1. The facts out of which this second appeal arises may be briefly stated. One Chellapa Goundan had some mis-understanding with his wife and to spite her and his minor son he executed a sale deed of his property to his nephew the defendant in this case, Ex. II, dated 23-11-1917 For a portion of the consideration of the sale a promissory note, Ex. A, was executed. The promissory note has been endorsed in favour of the plaintiff and the endorsement bears the date 23-1-19. On 5th May 1919 Chellappa Goundan's son filed a suit for partition and recovery of his half share of the property. Before the suit came on for trial, there seems to have been a compromise of the suit but before this compromise could be recorded the defendant fell il and an ex parte decree was passed in favour of the plaintiff therein for half the property. The defendant afterwards applied to set aside the ex-parte decree, but the matter was again compromised. The defendant also says that he sold the lands to one Govindaswami Goundan for Rs. 1,900 and it is said that under the final compromise it was arranged that a reconveyance for half the lands should be taken from Govindaswami. The plaintiff as endorsee of the promissory note filed this suit on 23rd November 1920.
2. Five issues have been framed by the District Munsif in this case. The 1st issue is whether there has been a partial failure of consideration for the suit promissory note, the second whether the promissory note has been since paid up by the defendant, the third whether the endorsement is antedated, the fourth whether the plaintiff is a holder in due course and the fifth relating to costs. The fourth issue goes with the first issue. The District Munsif found that the suit promissory note is supported by consideration only to the extent of a half as the vendor's son ultimately succeeded in his suit for partition and recovery of a half-share of the property. He also found that the plaintiff practically knew this fact and therefore he was not a holder in due course and would not be entitled to recover the whole of the amount due on the note.
3. On the 2nd issue the defendant produced Ex. I which purports to be a receipt for the full amount due on the note said to have been paid by him to Chellappa Goundan. The Munsif found the payment of the amount due on the note at a time when the son's suit was contemplated was improbable and also relied on the evidence that no money was paid at the time and he found that Ex. I was not supported by consideration. As to the third issue he was of the opinion that it does not really arise in the case. The suggestion of the defendant was that Ex, A I, the endorsement, was really executed after the minor's suit was filed and was antedated. Assuming that the object of so antedating it is to get a decree for the full amount, the point really becomes one of no importance as the District Munsif gave a decree to the plaintiff only for halt the amount of the note. The Munsif, however, points out that P.W. 1, D.W. 1 and P.W. 2 prove the endorsement on the date it bears and there is no evidence contra. I agree with the District Munsif.
4. It was contended before me by the vakil for the respondent that the antedating of the endorsement amounts to a forgery, though the document is genuine in the sense that Chellappa Goundan executed it, because the object of the assignment is to sustain a suit for the full amount against the defendant. It seems to the that the principle of Section 13, Clause 2 of the Bills of Exchange Act taken with Section 89 is applicable to negotiable instruments though there is no express provision to that effect viz., that antedating or postdating of a bill or a note or an endorsement does not by itself make the document invalid. But assuming there has been some offence the offence was if at all against the defendant and so far as the plaintiff and Chellappa Goundan are concerned it cannot be said that the note was obtained from the holder by means of an offence or fraud within the meaning of Section 58 of the Negotiable Instruments Act. Therefore I think there is nothing in law to prevent the plaintiff recovering half the sum due on the note.
5. The District Judge based his judgment solely on this point. He thinks that the assignment is a forgery and he also finds that the plaintiff did not pay any consideration for the endorsement, and on these grounds refused to give a decree to the plaintiff. In my opinion, the question of consideration for the endorsement does not arise. That is a matter between plaintiff and Chellappa Goundan and cannot arise in this case. I have already shown that the antedating (assuming that there is such antedating,) cannot prevent the plaintiff from sustaining the suit. But, in my opinion, there has been no evidence to prove it nor do I find any suspicious circumstances from which such a thing can be inferred.
6. The only other point that should be considered in the case is whether Exhibit I was really supported by payment (After discussing the evidence the judgment proceeded). Anyhow I do not see any reason for rejecting the District Judge's finding that Exhibit I was not supported by consideration and calling for a fresh finding.
7. The result is the promissory note is un-discharged to the extant of a half (the other half of the consideration having been found to have failed), the plaintiff is the holder of it in due course and is entitled to a decree. I therefore reverse the judgment of the District Judge and restore that of the District Munsif with costs here and in the lower appellate Court.