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Cowasji Muncherji Banaji Vs. the Official Assignee of Bombay - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 49 of 1927 and Suit No. 1109 of 1926
Judge
Reported inAIR1928Bom507; (1928)30BOMLR1310
AppellantCowasji Muncherji Banaji
RespondentThe Official Assignee of Bombay
DispositionAppeal dismissed
Excerpt:
.....security for the later advances. - - you must find a contract allowing you to hold articles for subsequent advances as well as the original advance. nor do i think one can properly infer from these inventories and from what took place in july 1917 that a different meaning ought to he given to the previous written documents of march and june 1917. 5. but one question we have to consider is whether it can be held that the effect of what took place at the safe deposit company and of the inventories then made was that a new deposit in effect was created, or a new pledge effected by which all the articles therein referred to were made security for all the moneys due and owing by hiramaneck. in my judgment it would be unsafe to draw that inference from the documents and the evidence we have..........authorize him to detain the pledge for that; debt, when it has been put into his hands for another debt or contract, unless there is come just presumption that such was the intention of the parties. the like rule applies to a subsequent debt or loan contracted by the pledger; for in such a case, the new debt or loan will not be deemed to attach to the pledge, so that the pledgee may retain the same therefor, unless, from all the circumstances, there is just ground of presumption, that the now debt or loan was made upon the credit of the pledge, and was so understood by the parties. the rule, in all these cases, strictly applies, that the particular contract is to govern the right of the parties.8. then there is a passage in halsbury, vol. xxii, p. 242, viz., that 'the principle of.....
Judgment:

Amberson Marten, Kt., C.J.

1. [After referring to facts the judgment proceded :] I may now refer to Section 174 of the Indian Contract Act which runs:-

The pawnee shall not, in the absence of a contract to that effect, retain the goods pledged for any debt or promise other than the debt or promise for which they are pledged; but such contract, in the absence of anything to the contrary, shall be presumed in regard to subsequent advances made by the pawnee.

2. I do not regard that section as being happily drafted, because it seems to me to involve rather inconsistent notions. But I think it amounts in effect to this: you must find a contract allowing you to hold articles for subsequent advances as well as the original advance. Then if you know nothing more than this that there was a pledge for a particular sum, and that then there was a further payment or a further advance, then you may presume, in the absence of anything to the contrary, that the real contract between the parties was that the pledge should! cover this subsequent advance. But I draw attention to the qualifying words 'in the absence of anything to the contrary.' also draw attention to the opening words that 'in the absence of a contract to that effect.'

3. Now in the present case what do we find? We find, it is true, a pledge in the first instance of goods for Rs. 2,000 unaccompanied by any writing and on perhaps rather dubious oral evidence. But when we come to the subsequent advances, they in each case (I refer to the two documents of March 10, 1917, and June 15, 1917) are secured on or refer to other goods which at the time at any rats could have been identified and which are quite separate and distinct from the article originally pledged.

4. Under those circumstances it seems to me that one cannot properly hold that although the writing said that subsequent advances were to be secured on article X, yet they were also to be secured on article A, viz., the article already in pledge. If that was the real intention, nothing would have been simpler than to put it in the written document. So stopping there I do not see how up to this time the section helps Cowasji. Nor do I think one can properly infer from these inventories and from what took place in July 1917 that a different meaning ought to he given to the previous written documents of March and June 1917.

5. But one question we have to consider is whether it can be held that the effect of what took place at the Safe Deposit Company and of the inventories then made was that a new deposit in effect was created, or a new pledge effected by which all the articles therein referred to were made security for all the moneys due and owing by Hiramaneck. In my judgment it would be unsafe to draw that inference from the documents and the evidence we have before us. For one thing it is not the case put -forward by the plaintiffs. The solicitors' letters are too vague on that point to allow us fairly to draw that inference, and the same observation applies, in my opinion, as regards the inventories. To my mind the letters and the inventories are on the whole consistent with this that Hiramaneck was to return to Cowasji's custody all articles which had previously been pledged by him, but it was not intended that individual pledges or mortgages were to be altered.

6. That being so, there is nothing in Section 174 which carries the matter, in my opinion, any further. I think I may add this that it would he, in my opinion, rather a dangerous view to take of Section 174 if we were to hold that although parties state specifically in writing A that certain articles are to be security for a particular sum X, and state in writing B that certain other articles are to be a pledge for another sum Y, yet we must in effect treat both lots of articles as security for both the debts. So, too, I think it would be dangerous to hold that any pledge of articles for a particular sum must be taken to include also a pledge for subsequent advances, In some very simple case which I have already mentioned that may be a proper inference to draw, but not in my opinion in any case approaching the facts that we have here.

7. Curiously enough there appears to be little or no authority on this particular section, We have been referred to a passage in Story on Bailments, p. 253, which I do not think really carries the matter very much further, but to some degree it bears out what I have already indicated, viz,:-

But the mere existence of a former debt due to the pledgee does not authorize him to detain the pledge for that; debt, when it has been put into his hands for another debt or contract, unless there is come just presumption that such was the intention of the parties. The like rule applies to a subsequent debt or loan contracted by the pledger; for in such a case, the new debt or loan will not be deemed to attach to the pledge, so that the pledgee may retain the same therefor, unless, from all the circumstances, there is just ground of presumption, that the now debt or loan was made upon the credit of the pledge, and was so understood by the parties. The rule, in all these cases, strictly applies, that the particular contract is to govern the right of the parties.

8. Then there is a passage in Halsbury, Vol. XXII, p. 242, viz., that 'the principle of consolidation of securities contained in the law of mortgage does not apply to a contract of pawn, at least as against the executor of a deceased pawner.' That refers to the case of Vanderzee v. Willis (1789) 3 C.C. 21, where the decision rested on this that there had been in effect an administration order, and so the Court's order had put an end to the right of tacking.

9. Another case which 1 might refer to is Demainhray v. Metoalfe. (1715) 2 Vern. 690. It was a case where certain jewellery was sub-mortgaged to secure a sum of 200. Then there were further loans of 36 and 50, and the question was whether the pawer could redeem on payment of 500, There, taking all the facts into consideration, the Lord Chancellor thought that all the three sums must be paid before the article could be redeemed. That, again, was a case depending on its own facts. There was no suggestion there, as we have here, that the subsequent advances were secured on another separate security.

10. In the result, therefore, I would hold that the learned Judge arrived at the correct conclusion in this case, and that accordingly the appeal must be dismissed with costs. [The rest of the judgment is not material to this report.]

Blackwell, J.

11. It is clear from the tearms of Section 174 of the Indian Contact Act that a pawnee is not entitled to retain the official goods pledged for any debt or promise other than the debt or Assignee promise for which they are pledged, in the absence of a contract to that effect. That contract may be expressed, or may be presumed in the absence of anything to the contrary, In the present case we find that in regard to the subsequent advances made by Cowasji to Hiramaneck, the terms upon which those advances were made and the securities given in respect of them were denned by two documents, viz., those of March 10, 1917, and June 15, 1917.

12. It has been admitted by Mr. Taraporewala that taking the words of those documents as they stand by themselves, he cannot contend that the silk hanging, the subject-matter of this suit, is referred to in terms in either of those documents or forms part of the security given to Cowasji by Hiramaneck. Mr. Taraporewala, however, has contended that the subsequent conduct of the parties ought to be looked to for the purpose of ascertaining what was their intention at the time they executed the documents of March 10, 1917, and June 15, 1917.

13. In my opinion where the terms upon which advances are made, and the security for those advances are given, are plain on the face of the documents relating thereto, it is not permissible for the purpose of ascertaining what was the intention of the parties as expressed in the terms of those documents to have any regard to their subsequent conduct. Upon that ground alone I should be prepared to hold that it is not permissible to have regard to the subsequent conduct of the parties for the purpose of ascertaining what was intended in this case.

14. A further question, however, has arisen, viz., whether the subsequent conduct of the parties may not evidence a new contract that this silk hanging should form part of the security thereafter to be retained by Cowasji in respect of the previous advances. By their solicitors' letter of July 9, 1917, which referred to the arrangement come to under the document of March 10, 1917, a complaint was made that some portion of the goods in Cowasji's possession had recently been removed by Hiramaneck from certain premises where they had been in the custody of Cowasji and had been deposited in the joint names of Hiramaneck and his manager one Lopez in the Safe Deposit Company. That was the fact. Certain goods had been removed by Hiramaneck, 1928 and included among thorn, was this particular silk hanging. Thereafter on July 10, Hiramaneck attended at the office of the v. solicitors who had written the letter of July 9, and the various articles which had been so removed, and which were set out in a list attached to a letter from the same solicitors to Hiramaneck dated July 10, 1917, including the silk hanging in question, were acknowledged by Hiramaneck to have been deposited with Cowasji as security, and all those articles were re-transferred into the name of Cowasji. It is sought from that conduct to imply an agreement by Hiramaneck that that silk hanging should thereafter form part of the security for the advances which are referred to in the documents of March 10, 1917, and June 15, 1917. In my opinion it would be entirely unsafe to draw that inference. It is common ground that that silk hanging had originally been pledged for an advance of Rs. 2,000. It had never formed part of the security for the advances made in accordance with the arrangement of March 10, 1917, or June 15, 1917. All we know is that it had been wrongly removed from the custody of Cowasji by Hiramaneck, and that upon a demand being made for its return, it was returned Its return may be attributable to the right conferred upon Cowasji by the original pledge, and to no other agreement between the parties.

15. Under those circumstances it seems to ma that it would be quite unsafe from the mere fact of its return into the custody of Cowasji to imply the agreement sought to be made out in this case that thereafter it was to stand as part of the security for previous advances. In my opinion there is no evidence whatever to show that that silk hanging was ever pledged except as security for Rs. 2,000. The oral evidence contains nothing to the contrary. The documentary evidence is all the other way. In these circumstances, in my opinion, the learned Judge came to the right conclusion in holding that the Official Assignee, as representing the estate of Hiramaneck, the original pledger, was entitled to redeem that hanging on payment of the amount of the loan.

16. I agree that this appeal must be dismissed with costs.


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