Promissory note evidence and interest terms: partial non-advance may be proved, but oral variation of written interest is inadmissible.

A promissory note's recital of consideration can be rebutted by evidence showing that only part of the stated amount was actually advanced, so recovery is limited to the proved advance. However, the contractual rate of interest fixed in the written note cannot be altered by an alleged oral agreement, because such evidence would contradict the written instrument and inadmissible settlement communications cannot be used for that purpose. A court deposit without notice does not stop interest until the claimant is informed and has an opportunity to take the money; after notice, interest continues only on the unpaid balance. The decree was therefore modified in the plaintiff's favour.

---

---

Issues: (i) Whether the defendant had proved that the amount actually advanced under the promissory note was less than the amount recited in the instrument; (ii) Whether oral evidence of an agreement reducing the contractual rate of interest was admissible; (iii) Whether the plaintiff was entitled to interest after the defendant deposited money in court without notice to the plaintiff.

Issue (i): Whether the defendant had proved that the amount actually advanced under the promissory note was less than the amount recited in the instrument.

Analysis: The burden lay on the defendant to show that the consideration stated in the note was not fully advanced. On the evidence of the defendant, his munim, and the account books found to be genuine, the Court accepted that only part of the stated amount had in fact been paid. The plaintiff's oral assertion of full advance was not supported by his books, though they were said to exist.

Conclusion: The defendant proved that the actual advance was less than the amount recited, and only the smaller sum was recoverable as principal.

Issue (ii): Whether oral evidence of an agreement reducing the contractual rate of interest was admissible.

Analysis: Once the rate of interest was embodied in the promissory note, it formed part of the written contract. A promissory note is an instrument required by law to be in writing, and any oral agreement varying its interest term would contradict or alter the written instrument. The Court also held that evidence of settlement negotiations and privileged communications could not be used for that purpose.

Conclusion: The alleged oral reduction of interest was inadmissible, and the original contractual rate of interest remained binding.

Issue (iii): Whether the plaintiff was entitled to interest after the defendant deposited money in court without notice to the plaintiff.

Analysis: A deposit in court does not affect the claimant's right to interest unless the plaintiff is notified and afforded an opportunity to take the money in satisfaction. As no notice of the deposit had been given before the relevant stage, the plaintiff could not be penalised for not withdrawing it. Once the deposit later came to the plaintiff's notice, interest could not continue on the whole decretal sum after that point, but only on the balance remaining unpaid.

Conclusion: The plaintiff was entitled to interest at the full contractual rate until the deposit came to his notice, and thereafter only on the unpaid balance.

Final Conclusion: The plaintiff substantially succeeded and the decree was varied in his favour, with enhanced recovery, proportionate costs, and modified interest.

Ratio Decidendi: The recitals as to consideration in a promissory note may be rebutted by evidence showing partial non-advance, but the rate of interest fixed in the written note cannot be varied by oral agreement where the instrument is required by law to be in writing.

---