Lord Russel of Killowen:-

The appellants 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. 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.

Paddy traders are, not unnaturally, desirous of anticipating to some extent the realization of the value of t