Abdul Coder and Meera Saibo.
Present : Howard C.J. and Keuneman J.
ABDUL CADER, Appellant, and MEERA SAIBO, Respondent.
53 (Inty.)—D. C. Colombo, 12,153.
Jurisdiction—Action on promissory note—Made at Badulla—Payable at
Badulla■—Place of payment—Cause of action.
Plaintiff sued the defendant in the District Court of Colombo as theindorsee of a promissory note made by the defendant in favour of Vand endorsed by the latter to plaintiff.
The note, which was payable on demand, was signed at Badullav and in the body of the note the defendant’s address was given as Lowerstreet, Badulla..
Held, that the intention of the parties was that Badulla should be theplace of payment and that therefore the cause of action arose at Badulla.Narayanan Chetty v. Fernando (2 C. L. R. 30) followed. *
* L.R. 1 Ex. 364, 367.
564HOWARD C.J.—Abdul Cader and Meera Saibo.
PPEAL from a judgment of the District Judge of Colombo. Thefacts appear from the head-note and the argument.
H. V. Perera, K.C. (with him C. Renganathan), for the defendant,appellant.—The District Court of Colombo had.no jurisdiction to try thiscase. The promissory note was made at Badulla and payable on demand.A promissory note made at a certain place, the maker being describedas of the same place, is, in the absence of express provision to thecontrary, a note payable at that placer The case of Narayan Chetty v.Fernando 1 is directly applicable. See also sections 45 (4) (b), 90 and 87of the Bills of Exchange Ordinance (Cap. 68). Further, the plaintiff isindorsee and not the payee ; the maker of a note cannot be expected toknow who and where an indorsee is. The cause of action must be heldto have arisen at Badulla and not at Colombo.
N. E. Weerasooria, K.C. (with him N. Nadarajah, K.C., and C.Thiagalingam), for the plaintiff, respondent.—The promissory note ispayable on demand and not one payable at a particular ,place. Nopresentment for payment was necessary in order to render the makerliable. The only ground on which jurisdiction was fixed in NarayanChetty v. Fernando (supra) was that of endorsement. Section 45 (4) (b) ofCap. 68 has to be read in conjunction with sections 87 and 88, and the effectis that presentment for payment is necessary only when a particular placeis mentioned, in the body of the note, for payment. In the circumstancesof the present case the rule that the debtor must seek out the creditormust prevail—Ponniah v. Kanagasabai, Dias v. Constantine Siyatu-harny v. Fernando Fernando v. Arunasalempillai", Ratnapala v. Marikar.[Howard C.J.—Have you any.English cases in point?]
Read v. Brown’, though not directly in point, is .helpful.
Buxton v. Jones * is referred to in Narayan Chetty v. Fernando (supra).H. V. Perera, K.C., in reply.—The rule in English law that the debtormust seek out the creditor is not an unalterable one. See Vol. 7 ofHalsbury’s Laws of England (2nd ed.), Art. 275. The place of performanceis to be found in the provisions of the Bills of Exchange Ordinance ;section 45 (4) (b) is a provision applicable both to bills of exchange andpromissory notes and is unaffected by sections 87 and 88. In Ceylon thecause of action contemplated in section 9 (c), of the Civil Procedure Codecannot arise in more than one place. Read. v. Brown (supra) may be ofassistance only in a: case where the cause of action is permitted to arise“partly or wholly” at a place. In the present case the failure, atBadulla, to pay on receipt of the letter of demand gave rise to the causeof action.
—'Cur. adv. vult.
October 21, 1943. Howard C.J.—-
In this case the plaintiff sued the defendant on a promissory note forthe sum of Rs. 1,650 made by the defendant to one Vellathamby whoindorsed it to the plaintiff. The note was signed at Badulla, was payableon demand and in the body of the note the defendant’s address was given
1 (1891) 2 C. L. Rep. 30.4 (1919) G C. W. R. 151.
7 (1932) 35 N. L. R. 128.-s (1919) 8 O. W. R. 247.
* (1918) 20 N. T,. R. 338.7 L. R. 22 Q. B. D. 12S.
■ (1920) 21 N. L. R. 191.“ 133 1C. R. 256.
HOWARD C.J.—Abdul Coder and Meera Saibo.
as of Lower street, Badulia. By a letter dated January 10, 1940, theplaintiff’s Proctor writing from Kegalla demanded from the defendantimmediate payment of the sum of Rs. 3,300 being the principal andinterests due on the note. In that letter the plaintiff was described as“ of Rambukkana ”, The money due on the note not having been paid,the plaintiff commenced proceedings for its recovery in the District Courtof Colombo. On objection being taken by the defendant to the jurisdic-tion of this Court, the question was decided as a preliminary issue in favourof the plaintiff. From this decision the defendant has now appealed tothis Court.
The learned District Judge has found (a) That the plaintiff was residentin Colombo, (b) That the principle of English law that a debtor must seekout and pay his creditor at the latter’s residence or place of businessapplies. Hence the cause of action arises at Colombo and the action wasproperly instituted in that Court. I will deal with (b) first. By virtueof section 97 (2) of the Bills of Exchange Ordinance (Cap. 68) the rulesof the common law of England apply to promissory notes. No doubtthe rule of law in cases of contract is that the action could be broughtin a place where the money had to be paid, and, in the absence of anystipulation in regard to it, the rule of English law that a man shouldseek out his creditor and pay him would apply. Thus it was so held inan action for goods sold and delivered (vide Dias v. Constantine', followedin Siyathuhamy v. Fernando'1). In the former case Bertram C.J., in hisjudgment stated as follows : —
” The question therefore, is, at what place under the contract wasthe payment to be made ? The place of payment under the contractis the place where the parties to the contract intended the payment tobe made. In this, case the contract does not expressly mention anyplace of payment. Consequently, what we have to discover is theimplied intention of the parties.
There have been several cases in England on this point, and it is arule of English law that it is the duty of a debtor to seek out and, payhis creditor, if the creditor is within the jurisdiction, at the creditor’sresidence or place of business. The relevancy of that rule in regard to thismatter is this, that under the English law, in determining what was theintention of the parties, this is a circumstance which the Court naturallylooks at. The debtor being under an obligation to seek out and payhis creditor, the Court assumes that the parties, if they did not mentionthe place of payment, contracted on that basis.”
It has been contended by Counsel for the respondent that the sameprinciple applies with regard to a promissory note and in this connectionhas referred us to the decision of Macdonell C.J., in Ponniah v. Kanaga-sabai*. The head-note in this case is as follows : —
“ Where a promissory note made by the defendant in favour of theplaintiff was silent as to the place of payment—
Held, that an action may be brought on the note in the Court withinwhose jurisdiction the plaintiff resided, as the debtor must seek out the
creditor at his residence or place of business.”
1 >0 y. L. R. 33S.- 21 N. L. R. 494.
* 3.5 N. L. R. VIS.
566HOWARD C-J.—Abdul Cader and Me era Saibo.
The following passage appears in the judgment: —
“ The rule of English law seems to be this; that you must discoverthe place of payment from the expressed intention of the parties.Here there was no expressed intention. The note was silent as tothe place of payment and the learned Commissioner was dissatisfiedwith such evidence as was addressed to him on that point. Then in theabsence of anything from which one can fairly deduce what was theintention of the parties as to the place of payment one is thrown backon what seems to be the English rule that the debtor must seek out thecreditor at his residence or place of business. This gives a Courtjurisdiction to entertain a case brought on a promissory note at theplace where the plaintiff resides. The only difficulty I feel on thispoint is the case that has been cited to me in 17 N. L. R., p. 479, whichis a two-Judge decision. It is possible that that case can be distin-guished on the facts, but in any event it does not seem at any timeto have been followed and is in effect dissented from in a decision ofanother case which too has been decided by two Judges'. Ifthat is so, then I think I am at liberty to apply what is plainly the rulelaid down by Statute, viz., that the debtor must seek out the creditorat his residence or place of business. From that it follows that acreditor can sue, at the place where he resides, on a promissorynote.”
It will be observed that the learned Chief Justice found himself unable todeduce anything as to the intention of the parties. Moreover he failedto follow a previous decision by two Judges, namely, Saibo v. Sena-nayake ’. So far as the present case is concerned, Ponniah v. Kanaga-sabai (supra) can be distinguished on the ground that the maker was suedby the indorsee and not by the payee. In Saibo v. Senanayake (supra)it was held that the District Court of Colombo had no jurisdiction inrespect of the plaintiff’s claim on a promissory note made outside theterritorial limits of the jurisdiction of the Court, no place of paymentbeing mentioned in the note, but the payee being resident in Colomboat the date of the action. It is difficult to understand the dictum ofMacdonnel C.J. in Ponniah v. Kanagasabai (supra) that the decision inSaibo v. Senanayake (supra) is inconsistent with that in Dias v. Constantine(supra) which related to a sale of goods. There can be no doubt that ifSaibo v. Senanayake is good law it is applicable to the facts of the presentcase. The case of Narayan Chetty v. Fernando ’, cited by Mr. Perera, isalso a direct authority for the contention of Mr. Perera that the cause ofaction in this case did not arise at Colombo, but at Badulla. In that casethe action was brought by the indorsee in the District Court of Negomboagainst the maker of a promissory note made at Chilaw, but indorsed atNegombo. It was held that the cause of action arose at Chilaw and theDistrict Court of Negombo had no jurisdiction. The report of this casedoes not disclose the residence of the plaintiff. 1
1 20 N. L. F- 17 M. L. R. 479.
3 2 C.L. Rep. 30.
HOWARD C.J.—Abdul Coder and Meera Saibo.
The general rule with regard to the place of performance of a contractis stated in Volume 7 of Lord Hailsham’s Halsbury’s Laws of England atp. 195, para. 275, as follows : —
“ Where no place for performance is specified either expressly or byimplication from the nature and terms of the contract and the surround-ing circumstances, and the act is one which requires the presence ofboth parties for completion, the general rule is that the promisor mustseek out the promisee and perform the contract whereve^he may happento be. This rule applies not only to contracts for the payment ofmoney, but to all promises for the performance of which the con-currence of the promisee is necessary. ”
It is, however, a matter of some significance that not one English case hasbeen cited to show that the general rule with regard to contracts has beenapplied to a promissory note. The inference to be deducted from thisabsence of authority is that the nature of the contract evidenced by thepromissory note, particularly its indorsability to a person whose residenceis unknown at the time of the execution of the note, precludes the applica-bility of the general rule. In a note to paragraph 275 of Volume 7 ofHalsbury’s Laws the reader is referred to Volume II. for the place ofpayment with regard to Bills of Exchange and Promissory Notes. Itwould, therefore, appear that Bills of Exchange and Promissory Notesdo not come within the general rule which I have stated. The positionis regulated by the Statutory provisions of the Bills of Exchange Act, or,in Ceylon, by the Bills of Exchange Ordinance. Section 45 (4) (b) of thisOrdinance is as follows :—
“ Where no place of payment is specified, but the address of thedrawee or acceptor is given in the bill, and the bill is there presented. ”In section 90 (1),. it is provided that subject to the provisions of Part IV.and except as by this section provided, the provisions of the Ordinancerelating to bills of exchange apply,, with the necessary modifications,to promissory notes. We have, therefore, to consider whether there isanything in Part IV. of the Ordinance to render section 45 (4) (b) inapplic-able to a promissory note. Section 88 (1) provides that where a promis-sory note is in the body of it made payable at a particular place, it must bepresented for payment at that place in order to render the maker liable.In any other case, presentment for payment is not necessary in orderto render the maker liable. In sub-section (2) it is provided that present-ment for payment is necessary in order to render the indorser liable.Section 87 (1) also provides that where a note payable on demand hasbeen indorsed, it must be presented for payment within a reasonabletime of the indorsement, otherwise the indorser is discharged. In thiscase a demand was made by D 3. This amounted to a presentment ofthe note in accordance with section 45 (4) (b). In my opinion the makingof the note at Badulla, the insertion of the maker's address as Lowerstreet, Badulla, and the demand for payment addressed to the defendantat Badulla indicate that the intention of the parties was that Badullashould be the place of payment. Following the cases I have cited, the causeof action, therefore, arose at Badulla and not at Colombo. In view ofthe conclusion at which I have arrived on this question, it is unnecessary
£68 D£ KRETSER J.—Ebert Silva Bus Service and Colombo Omnibus Company,
to decide whether the plaintiff can be considered for the purposes ofbringing this action as resident in Colombo. Only after considerablehesitancy did the learned Judge come to the conclusion that he was.In my opinion the question is shrouded in grave doubt.
For the reasons I have given, the appeal is allowed with costs in this.Court and the Court below.
Keuneman J.—I agree.