Wakilii

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

East African Court of Appeal · [1953] EACA 12 · 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
Second defendant held liable as endorser on five promissory notes totalling Sh. 2,000 plus Sh. 60 noting charges

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where promissory notes payable on demand were presented 16 to 18 months after execution, the delay was not unreasonable under section 87(2) of the Bills of Exchange Ordinance given a satisfactory explanation that the maker requested staggered presentment to allow time to pay. Where presentment for payment was admitted to have been made to the endorser himself, section 50(2)(d)(ii) read with section 90 dispensed with notice of dishonour, rendering any defect in notice immaterial. The endorser was held liable where his brother was held out as his agent with authority to endorse.

Outcome

Second defendant held liable as endorser on five promissory notes totalling Sh. 2,000 plus Sh. 60 noting charges

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 out by the first defendant in favour of the second defendant, and endorsed in favour of the plaintiff by the second defendant's brother, P. L. Bhalla, signing on his behalf. Judgment by default had already been given against the first defendant as maker. The notes were presented for payment 16 to 18 months after execution — two on 1 February 1952 and three on 11 March 1952 — at the National Bank of India, Nairobi, as specified on the notes. 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 plaintiff's manager testified that the delay occurred because the first defendant requested staggered presentment to allow time to pay.

Issues

  1. Whether a delay of 16 to 18 months in presentment of promissory notes payable on demand was unreasonable under section 87(2) of the Bills of Exchange Ordinance.
  2. Whether notice of dishonour was necessary where presentment for payment was made to the endorser himself.
  3. Whether the endorser's brother had authority to endorse the promissory notes on the endorser's behalf.

Orders

  • Judgment in favour of the plaintiff against the second defendant in the sum of Sh. 2,060.
  • Costs of the suit awarded to the plaintiff.
  • Interest at court rates awarded on the judgment sum.

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, and a promissory note payable on demand is deemed to be a continuing security such that a delay of up to 18 months in presentment is not unreasonable where a satisfactory explanation is given.
Bills of Exchange — Notice of Dishonour — Dispensation
Where presentment for payment of a bill of exchange or promissory note is admitted to have been made to the endorser himself, section 50(2)(d)(ii) read with section 90 of the Bills of Exchange Ordinance dispenses with notice of dishonour to that endorser, rendering any notice given superfluous and any defect in notice immaterial.
Agency — Authority by Holding Out
Where a principal holds out another person as his agent with authority to sign documents on his behalf, that person has ostensible authority to bind the principal by endorsement of promissory notes, and the principal cannot later deny the agent's authority.
Pleadings — Admissions by Failure to Traverse
Where a material averment in a plaint is not traversed in the statement of defence, that averment is deemed admitted and may be relied upon as established fact without further proof.

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 12 (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.