Claim on a P.N.

Manawatu Herald, Volume XXVII, Issue 3559, 12 August 1905, Page 2

Claim on a P.N.

A POINT REGARDING NOTICES. A case of some interest was heard at the S.M. Court ou Thursday by Mr A. D. Thomson. This '■ was a claim for £l6 13s gd on a dishonoured promissory note, by Cummer field and Spring: against P. E. Baldwin. Mr R. Moore appeared for plaintiffs, and Mr Harden for defendant. Mr Moore said the claim arose through a letter which the defendant, a Palmerston solicitor, sent to the’pkintiffis asking them to withhold a sa»motr3 against Wiremi Eparaima for good? supplied, the . defendant being indebted to the native and it being understood he Wait Id pay the amount claimed out of the amount he owed. The amount not being paid as promised plaint ills sued the' defendantjointly with Eparaima in May. This suit was compromised by the defendant undertaking to endorse a promissory note for the amount signed by Eparaima. The promissory note was acccordingly made and endorsed by the defendant by telephone and a letter subsequently ? Written. In the present action de- ' fend aHi was sued as endorser, and after receiving the summons he wrote disclaiming liability on three ground: (1) The note did not contain an interpreter’s certificate as required by sec. 96 of the Bill of Exchange Act; (2) it was not endorsed by the payees p (3), he did not receive notice of dishonour.^ In answer to the first objection council for plaiutffs contended that non-compliance with section 96 did not release the endorser. Tire effect of endorsement was the creation of a new contract between endorser and endorsee. The plaintiffs were “holders in due course ’ ’ within the meaning of section 38 (2) of the Act, and consequently held the note as against the defendant free from personal defences available to the maker. By section 55 (2) (c) the endorser is'precluded from denying to his imme ’bite or .my subsequent: endorsee that the note was valid and subsisting when he endorsed it. Further by section 96 a certificate by an in terpreter is made necessary only when the native has signed the bill in English. _ In the present instance the Maori part of the note was signed by the native and the English therefore was merely surplusage and the certificate unnecessary. With regard to the defendant’s second plea, endorsement by the payee is necessary only when the payee transfers. In this case the payees were the plaintiffs and their endorsement consequently unnecessary. This point was decided in the case Cook v. Fenton. In the case Bank of New Zealand v. Harper endorsement by the payee was necessary because the payee was described as the Agent of the Bank of New • Z aland end the plaintiff was the Bank itself. With regard to the third plea, notice by telephone is sufficient, being equivalent to “ personal communication.’’ Moreover, in this case the note had been made to compromise a Suit in which the defendant was sued jointly with the maker of the note. The bill was accordingly made for the accommodation of the endorser and notice to the endorser was unnecessary under section 50 of the Act. •

Mr Harden in reply submitted that as the note was not in compliance with section 96 of The Bills of Exchange Act, 1883, in not having a certificate by an interpreter that the note had been read and explained to the native, no liability could attach to the endorser, otherwise the endorser would be liable as a guarantor without having any remedy against his principal. Further, as the note was' not endorsed by the payee, the plaintiffs, it followed that if the defendant paid the amount he could have no recourse against the maker of the bill. And finally the defendant had received no notice of dishonour in the terms of the Bills of Exchange Act. The Magistrate ruled that on the first plea the defendant’s contention could not be upheld. With regard to the second plea, it was not necessary that the payees, being the plaintiffs, should endorse the bill, for if judgment were given against the defer riant he could demand the 'bill with the proper endorsement. On the third plea, he was of opinion that notice by telephone was not sufficient, but should be in writing or else personally communicated to the defendant himself. Plaintiffs would be nonsuited with £1 is costs.