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VELANDAN v. PERERA.
C. B., Colombo, 18,010.
Promissory note—Public Servants' Liabilities Ordinance, No. 2 of 1899,s. 8—'Liability contracted before commencement of Ordinance.
A promissory note given in renewal of another promissory note simplysuspends the liability of the maker until the dishonour of the new note.
Therefore, an action instituted against a public servant upon apromissory note which was made after the commencement of the PublicServants' Liabilities Ordinance, but in renewal of a liability contractedbefore such commencement, cannot be taken exception to, under section8 .of that Ordinance.
CTION on a promissory note dated 19th April, 1899. Pleataken- under the Public Servants’ Liabilities Ordinance
(No. 2 of 1899), which came into operation on 6th March, 1899: noaction could be maintained against the defendant, as he was apublic servant receiving a salary of Rs. 125 a month from theGovernment.
The Commissioner dismissed the plaintiff's action on the groundof the above exception.
The plaintiff appealed.
M. de Saram, for appellant.—The note sued upon was shownto be one given in renewal of another note made before theOrdinance No. 2 of 1899 commenced. A promissory note given inrenewal is not a discharge of the old debt, but only a conditionalpayment. If at its due date the note is dishonoured, the originalliability is revived (Chalmer’s Bills, p. 305). In the present casethe new note was dishonoured, and the debt due thereon is noneother than the old debt, which existed before the Ordinance cameinto operation. The dismissal of the action is therefore wrong.
Wadsworth, for defendant, respondent.—The plaintiff does notsue upon the old promissory note, but upon the one dated19th April, 1899. The Ordinance draws no distinction betweenold liability and new liability. The note sued upon clearly fallswithin the express terms of the Ordinance (section 3, sub-section 4).
28th August, 1902. Moncreiff, A.C.J.—
The plaintiff sues the defendant upon a promissory note datedthe 19th April, 1899, which fell due on the 18th June, 1899. It waspresented for payment at the Bank of Madras and was dishonouredand noted for non-payment. In reply to the claim, the defendantpleaded the benefit of section 3 of Ordinance No. 2 of 1899, which is
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styled the Public Servants’ Liabilities Ordinance. Sub-section (4)provides .that the benefit of the section is not to extend to anyliability contracted before the commencement of the Ordinance,that is to say, before the 6th March, 1899. It became a question,therefore, whether the liability in this oase was contracted beforethe 6th March, 1899.
The plaintiff says that this note was a renewal of a note whichwas made on the 15th February, 1899, which fell due on the16th April, and was noted at the bank for non-payment. He says,in fact, that the liability was contracted a considerable time ago,and had been the subject of several renewals before the makingof this note. The defendant says that the note sued uponhad no connection with any previous note, and that it was made inrespect of a debt contracted at .the time it was made.
The learned Commissioner has not found which of those storiesis correct, and I think that the case must go back in order that afinding upon that issue may be recorded. If the defendant’s storyis true, he is entitled to the benefit of the Ordinance; but if theplaintiff’s story is true, it seems to me that the liability wascontracted before the Ordinance came into operation.
It is clear that a negotiable instrument is only conditionalpayment of a debt, and that a bill given in renewal of a formerbill simply suspends the liability until the dishonour of the bill.When the bill is dishonoured, the liability is revived. Mr. Wads-worth endeavoured to persuade me that, although that was thecase, the liability in this instance could no.t be dated back .to theday on which .the preceding note of February, 1899, was made.He said that if the dishonour of the last note revived the oldliability, then the plaintiff should have sued upon the old note, orupon the liability which was revived. I am not aware that suchis the practice. So far as I am aware the plaintiff is entitled tosue upon the dishonoured note, and at present I should bedisposed to think that the mere fact that he does so does not pre-vent the renewal of the liability from which the note sued uponhas sprung. If the plaintiff’s statement is correct, this note was arenewal of the note of February, 1899. If such should prove to bethe case, I am inclined at present to think .that there should bejudgment for the plaintiff, but the point may remain open forconsideration. More than that it is impossible to say untilthe facts have been found.
VELANDAN v. PERERA