446 HIGH COURT OF CHANCERY.

Baughman did not comply with this, his alleged agreement,
but, on the contrary, on the 11th of September, 1848, three
months before the maturity of the note, the firm of which he
was a member borrowed from the defendant, Lee, twenty-one
thousand dollars, and lodged and hypothecated with him as
security for the re-payment of the money, this note, with many
others, a list of which is given in his answer. Of these notes,
it appears some have matured and remain unpaid, and that
others have not yet matured, so that a considerable portion of
the money loaned is still due.

There is nothing to show that Lee, the defendant, had any
knowledge or any reason to suspect when he received this note
as stated, that it had been procured by fraud or misrepresenta-
tion, or was without consideration; and in his answer he ex-
pressly denies that he had any such knowledge or suspicion;

and, denying all belief in the allegations of the bill charging
such fraud and want of consideration, the defendant avers him-
self to be a fiona fide holder of the note, for a full and valuable
consideration and without notice.

The bill charges, that the note was pledged by Baughman,
Nicholson and Cannon, to the defendant, Lee, to secure the
payment of a large sum of money which they had borrowed of
him, and upon which he charged and exacted from said firm,
usurious interest. The bill does not allege that the defendant
knew of the circumstances under which the note was given to
Baughman, nor does it charge that the complainants gave Lee
notice thereof, until after he had received the same from the
payees as security for the loan made to them; nor is there any
allegation that steps were taken by the complainants, by publi-
cation or otherwise, to caution the public against taking the
note. It is charged, that to secure the money borrowed by
Baughman, Nicholson and Cannon, from the defendant, they
pledged with him securities to a larger amount than the loan,
and the bill insists that Lee is bound, before he can proceed
against the complainants upon their note, to apply and exhaust
the other securities.

In answer to this charge, the respondent says, that several of