Bijayesh Mukherji, J.
1. This is a suit for recovery of Rs. 13,031.87 nP. only in the following circumstances:
On April 20, 1960, or thereabouts, the plaintiff Snow White Food Product Company Limited (shortened hereafter, as far as possible, into 'Snow White') entrusted, in Cal-cutta, the third defendant Shree Hanuman Transport Company, a firm doing the business of 'a common carrier of goods for reward', with two consignments -- one containing 25 tins of S/c refined groundnut oil and the other containing 400 tins of S/c Balloon Brand Vegetable Pro-duct -- for carriage by road to self (Snow White) at Raiganj and Islampur respectively in the district of West Dinajpur. The Transport Company -- that is how I call the third defendant hereafter, as far as possible --'received and accepted' the two consignments 'for reward' with a view to reaching them to their destination and to Snow White too, as desired. The contracts of carriage are evidensed by two consignment notes: one bearing the number A 1202 for despatch to Raiganj, and another bearing the number A 1203 for despatch to Islam-pur. Dated April 20, I960, both were issued by the Transport Company. At the trial, they have been marked exhibit B collectively. The Transport Company insured with the fourth defendant, the New Assurance Company Limited, the goods covered by the two consignment notes against loss and damage, among other things, during transit. But these insurances were had 'on account of and for the benefit of' Snow White. Leaving aside the permutation of 'alternatives' in which the plaint seems to revel, the pith of Snow White's case comes to this. The consignments were not delivered to Snow White --the Raiganj one at Raiganj and the Islampur one at Islam-pur. Worse, the goods consigned so were wrongfully disposed of and converted 'to their own use' by alt the defendants -- the Transport Company (the third defendant), its two partners -- Sohanlal Bagla and Madanlal Poddar -- the first two defendants, and the Insurance Company (as I call now and hereafter, as far as possible, the fourth defendant).
For the Raiganj consignment the claim is laid at Rupees 16,000, and (or the Islampur one at Rs. 931.87 nP., the total thus coming to Rs. 17,531.87 nP. To that is credited Rs. 4,500 paid by the Transport Com-pany and its two partners (the third, the first and the second defendants) in part satisfaction of Snow White's full claim. This leaves a residue of Rs. 13,031.87 nP., for recovery of which from all the four defendants, or for recovery of 'such other sum as may be found due' from the first three defendants, the instant action has been raised on April 20, 1961.
2. Of the four defendants, two only -- Sohanlal Bagla, the first one, and the Insurance Company, the fourth one -- resist the suit. The remaining two, Madanlal Poddar, the second one, and the Transport Company, the third one, do not.
3. The common plea taken by the two contesting defendants -- Sohanlal and the Insurance Company -- is that the insurance money is payable by the Insurance Company to the Transport Company. The insurance company adds that the Transport Company had taken out an open policy, but not on account of, or for the benefit of, Snow White, and that there is no privity of contract between the two -- the Insurance Company and Snow White -- thus affording no scope for its liability in any manner to Snow White.
4. Sohanlal denies that he had been a partner ever of the Transport Company of which, he admits, he was a mere assistant. He admits too the two consignments having been made over to the Transport Company for despatch to Raiganj and Islampur (Aluabari Road). And he pleads an accident the lorry carrying the goods met with near Lalgola in the district of Murshidabad by falling into a ditch -- an accident which culminated in the driver of the lorry being killed and the tins (full of Snow White's goods) being damaged and leaky. The surveyor deputed by the Insurance Company, he concludes, sold the damaged goods.
5. The issues struck at the trial are --
1. Has the first defendant Sohanlal Bagla been a partner at all material times of Shree Hanuman Transport Company, the third defendant?
2. Did the aforesaid first defendant hold out ever at all material times as a partner of the aforesaid Company?
3. Were the consignments in suit insured by the third defendant with the fourth one, namely, the New India Assurance Co. Ltd., on account of and for the benefit of the plaintiff?
4. Have the goods in controversy here damaged in transit been wrongfully converted by the defendants or any one or more of them?
5. Is the fourth defendant liable for the amount claimed?
6. What reliefs, if any, is the plaintiff entitled to?
6. The contesting parties examine a witness each, Snow White examines Rajendra Jha, one of its employees. Sohanlal examines himself. The Insurance Company exa-mines Sukhendu Dutt, one who has seen service for twelve years under N. T. Kothari and Company, a firm appointed by the Insurance Company for survey of the goods consigned by Snow White and damaged in transit.
7. For a better understanding of the pleadings, an apparent confusion may be cleared up here and now. The plaint at its inception is against Sohanlal Bagla, Madanlal Poddar and the Insurance Company, numbered defendants 1, 2 and 3 respectively. Sohanlal and the Insurance Company enter appearance and file separate written statements as defendants 1 and 3. Then the plaint comes to be amended, the Transport Company is added as the third defendant, the Insurance Company changing its original number as a defendant from 3 to 4. But no corresponding amendment is made in the written statement which still remains 'the written statement of the defendant No. 3 herein.' But after the amendment of the plaint it is really the written statement of the defendant No. 4.
8. That Sohanlal Bagla has not been a partner ever of the Transport Company, a firm, appears to be patent. His own denial apart, the entries in the Register of Firms (the first defendant's document No. 1 at pages 30-31 of the admitted brief of documents: exhibit A) show two partners, Madanlal Poddar (the second defendant) and Babulal Saraogi, on July 1, 1958, on the basis of the notice given of the changes in the constitution of the firm : just as Sohanlal himself says (q. 5 put by me along with the two preceding questions in his evidence-in-chief). True it is that under Section 68 of the Partnership Act, 9 of 1932, the notice of the change recorded in this register shall be conciusiva proof of the facts therein stated, that is to say, of Madanlal Poddar and Babulal Saraogi having been partners at the relevant time. But this is so against these) two gentlemen who cr on whose behalf such notice was signed. This is no conclusive proof against a third party, such as Snow White, to whom it is always open to prove that Sohanlal (whose name is not recorded in the Register of Firms) is a partner none the less. But unfortunately nothing like any attempt has even been made to do so. It must therefore be held that Sohanlal has not been a partner of the Transport Company, a firm at all material times.
9. But does he hold out as such during the negotiations between him and Rajendra Jha of Snow White --negotiations which culminate in the two contracts of carriage, exhibit B? This, indeed, is the subject of the second issue. Mr. Roy, the learned counsel for Sohanlal, nurses a grievance that such an issue is there without being anything to that end in the plaint. That 'holding out' has not been pleaded in the plaint is true. But the materials which the Court presses into service for framing issues do not consist of pleadings alone. The allegations made in the pleadings form but one class of such materials. Allegations in answers to interrogatories delivered in the suit furnish another class. Indeed, cl. (b) of Rule 3 of Order 14 of the Procedure Code contains these two classes of materials from which the Court may frame issues. Clause (c) 'ibid' prescribes one more class of materials : the contents of documents produced by either party. Clause (a) 'ibid' contemplates still another class of materials: allegations made on oath by the parties, or by any persons present on their behalf, or made by the pleaders of such parties. There are thus so many materials or classes of materials from all or any of which the Court may frame issues. Mr. Roy does not therefore appear to be right when he wants me to confine myself only to pleadings for the purpose of fixing issues. I have the complete freedom to look to, and draw upon, other materials listed in Rule 3 of Order 14, a rule which Order 49 does not keep away from this side of the Court.
10. And I have done no more. While Mr. Dutt, the learned counsel for Snow White, opens his case -- and it has been such an exhaustive opening -- he makes an allegation that Sohanlal does hold himself out to be a partner in the course of negotiations with Snow White's representative. Mr. Roy alleges on behalf of Sohanlal that that allegation is not true. I reckon 'these allegations made by the pleaders of ..... parties.' Pleader means, as Section 2(15) of the Procedure Code defines any person entitled to appear and plead for another in Court, and includes an advocate, a vakil and an attorney of a High Court. So Messrs. Dutt and Roy are pleaders within the meaning of Clause (a) of Rule 3 of Order 14. On their allegations I frame the second issue, as I am entitled to do.
11. So, what is really Mr. Roy's grievance about? I have not overstepped the limits of the law in doing what I have done. The technical rules of pleading which Mr. Roy stresses are no doubt good. But what subserves the ends of justice is better still. This, is why Rule 3 of Order 14 is there, enabling the Court to add materials other than those to be had in the pleadings, in order to get at the proper issues on which depends so much a full and fair adjudication.
12. Does an issue as that take Sohanla! by surprise? Ware I convinced so, 1 would have 'suo motu' postponed the hearing, so that he might come prepared to meet the case. No postponement Mr. Roy prays the Court for. No room for surprise is there too -- the simple allegation being that in the course of negotiations between Jha and Sohanlal -- (both admit negotiations) -- Sohanlal says to Jha : I am a partner -- (a statement which Sohanlal does not admit to have made ever). More, documents over the signatures of Sohanlal come from the Transport Company. So it is 'holding out' by words spoken and by conduct. And the decision ultimately turns on believing one against the other and assessing the documents, if any. It is not Sohanlal's case that he carries on negotiations (in which he is alleged to have given out himself to be a partner) in presence of witnesses whom he has been denied the opportunity to examine. Sohanlal had only to say so to get an adjournment. Still I confess so does Mr. Dutt -- that it would have been better if Snow White had prayed for amendment of the plaint after the discovery and inspection of documents. But that is another matter. On things as they stand, the second issue does arise. I have stated why.
13. Order 14, Rule 3 apart, Snow White says in its plaint: Sohanlal is a partner. Sohanlal denies it in his written statement. So, here is a material proposition of fact affirmed by one party (Snow White) and denied by the other (Sohanlal). Hence, under Order 14, Rule 1 (3), it shall form the subject of a distinct issue. Just so has been the first issue here. Snow White, because of words spoken by Sohanlal and because of the Transport Company's documents over his signatures, takes him to be a partner and sues him as such.
During the carriage of the suit it appears that Sohanlal is not, in fact, a partner. Still it must necessarily be always open to Snow White to say: 'it matters not that you are not, in fact, a partner. By words spoken and by conduct you have represented yourself so. We took you to be that and got our plaint drawn up on that footing -- on the footing of your being a partner. Evidence has not to be pleaded. We have not pleaded it either'. So the matter of 'holding out' is inherent in the first issue itself. Indeed, no discussion of the first issue can be regarded as complete without determination of the question whether or not Sohanlal is a partner by 'holding out' within the meaning of Section 28 of the Partnership Act, 9 of 1932. So this is an issue which arises very much on the pleadings and which is involved in, also so consistent with, the case thereby made. It is therefore so unlike Kanda v. Waghu, AIR 1950 PC 68 which Mr. Roy cites and which reveals the framing of an issue by the appellate Court on custom not arising on the pleadings. No more need be said in justification of the second issue to which Mr. Roy cannot reconcile himself from the beginning to the end.
14. Snow White had 'very many transactions' with the Transport Company. From October 1959 till the lorry with the consignments in suit met with an accident (say, the latter part of April 1960) Snow white had 'whole business' with the Transport Company. By 'whole business' is meant that the entire area of North Bengal was allotted to the Transport Company for despatching goods. Prior to October 1959 Snow White had 'part business', that is to say, the goods bound for one destination (Maldah) were sent through the Transport Company. In all such transactions Rajendra Jha entered into agreements on behalf of Snow White (qq. 140-142, 144 and 143 to Rajendra Jha). So, this Jha must be a very competent person to speak about negotiations carried on by him with Sohanlal representing the Transport Company, as he did in fact on Sohanlal's own admission (qq. 98-102 and 115 to Sohanlal). Such a one (Jha) says that Sohanlal represented the Transport Company -- a fact Sohanlal admits too, as just now noticed -- and that he was one of the partners. Anxious to know why he says so, I intervene:
7. Court: What leads you to say that he was one of the partners of the firm?
In connexion with the business he used to come to our office since a pretty long time and in the course of conversations with him, I enquired of him as to what was his position in that company. To that he said he was one of the partners of that Company. Moreover, signed documents used to come from that company in which his signatures used to appear.
Not that every time Sohanlal came to Snow White and Rajendra Jha, he continued repeating: Look here: here I am, a partner of the Transport Company. Only at the initial stags, he had announced himself so (q. 150 to Jha). Quite a believable version. Had Jha said that Sohanlal muttered all the time: I am a partner: I am a partner, I would have disbelieved him.
15. Pitted against this evidence of Jha --evidence which attributes to Sohanlal a statement introducing himself as a partner -- is Sohanlal's denial: 'I did not tell Jha that I was a partner', as he says in answer to question No. 9.
16 to 18. In the circumstances, I ask myself: whose evidence should I prefer -- Jha's or Sohanlal's? (After discussing the evidence of those two witnesses the judgment proceeded:) The only result of Jha's guess and Sohanlal's apparently untrue evidence has been, if I may digress a little, that the consignment notes have not been proved in accordance with law: section 67 of the Evidence Act, 1 of 1872. But that is of little con-sequence. Apart from their forming part of the admitted brief of documents, exhibit A, (pp. 10 and 11), the transactions the consignment notes embody are admitted by both parties. So the doctrine of authentication by contents comes into play and these documents are proved by internal evidence afforded by their contents found to be correct on evidence aliunde: Mobarik Ali Ahmed v. State of Bombay: (S) 0043/1957 : 1957CriLJ1346 .
(On discussing the credibility of the witnesses the judgment proceeds:)
19. Thus, the role Sohanlal is called upon to play, and actually plays, is important by any standard. That such a one will give himself out as a partner looks so probable.
20. This probability is rendered greater still when the evidence of Sohanlal touching the consignments in suit is taken into consideration. He times his first visit to Snow White for business in November or December 1959. Jha puts it as October 1959 (paragraph 14 ante). The two --Jha and Sohanlal -- discuss the terms of business. Sohanlal does not give Jha to understand then that he has full authority to negotiate the terms and to close the deal. The discussions do not turn that way. Does he then tell Jha that he is no more than a mere employee, a mere clerk, of the Transport Company? Sohanlal is found parrying the question by referring to negotiations and absence of discussions on his full authority. But when the question is repeated, he has to admit 'no; I do not say so before Jha' (qq. 97-105: 94-96). The negotiations take a week or two to be finalized (q. 106). Again, they are concluded in one day (q. 93). Let this sort of contradiction which it is difficult to understand be ignored. In the course of negotiations, the point as to who the partners of the Transport Company are does not come up. Nor does he say to Jha that he is the son-in-law of a partner. But he does say that the negotiations arc subject to confirmation by the partners. His memory fails him and he cannot say if he carries on the negotiations on his own or under instructions from his superiors. One thing, however, he is certain of. Whatever negotiations he has, he has with Jha and Jha alone. Verbal negotiations all, the terms, are ultimately agreed to between him and Jha (qq. 108-115). That Sohanlal tells Jha of the negotiations being subject to confirmation by the partners draws largely on my belief. Truth seems to come out inadvertently from him when he says, as noticed towards the close of paragraph 19 ante, that as he goes out looking for customers and secures customers, negotiations must be finalised with him. (What he volunteers bringing in confirmation by partners is not ant to carry conviction). And that has been the case here too. Before Jha, Sohanlal talks like a partner -- one in authority -- and behaves so too, taking good care to conceal that he is a clerk, if that. More, he says, asked by Jha what he is in the Transport Company: 'Well, I am a partner'. I believe Jha when he says so. And that renders into a certainty the probability of Sohanlal having given himself out as a partner. I therefore find as a fact that Sohanlal does hold himself out as a partner of the Transport Company at the start of the negotiations for despatch of the consignments in suit.
21. The conduct of Sohanlal in all matters touching the aforesaid consignments after they are entrusted with the Transport Company lends assurance to the conclusion just reached. After the accident the lorry carrying the goods meets with, naturally enough Snow White gets restless and writes to the Transport Company. One such letter is dated April 28, 1960 : exhibit D. The Transport Company answers this letter and asks for the 'claim bill for the full value of the goods'. It is dated May 5, 1960, over the signature of Sohanlal for the Transport Company: exhibit E. The other two equally important letters, in the course of correspondence that goes on, are over his signatures too. One is dated July 1, 1960, dwelling on the delay caused by 'non-completion of the police enquiry' etc., and requesting an official receipt for Rs. 4,500 paid already to Snow White: exhibit J. Another is dated July 21, 1960, expressing regret for the delay in settling the claim and requesting Snow White to furnish a 'no objection' certificate for submission to the Insurance Company: exhibit L. The surveyor appointed by the Insurance Company, with the consent of none else than Sohanlal, sells the damaged goods to the highest bidder and makes over the sale proceeds amounting to Rs. 11,556.54 nP. to Sohanlal again who grants a receipt therefor: exhibit or (vide also the surveyor's report: exhibit 02, and qq. 18-25, 60-76 etc., to Sukhendu Dutt, the Insurance Company's witness). He signs the claim papers too lodged with the Insurance Company (q. 186). So it is there only to be seen what the status of Sohanlal is like. I call this contact of his in aid only to lend assurance, as I have stated, to my conclusion that he does hold out as a partner at all material times -- a conclusion which stands, independently of this consideration, on the foot of the evidence of Jha whom I believe and that of Sohanlal whom I disbelieve.
22. Before I part with this matter it believes me to notice an instance showing how addicted to falsehood Sohanlal seems to be. He would have me believe that the surveyor. Sukhendu Dutt, does neither consult him nor obtain his consent before he sells away the damaged goods (qq. 209, 210 etc.,). How a surveyor can dare do so is more than what I can understand. Sohanlal accepts the sale proceeds, not under protest even. Appearances arc therefore in favour of his having been a consenting party, just as Sukhendu Dutt says (q. Gq etc.). I believe Sukhendu Dutt. Not that false in one thing, false in every thing. But that caution is needed in assessing the evidence of Sohanlal.
23. In vain does Mr. Roy comment on the non-examination of one Jogmohan Jatia, a director of Snow White, who verifies the plaint. True it is, as I pointed out in Mohammad Shafique v. Union of India, : AIR1963Cal399 , that non-appearance of a party (personally knowing the whole of the circumstances as a witness discredits the truth of the case. But where (as here) a trusted employee like Jha, knowing all about the relevant facts and circumstances, is examined, it will be wrong to make a presumption adverse to Snow White, only because Jatia is not examined. Section 114 of the Evidence Act prescribes: the Court may presume. Not that the Court must.
24. Having regard to the foregoing considerations, I reiterate the conclusion I have already come to: that Sohanlal does hold out as a partner of the Transport Company at all material times.
25. I now address myself to the question whether or not the Transport Company insures the consignments in suit with the Insurance Company on account of or for the benefit of Snow White. A true answer to this question necessarily depends on the terms of the policy which has to be read and re-read. And that in turn gives rise to another question : what is the risk insured? So I turn to the policy, the document No. 1 of the fourth defendant, the Insurance Company, at pages 1-9 of the admitted brief of documents: Exhibit A. This Transport Company is the assured 'interested in or duly authorized as Owner, Agent or otherwise to make the Insurance.' More, it has promised 'to pay forthwith' (which means January 14, 1960, the date of the insurance) a certain sum as a premium for the insurance, in consideration therefore, the Insurance Company 'promises and agrees with the said insured' that it
'will pay and make good all such losses and damage hereinafter expressed as may happen to the subject-matter of this policy and may attach to this policy in respect of the sum stated below hereby insured with (which ?) insurance is hereby declared to be upon the goods as below .....'.
The amount insured is Rs. 1,00,000. This is 'the sum stated below hereby insured.' The goods are 'the general merchandise of any description whatsoever' (subject to certain exceptions which do not bulk large here) sent by the assured after they have been 'sufficiently packed in accordance with the customs of the trade, and covered by Tarpuline (tarpulin ?) when in transit by motor lorry .....' Again, 'in the event of damage
for which the (Insurance) Company may be liable occurring during the voyage 'from anywhere in India to anywhere in India', 'all claims for average must be accompanied by' a certain certificate. This, then, is the contract of insurance effective for a year: January 14, 1960, to January 14, 1931, 'subject to conditions and clauses' specifications of which attach to and form part of this 'open policy'. One such condition is that the sendings are 'to be declared for amounts not exceeding their nett invoice value'. Another condition specifies the risk covered which, in so far as it is material here, is that 'all sendings'' are 'to be insured against' road risks in accordance with the road risks clause providing--
Whilst any interest hereunder is being conveyed by motor lorry this insurance covers the risks or loss or damage to the said interest, if occasioned by the motor lorry ..... capsizing ..... or falling into a Khud .....
26. Now it is time to answer the questions I have posed in the beginning of the preceding paragraph. The interest conveyed by the lorry that meets with an accident is the interest of the carrier, the bailee, which the Transport Company is. And the insurance covers the loss to that interest only by the lorry falling into a ditch, as it does fall, in fact. This is the loss the Insurance Company is liable for, the, damage occurring during the voyage (in the sense of journey of any kind) undertaken by the assured. I fail to discover anything in any part of the policy by which the interest of the owner, Snow White, is insured. What is insured instead is the interest of the bailee, the carrier -- the Transport Company. Absolute legal ownership which vests in Snow White is insurable interest without doubt. But that is not what has been insured. More, insurable interest is not confined to legal ownership only. The Transport Company's is the legal liability to make good the loss in transit to Snow White. That is insurable in-terest too. And precisely that is what has been insured, as I gather from the wording of the policy itself.
27. The question whether or not the Transport Company intended to protect the interests of Snow White is one of fact. The terms of the contract of insurance, as the policy evinces, go to show that all the assured is out to have is its own protection against the loss to Snow White. Normally a bailee limits his own interest I to the amount of his liability for loss of the goods to the owner. The Transport Company has done no more, going by the policy.
28. Mr. Dutt refers to the following,--
(i) payment of insurance premiums by Snow White as recorded in the two consignment notes, exhibit B, and as spoken to by Jha (qq. 103-109 etc).
(ii) insurance for the full value of the goods, the relevant sendings having been declared, in terms of the policy itself, for their nett invoice value, or such other amounts as may be declared by the owners or consignors themselves, whichever be the less,
(iii) the Insurance Company undertakes to make good any loss in transit,
(iv) insurance against non-delivery is provided for (vide Clause 4(a) of the policy at p. 4 of the admitted brief of documents: exhibit A), and
(v) loss being recoverable from other carriers, it is warranted that the policy covers only the excess beyond the compensation payable by others (vide Clause 15 of the policy at page 7 ibid), and asks me to spell out therefrom the intention of the assured (the Transport Company) to cover Snow White's Interest as well, the insurance being on account of and for the benefit of Snow White. Of these five circumstances, the first one tends to support him a little. The very fact that the carrier accepts insurance premiums from the owner may indicate that he is to insure the owner's interest as well. I cannot put it any the higher. But the ultimate test is what he actually does. And what he actually dees is best reflected in the policy itself and what it proclaims. Going by that test, no word is there proclaiming that the owner's interest has been assured too. The remaining four considerations are consistent with the bailee's insurable interest only having been assured and in no wise proclaim that the owner's insurable interest has been assured as well. The words I find in the policy limit the assured Transport Company's liability to Snow White. The matter may be examined from another point of view. Snow White is to pay all the expenses inclusive of insurance charges which are to be added, and are added, in the consignment notes, exhibit B (Jha q. 109). So added, they merge themselves in freight and are considered to be part of the freight, as the two invoices dated April 20, 1960, (P. D. 2 and P. D. 1 in the supplementary brief of documents, part of Ext. A) read with the 2 consignment notes, exhibit 6, go to show. The invoices record the total charges as freights. That being so, it does not follow that the carrier obliges himself to insure the bailor's interest.
29. The cases Mr. Dutt cites may row be noticed. Waters v. Monarch Life and Fire Insurance Co., (1856) 25 LJ QB 102, shows an attempt by an insurance company to prevent the assured, ware-housemen and wharfingers, from recovering the whole amount of the loss by fire, on the ground that they have no insurable interest in the corn and flour destroyed so, beyond their charge of 7 d. a sack for landing, wharfage and cartage. The attempt fails. The words 'goods in trust' in the policy there are held to mean goods with which the warehousemen have been intrusted; not goods of which they are the trustees in the sense used in a court of equity. Indeed, that cart never be, as is clear from the observations of Crompton, J. in the course of arguments and discussions:
If it were confined to goods of which the plaintiffs were trustees in equity, the words 'in trust' would be unnecessary, as the legal property would be in the plaintiffs' (at p. 104).
What is insured and destroyed is the whole corpus of the goods. The whole of it is, therefore, to be made good, and not merely the particular interest of the suing werehousemen in it. But once the whole of it is made good so, the warehousemen (the plaintiffs) will be en-tiiled to keep for their own indemnity as much as will cover their interest in the goods and they will be trustees of the residue of the money for the absolute owners, even though no order is given by the absolute owners to the warehousemen to insure. In this context the following passage from Lord Campbell, C. J.'s judgment upon which Mr. Dutt strongly relies has to be read and understood :
'I think a floating policy of this kind may be kept up, the money received under it being to be applied for the benefit of those whose goods have been intrusted to the assured.'
Thus, the accent is on 'for the benefit of those whose goods have been intrusted to the assured.' 'For the benefit of is not synonymous with 'on account of'. Thus on the trol of Waters' case, (1856) 25 LJQB 102 it cannot be held that the Transport Co. takes out the policy on account of Snow White, the expression 'on account of necessarily implying agency. But it can be held that the Transport Company does take out the policy for the benefit of Snow White. Its own charges amount to no more than Rs. 34.87 nP. for the Raiganj consignment (P. D. No. 1 at p. 10 of the admitted brief of documents: Ext. A) plus Rs. 502.50 nP. for the Islampur consignment (P. D. No. 2 at p. 11 ibid), totalling Rs. 637.37 nP. But the insurance is for an amount exceeding Rs. 16,000. So the balance (Rs. 16,000 odd minus Rs. 600 odd) cannot be the Transport Company's, only because it has been a carrier, even if it has insured -- which it has not -- its interest in the goods as a carrier covering the freight it charges. Be it stated at the risk of repetition that it has insured the invoice value of the goods the loss of which it has to make good to the owner, the consignor. I know of no principle or reason which can secure for a common carrier such a windfall. To such a consideration be added the agreement between Snow White and the Transport Company, as spoken to by Jha and evidenced by the two consignment notes, that the goods entrusted to the Transport Company have got to be insured, as they have been, before, the journey to North Bengal starts, for covering the risk to the goods in transit. It must therefore be said that the Transport Company dees insure the sending for the benefit of Snow White. Looking to the policy and the surrounding circumstances, there appears to be no escape from such a conclusion. The question, in the ultimate analysis, is one of construction of the policy, whether in the case before me or in the case Mr. Dutt relies upon. Here, the Transport Company insures for itself and itself only, for the loss it may sustain in carrying the goods from anywhere in India to anywhere in India, the limit of the loss being the limit of the nett invoice value of the goods sent. There, the warehousemen first insure for themselves, their interest in the goods as warehousemen, and then as to any residue for the benefit of the owner. What goes in Waters' case, (1855) 25 LJQB 102, as the warehouseman's interest in the goods, as distinguished from the full value of the goods, the policy before me does not provide.
30. By parity of reasoning the London and Northwestern Railway Company v. Glyn, (1859) 28 LJ QB 188, which really Waters' case (1856) 25 LJQB 102 just reviewed governs, negatives the defence that the suing common earners only insured their own risk as carriers and holds that they (the common carriers) insured the whole value of any goods sent to them to be carried, just as the Transport Company before me has done. Indeed, the words employed in the policy appear to be significant to a degree: 15,000, was declared to be on 'goods their (the suing common carriers') own and in trust as carriers'. These are words the like of which is not to be found in the policy before me. Sendings are declared for amounts not exceeding their nett invoice value which comes to, going by the invoices dated April 20, 1960, in the supplementary brief of documents, part of exhibit A p. dd. 2 and 1:
To say so, however, is not to say that the actual contract in law is on account of Snow White. It is by and for, the Transport Company. If the whole of the sendings be destroyed or lost in transit, the Transport Company will have to make good the loss to Snow White. Because of the insurance, it will do so not out of Its own pocket, but from the amount it receives from the Insurance Company.
31. Both these decisions, it is interesting to observe, answer the contention of Mr. Majumdar, the learned counsel for the Insurance Company, that the sendings of the merchandise on April 20, 1960, cannot come within the purview of a policy taken out on January 14, 1950. A policy as the present is in the nature of a floating policy and by its very terms brings within it all sendings of merchandise during the time it is in force, that is to say, from January 14, 1960, to January 14, 1931 (clause 20 of the policy at p. 8 of the admitted brief of documents: Exhibit A).
32. Again, in both these cases, the plaintiffs are the assured between whom and the insurance companies sued against there is a privity of contract. What is upheld is 'the right of the assured to recover the whole value from the insurers,' the apportionment of what is recovered so being left to be settled between the bailors and the bailees. In the case in hand, the plaintiff is the absolute owner (Snow White) between whom and the defendant Insurance Company there is no manner of privity of contract; and still the bailor Snow White is out to recover the whole value from the Insurance Company. (More of which hereafter). I am therefore unable to see a contract in law between Snow White and the Insurance Company. My finding must accordingly be that the insurance the Transport Company goes in for with the Insurance Company is not on account of Snow White. It is on account of itself. It contracts for itself, and nobody else, as a common carrier limiting its liability for an amount representing its liability to the owner, Snow White, and therefore for the benefit of Snow White too.
33. On conversion I do not feel called upon to say more than this. I see no wrongful disposition by the Insurance Company. All it does is to sell the damaged goods, the containers leaking, in an emergency which brooks no delay, and that too with the consent of the assured, bound in contract with it, as noticed in paragraph 22 ante. Upon the whole of the evidence of Sukhendu Dutt of N. T. Kothari and Company, a firm of surveyors, sent by the Insurance Company, I see the right thing done lawfully, and not wrongfully. He sees the goods lying with the tin containers broken in a police-station near about Lalgola in the district of Murshidabad, the place of the accident. Worse, he sees the consign-ment badly dented, crushed and almost the whole of it leaking. Then, he comes down to Calcutta and asks Sohanlal to accept the goods on weighment, offering him 15% allowance as the charge tor repacking. He warns: 'if you do not accept it, we will have to dispose it of immediately in the interest of all', failing which there is possibility of still more leaking and total loss. But Sohanlal is adamant. He will not agree. Thereupon he suggests the sale of the lot. Not that he decides it Sohanlal agrees. He sounds the market by sending his men to different dealers and by writing letters to others and sells the lot to one out of two or three from whom he gets the highest offer. Apparently he, does not issue any advertisement. In such a predicament to wait for any response to advertisements is to ensure total loss. He is one concerned with the insured only with whom he is to settle the claim (qq. 15, 50, 51, 55, 18, 60, 68, 69, 78, 80, 76, 83 etc. to Dutt). No blemish attaches to him because he does not inform Snow White and leaves the assurer's liability to be settled with Snow White later. Do I see in all this an intention on the part of the surveyor, an agent of the Insurance Company, to deal with the goods in a manner inconsistent with the right of the true owner? I do not. I see instead a good attempt to get the best value of the goods in all circumstances and that too with as much 'reasonable assistance' as Sohan-lal is pleased to render him, in terms of Clause 17 (b) of the policy -- in which Mr. Majumdar sees Implied warranty and Mr. Dutt sees a claim procedure only. It does not matter which. That the goods so badly damaged secure Rs. 11,556.54 nP. for the benefit of Snow White -- a benefit which only the dishonesty of the Transport Company deprives it of -- speaks well, on the whole, of Dutt. This is therefore not a conversion in the Insurance Company which bears no comparison to Potter and Company, insurance brokers, whom Guy, after having been adjudicated bankrupt, instructs to collect insurance moneys due upon his policies and who do collect so, coming on the edge of conversion, as in McEntire v. Potter and Co., (1889) 22 QBD 438 a case Mr. Dutt cites.
34. At the same time I see conversion writ large upon Sohanlal accepting the sale proceeds amounting to Rs. 11,555.54 nP. and not making the money over to Snow White, upon Sohanlal making over the money, If that, to Madanlal Poddar and Madanlal Poddar sitting tight over it, and also upon the Transport Company not making over the sum to Snow White. Converters all, they have no manner of right to retain the money they are doing.
35. Now I come to the liability of the Insurance Company for the whole of the money. As the result of the sale held at its instance and by its agent, Rs. 11,559, 54 nP. is secured and made over to the assured. On what principle I can ask the Insurance Company to pay this sum again to Snow White, thus making the same payment twice over, I do not understand. But to pay so is not to pay the full sum insured, Mr. Dutt contends and rightly too. Going by the policy itself, it appears to be clear that the sendings are declared for their nett invoice value which is, as set out in paragraph 30 ante, Rs. 16,610.17 r.P. only. By the very terms of the policy, summarised in paragraph 28 ante, this figure will receive effect, and not Rs. 17,531.87 only -- the value declared by the owner. The sendings are to be declared for either of the two amounts, but 'whichever is the less'. The earlier one is less. So the Insurance Company is still liable to pay Rs. 16,610.17 nP. minus Rs. 11,556.54 nP. which is equal to Rs. 5,053.63 nP.
36. To whom? To the Transport Company by the terms of the policy. But how it is misbehaving has been noticed. It has misappropriated Rs. 11,55634 nP. So contented it is with that, that it does nothing to get the residue from the Insurance Company. But Snow White is a stranger to the contract of insurance. Still the contract of insurance between the Transport Company and the Insurance Company is so framed and in such circumstances as to make the former a trustee for Snow White. I accept Mr. Dutt's contention to that end. A considerable body of decisions cluster round the subject: Waters' case, (1856) 25 LJ QB 102 supra where Lord Campbell, C. J. says:
'They (the warehousemen, the assured) will be entitled to keep for their own indemnity (not provided for in the policy in hand) 35 much as will cover their interest in the goods, and they will be trustees for the residue of the money for the absolute owners' (here the whole of the money for Snow White):
(1859) 28 LJ QB 188 (Supra), Harmer v. Armstrong, (1934) 1 Ch 65, Vandepitte v. Preferred Accident Insurance Co; of New York, 1933 AC 70, where Lord Wright delivering the opinion of the Privy Council observes:
'If cannot be questioned that abstractly such a Trusteeship (the father Berry, the insured, creating a trust of that chose in action for her daughter Berry as beneficiary whom the insurance company should indemnify) is competent ..... The action should be in the name of the trustee; if, however, he refuses to sue, the beneficiary can sue, joining the trustee as a defendant'
Just as Snow White, the beneficiary has done, suing the Transport Company as a defendant; also Jhan Chandra v. Manoranjan Mitra : AIR1942Cal251 where Mukherjea, J. (as his lordship then was cites a number of authorities, English and Indian, reiterates the principle I have governed myself by, but on facts obtaining there finds no trust. It therefore matters little I that Snow White is a stranger to the contract of insurance. Still it can sue upon the contract to enforce the trust created in its favour impleading, as it has done, the recalcitrant trustee, the Transport Company. I there-fore find that the Insurance Company's liability to Snow White to be Rs. 5,053.63 nP., the figure I have arrived at in the concluding portion of paragraph 35 ante, a figure from which the Insurance Company cannot escape in any event, as Mr. Dutt rightly stresses.
37. I owe it to Mr. Majumdar to record, or, the lines of his submission, that payment of this sum (Rs. 5,053.63 nP.) by the Insurance Company to Snow White will be a valid discharge of its full liability wider the contract of Insurance, it being no longer liable to pay anything else in terms of the said contract to the assured, the Transport Company.
38. The Transport Company's liability, as also that of Sohanlal and Madanlal Poddar, are still there. Here is a tabular statement for that-
The nett invoicevalue of the goods ...
Less paid .
Rs. 16,610.17 nP.
Rs. 12,110.17 nP.
Less payable by theInsurance Company to Show White in pursuance of this judgment .
Rs. 5,053.63 nP.
Rs. 7,056.54 nP.
which, I hold, is the Transport Company's andthe first two defendants' liability to Snow While. It therefore gets
Res. 5,053.63 nP...
before suit ;
from the InsuranceCompany in terms of the directivecontained here :
from the TransportCompany and the first two defendants in terms ibid.
which, I hold, is the Transport Company's and the first two defendants' liability to Snow White. It therefore gets
before suit ;
Rs. 5,053.63 nP,
from the Insurance Company interms of the directive contained bore :
Rs. 7,056.54 nP.
from the Transport Company and the first two defendants in termsibid.
Total Rs. 10,610.17 nP.
which is the nett invoice value for which the sending of the merchandise have been declared in the contract of insurance before me.
39. I, therefore, answer the issues as under--
Issue No. 1..
No (Paragraph 8 ante).
Issue No. 2..
Yes (paragraphs9-24 ante).
issue No. 3..
Not on account ofthe plaintiff, but for its benefit (paragraphs 25-32 ante).
Issue No. 4..
By defendant 1-3only; not by defendent No. 4 (paragraphs 33-34 ante).
Issue no. 5..
No. save that it isliable for Rs. 5,053.63 nP. only (paragraphs 35-37 ante).
Issue No. 6..
The plaintiff isentitled to a decree as under--
For Rs. 5,053.63nP.
For Rs. 7,053.54nP.
from defendants no. 4.
from defendants nos. 1-3.
40. Hence, I enter judgment for the plaintiff, as above, (see the summary of finding under issue No. 6 in the preceding paragraph), with costs, a moiety of which will be paid by defendants 1-3 and the remaining moiety-by defendant No. 4 only.
41. I express my indebtedness for the assistance I have received from Mr. Dutt and Mr. Majumdar.