Principles of the English Law of Contract

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1879 edition. Excerpt: ...when proved tainted the subsequent promise, and that this was not a simple promise to pay money, but that it 'sprang from and was the creature of an illegal transaction.' If a promise under seal would be void under these circumstances, it is obvious that a parol contract, even if based in part upon some new consideration, would be void also. Negotiable In the case of negotiable instruments we have to consider ments, how not only the effect of the illegality as between the original.affected by parties to the contract, but its effect upon subsequent holders being of the instrument. In these cases, as we have already ega' noticed, the ordinary presumption in favour of the holder of such an instrument does not exist. Upon proof of the illegality which tainted the instrument in its inception, the holder is liable to have to show that he is a holder for value; that is to say, that he gave consideration for the bill: and even then, if he can be proved to have been aware of the illegality, he will be disentitled to recover. Effect of Where the consideration is not illegal but the transaction beingvoid 1s void, a promise given to pay money due upon such a transaction is based upon no consideration at all. If made under seal it is binding, if by parol it is void. A good illustration of this rule is to be found in the case of contracts from which some formality necessary to the validity of the contract has been omitted. A covenant to pay money due upon a a. on pro-contract of this nature is binding. Thus where a corporation seaf'Un 6r borrowed money upon mortgage without having first obtained the approbation of the Lords of the Treasury, they "-& 6 win. iv. did what the Municipal Corporations Act declared to be 'unlawful;' but having...