1910 (7) TMI 1 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the delivery orders passed by endorsement.
2. Whether the issue of the delivery order amounted to a representation that payment had been made.
3. Whether the defendant company could claim a lien on the goods.
4. Whether the delivery order was a document of title.
5. Whether the property in the goods passed to the plaintiffs.

Detailed Analysis:

1. Whether the delivery orders passed by endorsement:
The delivery order was in favor of Messrs. Janki Dass & Co.'s principals or order, indicating it was transferable by endorsement. The evidence supported that delivery orders pass from hand to hand by endorsement and are dealt with in the market. There was no evidence requiring a document of assignment for their transfer. The delivery order in question was duly endorsed in the plaintiff's favor on the 4th of March.

2. Whether the issue of the delivery order amounted to a representation that payment had been made:
The evidence, including the testimony of the defendant company's witness, Mr. Tyrol, indicated that delivery orders in the Calcutta Jute Trade are only issued on cash payment and are considered a good tender under a contract. The contract stipulated "payments are to be made in cash in exchange for delivery orders on sellers" and "Ready payment against pucca delivery order." Mr. Young's assurance to Luchminarain that the delivery orders were correct implied that they could be safely dealt with in the ordinary course of business. The defendant company had no explanation for issuing the delivery orders on the 3rd or for taking post-dated cheques. The plaintiffs acted on the belief that the cash payable for the goods had been paid, and thus, the defendant company could not deny that such cash was paid.

3. Whether the defendant company could claim a lien on the goods:
The defendant company intentionally caused or permitted the plaintiffs to believe that the cash payable for the goods had been paid. The plaintiffs acted on that belief, and therefore, the defendant company could not claim a lien against the plaintiffs. The defendant company had the benefit of the money advanced by the plaintiffs, and allowing them to claim a lien would result in them benefiting from both the advance and the goods.

4. Whether the delivery order was a document of title:
In India, a delivery order is recognized as a document of title under Section 108 of the Contract Act and Section 137 of the Transfer of Property Act. The transferee acquires a title to the goods to which it relates. The defendant company did not provide evidence that the goods had not been ascertained. They could not deny that they held the goods for the plaintiffs, given the terms of the delivery order, the known course of dealing, Mr. Young's representation, and their conduct.

5. Whether the property in the goods passed to the plaintiffs:
The defendant company's representation and conduct led the plaintiffs to believe that the delivery order would pass and confer a good title. The plaintiffs, acting in good faith and for value, altered their position based on this representation. The defendant company could not defeat the plaintiffs' rights acquired through this representation. The property in the goods passed to the plaintiffs, and the defendant company's contention failed.

Conclusion:
The decree passed by Fletcher, J. was confirmed, and the appeal was dismissed with costs. The plaintiffs were entitled to the delivery of the goods or damages as awarded.