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SENDIRIGAPITIYA v. DEMALAMANE
NLR16V478
1913 Present: De Sampayo A.J.
SENDIRIGAPITIYA v. DEMALAMANE.
428-C. R. Kurunegala, 21,376.
Promissory note-Option to pay money or transfer lands-Collateral
security-Promise to pay-" Borrow."
The following document was held not to be a promissory note :- I, W, in a
pecuniary need, have borrowed and received the sum of Rs. 150 from K, and
promised to pay interest at 12 1/2 cents
for Rs. 10 per mensem on demand unto the said creditor
on the said sum.
That further, in default of payment as such, it is hereby
sincerely promised to sell and transfer all the shares of
lands belonging to me unto the said creditor only for the
estimated value.
Signed on two stamps (10 cents).
THIS was an action to recover a sum of Rs. 150 and interest on the document set out in the headnote. The learned Commissioner of Requests (G. W. Woodhouse, Esq.) held that the document was invalid as a promissory note and dismissed plaintiff's action. He appealed.
Balasingham, for the plaintiff, appellant.-After the plaintiff had obtained
judgment against the executor, de son tort of the deceased maker of the document
sued upon, another person who claims to be an heir of the deceased moved that
the decree entered be vacated. The order of the Judge vacating the decree and
setting the case for trial on the merits is wrong. [V. Grenier.-There is no
appeal against that order. This is a case for the recovery of money, and only
points set out in the appeal petition could be considered in appeal.] Objection
was taken to the vacating of the decree at the proper time, but the Commissioner
over-ruled the objection.
The Commissioner was wrong in holding that the document sued upon was not a
promissory note. There is an " unconditional promise to pay a sum certain in
money." [De Sampayo A.J.-There is no promise to pay the principal. The document
appears to be only a receipt.] The word " borrow " clearly shows that the money
has to be repaid. The document is in Sinhalese, and we should find out the
intention of the parties. If the document was merely intended to be a receipt,
the words used would have been " have received Rs. 150," and not " borrowed and
received Rs. 150."
The first part of the document satisfies all the requirements of the definition
of a promissory note.
The addition of the second portion does not vitiate the note. Sub-section (3) of
section 83 of the Bills of Exchange Act enacts that " a note is not invalid by
reason only that it contains also a pledge of collateral security with authority
to sell or dispose thereof." The second portion is nothing more than a
collateral security. It has been held that a promissory note is not the less a
note because it contains a recital that the maker has deposited title deeds with
the payee as a collateral security, or a pledge of collateral security with
power to sell. See Byles on Bills 13 (17th edition) citing Wise v. Charlton,1[(1836)
4A.&E.786. ] Fancourt v. Thorne.2[(1846) 9 Q. B. 312.] [De Sampayo A.J. -The words used in the document are not
words used for creating mortgage.] It is a paraphrase of the word " mortgage."
Instead of saying " I mortgage," the maker says " I give you the right to sell
my lands in case I make default." [De Sampayo A.J.-The words indicate an
alternative obligation-to pay money or to sell land.] That may be said in a
sense of every mortgage. The mortgagor says, in effect, " I promise to pay the
sum borrowed, or in default I authorize you to sell my lands."
The second portion of the document must be treated as a surplusage, as the
document has not been notarially executed. It does not affect the validity of
the first portion.
V. Grenier, for the substituted defendant, respondent, not called upon.
Cur adv. vult.
November 28, 1913. DE SAMPAYO
A.J.-
The question on this appeal is whether the document on which
the action is brought is a promissory note. It acknowledges that the party to it
borrowed a sum
