Lord Russell of Killowen—

This is an appeal from a decree of the Supreme Court of the Island of Ceylon reversing a decree of the District Court of Colombo. The relevant facts can be briefly stated. The parties to the action were both of them creditors of Nana Moona Mahamado Rawther and Co., who carried on business as ten merchants at Nos. 35 and 65, Second Cross Street, Colombo, and who may be conveniently referred to as "the firm." On 18th June 1925, the firm filed their petition in insolvency.

The respondent, who carried on business at No. 69, Second Cross Street, and had heard of the insolvency, observed that ten was, on 2lst June 1925, being removed from the firm's premises at 65, Second Cross Street.

The tea was on that day being removed in pursuance of an agreement which had been come to between the firm and the appellant on 16th June 192S whereby tea. and other goods were invoiced by the firm to the appellant at a sum of Rs. 21,700, the appellant being debited with that amount in account.

In fact, large quantities of tea had already in pursuance of this arrangement, bean re novel on 16th and 17th June from the firm's premises to the appellant's premises No. 102, Sea Street.

The r