ARATHIL KANDOTH MADHATHIL BALAKRISHNAN NAMBIAR Vs. PKCHATHU

JUDGEMENT

(1.) The appellant appeals from a decree of the Court of the Subordinate Judge of Tellicherry holding him liable as the endorser of a promissory note exec.uted by the second and third respondents and also as a guarantor of payment. In 1929 the first respondent had money which he wished to invest and got in touch with the appellant. On the 2nd May, 1929, the appellant wrote to the first respondent advising him to invest his money on the security of immovable property and assuring him that he could make safe investments on his behalf. On the 11 May, 1929, the first respondent wrote to the appellant stating that if he could get proper security, he would leave the matter of the investment of his monies entirely to the appellant. He stipulated that there should be interest at 12 percent, per annum and, the investment should be for six or twelve months. The correspondence clearly shows that the appellant's instructions were to invest on the security of immovable property. Instead of carrying out his instructions the appellant lent Rs. 4,500.of the first respondent's money to the second and third respondents on the promissory note in suit, without any security apart from the promissory note. The promissory note was drawn by the second and third respondents in the name of the appellant, who a month later endorsed it over to the first respondent.

(2.) On the 12 June, 1929, the appellant wrote to the first respondent a letter in which he said: The money is as safe as in any bank and you can have it at a week or ten days notice. You can rest assured on that point. To-day the party (merchants) is clearing Rs. 10,000 to Mr. M. Kannan Nambiar as it is the due date and I am arranging another loan for them. All is well; please don t worry in the least. Now, 27 is the due date of your money and you can be sure that I will come to Coorg with these men and clear the loan and interest after which you will be convinced about the safety of the transaction. This is the first of such a transaction you do, but this is not the 10 or 15 that I saw being done. Your money is quite safe. Please don t worry.

(3.) The second and third respondents did not pay when called upon to do so and the first respondent instituted a suit against them and the appellant on the 20th June, 1932. The claim against the appellant was not limited to his liability as an endorser. The plaint was sufficiently widely drawn to include a claim against him as a guarantor.