills 89. & n. 16 & n. 1 Johns. Dig. 125.
If, however, an action is brought by the indorsee of a note, before it arrives to maturity, not void in its creation, who has given value for it, the consideration, in general, cannot be the subject of enquiry.
The diversity is founded in this; that to strengthen and facilitate commercial intercourse, which is carried on through the medium of this species of security, it is necessary that the fair holder of a bill for value paid, should not be affected, by a want of consideration between the prior parties If, however, the holder of the bill receive it without consideration, then, as was justly said by Eyre, Ch. J. in Collins v. Martin & al. 1 Bos. & Pull. 651. “ he is in privity with the first holder, and will be affected, by every thing which would affect him.”
The determination in Barker v. Prentiss, 6 Mass. Rep. 430. on the ground of the preceding principles, runs the full length of the decision made by the superior court. A bill was drawn on Merrills, payable to F. G. Robinson & Co., and was by them indorsed in blank to J. Taber & Son, who indorsed the same to the plaintiff It appeared in evidence, in the action, brought by Jacob Barker, the last indorsee, against William Prentiss, the drawer, that the bill was sent to the Tabers, for collection, by Robinson & Co., and by them was indorsed to the plaintiff, for the same purpose. Robinson & Co. requested the defendant not to pay the bill to the plaintiff. To the competency of the testimony thete was an objection ; but the court adjudged, that notwithstanding the indorsements, it was admissible to prove, that the plaintiff received the bill, not as assignee, but as an agent to collect it for the payees. To the same effect was the decision in Hendrick v. Carman, 10 Johns. Rep. 224. In this case, it was adjudged, the above principles having been recognized, that in an action by the second indorsee of a promissory [527]*527note against his immediate indorser, it was competent for the defendant to prove, that the plaintiff had given no consideration for the note, but held it merely as the agent of the payees, to collect the amount for them, and of consequence, that he could not sustain his suit. This case clearly proves, that the defendants had no right of recovery against the Eagle Bank, to whom they had paid no consideration. They, however, repose themselves on the right of the Eagle Bank against the Phoenix Bank ; but here the same infirmity appears. The Eagle Bank received the bill for collection only, as the Phoenix Bank had done before.
I cannot but consider the attempt made by the defendants to be in direct perversion of the rule on which they have endeavoured to establish their case. That rule was adopted to prevent fraud or hardship on indorsees, who had possessed them selves bona fide of a bill for valuable consideration ; but it was no part of its object to sanction a recovery in favour of those who had paid nothing, and had no equitable title.
The defendants, to use the very appropriate expression of Ch. J. Eyre, were in privity with the Phoenix Bank, and the testimony, which was duly admitted, shews that they have no title to the avails of the bill. All the indorsees were merely agents of the plaintiffs, for the collection and transmission of their money.
The preceding observations contain an answer to the defendants’ position, that the indorsement should have been restrictive, and that they were bona fide holders.
They, however, claim a right of set-off against the Eagle Bank ; and a lien upon the money collected for the balance due to them. The former proposition is virtually founded on the latter ; for independent of lien, there is neither law nor equity for taking the plaintiffs’ property, and setting it off against the demands due from the Eagle Bank.
In the first place, the defendants insist, that as the factors of the Eagle Bank, they have a lien for the general balance of their account against them.
The answer is obvious, and without difficulty. The defendants were in no sense the factors of the Eagle Bank, or of the plaintiffs. A factor is a commercial agent, transacting the mercantile affairs of other men, in consideration of a fixed salary or certain commission, and principally, though not exclusively, in the buying and selling of goods. Lex Merc. Amer. [528]*528383. But an attorney, and such was the Stonington Bank, who collects a note, bill or demand for another, is not a factor. He is an agent of a different description ; and the law concerning factors, is inapplicable to him.
It is next contended, that the defendants, as bankers, have a right to retain in their hands the moneys of their principal, by way of lien, for their general balance.
To this proposition there are two insuperable difficulties. The first of them is, that the Eagle Bank is not their principal; but the plaintiffs, whose moneys they have collected, stand peculiarly in this relation. When the form of the transaction is removed, and it is viewed in its essence, the Eagle Bank was merely the instrument of transmisssion, and the bill was virtually delivered to the defendants, by the plaintiffs.
In the next place, the defendants, in their transactions with the Eagle Bank, were not bankers, in the sense which our books affix to that term.
In Jourdaine v. Lefevre & al. 3 Esp. Rep. 66. it was said, by Lord Kenyon, that a banker had a lien on a note paid into his house, and of course, a right to retain it for his general balance. The doctrine more clearly appears from the case of Davis & al.
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Hosmer, Ch. J.
Parol or simple contracts, in general, although in writing, will not be enforced, unless the plaintiff prove that they were made for a sufficient consideration. Rann & al. v. Hughes, 7 Term Rep. 350. n. But in respect to bills of exchange and promissory notes, the law is somewhat different.
It is an established rule, that in an action between the original parties to a bill or note, the consideration may be enquired into. The People v. Howell, 4 Johns. Rep. 296, 303. Pearson v. Pearson, 7 Johns. Rep. 26, 28. Schoonmaker v. Roosa & al. 17 Johns. Rep. 301. 304. Chitt. Bills 13. 5th Lond. ed. 2 [526]*526Phill. Ev. 11, And on the same principle, where the consideration is less than the amount of the bill or note, no recovery can be had beyond the sum actually paid. Bramin v. Hess, 13 Johns. Rep. 52. Brown v. Mott, 1 Johns. Rep. 361. Munn v. Commission Company, 15 Johns. Rep. 44. Chit. Bills 91. So if the holder claim by an indorsement after the note or bill has become due, or has taken it with a knowledge of fraud or other equitable circumstances, entitling the maker to avail himself of the defence, this is equally provable as a want or failure of consideration. Chitt. Bills 89. & n. 16 & n. 1 Johns. Dig. 125.
If, however, an action is brought by the indorsee of a note, before it arrives to maturity, not void in its creation, who has given value for it, the consideration, in general, cannot be the subject of enquiry.
The diversity is founded in this; that to strengthen and facilitate commercial intercourse, which is carried on through the medium of this species of security, it is necessary that the fair holder of a bill for value paid, should not be affected, by a want of consideration between the prior parties If, however, the holder of the bill receive it without consideration, then, as was justly said by Eyre, Ch. J. in Collins v. Martin & al. 1 Bos. & Pull. 651. “ he is in privity with the first holder, and will be affected, by every thing which would affect him.”
The determination in Barker v. Prentiss, 6 Mass. Rep. 430. on the ground of the preceding principles, runs the full length of the decision made by the superior court. A bill was drawn on Merrills, payable to F. G. Robinson & Co., and was by them indorsed in blank to J. Taber & Son, who indorsed the same to the plaintiff It appeared in evidence, in the action, brought by Jacob Barker, the last indorsee, against William Prentiss, the drawer, that the bill was sent to the Tabers, for collection, by Robinson & Co., and by them was indorsed to the plaintiff, for the same purpose. Robinson & Co. requested the defendant not to pay the bill to the plaintiff. To the competency of the testimony thete was an objection ; but the court adjudged, that notwithstanding the indorsements, it was admissible to prove, that the plaintiff received the bill, not as assignee, but as an agent to collect it for the payees. To the same effect was the decision in Hendrick v. Carman, 10 Johns. Rep. 224. In this case, it was adjudged, the above principles having been recognized, that in an action by the second indorsee of a promissory [527]*527note against his immediate indorser, it was competent for the defendant to prove, that the plaintiff had given no consideration for the note, but held it merely as the agent of the payees, to collect the amount for them, and of consequence, that he could not sustain his suit. This case clearly proves, that the defendants had no right of recovery against the Eagle Bank, to whom they had paid no consideration. They, however, repose themselves on the right of the Eagle Bank against the Phoenix Bank ; but here the same infirmity appears. The Eagle Bank received the bill for collection only, as the Phoenix Bank had done before.
I cannot but consider the attempt made by the defendants to be in direct perversion of the rule on which they have endeavoured to establish their case. That rule was adopted to prevent fraud or hardship on indorsees, who had possessed them selves bona fide of a bill for valuable consideration ; but it was no part of its object to sanction a recovery in favour of those who had paid nothing, and had no equitable title.
The defendants, to use the very appropriate expression of Ch. J. Eyre, were in privity with the Phoenix Bank, and the testimony, which was duly admitted, shews that they have no title to the avails of the bill. All the indorsees were merely agents of the plaintiffs, for the collection and transmission of their money.
The preceding observations contain an answer to the defendants’ position, that the indorsement should have been restrictive, and that they were bona fide holders.
They, however, claim a right of set-off against the Eagle Bank ; and a lien upon the money collected for the balance due to them. The former proposition is virtually founded on the latter ; for independent of lien, there is neither law nor equity for taking the plaintiffs’ property, and setting it off against the demands due from the Eagle Bank.
In the first place, the defendants insist, that as the factors of the Eagle Bank, they have a lien for the general balance of their account against them.
The answer is obvious, and without difficulty. The defendants were in no sense the factors of the Eagle Bank, or of the plaintiffs. A factor is a commercial agent, transacting the mercantile affairs of other men, in consideration of a fixed salary or certain commission, and principally, though not exclusively, in the buying and selling of goods. Lex Merc. Amer. [528]*528383. But an attorney, and such was the Stonington Bank, who collects a note, bill or demand for another, is not a factor. He is an agent of a different description ; and the law concerning factors, is inapplicable to him.
It is next contended, that the defendants, as bankers, have a right to retain in their hands the moneys of their principal, by way of lien, for their general balance.
To this proposition there are two insuperable difficulties. The first of them is, that the Eagle Bank is not their principal; but the plaintiffs, whose moneys they have collected, stand peculiarly in this relation. When the form of the transaction is removed, and it is viewed in its essence, the Eagle Bank was merely the instrument of transmisssion, and the bill was virtually delivered to the defendants, by the plaintiffs.
In the next place, the defendants, in their transactions with the Eagle Bank, were not bankers, in the sense which our books affix to that term.
In Jourdaine v. Lefevre & al. 3 Esp. Rep. 66. it was said, by Lord Kenyon, that a banker had a lien on a note paid into his house, and of course, a right to retain it for his general balance. The doctrine more clearly appears from the case of Davis & al. Bowsher, 5 Term Rep. 488. A customer lodges bills of exchange in the hands of his banker generally, and when the banker advances money to him, he applies it to the discount of such of the bills as happen to be nearest in value to the sum advanced, but without any special agreement to that effect. This does not invalidate the banker’s general lien upon all the other bills in his hands, but he may retain them, in order to secure the payment of his general balance. These cases, and others to the same effect, are inappropriate to the one before us. The transaction of sending notes for collection from one bank to another, has no analogy to the payment of notes to a banker, and obtaining discount on a part of them. Besides, it by no means follows, that the same transaction, which, in London, would infer a lien, ought to have a similar effect here. Liens are founded on express agreement between the parties in the particular instance; upon the mode of dealing between the same parties, in former instances ; or on the general usage and custom of the particular trade. 2 Stark. Ev. 883. 2 Phill. Ev. 123, 4, 5. Unless there has been either the same mode of dealing between the parties here, as in the place above named, or a similar general usage or custom, what is law there, is not, of course, law here, because the foundations are different.
[529]*529I have been induced to make these observations, as the argument of the defendants seemed to imply, that all liens were as universal as the common law is. On this principle, I presume, was cited the case of Savill v. Barchard & al. 4 Esp. Rep. 53. relative to the lien in favour of dyers, founded on the general course and practice of that particular trade.
The natural enquiry is, whether there has been a mode of dealing between the parties here, or a general usage and custom, that gives sanction to the asserted lien of the defendants in this case. No such mode of dealing has been proved, and no such usage; even if a mode of dealing and an usage be tween the banks, known only to themselves, and regulating their intercourse with each other, could avail to deprive a person of claims confided to them for collection. A man’s property cannot thus be taken from him without his consent; and this assent cannot be implied, unless an usage has existed so long, and with such publicity, as to warrant the presumption, that it was generally known. Barber v. Brace & al. 3 Conn. Rep. 9.
The custom of transmitting bills for collection from one bank to another, and crediting in account the avails received, whatever effect it may have between themselves, cannot affect the claims of a third person, who has confided the collection of a bill to one of them, without assent, either express or implied, to the mode of transacting their business ; and no such assept is inferable in this case.
In conclusion, I would apply the expressions of Lord Mansfield, in Buller v. Harrison, Cowp. 565. 568 No new credit was given, no acceptance of new bills, no alteration in the situation which the defendants and the Eagle Bank stood in towards each other, after the failure, or collect ion of the money. The defendants ought not to say, “ this is a hit; we have got the money, and we will keep it.” The Eagle Bank, the defendants knew, was insolvent. No prejudice has arisen to them from the collection of the bill; and in common honesty, they ought not to shelter themselves from loss, by casting their own misfortune on an innocent man, who ought not to bear it. In my opinion, the crediting of the money to the Eagle Bank “ does not alter the case a straw.” Cowp. 567.
The other Judges were of the same opinion.
New trial not to be granted.