UMMA SALOOMAR v. HASSIM

042-NLR-NLR-V-30-UMMA-SALOOMAR-v.-HASSIM.pdf


( 164 )
1928.
Present: Dalton J. and Jayewardene A..J.
UMMA SALOOMAR v. HASSIM.
21—D. C. Colombo, 22,866.
Promissory note—Endorsement in blank—Negotiation by delivery—Holder for value.
An endorsement in blank makes a note payable to bearer.
Such a note is negotiated by delivery and when value has beengiven for it, the holder is a holder for value against all partiesexcept the person from whom he receives it.
The compromise of a claim may be a good consideration for apromissory note.
A
PPEAL from a judgment of the District Judge of Colombo.
The plaintiff sued the defendant on a promissory note
for Rs. 5,000 made by the defendant in favour of one S. L. NainaMarikar Hadjiar and endorsed and delivered by the latter to her.The defendant denied that Naina Marikar had endorsed anddelivered the note to the plaintiff for valuable consideration orthat the plaintiff was the lawful holder thereof. The defendantfurther pleaded that he granted the note to Naina Marikar to beheld by him as part security for the payment to a brother of thedefendant, one Abdul Raheem, of a sum of Rs. 15,000, in con-sideration of the said Raheem having consented to withdraw his' (1916) 1 Ch. 213.
( 166 )
opposition to {in award 'made in respect of the distribution of the 1988.estate of their father. He stated that the notes were not meantto be endorsed and that the liability on it had been discharged Saloomar v.to the knowledge of the plaintiff, who was the wife of Raheem. BaurimThe learned District Judge gave judgment for the plaintiff.
H. V. Perera, for defendant, appellant.
B. F. de Silva, for plaintiff, respondent.
July 20, 1928. JayewardJne A.J.—
The plaintiff sued the defendant on a promissory note forRs. 5,000 made by the defendant on March 11, 1921, in favour ofone 8. L. Naina Marikar Hadjiar. The plaintiff alleged thatNaina Marikar endorsed and delivered the note to the plaintifffor valuable consideration and that the plaintiff was now thelawful holder thereof. The defendant denied that Naina Marikarhad endorsed and delivered the note to the plaintiff for valuableconsideration or that the plaintiff was the lawful holder. Thedefendant further stated in the third paragraph of his answerthat he granted the promissory note to Naina Marikar on March 21,1921, and on the same date the defendant’s two brothers IsadeenHadjiar and Haniffa also granted each a promissory note forRs. 5,000, to the said Naina Marikar, to be held by him as securityfor the payment by the makers to another brother of the defendant,one A. L. M. Abdul Raheem, of a sum of Rs. 15,000, in additionto-the amount payable to the said Abdul Raheem under the awardmade on or about November 10, 1919, by Naina Marikar in respectof the distribution of the estate of one Alim among his heirs, inconsideration of the said Raheem having consented to withdrawhis opposition to the said award, and that the said notes werenot to be negotiated or endorsed over. The defendant allegedthat he and his two brothers had fully paid and discharged theirliability to Raheem in the said sum of Rs. 15,000, and that he wasstill indebted to them. He further stated that the plaintiff isthe wife of Raheem and was aware of these facts and that she wassuing for and on behalf of her husband. After trial the DistrictJudge entered judgment for the plaintiff as prayed for, and thedefendant appeals.
Alim, the lather of the defendant and Raheem, died in December1917, and a last will dated October 22,1917, was brought to Court,by defendant and Isadeen. The District Judge held againstthe will and there was an appeal, but the order was affirmed. Thedefendant appealed to the Privy Council but the parties agreedto refer the matter to the arbitration of Naina Marikar. He madehis award on November 20, 1919, which was accepted by Raheem
30/14
( 166 )
1928.
Jayewab-DENK A.J.
UmmaSdloomar vHasaim
himself. The award was brought to Court in a special case, butthe District Judge held that it could not be brought to Court in aspecial case. There was an appeal and an order was made onApril 26, 1920, affirming that order, but stating that it could berelied on as an adjustment of the decree in the Testamentary case.
On August 30, 1920, the District Judge refused to accept theaward in the Testamentary case. On appeal the Supreme Courtset aside the order of the District Judge in September, 1921, andthe award was accepted as binding on the heirs. Then Raheemthreatened to appeal to the Privy Cbuncil. In consideration ofRaheem consenting to withdraw his opposition to the award,the notes mentioned in the 3rd paragraph of the answer were given.They were as a matter of fact, handed to Naina Marikar.
The first issue was whether the note now in suit was made underthe circumstances set out in the third paragraph of the answer.The learned judge has held that the note was made under thosecircumstances, except that there was no understanding that thenotes were not to he endorsed or negotiated. On December 13,1926, Raheem, by his Proctor, wrote to Naina Marikar askingfor the notes, and on December 18 they were sent to him duly-endorsed suns recours with letter P 2 of Mr. Akbar, Naina Marikar’sProctor. The learned Judge is right in thinking that Naina Marikarmust have consulted his lawyers before endorsing the notes, andhe would not have endorsed if, in fact, they had been given subjectto the conditions now sought to be imposed.
If the notes were given to obtain Raheem’s consent to withholdhis opposition to the award, there was valuable considerationfor them. Valuable consideration is defined “ as some right,interest, profit, or benefit accruing to the one party or someforbearance, detriment, loss or responsibility given, suffered, orundertaken by the other.” (Currie v. Misa.1)
The compromise of a claim may be a good consideration for apromissory note. (Cook v. Wright.2)
The learned judge has discussed the question of Raheem’sindebtedness to Alim’s estate and to the defendant. He hascarefully considered the terms of the awards D 4 and D 5. Heconcludes that the question of the debts due by Raheem to Alim’sestate could not come into consideration after, the award had beenaccepted, and that the sum of Rs. 15,000 which the defendantand his two brothers agreed to pay was in addition to the amountawarded in P 5 and therefore could not possibly have been subjectto any condition as to the payment of debts due to Alim’s estate.He thinks that the notes were made out in favour of Naina Marikar,and kept with him, because of an understanding that the sumB
(1875) L.R. 10 ex. 153, 1 App. Cases 554.
(1861) 30 L. J. Q. B. 321.
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due on the notes were not to be recovered till all the assets had beenrealized. The District Judge intimated this opinion to Counselfor the plaintiff after the plaintiff had given evidence. It seemsto me that this view is correct.
The plaintiff in her plaint stated that Naina Marikar endorsedand delivered the note to her, but it appears that he reallyendorsed the note to Raheem, her husband, and not to her. A billor note is payable to bearer which is expressed to be so payable,or on which only a last endorsement is an endorsement in blank.(Bills of Exchange Act, s. 8.)
The endorsement by Naina Marikar specified no indorsee andmade the note payable to bearer (section 34).
Such a note is negotiated by delivery, and where value hasat any time been given for a bill, the holder is deemed to be aholder for value, against all parties except the person from whomhe received it. The plaintiff is thus a holder for value of the notenow in question.
The plaintiff is a Muhammadan woman and as such is entitledto her separate property. She says that she sold four lands inColombo and that her husband Raheem took the money. Shesays that she spoke to Naina Marikar several times about thesenotes and that towards the end of 1926 she was pressing him forthe notes. She says that her properties were sold to pay herhusband’s debts and that he promised to endorse the notes to her.As a matter of fact the notes bear her husband Raheem’s endorse-ment. An antecedent debt may constitute valuable considerationfor a note. If her evidence is accepted as it has been by the Judge,her husband was indebted to her at the date of the endorsement.She has indeed received very little value for four Colombo houses.In that view the plaintiff is a holder in due course, who has takenthe note in good faith and for value, and without notice of anydefect in the title. As a matter of fact there was no defect in thetitle. Even if the defendant had any personal equities againstRaheem, of which there is no proof, they are not binding on theplaintiff.
It was contended that the plaintiff could not maintain thisaction as she averred that Naina Marikar had endorsed anddelivered the note to her, but the issues and the evidence showthat the case has been fully considered from the standpoint thatshe was an endorsee from her husband and subject to all hisequities. The learned Judge has held in her favour.
I am of opinion that the judgment is right and the appeal shouldbe dismissed with costs.
1928.
Javbwab-DJSNB A. J.
Vmma
Saloomar e.Baaeim
Dalton J.—I agree.