Marimuthu Pillai vs Krishnasami Chetti and Others

Two questions arise for decision in this appeal and the first of them is whether the promissory note A was executed for money lent or subject to

the agreement set up by the appellant. The finding of the judge is that the note was given for money lent and the contention in appeal is that the

judge has refused credit to the evidence adduced by appellant on insufficient grounds.

[Upon the evidence the court held that there was consideration for the note and proceeded as follows.]

The 2nd question is whether property in the promissory note A vested in Lakshmana Chetti at the date of suit so as to enable him to maintain it.

The facts so far as they bear on this point are shortly these : Lakshmana Chetti endorsed the promissory note to one Patnam Subbayyar but

appellant refused to pay when the note was presented for payment. Thereupon, Subbayyar applied to a Notary Public at Trichinopoly for noting

the dishonor and the note was accordingly protested. Thereupon the endorsee sued the maker in No. 37 of 1888 on the file of the District Court

but appellant pleaded the agreement now set up and contended further that the endorsee paid no consideration for the endorsement and that there

was, therefore, no valid transfer of the promissory note. The District Judge upheld his contention and dismissed the suit without entering on the

question whether any and what consideration passed from the payee to the maker. On the dismissal of this suit Lakshmana Chetti paid Subbayyar

and got back the note but it was not reindorsed in his favor. As appellant''s 4th witness Subbayyar states that the note was endorsed to him in part

payment of a debt due by Lakshmana Chetti and that when the suit failed Lakshmana Chetti paid him the amount due under it and got back the

dishonored note. It is no doubt true as argued by appellant''s pleader that the property in a promissory note payable to order on demand passes by

endorsement and delivery. So it was held in Pattat Ambadi Marar y. Krishnan, I. L. R 11 M 290 and it is also expressly provided for by Section

46 of Act XXVI of 1881. But in the case before us, the endorsement in favor of Subbayyar was declared by the decree in Original Suit No. 37 of

1888 invalid and must therefore be treated as cancelled. Moreover the payee of a promissory note is entitled to pay an endorsee when the note is

dishonored and, striking out the endorsement, to sue the maker for compensation or to reissue the note. See Byles on Bills of Exchange, 14th

Edition, page 195. The objection that respondents have not taken out a certificate to collect the debts due to Lakshmana Chetti is not pressed, the

certificate being produced before us.

This appeal fails and is dismissed with costs.