Charles Appu V. Fernando

Present: Pereira J.

CHARLES APPU v. FERNANDO.

420-C. R. Colombo, 35,214.

Promissory note-Note signed in blank given to A-Authority to fill up note for Rs. 30-Note filled up in favour of B for higher amount- Holder in due course-Negotiation.

Where a simple signature on a blank stamped paper was delivered by A to B, and the same was converted by B into a promissory note in favour of C. held that it was competent to C to enforce the note, as if the paper had been filled up within a reasonable time and strictly in accordance with the authority given. The word " negotiation " when used with reference to a bill of exchange or promissory note includes the original operation of transferring the bill or note to the payee.

In the case put above, if B was shown to have been guilty of fraud, it would be incumbent on C to establish the fact by evidence that he was a holder in due course.

IN this case the plaintiff-respondent, claiming to be payee of a promissory note, sued the defendant-appellant, as the maker thereof, for the recovery of Rs. 150 principal and Rs. 84 interest at 96 per cent, per annum.

The defendant filed the following answer: -

3. This defendant says that he signed the printed form of the note sued upon and handed it to one M. D. Abraham, with whom the defendant dealt. The amount (Rs. 150), the name of the payee (R. P. Charles Appu), the amount (rupees one hundred and fifty), the rate of interest (8 per cent.), and the names of witnesses to the note were not inserted in the said note. This defendant says that neither the said M. D. Abraham nor the plaintiff had any authority to insert the. said particulars in the said note, and the insertion thereof is a material alteration of the said note. The defendant authorized Abraham to fill in the note for Rs. 30 only.

4. Further answering, this defendant says that on January 22, 1913, he borrowed a sum of Rs. 30 from the said M. D. Abraham and agreed to pay interest thereon at the rate of 60 per cent, per annum. At the end of February, 1913, this defendant paid the said M. D. Abraham a sum of Rs. 25 in part payment of the said sum of Rs. 30, and there is now due and owing from this defendant to the said M. D. Abraham the balance principal sum of Rs. 5 and the interest, which this defendant has always been ready and willing to pay to the said M. D. Abraham.

5. This defendant denies that he had any dealings whatever with the plaintiff.

The learned Commissioner of Requests (P. E. Pieris, Esq.) held that the answer did not disclose a defence, and entered judgment for the plaintiff.

The defendant appealed.

A. St. V. Jayewardene, for defendant, appellant. -The plaintiff is the payee on the face of the note. He is not a holder in due course, as the note was not negotiated to him. See Bills of Exchange Act, section 29 (1).

Balasingham (with him Bartholomeusz), for the plaintiff, respondent.-If Abraham had filled up the note in his favour and endorsed it to the plaintiff, the plaintiff would be a holder in due course. The fact that Abraham filled up the note in favour of the plaintiff does not take away from plaintiff's rights on the note. Under section 20 of the Bills of Exchange Act, a person to whom a blank note is granted has prima facie authority to fill up the note for any sum the stamp would cover and in favour of any person whom he pleases. A blank note is in the nature of a note payable to bearer, and may be negotiated without endorsement. Plaintiff is a holder in due course. Counsel cited Lloyd's Bank S Co. v. Cooke,1 Pethaperumalpillai v. Sathaku.2 [His Lordship stopped counsel.]

A. St. V. Jayewardene, in reply.-The passage cited from Lloyd's Bank & Co. v. Coolie 1 was only an obiter dictum of Moulton L.J. (1902) 1 K. B. 361 is an express authority to the contrary. That judgment was not over-ruled by the Judges who decided Lloyd's Bank & Co. v. Cooke.1

Plaintiff has to prove that he is a holder in due course, if

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