153-NLR-NLR-V-17-MOHAMADU-v.-AHAMADALI-et-al.pdf
( 604 )
1914.
Present: Wood Benton C.J. and De Sampayo A.J.
MOHAMADU r. AHAMADALI et ah
292—D. C. Badulla, 2,761.
Promissory noteAssignment—Notice of assignment in writing necessary
to enable assignee to sue.
The validity of the assignment of a promissory note depends onthe giving express notice in writing, and the legal right to theinstrument passes only from the date of such notice. The assigneeof a note cannot sue the maker without such notice.
fJpHE facts are set out in the judgment of Wood-Benton C.J.
A. St. V. Jayewardene, for appellant.
J. W. de Silva, for respondent.
Cur. adv. vult.
October 14, 1914. Wood Renton C.J.—
The plaintiff 6ues the defendant cn a promissory note made bythe defendant in favour of Palaniappa Chetty, and assigned byPalaniappa Chetty to the plaintiff. The learned District Judgehas come, though with some hesitation, to a conclusion favourableto the plaintiff on the evidence, but, on the authority of the .d^cisfonof this Court in Garpen Chetty v. Sammugan Tewer,1 has dismissedthe action on the ground that no written notice of the assignmenthad been given by the plaintiff to the. defendant. The plaintiffappeals.
Carpen Chetty v. Sammugan Tewer1 is a decision by the" FullCourt. It is directly in point, and is therefore binding uponus. I desire to add that it is, in my opinion, sound, as well asauthoritative. Section 2 of Ordinance No. 5 of 1852 providesthat—
'‘ The law to be hereafter administered in this Colony in respectof all contracts and questions arising within the same uponor relating to bills of exchange, promissory notes'; andcheques, and. in respect of all matters connected with anysuch instruments, shall be the same in respect of the saidmatters as would be administered in England in the likecase at the corresponding period, if the contract had beenentered into or if the act in respect of which any suchquestion shall have arisen had been done in England,unless in any case other provision is or shall be made byany Ordinance now in force in this Colony or hereafter tobe enacted.99
1 {1883-84) 6 S. C. C. 49.
( 505 )
The language of this section is of the most comprehensive1W4*
character.' In particular, the words “ all contracts and questionsWood
arising within the Same relating to bills of exchange, promissoryO-T.
notes, and oheques, ” and “ all matters connected with any such Mohamaduinstruments, " must include an assignment of a negotiable instrument •• Ahamadaliif they are to receive a natural interpretation. The only point tobe determined then is, What is the law of England as to theassignment of such instruments ? The answer is supplied bysection 25 (6) of the Judicature Act, 1873,1 which provides that—
*' Any absolute assignment, by writing under the hand of theassignor (not purporting to be by way of charge only),of any debt or other legal chose in action, of whichexpress notice in writing shall have been given to thedebtor, trustee, or other person from whom the assignorwould have been entitled to receive or claim such debt 'or chose in action, shall be and be deemed to have beeneffectual in law (subject to all equities which would havebeen entitled to priority over the right of the assigneeif this Act had not passed) to pass and transfer the legalright to such debt or chose in action from the date ofsuch notice, and all legal and other remedies for the same,and the power to give a good discharge for the same,without the concurrence of the assignor. "
The words of this section are wide enough to embrace negotiableinstruments, just as those of section 2 of Ordinance No. 5 of 1852are sufficiently comprehensive to include assignments of suchinstruments, and Chalmers 2 places the matter beyond doubt—
“ A bill may be transferred by assignment or sale, subject tothe same conditions that would be requisite in the caseof an ordinary chose in action. ”
Now it ia well-settled law that the requirement as to express noticein writing is a condition precedent to the assignee’s right to sue. Inthe present case the learned District Judge finds that not evenverbal notice was given to the debtor, and he has therefore rightlyheld that the action fails. There is nothing in conflict with theratio decidendi in Carpen Ghetty v. Sammugan Tewer3 in laterdecisions. My brother De Sampayo refers to it as an authority inJoronie Appu v. Peiris,* in which it was held that the interest in abill or note may be transferred otherwise than by endorsement, andPereira J. cited section 31 (4) of the Bills of Exchange Act, 1882, sas itself involving a recognition of this right. I- do not think thatthe decision of Sir Alfred Lascelles C.J. in Mudalihamy v. PunchiBanda, 3 that section 2 of Ordinance. No. 5 of 1852 does not introduce
36 and 37 Viet. e. 66.* {1913) 16 N. L. R. 431.
BUle of Exchange, 6th ed.,p. 131.3 45 and 46 Viet. e. 61.
3 {1383-84) 6S.C.C.46.3 (1912) 15 N. L. R. 350.
( 506 )
1M4»any part of the English procedure into actions on bills of exchange
WooDand promissory notes in any way weakens the authority of Carper*
Bbnvqk C.J. Chetty v. Sammugan Tewer.1 The point of procedure involved in theMohamadu ^onner case was one of mere procedure dealt with by the Civilv. AhamadaU Procedure Code. The provisions of section 25 (6) of the JudicatureAct, 1878, are much more closely akin to substantive law.
I would dismiss this appeal with cost6.
De Sampayo A.J.—
The plaintiff sues the defendant on a promissory note made byhim in favour of one Palaniappa Chetty, and assigned by PalaniappaChetty to the plaintiff by deed. The plaintiff has not given to thedefendant any notice of this assignment, and the only point sub-mitted for consideration on this appeal is whether the plaintiff, aaassignee of the promissory note, can sue in his own name withoutsuch notice; This point is covered by the authority of the FullBench decision in Garpen Chetty v. Sammugan Tewer, 1 which is not'only binding upon us, but in my judgment is in accordance with thelaw applicable in Ceylon. The provisions of section 2 of the Ordi-nance No. 5 of 1852, which introduces the English law, is very wide.It enacts that the English law shall govern, not only in respect ofbills of exchange, promissory notes, and cheques, but “ in respect ofall contracts and questions arising within (this Colony) upon orrelating to bills of exchange, promissory notes, and cheques, and inrespect of all matters connected with any such instruments. ’* Theassignment of a promissory note is certainly a contract “ relating ”to a promissory note, and is a matter M connected with ’* such aninstrument, and must therefore be (regulated by the English law.Section 45, sub-section (6), of the Judicature Act, 1878, which requireswritten notice of an assignment, applies not merely to negotiableinstruments, but to all choses in action,' and Chalmers' Bills ofExchange (7th ed.)f p. 143, puts it thus:“ A bill may be
transferred by assignment or safle subject to the same conditions aswould _be requisite in the ease of an ordinary chose in action. ”Since then, in England, negotiable instruments cannot be validlyassigned, except in the manner provided* the same law must neces-sarily prevail here in regard to assignments of such instruments.The case of Joronis Appu v. Peiris,2 which was cited on behalf of theappellant, has no bearing on this point, because all that the Courthad to consider there was whether a promissory note could not betransferred otherwise than by endorsement. It was also arguedthat this was a matter of procedure, and that the English law didnot therefore apply. It is dear, however, that the provision in theJudicature Act as to assignments is not a mere matter of procedure,but enacts substantive law. The validity of the assignment is
* (1883-84) $8.0.0. 40.
* (1913) 16 N. L. R. 481.
m$de to depend on the giving of express notice in writing as a condi-tiotr precedent, and the legal right to the instrument is to pass onlyspw Bamuxofrom the date of auoh notice. This being so, Andris- v. Sutiya 1 andMudaUhamy v. Punchi Banda, 8 which were cited in this connection, Mohamaduare not in point. The section of the Judicature Act in question *• Ahamadaliproceeds to enact that an assignment in the manner provided shallbe effectual to pass and transfer to the assignees " all legal or otherremedies for the same without the concurrence of the assignor."
An assignee may under the general English law sue in the name of theassignor, and how the matter might stand if Palaniappa Chatty hadbeta joined as a plaintiff in' this case it is not necessary to consider,because Palaniappa Chatty is not a party to the action at all.
In my opinion the judgment appealed against is right, and thisappeal should be dismissed with costs.
Appeal dismissed.