The legal validity of assignments of beneficial interests in contracts and the requirement of written instruments for transfers of actionable claims.

Subheda, A J C—The facts concurrently found by the two Courts below, with reference to which the two points of law raised by the appellant (defendant 1) arise for decision in the present appeal are briefly these. On 4th March 1931 the plaintiff and the two defendants agreed between themselves to do some business in forward delivery contracts in the Bombay market and accordingly they approached their local Adatia, Sheojiram Parmanand, to purchase 12 1/2 tons of alsi for defendant 1 and 6 1/4 tons each for defendant 2 and the plaintiff. The Adatiya having declined to accept the aforesaid offer of the parties, evidently because the rules of the Bombay market did not permit a single trader to enter into a forward delivery contract for less than 25 tons, the plaintiff alone agreed to purchase 25 tons of alsi at Rs. 7-11-0 per cwt. for September delivery in Bombay. It was however agreed between the parties that out of the 25 tons of alsi purchased by the plaintiff he should retain 6i tons for himself and deliver to defendant 1 12 1/2 tons and to defendant 2, 6i tons at the same rate of Rs. 7-11-0 per cwt.

2. After some time as the rate of alsi began to fall defendant 2, on 23rd April 1931, with the plaintiff's approval and consent, transferred his contract for the purchase of 6 1/4 tons to defendant 1 at a loss of about Rs. 27 odd, and on 27th April 1931 the plaintiff himself agreed to transfer to defendant 1 his own Sowda of 6 1/4 tons of alsi at a loss of 0-11-0 per cwt Defendant 1 thus became responsible to take delivery of the whole quantity of 25 tons of alsi the contract for which was originally entered into with the Adatiya by the plaintiff. As the rate of alsi further declined defendant 1 instead of taking delivery of the goods asked the plaintiff to instruct the Adatiya to settle the contract by payment of difference in prices and accordingly the contract was discharged by settlement at the rate of Rs. 5-5-0 per cwt. and Sheojiram debited the plaintiff with Rs. 1,219-3-0 for the total loss on the original contract. The plaintiff also executed in favour of Sheojiram a sarkat for the aforesaid amount. On these facts, which were categorically denied by defendant 1, though admitted by defendant 2, both the Courts below discharged defendant 2 and decreed the plaintiff's claim for Rs. 1149-14-0 against defendant 1 with costs and future interest. Against the appellate decree defendant 1 has filed the present second appeal.

3. Defendant 2 respondent died during the pendency of the appeal, but as the appellant did not bring his legal representatives on record, the appeal abated as against the deceased respondent. The result of this abatement would naturally be that so far as the question of the liability for the loss appertaining to the contract of 6 1/4 tons of alsi, which the deceased defendant transferred to the appellant, is concerned the decrees of the Courts below fastening that liability on the appellant have become final and are not liable to revision in the present appeal irrespective of the merits of the appeal.

4. The two points raised by the appellant's counsel for decision are these : (1) that as the so-called assignments of their respective beneficial interests in their contracts by the plaintiff and defendant 2 to defendant 1 were transfers of actionable claims as defined in S.3, Transfer of Property Act, the same had to be effected by instruments as required by S.130 ibid, but having admittedly been made by parol they were ineffectual and no liability attached to the plaintiff in respect of each of the contracts for the purchase of 6 1/4 tons originally entered into by the plaintiff and defendant 2; and (2) that as no cash payment for the loss on the contract of 25 tons was admittedly made by the plaintiff to the Adatiya Sheojiram no cause of action arose to the plaintiff to recover the said loss from defendant 1. In my opinion both these contentions are untenable as they are based upon a clear misapprehension o