006-NLR-NLR-V-17-VYRAMUTTU-v.-SUDUAPPU-et-al.pdf
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Present : Pereira J. and De Sampayo A.J.
VYRAMUTTU v. SUDUAPPU et ol.
147—D. C. Batticaloa, 3,632.
Promissory note—Assignment by deed—Assignee not a holder in duecourse—Past consideration insufficient to support a note.
The assignment ol a promissory note by deed is a sufficienttransfer of the transferor’s interest on the' note. The assignmenthas not thefalleffectof an indorsement, becausethe plaintiff
cannot be looked upon as a “ holder in due coarse ” of the note,unaffected by defences of payment, lack of consideration, Ac.,which the maker may have as against the assignor ; bnt whateverdefence the maker may maintain as against the assignor is alsomaintainable as against the assignee.
Under the Bills of Exchange Act (section 27) valuable consider-ation for anotemaybe constituted by (1) anyconsideration
sufficient to support a simple contract, (2) an antecedent debtor liability. A past consideration is not a consideration which willsupport a simple contract.
rjl HE facts appear sufficiently from the judgment.
J.Grenier, K.G.,fortheplaintiff, appellant.—Theplaintiff is
entitled to sue on the note by virtue of the deed of assignment. Itis clear from- the evidence that the note was in the possession ofMr. Sheriff on behalf of the payee.
Balasingham, forthedefendants, respondents.—There is no
consideration for the note. There is no evidence to showthat Ponniah spent money in the testamentary case in which thefirst defendant was a party at the request of the first defendant.Even if the money was spent on behalf of first defendant, it is dearfrom the evidence that many persons were spending money in thehope of getting a share of the estate. There does not appear tohave been any agreement to repay the money. If the payee couldnot sue first defendant apart from the note, he could not sue on thenote. There was no antecedent debt or liability at the date of themaking of the note. A past consideration would not support anote.x
J. Grenier, K.C., in reply.
■Cur. adv. vult.
June 16, 1913. PebeiBa J.—
' In this case the plaintiff sueff for the recovery of A half share ofthe principal on a promissory note granted by the first defendantto idle second defendant and one Ponniah. The plaintiff bases his
1918.
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1918. claim on a deed oi assignment, whereby Ponniah conveyed to thej plaintiff his " tight, title, and interest ” in and to the note. The
first issue framed was .whether the plaintiff was entitled to sue on
note filed by virtue of deed lifo. 10,396 dated September 6, 1912,that is, the deed of assignment referred to above. I think it isclear that the assignment was a sufficient transfer to the* plaintiffof the rights of Ponniah on the note. The assignment has not thefull effect of an indorsement, because the plaintiff cannot be lookedupon as a “ holder in due course ” of the note, unaffected by defencesof payment, lack of consideration, &c., which the maker may haveas against the immediate payees; but whatever defence the makermay maintain as against the payees is also maintainable a6 againstthe plaintiff.
. One of the defences in the case appears to me to be that thepromissory note was not in fact granted by the first defendant tothe second defendant and Ponniah, but that the whole transactionwas inchoate. The note, it is said, was left in the hands of Mr.Sheriff, and it was to be operative only when, on the fulfilment ofcertain conditions, he parted with it by giving it to the payees.It is argued that this defence is not open to the defendants tinderthe issues framed, but I find there is an issue that would admit ofsuch a defence, and that is: "Is plaintiff entitled to recover theamount claimed ? ” Strictly speaking, an issue should never beframed in such general terms. Any defence would be covered bysuch an issue. But I find that the issue has been expressly agreedto by the plaintiff, and that being so, it is not for him to complainagainst its being given its full effect. Now, as to the merits of thisdefence, it is quite .clear on the evidence that it is only when thenote was handed over by Mr. Sheriff to the payees that they wereto be entitled to the benefit of it. It was suggested by the counselfor the appellant that possibly Mr. Sheriff was an agent of thepayees, and that he held the note at their instance; but that is notthe effect of Mr. Sheriff’s evidence. The question was pointedlyput to him whether the note was left with him because the payeesdid not trust each other. His answer was: " No, it was the makerswho wished me to keep the note.” This answer places beyonddoubt the fact that so long as Mr. Sheriff held the note in questionin this case it was to be deemed to be held by the maker. The nextdefence is that there was no consideration for the note. It appearsthat there was some costly and prolonged litigation over the will ofone Sinne Tamby, Vanniah of Kallar, and in the course of thislitigation persons who took sides with the parties immediatelyconcerned spent money over matters in connection with the litiga-tion; and possibly Ponniah, as he says in his evidence, spent moneyfor this purpose, but there is not a scrap of evidence to show thathe did so at the request of the, first defendant, or that the firstdefendant in any way became liable to pay him the money so spent.
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Anyway, the District Judge holds that by reason of a settlement 1918.arrived at by and between all the parties concerned the executorjm
of the will was allowed to remain in possession of the property of
the estate of the deceased and pay all persons who had spent money Tj£Xappu"
as stated above, and that he did so, and thereby the liabilities of all
parties on promissory notes signed in the course of the settlement
which were to remain as mere security were determined, or rather
no liabilities actually accrued on those notes. Be that as it may,
there was, to my mind, really and truly no consideration for the
note sued upon. By section 27 of the Bills of Exchange Act, 1882
(46 and 48 Viet. ch. 61), valuable consideration for a bill may be
constituted by (1) any consideration sufficient to support a simple
contract, (2) an antecedent debt or liability. Clearly, in the present
case there was no antecedent debt or liability. As observed already,
there is nothing to show that Ponniah spent any moneys at the
request of the first defendant, and that thereby or otherwise the
first defendant incurred any debt or liability to Ponniah, As
regards consideration to support a simple contract, it is clear law
that a past consideration is in effect no consideration at all (see
Anson on Contracts, 9th ed., pp. 98, 101).
would affirm the judgment appealed from with costs.
s
De Sampayo A.J.—I agree.
Appeal dismissed.
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