Leon Saubolle v. K.V Seyne & Bros.

The Judgment of the Court was as follows:—

The Plaintiff in this suit sues to recover from the Defendants a new “Art Caxton” Platen Machine, Model “E,” No. 102, or in default-a sum of Rs. 2,100, and Rs. 300 as damages and also a sum of Rs. 50 being the balance due under the agreement scheduled to the plaint. The first Defendants do not appear to defend the suit although they were duly served. By an agreement in writing, dated the 9th August 1913, and made between Leon Saubolle & Co. (therein called the owners) of the one part and the first Defendants (therein called the hirers) of the other part, it was agreed (inter alia) as follows: (1) the owners agreed to let on hire and the hirer agreed to take from the owners the machinery in suit, (2) the owners acknowledged the receipt of Rs. 300 for the option of purchase thereinafter contained, credit to be given to the hirer for this sum if the hirer exercised such option, the sum otherwise to belong absolutely to the owners, (3) the hirer agreed, so long as he thought lit to continue the hiring, to pay to the owners at Calcutta the sum of Rs. 300 without demand against delivery and Rs. 150 per month commencing from the date of delivery, (6) the hirer agreed with the owners that during the hiring (b) the machinery should be kept in the possession of the hirer and upon trust for the owners at his address and that on no account it should be sold, assigned or dealt with, or the possession thereof parted with, (9) that if the hirer (a) should make default in punctually paying any hire or instalment or (e) should fail to observe and perform any of the agreements and conditions contained therein and on his part to be observed and performed, then and in any such case it should be lawful for the owners to immediately put an end to the hiring and enter upon the premises in which the machinery might be for the time being, and to seize and take away the same, (11) that no allowance return credit or payment should be allowed or paid to the hirer in the event of the hiring being determined by the owners or the hirer as provided by cl. 9, but that the hirer should pay to the owners at Calcutta all arrears of hire, interest and damages for the breach of the ageement up to the date of such determination, (12) that the owners agreed that the hirer should have the option of purchasing the machinery at any time during the hiring by paying the sum of Rs. 2,100 only and that if the hirer should exercise such option, they would give the hirer credit against such purchase price for all payments which should have been made by him for hire, (13) that if the owners should grant to the hirer any time or indulgence, the same should not affect or prejudice the rights of the owners under the agreement.

The agreement appears to me to be an ordinary agreement of hire-purchase with the result that the property in the goods remained in the owners until the option to purchase was exercised.

On the 2nd December 1914 the first Defendants pledged the machine to the second Defendants for valuable consideration and the second Defendants took possession of the machine on that date. It is not disputed that the second Defendants acted in good faith and that there were no circumstances to raise any reasonable presumption that the first Defendants were acting improperly.

On the 17th May 1916 the Plaintiff by letter of that date determined the agreement of hiring under the provisions of cl. 9 of the agreement, a sum of Rs. 50 being due from the first Defendants on that date in respect of the last instalment payable until the full sum of Rs. 2,100 under the agreement had been paid, that is to say, at that date Rs. 2,050 had been paid under the agreement.

So far as the first Defendants are concerned, there is no defence to the suit and I make an order as against them for return of the machine and for payment of Rs. 50, being the balance of the last hiring instalment; they will also pay the costs of the suit on Scale No. II. In default of the machine being returned, I assess the damages at Rs. 1,470, being the value of the machine, less depreciation on the 17th May 1916.

So far as the second Defendants are concerned, they claim to retain the machine by virtue of the provisions of sec. 178 of the Contract Act, and, apart from authority, I should have thought that their contention was correct. The real point is a very short one, namely, whether the possession of the first Defendants under the hire-purchase agreement was possession within the meaning of sec. 178. Possession under sec. 178 means juridical possession as distinguished from mere custody: see Biddomoye Dabee v. Sittaram (1) and Seager v. Hukma Kessa , and it would appear that possession in Excep. I to sec. 108 of the Contract Act has the same meaning as possession in sec. 178, Naganada Davey v. Bappu Ghettiar , Pollock's Indian Contract Act, 3rd Ed., p. 524. If that is so, then I think the matter is concluded by authority in this Court, see Greenwood v. Holquette , where a person in possession of a piano under a hire-purchase agreement sold it and it was held that the purchaser did not get a good title as the possession of the holder under the hire-purchase agreement was not possession under sec. 108.

In Abdul Hassan Khan v. Rangi Lal (5) the Punjab Chief Court have held that possession under a hire-purchase agreement, where all the instalments are paid, is possession within sec. 178. I am not prepared to say that possession under sec. 178 has not the same meaning of the possession under sec. 108. That being so, as Greenwood v. Holquette is a decision of this Court which’ has stood for many years, I do not think it is for me to depart from it, and I treat it as decisive of this case and binding on me as I am not able to distinguish possession in sec. 178 from possession in sec. 108. It has probably been treated as the law guiding makers of hire-purchase agreements by those who advise them, and this is an additional reason why I should not depart from it.

In case this matter goes further, I should add that if for the purpose of my decision anything had turned on whether any instalments were in arrear at the date of the pledge, I should have given the Plaintiff an opportunity of adducing evidence on this point.

I should mention one further point which was raised on hehalf of the second Defendants, namely, so far as I apprehend it, that as part of the last instalment had been paid, the Plaintiff could not now enforce his rights under the agreement. I think the answer to this is to be found in cl. 13 of the agreement. The result is, that there will be a decree against the second Defendants for return of the machine, or, in the alternative, for payment of Rs. 1,470 as damages, but the Plaintiff will not be entitled to recover more than Rs. 1,470 in all by way of damages. I think the justice of the case will be met by making no order for costs against the second Defendants. The decree will carry interest at 6 per cent.

Messrs Watkins & Co., Solicitors, for the Plaintiff.

Messrs Dutt and Sen, Solicitors, for the Defendants.

M.N.K