Acknowledgement of liability, not promissory note, where repayment terms and instalments replace an unconditional promise to pay.

A document framed as a letter, recording an account between the parties and specifying the amount due together with repayment by instalments, was held to be an acknowledgement of liability with an agreement to pay, not a promissory note. Because it contained no unconditional promise to pay on demand and lacked the negotiable character required of a promissory note, its form, contents, and surrounding circumstances showed that the parties intended only to settle the debt on agreed terms. The construction favouring justice was applied. The appeal succeeded and the matter was remanded for decision of the remaining issues on the footing that the document was not a promissory note.

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Issues: Whether the document in suit is a promissory note or an acknowledgement of liability with an agreement to pay.

Analysis: The document was framed as a letter, contained an account between the parties, and recorded the amount found due together with the mode and schedule of repayment by instalments. It did not contain an unconditional promise to pay on demand, and the form and contents showed that it was not intended to operate as a negotiable instrument. The surrounding circumstances and the manner in which the document was stamped and executed indicated that the parties intended an acknowledgement of liability with terms for discharge of the debt, not a promissory note. In cases of competing interpretations, the construction that advances justice was preferred.

Conclusion: The document is an acknowledgement of liability with an agreement to pay and is not a promissory note.

Final Conclusion: The appeal succeeds and the matter is remanded to the lower appellate court for decision of the remaining issues on the footing that the document is not a promissory note.

Ratio Decidendi: A document acknowledging liability and merely stipulating the mode and instalments of repayment, without an unconditional promise or negotiable character, is not a promissory note.

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