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Yarlagadda Veera Ragavayya and ors. Vs. Gorantla Ramayya - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Judge
Reported in(1906)ILR29Mad111
AppellantYarlagadda Veera Ragavayya and ors.
RespondentGorantla Ramayya
Cases ReferredPothi Reddi v. Velayadasivan I.L.R.
Excerpt:
promissory note - promissory note on account of pre-existing loan--action maintainable on original consideration, even if note unstamqed and inadmissible. - - 3. the law is clearly laid down by garth, c. he says at page :when a cause of action for money is once complete in itself, whether for goods sold, or for money lent, or for any other claim, and the debtor then gives a bill or note to the creditor for payment of the money at a future time, the creditor, if the bill or note is not paid at maturity, may, always as a rule, sue for the original consideration, provided that he has not endorsed or lost or parted with the bill or note, under such circumstances as to make the debtor liable upon it to some third person......whether for goods sold, or for money lent, or for any other claim, and the debtor then gives a bill or note to the creditor for payment of the money at a future time, the creditor, if the bill or note is not paid at maturity, may, always as a rule, sue for the original consideration, provided that he has not endorsed or lost or parted with the bill or note, under such circumstances as to make the debtor liable upon it to some third person. in such cases the bill or note is said to be taken by the credit or on account of the debt, an if it is not paid at maturity, the creditor may disregard the bill or note and sue for the original consideration...but when the original cause of action is the bill or note itself and does not exist independently of it...here there is no cause of action.....
Judgment:

1. The District, Judge has not fully appreciated the law or the facts in this case.

2. The plaintiff sued on the original contract entered into between the plaintiff and the defendant alleging that the promissory note (which was not admissible in evidence for want of a stamp) did not constitute the contract between the parties.

3. The law is clearly laid down by Garth, C.J., in Sheikh Akbar v. Sheikh Khan I.L.R. 7 Calc. 256 with which we entirely agree. He says at page : 'When a cause of action for money is once complete in itself, whether for goods sold, or for money lent, or for any other claim, and the debtor then gives a bill or note to the creditor for payment of the money at a future time, the creditor, if the bill or note is not paid at maturity, may, always as a rule, sue for the original consideration, provided that he has not endorsed or lost or parted with the bill or note, under such circumstances as to make the debtor liable upon it to some third person. In such cases the bill or note is said to be taken by the credit or on account of the debt, an if it is not paid at maturity, the creditor may disregard the bill or note and sue for the original consideration...but when the original cause of action is the bill or note itself and does not exist independently of it...here there is no cause of action for money lent or otherwise than upon the note itself, because the deposit is made upon the terms contained in the note, and no other. In Pethi Reddi v. Velayudasivan Calc. 10 Mad. 94, the plaintiff sought to prove the promise contained in the promissory note, viz., to pay at a subsequent named date, because if he had sued on the original consideration his suit would have been barred by the Statute of Limitation. He was therefore bound to rely upon the contract contained in; the note and could sue on no other.

4. In this case the plaintiff's case is that there was a completed contract between himself and the defendant independent of the promissory note an that the unstamped note was not itself the contract but was merely received by him on account of the loan made previously by the plaintiff to the defendant. This the District Munsif has found to be the fact but the District Judge has reversed the decree of the District Munsif without considering the facts on the ground that the case is on all fours with Pothi Reddi v. Velayudasivan I.L.R. 10 Mad. 94.

5. No facts are found which in our opinion make the case identical with Pothi Reddi v. Velayadasivan I.L.R. 10 Mad. 94, We therefore set aside the decree of the District Judge and remand the appeal to the lower Appellate Court for disposal according to law.

6. Costs will abide and follow the event.


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