SPECIALTY CONTRACTS AND EQUITABLE DEFENCES. 59 tion. It is as true to-day as it ever was, that fraud, payment, and the like, do not nullify the title of the fraudulent or paid obligee, but are simply conclusive reasons why he ought not to enforce his title. The truly equitable or personal character of these defences at law has commonly only a theoretical value in actions upon the ancient common-law specialty, the instrument under seal.^ But it is of the highest practical importance in actions upon the modern mercantile specialty, the bill of exchange or promissory note.^ For the legal title to bills and notes, by reason of their negotiability, passes freely from hand to hand, and equity would not restrain, by injunction, any holder from enforcing his title, if he came by it honestly and for value. And the plea at law being, in substance, like the bill in equity for an injunction, we see at once the reason for the familiar rule that fraud and other defences, based upon the conduct of the payee or some other particular person, cannot be successfully pleaded against any bona fide holder for value. James Barr Ames, 1 But the equitable nature of these defences explains the right of an innocent obligee to recover in covenant even though the defendant was induced to execute it by the im- proper conduct of a third person. 2 Because assumpsit would lie upon them, the notion became current that bills and notes were simple contracts. In Scotland, and in Europe generally, a bill or note is recognized to be a literarum obligatio, and the logic of facts is sure to compel, even- tually, a similar recognition in England and this country.
