MEYAPPA CHETTY v. SOMASUNDRAM CHETTY.

MEYAPPA CHETTY v. SOMASUNDRAM CHETTY.

 D. C., Kandy, 13,035,

Lost cheque-Action by holder in due course against drawer--Right of defendant to plead that the cheque was not fitted in by his authority--Estoppel by negligence.

S, having an account in the Kandy branch of the Mercantile Bank of. India, signed a number of cheques in blank and left the cheque book in the custody of his agent with authority to fill in the cheques when required. The agent kept the cheque book in a box secured by a lock in his shop at Kandy. Some one tore a cheque out of the book, filled it in favour of A or order, and A carried it to Colombo, where plaintiff, for a consideration paid by A, cashed it for him on the day after it was drawn, and then presented the cheque for payment at Kandy. The banker not being placed in funds referred the cheque to the drawer, when it was discovered that the cheque in question had been improperly abstracted from S's cheque book and filled in, without his or his agent's knowledge or approval.

Held, per Bonser, C.J., in an action brought by the holder against S, that the banker not having cashed the cheque, the defendant had done nothing to stop him from pleading the fact that the cheque was not filled in by his authority, direct or indirect.

Per Browne, A.J.-There is nothing proved against the defendant: not an estoppel by negligence in the transaction itself; nor in leading the third party into mistake; nor in neglecting some duty to the third party or the public.

The proximate cause of the fraud was not negligence on the part of the defendant, but theft on the part of an unknown person.

THE defendant in this case was sued upon a cheque said to have been granted by him to one Abdul Rahiman and endorsed by the latter to the plaintiff. The defendant pleaded forgery. The District Judge gave judgment for plaintiff as follows: -

This is an action on a cheque1 signed by the defendant for Rs. 2,800. The parties are. as their names indicate, Chetties. The plaintiff resides in Colombo and the defendant in Kandy. The facts I find are these. The defendant had an account in

the Mercantile Bank of India in Kandy. In accordance with a rule of the bank that Chetties and others who cannot sign their names in English should sign their cheques before the agent and have them initialed by him, the defendant so signed a number of blank cheques and left his cheque book, as was his wont, with his kanakapulle to be tilled up and issued as occasion arises. The cheque in question was the last of several cheques so signed, and was with its counterfoil abstracted from the cheque book. There is no proof by whom it was abstracted.

" The cheque book was always kept by the kanakapulle in a cash box locked. Some person tore the cheque and counterfoil out of the book unknown to the kanakapulle. It is dated 21st January, 1899, and is in favour of K. Abdul Rahiman Saibo, or order. It was endorsed by the payee and delivered on 21st January to the plaintiff, who cashed it and received Rs. 13 as his commission. I do not believe that Abdul Rahiman Saibo received the cheque from the defendant's kanakapulle Kanapadi for the Rs. 2,800 he had given him on 10th December, 1898, for safe-keeping. Abdul Rahiman Saibo received the cheque post-dated. It was given to him, he says, on the 20th January. The plaintiff had no account in any bank in Kandy. Not wishing to pay commission on it, he delivered it to a firm in Kandy on 22nd January. The cheque was presented for payment at the bank in Kandy on the 24th January and was dishonoured. When it was presented, Mr. Bishop, the Agent of the Bank, sent for the defendant to ask him to place his account in funds to meet the cheque. Kanapadi thereupon went to the bank and was shown the cheque. He returned and informed the defendant, and both of them returned to the bank with the cheque book and informed the agent the cheque had not been issued by the def

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