DAWSONS BANK LIMITED Vs. NIPPON MENKWA KABUSHIKI KAISHA JAPAN COTTON TRADING COMPANY LIMITED

JUDGEMENT

(1.) THE appellents are a limited company incorporated under the Indian Companies Act. THEy carry on the business of bankers in Burma through the head office at Pyapon and various branches, one of which was at Bogale. THEy may be conveniently referred to as the Bank. THE respondents to the appeal are a trading company incorporated in Japan. THEy carry on business in Burma, and in the course thereof they purchase rice from paddy traders. THEy may be conveniently referred to as the Japanese company, or as the plaintiffs.

(2.) IN the neighbourhood of Bogale are to be found rice mills to which the traders bring their paddy for the purpose of having it milled. One of these mills, the Natchaungwa Mill, had been mortgaged by its owner to the Bank, and at -all times relevant to this appeal the Bank were mortgagees in possession of this mill and were milling paddy there for various paddy traders. For brevity's sake this mill will be referred to as the N. mill. It was managed by one Ba Maw, under the general supervision of the Bank's branch manager at Bogale, one Pya Cho.

(3.) THE facts which gave rise to the present litigation may now be stated. One: of the traders who brought his paddy to be milled at the N. mill was one Saw Kai. On April 18, 1930, a contract in writing was entered into between Saw Kai and the Japanese company by which the former sold to the latter 1,200 bags of Nagsein big mill special rice at a price therein mentioned, to be delivered on May 15, 1930, and to be milled at the N. mill. This contract was witnessed by Ba Maw, describing himself as manager of the N. mill. It is not in dispute that Saw Kai's produce at the N. mill was in fact subject to securities (of the nature hereinbefore described) in favour of the Bank for advances made to him, though it is denied that that fact was known to the Japanese company. All Saw Kai's produce at the N. mill was noted in the paddy register kept at the mill as being under security to the Bank.