JUDGMENT

COX CJ

The Plaintiff claims on a Promissory Note for $1,500 dated 6th April, 1889, made by Tan Ke Tong Chop Kian Soon payable to the Defendant, endorsed by Defendant to Koh Sek Quee and by Koh Sek Quee endorsed to the Plaintiff. The total claim including interest is for $3,106. The Defendant denies having endorsed to Koh Sek Quee and alleges that the note was made by Tan Ke Tong for the accommodation of the Defendant and had been discharged before it came into the possession of Koh Sek Quee or the Plaintiff. Koh Sek Quee swears that about seven months ago he bought this note from Veerappa for $750, and the Plaintiff swears that he bought the note from Koh Sek Quee (who endorsed to him "sans recourse") for $1,000. Veerappa, the Defendant, has given evidence to the following effect. He says that this note, which had been given to him by Tan Ke Tong for his accommodation, was endorsed by him to the Hongkong and Shanghai Bank as security for a loan. When the note became due (i.e. in April, 1890) he gave another note for it and it was returned to him by the Bank. He placed the note with other papers in his box to which the Plaintiff Kurpen, who was then his clerk, had access. Kurpen was dismissed some time after, and Veerappa suggests that he must have stolen the note. Veerappa denies having returned the note to Koh Sek Quee or having received value for it. As the note is no longer in the possession of Veerappa, who has signed as endorser valid and unconditional delivery by him must be presumed until the contrary is proved under section 21(3) of the Bills of Exchange Act. This evidence as to the circumstances under which he lost possession of the note is contradicted by Koh Sek Quee and the Plaintiff, and, as I do not find sufficient grounds for believing him rather than those two men, I must hold that there was delivery for value to Koh Sek Quee, viz.: for $750. I find also that the note was made by Tan Ke Tong without consideration and for the accommodation of Veerappa and the evidence of Mr. Bateman of the Hongkong and Shanghai Bank shows that it had been endorsed to the Bank and at due date was returned to Veerappa in exchange for other notes. This is equivalent to payment. There has, therefore, been payment of this accommodation note by Veerappa the party accommodated. The result is that under section 59(3) of the Act by such payment the note became discharged and under section 36(1) it ceased to be negotiable. The question then is, what is the liability of the Defendant assuming, as I must assume, that he delivered this discharged note for value to Koh Sek Quee. I do not believe that for the sum which Koh Sek Quee says he paid, Veerappa consented to be liable for the full amount due on the note, which could have been claimed form him immediately after the transaction. Apart from consent on his part to be so bound, I am of opinion that in law he is not liable as an ordinary indorser. In fact, Veerappa did not endorse to Koh Sek Quee. He had endorsed to the Bank five years before and his liability on that endorsement has been discharged when he took up the note. His signature remained on the note, thus making it payable to bearer when he handed over the note to Koh Sek Quee for $750, as Koh Sek Quee says. The transaction was not a negotiation by endorsement on delivery with section 31 (3) but it was a transfer by delivery within section 58. The real liability of Veerappa was therefore that of a transferor by delivery; there was an implied warranty on his part that he was a holder for value and that the note was what it purported to be in conformity with section 58(3). In consequence of that warranty he is liable to repay what he has received on the transaction, and, at the same time, he is estopped from questioning the validity of the endorsement by Koh Sek Quee to the Plaintiff who can therefore maintain this action: but the Plaintiff, having taken the note when it was overdue, acquired no better title than Koh Sek Q