DISHONORED PROMISSORY NOTE

Evening Star, Issue 19791, 15 February 1928, Page 5

DISHONORED PROMISSORY NOTE

GLAIi AGAINST gHDORSER CASE IH SUPREME COURT In the Supreme Court to-day, before His Honor Mr Justice Sim, a claim was n..Jo by Ernest 0. Noes (trading as the Investment and Discount Company, of Dunedin) against Charles Dotting for £550 as principal and interest due on a promissory note. Mr J. S. Sinclair appeared tor the plaintiff and Mr H. E. Barrowclongh lor the, defendant. Mr Sinclair said the action was under a, bill writ by which the plaintiff, who was the solo proprietor of the Commercial Investment and Discount Company, of Dunedin, claimed £550 from defendant Dotting, who was the endorser of a promissory note. The note was dated June 2, and was payable on December 2, 1927. It was signed by F. B. Francis and endorsed by Ghnilos Dotting. About the end of May Francis, who bad done business with the plaintiff before, called on him and asked for a loan. Nees • said he would be prepared to make a loan provided Francis got a suitable backer to a bill. Francis came back and suggested Charles Dotting, and after Necs had made inquiry of his bankers lie said ho was satisfied with Dotting. brancis produced a blank promissory note form and filled in the amount of fcooU. Francis took tho bill away, and bad it endorsed by Dotting. That afternoon Llio money was advanced to Francis. Within four days Ncos endorsed the bill, and took tho precaution of endorsing tho name of his company above tho signature of Dotting. The bill was pavablo to Nces at bis order. It was claimed that endorsement was made within reasonable time after the bill was issued, Francis gave Nces Ids for a stamp which was put on uio bib. It was admitted that the stamp duty was Fls. Necs put a shilling stamp on the bill on Juno 6. It was claimed that legally that did not affect the position. As time went on Francis became involved financially, and at a meeting of his creditors it was disclosed that his position was not very satisfactory. Before the bill became duo on December 2 Mr Lousley, Botting’s_ solicitor, was in Mr Nees’s office to discuss tho bill, which was produced. On December' 2 the bill was presented at the Commercial Bank of Australia, and was dishonored. Notice that the bill had been dishonored was sent that day to Dotting, who did not reply. A solicitor’s letter was sent to. Dotting, but as far as counsel knew there was no reply to that, and a bill writ was issued. Dotting admitted Iris signature, bu L . denied that tbe sum. of £soo was due by him to plaintiff. It was also contended by the defence that tho copy of the promissory note was not a real and complete copy; that at the time tbe defendant signed bis name on the back of tho note and at the time it was first received by the plaintiff it was not complete and regular on its face; and that tho defendant had no notice of tho dishonoring of the bill. Learned counsel submitted that the defence, so far as tho defendant was concerned, was a most discreditable one, because Dotting, as an honorable man, unquestionably guaranteed the money. Defendant sought to escape his obligations by certain technicalities, which it was contended could not stand in taw. Evidence was given by Ernest Oscar Ncos, who said be gave Francis a cheque for £490. . In reply to Mr Barrowclongh, witness said Francis told him bis bankers were pressing him, and lie bad to reduce Ins overdraft. Witness was asked for a loan of £SOO. Lethaii G. Algie, bill clerk _in the Commercial Bank, also gave evidence. Mr Barrowclongh, in opening his case, said it was only to be expected that such remarks ns had been made in regard to defendant’s position could not be avoided by learned counsel lor tho plaintiff. It was hoped, however, to advance a sound defence. The primary defence, which rested purely on a point of law, was .a question as to whether sufficient malice of dishonor had been given or whether any notice of dishonor had been given. Another defence, which would bo dependent on the evidence, was that at the time of the negotiations the note was not complete and regular on its face. The form which Dotting signed was blank at the time.

Mr Sinclair claimed that he had not had notice that the defence would claim that Dotting signed a paper with no writing on it at all. Mr Barrowclongh: “I do say the note Dotting signed was blank when he signed it.” Charles Dotting stated in evidence that Francis owed him £550 and something more for interest at the time of the negotiations, and witness was pressing him for a settlement. Francis said ho would settle if Dotting would endorse a note. Witness was absolutely certain there was no amount filled in on the bill when he signed it. When he endorsed the note he gave it to Francis, who took it away. To Mr Sinclair: There was no “ frame up ” between Francis and him. H? had not been told by his solicitor that Francis had been committing a number of fraudulent transactions, though he had heard rumors. He was now a builder, and had previously worked with Mr Francis as - a salesman. He had not previously endorsed a promissory note. When he received the letter from Nees he did not think the note had been dishonored. Fie admitted that he then had some doubt about it. His Honor: “I should conclude he knew perfectly well it had been dishonored.”

Francis Bernard Francis gave evidence, and stated in reply to Mr Sinclair that the amount was filled in both in words and figures on the note when Dotting signed it. ( After hearing legal argument by Mr Barrowclongh His Honor adjourned the case till the afternoon.