KARMALI ABDULLA ALLARAKHIA Vs. VORA KARIMJI JIWANJI

JUDGEMENT

(1.) THIS action arises out of transactions connected with a venture in brown sugar entered into by the first and second respondents. The second respondent is now bankrupt and the third respondent is his official assignee; and neither of them defended the action or took part in the proceedings under appeal.

(2.) THE first respondent, Karimji, and second respondent, Rashid, were both merchants carrying on business in Mauritius, and had for some time been rivals in the sugar trade. Rashid had all along also had a Bombay house, and Karim was in the act of setting one up, but it was not at the date to be presently mentioned yet open.

(3.) KARIM and Rashid resolved to have a joint speculation in brown sugar to be shipped from Mauritius to Hong Kong. The terms of the arrangement they made between themselves were on July 25, 1900, embodied in a stamped agreement. The document is too long to quote, but may be summarized thus: It begins with a preamble that the parties "for the purpose of doing business in partnership in brown sugar from Mauritius to Hong Kong agree to act as follows." Then follow the terms. Purchases were to be made "jointly" at Mauritius. These purchases were to be made by both firms after consultation with each other, and after taking advice from the Bombay houses. No limit as to purchase is imposed on either firm; but as soon as either firm buys, that firm is to give a delivery order on the dock warehouse for half the quantity of the parcel to the other firm. When sufficient sugar to load a ship has been purchased, then a ship is after consultation to be chartered, and loaded with the purchased sugar and despatched to Hong Kong. Invoices for the sugar, made out separately as half and half, were to be sent respectively to each of the Bombay firms. At the same time Rashid was to draw bills to the value of the sugar on his Bombay house, and Karim on his Bombay house when it came to be opened. But until that time came he was to draw bills on Karmali. If the banks at Mauritius refused to discount the bills on the Rashid or Karim house, the Bombay firms were to be informed by wire, in which case it was said that Karmali would come to the rescue by interposing credit according to arrangement made with him. On the ship arriving at Hong Kong the arrangements as to sale of the sugar were to be carried through by the Bombay houses. Account sales were to come from Hong Kong made up separately, half and half to each. Then the invoices were to be added together and the surplus or deficit on the entire transaction was to be divided equally. Chartering was to be done in either one or both names; but all commissions were to be equally divided. In the event of the Hong Kong market being bad and there being an opportunity of a profit by reselling at Mauritius, this was to be done after permission got from Bombay; and such profit on all sales was to be equally divided. The agreement was to remain good for a year from date of signing. There is then an addendum to the agreement written and signed by the plaintiff, in which he binds himself to come to the assistance of the partners if the Mauritius banks refuse to discount the bills drawn by the Mauritius firms of the two defendants on their own Bombay firms respectively.