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2014 MarsdenLR 1028
STRAITS SETTLEMENTS LAW REPORTS
SKRSL SOMASUNDARAM CHETTY – Appellant
Versus
LIM HAM KAI AND OTHERS – Respondent
The admissibility of evidence to establish that a signatory on a promissory note signed as a surety rather than a principal is governed by local law, not English case law.
Headnote:(A) Evidence Ordinance No 53, Section 92 - Promissory Notes - Joint makers' liability - Two defendants claimed they signed as sureties only, known to the plaintiff, contending liability ended due to plaintiff's actions - Lower Court admitted evidence supporting their claim, resulting in dismissal of the action. (Paras 3, 4, 6)
(B) Admissibility of Evidence - English case law on evidentiary standards regarding surety signatures does not apply - Only admissible evidence is that which falls within exemptions of Section 92 or evidence of surrounding circumstances. (Paras 5, 7)
Facts of the case:
Plaintiff sued three defendants on a promissory note, with two defendants asserting their signature was as sureties, aware of the plaintiff granting time to the principal without their consent.
Findings of Court:
The evidence of signing as surety is permissible only if it fits the criteria outlined in local law rather than English case law.
Issues: Whether surety signatures can be proven contrary to the principal's knowledge under local evidentiary law; the scope of Section 92 of the Evidence Ordinance.
Ratio Decidendi: The court determined that only evidence permissible under Section 92 and corroborating circumstances can establish the nature of the signatory's intent, concluding that English case law is inapplicable.
Result: Appeal allowed; judgment granted for plaintiff against all defendants.
The plaintiff now appeals.
The first question is whether evidence is admissible to prove that the signatory to a note signed only as surety and not as a principal. The cases quoted to DEANE J upon this point were supplemented before us by a latter case Greenough v. McLelland [1860] 2 El. & El 424. These cases state the English Law on the matter which is that while Equity lets you prove that you signed as surety and that the principal knew that you signed as surety, that rule is a rule of equity and not a rule of evidence. The further question (which was reserved for consideration by the trial Judge, although there is no further note of any argument on the point) then arises whether section 92 of the Ordinance No 53 (Evidence) allows this evidence to be given. In England the laws of evidence, for the reasons set out in Lincoln v. Wright [1859] 4 De G & J 16 and other cases permit such facts to be established by a proof at large, the general view being that unless this were does the statute of Frauds would be used as a protection or vehicle for frauds. See Maung Kying v. Ma Shwe La [1917] 44 IA 236 at pp 243, 244. In Balkishen Dass v. Legge [1899] 27 IA 58, it was laid down that the English Chancery cases have no application to the Law of India (which in this respect is the same as the law of the Colony) and that therefore the case had to be decided on a consideration of the contents of the documents themselves with such extrinsic evidence of surrounding circumstances as was required to show in what manner the language of the document was related to existing facts (See p 65). We refer also to Harck Chand v. Bishun Chundra [1904] 8 CWN 101.
Upon these authorities we come to the conclusion that the only evidence admissible to prove that a signatory to a note signed as surety and not as principal is either evidence to prove that the case comes within one of the provisos to section 92 of the Evidence Ordinance or evidence of surrounding circumstances as stated just above.
