Thenappa Chetty V. Veerappa Chetty

Present: The Hon. Sir Joseph T. Hutchinson, Chief Justice,
and Mr. Justice Wendt.

THENAPPA CHETTY v. VEERAPPA CHETTY and another.

D. C, Negombo, 7, 144.

Promissory note-Agreement to give evidence in favour of a person- Illegality of consideration-Stake-holder-Recovery from stakeholder-Repudiation of unlawful agreement.

Where a promissory note was granted in consideration of an agreement entered into between the maker and the payee that the payee should give evidence in favour of the maker in a pending litigation, - Held, that the agreement was unlawful and immoral and that the note was void.

Where a promissory note made in furtherance of an unlawful agreement is deposited with a third party as stake-holder, the maker of the note has a right, before the unlawful agreement is carried out, to repudiate it and demand back the note from the stakeholder; but where the unlawful agreement has been carried out, the right to get back the note ceases. Hampden v. Walsh 1 referred to.

THE plaint alleged that the plaintiff made a promissory note in favour of the 2nd defendant for Rs. 1, 000 and handed it to the 1st defendant, who was to keep it till he was instructed by the plaintiff to give it over to the 2nd defendant; that the 1st defendant, without any such instructions, acting in collusion with the 2nd defendant, fraudulently handed it over to the latter; that the 2nd defendant endorsed the note to one Pidelis de Silva, who obtained judgment thereon, and that the plaintiff paid and satisfied the same. The plaintiff brought this action to recover damages against the defendants jointly and severally for having negotiated the note in breach of their agreement.

1 (1876) 1 Q. B. D. 189.

The defendants admitted the making of the note by the plaintiff, but denied all the other averments in the plaint.

The plaintiff being examined at the trial gave the following evidence: -

" I purchased a share of land at Lianagemulla at a Fiscal's sale and obtained a Fiscal's transfer. Sam. Silva was the owner of the other half. I instituted a partition suit making Sam Silva defendant. He filed statement of claim claiming the whole land by prescription. Second defendant is the headman of Lianagemulla. I spoke to 2nd defendant about giving evidence in the suit. We came to an agreement that I was to sell my half share to him for Rs. 2, 260. He agreed to give evidence in the case-on my behalf that I was the owner-to support my title. He did not give evidence. He was summoned. I was not present on the trial day. I was informed he did not give evidence. The agreement was that if he gave evidence in my favour he was to have the land for Rs. 2, 250, and a promissory note was made by him in my favour for Rs. 1, 000, another promissory note was made by me in his favour for Rs. 1, 000 on June 8, 1907. He also paid me Rs. 250 as an advance. I gave him a promissory note for Rs. 250. Three promissory notes were thus drawn. The three notes were left with Veerappa Chetty to be held by him. According to agreement it was fulfilled on terms, the notes were to be returned to the respective parties who signed them. This was to be on the headman's giving evidence and on the deed being signed. It was arranged that I should tell Veerappa. He was to keep the notes till I gave him instructions. I was informed the headman did not give evidence. I informed Veerappa that the headman had not given evidence, and that the notes should not be handed over. I sold my half share to Abraham Gunasekere's wife. The note I had made was sued upon in 7, 039, D. C, Negombo, Judgment went against me. The plaintiff was Pidelis, who alleged Harmanis endorsed the note to. him. I did not defend the action on advice of my proctor. I did not receive Rs. 1, 000 from Harmanis on the note. I did not hand the note to Harmanis, but to Veerappa Chetty. This man present is not Veerappa, but his attorney. In. D. C. 7, 3091 paid the claim R

Click Here to Read the rest of this document