FLORRIE EDRIDGE Vs. RUSTOMJI DANJIBHOY SETHNA

JUDGEMENT

(1.) This appeal arises out of a contract between the respondent and Richard Tilden Smith (since deceased, the present appellants added during the litigation as being representatives of his estate) this contract is contained in a letter dated 7 January 1926 signed by Tilden Smith and addressed to an agent for the respondent and duly accepted on behalf of the respondent. The letter was in the following terms: "Bombay House, Fort, Bombay, 7 January 1926. Dear Dinshaw.

(2.) Re.R.D. Sethna's matter. If Sethna will pay costs in connexion with the appointment of the receiver and the receiver's costs and give credit of any distribution he may receive in respect of receiver's distribution and write letters to his solicitor and to the receiver to the effect that he is satisfied that the affairs of the company have been properly conducted, I will pay him the sum of ? 5,000 invested by him in Ifold Herds Limited less such credit. Yours sincerely, (Sd.) R. TILDEN SMITH."

(3.) The circumstances under which this contract was made were that the respondent had in 1921 invested ? 5,000 in debentures in Ifold Herds Ltd., a limited company incorporated and registered in England. These debentures were part of an issue of ?40,000 the residue being taken by two companies which were the nominees of Tilden Smith, who had also put a large sum of money into the company as a share-holder and whose evidence was that his total interest amounted to a very large sum. It was on his introduction that the respondent took the debentures which he did in the sum of ?5,000. The venture having proved a failure, on 28 March 1925 the respondent instituted a debenture holders' action against the company in the Chancery Division of the High Court of Justice in London, claiming the usual relief including accounts and the appointment of a receiver. By an order in the action dated 30 April 1925 a Mr. Page was appointed receiver and the usual directions were given. During these proceedings the respondent made various allegations adverse to Tilden Smith in regard to his participation in the affairs of the company : it was also intimated by his solicitors that an investigation should or might be held into the management of the company.