1. In this case the plaintiff firm purchased 25 Kelvin. Jute shares on the 2nd November, 1916, from the defendant firm of Baijnath Champalall. Baijnath Champalall had bought them from Mungiram Banger & Co. who had purchased them from one Sham Das Sil who in his turn had purchased them from one Ashutosh Ghosh on the 1st November 1916. Before Ashutosh Ghosh obtained possession of these shares, they belonged to the National Bank of India who are defendants in this action. The Bank purchased them for one of their constituents through their brokers, Place Siddons and Gough. The purchase was made about the end of October 1916. Following the rule in the Bank, these shares were made over to the officer in charge of their Safe Custody Department. It is also the practice of the Bank to get the shares registered in the Company in the name of their constituents on whose behalf they are purchased. With that object these shares were made over by Ross, the officer then in charge of the Safe Custody Department, to Ashutosh Ghosh the head clerk of that Department, who without sending the shares to the company for such registration fraudulently disposed of them to Sham Das Sil. The Bank did not know that any fraud had been committed or that these shares hart been dealt with by Ashutosh Ghosh, until some time about the end of November 1916. In the meantime these shares passed from hand to hand as above stated. The purchase by the plaintiff from Baijnath Champalall and by Baijnath Champalall from Mungiram Banger & Co. and also the purchase by Sham Das Sil were bond fide purchases: full value was paid for these shares and they passed from hand to hand. Attached to the share certificate was a deed of transfer endorsed in blank by the last registered owner, one H.P. String fellow.
2. It was contended that inasmuch as Ashutosh Ghosh was in possession of these documents, he could transfer good title to Sham Das Sil, and the subsequent sellers passed, good title to their respective purchasers. Now the use of the word 'possession' in Section 108, Exception (i), does not include possession of this character. These shares were in the custody of an officer of the Bank and were made over to Ashutosh Ghosh for a particular purpose, and he dishonestly dealt with them. It was held in Green wood v Holquette (1873) 12 B.L.R. 42, that the exception did not apply in the case of qualified possession, such as that of a hirer of the goods or where the possession was for a specific purpose. A clear distinction has been made in this Court in respect of juridical possession and mere possession. The same word is used in Section 178 of the Contract Act, in respect of pledges, and it has been held in, amongst other cases, Biddomoye v. Sittaram (1878) I.L.R. 4 Calc. 497, Seager v. Hukma Kessa (1900) I.L.R. 24 Bom. 458 and Naganada v. Bappu (1903) I.L.R. 27 Mad. 424 that a pledger's possession was not such possession as entitled him to deal with the goods in fraud of the rights of the owner. The Bank never intended Ashutosh to deal with these shares, never authorised him to deal with thorn and did not do anything by which it might be presumed that he had authority, express or implied, to deal with these shares. It was an absolutely dishonest dealing by him without the knowledge of the defendant Bank.
3. It was next contended that share certificates accompanied by the blank transfer deed were negotiable instruments by mercantile usage and were transferable freed from all equities, and complete title passed from purchaser to purchaser upon delivery of the certificate and transfer deed. I have just dealt with the question as to whether such share certificates can be considered as negotiable instruments in my judgment in suit No. 337 of 1918 [Hazrimull Shohanlal v. Satish Chandra Ghose (1918) I.L.R. 46 Calc. 331] and therefore it is unnecessary to repeat myself. There is a little more evidence in this case about usage than there was in suit No. 337. A member of the firm of Place Siddons and Gough stated that if the purchaser wanted his name registered and if the company refused to register the document, then they as his brokers would not consider the script as good delivery but would return it to the vendor. There was some evidence from the Bank of Bengal which does not purchase shares on its own account, but purchases them on account of constituents. The officer in charge of that department of the Bank said that they did not recognise these documents until registration was effected in the name of the purchaser. There is evidence that in the market such share certificates accompanied by transfer deeds blank endorsed by the last registered holder, pass from hand to hand and registration is effected by the last purchaser if he desires to register his name; but apparently, in order to avoid the cost of stamps and, to save time, registration is not usually, effected; but that does not, in my opinion, give a negotiable character to the certificate. The defendant Bank at the same time lost another lot of shares which curiously came back to them after having passed from hand to hand. This is relied upon as a strong circumstance showing the negotiable character of the documents. I do not think that circumstance of additional value. The document on the face of it does not show that it is transferable and it is well known that registration is necessary for legal title and that registration has to be effected in terms of the Articles of Association. Several purchasers in fact want registration to be effected and do not accept the delivery of the certificate with a transfer deed blank endorsed as effective. For the reasons I have already given I cannot treat the transfers in this case as transfers of a negotiable instrument. I, hold that the Bank is entitled to recover these documents. They held these shares originally as bankers for their constituent but they have made over shares of equal value to him and are now entitled to possession of those shares on their own account; and the plaintiff is not entitled to the declaration he seeks for. I hold that the plaintiff is entitled to recoup his loss from his vendor and I make an order that he is to be paid by Barjnath Champalall the value paid by him for these shares with interest at six per cent, from the date of his purchase.
4. Ashutosh Ghosh, who abstracted these documents was prosecuted; but the jury differing, a retrial was ordered but, before the retrial took place, he committed suicide.
5. I shall deal with the question of costs after hearing counsel who have expressed a desire to be heard.