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Present: Dalton J. and Maartensz A.J.
SILVA v. SOMAWATHIE.77—D. C. Badulla, 4,524.
Money Lending Ordinance—Promissory note—Money due on accountslated—Partnership business—Ordinance No. 8 of 1918, e. 2.
Where a promissory note was given on an account statedbetween parties who bad been carrying on business together,—
Held, that the provisions of section 10 of the Money LendingOrdinance have no application to the note.
^J^PPEAL from a judgment of the District Judge of Badulla.
Plaintiff sued to recover a sum of Bs. 1,922.85 with interestdue oh a promissory note from the defendant, who was the widowand administratrix of the estate of the maker of the note. Itwas stated that the note was given by the defendant’s husbandafter accounts had been gone into between him and the plaintiff,who carried on a business together. It was alleged that the sumwas found to be due to the plaintiff when the accounts were settled.The learned District Judge gave judgment for the plaintiS.
N. K. Choksy, for defendant, appellant.—The note is unenforce-able as the marginal particulars are not set forth separately anddistinctly, apart from the particulars in the body of the documentitself. (Vadivelu v. Velupillai,1 Kadirsan Chetty v. Amelia.2)
1 4 Low Recorder 143.* 23 N. L. R. 182.
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They must be stated apart from the particulars set out in thebody of the note because the amount mentioned in the body ofthe note is not necessarily the amount actually borrowed. Norwould the body of the note state what amount was deducted inadvance.
Even though the point was not taken in the Court below, thisCourt will give effect to the objection, considering the scope andobject of the provisions of the Ordinance. An analogous caseis that of objections under the Business Names Ordinance—seeKaruppen Ghetty v. Harrisons & Crosfield, Ltd.1
Counsel also referred to Sannitamby v. Noganra Wijeysinghe v.Don Girigoris, 3 and Raman Ghetty v. Renganathan Pillai. 4
N. E. Weerasooria, for defendant, respondent.—The MoneyLending Ordinance does not apply to the facts of this case asit is not a money lending transaction.
The Money Lending Ordinance is based on the Usury Act of theCape Colony, No. 23 of 1908. Section 5 corresponds to section 10of our Ordinance. Vide statement of objects and reasons of theOrdinance (Gazette of October 12, 1917, Part II., page 123).
In the case of Rex v. Goedhals and de Wet3 it was held that theanalogous provisions of the Cape Act did not apply to factssimilar to those in this case.
Counsel also cited Vol. VI., Bissett & Smith’s Digest, pages 401and 402. .
August- 9, 1929. Dalton J.—
This is an action on a promissory note to recover the sum ofBs. 1,922.85 with interest thereon, in all the sum of Bs. 2,508.85.The defendant is the widow and administratrix of the estate of thealleged maker of the note.■
The defence to the action in the lower Court was based uponthe plea that the note was a forgery, but the trial Judge has cometo the conclusion that this plea cannot succeed. The plea seemsto be based upon the defendant’s evidence that the signature tothe note is not like her husband’s signature and that he told hernothing of the debt. I see no reason to differ from the finding ofthe lower Court on this question of fact.
It has further been urged in appeal that the promissory notedoes not comply with the provisions of the Money Lending Ordi-nance, 1918, section 10 of which requires certain particulars in. every promissory note to be set forth upon the document, otherwiseit shall not be enforceable. 1
» 24 N. L. R. 317.* 21 N. L. R. 342.
* 26 N. L. R. 217.4 23 N. L. R., at 344.
» 26 S. C. 545.
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1829" This point was not raised in the answer or in the issues, althoughDalton J. plaintiff did plead in his plaint (paragraph 4) that he accepted theSiOiapromissory note “ without the marginal notes,” bona fide and
Somawathie inadvertently., and without any intention to evade the provisionsof the Money Lending Ordinance. This was apparently done toobtain the benefit of the proviso to section 10, in case the noteshould be held to come within the provisions of the Ordinance.Defendant, however, as the poiqt was not taken in the answer,was probably advised, and if so, in my opinion advised correctly,that it would be useless for her on the facts here to raise the plea inher answer.
The note is stated to have been given by defendant’s husbandafter accounts had been gone into between him and plaintiff.Plaintiff and deceased had carried on a lorry business together,and when accounts were gone into on May 23, 1926, it is allegedthat the sum of Rs. 1,922.85 was found to be due to plaintiff.He thereupon obtained this note from deceased on account ofhis indebtedness to him, according to plaintiff on deceased’s ownsuggestion, the latter taking the lorry away. Deceased died onDecember 30, 1926.
The note is on a printed form such as is in common use in Ceylon,in the form given in the schedule to the Money Lending Ordinance,but with no marginal notes. The form has been torn down theleft-hand side where the marginal notes as a rule appear. It wasurged that as the note has no marginal particulars it is unenforce-able. In support of this Vadivelu v. Velupillai et al.* was cited.I must admit, if it were necessary to come to a conclusion on thispoint, I should have considerable difficulty in interpreting thewords ” separately and distinctly ” as used in section 10 in thesense adopted by the learned Judges in that case. Marginal notesdo appear in the form provided in the schedule, but it is nowhereenacted that that form is the only form that can be followed.De Sampayo J. was of opinion that section 10 required a separatestatement of the particulars mentioned in the section, i.e., separatedfrom the note itself. With all respect to this learned Judge andhis wide experience, I am inclined to think that what section 10means is that the three particulars (a), (b), and (c> must be set outdistinctly and separately in the note, that is, separately and distinctlyfrom one another, whether by use of marginal notes or otherwise,and that what sub-section (4) provides is that if that is done sub-stantially in accordance with the form in the schedule, no questioncan arise that it does not comply with the provisions of section 10in this respect. I can find nowhere any provision that the particu-lars must be set out in a separate statement if they are alreadyset out in the hody of the note itself. The section does not enact
1 4 C. L. R. US.
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that the particulars must be set out in two places:, for example,in the body of the note and in marginal notes as well. I examinedthe statement of objects and reasons published with the bill afterI had formed a definite opinion upon this question and it seemsto me to confirm my view. This section is stated to deal withblank and fictitious notes and to require a clear statement of thevarious particulars on the face of the note. However, it is notnecessary to decide the case on this point, as it must fail on othergrounds.
Section 10 was. taken over from the Cape Colony Act, No. 23 of1908, as appears from the explanatory statement of objects andreasons above referred to, published with the bill in the officialGazette of October 12, 1917, Part II., page 123.
Mr. Weerasooria has cited a South African case, Bex v. Goedhals-
and de Wet1 in support of his argument.The defendants
there were charged with contravening the provisions of Act 23of J908 by charging a greater rate of interest than that allowed bythe Act. The note was given with the exception of an amountof £7, for the balance of indebtedness of one Moolman to the defend-ants for work done and money paid. The defendants wereconvicted, but on appeal the conviction was quashed, Maasdorp J.holding that the Act did not apply to promissory notes given formoney due for work done and in agency transactions. It wasnot a transaction that could be described as substantially one ofmoney lending under the Act. The same conclusion was reachedin an unreported case (S. C. No. 411—D. C. Galle, No. 23,581,
S.C. Minutes of February 15, 1929) where Fisher C.J. and Garvin J.held that a promissory note, given as security for an existingdebt that was not based upon a loan, was not a- note to whichthe provisions of the Money Lending Ordinance applied. . Thenote with which we have to deal was given on an account statedbetween parties who had been carrying on business together.Following the decisiops referred to above, one has no difficulty inreaching the conclusion that it is not one to which the provisionsof the Ordinance apply, since there is no evidence to show thatit was given as security in any money lending transaction.
For these reasons the appeal must be dismissed with costs.Maartensz A.J.—I agree.
» 26 S. <?. 545.
SILVA v. SOMAWATHIE