SIGNING P.N.’S

Hokitika Guardian, 23 August 1930, Page 3

SIGNING P.N.’S

ONE OE THE PITFALLS. FARMER PAYS TWICE. The danger of signing promissory notch without giving full consideration to the results of their negotiability is •strikingly instanced in a ease quoted by the “Mercantile Gazette.’’ A fanner in-,, the North' Island purchased a second-hand car in April, 1928, from a limited company and aftci paying a cash instalment signed S i- N promissory note-S, in favour of the vendor, of £22 each at three, six. nine, twelve, fifteen and eighteen months from j date. . Four of - these 'totes were subsequently discounted. Later on the purchaser called at. the vendor’s office and intimated his wish to pay whatever balance was owing on his car, and informed the manager that four of the promissory notes vere not yet due and wanted to know what discount he would bo allowed for prepayment.

The manager called in the salesman who had sold the car and after makng some calculations they said that “74 would be wanted to give him «> •lear discharge of Ids liability; this, he agreed to and he received a formal receipt for the total money lie Had paid’;' showing- that he was exonerated.. from any further liability tr the company. He asked for the promissory notes', made' by,, him and, was told, by the cashier “You have got a •cceipt for the moneys, tlie notes are worth‘nothing now and will 'be returned to von.’’

The buyer went away quite satisfied, and remained so until he received a letter from a finance cor-’ no-ration with, whpm the vendor bad discounted two of the notes, requesting payment of £44. The purchaser made 'inquiries and discovered that vs the Finance Corporation wan - bona fide holder of the two notes, its claim upon him could not be defeated; by the fact that he had paid the money to the vendor company, and this advice was later on proved to be sound, as the magistrate before whom tiie case was tried gave judgment in favour of the plantiffs for the amount claimed and copts.

It- appeared in evidence that the vendors, when they received the £74, vere prevented from picking up the .wo- notes in the hands of the plaintiffs, by the intervention of the receiver for the debenture holders who had security over the property of the. company. By a coincidence; he took possession just about the time that the £74 had been paid in, and refused to permit' that taoney or any portion of it to be used in taking up the notes which were oustanding, and in: consequence of this the vendor had to pay twice over to the extent of £44, which was hard on him,' and although lie could look to tlve conipauv to reimburse him, his claim was of little value, as after payment of ,the debenture holders, there, wan an insufficiency of assets and he- made a total loss, of the money he was compelled to pay. the Finance Corporation.”. ....'.