JUGGERNATH AUGURWALLAH Vs. EASMITH

JUDGEMENT

(1.) The facts in this case are scarcely disputed. By a contract dated the 28 of November 1905, the plaintiffs sold to the defendants, E.A. Smith & Co., 1,000 bale's of jute of a particular mark; the goods were to be placed alongside the exporting vessel during the month of November and to be paid for in cash against the mate's receipts. The goods were placed alongside the steam-ship Uganda under instructions from the defendants firm and were subsequently shipped on board the vessel and two mate's receipts, dated the 3 and 4 of December, for 875 and 125 bales respectively, made out in the names of Smith & Co., were obtained by the plaintiffs. These mate's receipts together with the plaintiff's bill against Smith & Co. for Rs. 46,000 and the usual measurement and weighment certificates were on the 5th of December made over to Smith & Co. for examination, and Smith & Co. gave the plaintiffs on the same day the usual receipt containing the statement that the documents were accepted for examination. Smith & Co. then presented the mate's receipts to Messrs. Mackinnon, Mackenzie & Co., the agents of the steam-ship Uganda, and obtained bills of lading in respect of goods mentioned in the mate's receipts, and subsequently pledged those bills of lading with the defendant Bank. We may say at once that there is no evidence to show that the Bank did not act in good faith or that there was anything in the transaction, so far as they were concerned, to raise any reasonable presumption that Smith & Co. were acting improperly: when that pledge was made, the Bank had no notice of the plaintiffs present claim, and Smith. & Co. were given credit in their account with the Bank for the full amount of the bills of exchange drawn against the goods represented by the bills of lading. The pledge was effected on or before the 7 of December, and, it is, perhaps unnecessary for present purposes to further follow the dealings with the bills of lading. The plaintiffs now claim to recover from Smith & Co. and from the Bank either the goods or their value. Smith & Co., who became insolvent very shortly after the 7 of December, have not defended the suit, but the Bank has, and they claim that they have a better title to the goods than the plaintiffs. Mr. Justice Sale dismissed the suit with costs, and the plaintiffs have appealed.

(2.) The first question, which appears to arise, is whether, in the circumstances, the property in the goods passed to Smith & Co. The law on this subject has been codified by Secs.77 and 83 of the Indian Contract Act. Those sections are as follows: Section 77. "Sale is the exchange of property for a price. It involves the transfer of the ownership of the thing sold from the seller to the buyer." Section 83. "Where the goods are not ascertained at the time of making the agreement for sale, but goods answering the description in the agreement are subsequently appropriated by one party for the purpose of the agreement and that appropriation is assented to by the other, the goods have been asceratined and the sale is complete." In the present case the goods were not ascertained at the time of the contract. The question, therefore, arises whether goods answering the description were subsequently appropriated by the sellers for the purposes of the agreement, and whether that appropriation was assented to by Smith & Co. The Judge in the Court of first instance has found that there was such appropriation, and in that finding we entirely concur. 1,000 bales of jute bearing the contract mark were attributed to the contract by the plantiffs; they were put alongside the Uganda, shipped in due course at the request of the defendants, Smith & Co., and the mate's receipts given in respect of the goods show that the goods so shipped wore marked. with the private mark of the defendant firm in red ink as required by their shipping instructions. Subsequently, Smith & Co., having obtained the bills of lading in respect of those goods as shippers of the goods, contracted for the despatch, and it must be taken that the goods were delivered in due course in accordance with the bills of lading. These, in substance, are the findings of the Court of first instance and in those findings we concur; and we think that in these circumstances there was an appropriation by the sellers assented to by the buyers. The case seems to be consistent with the illustration to Sec. 83 of the Indian Contract Act, which is based presumably upon the view expressed by Holroyd J. in the case of Rohde v. Thwaites (1827) 6 B.L.C. 388 where that learned Judge says: "The selection of the goods by one party and the adoption of that act by the other converts that which before was a mere agreement to sell into an actual sale and the property there by passes." The goods therefore must be taken to have been ascertained and under the conjoint operation of the sections of the Indian Contract Act, to which I have referred, the sale must be taken to have been complete, and that involved the transfer of the ownership of the goods from the seller to the buyer. If then the property passed to Smith & Co., the latter, having the mate's receipts, were entitled to the bills of lading and they could sell the goods or pledge them. We think that the pledge by Smith & Co., of the bills of lading to the Bank, who acted bond fide in the matter and without any notice of the contract between the plaintiffs and Smith & Co., was a perfectly valid pledge.

(3.) It is said, however, that the appropriation was conditional, having regard to Clause 13 of the contract.