Mortgage of movable property over shares and contractual limitation on recovery were upheld on the instrument's true effect.

A transaction over shares was treated as a mortgage of movable property, not a sale, because the instrument and parties' conduct gave the transferees possession, voting rights and transfer authority while preserving the transferor's right of redemption on repayment within a stipulated period. The presence of part-payment rights and default-sale terms also showed a security arrangement rather than outright transfer. On limitation, the creditor's right to sue arose only after expiry of the contractual repayment period, so time did not run from the advance alone. The recovery suit was therefore within limitation, and the appeal failed.

---

---

Issues: (i) Whether the transaction evidenced by the agreement in respect of the shares was a sale, a pledge, or a mortgage of movable property; (ii) Whether the suit for recovery of the amount due under the agreement was barred by limitation.

Issue (i): Whether the transaction evidenced by the agreement in respect of the shares was a sale, a pledge, or a mortgage of movable property.

Analysis: The terms of the agreement, the conduct of the parties, and the surrounding circumstances showed that the transfer of shares was not an outright sale. The transferees were given possession, voting rights, and authority to lodge the shares for transfer, while the transferor retained a right to redeem the shares within a stipulated period on repayment of the amount. The agreement also contemplated return of the shares on part-payment and permitted sale of the shares on default at the transferor's risk and responsibility. Those features showed that the transferees had more than a bare pledgee's interest and that the arrangement created a security over movable property with a right of redemption.

Conclusion: The transaction was not a sale and was rightly treated as a mortgage of movable property.

Issue (ii): Whether the suit for recovery of the amount due under the agreement was barred by limitation.

Analysis: Under the agreement, the debtor was entitled to repay within the stipulated period, and the creditor could not enforce the claim before expiry of that period. In such a case, limitation does not run from the date of the advance alone, but from the date when the right to sue actually accrues on default after the contractual period expires. On that footing, the suit was instituted within time.

Conclusion: The suit was within limitation.

Final Conclusion: The appeal failed because the underlying transaction was a mortgage of movable property and the claim was not time-barred.

Ratio Decidendi: A transaction concerning movable property must be classified by the true intention of the parties and the rights conferred by the instrument, and where the debtor retains a contractual right of redemption, the arrangement may constitute a mortgage of movable property rather than a pledge or sale; limitation begins when the creditor's right to sue actually accrues under the contract.

---