WOLF AND SONS Vs. DADIBA KHIMJI AND CO

JUDGEMENT

(1.) This is an appeal from the judgment of Mr. Justice Macleod of the 12th December 1918 dismissing the plaintiffs claim in this suit and allowing the defendants counter-claim. On the figures since agreed, the amount of the claim is Rs. 69,467-9-0 representing the nett proceeds of sale of certain cotton blankets. The amount of the counterclaim is Rs. 58,440-9-0 representing part of the nett proceeds of sale of certain cotton bales. The aggregate amount in dispute is therefore Rs. 1,27,908. This sum represents the amount alleged to have been owing to the defendants on the security of the blankets and bales, which were pledged to them for differences on certain cotton contracts. The plaintiffs say these pledges and contracts became or were illegal and void, having regard to the outbreak of war at 11 P.M. on 4th August 1914, and that they are entitled to recover the sale proceeds of the blankets which were sold by the defendants in and prior to 1915, and to retain the sale proceeds of the bales which were by arrangement sold by the then Liquidator of the plaintiffs in the same year. Counsel for the appellants stated that apart from the sums in dispute, the realised Indian assets of the plaintiff s are insufficient to meet their Indian liabilities, but there is no evidence before us to that effect.

(2.) It is common ground that both the cotton blankets and the cotton bales were, prior to the war, the property of the plaintiffs, Wolf & Sons, a German firm with its head office in Germany and a branch office at Bombay, which was managed by a German named P. Zoller, who was interned on the 5th September 1914. Para 2 of the plaint describes the plaintiff-firm as being "incorporated"; but there is no evidence of this, and they have been treated in these proceedings as an ordinary partnership firm. From the report in Wolf & Sons v, Carr, Parker & Co. (1915) W.N. 195, this appears to be their correct status. The plaintiff firm now sues by Mr. P. S. Mellor, the present Controller of Hostile Trading Concerns, Bombay, who was appointed Liquidator of this hostile firm by the Bombay Government Order of the 20th September 1916, Exh A to the plaint. The defendants Dadiba Khimji & Co. are an Indian firm carrying on business in Bombay, and were the guaranteed brokers and Muccadums of the plaintiffs prior to the war.

(3.) It is also common ground that between the 4th August and the 3rd September 1914 (inclusive) the blankets and bales were handed over to the defendants by Zoller on behalf of the plaintiffs as security for (a) the cotton differences, and (b) Rs. 10,000, the balance of a deposit of Rs. 50,000 by the defendants. No dispute arises about the Rs. 10,000. That is admitted to have been since repaid, and properly repaid, to the defendants out of the proceeds of sale of the blankets. But a dispute does arise about the cotton differences. These arose out of certain pre-war cotton contracts between the plaintiffs and the defendants for January to March 1915 delivery, which were closed or purported to be closed by Zoller on behalf of the plaintiffs on the 3rd September 1914, and shewed a heavy balance payable to the defendants on the due dates. To secure the sum ultimately payable by the plaintiffs on these pre-war contracts, Zoller pledged the cotton blankets on the 4th or 5th August 1914, and by way of further security the cotton bales on or about the 26th or 27th August. There is no evidence of any further express pledge on the 3rd September.