Judgement Appeal (No. 26 of 1924) from a decree of the High Court in its appellate jurisdiction (March 15, 1923) reversing a decree of that Court in its original jurisdiction. The appellants brought the present suit in the High Court against one Gora and the respondents (defendants 2 and 3). Against Gora they claimed the return of certificates and blank transfers in Law Rep. 53 Ind. App. 92 ( 1925- 1926) Maneckji Pestonji Bharucha V. Wadilal Sarabhai and Company respect of 129 shares in Alcock, Ashdown & Co., Ld., or Rs. 1,54,800, the contract price; against the respondents, Wadilal Sarabhai & Co. and Gora, they claimed delivery of the certificates and transfers, and payment of damages by Gora. The facts appear from the judgment of the Judicial Committee. The trial judge (Kajiji J.) made a decree, the effect of which was as follows Gora was ordered to deliver to the plaintiffs 129 shares or to pay Rs. 1,54,800 ; defendants 2 and 3 were declared to be in possession of 104 shares and were ordered to deliver them, to pay Rs. 71,500 damages, and to account for all dividends received. The defendants 2 and 3 filed separate appeals, which were tried together, and allowed. The reasons of the learned judges (Macleod C.J. and Crump J.) appear from the present judgment. 1925. Nov. 17, 19, 20. Clauson K.C., E. B. Raikes and H. Johnston for the appellants. Upon the default in payment the appellants were entitled to rescind the contract and call for the return of the certificates and transfers. A stipulation was to be implied in the contract that the seller could rescind upon default in payment. Time was of the essence of his contract to pay In re Schwabachen. (( 1908) 98 L. T. 127, 129.) That was especially so if the Bombay Stock Exchange rules applied. In s. 121 of the Indian Contract Act, 1872, the proviso as to a stipulation to the contrary includes an implied stipulation. But s. 121 does not apply, because the subject of the sale was a chose in action, not " goods." There was no delivery, since the name of the transferee had not been put upon the register. Sir John Simon K.C., Sir George Lowndes K.C. and Dube for the first respondents. But s. 121 does not apply, because the subject of the sale was a chose in action, not " goods." There was no delivery, since the name of the transferee had not been put upon the register. Sir John Simon K.C., Sir George Lowndes K.C. and Dube for the first respondents. Having regard to s. 76 and the illustration to s. 88 of the Indian Contract Act, 1872, and s. 2, sub-s. 6, of the General Clauses Act, 1868, the subject of the contract was " goods " within the former Act. The sellers had no right to rescind. The stipulation referred to in the proviso to s. 121 of the Act of 1872 is an express stipulation. Rule C. of the Bombay Stock Exchange was not shown to have been incorporated with the contract; the rules were not pleaded. There was a complete delivery in the only way in which delivery of the subject of the contract could be made Hibblewhite v. MMorine (( 1839) 5 M. & W. 462.); Pollock and Wright on Possession, p. 6. Clauson K.C. in reply. Time being of the essence of the contract, the seller had a right to rescind under s. 55 of the Indian Contract Act even if the property had passed Buldeo Doss v. Howe. (( 1880) I. L. R. 5 C. 64.) Gora was bound by the rule of the Bombay Stock Exchange to return the shares, and the appellants were in no better position. The subject matter of the contract was not " goods," but a chose in action ; the Court will apply equitable principles. Until the shares were placed in the transferees name on the register the seller had an equitable lien in respect of the price ; the buyer was in the position of a trustee In re Stuckley ([ 1906] 1 Ch. 67.); Fry on Specific Performance, 6th ed., pp. 549, 550. The subject of transfers of choses in action is dealt with in the Transfer of Property Act, 1882, ss. 130 et seq., but s. 157 excludes stocks and shares. A contract for the sale of shares is enforceable by specific performance Paine v. Hutchinson (( 1868) L. R. 3 Ch. 388.); Fry on Specific Performance, 6th ed., p. 678 ; the law in India is the same Specific Relief Act, 1877, ss. 12, 35. 130 et seq., but s. 157 excludes stocks and shares. A contract for the sale of shares is enforceable by specific performance Paine v. Hutchinson (( 1868) L. R. 3 Ch. 388.); Fry on Specific Performance, 6th ed., p. 678 ; the law in India is the same Specific Relief Act, 1877, ss. 12, 35. Sir John Simon K.C. in rejoinder on new contention in reply. There was no lien under Indian Contract Act, because it is excluded by s. 95, and s. 121 makes it clear that after delivery there is no lien. There was no equitable lien, because the subject of vendors lien in India is dealt with by the Transfer of Property Act, and s. 559 sub-s. 4, of that Act applies only to immovable property. [Reference was made also to the Specific Relief Act, 1877, s. 12 (a) illustration.] 1926. March 1. The judgment of their Lordships was delivered by Law Rep. 53 Ind. App. 92 ( 1925- 1926) Maneckji Pestonji Bharucha V. Wadilal Sarabhai and Company 22 VISCOUNT DUNEDIN. In March, 1920, the second plaintiff in this case, Arajania, who is not a certified share-broker, and who describes himself as the sub-broker of the first plaintiff Bharucha, who is a certified share-broker, sold on the Bombay Stock Exchange to first defendant, Gora, 129 shares of a company called Alcock, Ashdown & Co., Ld., for delivery on April 14, 1920. Neither of the two plaintiffs was the registered holder of any such shares. In order to make good the delivery the first plaintiff acquired the requisite number of shares in the market from various brokers and took from these brokers blank transfers signed by the registered holders along with the corresponding certificates. These certificates and blank transfers were handed by the second plaintiff to the first defendant at 6 p.m. on April 14. At 8 p.m. a cheque for the sum due under the contract in favour of the first plaintiff was handed to the second plaintiff. This cheque was dishonoured on the next day. The first defendant, having had the blank transfers and certificates thus delivered to him, made certain propositions as to the raising of money to Manilal, a partner in the firm of Wadilal, Sarabhai & Co., the second defendants, and handed the certificates and transfers to him. This cheque was dishonoured on the next day. The first defendant, having had the blank transfers and certificates thus delivered to him, made certain propositions as to the raising of money to Manilal, a partner in the firm of Wadilal, Sarabhai & Co., the second defendants, and handed the certificates and transfers to him. The second defendant in turn handed them to the third defendant, Ghia, again on certain propositions as to raising money. The cheque was never honoured, and the first defendant absconded. The present action is brought by the first and second plaintiffs against all the three defendants, asking for return of the certificates and blank transfers or otherwise for damages. Proof was led before the trial judge, who held in fact (1.) that plaintiff No. 2 acted as sub-broker to plaintiff No. 1, and that, accordingly, plaintiff No. 1 had a direct title to sue the other defendants; (2.) that Manilal, the defendant No. 2, knew when he took the certificates and shares that the cheque of Gora, defendant No. 1, was not likely to be honoured. He gave a decree in favour of plaintiff No. 1 against all defendants. The ratio of his judgment is to be found in the following passage " Gora was only an ostensible owner and the plaintiffs, who were the unpaid vendors, had equity in them, and they could have stopped Gora from getting these shares transferred in his name in the books of the Company, but if Gora had passed on these shares either by way of sale or by way of pledge to any third person who acted bona fide and without notice, then I certainly think that such a person would have a better title to these shares than the plaintiffs. But in this case it is abundantly clear that Gora himself felt that he was not the owner.....Manilal had notice that these shares were not paid for, and Ghia, being a mere nominee of Manilal, Ghia was in no better position than Manilal himself. They took these shares with the infirmity from Gora, and therefore they cannot claim these shares in priority to the plaintiffs." He had previously pointed out that in a question with the company the owners of the shares were the old owners who had signed the blank transfers. They took these shares with the infirmity from Gora, and therefore they cannot claim these shares in priority to the plaintiffs." He had previously pointed out that in a question with the company the owners of the shares were the old owners who had signed the blank transfers. On appeal by the second and third defendants the learned judges of the appellate Division of the High Court reversed the judgment of the trial judge and dismissed the action as against them. They held on the facts that plaintiff No. 2 had acted as agent for plaintiff No. 1, and that consequently, as plaintiff No. 2 was not a certified broker, the buyer was not affected by the rules of the Stock Exchange. This is only of importance as regards a certain rule C, with which their Lordships will afterwards deal. On the merits of the case they held that, under the Indian Contract Act, the property of the shares as sold passed on the delivery of the certificates and blank transfers to Gora; that, after that, plaintiff No. 1 had no claim against Gora except upon the cheque ; that consequently he had no claim against defendants Nos. 2 and 3, and could not have a judgment against defendant No. 3 for delivery of the certificates and transfers. They held further that s. 121 of the Indian Contract Act, which is in these terms " When goods sold have been delivered to the buyer, the seller is not entitled to rescind the contract on the buyers failing to pay the price at the time fixed unless it was stipulated by the contract Law Rep. 53 Ind. App. 92 ( 1925- 1926) Maneckji Pestonji Bharucha V. Wadilal Sarabhai and Company 23 that he should be so entitled," prevented the plaintiff from rescinding the sale, there having been no stipulation provided in the contract for sale that he should be so entitled. Appeal was then taken by the plaintiffs to the King in Council. Their Lordships agree that the stipulation referred to in the section must be an express stipulation, and that, as nothing was proved to the contrary, it must be presumed that the contract here was an ordinary contract for the sale of shares effected by bought and sold notes. Appeal was then taken by the plaintiffs to the King in Council. Their Lordships agree that the stipulation referred to in the section must be an express stipulation, and that, as nothing was proved to the contrary, it must be presumed that the contract here was an ordinary contract for the sale of shares effected by bought and sold notes. On the hearing of the appeal to their Lordships, the view expressed by the trial judge that Gora was only an ostensible owner of the shares and the plaintiff, who was the unpaid vendor, had the equity in them, was elaborated into an argument that, according to the law of England, there would be an equitable lien in favour of the unpaid purchaser and that that law applied. Such a view would be so far-reaching in ordinary Stock Exchange transactions that their Lordships think it necessary to emphasize their view of its unsoundness. In the first place, so far as lien is concerned, the law as to lien is statutory, and is contained in s. 95 and following sections of the Indian Contract Act. Sect. 95 applies to this case ; unless there is possession there is no lien. But, further, there seems to their Lordships a good deal of confusion arising from the prominence given to the fact that the full property in shares in a company is only in the registered holder. That is quite true. It is true that what Bharucha had was not the perfected right of property, which he would have had if he had been the registered holder of the shares which he was selling. The company is entitled to deal with the share holder who is on the register, and only a person who is on the register is in the full sense of the word owner of the share. But the title to get on the register consists in the possession of a certificate, together with a transfer signed by the registered holder. This is what Bharucha had. He had the certificates and blank transfers, signed by the registered holders. It would be an upset of all Stock Exchange transac tions if it were suggested that a broker who sold shares by general description did not implement his bargain by supplying the buyer with certificates and blank transfers, signed by the registered holders of the shares described. He had the certificates and blank transfers, signed by the registered holders. It would be an upset of all Stock Exchange transac tions if it were suggested that a broker who sold shares by general description did not implement his bargain by supplying the buyer with certificates and blank transfers, signed by the registered holders of the shares described. Bharucha sold what he had got. He could sell no more. He sold what in England would have been choses in action, and he delivered choses in action. But in India, by the terms of the Indian Contract Act, these choses in action are goods. By the definition of goods as every kind of movable property it is clear that, not only registered shares, but also this class of choses in action, are goods. Hence equitable considerations not applicable to goods do not apply to shares in India. Now s. 78 is as follows " Sale is effected by offer and acceptance of ascertained goods for a price .... or of a price for ascertained goods .... together with payment of the price or delivery of the goods." Here the goods were not ascertained goods at the time of the contract, for the contract was only for so many shares of Alcocks, not of any particular shares, but then s. 83 provides "Where the goods are not ascertained at the time of making the agreement for sale, but goods answering the description in the agreement are subsequently appropriated by one party for the purpose of the agreement, and that appropriation is assented to by the other, the goods have been ascertained, and the sale is complete." So soon, therefore, as Arajania, acting for Bharucha, handed Gora the certificates and transfers and Gora accepted them and gave the cheque, the goods became ascertained goods, the sale was complete and the property passed. From that time onward Bharucha and Arajania could only sue Gora on the cheque, or for the price of the shares unpaid in respect that the cheque had not been honoured. They had no longer any jus in re of the certificates and transfers. They had no statutory lien, for they had parted with possession, and, consequently, as they had no contract with defendants Nos. They had no longer any jus in re of the certificates and transfers. They had no statutory lien, for they had parted with possession, and, consequently, as they had no contract with defendants Nos. 2 and 3, they could not sue them for delivery of the shares, whether the defendants had got good title as against Gora or had not. Their Lordships have already mentioned that the trial judge held that the sale was between brokers, Law Rep. 53 Ind. App. 92 ( 1925- 1926) Maneckji Pestonji Bharucha V. Wadilal Sarabhai and Company 24 and was, therefore, under the rules of the Stock Exchange, from which finding the Court of Appeal dissented. In their Lordships view it is not necessary to decide this question of fact. They will assume, for the purpose of the argument, that the sale was as between brokers. That brings in rule C of the Bombay Stock Exchange, which is as follows "If the cheque given for the monies of the shares will not be honoured at the bank on the day following the day when the cheque is given, the shares shall have to be returned immediately to the person selling (them), and the person purchasing (them) shall have to take away those shares having paid the rupees in cash before two oclock on that very day. And if the person purchasing shall fail to do so, those shares will be sold off by auction before three oclock....." It was argued that the effect of this rule was to make the delivery not actual but conditional, with the result that the property did not really pass till the cheque was honoured. Their Lordships consider this argument quite unsound. The Indian Contract Act settles that property is to pass on delivery. Delivery is a fact, and the statutory result must follow. Further, the rule cannot be read as an express stipulation in the sense of s. 121, because it does not say what s. 121 provides must be said. But in truth, in their Lordships view, the rule in question had nothing to do with the perfection of contracts or the passing of property. It is for quite another purpose. The buyer may be unable, from temporary embarrassment, to meet his cheque on an exact day. But in truth, in their Lordships view, the rule in question had nothing to do with the perfection of contracts or the passing of property. It is for quite another purpose. The buyer may be unable, from temporary embarrassment, to meet his cheque on an exact day. Time is of the essence of this ordinary contract of sale of shares, therefore he is enjoined by the rule to hand back the shares ; he is given the latitude of paying up till 2 oclock, but if he does not do so then they are sold by the authorities, so as to fix, without further ado, the damages which are become due for breach of contract. Their Lordships will accordingly humbly advise His Majesty to dismiss the appeal with costs.