(1.) The plaintiff is a broker and a member of the East India Jute Association Limited. The defendant also is a broker. The plaintiff's claim relates to a number of transactions in jute carried out by the plaintiff for and on behalf of the defendant and upon his instructions. These resulted in a sum of Rs. 16,511-15-0 becoming due to the plaintiff upon 28 January 1939. On 30 January 1939, the defendant paid to the plaintiff Rs. 5000 on account leaving a balance of Rs. 11,511-15-0. Adding to this interest amounting to Rs. 153-9-6, the plaintiff's claim is Rs. 11,665-8-6. Under the rules of the association future contracts of purchase or sale of jute are made between members of the association only, that is to say, the association only recognizes its members in these transactions. They are forward contracts and are made for a period of three months and each week during the period of the three months a clearing rate is fixed by the board of control of the association and periodical payments of margins have to be made on the basis of the difference between the contract rates and the clearing rates. At the end of the period of three months, if the contract has not been adjusted meanwhile, delivery has to be made. Some members of the association both act as brokers and enter into contracts direct as principals with their customers. Other members act only as brokers and never make any such direct contracts.
(2.) The plaintiff never acts otherwise than as a broker and this is confirmed by a mass of documentary evidence. For his services he charges commission and this is all that he gets out of any business which he does on behalf of his customer. The method of doing such business is as follows: The customer either rings up the plaintiff on the telephone or goes to see him at his office. He instructs him either to sell or purchase so many bales of jute on behalf of the customer. Thereupon the plaintiff goes downstairs into the exchange and makes an appropriate contract with a member of the association. He then returns to the telephone or to his office and tells his customer what he has done. In the evening, in some cases, he goes to see the customer and obtains confirmation of the deal so as to avoid any mistake. The transaction is then entered in his books. Another rule of the association is that one member does not pay or receive directly from the other member; he pays or receives from the association itself, and the association pays or receives from the other party to the contract. The result is that in all such transactions the member makes himself liable to the association for the business which he has done on behalf of his customer.
(3.) In the present case the result was that the plaintiff had to pay to the association out of his own pocket the sum of Rupees 16,511-15-0, and all that he has received up to the present from the defendant is the Rs. 5000 to which I have referred, and commission which he earned on the various transactions. A further condition of the transactions was that interest at six per cent, would be calculated on the periodical margins and would run in favour of either party after the closing of the transaction. It is admitted that the plaintiff has been acting for the defendant for a number of years and that all dealings and transactions between them up to 13 January 1939 were adjusted and paid except an outstanding sale of 1500 bales by the defendant at Rs. 36-12-0. From that date up to 21 January there were a number of other transactions which are set out in the annexure to the plaint. Thus, sales on behalf of the defendant were made to the extent of 2250 bales, and purchases on his behalf to the extent of 3750 bales, and they resulted in the loss which is represented by the amount paid by the plaintiff to the association. The plaintiff's brokerage was originally at the rate of six pies per bale, and subsequently three pies per bale.