1. This is an appeal by the defendants from the judgment of Greaves, J., whereby he gave judgment for the plaintiffs for Rs. 4,750 and costs.
2. The cases made by the plaintiffs and the defendants in the pleadings are fully set out in the learned Judge's judgment, and I need not refer to them in detail.
3. The case made at the trial for the plaintiffs was based upon the evidence of Bhuban Mohan Saha, who stated that he looked after the plaintiffs' business.
4. He alleged that the plaintiffs bought from Gillanders Arbuthnot & Co. 251 bags of Java Sugar, and that a delivery order for the same, signed by Gillanders Arbuthnot & Co., was brought to him by the broker of the plaintiff firm, viz., one M.L. Roy. The delivery order was as follows:
Dock Delivery Order,Calcutta, 25th April 1913.No. 479ToThe Superintendent,Kidderpore Docks.Indiaoneanna.
5. Please deliver to Baboo Lalit M. Nalini M. Shah, 251 bags Java Sugar Arqi: 17 Mark K.P.
Ex: S.S. Burma. Kidderpore Docks.
(Two hundred) No. 27 Berth.
fifty one bags.) Date
Gillanders Arbuthnot & Co.
6. According to his story, on the 30th May 1913, he accompanied by M.L. Roy went to the defendants' guddee and handed the delivery order to S.N. Rakshit, the defendants' manager, and arranged with S.N. Rakshit to take delivery of the sugar and sell the same at a commission; the plaintiffs were to bear the costs and charges relating to the sugar, and after the sale the proceeds were either to be brought to the plaintiffs or intimation that the money was standing with the defendants to the plaintiffs' credit was to be sent to the plaintiffs. In cross-examination he stated that at the time he made over the delivery order, he told Surendra Nath Rakshit that Makhan Lal Roy would accompany the representative of the defendant firm to take delivery of the sugar from the docks, and that he (Makhan Lal Roy) would sign the dock delivery order after inspecting the bags. He stated that Makhan Lal Roy had authority to sign the firm's name and get delivery. I should also add that he stated in cross-examination that the transaction in suit was the first transaction that his firm had had with the defendants. He also stated that at most of his visits, I think in all his visits, to the defendants' guddee, with one exception, he saw Surendra.
7. The defendants' case on the other hand was that B.M. Shaha did not bring the delivery order to the defendants but that on the 2nd June M.L. Roy and Khitish came to Surendra Nath and stated they had lot of sugar which they wished him to sell on commission, and that the defendants agreed to this: that on the following day, the 3rd June, Khitish brought to the defendants the delivery order, that at the time the delivery order was brought, it bore the endorsement which now appears upon it. (In passing I may say that I think the learned Judge has in error fixed the first interview on the 3rd instead of the 2nd and the 2nd interview on the 4th instead of the 3rd: it is, however, a matter which makes no material difference.)
8. It is common ground that the proceeds of the sale were not paid to the plaintiffs in accordance with the agreement alleged by the plaintiffs; and that the plaintiffs have not in fact received the proceeds.
9. It is necessary, therefore, in the first instance to arrive at a conclusion as to which of these two stories relating to the inception of the transaction, is true in fact.
10. The learned Judge has said as follows:
Turning once more to the issues in this case, with regard to issue No. 1, that is to say: Did the plaintiff enter into any agreement with the defendant firm on the 30th of May as alleged in paragraph 3 of the plaint ?' I feel some difficulty in deciding between the evidence called on behalf of the plaintiff and the evidence called on behalf of the defendant in this case, that is to say, as to whether the plaintiff's representative Bhuban Mohan Shaha, as he alleged, came on the 30th May to the defendant's guddee, or whether the story of the defendant is true that Bhuban Mohan Shaha never went there and that the whole business was transacted by Makhan Lal Roy and Khitish Chandra Pal. I do not think myself that it is really necessary to decide for the purpose of this case, which story in fact is true, but as the issue has been raised, I am bound to decide it, and so with some doubt I accept the story of the plaintiffs having regard to the corroboration afforded it by Khitish Chandra Pal that he had gone and entered into an agreement with the defendant firm on the 30th of May.
11. I am most unwilling to interfere with a finding of fact by the learned Judge who tried the case, and who has had the opportunity of seeing and hearing the witnesses; but in this case the learned Judge has expressed a doubt as to the correctness of his finding and has put on record the difficulty he has felt in coming to a decision. Although some weight must be given to the learned Judge's finding, even when it is given with doubt, as in this case, such a finding cannot be of such importance as a definite and decisive finding of fact, and it throws upon this Court the necessity of closely investigating the evidence and arriving at a conclusion for ourselves, if possible, on this question of fact. After such investigation I have come to the conclusion that the learned Judge's finding of fact, that the plaintiffs' story should be accepted, should not be supported. First of all, the evidence of B.M. Shaha as to this part of the case is almost entirely uncorroborated. I do not think that the admission of Khitish that he knew of the dispute between the plaintiffs and defendants is much, if any, corroboration of the plaintiffs' story; for it appears from his evidence that he did not receive any payment from the defendant firm after hearing of the trouble, and the last payment he did receive was on the 30th June; so that if this be accepted as correct, he did not hear of the trouble until the end of June, or beginning of July, and not by the 23rd June, as the learned Judge seems to think. This may have made a material difference in the learned Judge's mind.
12. Further, there are some features of the plaintiffs' story which seem to me improbable. I do not understand why the plaintiffs' manager, if he took the delivery order to the defendants on the 30th May and left it with them for the purpose of collecting the goods and selling them as he alleged, should not have endorsed the delivery order then and there. I think the reason alleged by the plaintiffs is not a sufficient or satisfactory one. Further, it is hard to believe the plaintiffs' manager's story as to his visits after the 30th of May, when he alleges the defendants told him they had not been able to get delivery of the goods owing to the weather, when, as a matter of fact, they had not only got delivery but had sold them. This was a fact which the plaintiffs' manager could have discovered for himself by the most casual enquiry at the docks, and which, of course the defendants most have known. Again, if it be true that the defendants expressly agreed to take the proceeds of the sale to the plaintiffs, or that information that the money was standing with the defendants to the plaintiffs' credit should be sent to the plaintiffs, I do not understand why the defendants, who are experienced in business, and against whose honesty as regards the money no accusation is made, should have failed to carry oat the arrangement, and should have paid the money to Khitish Chandra Pal and to Probodh--neither of whom, as far as the defendants were aware, were known to the plaintiffs.
13. On the other hand, the defendants' story as to this part of the transaction is, I think, the more probable, and it has the advantage of being corroborated in material respects by the entries in their books, and though criticism has been directed to some of the entries, it has not been sufficient to convince me that the entries relating to the receiving of the delivery order were made otherwise than in the ordinary course of business. These are some of the reasons for my coming to the conclusion that the defendants' story as to the inception of the business and the bringing of the delivery order should be accepted in preference to that of the plaintiffs.
14. The case, therefore, must be considered upon the assumption that M.L. Roy and Khitish had an interview with the defendants on the 2nd of June, and that on 3rd June Khitish brought the delivery order in pursuance of the arrangement made on the 2nd Jane, and that it then bore upon it the endorsement showing the name of the plaintiff firm by the pen of M.L. Roy.
15. It is clear that the goods belonged to the plaintiffs and that they have not received the money realised by the defendants by the sale of the (plaintiffs') goods. The defendants in the first instance sought to defend themselves on the ground that as the delivery order endorsed in blank had been handed to them by Khitish, from whom they had received instructions, they were entitled to pay over the proceeds to Khitish in accordance with the custom of the sugar trade, and that they had paid over the proceeds, Rs. 4,750, in three instalments, viz., two of Rs. 200 and Rs. 30 to Khitish, and one of Rs. 4,500 to Probodh Ch. Roy, son of M.L. Roy, at the request of Khitish. This was the case made at the beginning of the dispute; see the defendants' letter of 3rd July 1913 and the statement of defence, and it was, in my opinion, the real case made by Surendra Nath Rakshit in his evidence, although there were variations of it at different stages of the evidence.
16. The learned Judge decided against the existence of, any such custom, and it was not seriously urged in the appeal that the payment to Khitish by itself would amount to a discharge of the defendants.
17. But it was argued (1) that in effect it was M.L. Roy and Khitish who handed over the delivery order and that, as far as the defendants knew, M.L. Roy and Khitish were owners of the sugar and principals in the transaction;
(2) in the alternative, that, as far as the defendants knew, M.L. Roy was the owner and principal and Khitish was the broker acting for him;
(3) that if neither was in fact a principal, the defendants were entitled to treat them as being in the position of factors entrusted with the delivery order by the owners of the goods; and
(4) that the defendants had paid Khitish and Probodh the proceeds of the sale, and that such proceeds had reached the pocket of M. L. Roy, and consequently they were discharged.
18. It is to be noticed that this case was not made at the trial, and Section 108 of the Contract Act, upon which the learned Counsel for the defendants relied, was not mentioned to the learned Judge, though it was urged that the defendants could raise the question whether M.L. Roy was the agent to receive payment of the moneys in respect of the 25 tons of sugar sold.
19. As regards the payment, I think sufficient evidence has been given to justify as in coming to the conclusion that the moneys paid by the defendants to Khitish and Probodh, at the request of Khitish, were handed by them to M.L. Roy, that is, of course only for the purposes of this case. M.L. Roy has not been called as a witness and we have not heard his explanation, if he has any. The question, therefore,' remains, can the defendants escape from liability to the plaintiffs by relying on this payment to M.L. Roy through Khitish and Probodh.
20. As regards this matter, it must be remembered that the delivery order was made in the name of the plaintiff firm: it was endorsed in the name of the plaintiff firm, though by the pen of M.L. Roy. The account was opened in the name of the plaintiff firm in the defendants' books in accordance with instructions from M.L. Roy or Khitish, as alleged by the defendants. M.L. Roy's name does not appear in the books, in the defendants' letter of 3rd July 1913 or in the statement of defence.
21. The defendants had known Khitish as a broker and M.L. Roy also as a broker, they had never heard the name of the plaintiffs' firm before this transaction.
22. No suggestion was ever made that the defendants regarded M.L. Roy as the owner of the goods until the trial of the case, and then what happened is described by the learned Judge as follows:
He stated in cross-examination that it was their custom to pay the persons who brought the delivery order signed, and that these persons received payment, and that with regard to the transaction in suit he understood it was the joint transaction of Khitish and Makhan, and that Khitish said, with reference to the transaction, that he was Makhan's underbroker, Makhan being the principal, and the witness said: 'My case is, that Makhan was the principal and Khitish the agent, and I had no concern with any one else.' I remark, with regard to this in passing, that no such case was made in the written statement, nor was it made until this suit had proceeded for sometime. I gather from Counsel for the defendants in this case that he does not rely on any such case, that is to say, that Makhan and Khitish were principals in the transaction.
23. Having regard to the evidence and the circumstances of this case, I cannot believe that the defendants ever regarded M.L. Roy as anything more than a broker, and Khitish as his underbroker; and I am convinced beyond all reasonable doubt that the only thing they cared about was that they had received the delivery order endorsed is blank from Khitish, and consequently they considered they were entitled to pay him and were fully discharged thereby.
24. The reliance on the payment to M.L. Roy was an afterthought; but in view of the evidence I think they had notice that the principals were the plaintiff firm and that M.L. Roy was broker, and if they wished to rely on the payment to M.L. Roy as a discharge, they should have proved either that the plaintiffs had given authority to M.L. Roy to receive the money or that the plaintiffs had so acted as to make the defendants believe that they had done so. This, in my opinion, they have failed to do.
25. I ought to mention that the learned Counsel for the appellants contended that if the plaintiffs' story as to the alleged contract was not accepted, the form of the action was wrong; but that he did not intend to take any technical objection on that ground.
26. The defendants had very considerable latitude in raising new points both in this Court and in the Court of First Instance, and I think that there are sufficient materials before us to enable us to come to a conclusion as to the rights of the parties upon the merits of the case, and in my judgment this appeal should be dismissed with costs.
27. I agree.