In Brief
Farmers stored agricultural produce at a cold store, which held goods on bail against rental. A fire destroyed the produce. The bank that lent to farmers sought insurance recovery; the insurance company contested liability claiming policy violations and lack of privity with farmers. The Supreme Court held that goods constituted a bailment for consideration, not trust. The insurer's failure to verify ownership over a renewed three-year policy precluded disclaiming liability. The farmers, as beneficiaries, were entitled to recover against insurance proceeds after satisfying bank dues. The warehouse receipt value was the appropriate measure of loss. Statutory relief sufficed; extraordinary constitutional powers were unnecessary.
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