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Tehilram Girdharidas Vs. LongIn D'mello (21.01.1916 - BOMHC) - Court Judgment

LegalCrystal Citation
Decided On
Case Number O.C.J. Suit No. 546 of 1915
Reported inAIR1916Bom77; (1916)18BOMLR587
AppellantTehilram Girdharidas
RespondentLongIn D'mello
hypothecation - mortgage of moveables -possession not necessary to be transferred- indian contract act (ix of 1872), sections 108, 178.;the plaintiff advanced rs. 2000, in 1913, to v on the hypothecation of the press machines and other accessories of a printing press belonging to v, who remained, as before, in possession of his press. in 1914, v took d as his partner in the concern on payment of rs. 3000. in 1915, v again hypothecated the same property to plaintiff for a fresh advance of rs. 1000. d had no notice of either transaction. on v's death, the plaintiff claimed to recover his money by sale of the property hypothecated, d resisted the suit contending that the plaintiff's claim could, at the most, extend to v's share ( which was one-half) in the concern:-;(1) that the plaintiff.....beaman, j.1. the plaintiff in this suit, a money-lender, claims to have a preferential right over all the creditors of the deceased gabriel f. vaz in respect of certain hypothecated property, being the press machines and other accessories of the minto printing press.2. the official assignee, a party defendant in this suit, has taken no part in it. i suppose that is because the deceased vaz has no other assets worth troubling about than the subject-matter of the present suit.3. the defendant d'mello alleges that, on the 3rd of october 1914, he put rs. 3000 into what was thereon constituted a partnership between himself and vaz for the working of the minto printing press, he, therefore, contends that the plaintiff's claim, if in all other respects proved to be valid, must be restricted to a.....

Beaman, J.

1. The plaintiff in this suit, a money-lender, claims to have a preferential right over all the creditors of the deceased Gabriel F. Vaz in respect of certain hypothecated property, being the press machines and other accessories of the Minto Printing Press.

2. The Official Assignee, a party defendant in this suit, has taken no part in it. I suppose that is because the deceased Vaz has no other assets worth troubling about than the subject-matter of the present suit.

3. The defendant D'Mello alleges that, on the 3rd of October 1914, he put Rs. 3000 into what was thereon constituted a partnership between himself and Vaz for the working of the Minto Printing Press, He, therefore, contends that the plaintiff's claim, if in all other respects proved to be valid, must be restricted to a half share of the assets of that partnership upon a proper winding-up.

4. On the one hand, the defendant contends that the writings of hypothecation of the nth of March 1913 and the 27th of February 1915 are fabrications, and that, if there was any transaction at all between the plaintiff and Vaz, it went no further than an ordinary money loan secured by promissory-notes, On the other hand, the plaintiff contends that D'Mello paid no consideration whatever for his half share in the partnership and that if any transaction of the kind actually occurred in October 1914,11 was entered into designedly in order to defraud him,

5. A great deal of evidence has been recorded, much of it to prove the respective contentions I have just barely outlined and much of it directly to prove that the plaintiff not only obtained the hypothecation of the property in suit in March 1913 but actually took constructive possession thereof by affixing boards on the premises announcing to the public that he was a mortgagee in possession,

6. The defendant is not now in a position to prove that the plaintiff's principal document, Exh. B in the case, dated the nth of March 1913, was not what, on the face of it, it purports to be. Vaz died on the night of the 2 and or early morning of the 23rd of April 1915 by his own hand. He appears to have taken poison on or about the 19th of April and succumbed during the night of the 22nd. D'Mello has no knowledge of the transaction evidenced by Exh. B in the case and can only argue upon general grounds that the writing of that date, viz., the nth of March 1913, and the later writing of the 27th of February 1915, are fabrications made to support the plaintiff's case, Exhibit B and Exh. F, the document creating the second charge, are signed by Vaz. They are written in the vernacular, and the defendant's suggestion is that the plaintiff got Vaz's signature to papers the contents of which he did not understand. I may briefly dismiss the evidence and state my conclusions upon it. I see no reason on this record to hold that Exhs. B and F are not genuine papers, although I confess that I view them and their proprietor, the plaintiff, with considerable suspicion. Nor do I see any sufficient reason to doubt but that D'Mello paid Rs. 3000 on the 3rd of October 1914 as consideration for a half share in the partnership thereupon constituted and evidenced by the partnership deed of that date, Exh. No, 3 in the present case, There has been a great deal of dispute over the payment of this consideration, and the fact that the deed bearing date the 3rd of October is said, by some of the witnesses, to have been executed on the 5th. I attach little or no importance to these matters. I am satisfied that D'Mello gave valuable consideration for his share in the partnership, thenceforward intended to work the Minto Printing Press. I am further satisfied that D'Mello had no notice of the plaintiff's claim in October 1914. It is possible that the plaintiff may have occasionally stuck up his board on the Printing Press, but the evidence on behalf of the defendant is far too good and far too strong to allow me to entertain any doubt but that a very great part of the plaintiff's evidence on this point is entirely false, And the defendant's evidence is such as to satisfy me that neither by means of these boards nor in any other way was notice given to D'Mello by the plaintiff of his alleged mortgage of the whole of the Printing Press plant. I could easily amplify my reasons for these conclusions, summarily stated, by an examination of the evidence more in detail, but I do not think it necessary to do so. Speaking generally, wherever that evidence conflicts with the defendant's evidence, I should not hesitate to reject the testimony given by the plaintiff, his nephew and his bhayas, With the single exception of Baptista, who appears to have acted very much in the plaintiff's interest in these matters, the whole of the plaintiff's evidence is of a character inviting the comment that it is completely subject to his control. It is of the quality to be expected from witnesses of that class. On the other hand, the defendant, D'Mello, has not only given what appeared to me to be candid and straightforward evidence himself but has supported some of his contentions at least, by the testimony of credible and unimpeachable witnesses such as Brewin and Templeton, There cannot be the least doubt, I think, but that D'Mello not only purchased a share in the partnership but immediately assumed predominant control of it and from the 3rd of October 1914 to the 19th of April 1915 was in effect the sole manager of the Printing Press without any notice or suspicion of the plaintiff's claim to be a mortgagee of the entire plant. On the 19th of April 1915, becoming aware, I suppose, of Vaz's intended suicide, the plaintiff and his men hastened to the Press to assert their rights and declare that the plaintiff was mortgagee in possession. This led to a serious fracas on the morning of the 22nd. Complaints were made in the Police Court and the plaintiff was fined for trespass.

7. These being the material facts, all of which I hold to be proved beyond reasonable doubt, I have to consider what is the legal position of the parties and to determine their relative rights and liabilities in the light of the facts so found.

8. I should mention that the first mortgage, Exh. B, was for Rs. 2000 at 18 per cent, interest. On the 27th of February 1915, about three months after the partnership between D'Mello and Vaz had been constituted, Vaz is alleged to have borrowed a further sum of Rs. 1000 from the plaintiff and to have executed a further charge, at the same time reaffirming the earlier mortgage, by the document F in the present case. That paper contains no allusion whatever to what was then an undoubtedly existing partnership between Vaz and D'Mello. It contains a list of all the Press plant and a statement that that plant had been assigned by a writing to the plaintiff' on the nth of March 1913. The rate of interest upon the total sum of Rs. 3000 thus charged upon the plant of the Minto Printing Press was thenceforward to be 12 per cent, per annum.

9. The case has occupied me a considerable time, because it raises questions which have long interested me and upon the true legal answers to which I have for years felt much doubt. For that reason have throughout suggested points and invited counsel to collect authorities, bearing upon them, which might serve, if possible, to elucidate some definite and intelligible' principle. I am much indebted to the industry and patience of the learned gentlemen on both sides, who have laid before me in this way a very great number of cases, both Indian and English, so enabling me to take a comprehensive survey of the whole of this most difficult and much vexed field of the law. Many of the cases cited proved to have no direct bearing upon what I understand to be the material question of law standing here to be answered, but all of them have illustrated other points of equity or law indirectly bearing upon the main question. I think that the result has been to show how very difficult it is to extricate, from the mass of authority thus entangled by many converging and interpenetrating doctrines of the English law, any satisfactory ground upon which to rest, in this country at any rate, what seems to have become settled as the legal doctrine of the mortgage of moveables. I have always felt almost insuperable theoretical difficulties in the way of making any such doctrine suitable for practical application by the Courts in this country: indeed of its establishment at all as a proper extension of the corresponding doctrine governing the mortgage of immoveables. It might be thought that what is easy to state theoretically and administer practically in regard to immoveable might be as easy to state and apply in regard to moveable property. This is by no means the case, and were the matter res Integra, I should have no hesitation in deciding upon grounds of public policy, quite apart from theory, that the Courts have no business to recognise the mortgage, in the wider sense, of mere chattels. In the statute law of India it 'would be difficult to find anything making it imperative upon Courts to acknowledge any such doctrine. In the 3rd section of the Transfer of Property Act, amongst other definitions, the definition of a chose in action mentions the hypothecation of moveables as though that were an accepted part of the law of this country, and, again, in the Stamp Act, Section 2, Clause 7, the like words are to be found. Elsewhere I do not believe that it would be easy to discover in the sufficiently voluminous statute law of this country any warrant for the assertion that the Courts of India are bound to recognise a mortgage of moveables. Nor after having considered the case-law, both of this country and England, which has gone to establish that doctrine, very carefully and critically for many years, am I able to discover any authority, in reason or equity, adequate to establish it. If, however, it is to be taken as a part of the law of India, and in the existing state of the case-law I suppose it must be, then it is very necessary to examine the essential ingredients of the mortgage of moveables and so arrive at a clear understanding not only of the nature of the legal notion but of all its legal consequences in relation to others who may have dealings with or rights in the moveables so mortgaged.

10. We may take it on the authority of all the text-book writers that a mortgage of moveables can be as validly effected by parole as by a writing, and that the immediate effect of such a mortgage is to pass the property in the chattels mortgaged from the mortgagor to the mortgagee. It is altogether unnecessary that actual possession of the chattel should be given. Thus, unlike a mortgage of immoveable property, which, no matter what its value, can only be effected in this country by a writing or a transfer of possession, mortgages of chattels, having the effect of immediately transferring the property thereunder from the mortgagors to the mortgagees, can be made by mere parole and without the transfer of possession. It is only necessary to dwell for a moment upon this, in particular relation to the known conditions of life in India, to realise how heavily weighted such a doctrine must be with the gravest potentialities of mischief. I can hardly imagine any other legal doctrine that might be more mischievous or open a wider door to fraud and interminable litigation There is no possibility, as far as I can see, of drawing any distinction between the so-called mortgages of moveables made by a few spoken words, unaccompanied by possession, and the like mortgages made by the most correct and artificial documents, accompanied by possession. The only possible justification which occurs to me for having accepted and enforced the principle of the mortgage of chattels in this country lies in the needs of considerable traders. Very true, in times of pressure and difficulty a trader may need large advances on the security of his stock-in-trade, and that security might be withheld if the stock-in-trade, whatever it might be at the time the payment was called for, could not be made primarily liable. Obviously too, the creditor could not take more than symbolical possession of the stock-in-trade without defeating the very object of the loan. So that in cases of that kind there might be a reason for permitting the hypothecation of moveables on a large scale by the execution of properly drawn formal documents duly registered. But as the doctrine has been imported in its entirety from England, its application in this country must be regarded as co-extensive with its application in England before a plentiful crop of abuses had necessitated the passing of the Bills of Sale Acts. And in England it was quite enough for any one borrowing to hypothecate orally anything and everything of which he might then be or in future become possessed as security for the loan. In such cases where possession is not taken, it is very easy to see practical difficulties of the most serious kind and put cases in which the results must be anything but equitable, Take the following two very simple illustrations of what is at the present moment passing through my mind. A being in need of money and possessing a gold watch goes out into the streets and successively mortgages it to B, C, D and E, in each case for 5, the four transactions all occurring on the same day, Now, what are the resultant rights of the mortgagees B, C, D and E In England the text-book writers at any rate have gone the length of saying that once a mortgage of chattels is created, all the subsequent dealings are to be treated on the same footing and governed by the same principles as the like subsequent dealings in relation to a mortgage proper, But analysis shows that that can hardly be the case where chattels are made the subject of what is called a mortgage immediately transferring the legal estate; because we come at once in conflict with the principle to which expression is given in Sections 108 and 178 of the Indian Contract Act. The mortgage of chatties, whether by parole or by a writing, instantly transfers the property in the goods from the mortgagor to the mortgagee, that is to say, immediately on the payment of the price, or loan or mortgage advance. But let this be regarded from whatever point of view be chosen, it works out to this and nothing else, that every hypothecation of that sort is an out-and-out sale subject to a condition that the vendee will re-sell the chattel to the vendor at a certain price and upon certain conditions. But if it be an out-and-out sale, then in the case supposed, the chattel mortgaged remains in the possession of the vendor with the consent of the vendee, and each subsequent oral mortgage becomes a sale in turn. In the case supposed, there could be no possibility of such circumstances existing as would put the second, third and fourth mortgagees, respectively, upon guard, while the possession of the vendor would in each case be with the consent of the true owner. So that as far as I can see in law the last mortgagee would be the only owner of the watch and the three prior mortgagees would have no claim upon it whatsoever. Or upon another view the first mortgagee might have the better claim and the others none. It could hardly be said that like the puisne mortgagees of real estate each had no more than a right to the equity of redemption. For that altogether ignores the very salutary and necessary principle of Section 178 of the Indian Contract Act regulating what actually occurs when these mortgages of chattels are effected. The subject is doubtless confused by substituting the word ' mortgage' with all its legal associations for the word ' sale.' But slurring over difficulties by the use of this or that word or the application of special terminology to the matter in hand is but too shallow a way of dealing with what is really going to the root of the principle. And the second illustration I give is that of a trader in active business to whom A lends, let us say, 1000 on the general faith of his solvency as exhibited by his possessions and more particularly by his stock-in-trade. Ten days later, B advances the same trader 1000 upon an oral mortgage of every stick and chattel of which he is then or may in future be possessed. And later the (sic)ader becomes bankrupt or A takes out execution against him. Adopting the law of the mortgage of chattels, it is obvious that in both cases B will be the secured creditor with all preferential rights over A if in the former he has demanded the possession a day before the bankruptcy, though I am entirely at a loss to see what superior equity he has. It may be argued that A has been lending money upon the faith of reputed chattel possessions and takes his risk of their disappearing before he seeks repayment. That is undoubtedly true. On the other hand, apart from the doctrine of the mortgage of moveables and assuming that the possessions (chattels) upon which the money is really, though not in so many words stated to be, lent in specie at the time the loan falls due, and supposing there is no question of preference, it is obvious that a creditor's remedy is exactly the same at law whether there be or be not any hypothecation, that is to say, in any money decree a creditor may attach and sell any or all the property of his judgment-debtor, It thus becomes clear that it is only for the purposes of preference that there is the least need for this hypothecation of moveables. And then, again, it could only be in cases where they, or, at any rate, a part of them or substitutes, in law their equivalents, exist in specie at the time the question of priority arises, that the hypothecation can be of value to the mortgagee. So that it really comes to this, that quite apart from any true equity, the creditor, who has been wise enough to stipulate in so many words that the money he advances is advanced on everything chattel which the borrower may then or thenceforward possess, is to have preference on that account over equally bona fide lenders, unaware of the oral contract, who have not been far-sighted enough to make such a contract of their own at the time of the advance; and it certainly appears to me that here we are faced with a very real difficulty, and with a doctrine of law, which, carried out logically, would certainly do more injustice than justice. For a man in a seemingly good way of business might go on for years barrowing money from creditors lending in good faith upon his apparent prosperity, while in fact everything moveable belonging to him may have been hypothecated orally to some other and earlier creditor, and so upon a case of. preference arising, all later creditors would be unable to recover any part of their money: or in the event of each of them in turn having stipulated for the like hypothecation of all the debtor's moveables, a problem would arise, as I have already indicated, of which I do not believe any logical legal solution is possible.

11. I have felt it necessary to indicate, indeed within the compass of a judgment I can do little more than indicate, some points and lines of reasoning, which, being thoroughly exhausted and followed up, have convinced me that it is eminently desirable that the law of hypothecation or mortgage of moveables is in need of radical reform. This law, it is to be observed, has been transferred bodily from England to India as part of the old common law, and must, therefore, be administered here as it was in England before public policy required its correction and curtailment by the various Bills of Sale Acts. There are no such Acts in this country, and, in my opinion, we should be much better without them, provided that it were legislatively enacted that no Courts should recognize any mortgage of moveables for a less sum than, say, Rs. 5,000 evidenced by a registered writing. That would suffice to meet the legitimate exigencies of trade; and smaller loans upon the hypothecation of chattels, especial or general, should, I think, be ignored, unless they fulfil all ..the requirements of a pledge. In this country we have a very precise and easily administered law of pledge. Where money is really advanced upon a chattel and the property in that chattel thereupon passes to the creditor, it is only right that he should take possession of it and so prevent other people lending money to his debtor on the faith of his being the ostensible owner of goods which really do not belong to him. I may note in this connection that several of the cases cited by Mookerjee J. in the case of Mahamaya Debi v. Haridas Haldar I.L.R. (1914) Cal. 455, in support of his conclusion that a mortgage of moveables is recognized and established in this country as well as in Englands appear to me to be cases which fulfil all the requirements of a pledge, and the only point with which the English Judges were concerned in those cases was the remedy of the mortgagee. The remedy of a pledgee is limited to sale, whereas in those cases the mortgagee was seeking foreclosure. That is a point with which 1 am not concerned here, inasmuch as I do not suppose that any Court in this Country has yet decreed foreclosure of a chattel alleged to have been mortgaged.

12. Another point occurs to me in connection with the principal contention of the parties. The facts 1 have found show that the plaintiffs' first loan was made to Vaz before Vaz entered into partnership with D'Mello. The question naturally suggests itself whether in such circumstances a creditor can recover against the partnership in excess of the share owned by his debtor therein, I do not think that the answer to that would be affected by any stipulation such as is to be found in Exh. No. 3, that the partnership shall not be liable for any preincurred debts. It must, at once, I think, be conceded that in the case of a simple money loan not in form professing to be a hypothecation made to a debtor, at that time not a member of any partnership, it could not possibly be enforced against the, partnership, that is to say, in the case of a man, for example, who was not engaged in trade at all at the time he borrowed money but a year afterwards enters into partnership and carries on business. Is .that conclusion affected by a change in the circumstances Let it be supposed that A is a sole trader and borrows a sum of money for the purposes of his business, Presently, he takes B into partnership with him, Can the creditor now sue the partnership as a partnership for the money advanced to A as a sole trader If that money has been employed upon the business and so entered as an ingredient into what actually became the subject-matter of the later partnership, there might be a strong theoretical reason for holding that the partnership was liable as a whole for the antecedent debt. The point is one of considerable nicety, In England the law seems to have been once at least laid down, without any doubt, or for that matter without giving any elaborate reasons, to the effect that A dealing with B, and B thereafter taking C into partnership and notifying A of the fact) A is put to his election upon the receipt of the notice whether to make B solely, or B and C jointly, answerable to him for the result of the dealing: British Homes Assurance Corporation, Limited v. Paterson [1902] 2 Ch. 404. And in another and much earlier case, Ex parte Jackson (1790) 1 Ves. Jun. 131 the Chancellor was very much perplexed over the law proper to be applied to such a state of facts. There the real debt was an ordinary bond debt, and the debtor subsequently took two other persons into partnership. I gather from Lord Eldon's judgment that his opinion was that the partnership could not be made liable if it were a genuine trading partnership, for the pre-existing debt. On the other hand, reasons could easily be suggested why that law might operate very harshly and unjustly. If A advances to B, a sole trader, a large sum of money on the faith of his stock-in-trade, and the next day A having no other means takes nine other persons into partnership with him, it is obvious that a very great injustice might be done to the, lender. Such considerations are peculiarly proper to cases of ordinary loans, and having regard to the established legal doctrine of the mortgage of movables, I do not think that unless a general proposition be firmly established that every partnership was liable for all antecedent debts incurred in the same business prior to the partnership, it could be of any practical value for the purpose of my present discussion, and I am not at all sure that such a general legal proposition ever did warrant it.

13. I must, therefore, start once more upon, the found facts from the point that, on the nth of March 1913, the whole plant of the Minto Printing Press passed out of the hands of Vaz into those of the plaintiff. 1 he plaintiff on the execution of Exh. B appears to have become in law, according to the old English doctrine, the true owner of all the property, the subject-matter of this suit. He allowed that property to remain in the possession of Vaz, I-shall. not again cover the ground in this judgment which I attempted to examine minutely and exhaustively in my judgment in the case of Nandlal Thahersey v. The Bank of Bombay (1909) 11 Bom. L.R. 926 touching the true meaning of the word ' possession.' Ever since the enacting of Sections 108 and 178 of the Indian Contract Act, notwithstanding the fact that they are designedly worded quite differently from anything to be found in the old English Factors Act and the like, the Courts in India appear to have struggled to confine the application of those sections within the very much narrower meaning prescribed by the terminology of the English Acts. Over and over again very learned and eminent Judges have interpreted those sections as though the word ' possession ' meant something very much more than in any known legal sense it does. But if the word had the meaning thus sought to be given to it and no more, many of the very cases which those sections were intenced to cover would be excluded from their operation. Reading the sections as they stand, it is only too obvious that they were advisedly worded to have much larger and freer scope than the English Factors Act. Commentators, I notice, referring to the discussion which arises over these sections before the Indian Contract Act was passed record objections to them on the score that they convert the whole of India into a market overt but confining myself to Section 108, at any rate, such an objection appears to be out of place. It is essential that possession should be with the consent of the true owner, and that, just as the proviso to Section 178, excludes all cases of property which had been stolen or acquired by any dishonest means. And if the intention of the Legislature had been as the Courts have often enough interpreted it, that is to say, that possession in those sections should mean possession for a limited and specified purpose, it would have been easy enough to say so. '1 he truth is that the sections are enacted for the protection of bona fide purchasers and pledgees and are really grounded upon principles of estoppel. If the true owner of property puts another in ostensible possession of it and holds him out to the world as being fully capable of disposing of and conferring a good title to it, and such a person does dispose of it the true owner, as far as I can see, has no good ground of complaint against the bona fide purchaser for value. I am not, therefore, disposed now any more than I was in the year 1909 to adopt the very narrow construction put upon these sections in the various decisions of the Indian High Courts. Their language appears to me to be too plain to admit of any doubt, and I do not think that we have any right to go behind that language and limit it by reference to a supposed historical tradition.

14. In the present case, then, I find that while the true owner of the plant of the Minto Printing Press in October 1914 was the plaintiff, Tehilram Girdharidas, Vaz was in possession with his consent. That being so, had Vaz sold the whole or any part of the property in suit to D'Mello without notice and in the absence of any circumstances putting D'Mello upon inquiry, and D'Mello had paid the sum in good faith, believing Vaz to be the real, as he was the ostensible, owner, then I should have no doubt whatever in holding that D'Mello had acquired a perfectly good and valid title against Tehilram. Unfortunately, that is not what occurred. And a further difficult question arises, viz., what actually passes in such a transaction as that evidenced by Exh. No. 3 in the present case. It cannot be said that Vaz sold any part of the Printing Press machinery to D'Mello. The contract is that D'Mello is to put Rs, 3000 into the business and thenceforward is to become a joint owner with Vaz of all the printing press plant, etc. Now, persons entering into agreements of partnership, cannot be said to buy anything at all from each other. Both pe. 's remain, as long as the partnership exists, joint owners per mie et per tout of all the partnership assets, and it is impossible to say at the date of the institution of the partnership what any partner may have acquired as consideration for the money he has paid in order to become a partner. That can only be ascertained upon a dissolution of the partnership when all the assets of the partnership, as they stood at the time it was constituted, may have finally disappeared The most that any partner can be said to buy by putting money into a business in consideration of a partnership share in it is the right upon a dispute to a partnership account and division, of any of the assets ultimately found due. It is clear that, on the 3rd of October 1914, D'Mello cannot be said in law to have purchased any part of the property left in the possession of Vaz by the true owner Tehilram. Nevertheless it might be contended that by parity of reasoning and on analogy, D'Mello, in equity, at any rate, should be entitled to exclude from the materials available for the satisfaction of Tehilram's debt one half of the partnership assets after such should have been ascertained upon a winding-up; and that is the view I should very much like to take because I think it is most consistent with the justice of the case; but long and anxiously as I have pondered over it, I am unable to discover any solid legal ground upon which to put it. If there was no sale of any definite chattel to D'Mello in October, it follows that he cannot take the benefit of Section 108; and there is no other section in our statute law which extends that principle to a case like this. It could only be by analogy and by breaking new ground altogether that D'Mello could be brought within the protection of Section 108. In my opinion, although the equity of the case is very strongly on his side, as long as this very mischievous doctrine of mortgage of chattels is part of the law of the country, I see no escape from the consequence that Tehilram, the plaintiff, was, on March nth 1913, and has since remained, and still if, the true owner of the property in suit covered y the mortgage deeds of the 11th of March 1913 and the of February 1915. His not really a case of preference! at all. As I understand the law it is a case of property supposed to belong to A being found to belong to B and. if. that be so, any one in possession of it admittedly from A(sic)uin, or claiming through A, would have no case against B That , I take to be the true legal position occupied respectively by D' Mello and the plaintiff in this case.

15. I have come to this conclusion only after long and anxio us reflection and the study of a very great number of ci SS.. I have come to it, too, with great reluctance; becauase it rests upon a doctrine which I should like to see wholly', abolished, or, at any rate, confined within such narrow limits a is to make it incapable of lending itself to further frauds and in justice. I am not in a position to make new law. I can only administer the law as I find it to be and understand it. Since there has been no transfer by sale or pledge of any parts of the property belonging to Tehilram and left by him in possession of Vaz, it appears to me that his rights over it acquired in 19I3 remained wholly unaffected by the illusory partner/ship, purporting to cover it, entered into between D 'Mella' and Vaz on the 3rd of October 1914. I mug therefore, hold that the plaintiff, Tehilram, is entitled to bring all the property in suit to sale under his mortgage-deed of the nth of March 1913, Exh. B. And as to the second mortgage of the 22nd of February 1915, although there might be some theoretical difficulty in supposing that the amount is advanced on the security of his own property, yet being his own property in law 1 suppose it will have to be conceded that he is entitled to recover the amount of that charge also from the sale proceeds;

16. This suit must now be decreed against both the defendants with all costs.

17. The order of the 5th of July 1915 to continue.

18. Liberty to both the sides to apply.

19. The sale to be effected after six months within which time D'Mello may redeem or settle with the plaintiff if be likes.

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