Supreme Court
Action No. 128 of 1976
28th February, 1983.
Moe, C.J.

Mr. John Avilez for the Plaintiff
Mr. Denys Barrow for the Defendant

Promissory Note - 1st Defendant executing promissory note with Plaintiff bank - 1st Defendant signing promissory note in his own name - Whether 1st Defendant signed promissory note as agent or director of 2nd Defendant - Whether 2nd Defendant liable under the promissory note - Section 26 of Bills of Exchange Ordinance - Section 63 of Companies Ordinance - Construction to be given to these sections in determining liability of a Defendant who claims his name appears on a promissory note as agent or director.

J U D G M E N T

The Plaintiff claims from the Defendants as makers of a promissory note, a balance due on the principal sum of the note together with interest thereon.

There is no dispute that the Plaintiff loaned to the second Defendant a sum of money, that a bill of sale on certain property was executed as part of security for the loan and the first Defendant signed the promissory note under consideration. Particulars of the note are not important to the issue to be determined except as follows:- It commences, "For the value received, the undersigned jointly and severally promise (s) to pay to the Atlantic Bank Ltd. ---" and at the bottom of the note it is signed (where "borrower" is indicated) by the first Defendant using merely the words George Foreman. Written at the top of the note are the words B/S Secured 341/73 Belize City Bus Service Ltd. and at the bottom of the note Secured 341/73.

There was evidence that the Plaintiff prepared the note and gave it to the first Defendant to sign. That it was the Plaintiff's understanding that the first Defendant was signing as Managing Director of the second Defendant, and it appeared to the Plaintiff, the Defendant regarded himself as so signing.

The issue to be determined was whether the first Defendant is liable on the note. Looking first at the document as it stands it says that the undersigned i.e. George Foreman, the first Defendant, promises to pay and that would make the first Defendant personally liable thereon. It would be doing violence to the writing on this note to say otherwise.

But I am asked to take into account the evidence that the first Defendant was Managing Director of the Defendant company and that when he signed the note he signed as such. The question then is whether the first Defendant had excluded his personal liability, i.e. put his name on the note only as agent.

The only evidence I have on the point other than what the document says is that the Defendant was signing as Managing Director of the Defendant company. That bit of evidence explains who he was, no more than the Managing Director of the Defendant company, and how he came to sign the document. But it does not show he was excluding his personal liability. The evidence I am left with does not show that he qualified his signature, i.e. that he made it clear he was not undertaking any personal liability.

I was referred to section 26 of the Bills of Exchange Ordinance Cap. 209 which provides:- "(1) Where a person signs a bill as drawer, indorser or acceptor, and adds words to his signature indicating that he signs for or on behalf of a principal or in a representative character, he is not personally liable thereon, but the mere addition to his signature of words describing him as an agent or as filling a representative character does not exempt him from personal liability." And "(2) In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instrument shall be adopted."

That section does not appear to apply to these circumstances. There was no addition of a description by the first Defendant of any kind to bring into play subsection (1) and thus there is no indication of agency or representative capacity causing ambiguity to involve the rule of construction under subsection (2). But if it is an applicable rule of construction to apply the rule of construction under subsection (2), I would have to find that the construction that the signature is the personal signature of the first Defendant is the one which is most favourable to the validity of the note.

For the first Defendant, reference was also made to section 63 (3) of the Companies Ordinance, Chapter 206 which provides:- "If any director of a limited company ---- (b) ---- signs --- on behalf of the company any --- promissory note --- wherein its name is not mentioned in manner aforesaid --- he shall be liable to a fine --- and shall further be personally liable to the holder of any such --- promissory note --- for the amount thereof unless the same is duly paid by the Company."

Section 63 (1) (c) requires every limited company to have its name mentioned in legible characters in all --- promissory notes. It was contended that the appearance of the name of the company at the top of the note is sufficient to bring the note within the ambit of that section and to excuse the first Defendant from liability to the Plaintiff. This contention fails for the following reasons. There is no evidence that the name of the second Defendant was put at the top of the note in connection with the signing of the first Defendant's name. There is evidence that the name of the company refers to the person who had secured the loan by a bill of sale. I would therefore hold that the first Defendant is caught by that section and by virtue thereof is also liable on the note. But even if the notation was sufficient for the purposes of section 63 of CAP 206, it would take me no further than that the Defendant is not liable under that section. I would still be driven back to decide whether it was clear that the first Defendant signed as agent only thus excluding his personal liability. I do not so find.

In the circumstances, I hold that the first Defendant is liable as maker of the promissory note. The evidence undisputed is that there is a balance of $11,309.90 due under the note with interest thereon at 11% per annum from 30th March, 1974. Judgment is entered for the Plaintiff against the first Defendant in the sum of $11,309.90 with interest thereon at 11% from 30th March, 1974 until today's date. I do not find any liability attaching to the second Defendant. Judgment to be entered for the second Defendant. The Plaintiff to have its costs.

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