1961 Present : Sinnetamby, J., and L. B. de Silva, J.

R. S. THAMBIRAJAH, Appellant, and T. MAHESWARI,
Respondent

S. C. 394-D. O. colombo, 21633/8

Promissory note-Action instituted by indorsee against maker-Issue raised as to fact of 1ndorsement--Burden of proof-No presumption in favour of valid or genuine indorsement--Bills of Exchange Ordinance, ss. 2, 21 (2), 30 (2), 31 (2)Evidence Ordinance, s. 101.

In an action in which the maker and the payee of a promissory note payable to order are sued by the person to whom the payee indorsed the note, if the maker raises an issue questioning whether the note was indorsed, the burden is upon the plaintiff to prove affirmatively the fact of indorsement completed by delivery. In such a case the plaintiff must first prove that he is a " holder" within the meaning of that term in section 2 of the Bills of Exchange Ordinance before he can claim the benefit of the presumption created under section 30 (2) that every holder of a bill is prima facie deemed to be a holder in due course.

APPEAL from a judgment of the District Court, Colombo.

A. C. M. Uvais, for the Plaintiff-Appellant.

N. K. Choksy, Q. C., with E. B. Wikramanayake, Q. C., and S. Sharvananda, for the 1st Defendant-Respondent.

Cur. adv. vult.

January 24,1961. L. B. DE SILVA, J.

The Plaintiff sued the 1st and 2nd Defendants to recover two sums of Rs. 1,000 and Rs. 500 on the Promissory Notes marked" A" and" B " filed of Record and dated 10/3/1956. Admittedly the 1st Respondent granted the promissory notes in favour of the 2nd defendant. The Plaintiff alleged in his plaint that the 2nd defendant had endorsed the said notes to the Plaintiff for valuable consideration and that he became the holder of the said notes in due course.

This action was filed under Summary Procedure and the 1st defendant brought the amount claimed to Court and obtained leave to defend the action. The 2nd defendant did not obtain leave to defend the action.

The case went to trial between the Plaintiff and the 1st defendant on several issues. Amongst them, were the following issues :

(1) Were the Notes in question endorsed to the Plaintiff by the 2nd defendant ?

(2) If so, has the 2nd Defendant the legal capacity to endorse the said notes ?

(3) Did the Plaintiff pay the 2nd defendant valuable consideration for  the said notes ?

(4) Is the Plaintiff a holder in due course ?

(5) Were the Notes in question given as security for loans of Rs. 850 and Rs. 425 respectively ?

(6) Were sums ofRs. 150 and Rs. 75 respectively deducted as interest for 3 months at the time of the said loans ?

(7) If so, are the said Notes unenforceable in terms of section 10 of the Money Lending Ordinance.

(8) Are the Defendants or either of them married ?

(9) If so, are they and their husbands subject to the Law of Thesa valamai ?

(10) If so, did the 1st defendant have the capacity to incur liability by signing the notes sued upon or borrow money without the concurrence or consent of her husband ?

After trial the learned District Judge answered the Issues as follows:

(1) Yes.

(2) Does not arise in view of section 89 (b) of the Bills of Exchange Ordinance.

(3) and (4) Plaintiff did not pay to the 2nd Defendant valuable consideration for the Notes and the Plaintiff is not a holder in due course.

(5)-(10) Does not arise.

The action against the 1st defendant was dismissed with costs.

The Plaintiff appealed against the Judgment and Decree in favour of the 1st defendant. It was urged in appeal that there was no evidence except hearsay that only sums of Rs. 850 and Rs. 425 were lent on these notes-and that the balance was deducted by way of interest.

The husband of the 1st defendant gave evidence in this case. Commenting on his evidence, the learned District Judge stated in his judgment "Thereupon, he questioned his wife who appears to have told him that she actually borrowed sums of Rs. 850 and Rs. 42