006-NLR-NLR-V-11-TENNA-v.-BALAYA.pdf
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190S.
February 7.
C. R., Kandy, 15,435.
Promissory note payable on demand—Payment—.Wjofial/ottafter pay-
ment—Bilis of Exchange Act, ss. 36 (1) and (3), 59, 86 (3).
The holder of a promissory note payable on demand may demandand receive payment from the maker of it at any time; and when,payment is made the note is discharged and ceases to be negotiable,and the endorsement and delivery of the note, after such payment,to a third party gives such third party no right to sue on it.
O
N November 24, 1903, the defendant made a promissory note forRs. 60 payable on demand in favour of one Sarana. In May,
Present : Mr. Justice Wendt.TENNA v. BALATA.
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1008.1906, Sarana endorsed the note to plaintiff, who brought this action in
Jpebruary 7. February, 1907, to recover the amount. The defendant pleaded thathe had paid the amount to Sarana on April 1, 1904, and alleged thatthe plaintiff took the note with notice of the payment and withoutconsideration. The Commissioner found that payment had beenmade to Sarana as alleged, although the plaintiS had no notice ofsuch paymeut, and dismissed the plaintiff’s action. The plaintiffappealed.
Ji. L. Pereira, for plaintiff, appellant.
H. Prine, for defendant, respondent.
Cur. adv. vidt.
February 7, 1908. Wendt J.—
The facts necessary for the decision of this appeal are shortly asfollows: —
On November 24, 1908, the defendant made a promissory notefor Rs. 60 payable on demand to one Sarana with certain interest.About May, 1906, Sarana endorsed the note to plaintiff, who inFebruary, 1907, brought this action to recover the amount of it.The defendant pleaded payment to Sarana on April 1, 1904, andalleged that plaintiff took the note with notice of the payment andwithout consideration. There is, however, no proof of such notice,and plaintiff’s evidence as to consideration has not been rejected.The Commissioner has found that the paymeut was made to Sarana,and although there are one or two strange circumstances in defend-ant’s story. I see no reason whatever for disagreeing with that finding.I am convinced, as the Commissioner was, that the witness AhamaduLebbe gave plaintiff the deed which defendant has pledged with Saranaas security for the debt, and had got back on making the payment.
The plaintiff’s counsel contended, as a matter of law, that, evenassuming that the payment had been made, his client had takenthe liote before it was overdue, and without notice of the payment,and was therefore entitled to recover from the maker. No doubtsection 86 (3) of the Bills of Exchange Act exempts promissorynotes payable on demand from the rule enacted in section 36 (3),whereby a bill payable on demand, which appears on its face tohave been in circulation an unreasonable length of time, is deemedto be overdue; and plaintiff is therefore entitled to say thathe acquired the note before it was overdue. But this does not affectthe matter of payment. If a bill or note is duly paid, it ceases tobe negotiable (section 36 (i.)). “ Payment and other discharges,’’says Mr. Chalmers in his book on the Act (6th edition, page 120),“ are sometimes spoken of as equities attaching to a bill, but thisseems incorrect—they are rather grounds of nullity. That whichpurports to be a bill is no longer such; it is mere waste paper.” Was.then, this note duly paid? Section 59 prescribes the requisitesfor ” payment in due course ”—it means payment made at or
after the maturity of the bill to the holder thereof iti good faith andwithout notice that his title to the bill is defective. There is noquestion that Sarana was in April, 1904, the holder of the note, andwithout any defect of title. Was the note then mature? Theanswer can only be in the affirmative. It was payable on demand,and therefore it was open to the holder at any time to demand pay-ment of the maker, and upon his receiving such payment the billwould be discharged and dead. That is what happened here. Thenote therefore was not negotiable, and the endorsement anddelivery of it to plaintiff gave him no title.
The appeal fails, and is dismissed with cost.
Appeal dismissed.
1908.
February 7*Wendt J.