087-NLR-NLR-V-18-WIJEWARDENE-v.-APPU-et-al.pdf

WIJEWABDEXE v. APPU et al
136— D. 0. Gallc, 12,595.
Blank promissory note—Insert ion of rate of interest without authority—Material alteration.
Defendants gave plaintiff a blank promissory note as security forpurchases and authorized him to fill it up for the amount of thepurchase. The plaintiff in filling up the note inserted interest atIQ per cent., for which he had no authority.
Held, that the note was materially altered by the insertion ofthe rate of interest, and that plaintiff could not maintain an actiouon the note.
fJpHE facts ate 6et out in the judgment.
J. S. Jayewardene9 for the appellants.—The plaintiff was notauthorized to insert interest at 18 per cent. There was no agree-ment, express or implied, as to interest, nor is it customary to chargeinterest for purchases. ' The insertion of interest without authorityamounts to a material alteration of the note. Counsel relied on1 Balasinyham 182.
A. Si. I'. Jayewardene, for the respondent.—The judgment isj i^ht, us it is only for the admitted indebtedness of the defendants.The evidence of the plaintiff shows that the defendants agreed to payinterest, and the insertion of interest does not therefore vitiate thenote. Counsel relied on 14 N. L. 1* . 106.
June 7, 1915. Wood Kk.ntox C.J.—
This )6 an action on a promissory note for B6. 500 and interestat 18 per cent. The plaintiff alleged that the promissory note was•one of the ordinary character, and that he had in fact lent thedefendants the amount which it covered. The defendants pleadedthat the note was in security of purchases which they had made orwere to make from the plaintiff, and that after taking account ofcertain payments in respect of these purchases there was only asum of Bs. 275.46 due upon the note. The defendants in theiranswer said nothing expressly about the claim for interest at 18 percent. But the third issue on which the parties went to trial raised
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the question whether there was on agreement that interest at IB *****per cent, should be payable on the note; and the fourth issue was in Woodthese terms: “ If not, is the plaintiff entitled to sue on the note liKsmuf C.J,at all ?” The learnpd District Judge heard evidence on both sides, Wtjeuxwdeneand came to the conclusion that the defendants' version of the r* -*PPUcircumstances in which the note came to be granted was the trueone. He, therefore, gave the plaintiff judgment only for the amountwhich the defendants themselves had admitted to be due, namely,
Rs. 275.46, and directed that the plaintiff should pay all Hiedefendants' coots of aotion. The defendants appeal. The onlyserious point that we have to consider is the effect of the findingsof the District Judge on the question of interest. He answered thethird issue above referred to in the defendants’ favour, and saidthat it had been admitted that on notes made to oover purchasesno interest was charged. That statement on the part of the DistrictJudge is supported by the evidence both of the first defendant andof the plaintiff himself. The point, therefore, arises whether, nsthere had been no express agreement on the part of the defendantsto pay interest, and as the evidence on the record shows that nosuch agreement can be implied, the fourth issue, namely, whetherthe plaintiff can sue on this note—which had been issued in blankand filled up both with the amount alleged by the plaintiffto be due and with the rate of interest thereafter—should nothave been answered in the negative. The point is purely atechnical one, and I think that it would have been better if thedefendants had been willing to allow the judgment in the plaintiff'sfavour for the amount of their admitted indebtedness to him tostand. But they insist upon their legal rights, and that being so.
I feel constrained to hold that the alteration of the note was amaterial one, and that the plaintiff had no cause of action upon it.
I would set aside the decree under appeal, and direct that decreeshould be entered dismissing the plaintiff's action with the costs ofthe action—the order as to the costs already made by the DistrictJudge. But in all the circumstances I would make no order a* t<vthe costs of the appeal.
Shaw J.—
I agree. The plaintiff was authorized to till up this note for theamount of the purchase. He was not authorized to insert theinterest at 18 per cent*. He admitted himself in his evidence thatit was not customary to charge interest on a transaction of thiskind. Under these circumstances, by inserting interest at 18 percent, in the note he had made a material alteration in the note, andthe note is therefor bad, and the plaintiff cannot recover in anaction brought upon it. Throughout the case it was admitted by
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1915.
Shaw J,
WijeitTirden*v. Appu
the defendants, and it has been found by the Judge, that the amountof As. 275.46 Is due from the defendants to the plaintiff. Had theplaintiff claimed in the Alternative for goods sold and delivered, hecould have recovered this amount. But he has not done so, and,therefore, he cannot recover in the present action. The Judge hasgiven judgment for this amouut on the promissory note, and I thinkhis judgment cannot be supported. The appeal has really nomerits in it, because it is admitted that the amount is due, and thatthe plaintiff can recover it from the defendants if he brings an actionin the right form. I agree with my Lord's decision as to the eastsof the appeal and to the order that he has made.
Set aside.
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