031-NLR-NLR-V-14-SWAMINADAN-CHETTY-v.-KANNAN-et-al.pdf
( 106 )
Sept. 2, 1910Present : Middleton J.
SWAM1NADAN CHETTY v. KANNAN et al.71 and 71 a—C. R. Colombo, 16,942.
Blank provussory note.–Insertion of rote of Interest agreed upon.—.Voexpress authority—Material alteration—Bills of JSxchangc Act,ss* 20 and 04.
Where the defendant borrowed from plaintiff money on a blankpromissory note and agreed to pay interest at a certain rate ontho amount borrowed by him, the insertion by the payee of t hesaid rate of interest in the note without express'authority is not. amaterial alteration.
Middleton «T.—If the note was given in blank, the payee wasentitled to fill it up, as the Commissioner has found, to the amountcovered by the stamp, and in my opinion he would have impliedauthority to insert the interest agreed on between the parties. Itis not suggested here that the note was filled up first withoutmentioning the interest, and then that the interest was added bythe payee, although as between payee and maker, where the rateof interest so inserted was the rate of interest agreed on betweenthem, I am by no means confident that this should be deemed amaterial alteration so as to vitiate the note between payee andmaker.
Raman Chetty v. Ramanalhan' and Abdul Majeed v. YasayaNadan* distinguished.
I
N this case the plaintiff sued the defendants on a promissorynote for the recovery of the balance sum of Rs. 230 due on it.
The issues agreed on were :—
Was the note signed in blank ?
Was the amount of the note filled in contrary toauthority ?
Was the rate of interest filled in with the authority ofthe defendants ?
The learned Commissioner (M. S. Pinto, Esq.) delivered thefollowing judgment :—
It is quite clear that the first defendant did not fill in the rate ofinterest. The figures “ 30 per cent.’* are in the same hand as the restof tho words in the body of the note : not only is tho handwriting I hesame, but the pen and ink used appear to be the same.
The handwriting of the first defendant is particularly bold and firm.The words in the body of the note, including “ 30 per cent.”, are written
lightly over the paper.
1 {IVOo) 1 Bat.
« (VJ00) 4 Leader L. It 1.
( 107 )
It is hardly necessary to enlarge on this point; (he conclusion I have Sept, t, 1910arrived at is supported by a comparison of the figures “ 30 per cent.”~ ,
with the figures 30 on D 1. The latter figures .10 are of the same Ciiethj v.type as the signature of the first defendant.Kannan
I, therefore, readily believe the first defendant's statement thai thefigures “ 30 per cent.” were not inserted by him. Even as regards thefigures “ 200,” I aift of the opiniou that they were not filled in by thefirst defendant. But there is the implied authority to fill in anyamount covered by the stamp.
But as regards the rate of interest, there was no authority to fill inthe rate of interest. My finding is that this rate was filled in after thedefendants signed the note. But there is no proof that the plaintiffwas authorized to fill in the rate of interest. He was asked, “ Bid youagree that the rate of interest was to be inserted on the note ?” Hesaid “ Yes.” But he apparently did not understand the question,for he repeatedly said immediately afterwards that there was noauthority to fill in the rate of interest. What he meant was that itwas agreed upon to pay 30 per cent, interest.
I am satisfied that the evidence given by the defendant is true inevery respect. Now, in view of the Supreme Court decision in RamanGhetty v. Ramanathan' followed in the Supreme Court decision in anothercase of this Court, I am bound to hold that the note was materially alteredby the insertion of the rate of interest, without the authority of thedefendants to such insertion. The authority cannot be implied fromthe agreement to pay interest. The learned counsel for the plaintiffargued that there was a ratification of the alteration; but there wasno ratification of the alteration. The defendants never said that theyratified the alteration of the document; and even if they so ratifiedit, the alteration could not cease to be a material alteration, and amaterial alteration vitiates a note, irrespective of the attitude of theperson affected by the alteration towards the alteration.
The plaintiff lied when he said that the first defendant filled in thefigures “ 200 ” and the rate of interest. He had no doubt about this ; .it was clearly an intentional lie, for_he says the body of the note wasfilled in by another man. He knew the importance of saying that thefigures “ 200 ” and the rate of interest were filled in by the firstdefendant; he knew that if the first defendant had filled in thesefigures, the question of material alteration could not come in.
I decide the issues as follows :—
Yes.
No, for there was implied authority to fill in the note for the
amount covered by the stamp.
No.
I dismiss the case with costs, and I have no regret in giving effectto the decision in Raman Chetty v. Ramanathan, for the defendant’sversion is true.
The plaintiff appealed.
Van Langenberg (with him Tissaverasinghe), for the appeJiaut.
Tamhyah, for the respondent. 1
1 (1905) 1 BaL15>.
Cur. adr. vult.
( 108 )
Sept.J^jjoio September 2, 1910. Middleton J.—
™ This was an action for the recovery of a balance of Rs. 230 dyeKantian, on a promissory note for Rs. 200 dated February 11* 1908, givenby the defendants to the plaintiff, with interest at the rate of 30per cent, per annum. A sum of Rs. 175 was admitted by theplaintiff to have been paid on account of the note, and the balanceclaimed was for principal and interest up to date of action. Thedefendants admitted the making of the note, but pleaded that theysigned and delivered it as security for the payment of Rs. 150, ofwhich they alleged they had paid Rs. 75—not Rs. 175 as averredin the plaint. They averred that the plaintiff fraudulently anddishonestly filled up the note for Rs. 200, while the second andthird defendants pleaded that they signed the note merely for theaccommodation of the first defendant. Nothing was pleaded as tothe rate of interest or its insertion in the note.
The issues agreed on were :—
Was the note signed in blank ?
Was the amount of the note filled in contrary to authority ?
Was the rate of interest filled in with the authority of the
defendants ?
At the settlement of issues plaintiff’s counsel admitted thatRs. 175 in the plaint was a mistake for Rs. 75, and the Commissionerof Requests deemed it right under section 809a of the Civil ProcedureCode to examine the plaintiff, who thereupon affirmed that theamount Rs. 200 and the rate , of interest were inserted by the firstdefendant personally in the note. After hearing evidence for thedefence, in which the first defendant denied the plaintiff’s assertion,and further evidence of the plaintiff, the Commissioner decided thefirst issue in the affirmative, and the second and third in the negativeand, being of opinion that authority to insert the rate of interestcould not be implied, dismissed the plaintiff’s action with costs.
The Commissioner of Requests further charged the plaintiff undersection 12 (I) of Ordinance No. 9 of 1895 for making a false state-ment, and fined him Rs. 50. The plaintiff appealed both againstthis order and on the law, and obtained leave to appeal on the facts ;and it was contended for him, on the basis of the Commissioner’sfinding on the first and second issues, and on the evidence given forthe defence, that the rate of interest agreed upon before the notewas written was 30 per cent., and that it was either expressly orimpliedly agreed between the parties that the rate should be insertedin the note, and that it was so inserted accordingly.
For the respondent it was admitted that it had been proved thatthe defendant’s agreement was to pay 30 per cent, interest, but itwas contended that there was no agreement, expressed or implied,to insert that rate of interest in the note, and Raman Chetty v.
( 109 )
Ramanathan,' Abdul Majeed v. Yasaya Nadan,4 and Warrington v. Sept- 2.1010.Early-' were cited as indicating that the note would be void for a mh>di.etommaterial alteration if the rate of interest were inserted in it withoutan express agreement to do so. In Raman Chetty v. Ramanathan, Smminadanubi supra, the evidence proved that though the rate of interest Chetty v.inserted in the note was the rate agreed upon to be paid by the Kannnnmaker to the payee, no rate was inserted when the note was made,and it was held by my brother Grenier in an action by the payeeagainst the maker that the subsequent insertion of the rate ofinterest agreed upon by the payee was a material alteration whichvitiated the note under section 64 of the Bills of Exchange Act.
In Abdul Majeed v. Yasaya Nadan, ubi supra, the same learnedJudge followed his ruling in the former case.
I have sent for the record in 168 (Inty.)—D. C. Puttalam, 1,455,referred to by Mr. Justice Grenier in Raman Chetty v. Ramanathan,and in that case there was allegation and proof of the fradulentaddition of interest after the making of the note. Here it is admittedthe interest on the note was the interest agreed on, and no fraud isalleged, but the case is complicated by the Commissioner’s findingthat the note was not filled in as regards the amount and interestby the first defendant, as plaintiff alleges. My experience of pro-missory notes in Ceylon leads me to think that the usual practiceis to use a printed form embodying an agreement to pay interest,as in this case, and if interest was agreed on, the payee of the notewould, under section 20 (1) of the Bills of Exchange Act, haveauthority to insert it.
Taking the Commissioner’s finding to be correct as to the notebeing signed in blank, and that it was agreed upon to pay 30 parcent, interest, the presumption is the note was filled in by thepayee or by his authority when the note was completed with therate of interest agreed between the parties, when it was given to thepayee. There is no evidence to the contrary, and this inferenceis strongly fortified by the fact that the defendants took no objectionto the rate of interest charged in the note in their answer. Thefirst defendant also says, in his evidence he has no complaint aboutthe rate of interest. If it was given in blank, the payee was entitledto fill it up, as the Commissioner has found, to the amount coveredby the stamp, and in my opinion he would have implied authorityto insert the rate of interest agreed on between the parties. It isnot suggested here that the note was filled up first without men-tioning the interest, and then that the interest was added by thepayee, although as between payee and maker, where the rate ofinterest so inserted was the rate of interest agreed on betweenthem, I am by no means confident that this should be deemed amaterial alteration so as to vitiate the note between payee andmaker.
1 {1905) 1 Pal. 1S3.* (1909) 4 Leader L, R, 1.
32-3 B, J- 9- B, 47,
13-
Sept. 3030MlDDLETON
J.
SwaminadanOhetty v.Kannan
In my view of the case there is here no material alteration ofthe note either in facie or by implication to Vitiate the note undersection 64, and 1 think the judgment of the Commissioner shouldbe set aside and the appeal allowed, and judgment entered for theplaintiff as prayed for, with costs in both Courts.
I was inclined to think my judgment would conflict to someextent with the judgments in Raman Chetty v. Ramanathan andAbdul Majeed v. Yasaya Nadan, and therefore to send the case tobe argued before two Judges. Mr. Justice Grenier appears to think,as I read his judgment, that unless there is proof of express agree-ment to insert the rate of interest in the note, or an express assentby the payee to its being done, the note would be void undersection 64.
On reconsideration, however, I think on the facts this case isdifferent.
Set aside.