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Present: Schneider A. J.
116—C. B. Dandagamuwa, 4t503.
Promissory note—Interest payable monthly—Principal and interest to bepaid if interest is not so paid—Is note payable on demand ?—Stampduty.
A document purporting to be a promissory note set out thereasons why the money was borrowed, and proceeded, to state thatin failure of so paying the interest every month, the principal andinterest so due shall be paid to the creditor, and that the noteshall be received back. The note was stamped with a six-centstamp.
The Commissioner held that the note was not properly stamped*as the note was not payable on demand, but only upon failure topay interest “ every month.”
Held, that the note was payable on demand, and that it wasproperly stamped.
r j ^HE facts appear from the judgment.
Arulanandany for appellant.
July 22, 1921. Schneider A.J.—
The decision of this appeal turns upon the interpretation to begiven to the document marked P 1 which is as follows: “*Thepromissory note, written and granted to Neina Meera Saibu ofElabodagama in Katugampola korale west, in the District ofKurunegala, by XJduma Lebbe, son of Usubu of Elabodagamaaforesaid, purports as follows : “ To pay the debt of my father whoborrowed money from the said creditor Meera Saibu and for theexpenses of my family, I, the said Uduma Lebbe, have borrowed incash a sum of Rs. 200 from the said Meera Lebbe, promising to payinterest thereon at the rate of 12 per centum per annum everymonth, and, in failure of so paying the interest, the principal andinterest so due shall be paid to the said creditor Meera Lebbe ororder, and this pro-note will be received back.”
It is undoubtedly a promissory note, and as undoubtedly hasbeen drafted by a person not familiar with the precise legal formand language of a pro-note. The plaintiff says that it was writtenby his Kanakapulle. The earlier and the latter parts of it appearto me to be mere surplusage. It is not neoessary to set out whythe money was borrowed, nor that the note would be “ receivedback ” when payment is made. It bears a six-cent stamp. If itbe regarded as a promissory note payable on demand, it is duly
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stamped; if not, it is insufficiently stamped. The only defenceraised in the answer is that the document is a forgery. But at thetrial the objection was taken that it was not duly stamped. Up-holding this objection, the Commissioner dismissed the plaintiff’saction. He appeals. The plaintiff is a money lender, and thedefendant is a person who has been borrowing money upon pro-notes. It is but fair to assume that they were aware that a six-centstamp is the appropriate stamp for a promissory note payable ondemand. From the fact that the document bears such a stamp,and from the internal evidence of the document itself, I am inclinedto think that the parties intended the document to be a note payableon demand. But there is room for the contrary view upon thispoint. I would therefore decide the appeal upon other groundswhich admit of no doubt. I would hold that it is a note payableon demand. The Bills of Exohange Act, 1882, defines a promissorynote as “ an unconditional promise in writing made by one personto another, signed by the maker engaging to pay on demand or ata fixed or determinable future time a sum certain in money to, orto the order of, a specified person or to bearer.” The learnedCommissioner appears to have thought that the note was payableonly upon a failure.to pay interest “every month,” and that,therefore, it was not payable on demand. By virtue of section 89of the Act, the provisions of sections 10 and 11 are applicable topromissory notes. Section 10 states that promissory note ispayable on demand: (a) which is expressed to be payable on demandor (6) in whioh no time for payment is expressed. This documentmust be regarded as one coming within the category (6), and,therefore, as a note payable on demand. It cannot be regardedas one payable at a “determinable future time,” because the failureto pay interest may never happen. The note would then not be“an unconditional promise to pay,” but a promise to pay uponthe happening of a condition, namely, the failure to pay interest.I call it a condition because it has both the essentials of a conditionas that is understood in the law, viz.: (1) uncertainty, (2) futurity.The failure to pay interest is uncertain for two reasons, because itmay never happen and it is not certain when it may happen evenif it does happen. But the Act in section 11 puts the matter inexpress terms. It says that a promissory note is payable “ at adeterminable future time ” within the meaning of the Act, whenit is expressedto be payable inter alia, on the occurrence of a specifiedevent “ which is certain to happen, though the time of happeningmay be uncertain.” The failure to pay interest obviously does notcome within the description of this event.
I would, therefore, allow the appeal, with costs, and direct thatdecree be entered for the plaintiff as prayed for, with costs.
Meera Saibov. TJdumaLebbe
Appeal allowed.