Wakilii

Naranjee v Khan and Another (Civil Suit No. 540 of 1952)

East African Court of Appeal · [1953] EACA 48 · 1953 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit on promissory notes against endorser
Decision
Judgment entered for plaintiff against second defendant as endorser on five promissory notes

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a delay of 16 to 18 months in presenting demand promissory notes was not unreasonable where the maker requested intervals to allow time for payment, as section 87(2) requires consideration of the facts of the particular case and a promissory note payable on demand is a continuing security. Where presentment for payment to the endorser is admitted, section 50(2)(d)(ii) read with section 90 dispenses with notice of dishonour, rendering any notice superfluous. Judgment for plaintiff against endorser.

Outcome

Judgment entered for plaintiff against second defendant as endorser on five promissory notes

Facts

The plaintiff sued the second defendant as endorser on five promissory notes for Sh. 400 each, dated 21 September 1950 and payable on demand. The notes were made by the first defendant in favour of the second defendant and endorsed to the plaintiff by P. L. Bhalla signing for his brother, the second defendant. Two notes were presented for payment on 1 February 1952 and three on 11 March 1952, a delay of 16 to 18 months. The second defendant defended on three grounds: that his brother had no authority to endorse; that presentment was unreasonably delayed; and that no valid notice of dishonour was given. The court accepted evidence that the second defendant held out his brother as his agent with authority to sign on his behalf. The delay was explained by the first defendant's request for intervals to allow time for payment. Presentment to the second defendant as endorser was admitted in the pleadings.

Issues

  1. Whether a delay of 16 to 18 months in presentment of demand promissory notes was unreasonable under section 87(2) of the Bills of Exchange Ordinance.
  2. Whether notice of dishonour was necessary where presentment for payment to the endorser was admitted.
  3. Whether P. L. Bhalla had authority to endorse the promissory notes on behalf of his brother, the second defendant.

Orders

  • Judgment in favour of the plaintiff against the second defendant in the amount of Sh. 2,060.
  • Interest thereon at court rates.
  • Costs of the suit to the plaintiff.

Rules and key headnotes

Bills of Exchange — Promissory Notes — Reasonable Time for Presentment
In determining what is a reasonable time for presentment of a promissory note payable on demand under section 87(2) of the Bills of Exchange Ordinance, the nature of the instrument and the facts of the particular case must be taken into account; a promissory note payable on demand is deemed to be a continuing security, and a delay of 16 to 18 months is not unreasonable where a satisfactory explanation is given.
Bills of Exchange — Notice of Dishonour — Dispensation Where Presentment to Endorser
Where presentment for payment to the endorser is admitted, section 50(2)(d)(ii) read with section 90 of the Bills of Exchange Ordinance dispenses with notice of dishonour, rendering any notice superfluous and precluding any defence based on defects in the notice.
Agency — Holding Out — Authority to Endorse Negotiable Instruments
Where a principal holds out another person as his agent with authority to sign documents on his behalf, and that person endorses promissory notes in the principal's name, the principal is bound by the endorsement even if he later denies having given such authority.

Legislation cited (4)

  • Bills of Exchange Ordinance (Cap. 291) s.87(2)
  • Bills of Exchange Ordinance (Cap. 291) s.50(2)(d)(ii)
  • Bills of Exchange Ordinance (Cap. 291) s.90
  • Bills of Exchange Ordinance (Cap. 291) s.50(2)(d)(iii)

Cases cited (1)

  • Chartered Mercantile Bank v Dickson (1871) L.R. 3 P.C. 574

Full judgment

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Naranjee v Khan and Another (Civil Suit No. 540 of 1952) [1953] EACA 48 (1 January 1953)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.