Kandiah v. Solomons.
Present: Poyser and de Kretser JJ.
KANDIAH v. SOLOMONS et al.
125—D. C. Jaffna, 10,886.
Promissory note—Instrument in form, of pro-note—Agreement annexed—Action by endorsee—Bills of Exchange Ordinance, No. 25 of 1927;s. 84 (1).
Where the plaintiff as endorsee sued /on an instrument, which wasin the form of a promissory note but which contained the followingwords in addition : “ Whereas this amount has been taken out on accountof cheetu and whereas deposit has been made for 37 months at the rate.,of Rs. 25 once in a month, the amount will be paid off. This cheetuis in the name of the first named, and the second and third named aresureties ”,—
Held, that the document was not a promissory note.
POYSER S.P.J.—Kandiah v. Solomons.
HIS was an action brought by the plaintiff as the endorsee of analleged promissory note executed by the defendants in favour of
one Sivaguru and endorsed by the latter to the plaintiff. The learnedDistrict Judge held that the promissory note was not negotiable anddismissed the plaintiff’s action.
N. Nadarajah (with him H. W. Thambiah), for plaintiff, appellant.—The document complies with all the requirements of section 84 of the Billsof Exchange Ordinance, No. 25 of 1927, and' is therefore a promissorynote. The District Judge is wrong in concluding it is not negotiable.The additional memorandum does not impair the validity of the promis-sory note. See Meera Saibo v. Vduma Lebbe,l Caldera v. Zair.udeenThe plaintiff is a holder in due course. The District Judge has mis-directed himself and gone wrong on the question of fact.
L. A. Rajapakse (with him M. M. I. Kariapper and SabapathipiUai), fordefendants, respondents.—The document must be construed as a whole.There is here a contemporaneous written agreement which controls theoperation of the note. Such agreement is made before the bill iscompleted and must be considered 'as part of the instrument. Byles onBills (17th ed.), p. 120. It is, therefore, not a promissory note as definedin the Ordinance. Chalmers on Bills calls them ambiguous instruments.See 9th ed., p. 337. See also Leeds v. Lancashire’; Bell v. Ingestre*;Richards v. Erankun*; and Fernando v. Silva.’
• 1Cur. adv. vult.
October 19, 1938. Foyser S.P.J.—
In this case, the plaintiff sued the defendants on an alleged promissorynote (P 1). The plaintiff is the endorsee of P 1 which was executedby the defendants, in favour of one Sivaguru, under the followingcircumstances. Sivaguru instituted a cheetu. The first defendantbecame a member and subscribed to the funds a sum of Rs. 25 a month.'After three months, he purchased the cheetu fit an auction, and on suchpurchase executed P 1. This document is in the form of an ordinarypromissory note signed by the three defendants, but the following hasbeen added—
“ whereas this amount has been taken out on account of cheetu,and whereas deposit has been made for 37 months at the rate ofRs. 25 once in a month, the amount will be paid off. Thischeetu is in the name of the first named, and the second andthird named are the sureties ”.'
After the execution of this document, the first defendant continued■ to pay his monthly instalments. In July, 1936, however, the cheetuceased. Up to and including that month the first defendant had paid allhis intalments. On the closing of the cheetu the document P 1 wasendorsed to the plaintiff who now sues upon it.
The District Judge -has dismissed the plaintiff’s action. He cameto the conclusion that although P 1 was a promissory note it was notnegotiable apd, on that ground, he dismissed the plaintiff’s action.1 22 N. L. ft. 508.* (1848) 12 Q. B. 317.
= Q4 N. L. ft. 244.3 (.1840) 9 C. .* P. 221.
* (1809) 2 Camp 205.* 7 N. L. ft. 1.
Bartleet & Company v. Ebrahim Lebbe Marikar.
I think the District Judge came to a correct conclusion, although I do hotagree with the reason he gave. In my opinion, the document P 1cannot be regarded as a promissory note. It is more in the nature of anagreement. “A promissory note is an unconditional promise in writingmade by one person to another and signed by the maker engaging to pay,on demand or at a fixed or determinable future time, a sum certain in money,to, or to the order of, a specified person or to bearer ”. See section 84 (1)of the Bills of Exchange Ordinance, No. 25 of 1927. The document 'P 1is not an unconditional promise to pay. It is more in the nature of anagreement to pay a certain sum on the happening bf a certain event,namely, the default in the monthly payments to the cheetu. As thecheetu ceased in July, 1936, and as up to that time the first defendanthad paid all the instalments that were due from, him, his liability underthis document clearly ceased.
For these reasons the appeal will be dismissed with costs,ns Kbetsek J.—I agree.
KANDIAH v. SOLOMONS et al