Law: Negotiable Instruments Act (XXVI of 1881)

Section: 6.0,82

Law: Evidence Act (I of 2872)

Section: 91,92

  (a) Promissory note-----Mortgage bond executed in lieu of Bond's contents held to be equivocal-Indorsement by Notary Public on back of note not indicating discharge of note-Drawer of note held liable to holder in due course-(Ceylon case) [Negotiable Instruments Act (XXVI of 1881)], Ss. 6.0 & 82 Evidence Act (1 of 1872), Ss. 91 & 92-Evidence of Notary Public that note was discharged inadmissible.   The drawer of a promissory note executed a mortgage bond in favour of the payee in lieu of the note. The indorsement on the reverse of the note made by the Notary Public was:   "The amount due on this promissory note together with interest thereon from the date hereof has been secured by mortgage bond No. 44 dated 15th January 1948 attested by me". The contents of the bond were equivocal and the note as indorsed remained in the possession of the drawee.   Held, that the bond by itself being equivocal, the indorse ment on the note and the fact that the notes were attached to the bond and retained by the mortgagee and payee were conclusive to negative the discharge by merger or novation and show that the bond was taken by way of additional security.   The drawer was therefore liable to a holder in due course without notice of discharge.   Held further, that the evidence of the Notary Public intending to relate the meaning of the bond, namely, that the note was dischaged by the bond was inadmissible under sections 91 and 92, Evidence Ordinance (Ceylon)-Evidence Act (I of 1872), sections 91 and 92.   The language of the bond together with that of the notes attached thereto spoke for itself and even if admitted without objection the Court could not properly act on such evidence.   The evidence of the Notary Public as allegedly supporting a separate and independent agreement upon a matter on which the bond was silent was no evidence against the holder in due course, neither of the drawer and the payee. having gone into the witness box.   If such an agreement was in fact made, it was not carried out as the note was not "cancelled" in the manner provided in section 63 (I) of the Bills of Exchange…