Judgement Appeal (No. 36 of 1937) from a decree of the High Court in its civil appellate jurisdiction (March 18, 1936), reversing a judgment and decree of the same Court in its original civil jurisdiction (July 16, 1929). On May 4, 1926, the respondents, Ramjiban Serowgee, brokers and merchants of Calcutta, entered into three contracts with three mills respectively for the purchase of 250 bales of gunnies. On the same day the respondents sold the same quantity of 250 bales to the International Export Company, Limited (hereinafter called the "Export Company"). The conditions of all the contracts were identical, the form used being the ordinary form approved by the Indian Jute Manufacturers Association. Clause 3 of the terms and conditions provided that Payments to be made in cash "in exchange for....mates receipts (which....are to be handed....to the sellers representatives) "; and by clause 4 " The buyers hereby acknowledge that so long as such....mates receipts (whether in sellers or buyers name) are in possession of the sellers, the lien of the sellers as unpaid vendors subsists both on such mates receipts and the goods they represent until payment in full." The contracts stipulated for delivery free alongside export vessel in the port of Calcutta. The Export Company booked freight space with the appellants, Nippon Yusen Kaisha, shipowners, and it was stipulated in the shipping order (inter alia) that the mates receipts must be exchanged for bills of lading. On May 4, 1926, the Export Company gave shipping instructions to the respondents, which they passed on in the same terms to the three mills, and in due course the goods were sent on board two of the appellants vessels for conveyance to Kobe, Japan, and mates receipts, in the name of the shippers, the Export Company, were delivered to the mills sircars on May 17, 18, 24 and 25. The appellants forthwith issued the respective bills of lading to the Export Company without the mates receipts being given in exchange, but a letter of guarantee or indemnity was taken from the Export Company by the appellants. The respondents obtained the mates receipts from the mills against payment for the goods, and then tendered the mates receipts to the Export Company, who defaulted in payment. The respondents obtained the mates receipts from the mills against payment for the goods, and then tendered the mates receipts to the Export Company, who defaulted in payment. Thereupon the respondents, on May 27, 1926, notified the appellants in writing that they had an unsatisfied lien or claim for the price of the goods, and that bills of lading must not be issued by the appellants until the mates receipts had been surrendered to them. By that time, however, the Export Company, having the bills of lading in their possession, had resold the goods to purchasers in Japan, and had drawn bills of exchange for the price en the purchasers, which bills they had discounted with the International Banking Corporation and had endorsed the bills of lading to that Bank by way of security. The goods were in due course delivered by the appellants to the purchasers on presentation of the bills of lading. On June 12, 1926, the respondents issued a writ, claiming as against the appellants (inter alia) a declaration that they were entitled to stop the goods and take delivery of them, and in the alternative, and as against the appellants and the Export Company, they claimed Rs.54,000, the price of the goods. The facts appear more fully from the judgment of the Judicial Committee. The Export Company did not appear at the trial and judgment was entered against them by default. The trial judge (Buckland J.) dismissed the suit as against the appellants. On appeal by the respondents the High Court in its appellate jurisdiction (Derbyshire C.J., Costello and Panckridge JJ.) allowed the appeal, and the present appellants were directed to pay to the respondents Rs.49,625, the agreed amount of the damages. The reasons for the decision of the trial judge and of the Appellate Court appear from the judgment of the Judicial Committee. 1938. Feb. 14, 15, 17. Sir Robert Aske K.C. and W. Lennox McNair for the appellants. The scheme of the contract is that the seller places the goods alongside the ship, and when he has done that the property passes to the buyer. If the respondents had wished to retain the property they could have done so in various ways they could have had the mates receipts made out in their own name; they could have required the ship to issue bills of lading in the name of the sellers. If the respondents had wished to retain the property they could have done so in various ways they could have had the mates receipts made out in their own name; they could have required the ship to issue bills of lading in the name of the sellers. The most important part of the contract as indicating intention is the fact that the respondents stipulated for a contractual lien, which could not exist if the property were still in them. They therefore knew that on delivery of the goods alongside the ship on shipping instructions notified to the ship that the contracts were made with the ship by the Export Company, and the mates receipts being in the name of that company, that the only right of the ship was to issue bills of lading in the same name as the mates receipts. The appellants had no right to issue a bill of lading in any other name, and therefore the general property in the goods passed. At the time the mates receipts were given and the ills of lading were issued the respondents had neither possession of the goods nor of the mates receipts, and they had no right to possession of either. They had merely a contractual right against the Export Company. The first matter is whether the ship was under any obligation to the respondents with regard to the issue of the bills of lading, and that falls into two branches (a) what is the general law with regard to the duty of a ship in issuing bills of lading ? and (b) how are those general principles to be applied to the respondents who, it is submitted, have no contractual right as against the ship. It is stated in Scrutton on Charterparties and Bills of Lading, 13th ed., at p. 172, that " The mates receipt is also recognition of property in any person named therein as owner.... "The master will therefore be justified in delivering bills of lading to such a person; or to a person proved to be owner of the goods, even though the mates receipt is not produced, if he has received no notice of other claims. . . ." The position has always been regulated by Hathesing v. Laing. (( 1873) L. R. 17 Eq. 92.) Evans v. Nichol (( 1841) 3 Man. . . ." The position has always been regulated by Hathesing v. Laing. (( 1873) L. R. 17 Eq. 92.) Evans v. Nichol (( 1841) 3 Man. & G. 614, 619.) shows that where a mates receipt is issued in the name of a particular person the ship is estopped from issuing the bill of lading to any one else, and must issue it to the person named in the receipt. Further illustrations in this connection are Craven v. Ryder ((1816) 6 Taunt. 433.); and Cowas-Jee v, Thompson. (( 1845) 5 Moo. P. C. 165.) The Court of first instance and the Appellate Court were right, it is submitted, in holding that the appellants did not act wrongfully in issuing the bill of lading to the person named in the mates receipts—the Export Company. The next question is, had the respondents any property in the goods, either generally or specially, which would enable them to maintain an action of trover against the appellants ? If the Board decide that point in favour of the appellants that would dispose of the appeal. If, contrary to the appellants submission, it is decided that the respondents have a sufficient right of property to maintain trover, then the question arises as to where is the better title to receive the goods. Is that title in the respondents by virtue of these contractual terms, or is it in the bank who are endorsees of the bills of lading ? It is submitted that the first point should be decided in favour of the appellants on the ground that the respondents never had anything other than a personal right, which was enforceable by injunction, to restrain the Export Company from dealing with the goods contrary to their agreement with the respondents. If their right was in truth of that character then they had no title to maintain trover. [Reference was made to Sewell v. Burdick (( 1884) 10 App. Cas. 74, 95-6.); Howes v. Ball (( 1827) 7 B. & C. 481.); and Official Assignee of Madras v. Mercantile Bank of India, Ld. (3)] It is submitted on those authorities that, even in a case where, as in the Mercantile Bank of India case ([ 1935] A. C. 53, 58, 64; L. R. 61 I. A. 416.) and in In re Hamilton Young & Co. (3)] It is submitted on those authorities that, even in a case where, as in the Mercantile Bank of India case ([ 1935] A. C. 53, 58, 64; L. R. 61 I. A. 416.) and in In re Hamilton Young & Co. ([ 1905] 2 K. B. 772.), which this Board approved in the Mercantile Bank of India case (3), there was a letter of hypothecation of the documents of title, and those documents were deposited by way of security, there is no right other than one to enforce the contract by injunction. The shipowner must, in accordance with the most the authorities lay down, deliver to the person who has the immediate right to possession. A person with merely an equitable right in the goods cannot ask the shipowner to deliver the goods to him at his peril—there is no authority for such a proposition. The only right of a plaintiff claiming some interest in the goods as against a carrier is the right to sue in conversion, and since that right depends either on actual possession or the right to immediate possession, and the plaintiffs in this case, it is submitted, had neither, the only remedy which might in certain circumstances have been available against the carrier is not open to the respondents in this case. On the question as to where the onus of proof lay to prove that the appellants acted in good faith reference was made to s. 178 of the Indian Contract Act, IX. of 1872; to Whitehorn Brothers v. Davison ([ 1911] 1 K. B. 463, 481, 487.); Official Assignee v. Khoo Saw Cheow ([ 1931] A. C. 67, 70-1.); Pope v. Official Assignee, Rangoon (( 1933) L. R. 60 I. A. 362, 364.); Bhup Narain Singh v. Gokhul Chand Mahton (( 1933) L. R. 61 I. A. 115, 122.); Gobind Chunder Sein v. Ryan (( 1861) 9 Moo. I. A. 140, 160.); and Heap v. Motorists Advisory Agency, Ld. ([ 1923] 1 K. B. 577, 589.)] The foregoing are the authorities on " onus," but it is submitted that it is unnecessary for the appellants to rely on the Factors Acts at all reliance is placed on the common law right. [Reference was also made to Lickbarrow v. Mason. ([ 1923] 1 K. B. 577, 589.)] The foregoing are the authorities on " onus," but it is submitted that it is unnecessary for the appellants to rely on the Factors Acts at all reliance is placed on the common law right. [Reference was also made to Lickbarrow v. Mason. ((1787) 2 T. R. 63.)] Finally, there is no evidence of any knowledge on the part of the appellants of the particular clauses of the contract in question, or of the respondents’ interest in the goods; indeed, the evidence is that the appellants did not know the respondents at all. A. M. Dunne K.C. and J. M. Pringle for the respondents. As between the sellers and the buyers—the respondents and the Export Company—there is no doubt that the basic reason for the incorporation of clauses 3 and 4 in the contract was to ensure that bills of lading should be issued only on the production of the mates receipts. That is the basis of the transaction. The moment that system was changed by the ship issuing the bills of lading the whole of the sellers contract with the buyers was gone. If a lien must import possession, it is submitted that the possession must remain in the sellers. In this trade in gunnies shipowners know perfectly well the terms of the contract between the buyers and the sellers. The duty of the ship to the sellers arises in consequence of the knowledge of the shipowners of the usage of the trade in regard to deliveries under those contracts, and of the rights of the parties arising out of the possession of the mates receipts. The sellers have, as long as the mates receipts are in their possession, a right to the possession of these goods under the lien. They have a lien both on the goods themselves and on the mates receipts, which represent the goods, until payment in full. It is impossible, on the true construction of the contract, to suggest that on the goods being placed alongside and the mates receipts being received, the possession has passed to the buyers so that there could be no lien at all. If possession has not been given, the property will not have been passed. It must be either delivery of possession or payment which passes the property under the Indian Contract Act. If possession has not been given, the property will not have been passed. It must be either delivery of possession or payment which passes the property under the Indian Contract Act. The mates receipts had to be taken by the buyers before they could get bills of lading. Under those circumstances it is submitted that it is not at all a question of there being a mere equitable right left in the sellers. The right to immediate possession remains in them under the provision for the lien. Neither possession nor property had passed. Assuming that the buyers did get possession, the possession which they obtained by reason of the delivery of the goods to the ship in their name, was a possession which they held for the sellers. The buyers have acknowledged the sellers lien upon the goods, and it is submitted that if a lien imports possession in the person claiming the lien, it must be a fair construction of the contract that the possession which the buyers had got from the sellers was not intended to pass the property out and out to them, but was possession for the sellers benefit. That is a reasonable construction of the contract. There remained in the sellers a special property; they had not parted with possession. Next, there was in fact a duty on the appellant shipping company not to part with the bills of lading to the buyers until production of the mates receipts. In breach of that duty they handed to the buyers, without any notice to the sellers, bills of lading without production of the mates receipts. It makes away with the whole of the property, and the sellers protection under the standardized contract is gone. The appellants owed a special duty under the circumstances of this trade not to issue bills of lading without the production of the mates receipts Nippon Yusen Kaisha v. Mahaliram Ramjidas. (( 1930) 52 Cal. L. J. 365, 373, 402.) The appellants were aware of the usage and custom of this trade in gunnies in Calcutta—that the mates receipts were to be handed by the ship to the seller, and were to constitute in the hands of the seller a right to payment from the buyers—the shippers —and that the buyers could only get the bills of lading upon production of the mates receipts. That would ensure the rights of the sellers under the contract and the lien. [Reference was made to the evidence dealing with the question of custom.] Hathesing v. Laing (L. R. 17 Eq. 92.) lays down a general proposition that the master or shipowner, unless he has notice of a prior claim, is entitled to issue bills of lading to a shipper whose name alone comes before him in connection with the transaction. The appellants in the present case say that therefore the master was justified, even if he had not got the mates receipts, unless he had notice of somebody elses claim against the shipper, in issuing the bills of lading. The generality of the rule in Hathesing v. Laing (L. R. 17 Eq. 92.) must be admitted, but the only question in the present case is whether the circumstances are such that they impute the knowledge to the shipowners that in the sellers interest they should not issue bills of lading to a person who has not the mates receipts. That knowledge must be imputed to the appellants for the following reasons (a) They must be understood to have knowledge of the terms of the contract in the trade under which there is the system of placing alongside by the sellers, which gives them (the sellers) the right to have the mates receipts, (b) By the shipping order which the buyers obtained from the shipping company to hand to the master it was provided that the bills of lading were to be issued only on the production of the mates receipts, (c) The appellants took letters of indemnity from the Export Company, to whom they gave the bills of lading. The circumstances in this case distinguish it from Hathesing v. Laing. (L. R. 17 Eq. 92.) The letter of indemnity is strongly relied on. Assuming that there is no duty not to issue bills of lading without the production of the mates receipts, then it is contended that notice of the sellers claim having been given . to the ship on May 27, 1926, when the goods were n the high seas, the sellers were entitled to a special property in the goods and were entitled to immediate possession from the appellants. No higher title would pass to the Bank as against the sellers than the Export Company possessed. [Reference was made to ss. to the ship on May 27, 1926, when the goods were n the high seas, the sellers were entitled to a special property in the goods and were entitled to immediate possession from the appellants. No higher title would pass to the Bank as against the sellers than the Export Company possessed. [Reference was made to ss. 77, 78 and 79 of the Indian Contract Act; and on the question of onus to Bhup Narain Singh v. Gokhul Chand Mahton. (( 1933) L. R. 61 I. A. 115, 123.) Reference was also made to Rash Behari Karuri v. Narain Das Dorilal. (( 1922) I. L. R. 50 C. 399, 408.)] The principle in Whitehorn Brothers v. Davison ([ 1911] 1 K. B. 463.) does not apply here; there was no question about there being a valid transfer until avoided; there was no right in the Export Company to transfer at all. Heap v. Motorists Advisory Agency, Ld. ([ 1923] 1 K. B. 577.) is clearly in point and is relied on. J. M. Pringle followed, and referred to Heap v. Motorists Advisory Agency, Ld. (Ibid. 589.); In re Shipton, Anderson & Co. and Harrison Brothers & Co.s Arbitration ([ 1915] 3 K. B. 676.); Halsburys Laws of England, Vol. 25, p. 182, para. 324, and note (e); Folk v. Fletcher (( 1865) 18 C. B. (N. S.) 403.); Moakes v. Nicolson (( 1865) 19 C. B. (N. S.) 290.); Dodsley v. Varley (( 1840) 12 A. & E. 632.); and Benjamin on Sale of Personal Property, 7th ed., p. 230. Sir Robert Aske K.C. replied. As soon as the goods are placed alongside by the sellers under the contract the property passes, and the sellers have neither property nor possession; they have to rely for protection on such control as the mates receipts give them. A mates receipt is not a document of title Official Assignee of Madras v. Mercantile Bank of India, Ld. ([ 1935] A. C. 53.) If the sellers had taken the mates receipts in their own name there would have been no difficulty. A mates receipt is not a document of title Official Assignee of Madras v. Mercantile Bank of India, Ld. ([ 1935] A. C. 53.) If the sellers had taken the mates receipts in their own name there would have been no difficulty. Whatever the rights of the sellers may be as against their buyers, as against the appellants, who are merely carriers of the goods, they have no rights whatever in respect of delivery of the goods, except in conversion, and unless the respondents can prove that the ship was guilty of conversion, it is not necessary even to consider what are the relative merits of the claim as between the sellers and the assignees of the bills of lading. [Reference was made to Gobind Chunder Sein v. Ryan (( 1861) 9 Moo. I. A. 140, 164.), and to Scrutton on Charterparties and Bills of Lading, 13 ed., pp. 228 and 192 (note 0).] March 11. The judgment of their Lordships was delivered by LORD WRIGHT. The appellants in this appeal, a Japanese ship-owning company, have been held liable to pay to the respondents, who are brokers and merchants at Calcutta, damages representing the value of certain consignments of jute gunny bags. Before explaining the issues in the case it will be convenient to state in briefest possible outline the material facts and documents. On May 4, 1926, the respondents entered into three contracts with three mills respectively for the purchase of a total quantity of 250 bales of gunnies. On the same day they sold the same quantity of 250 bales to a company called the International Export Company, Limited, carrying on business in Calcutta, who will be referred to as the Export Company. The conditions of all the contracts were identical, the form used being the ordinary form approved by the Indian Jute Manufacturers Association. This is the form under which the entire export business in gunnies in Calcutta is conducted. Clauses 3 and 4 of the terms and conditions are material— "3. Payments to be made in cash in exchange for delivery order on sellers, or for railway receipts, or for docks receipts or mates receipts (which docks receipts or mates receipts are to be handed by a dock or ships officer to the sellers representatives)." "4. Clauses 3 and 4 of the terms and conditions are material— "3. Payments to be made in cash in exchange for delivery order on sellers, or for railway receipts, or for docks receipts or mates receipts (which docks receipts or mates receipts are to be handed by a dock or ships officer to the sellers representatives)." "4. The buyers hereby acknowledge that so long as such "railway receipts or mates receipts (whether in sellers or buyers name) are in possession of the sellers, the lien of the sellers as unpaid vendors subsists both on such railway receipts or docks or mates receipts and the goods they represent until payment in full." The contracts stipulated for delivery free alongside export vessel in the port of Calcutta. The Export Company in due course had engaged freight from the appellants. The terms of the engagement are taken as evidenced by a document, called a shipping order, from the appellants Calcutta branch to the ships commanding officer. It was there stipulated that the goods should be sent alongside on notice, that freight was payable in Calcutta, and that the receipt of cargo issued by the ship (that is the mates receipt) must be exchanged for bill of lading. On May 4, 1926, the Export Company gave shipping instructions to the respondents, which they passed on in the same terms to the three mills. On May 17 and 18, 1926, two of the mills sent alongside certain parcels to the Moji Maru, and the remaining quantities were sent to the Hakata Mara. These two vessels were owned by the appellants, who received the parcels in accordance with the shipping engagement between themselves and the Export Company, and issued mates receipts as presented to them for signature by the mills; these receipts were in the following terms "Received on board....for conveyance to Kobe from [the Export Company] the under mentioned goods subject to the terms "and conditions of the Companys Bill of Lading." These receipts were severally delivered to the mills sircars, who had tendered with the goods a request to the steamer in the following terms "Please receive on board from the above mills the undernoted goods, shipping documents "for which have been taken out in the name of Messrs. International Export Co., Ld., and hand mates receipt to our sircar." In three cases on the same day as the mates receipts were severally given, and in one case on the following day, the appellants issued the respective bills of lading describing the goods as shipped by the Export Company and deliverable to order at Kobe, without the mates receipts being given in exchange, but a letter of guarantee or indemnity was in each case taken from the Export Company by the appellants. At these several dates the respondents were not themselves in possession of the mates receipts, which they obtained from the mills a few days later against payment. When they thus obtained the mates receipts they tendered them to the Export Company, who defaulted in payment. Thereupon the respondents, on May 27, 1926, gave notice in writing to the appellants that they had an unsatisfied lien or claim for the price and were entitled to retain the relative mates receipts, and that bills of lading must not be issued by the appellants until mates receipts were surrendered to them. By that time, however, the Export Company, having the bills of lading in their possession, had resold the goods to purchasers in Japan, and had drawn bills of exchange for the price on the purchasers. These bills of exchange they had discounted with a bank (sometimes referred to in the proceedings as the Taiwan Bank, but in fact the International Banking Corporation, a subsidiary of the National City Bank of New York), and had endorsed to them by way of security the bills of lading. On June 12, 1926, the respondents, as they could get no satisfaction from the Export Company, and as the appellants replied that they had passed bills of lading on the shippers (that is, the Export Companys) own letter of guarantee and referred the respondents to the shippers, issued their writ, claiming payment of the price from the Export Company and damages from the appellants. In due course the vessels, the Moji Maru having sailed on May 19 and the Hakata Maru on June 4, 1926, proceeded to their destination, and the goods were delivered at Kobe on presentation of the bills of lading. In due course the vessels, the Moji Maru having sailed on May 19 and the Hakata Maru on June 4, 1926, proceeded to their destination, and the goods were delivered at Kobe on presentation of the bills of lading. An application which had been made by the respondents for an injunction and interim receivership of the goods while the ships were still at sea had been ordered to stand over till the trial. At the trial, which took place in July, 1929, the Export Company did not appear, and judgment went against them. But the judge, Buckland J., dismissed the suit as against the appellants. He held that the appellants could not be held liable to the respondents for issuing the bills of lading without having the mates receipts unless they had received notice of the respondents lien or claim before they did so. For this purpose the written notice of May 27, 1926, was too late. He rejected the respondents evidence that oral notice had been given on May 14, 1926. " Admittedly," he held on the evidence, “it was a common practice" at the port of Calcutta to issue bills of lading without mates receipt. He curtly negatived the contention that the respondents had a special property in the goods which was violated by the delivery at Kobe to the bill of lading holders, so that the respondents were entitled to damages as in trespass or conversion. The respondents having appealed, judgment was given by the Court of Appeal on July 22, 1930. Rankin C.J., who delivered the leading judgment, agreed with the trial judge that the appellants were guilty of no breach of duty in issuing the bills of lading to the Export Company, which was named as shipper in the mates receipts. He gave his reasons for this conclusion shortly, as he had already more fully discussed the point in giving judgment in an appeal heard by the Court immediately before, Nippon Yusen Kaisha v. Mahaliram Ramjidas. (( 1930) 52 Cal. He gave his reasons for this conclusion shortly, as he had already more fully discussed the point in giving judgment in an appeal heard by the Court immediately before, Nippon Yusen Kaisha v. Mahaliram Ramjidas. (( 1930) 52 Cal. L. J. 365.) But he held that the respondents had a special property or right of possession in the goods, and that the notice of lien and other demands were sufficient to render the appellants guilty of conversion for that, not withstanding the notice and demands, they delivered the goods under the bills of lading, because, he said, " an indorsee "of a bill of lading cannot make a better title to the goods "than his indorser upon the principle of purchaser for value "without notice." But, as he was of opinion that s. 178 of the Indian Contract Act might entitle the Bank to claim as against the respondents a better title than the Export Company to the goods, he ordered a remand to determine that issue. Ghose J. concurred with the Chief Justice, while Lort Williams J. dissented. Buckland J., who tried the issue, held that the transaction was of the most ordinary and normal kind in every way, and that there was no question on the evidence before him of any want of good faith or of any circumstance that would raise any presumption whatever that the Bank was acting improperly. This finding came before the Court of Appeal, which reversed the finding of the judge, and held that judgment should be entered for the respondents against the appellants for a sum to be agreed or ascertained. Derbyshire C.J., with whom the other members of the Court agreed, held that the onus was on a party seeking to rely on s. 178, to establish affirmatively that he acted in good faith and under circumstances which were not such as to raise a reasonable presumption that he acted improperly, and that the appellants had failed to discharge that onus. The present appeal is from the judgment so entered against the appellants. The present appeal is from the judgment so entered against the appellants. The mtters to be decided in the appeal are, first, whether the appellants, in issuing bills of lading without having the mates receipts, committed a wrong as against the respondents, and secondly, whether by delivering to the bill of lading holders they converted the respondents goods, that is, goods in which the respondents had an immediate right of possession as against the indorsees of the bill of lading, which was infringed by the delivery from the ships at Kobe. If both these questions are answered in the negative, the third question, which has been dealt with by the Court of Appeal and debated before this Board, does not arise. The first issue to be determined is when under the contract the property passed. The sale was of unascertained goods. Prima facie on such a sale the property in the goods passes when goods answering to the contract description are unconditionally appropriated to the contract with the assent of the buyer, which, in this connection, does not mean expressed assent, but simply that the appropriation has been made in the manner contemplated by the parties. This prima facie rule may, however, be varied by the terms of the contract, or even by a reservation made by the seller in the act of appropriation. The general rule is that the property passes when the parties intend it to pass. In the present case, the sale being free alongside, the property prima facie passes when the goods are appropriated by delivery alongside in implement of the contracts. It is, however, said that cl. 3 of the contract precludes the passing of the property until the price is paid against the mates receipts or the other documents specified. That would no doubt be so if cl. 3 were not followed by cl. 4. The contract must, however, be read as a whole. Clause 4 provides for a lien of the sellers as unpaid vendors on the mates receipts or other documents so long as they remain in the sellers possession, and on the goods, until payment in full. Can this be reconciled with the reservation of the jus disponendi which cl. 3 would import if it stood alone ? That depends on the meaning to be attributed to the word "lien" as used in regard to the goods.. Can this be reconciled with the reservation of the jus disponendi which cl. 3 would import if it stood alone ? That depends on the meaning to be attributed to the word "lien" as used in regard to the goods.. A common law lien is possessory and depends on possession, but it also presupposes that the property in the goods has passed. A person cannot have a lien on his own goods. Thus cl. 4 imports that notwithstanding cl. 3 the property has passed when the goods were delivered alongside, that is, placed in possession of the shipowners. The result is that the sellers have parted with both property and possession. "Lien" must therefore be used in a different sense, as meaning either an equitable lien or a hypothecation such as that discussed by this Board in Official Assignee of Madras v. Mercantile Bank of India, Ld. ([ 1935] A. C. 53; L. R. 61 I. A. 416.), or the common law right or licence to resume possession, such as that discussed in Howes v. Ball. (( 1827) 7 B. & C. 481.) The result is that the sellers had, after delivery alongside, nothing left except the equitable charge,, which is only enforceable by equitable remedies, against the buyers or person taking with notice of the equity, or a licence to resume possession which is personal or contractual as between the sellers and buyers. In neither case was there left to the sellers a common law or possessory lien, which, if it existed, would have been a right in the nature of property and would have supported an action in conversion or trespass. The importance of this conclusion in the present case will appear later. A different state of things would have resulted if the sellers had delivered the goods to the ship in their own name as shippers, so that the ship would have held the goods on their behalf. But they did not. They delivered the goods as being shipped by the Export Company, and took a mates receipt which expressly stated the name of the Export Company as shippers. In this way the ship received the goods on behalf of the Export Company, who had booked the freight from the shipowners. All that the sellers had was possession of, or a lien on, the mates receipt. In this way the ship received the goods on behalf of the Export Company, who had booked the freight from the shipowners. All that the sellers had was possession of, or a lien on, the mates receipt. It is, however, on this fact, coupled with the terms of the challan or document delivered to the ship by the mills with the goods, and also on the course of business, that the respondents rely as justifying their first claim, which is that the issue of the bills of lading to the Export Company, without production of the mates receipt, was a wrongful act by the appellants as against them, which deprived them of their security on the goods and caused them damage equivalent to the full value. The mates receipt is not a document of title to the goods shipped. Its transfer does not pass property in the goods, nor is its possession equivalent to possession of the goods. It is not conclusive, and its statements do not bind the shipowner as do the statements in a bill of lading signed within the masters authority. It is, however, prima facie evidence of the quantity and condition of the goods received, and prima facie it is the recipient or possessor who is entitled to have the bill of lading issued to him. But if the mates receipt acknowledges receipt from a shipper other than the person who actually receives the mates receipt, and, in particular, if the property is in that shipper, and the shipper has contracted for the freight, the shipowner will prima facie be entitled, and indeed bound, to deliver the bill of lading to that person. So it was held by Bacon V.-C. in Hathesing v. Laing (i), a case in principle not different on its facts from the present. It was held that the indorsement of the mates receipt did not transfer a property which overrode that given by the indorsement of the bill of lading, which had been issued without production of the mates receipt, though the latter was held as security by the person to whom it had been issued. In that case, as in this, the person who delivered the goods to the ship took the mates receipt describing the debtors as the shippers. In that case, as in this, the person who delivered the goods to the ship took the mates receipt describing the debtors as the shippers. No doubt, if the shipowner, before he issues the bill of lading, is given express notice that he is not to issue the bill of lading without the mates receipt or to anyone but the person who delivered the goods, he cannot disregard that notice. Even without express notice, he may be affected by notice to the same effect by knowledge of the actual circumstances of the case. Hathesing v. Laing (( 1873) L. R. 17 Eq. 92.) was decided in 1873, and has been treated as good law ever since, as, for instance, in the late Judge Carvers " Carriage of Goods by Sea," s. 60. Indeed, it is difficult to see what other course a shipowner in a case like this could, in the absence of notice, adopt. He is bound to deliver bills of lading for the goods to the shipper; the shipper here is beyond question the Export Co., who engaged the freight, who are owners of the goods, who are described in the document presented by the mills as the persons in whose name shipping documents have been taken out, and whose name appeared in the mates receipts as the persons from whom the goods were received. The mills, who at the respective dates of the mates receipts had not been paid by the respondents, might have given notice of lien on their own or the respondents behalf, or they might have inserted the names of themselves or the respondents as persons shipping the goods and persons to whom the mates receipts were to be given. If that were done, the appellants could not properly have issued bills of lading to the Export Company. But if the mills or the respondents had taken the bills of lading in their own name as shippers, they would have become liable on the bill of lading contract, and in particular for payment of advance freight. It was not till May 27, 1926, that express notice was given to the appellants not to issue bills of lading, but it was then too late to close the stable door. An attempt to prove express notice given on May 14, 1926, which would have been in time, completely failed. It was not till May 27, 1926, that express notice was given to the appellants not to issue bills of lading, but it was then too late to close the stable door. An attempt to prove express notice given on May 14, 1926, which would have been in time, completely failed. Various matters were relied upon as amounting to implied or indirect notice. It was said that the direction in the mills document that the receipts were to be given to the mills sircars amounted to sufficient notice, especially when coupled with the course of business in the trade, according to which payment is to be made against the mates receipts, which thus constitute a sort of security. But as the receipt itself acknowledges shipment by the Export Company, the mere direction to give the receipt to the mills sircar appears to be too obscure and ambiguous to countervail the clear recognition of property in the Export Company. There might be many reasons why the receipt should be given to the person who actually delivered the goods to the ship. It is admitted by witnesses on both sides that bills of lading were frequently issued without mates receipts against an indemnity. Such an indemnity is a common commercial precaution in use all over the World whenever bills of lading are issued without mates receipts, and no sinister inference can be drawn from its being taken. It is true that the Export Company had obtained bills of lading in several cases from the appellants against an indemnity without producing mates receipts, and that the appellants had been complaining, and demanding delivery of the mates receipts, but vendors must have been in some measure aware of what was being done; it is suggested that they did not wish to make trouble with the shippers, the Export Company, who seem to have been doing a large business until the crash came about the end of May, 1926. There is no finding of any fraudulent collusion between the Export Company and the appellants, or indeed any evidence of that nature. Under all the circumstances of the case, not only was there no timeous express notice to the appellants, but there is no ground for imputing implied notice. There is no finding of any fraudulent collusion between the Export Company and the appellants, or indeed any evidence of that nature. Under all the circumstances of the case, not only was there no timeous express notice to the appellants, but there is no ground for imputing implied notice. The case must be regarded as one in which shipowners, who for their own protection stipulated with the shippers that bills of lading were to be given in exchange for mates receipts, waived that provision, and without notice issued bills of lading to the named shippers and owners of the cargo. It would impose an unprecedented burden on shipowners if under such circumstances they were held responsible. Their Lordships agree with the conclusion of Sir George Rankin C.J. on this issue. The second issue is alternative. It proceeds on the footing that bills of lading were delivered to the Export Company, but none the less, it is contended, the bills of lading in the Export Companys hands did not dispossess the respondents of their unpaid venders lien, or the lien for which they stipulated, because they continued to hold the mates receipts, and thus they had a right to immediate possession as against the appellants, so that they were entitled to sue in conversion when their notice of May 27, 1926, and their subsequent demands for the goods, were refused by the appellants. The primary question thus is whether the respondents still possessed a right to possession, sufficient to found a claim in conversion. The appellants in reply not merely contest the contention that by the possession of the mates receipts the respondents retained their lien, but say that the bills of lading had been indorsed to the Bank so as to put an end to the right (if any) of stoppage in transitu, and that they were bound to deliver the goods to the indorsees of the bills of lading, which they duly did. The learned Chief Justice on this point was in favour of the respondents, though, as already stated, he ordered a remand on the issue based on s. 178 of the Indian Contract Act, 1872, which was then in force, though since repealed in 1930. Their Lordships, with all deference, find themselves unable to concur in this conclusion in the respondents favour. Their Lordships, with all deference, find themselves unable to concur in this conclusion in the respondents favour. It seems to be based on two propositions, first that under the contractual terms, coupled with the retention of the mates receipts, the respondents retained a lien or immediate right to possession, which was a property interest and not merely an equitable or personal right or license, and secondly, that as the indorsement of a bill of lading passed no better title than the indorser had, the indorsement and transfer to the Bank passed no greater rights than the Export Company had, so that the Bank could not claim delivery from the shipowners in defeasance of the respondents possessory title. It is clear, however, that the conclusion of Sir George Rankin C.J. depended on his view that the respondents had a right in law to immediate possession; indeed, it was properly conceded before their Lordships that only such a right would entitle the respondents to claim in conversion, and that a merely equitable right or contractual right or license would not do. Their Lordships agree with Sir George Rankin in his view that the general property passed to the Export Company, but differ from him, for reasons stated earlier in this judgment, in his view that a right at law to possession remained in the respondents. Thus the whole basis of his conclusion fails. It is true generally that a bill of lading is not a negotiable instrument in the sense that a bill of exchange is, and that the transferee of a bill of lading does not get a better title than his transferor. But while that is true of title in law, it cannot be asserted in regard to equitable rights. The legal right given by a possessory lien can, indeed, be distinguished from the general legal property in a thing. This is illustrated by Pease v. Gloahec. ((1366) L. R. I. P. C. 219.) That case, however also illustrates the distinction between legal and equitable rights. The documents of title in that case had been obtained by fraud from the lawful possessor, who had not the general property which belonged to those guilty of the fraud. This is illustrated by Pease v. Gloahec. ((1366) L. R. I. P. C. 219.) That case, however also illustrates the distinction between legal and equitable rights. The documents of title in that case had been obtained by fraud from the lawful possessor, who had not the general property which belonged to those guilty of the fraud. It was held that an indorsee from those latter persons in good faith for value got a good title, and not a merely defeasible title, and in that sense got a better title than his transferors, whose possession was defeasible. This is the general rule where the transferor has a title defeasible for fraud, but the transferee takes in good faith and for value. Another illustration of an equitable right which is defeated by the transfer of a bill of lading to a bona fide indorsee for value is the right of stoppage in transitu. It follows from the same general rule that the equitable lien or personal license which, in their Lordships judgment, was all that remained with the respondents when the goods were delivered to the ship, did not affect the transferee of the bill of lading so as to found a claim for conversion, though it might indeed found a claim for breach of contract against the Export Company, or a claim for equitable relief against them or any assignees subject to the same equities, a category which would not include the appellants. In respect of the matters discussed above there is no difference in substance between English and Indian law. This conclusion renders it unnecessary for this Board to give a decision on the issue raised on the remand under s. 178. It seems, however, proper for their Lordships to say that, as at present advised, they would prefer the judgment of Buckland J. to that of the Court of Appeal. Even assuming that the onus of proof under the section is on the appellants, it would seem that they discharged it by the evidence of the Bank, which showed that the transaction was a banking transaction of the most ordinary and normal character. If it were necessary to look further, the presumption of good faith would complete the proof. But their Lordships are far from satisfied that under the section the onus would have lain with the defendants. There are in the section two separate provisoes. If it were necessary to look further, the presumption of good faith would complete the proof. But their Lordships are far from satisfied that under the section the onus would have lain with the defendants. There are in the section two separate provisoes. The onus of proof under the second proviso cannot, it seems, be on persons in the position of the defendants, and if so, it would seem to follow that the onus as to the first proviso must likewise rest in the same quarter. Otherwise an anomalous result would follow. Decisions under other statutes have been cited. But it is always dangerous to seek to construe one statute by reference to the words of another. It may well be that in this section the plaintiff who seeks to impugn what is ex facie a valid disposition should be held to assume the burden of showing bad faith and such other matters as the provisoes require to be established in the particular case. Their Lordships, on the whole case, are of opinion that the appeal should be allowed, the orders of the Court of Appeal should be set aside, and the orders of Buckland J. restored, and that the respondents should pay the appellant’s costs in the Court of Appeal and before this Board. They will humbly so advise His Majesty.