1904 (3) TMI 1 - HC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction of the Court
2. Validity of mortgage or pledge of future property
3. Priority of equitable titles
4. Privileged lien claim

Detailed Analysis:

1. Jurisdiction of the Court:
The Official Assignee contended that the Court of the Subordinate Judge had no jurisdiction, as the claim was against the insolvent estate of Messrs. Moran & Co., vested in him by an order of the High Court in Calcutta. The Subordinate Judge accepted this plea based on a precedent, which was found inapplicable to the present case. The High Court held that the plaintiffs sought recovery of property wrongly seized by the Official Assignee, and thus, the Civil Court had jurisdiction to adjudicate this claim. The finding of the Subordinate Judge on this point was set aside.

2. Validity of Mortgage or Pledge of Future Property:
The Subordinate Judge held that there could be no valid mortgage or pledge of property to come into existence in the future, as per the Transfer of Property Act. However, the High Court clarified that while such mortgages are not mentioned in the Act, they are enforceable in equity. The Court cited English and Indian precedents to support the validity of mortgages of future property, emphasizing that equity treats as done what ought to be done.

3. Priority of Equitable Titles:
The plaintiffs argued that their title should take priority as they perfected it by possession. The High Court disagreed, stating that the equitable interest of Messrs. Moran & Co. was not defeated by the plaintiffs taking possession of the indigo-cakes. The Court found that the plaintiffs had notice of the prior encumbrance when they made their loans to Mr. Wilson, and thus, could not claim to be bona fide transferees without notice. The evidence did not support actual delivery of possession to the plaintiffs, and thus, they could not rely on possession to claim a legal title.

4. Privileged Lien Claim:
The plaintiffs claimed a privileged lien over the indigo-cakes, arguing that their loans were for the cultivation of the crops. The High Court rejected this claim, distinguishing it from a salvage lien. The Court noted that the plaintiffs had no prior interest in the factory and that the loans were not made to protect the factory but for Mr. Wilson's purposes. The stipulation to hand over the indigo-cakes was intended to defeat the rights of the prior mortgagee. The Court cited precedent to support the view that such loans do not entitle the lender to a privileged lien.

Conclusion:
The High Court dismissed the appeal, upholding the Subordinate Judge's dismissal of the suit against defendants Nos. 1, 3, and 4, though for different reasons. The plaintiffs' claims were found to be without merit on all the contested points. The appeal was dismissed with costs.