Present . Fisher C.J. and Drieberg J.

WEERAPAH v. WIGGIN et al.

28-D. C. Colombo, 27,713.

Promissory note-Sale of car on hire purchase system-Note given to guarantor-Marginal entries-Ordinance No. 2 of 1918, s. 10.

Where A purchased a car from C on the hire purchase system through a motor car agent, B, and B, in order to help A to enter into the hire purchase contract with C, agreed to pay to C, on A's behalf, the initial payment and the first three instalments, and took from A a promissory note for the amount of these payments,-

Held, this was not a transaction to which the Money Lending Ordinance applied.

THE plaintiff sued the defendants, husband and wife, on a promissory note to recover a sum of Rs. 3,332.98. The second defendant entered into a purchase hire agreement for the purchase of a car from the Auto Supply Company according to which the second defendant was to make an initial payment of Rs. 2,283,33 and thereafter eleven payments of Rs. 452.52 each. The second defendant was unable to make the payments and the plaintiff on behalf of the second defendant agreed to pay the Auto Supply Company the initial payment, and the first three instalments. The second defendant and his wife gave the promissory note sued upon to cover the amount of the instalments.

The learned District Judge held that the promissory note was not enforceable as it had failed to conform to requirements of section 10 (2) of the Money Lending Ordinance.

H. V. Perera (with him Choksy), for plaintiff, appellant,

H. E. Garvin, for first defendant, respondent.

September 5, 1929. DRIEBERG J.-

The position of the parties to this note is clear when the facts-concerning the sale of the car are stated.

The car was sold by the appellant, not to the second defendant, but to the Auto Supply Company, who paid him its price, Rs. 6,850. The second defendant entered into a purchase hive agreement with the Auto Supply Company by which the second defendant was to make an initial payment of Rs. 2,283.33 and thereafter eleven payments of Rs. 452.52; if the second defendant made all these

payments amounting to Rs. 7,261.05, he would have become entitled to the car. The second defendant was not able to make the initial payment to the Auto Supply Company and the instalments which fell due thereafter; the appellant, who was interested in wiggin helping the second defendant to enter into the purchase hire agreement with the Auto Supply Company, for on this depended the company completing the purchase of the car and paying him the price, agreed to pay to the Auto Supply Company on behalf of the second defendant the initial payment of Rs. 2,283.33 and the first three instalments amounting to Rs. 1,357.56. The appellant took over a Buick car of the second defendant for Rs. 1,002.50, and thus the second defendant then had to repay to the appellant a sum of Rs. 2,638.39.

On January 12 the second defendant and his wife, the first defendant, gave the appellant the promissory note sued on, for Rs. 3,332.98 payable on April 12, the difference being made up of Rs. 190.25 insurance of the car, Rs. 10 registration fee paid by the appellant, Rs. 324.34 value of accessories sold to the second defendant, and Rs. 170 for interest and discounting fees. On January 18 the second defendant entered into the purchase hire agreement, D 1, with the Auto Supply Company.

The appellant paid to the Auto Supply Company the initial payment of Rs. 2,283.33 and on February 1 the second defendant gave the appellant in part repayment a cheque for Rs. 300 which was to be presented on February 23; in the meantime, on February 18, the first instalment of Rs. 452.52 fell due and was paid by the appellant, who told the second defendant that unless the cheque was met he would not pay further instalments. The cheque was dishonoured. The appellant says that the second defendant then agreed to pay the further instalments himself.