AKBAR S.PJ.—Siripina v. Somasunderam Chettiar.
1936Present: Akbar S.P.J. and Koch J.
SIRIPINA v. SOMASUNDERAM CHETTIAR.
71—D. C. Kandy, 45,519.- –
Promissory note—Security for a loan and a balance due on former note—Capital sum borrowed—Renewal of loan—Ordinance No. 2 of 1918, s. 10 (5).
Where a promissory note is given by A and B partly as security for aloan ard partly to cover the balance due from A to the payee on a previousnote,—
Held, that the transaction did not amount to the renewal of a loanwithin the meaning of section 10, sub-section (5) of the Money LendingOrdinance, No. 2 of 1918, and that it was not necessary to insert theamount of the original loan.
PPEAL from a judgment of the District Judge of Kandy.
F. N. Gratiaen, for defendant, appellant.
A. Rajapakse, for plaintiff, respondent.
Cur. adv. vult.
June 8, 1936. Akbar S.P.J.—
Plaintiff-respondent, a money lender, sued the defendant for therecovery of Rs. 440.10 (Rs. 270, being the principal sum actually borrowedand the balance interest due) on a promissory note made on October 9,1930, by the defendant and one Dharmadasa (since declared insolvent)jointly and severally.
Defendant in his answer pleaded that at the time this not was signedonly Rs. 60 was borrowed by Dharmadasa, and that Rs. 210 then duefrom Dharmadasa on another note as principal and interest, was addedand the note sued upon drawn up to the amount of Rs. 270.
Mr. Gratiaen argued before us that the note was a fictitious notewithin the meaning of section 14 of Ordinance No. 2 of 1918, as it was notdrawn up in terms of section 10 of that Ordinance. It will be seen fromsection 10 (1) (a) that a promissory note given as a security for the loanof money shall have inserted in it the capital sum actually borrowed.
Gunatileke v. The Municipal Council, Colombo.
By sub-section (5) of section 10 the provisions of the section are toapply to renewals of any loan, and in all such cases the amount stated asthe capital sum actually borrowed shall be the amount of the originalloan. In my opinion sub-section (5) does not apply here, as the notesued on was not a renewal of the old loan. It was a note in which therewas a new debtor jointly and severally liable with Dharmadasa whocontracted to incur the whole liability for Rs. 270 personally atthe option of the creditor. Mr. Gratiaen has quite properly referred us toan English case Barber v. Mackrell'. Lindley L.J. held that a “ bill isrenewed when another bill is taken in its place, the parties to the bill andthe amount of it being the same, though perhaps in some cases the interestdue on the first bill is added.” Smith L.J. said “ Renewing a bill meansas a rule that the new bill shall be between the same parties, and thatthe amount, &c., shall be the same.” It will be noticed that the wordsin sub-section (5) are “ renewals of any loan.” In the case before methere can be no question that the new note was not a renewal of the oldloan, because a sum of Rs. 60 was added and lent and there was a newjoint and several debtor. The appeal must therefore be dismissedwith costs.
Koch J.—I agree.
SIRIPINA v. SOMASUNDERAM CHETTIAR