1928 Present : Garvin and Lyall Grant JJ.

MATHERENAYAKAM v. CHELLIAH et al.

327?D. C. Colombo, 19,151.

Promissory note-Agreement to pay money on behalf of other-Within one year-Bills of Exchange Act, 1882.

Where the plaintiff sued the defendants upon a writing expressed in the following terms: -

" We the undersigned agree to pay M. the sum of Rs. 5,000 within one year from this date on account of K. V. M. and K. V. S., the late proprietors of the Pennsylvania Oil Company. This sum is due from them to us after our paying to the said M."-

Held, that the document is not a promissory note as defined by the Bills of Exchange Act of 1882.

APPEAL from an order of the District Judge of Colombo. The facts appear from the judgment.

H. V. Perera, for plaintiff, appellant.

Hayley, K.C. (with Tisseverasinghe), for defendant, respondent.

February 6, 1928, GARVIN J.-

The plaintiff sued upon a certain writing whereby the defendants undertook to pay him a sum of Rs. 5,000. Answer was filed and the plaintiff then filed a replication. Upon these pleadings several issues were framed. The parties agreed that the first two issues, which were in the nature of issues of law, should be tried first. These issues are as follows: (1) Is the document sued on a promissory note? and (2) Is the document duly, stamped? The submission on behalf of the defendants was that the writing was a promissory note within the definition attached to that term in the Stamp Ordinance, and in as much as it was not stamped at the time of execution no action could be proceeded on upon it. A " promissory note " is defined in Ordinance No. 22 of 1909 as " a promissory note as defined by the Bill of Exchange Act, 1882,1[ 45 & 46 Vic. c. 61] and any other document entitling or purporting to entitle any person, whether named therein or not, to payment by any other person of, or to draw upon any other person for, any sum of money." With the latter part of this definition we are not concerned. The question for determination, therefore, is whether the document is a "promissory note" within the meaning of the definition of this term in the Bills of Exchange Act, 1882. The learned District Judge held that it was.

It is submitted on behalf of the appellant that the document is neither in form hot in substance a promissory note. The writing in question is in the following terms: " We the undersigned agree to pay T. Muttusamypillai Matherenayakam of 40, Brass founder street, Colombo, the sum of Rupees Five thousand (Rs. 5,000) within one year from this date on account of K. V. Marcandan and K. V. Subramaniam, the late proprietors of the Pensylvania Oil Company. This sum is due from them to us after our paying to the said Matherenayakam." The first point raised is the absence of the word " promise " and then attention is drawn to the form of the document as a whole. There can be no question that the document is not drawn in the ordinary form in which promissory notes are drawn. There is the absence of the word " promise " and there is not the usual undertaking to pay to payee or order. These matters of detail are of course not decisive in themselves. But it seems to me that the document as a whole was intended to be a memorandum or agreement whereby the signatories undertook to pay a debt of Rs. 5,000 on account of Marcandan and Subramaniam upon the understanding that upon such payment they were to have the right to recover that sum from the persons named. The document clearly gave the signatories the right to make this payment at any time they chose within a period of one year, and, having regard to what I have already observed, it is quite conceivable that it may have proved to be a right of considerable value to them. I have no hesitation in saying that the parties did not intend this to be a promissory note with the negotiability which attaches to these notes, but merely as evidence of the agreement