Ramjiban Serowgee And Ors. vs Nippon Yusen Kaisha And Ors. on 22 July, 1930

Calcutta High Court
Ramjiban Serowgee And Ors. vs Nippon Yusen Kaisha And Ors. on 22 July, 1930
Equivalent citations: AIR 1931 Cal 373
Author: Buckland


Buckland, J.

1. The plaintiffs sue to recover Rs. 54,000 by way of damages and for other reliefs in the following circumstances. The plaintiffs are gunny brokers; defendant 1 company, to which I shall refer as the Export Company, is a company which carried on the business of dealers and exporters of gunnies; and defendant 2 company is a Japanese Steamship Company by which defendant 1 company used to ship their goods. Defendants 3, 4 and 5 are companies owning jute mills which produce the goods in which the plaintiffs and defendant 1 company deal. They were added as defendants after the suit was filed but no relief was claimed against them and at the commencement of the hearing Mr. Banerji on behalf of the plaintiffs agreed that as against them the suit should be dismissed, which was accordingly done. These companies appear to have been added as ornamental parties to borrow Vice-Chancellor Bacon’s picturesque expression.

2. The early stages of the matter with which this suit is concerned have not been made as clear as I should have been glad to have had them made, if only for the purpose of a complete and accurate account of the whole matter. Generally however they followed the usual course of events in such dealings and when the point is reached where details become important nothing has been omitted.

3. Early in the month of May 1926, the plaintiffs as brokers entered into contracts on behalf of themselves as undisclosed principals with the Export Company for the sale of a large quantity of gunnies. At the same time they entered into similar contracts with several jute mill companies for the purchase of goods with which to implement their contract with the Export Company. Among the latter were contracts with the three defendant jute mill companies. I have not seen all the contracts and I am unaware of the total amount of each. These details are however of no account, and for the form of the contract, which it is common ground was the same in every case, both as regards the sale by the plaintiffs to the Export Company and the purchase by them from the jute mill companies, there has been exhibited a sold note dated 4th May 1926, expressing the terms on which the plaintiffs bought from the Kensington Jute Mills Co. Ltd.; certain clauses in that note relating to payment and delivery will have to be considered, but other details may be ignored. This suit relates to 75 bales bought from the Kensington Jute Mills Co. Ltd., 75 bales bought from the Dalhousie Jute Co. Ltd., and 100 bales bought from the Auckland Jute Co. Ltd., which were to be shipped by two steamers, the Moji Maru and the Hakata Maru. The Export Company duly sent to the plaintiffs shipping instructions accordingly, and the plaintiffs-passed them on to their sellers. A complete record of subsequent events, as to which there is no dispute is to be found in an admitted statement, in columnar form, which has bean prepared and exhibited. To attempt to state such a record at length would sacrifice its lucidity, and I therefore reproduce it, though after discarding a few details which are not necessary for the purposes of this judgment. The essential dates appear from the following table:


Name of    No. of  Dates of   Dates of   Dates of    Name of  Date of   Dates of    Amount. 
Jute Mill  Bales    Mate's    B-Lading.  Letters of  Steamer. Sailing.  Plaintiffs'
Company.           Receipts.             Indemnity                      cheques. 

1            2        3           4          5          6         7        8          9
Kensington.  75   18th May   18th May   18th May   Moji Maru  19th May  24th May  l6,200
Dalhousie.   75   17th May   17th May   18th May   Moji Maru  19th May  24th May  16,200
Auckland.    50   24th May   25th May   25th May    Hakata,   4th June  29th May  21,600
Auckland.    50   25th May   25th May   25th May    Hakata    4th June  29th May  21,600


4. While the details to be found in the foregoing table state with my introductory observations all the facts necessary-for the purposes of an ultimate decision, there is another question of fact which has to be determined before a state of; facts so limited is reached and the nature of the suit has yet to be explained.

5. After the goods had been shipped, and while the mate’s receipts were still in the hands of the mills, the Export Company under an arrangement, which is not unusual in the trade, obtained the bills of lading from the Shipping Company giving them at the same time letters of indemnity or guarantee. How they dealt with such bills of lading does not specifically appear, but the ‘fact was that the Export Company closed its doors without paying the plaintiffs, who after paying the mills arid receiving the mates’ receipts from them, demanded payment by the Export; Company. Meantime the steamer had sailed and recourse to the goods themselves, even if legally justifiable, was out of the question.

6. The contract between the plaintiffs and their buyers and sellers provides:

7. Payments to be made in cash in exchange for delivery order on sellers, or for railway receipt, or for dock’s receipts or for mates’ receipts (which dock receipts or mates’ receipts are to be handed by a dock or ship’s officer to the seller’s representative.)

8. The buyers hereby acknowledge, that so long as such railway receipt or dock a or mate’s receipts, (whether in seller’s or buyer’s name) are in the possession of the sellers, the lien of the sellers, as unpaid vendors, subsists both on such railway receipts, or dock’s or mate’s receipts and the goods they represent until payment in full, and purporting to exercise such rights as Clause 4 may gave them the plaintiffs on 27th May gave the Shipping Company notice of lien, to which the latter replied informing them of the position. That, as the dates show, was well after the bills of lading had been handed over and the steamers had sailed and such notice could be of no avail to the plaintiffs.

9. The plaintiffs’ suit against the Export Company is for the price of the goods. As -regards the Shipping Company they contend that the Shipping Company is liable to them in damages for having delivered the bills of lading to the Export Company in the absence of the mate’s receipts, the grounds for which contention give rise to questions of . law which will have to be considered. But in order to strengthen their case, though it is contended on behalf of the Shipping Company that even if established it would not help the plaintiffs, the plaintiffs at the hearing, though not in their plaint, have sought to make a case of express oral notice of their lien and of the shipping instructions relative to these bales, having been given by them to the Shipping Company on 14th May 1926. Unless the learned Advocate-General’s contention on behalf of the Shipping Company is right, the date of this alleged notice makes this a question of first importance to the plaintiffs’ case, and therefore it requires very full consideration and a careful scrutiny of the evidence. Before considering how the plaintiffs’ case is founded in law I will dispose of this matter and thus determine the facts upon which judgment should proceed, for there is no other disputed question of fact in the ease.

10. The plaintiffs’ version of the interview of 14th May 1926, when it is alleged that notice of lien was given to the Shipping Company, depends upon the evidence of two witnesses, Gulzari Lal and Fulchand Serowjee. Their story is that on arrival at the office of Nippon Yusen Kaisha they were first met by a gentleman named Mr. Awoki who enquired their business. Gulzari Lal told him that they had sold goods to the Export Company and they wanted to know about the bills of lading. Mr. Awoki then took them to Mr. Kimura who was the sub-manager of the company. Mr. Kimura asked what they wanted and Gulzari Lal asked whether bills of lading were issued without production of the mate’s receipt to which ho received the reply that that was not done. Gulzari Lal then told Mr. Kimura that goods had been sold to the Export Company and he enquired whether the bills of lading would be issued by them to which Mr. Kimura replied in the negative and asked for particulars of the goods. Gulxari Lal gave him particulars of the goods showing him the shipping instructions and definitely told Mr. Kimura that they had a lien on the goods. The interview is not denied nor is it denied that enquiries were made as to the practice. Mr. Kimura states that he gave no assurance to Gulzari Lal or Fulchand that the company never issued bills of lading without mate’s receipts. He explained to them the practice, that though bills of lading were generally issued against mate’s receipts, yet at times bills of lading were issued to shippers against letters of indemnity. Both Mr. Kimura and Mr. Awoki deny that any mention was made of the shipping instructions, or that, as stated by Gulzari Lal, Mr. Kimura made notes of them, which, Mr. Kimura says, in no case would he do but he would depute one of his subordinates to do it or that any notice of lien was given. That, substantially is all the evidence as to the interview and if the matter depended upon that alone the only question would be whether the statements of the two Marwari gentlemen as to what was said regarding shipping instructions and lien was to be believed or the denials of the two Japanese gentleman. But for the purpose of determining which account of the interview is true, there is far more to be considered,

11. It will be remembered that the mate’s receipts were of later data, likewise the bills of lading and the letters of guarantee, that the ships sailed on 19th May and 4th June respectively, that on the 24th and the 29th days of May payment was made by the plaintiffs when they received the mate’s receipts. Meantime Gulzari Lal had been making enquiries. He says ha was concerned as result of whit ha had heard with reference to a firm of the name of Osam Jamal, in connexion with which 1 gather that something akin to what has happened in this case had also occurred.

12. Among other parsons ha appears to have made enquiries of a Mr. Nissim, of the firm of E. Mayer & Co. This gentleman has bean called as a witness in the case and I shall refer to his evidence later after considering various matters to be taken into account in appraising the evidence of Gulzari Lal and Pulchand. The next incident was that on 27th May a written notice of lien was sent by or on behalf of the plaintiffs to Nippon Yusen Kaisha giving them notice of an unsatisfied lien or claim on the goods in question for Rs. 1,62,000. The, notice of course purports to cover all the goods to which the contracts related and is not limited to the 250 bales in suit. This notice, I have no doubt, was the upshot of the enquiries which had been made a few days before and the evidence is that a form of notice of lien had to be obtained. It is to be observed that there is no reference in this letter to any earlier oral notice of lion. That is significant, bat the omission is of less account in view of similar later omissions.

13. On 28th May the shipping company replied by latter to the plaintiffs saying that bills of lading for the goods in question have already been passed and signed under the shipper’s own letter of guarantee. Gulzari Lal thereupon went to Mr. Leslie of Messrs. Leslie and Hinds and informed him of as to the whole matter, told him of the interview of 14th May, how he had then produced the shipping instructions and given Mr. Kimura notice of the lien. He says that Mr. Leslie was very angry. Though the expression may be figurative, so far as it expresses what Mr. Leslie Said, it can only be based upon the conduct of the Shipping Company in issuing bills of lading without the mate’s receipts notwithstanding the notice of 14th May, Mr. Laslie thereupon, on the instruction’s of Gulziri Lal, wrote a latter to the Shipping Company. The letter makes no reference whatever to the alleged notice of 11th May and is limited to protests against the action of the Shipping Company, and based entirely upon the omission of the Company to follow the usual and correct custom of issuing bills of lading only on production of mate’s receipt, and nothing is referred to which could have aroused Mr. Leslie’s indignation. On 31st May a further latter was written by Mr. Kimura to Messrs. Leslie and Hinds acknowledging the latter’s letter of the 29th and stating that they accept no responsibility in the matter and referring them to the shippers. If, at the interview of the 14th notice of lion had been given and shipping instructions had been produced, it is inconceivable that Mr. Kimura should have limited himself to a reply in that form. His evidence is that he would have communicated with the shippers, a statement which the evidence supports. On 8th June Messrs. Leslie and Hinds, again, under the instructions of Gulzari Lal, wrote correcting their former letter which related only to 175 and not 250 bales, but again there was no mention of any notice given on 14th May.

14. On 10th June the Shipping Company again wrote to Messrs. Leslie and Hinds stating definitely that
the bills of lading were issued in the absence of your client’s notice of lien.

15. This advances the matter a stage further, but no further letter was written on behalf of the plaintiffs and no statement was made that in fact notice -was given on 14th May, though, if ever the omission was to be repaired, here was the opportunity to do so. For this omission Gulzari Lal is unable to give any explanation. The matter does not stop there. On 11th June the plaint in this suit was filed. It was verified by Gulzari Lal and it contains no reference, however remote, to a notice of lien given on 14th May. In fact, as admitted by Gulzari Lal in his evidence his real complaint was that the steamship company was not entitled to issue bills of Jading without mate’s receipt. On 16th June an application was made for the appointment of a receiver. Reading para. 2 of the petition it was based on fraud and conspiracy. No suggestion was made that the shipping company had notice of the lien on 14th May. Then follows a succession of affidavits, one by Mr. Kimura affirmed on 16th June 1926 in which ho says that bills of lading were handed in good faith to the shippers without notice of any claim. In reply to that an affidavit affirmed by Gulzari Lal on 21st June was filed in which he submits that the company acted negligently, and then goes on to give an account of the interview of 14 th May in which he says that he and Fulchand called on the Shipping Company and enquired of Mr. Kimura whether the Shipping Company would grant bills of lading without production of mate’s receipt and Mr. Kimura assured him that his company would “never” grant bills of lading without production of the mate’s receipts. He then says that believing such assurance he took no further steps until 27th May, on which date the plaintiff firm informed the Shipping Company of their lien on such goods. That affidavit was replied to by another by Mr. Kimura on 23rd June 1926. I will not quote he relevant passages at length, but it is practically to the same effect as that of Gulzari Lal except that Mr, Kimura says that he did not tell Gulzari Lal that the company would “never” issue bills of lading without production of mate’s receipt, but he told him that though they generally did so on such production there were occasions when bills of lading were issued against a letter of indemnity.

16. Now this is a very remarkable situation, that the notice, said to have been given on 14th May, which has been put in the forefront of the plaintiff’s case, should still not be mentioned in Gulzari Lal’s affidavit of 21st June, but on the contrary, that he should refer to the notice given on-27th May, as though it were the first notice of lien. The next stage was ,that on 11th August a petition was filed asking for leave to amend the plaint. Among other paragraphs which the plaintiffs wished to add was that which has been numbered 5-A in the amended plaint. Here again no notice on 14th May is alleged and it is clear that what was then sought to be done was to submit the plaintiffs’ view of the meaning of Clause 4 of the contract whereby in certain circumstances a lien is given to holders of mate’s receipts. The first mention of the notice of lien said to have bean given on 14th May 1926 was only three years later, in May 1929, when the suit brought by Mahaliram Ramjidas was heard by my learned brother, Costello, J.

17. To consider other aspects of the interview of 14th May, I am satisfied that Gulzari Lal and Fulchand went to make enquiries as to the practice, it may be, to ascertain whether the practice was going to be changed. Gulzari Lal says that Mr. Kirnura told him that they “never” issued bills of lading without mate’s receipt. This is palpably impossible. Mr. Kirnura could not have given this answer, for even if ho intended to be dishonest he would have been faced with the large number of occasions when it had been done and not only at the instance of the Export Company. Admittedly it is a common practice. That is agreed to by Mr. Nissim. If on the other hand Mr. Kimura, as Gulssari Lal says, never issued bills of lading without mate’s receipts there was no necessity for him to take details of the shipping instructions and particulars of the goods. If he wanted to assist the Export Company the details of this particular transaction would not help him and there would he no need specially to make a note of the plaintiff’s goods. Mr. Kimura himself says that if he had notice of the lien he would have referred to the shipper and that if the Export Company had been mentioned ho would immediately have referred to that company. That is supported by the correspondence, because, having received the notice of lien dated 27th May, the evidence is that on the next day a letter was written by the Shipping Company to the Export Company drawing the latter’s attention to the notice of lien and asking the Export Company to settle up the matter with Ramjiban Serowgee and submit the mate’s receipts quickly.

18. It is incredible that, if the real object of the visit of 14th May was to give notice, Gulzari Lal should not have given written notice as well. In the course of his deposition he feigned ignorance of the practice. Fulchand was cross-examined about it and suggested that the lien notice would have given trouble with the shippers. He was asked to explain what he meant by that but he was incapable of giving any reasonable explanation. So far from being ignorant of the practice I have no doubt that these gentlemen were very familiar with it. That appears to have been in accordance with the instructions to learned Counsel for the plaintiffs for in his cross-examination of Mr. Kimura ha put the significant questions:

Q. You know now that the plaintiffs have been in the gunny trade for a long time ?-Yes, I know it now.

Q. Knowing that, does it strike you as curious that they had merely gone to enquire of your practice that you have mentioned ?

19. These are not the questions of counsel who has been instructed that his clients-are ignorant of these matters. Then it is suggested that there was anxiety as to the position of the Export Company, but this suggestion, be its value what it may is not one which bears examination, for Gulzari Lal has admitted that business-was being done with the Export Company even on 19th May. On 28th May the Export Company wrote to the plaintiffs asking them to expedite despatch. On 31st May they wrote again because shipment was stopped. An arrangement was made between the Export Company’s banias and the Bank of Taiwan and the creditors for the purpose of paying off the creditor?. This arrangement went on until 4th June when the second of the two ships sailed. There is no evidence of any panic or other sufficient reason for a notice on 14th May. The real explanation of the visit of 14th May came out in Gulzari Lal’s last answer-though as a matter of fact it was not an answer to the question put. He was asked : What had he received in the assurance which he says he had from the Shipping Company on 14th May, altered his state of mind so as to make enquiries and send written lien notice ? His answer was:

that (which I take to be the lien notice) was not with reference to this case but with refer once to something previous.

20. The question was then repeated and he replied:

I had in my mind that I was to mate enquiries regarding future transactions and other-contracts not only with reference to this contract.

21. This answer shows that Gulzari Lal’s object was to acquire information and not to impart it.

22. On the evidence, so far as I have considered it already, I should reject without hesitation the account of the inter view of 14th May given by Gulzarilal and Pulchand so far as it differs from that of the two Japanese gentlemen. The only remaining question is whether notwithstanding the mass of evidence there is which supports this view, the absence of any contemporaneous record which supports the two Marwari gentlemen, and the many reasons why their testimony should be disbelieved, their version should nevertheless be accepted by reason of the corroboration which it has been sought to give it by the evidence of Mr. Nissim.

23. Before I examine the evidence of Mr. Nissim I would first point out that it does not appear to have been intended to call Mr. Nissim in the, first instance. Gulzari Lal was asked in the course of cross-examination whether he had ever told anybody about the interview of 14th May and ha said that he had told Mr. Nissim among persons, He was asked whether he had seen him lately and he said he saw him constantly and about a week before the hearing. It appears that he went to Mr. Nissim and said:

You remember, Mr. Nissim, I told you about that time that N. & K. had assured me that they would not issue bills of lading without mate’s receipt ?

24. Mr. Nissim said he remembered. The word assured ” shows that what Gulzari Lal proposed to do was in the form of a reminder to put before Mr. Nissim what it would be of value to him for Mr. Nissim to say he had heard at the time. He was also asked, what, when he saw Mr. Nissim a few days after the interview in May 1926, he had told him. I need not refer to that in detail but he did not tell him that he had informed Mr Kimura that his firm had a lien on the goods nor did he tell Mr. Nissim that he had shown the shipping instructions to Mr. Kimura. Fulchand however did so inform Mr. Nissim according to that gentleman, not very many days ago, a circumstance which I only introduce by reason of the light it throws upon the plaintiffs and their ways.

25. Mr. Nissim’s evidence is that the conversation was that Gulzari Lal had told him that ha fad sold the goods to the Export Company, they had received shipping instructions and the goods were being shipped, but they had not received the mate’s receipt and were rather anxious about the matter as to whether bills of lading would be given to the Export Company by the Steamer Company without the mate’s receipts being tendered to the Steamer Company. He also told Mr. Nissim that he had been to the steamer agents and they told him that they would not give bills of lading without receiving mate’s receipt, in short, what he had learned and that it was in conformity with the usual practice. Later, when I asked him about the conversation a week earlier when Gulzari Lal had been to him he said that he remembered it himself. He said that Gulzari Lal
started by saying : ” Do you remember I went to the Steamer Company and do you remember that I came to tell you about it ?

26. That is how it started and I finished the sentence for him and said:

so far as I remember, you said that they would not give bills of lading except against-mate’s receipt.

27. I then asked him whether that was what he remembered of the actual interview in May and he said that it was. So far as Mr. Nissim was questioned about what transpired when Gulzari Lal went to him recently it is not necessary to pursue the subject as it would be irrelevant.

28. I am somewhat sceptical as to Mr. Nissim’s independent recollection and his answers as to how he came to think of the matter about a year or two ago are to my mind both unintelligible and unconvincing. I do not think that Mr. Nissim’s own recollection was as clear as he himself thought. The matter has obviously been the subject of discussion of late and a witness may be excused if he confuses what he has-heard in the course of a recent discussion with his recollection of what happened three years ago. But nevertheless his evidence as to what he was told’ by Gulzari Lal shortly after 14th May 1926 is inconsistent with the evidence of Mr. Kimura, and does not corroborate the case put forward on behalf of the plaintiffs as to oral notice of lien and communication of the shipping instructions. Indeed after Gulzari Lal had said that he did not tell Mr. Nissim about the oral notice of lien and communication of the shipping instructions-there was very little left in regard to these particular goods which Mr. Nissim could corroborate. I cannot conceive that if Gulzari Lal had told Mr. Nissim of anything said by Mr. Kimura as to not issuing bills of lading for these particular goods, Gulzari Lal would not at the same time have mentioned the oral notice and what had been done by Mr. Kimura about the shipping instructions.

29. It is not difficult, when an interview is admitted, to introduce into an account of it a false statement as to something which, it is important to prove, was said. The trick has no novelty, but it is not always that the falsity is as patent as it is in this case. In my judgment the story told by Gulzari Lal and Fulchand in this respect is entirely false and 1 hold that no notice of lien was given on 14th May nor were the shipping instructions shown to Mr. Kimura.

30. I now therefore revert to the position shown by the tabular statement and the few facts which it discloses.

31. On behalf of the plaintiffs Mr. S. N. Banerji has contended that by virtue of the clauses quoted the goods were either the plaintiff’s or the plaintiffs had a special property in them and that the Shipping Company committed a breach of the
duty imposed by the obligation of every individual not to destroy or deal with the goods of another.

32. These contentions appear to me to be founded on more than one fallacy, for at the time when the bills of lading were issued the plaintiff’s had not paid for the goods and thereby obtained possession of the mate’s receipts so as to acquire that special property to which they lay claim though it has been faintly suggested that in relation to the Shipping Company the mills were their representatives. Further the Shipping Company had no knowledge that the goods were the plaintiff’s or that the plaintiffs had a special property in them, assuming that to have been the case. The Shipping Company had contracted with the Exports Company to carry the goods and if the Shipping Company were prepared to forgo the production of the mate’s receipt, which is an acknowledgment of the receipt of the goods on board (Abbot on Shipping Edn. 14, 46, Section 504. Halsbury’s Laws of England, Vol. 26, p. 151), they were under no obligation to enquire as to the reason for such non-production. Nowhere has it been decided that a Shipping Company may not issue a bill of lading without production of the mate’s receipt and there was no duty east upon the Shipping Company in the absence of notice to make enquiries of the Export Company as to the goods which had been shipped at their instance or whether any other person or persons had any claim to them.

33. It is unnecessary in my opinion, for an authority applicable to the facts as I have found them, to look beyond Hathesing v. Laing [1877]17 Eq. 92 in which the facts in many respects resemble the facts of this case. That is an authority for the proposition that if the master is satisfied that the goods are on board the vessel and he has no notice that anyone but the shipper claims any interest in them, ha may properly sign bills of lading in favour of the shipper of the goods without production of the mate’s receipts: of Cowasjee ‘v. Thompson[1845] 5 Moo. P.C. 165.

34. The learned Advocate-General has argued that the special property claimed by the plaintiffs is a personal right only, which does not entitle the plaintiffs to any rights as against third parties, and in support of that contention he has cited Benjamin on Sale, Edn. 6, p. 944: Halsbury’s Laws of England, Vol 25, pp. 245 and 246: Dodsley v. Varley [1840] 12 A. & E 632, Donald v. Suekling [1866] 1 Q. B. 613, Sewell v. Buddick [1884] 10 A. C. 74 and Howes v. Ball [1827] 7 B. & C. 481. He also contended that the suit being founded upon negligence the plaintiffs must first establish a duty on the part of the Shipping Company towards the plaintiffs and that in the absence of fraud the plaintiffs cannot succeed. In support of this contention he has cited LeLievre v. Gould [1893] 1 Q. B. 491, Australian Steam Shipping Co. Ltd. v. Devitt [19171 33 T.L. R. 178, Low v. Bonverie [1891] 3 Ch. 82 and Diokson v. Renter’s Telegram Company [1877] 3 C. P. D. 1.

35. I have taken time to consider the authorities and though they support the propositions in support of which they were cited, in my judgment, in the view which I take of the facts, no such considerations arise however important they’ might have been had I come to a different conclusion on the issue as to the oral notice of lien, in which connexion they were referred to.

36. In Hathesing v. Laing [1877]17 Eq.92 the learned Vice-Chancellor considered the position from various aspects and dwelt upon the difficulties and questions which might arise if a view different from that which he took were to prevail. The learned Vice-Chancellor’s observations are most apposite to the case and no authority has been cited in support of the proposition that in the circumstances stated the goods were the plaintiffs’ or that, as an absolute rule, for it must amount to that the Shipping Company may not issue bills of lading without production of the mate’s receipts. On this point therefore the plaintiffs’ case must fail.

37. Mr. S.N. Banerjea has based a further [contention on Articles 3, (3) and (7), Carriage Goods by Sea Act, 1925. He submits that that to which Art 3 refers as a bill of lading is really a mate’s receipt and therefore his clients were entitled by virtue of that article to a bill of lading and subsequently under Article 7 to a shipped bill of lading. This cannot in my opinion be the intended effect of this statute. The plaintiffs were not the shipper; that was the Export Company. The article does not exclude a mate’s receipt in addition to a bill of lading and the circumstance that a bill of lading must be issued to the shipper does not exclude the delivery of a mate’s receipt as an acknowledgment of receipt of goods. There is no indication that the usual course of business was intended to be disturbed by the statute in this respect and if the argument were sound the practical result would be to entitle whoever put the goods on board to a bill of lading to the exclusion of the shipper as that term is generally understood. Whether a mate’s receipt may become a “shipped bill of lading” under Article 7 is another matter: see Scrutton on Charter Parties, Edn. 12. p. 498, Note (W) but that does not affect the argument as presented to me.

38. The suit will be dismissed as against the Shipping Company and as against the Export Company there will be a decree for the amount claimed, with costs in each case, including reserved costs.

39. The following judgments were delivered on appeal:

Rankin, C.J.

40. The plaintiffs appeal from a decree dismissing their suit against Nippon Yusen Kaisha for damages laid at Rs 54,D00 as being the value of 250 bales of gunnies. The plaintiffs bought from certain mills and resold to the International Export Company by contracts which contained clauses to the effect that payment was to be made in cash in exchange for mate’s receipts to be handed by the ship’s officer to the] seller’s representative and that so long as such mate’s receipts whether in sellers’ or buyers’ name were in the possession of the sellers the lien of the sellers as unpaid vendors should subsist both in such mate’s receipts and the goods they represented until payment in full. Their case on appeal is that although the Shipping Company well knew of this course of business, it issued bills of lading to the plaintiffs’ buyers at a time when the buyers had not paid for the goods and were not in possession of the mate’s receipts and that when the plaintiffs demanded that the goods be delivered to their order the Shipping Company set up title in and delivered to the Bank of Taiwan to whom the Export Company had endorsed the bills of lading and refused to recognize the plaintiff’s claim. The case, so presented is exactly on all fours with the previous case of Mahalnram Ramjidas which was argued before us and in which we have just given judgment: Nippon Yusen Kaisha v. Mahaliram Ramjidas . (S.B.), but the state of the pleadings is very different. The learned Judge has set out all the facts in a convenient tabular statement incorporated in the judgment under-appeal.

41. He has found against the plaintiffs as regards their allegation that on 14th May 1926 they gave express verbal notice of their lien. This finding is in my judgment unassailable and indeed it has not been contested before us. The’ learned Judge citing Hathesing v. Laing has refused to hold that the Shipping Company ware guilty of any wrongful act in issuing the bills of lading to The Export Company which was named as shipper in the mate’s receipts. For the reason which I have given in the previous case I think that the finding is correct. On this basis however he has dismissed the claim against the Shipping Company and the question arises whether this finding disposes of the case. The plaintiffs gave written notice of lien on 27th May by which time the bills of lading had all been issued though Hakata Maru did not sail till 4th June. The notice stated that the goods were not to be delivered to any person whomsoever, unless and until the mate’s receipts were surrendered by the plaintiffs.

42. On 28th May the Shipping Company informed the plaintiffs that bills of lading had been already issued and referred them to the Export Company. On the 29th the plaintiffs’ solicitor claimed to hold it liable for the price of the goods. On 31st the Shipping Company refused to accept any responsibility and on 8th and 10th June further letters were exchanged to the same effect. This suit was filed on 12th June claiming that the goods were still the plaintiffs’ property, also (alternatively) that the plaintiffs had a lien thereon. Alleging that the goods were on the high seas, the plaint asked in a. somewhat in artificial manner but quite clearly for a declaration that the goods belonged to the plaintiffs, for an injunction, and alternatively for Us. 54,000 being the “price” of the goods. It contained an averment that the Export Company obtained the bales by cheating the plaintiffs. Application was made for an interlocutory injunction to restrain the Shipping Company from delivering to the endorsees of the Export Company and this was successfully resisted by the Shipping Company. Their {Manager in his affidavit of 18th June stated:

This defendant company is bound to hand over the goods at destination to the person who presents the bills of: lading and failure to do so will involve this defendant, in liabilities which it is not prepared to undertake.

43. It seems to me that notice of lien and the correspondence and events which followed it incontestably evidence a demand and refusal of the goods before action brought, so as to ground a claim [for conversion of the goods. As an endorsee of a bill of lading cannot make a better title to the goods than his endorser had upon the principle of purchaser for value without notice, the Shipping Company even upon the learned Judge’s finding that its action in giving the bills of lading to the Export Company was not wrongful, would have no defence to the claim for damages unless it can show that the Bank of Taiwan or other endorsee can rest its title upon the provisions of Section 178, Contract Act. No such case was pleaded and no such case was proved by the Shipping Company though it sought by its written statement in a halting and absurd paragraph (para. 15) to set up the title of the bank. The amended written statement says that save as stated in para. 8 of its original written statement it has no knowledge as to the alleged disposal by the Export Company of the bills of lading and makes no admission in respect of such allegation. It should however be said that the plaint nowhere pleaded the notice of lien or any demand or refusal before suit, even though it was amended in August 1926. The case made was that the issuing of the bills of lading was wrongful and entitled the plaintiff to the price of the goods, apparently because after the bills of lading had been endorsed
the plaintiff firm was deprived of the purchase price of the goods namely Rs. 54,000 which amount or any part thereof they have not been and are not able to recover.

44. The learned Judge observes in his judgment:

Meanwhile the steamer had sailed and recourse to the goods themselves even if legally justifiable was out of the question.

45. The question which now arises is whether we should hold that the plaintiffs cannot succeed upon the ground of a demand and refusal of the goods between 27th May and 12th June because that case was not made by the plaint and whether if we do not take this view we should assent to the request of the Advocate-General on behalf of the Shipping Company that there should be a remand. He asks us in that event to frame issues definitely raising this case of conversion and raising as incidental thereto the question whether the Bank of Taiwan was not entitled to the property in and possession of the bales from a date prior to 27th May. Now I do not think that the Shipping Company has very much excuse for not dealing with any question under Section 178 by its pleadings and evidence, and I think that as the goods were on the high seas when the plaint was filed the plaintiffs have some little excuse for not pleading more correctly in the original plaint. Kara 5 (b) of the amended plaint, which was drafted after the goods had been delivered to the endorsees of the bills of lading, rather indicates however that in August 1926 the view of the plaintiffs was that the goods were lost to them because the bills of lading had been endorsed, and upon the whole considering the plaint, the issues framed and the view taken by the learned Judge at the trial, I think that the proper course is to frame an issue upon the question under Section 178, Contract Act, and to remand the case for a finding on this issue. I would frame the issue thus:

Whether the Taiwan Bank or other endorsee of the bills of lading, or any of them, can, by virtue of Section 179, Contract Act, claim a better title to the goods as against the plaintiffs than the title of the International Export Company.

46. I see no need for any further issue. I would keep this appeal on our own file, and remand the case to the original side for a finding upon this issue under Order 41, Rule 25 of the Code.

47. In this case we do not impose terms upon either party as a condition of the remand, both sides being in fault as regards their pleadings. All questions of costs will be dealt with at the final disposal of the appeal.

C.C. Ghose, J.

48. I agree.

Lort-Williams, J.

49. I regret to differ from my learned brothers. For the reasons; which I have given in Appeal 69 of 1929, Nippon Yusen Kaisha v. Mahaliram Ramjidas I consider that this appeal ought to be allowed.

50. The evidence shows that the respondents had full knowledge of the terms upon which the gunny trade is carried on in the port of Calcutta, and knew, or ought to have known, when they delivered bills of lading to the Export ‘Company without production of the mates’ receipts, that there was a very strong probability that the Export Company were not then entitled to the bills, and might never become so entitled, and in those circumstances they Wore not justified is so doing, and as against the plaintiff’s claim they cannot be allowed to set up a title in a third party which was created, if at all, as a result of their own wrong doing.

51. The Court then passed the following order:

The order of the Court therefore is that the appeal will be kept on the file of this Court and the case will be remanded to the original side for finding upon the issue:

Whether the Taiwan Bank or the endorsee of the bills of lading or any of then can by virtue of Section 178, Contract Act, claim; bettor title to the goods as against the plaintiff than the title of the International Export Company.

52. On receipt of the finding final order will be passed in the appeal. All question of costs will be dealt with at the final disposal of the appeal.

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