420
piecemeal if the Powers could agree amongst themselves as to the division. Mr. BALFOUR in his recent speech in the House of Commons said that the pathology of empire might be studied in vain to find any example of so complete a paralysis as that rom which China is suffering at the present time. The expression is an apt one, and continuing the simile we may say that, pace Lord SALISBURY, the paralysis will in-
THE HONGKONG WEEKLY PRESS AND existing circumstances for the benefit of an enemy of Spain, Great Britain being neutral in the conflict and the Company being a British concern.
SUPREME COURT.
19th May.
IN ORIGINAL JURISDICTION.
May 28, 1898.
and the first two calls on the shares.
There
is no direct evidence on the point, but it seems reasonable to infer from the facts before the Court that the provisional certificate soon afterwards came into the hands of G. L. Coxon, with the blank transfer attached. At that time-June, 1891-this gentleman was one of a syndicate of seven which had been formed for the purpose of dealing in shares of - the Hongkong and Shanghai Banking Corpora- tion. He seems to have been the moving spirit
evitably be followed by dissolution unless BEFORE SIK JOHN CARRINGTON (CHIEF of the syndicate. The other members of it
prompt and vigorous remedies be applied by the patient's friends. But it is necessary to distinguish between the government and the nation: it is the government that is afflicted with paralysis, and its death would leave little permanent effect upon the nation provided another ruling power with the grasp of empire were ready to step into the place of the present expiring dynasty. The reason of the weakness which so greatly excited Mr. BALFOUR's astonishment, and which Lord SALISBURY discredits, is to be found in the absence of community of in- terest and sympathy between the dynasty and the nation and the lack of anything like fervour of patriotism in the latter. If China were to-morrow divided between two
or more foreign Powers, the Chinese, not- withstanding their homogeneity of race, would care little for the political division, nor would they be prepared to make sacrifices to again secure unity. Such being the conditions, if Great Britain is to under- take the task of bolstering up the Enipire as it exists--a government without honesty and a nation without patriotism--it has what may be emphatically termed "a very tall
CE
"
"
order" to fulfill.
TELEGRAPH CABLES IN WAR.
was
An article appears in Monday night's issue of the Hongkong Telegraph, which, as Trilby said of Taffy's picture, is wrong alto- gether." The writer, taking as his text, the continued interruption of telegraphic communication with Manila, contends that the Eastern Extension Telegraph Company is by its very nature international, and that "in case of a war in which Great Britain was at all concerned, the British au- "thorities would be barred from tele- graphing, say, from Hongkong to La- "buan or from Hongkong to Singapore "yia Labiau." The Company referred to is not an international Company but a British Company, and the preamble to the agreement under which the cable from Hongkong to Singapore via Labuan laid recites that it is expedient that "existing telegraphic communication with Hongkong should be strengthened by the laying of a second submarine telegraph "cable between Singapore and Hongkong "without touching at any point uot in "British territory," which sufficiently indicates the political character of the line. It was, in fact, principally for political reasons that the line was laid Where any
of the Company's cables touch foreign territory they naturally come under foreign control, as, for instance, at Saigon and Manila, but such control at particular points has no bearing whatever upon cables laid directly from one British port to another British port. The cable from Hongkong to Singapore via Labuan is under exclusively British control and in the event of war the Company could have no desire to prevent its use by Great Britain, nor, even if it had such an extraordinary desire, would it be able to oppose such use. In the case of the Manila cable the Company's contract was with Spain, and it is naturally bound not to restore communication under
JUSTICE.)
HARDOON V. BELILIOS.-JUDGMENT.
Mr. J. J. Francis, Q.C. (instructed by Mr. Brutton, of Messrs. Mounsey and Brutton) appeared for the plaintiff, and Mr. É. Robinson instructed by Messrs. Deacon and Hastings) for the defendant.
The Chief Justice delivered judgment in this case, in which Elias Aaron Hardoon was plain-
lows tiff and Emanuel Raphael Belilios defendant, as
In his Petition the plaintiff alleges that in the month of April, 1891, he became the registered owner of 50 shares (new issue) in the Bank of China, Japan, and the Straits, Limited, num- bered from 157,427 to 157.476, both numbers inclusive; that he sold the shares and executed a blank transfer for them; that the Bank subse- quently went into liquidation; that he, as the registered owner of the shares, was placed on the list of contributories of the company; that
the liquidator has recovered judgment against him for £102.12.11 for calls due on the shares and for interest and costs; and that the defen- daut is the true owner of the shares and is liable, by agreement or otherwise, to indemnify the Che plaintiff therefore claims that the defen- plaintiff in respect of all calls on the shares. dant may be declared liable to indemnify the plaintiff accordingly, and that he may be or dered to pay to the liquidator the above-men- tioned sum of £402.12.11, with interest and costs.
The Answer of the defendant, admits for the most part the allegations of the Petition, but says that the defendant is not the true owner of the shares but is merely the holder of them as pledgee; that in the month of July, 1891, they were deposited with the defendant by George Lionel Coxon as security in respect of certain liabilities which the defendant had incurred in respect of the said George Lionel Coxon and others; that the defendant never had any beneficial interest in the shares but holds them due to ouly as pledgee in respect of the moneys to return the shares to those gentlemen on him by those gentlemen; and that he is bound
payment of the moneys due by them.
The hearing of the case began on the 13th April, 1898, and occupied eight days. At the close of the plaintiff's case Mr. Robinson, on behalf of the defendant, applied for a nonsuit on two grounds, one of fact and the other of law. He submitted, first, that the plaintiff had failed, on the evidence before the Court, to establish his contention that the defendant was the true owner of the shares in question, and. secondly, that, even assuming he had succeeded in that contention, there was no privity of con- and the defendant in tract between him respect of the shares and consequently no liability on the part of the defendant to indem- nify him against any calls made upon them. These points were fully and elaborately argued by Mr. Robinson for the defendant and by Mr. Francis for the plaintiff, and I will now consider them in their order.
were H. W. Dick, G. Stewart, F. H. Sawyer, E. J. Coxon, E. H. Melbye, and the defendant. The interests of the several members in the -venture varied in amount. Belilios & Co.
agreed to finance the venture, and for this pur- pose they obtained, on the 23rd June, 1891, from the local brauch of the Bank of China, Japan, and the Straits, Limited, a letter of credit on the London Office for £100,000 and on the next day a similar letter of credit for £10,000. With the proceeds of drafts drawn at
were
six months under these letters of credit the shares of the Hongkong and Shanghai Banking Corporation in which the syndicate to operate were purchased, and it was arranged that they should be deposited with the Bank of China, Japan, and the Straits, Limited, as security for the drafts. The syndi- cate also undertook to pay to Belilios & Co. the sum of $25.00 in respect of each of the shares as a margin for their protection. This
sum
was not paid in cash, but 50 shares in H. G. Brown & Co., 32 shares in the Hong- kong Ice Company, Limited, and 10 founders' shares and 1,600) ordinary shares in the Bank of China, Japan, and the Straits, Limited-in which latter were included the 50 shares now in question-were provided in lieu of it. Ac-
counts relating to these transactions were
opened under several heads in the books of Belilios & Co., and amongst others the shares just mentioned were dealt with in an account headed "Syndicate's Margin Account." All these shares were, on the 9th, 13th, and 17th
July, 1891. deposited by G. L. Coxon with the Bank of China, Japan, and the Straits, Limited, as further collateral security for the drafts under the letters of credit.
For the present purpose it does not seem necessary to refer in detail to the financial re sults of the operation or to an intermediate Margin dealing with the shares held on the “
Account."
On the 9th March, 1892, Belilios & Co., as "holders of the 50 shares now in question,
"
applied to the plaintiff, as the registered owner of them, for payment of a dividend then accrued on the shares. This payment was duly made to them, and the amount was carried to the credit of the syndicate in the " Margin Account." This action on the part of the defendant's firm does not appear to have any bearing on the case, because, at the time when it was taken, the firm were admittedly no more than pledgees of the shares and in that capacity would be entitled to get in, if they could, any dividends receivable on them.
The third call on the shares was paid by G. L. Coxon on the 19th October, 1891.
The action next taken by the firm was of much importance. In consequence of the fall in exchange and in the value of shares in the Hongkong and Shanghai Banking Corporation, the operatious of the syndicate resulted in a considerable loss. Belilios & Co. seem to have
been unwilling to continue the financing of the concern, and accordingly they closed the several accounts of the syndicate in their books under date the 31st October, 1892, but as of the 9th September, 1892. The liability of two of the members, Messrs Stewart and Sawyer, was liquidated and individual accounts were opened in the names of the remaining members. "It is not material to consider what was done with regard to the shares of the Hongkong and Shanghai Banking Corporation which belonged to the syndicate. But with regard to the shares
First, with regard to the facts, the evidence, which was voluminous, consisted in great part of entries in the books of Belilios & Co., the firm of which the defendant is now the sole partner, and of the explanations of those entries given by M. H. Michael, who, during the period covered by the transactions in question, was the bookkeeper of that firm. From the evidence it appeared that the plaintiff was never more than the nominal holder of the shares, which were taken in his name by his then employers, Messrs. Benjamin and Kelly, sharebrokers. This was in April, 1891. The shares were for £10 each. Messrs. Benjamin and Kelly obtained the pro- visional certificate for the shares, and also an instrument of transfer in blank signed by the date of the closing of the accounts, and the pro- plaintiff. They also paid the allotment moneyceeds were credited to the remaining members
held on the Margin Account "--which re- turned into the possession of Balilios & Co. in October, 1892—Ï find the effect of the closing entries in the several accounts to be that those shares were taken over from the syndicate" by Belilios & Co. at their market value at the