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ARNASALAM v. MARIKAR
NLR8V209
ARNASALAM v. MARIKAR.
D. C, Colombo, 15,695.
Composition deed-Action on promissory note-Delay in presenting endorsed cheque for payment.
Action by endorsee of certain promissory notes against the maker (first defendant) and endorses thereof. Flea that the second and third defendants trading together as partners endorsed the notes and delivered them to the plaintiff, and that the plaintiff having agreed with the first defendant to accept a composition at the rate of Rs. 4.75 for every Rs. 10 of his debt, the first defendant paid by cheque to plaintiff Rs. 3,075, leaving only Rs. 783 unpaid, which was still due,-
Held, that plaintiff was bound by the composition deed to which he and the firm of the second and third defendants were parties as creditors of the first defendant, and the plaintiff by acquiescing in the deed must be presumed to have agreed that the first defendant should be released altogether as regards himself, and that the first defendant's liability towards the firm of the second and third defendants should be the measure of that firm's liability to the plaintiff.
As regards the cheque for Rs. 3,075 accepted by the plaintiff in part payment of the sum due upon the composition, it was drawn on 30th November, 1900, endorsed to plaintiff on 1st December, but not presented for payment till 6th February, 1901, when it was dishonoured.
Held, that the endorsed cheque should have been promptly presented for two reasons, the first being that if the drawer suffers actual damage through the delay, as by the failure of the bank, he is discharged to the extent of such damage; and the record being that if it is not presented for payment within a reasonable time after endorsement, the endorser will be discharged.
THE plaintiff instituted this action against one S. A. L. Marikar and two others, who traded as Chittambalam, Mather & Co., for the recovery of the sum of Rs. 8,129.75, alleged to be due on seven promissory. notes made by the first defendant in favour of the other two and endorsed by them and delivered to the plaintiff.
On the 21st day of October, 1901, judgment was signed against the first defendant for the full amount due on the said promissory notes.
The second defendant, Chittambalam, filed answer admitting that the said promissory notes were made in favour of the firm aforesaid, and that he had endorsed and delivered them to the plaintiff, but he pleaded that he had so endorsed the said promissory notes for the accommodation of the first defendant.
The second defendant further pleaded in his answer that the plaintiff had agreed with the first defendant to accept from the first defendant a composition at the rate of Rs. 4.75 on every Rs. 10 on his debts, and that in pursuance of the said agreement the first
defendant paid to the plaintiff the sum of Rs. 3,074.50, leaving a balance sum of Rs. 783 unpaid, which the second defendant admitted was due from him to the plaintiff.
The second defendant also claimed in reconvention certain sums which he alleged he had paid to the plaintiff, and which had not been repaid to him.
At the trial of the action the following issues were framed: -
(1) Did the first defendant on the 17th November, 1900, enter into a deed of composition with his creditors, including the plaintiff, whereby his creditors, including the plaintiff, agreed to accept Rs. 4.75 for every Rs. 10?
(2) In pursuance of the above agreement did the plaintiff accept a cheque for Rs. 3,074.50 in part satisfaction of the amount due on the notes sued on?
(3) Was the second defendant discharged from all liability on the notes by reason of the plaintiff entering into the deed of com position with first defendant?
(4) Were the amounts appearing in paragraph 6 of the answer deposited with the plaintiff as therein alleged, and are they still due?
The second defendant admitted that the amount of the notes sued on was included in the sum of R
