Dear Sib,
In continuation of my letter of September 7, 1922, you will see fromthe enclosed that the Registrar of Companies had gazetted that thename of the Bank of Colombo, Ltd., will be struck off the Register ofJoint Stock Companies on the 30th instant. It might therefore be toyour advantage if you will kindly see me as early as possible on any weekday convenient to you between 9 and 11 a.m. at my office, No. 3, Staplesstreet, Slave Island.
Yours faithfully,
(Sgd.) 0. B. WlJBYBSBKEBA;
The – plaintiff says he saw the defendant with reference to hisfirst letter and the defendant said “ if I gave him the cheque in hisfav.our and abandoned the claim against him he would be responsiblefor the money and he would give me a note agreeing to pay themoney within five years with interest.”
The plaintiff did not consent as h6 wished to consult: his lawyers.The defendant says plaintiff did not see him before the second letterwas written. The learned District Judge has accepted the plaintiff'sevidence and I see no reason to disagree with him. As the secondletter was a circular letter I cannot infer from the terms of it. thatit was written because plaintiff had not seen the defendant inresponse to his first letter.
As regards the interview on November 20, when the note wasmade, the plaintiff’s evidence is that the defendant gave him thenote in exchange for his cheque for the amount standing to hiscredit at the Bank of Colombo, that the defendant told him he wouldget payment of the amount due on the note at the end of five years,and that he did not take any steps against the bank because thedefendant had given him the note. He denied that defendant toldhim he would not get payment if the bank did not reopen.
The defendant’s evidence is, that the note was given on thecondition that he would be liable on the note only if the bank wasreopened and he was able to cash the. cheque given by the plaintiff.
The defence to the claim is that as the bank was not reopenedand the defendant was unable to cash plaintiff’s cheque there was afailure of consideration.
The trial Judge has accepted the plaintiff’s evidence and I thinkthat his view of the evidence is in accordance with the facts.
The defendant was not only .the largest shareholder in the bankand the managing director, but he was also the largest debtdr tothe bank, and it is to be expected that he would not be anxious tohave an inquiry regarding the circumstances which compelled thebank to suspend payment. It was possible to avoid an inquiryby taking from the customers cheques for the amounts standingto their credit in exchange for promissory notes on which thedefendant was personally liable. It is highly improbable that thecustomers would part with their cheques merely on the chance ofthe bank being reopened./
The plaintiff was not the only customer to whom the defendantgave promissory notes. He gave a note to one Elisa Fernandodated November 30, payable at the Imperial Bank of India, Ltd.,like the note sued on, in 1927. As the note was made on the lastday on which cause could be shown against the bank being struckoff the List of Companies and dissolved it could not have been madeon condition that the bank was reopened. What is more, thedefendant paid, off a large part of the amount due on that notebefore 1927, and stopped payment only because this action wasfiled. This note clearly supports the'plaintiff’s evidence that thenote shed on was not given on condition that the bank was reopenedand his cheque cashed. Even on November 20 the defendant hadhardly time to place himself in a position to show cause against theRegistrar’s notice.
I am of opinion that the note was given to the. plaintiff in con-sideration of his abandoning his claim against the bank and thatthere was no condition that the defendant should not be liable if thebank did not reopen.
I accordingly dismiss the appeal with costs.
Appeal dismissed.