101-NLR-NLR-V-39-SAMSUDEEN-v.-ABDUL-WAHIB.pdf
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Samsudeen v. Abdul Wahib.
193TPresent : Soertsz J.
SAMSUDEEN v. ABDUL WAHIB.
174—C. R. Panwila, 8,937.
Promissory note—Payee filling up a blank note—Rate of interest inserted withoutauthority—Holder in due course.
The payee of a promissory note cannot be regarded as. a holder indue course.
Charles Appu v. Fernando (17 N. L. R. 23) referred to.
SOERTSZ J.—Samsudeen v. Abdul Wahib.
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^^PPEAL from a judgment of the Commissioner of Requests, Panwila.C. E. S. Perera (with him D. Goonewardene) for plaintiff, appellant.No appearance for defendant, respondent.
Cur. adv. vult.
June 4, 1937. Soertsz J.—
This was an action on a promissory note. The defence inter alia wasthat the note had been given to the plaintiff in blank and that he, intilling the note, inserted a rate of interest without authority and haethereby materially altered the note.
Mr. Perera relied strongly on the judgment of Pereira J. in CharlesAppu v. Fernando ’. In that case it was held that “ where a simplesignature on a blank stamped paper is delivered, and aftei completion, itis negotiated to a holder in due course, it shall be valid and effectual forail purposes in his hands and he may enforce it as if it had been filled upwithin a reasonable time and strictly in accordance with the authoritygiven ”. Up to that point, if I may respectfully say so, I am in completeagreement. But Pereira J. went further and relying on the ruling byMoulton Li.J. in Lloyds Bank and Co. v. Cooke', held that * holder indue course would include a payee who has given value in good faith’. Itwill be noticed that Moulton L.J. emphasizes the condition that thepayee to be a ‘holder in due course ’ should have given value in goodfaith. In the present case, the commissioner has found that the plaintiffwas not acting in good faith in this matter and even if Lord Moulton’sruling stood, this case is easily differentiated. But the ruling of LordMoulton in Cook’s case has been disapproved by the House of Lords inthe case of R. E. Jones, Ltd. v. Waring and Gillow, Ltd.’. The LordChancellor Viscount Cave said, “I do not think a holder in due courseincludes the original payee of a cheque …. The decision of LordKussell in Lewis v. Clay * was to the effect that the expression does notinclude a- payee ; and the opinion to the contrary expressed by FletcherMoulton L.J., in Lloyds Bank v. Cooke does not appear to have beenaccepted by the other members of the Court of appeal ”. Lord Shaw ofDunferline said, “ I too venture to disagree with the view ….expressed by Fletcher Moulton L.J. in Lloyds Bank v. Cooke ”, and LordSumner remarked ” as at present advised I do not think Fletcher Moulton
J.’s observations in Lloyd’s Bank v. Cooke are correct ”.
The view taken by Pereira J. in the case I have referred to cannot,therefore, be regarded as correct, namely, that the payee of a promissorynote is a holder in due course.
In my opinion, this appeal fails and must be dismissed.
Dismissed.
1 IT N. L. A. 23.
1 (1907) 1 K. B. 794.
(1926) A. C. 670.
14 Times L. R, 149.