Dargavarapu Sarbapu vs Rampratapu and Others

The second contention raised on behalf of the appellant that the plaintiff cannot sue for the balance of the price of opium sold and delivered

between the 15th June 1896 and 12th September 1896, and that his cause of action, if any, is only upon the promissory notes which he obtained

for the value of the opium, is clearly untenable upon the admitted facts, viz., that the promissory notes were made and given, for the value of opium,

by the vendees themselves, payable on demand to the plaintiff--the vendor or order--and the notes have not been negotiated by the plaintiff and

have been produced by him in the suit. ""When a bill or note is given for the price of goods sold and delivered, the presumption is that it is only a

conditional payment with a recourse to the original debt (Goldshede v. Cottrell 2 M. & W. 20 Maillard v. Argyll 6 M. & G. 40 and Bottomley v.

Nuttall 5 C.B.N.S. 134. So far as exhibit 0 is concerned, it is a promissory note made and given by both Veerabhadrudu and the third defendant

in respect of the price of the first supply of opium. The subsequent promissory notes D, D1 and D2 were signed by Veerabhadrudu alone; be did

not purport to sign on behalf of, or as agent for, the third defendant also; and it is not alleged that the name Veerabhadrudu is the name of the

partnership. The promissory notes are all payable on demand to plaintiff or order. Though D, D1 and D2 purport to be executed by both, yet as

the promise to pay is only by Veerabhadrudu, who alone signed them, the third defendant cannot be sued upon these promissory notes as such. If

two partners are indebted on the partnership account and one of them alone gives a promissory note for the debt and it is not alleged or shown that

the creditor intended to substitute the liability of the one giving the promissory note for the joint liability of the two Evans v. Drummond 4 Esp. 89

and Reed v. White 5 Esp. 122, the partner who has not joined in the promissory note will continue liable only on the original cause of action and he

cannot be sued upon the promissory note. In respect, therefore, of the prices of the supplies of opium covered by exhibits D, Dl and D2, the third

defendant, as one of two partners, can be liable only on the original cause of action, i.e., the price of the opium supplied on those occasions, and

the promissory notes given therefor by the other partner Veerabhadrudu will in no way affect such liability; and the very fact that the promissory

notes were intended to be promissory notes given by both clearly establishes that the creditor did not intend to substitute the liability of one partner

for the joint liability of the two.

So far as exhibit C is concerned--and the same would hold good in respect of D, Dl and D2 also even if the third defendant were liable to be

sued thereon--the third defendant as one of the two joint-makers of the promissory note is primarily liable, and it therefore lies upon him, when

resisting a claim for the original debt (the price of opium, covered by exhibit C), to allege and prove that the note is still running or that the plaintiff

has endorsed it over in favour of a third person and that it is not in his hands Price v. Price 16 M. & W.P. 232 and National Savings Bank

Association, Ltd. v. Tranah L.R. 2 C.P. 556. It is only when the debtor is but secondarily liable as drawer or endorser that the delivery of the bill

or note is sufficient prima facie answer to the claim founded upon the original cause of action and that it lies upon the creditor to account for the

nonpayment of the bill or note in a way to revive the liability of the debtor; for, as holder of the bill or note, he is bound to take all steps necessary

to obtain payment and to preserve the rights of his debtor upon it, i.e., such steps as due presentment for payment, and notice of dishonour, in

default of which (where it is necessary) the debtor is discharged not only from his liability upon the bill or note, but also from the original debt per

curo Price v. Price 16 M. & W. 232 Bridges v. Berry 3 Taunt 130 Soward v. Palmer 8 Taunt 277 and Plimley v. Westley 2 Bing. N.C. 249.

The case of Camidge v. Alleby 6 M. & C. 373 and Peacock v. Russell 32 L.J. 266 cited on behalf of the appellant fall under the latter class of

cases above and are entirely inapplicable to the present case. In the former case the vendor of goods, who accepted from the purchaser in

payment of the price certain promissory notes payable to bearer on demand, made and issued by a bank, was guilty of laches in not circulating the

same or presenting them to the banker (who became insolvent) for payment, and it was held that the vendor had thereby made the notes his own

and consequently that they operated as a satisfaction of the debt. In the latter case, the creditor took a bill of exchange from his debtor as collateral

security for the payment of his debt, and when the time for payment came the bill was not paid by the acceptor, but the creditor nevertheless gave

no notice of dishonour and the bill consequently became worthless, and it was held that he could not afterwards sue his debtor either on the bill or

on the original consideration.

The appeal therefore fails and is dismissed with costs.