March 2, 1908.]
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CHINA OVERLAND TRADE REPORT.
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149
entered into agreements altering the terms of said that there is a constructive consent ou the contracts; and whether this has been done the par. of theis unknown debtors to the with the conssat or acquiescenci of the com¡ guarantee of the compradore on their behalf ? pradors? At this point the question which I It seems to me that Alexander v. Vane (I. M, anggested in my minute again arises: Is the con and W. 511) which is quoted by De Colyar in tract of the compradore one of suretyship, or of ; support of his proposition hardly warrants it, insurance? and thea, further, is the contract of for there the engagement to pay on his behalf the surety of the compradore one of the surety. I was made in the presence of the debtor, and it ship or of ius rauc? This question is not dis- I was a question more of tacit than constructive posed of by the fact that in my opinion the content on his part. The osse which is nearest compradore has a power of dissent. For even to-the present facts is Exp. Bishop, re Fox, granting that, he may still on the plain mean. Walker and (')., which is cited by De Colyar, ing of the words have made himself an insurer. and which when examined carries us a great The 1estion 80 for AR it concerns this way forward. An accommodation bill WAS pla ntiff may be disposed of at paca. It drawn and accepted for the purpose of rais. is probable on the face of it that the ing money for the drawer and acceptor, and the guarantee of the compradore would have im. drawee discounted it with bill brokers in the ported into it the same quality as the con- city of London. The bill brokers then dis. tract entered into by the compradore himself. counted the bill with their bankers. It was That is to say; if that is an insurance, then proved that according to a well established usage the plaintiff has guaranteed the performance it is the common and invariable practice of bill of a contract of insurance; and if it is a contract brokers in the city of London not to go through of suretyship, then be has guaranteed that. the form of putting their names upon every But I cannot see anything which would make it bill which they re-discount with their bankers per se a contract of insuranc Stress was lid but to give in-tead of a general indemnity on the use of the word "all losses:" but a or guarantee to their bankers by which they surety may guarantee all Inages occasioned by, audertake to be liable to the bankers or arising out of the business in resp ct of
upon each bill which they re. discount which the compradore has undertaken liability, with them just as if they had endorsed that bill. whatever that liability may be. The impo, taut Except for the fact that in this case the bill question is whether a contract to incur brokers could choose the persous from whom liability in respect of losses incurred ia they made themselves liable, whereas the com- trade by the firm with Chinesó –“ with ог pradore cannot, this is as near a compradore without the consent or knowi dga of the agreement as we shall get from the circum- compradore "is a contract of suretyship.stanc-s of business in the West. The bill being This can be solved by inquiring: Whether a dishonoured a payment was made by the dis- guarantee can extend to a person unknown? counters to the Bank, and the question arose And whether it can extend to an indefinite whether they could prove for this amount in the namber of person also unknown ? And the bankruptcy of the acceptor. The doctrine I answer to these questions can, I think, be have just been considering was relied on by the satisfactorily obtained by propanding the trustee in the bankruptcy and it was rgued on following question: Would it be possible for bis beba'f that there had been no ratification of the compradore to exercise the rights of a these payments by the acceptor. But the Court surety against the debtors (the Chinese of Appeal held that there was a relationship of merchants) and against the creditor (the principal and surety set up by the circumstances defendant company, his principals)? If he of the case. for, said James, L.J., it must could, he is a surely, and there 18 Do have been perfectly well known to both drawera геавод for attributing to this contract A and acceptors that anderson and Company meaning which is not the commouly ace-p'ed were e rrying on an enormous business as bill. one: if he could not, he is an insurer, discounters, and that they could discount the anl bas, therefore, not get the rights of a bills only by procuring advances from their surety, on which, speaking generally, these bankers, ie, that they would re-discount inquiries depend, and therefore, would not be the bills." After referring to the custom of entitled to the inquiries. The argum nti the city in the words
have already covered a wide range, as is natural when we quoted, the L. J. said: This fact must have have to deal with an entirely new relationship been well know and understood by the gentle- which the parties, aided by very acute legal man who manufactured these bills." From the minds, bave created, But I think the answer point of view of the unknown Chinese customers lies in a fairly narrow compass. The general whose debts are guaranteed by the e mpradore principal is that this must b、 8 contractual the facts are on all fours with this case; I must relationship between the person guaranteed assume something with regard to the business and his surely, in order to enable the of a compradore; and I am not stretching my surety to exercise his rights against the imagination too far when I incorporate into person guaranteed, dealt with by De Colyar this case the one fact that the Chinaman in this (p. 344), and he says that the reason why the Colony knows that his debts to European firms principal debtor is not chargeable to the surety, are guaranteed by the compradors. I need go no than this, and I should not be unless the engagement to the latter was made furthen with the former's consent, actual or constructive, justified in so doing; the terms of bis is because the English law does not allow a liability are not known, but that does not person to make himself the creditor of another concern the Chinese custom-r; he knows the by volunteering to discharge his obligation."oca fact only, that he is guaranteed, and that "The authorities bear out this proposition; he could not do business without the inter- the only one I need refer to is Walter v reation of the compradore. Therefore, so far James (L. R. 6 Ex. 124). There the Court as he is concerned, in spite of the fact that the laid down this proposition e'ear law: compradore may not know him, or know of the **that whero
makes ona
payment in business which he has entered into, the relation- the name and on behalf of another without ship of principil and surety is set up. Can it authority, it is competent for the debtor be that the compradore's ignorance of the to ratify the payment "-which shows 'Chinese trader's existence will prevent the ratification is necessary to establish the legal relationship arising For that is the only claim binding on all parties, and if ratißestion i-point which may differentiate this case from
the one just cited. I think not. is necessary to establish the link between the
test whether there is B debtor and the volunteer it is obvious that real
is
not is contract
whether there is a without ratification there
vinou. batween them.
nd if thers is lum juris set up between the compradore and the Chinese customer. And if it is set up by cotract between them, there cannot a relationship of principal and surety, because a one set of facts it can hardly be destroyed by surely ceases to be surely if he cannot sue the
the introduction of another fact, which leaves principal debtor. We have now get to a pro.
the former facta unaltered. And if it were posit ou
reason for this view I of law which is applicable to the necessary to find a relationship established by this compradore agreement in respect of the unknown prin. cipals for whose defaults it professes to make the comprador. liable; and the next question is whether there is any modification to be intro duced into its application, owing to the air. cumstances arising out of the relationship of all these parties. The question now is: Can it be
immaterial, and his knowledze is immaterial. 'Knowledge is the wider term, and covers the narrower term 'consent,' knowledge being immaterial, and consent being immaterial,
express dissent "
would amount to no more than Я protest against the firm acting within the rights conferred by this large clause, which virtually makes the compradore guarantee the whole Chinese nation in their dealings with Messrs. Sassoon & Co. But the mere fact of having come to this decision made me beatitate, and feel grave doubt whether it was sound, whether it does not err against the rules of construction which have been laid down with regard to contracis There is a variety of principles on this subject, of which the f llowing may have more or less application to this contract. Words must be construed in their grammatical and ordinary sense: the construction mast not lend to an absurdity: they must be presumed to have been used in their plein ordinary meaning mercantile terms masi be understood iu their ordinary mercantile meaning Above all the intention of the parties must b, earried out and if the parties are not ad idem, then other rules apply. Now on re-reading the argument which I adopted in Chambers I am satisfied that it is a very forced and artificial construction of the words; it reveals, it is true, the latent meaning of the words, but I do not think there is any case which warrants the Ccart in holding parties bound by a latent meaning in a contract if that was clearly of the intention of the parties. I was tempted to apply what may be called the well-known meaning to the word 'compradore,' but the meaning involves a statement of his righ's and duties, and possible liabilities. And what these are is precisely the question I have to decide. Beyond saying that it is com- mon knowledge that a compradore is a surety for Chinese customers I cannot go. for it may may be that he has accepted liabilities which make him something more and turn him in fact into an insurer. The fact is that the real nature of these rights and liabilities has never, so far as I can ascertain, been determined by the Court. As was said during the argument these agree- ments have been drawn up in different solicitors' offices, each office probably having a form of its own; they have been gradually evolved, obviously becoming gradually more and more stringent the security covering a wider area, until the agreement which is before me now has been arrived at, which, as will appear from what I have already said, goes about as far as it is possible to go. So much for the merchant's side of the case: so far as the compradore's side is concerned, it may be summed up in one sentence, be and his surety have accepted it, and unless I can see clearly that it was not the intention of the parties when they made the contract, he will be bound by the grammatical construction I have just indicated, even though it cannot be said to be a plain grammatical construction. The law imputes to a person an intention corresponding to the reasonable mean- ing of his words; but not an unreasonable meaning. Now is it possible that a surety can be said ever to bave intended to be bound to guarantee, or that the other party to the contract ever intended so to bind him? This question must be considered independently of a priori | arguments, of which there are a certain number available on either side. The whole idea of suretyship is based on consent. The del cred-re agenoy, which is the widest from of surelyship. | involves consent also: and this negation of the right of refusal in any given case was one of the grounds which induced me to think that perhaps this was really a contract of insurance, But even in contracts of insurance consent on the part of the insurer is obviously the basis of the contract, and therefore I think that no such contract whether of suretyship or Msurance can cover a case of express dissent, unless it appears clearly, and not by any round about argument, from the words used: that the argument I have referred to and up to now accepted is round about needs no demonstration, Therefore i am satisfied that this was not the intention of either party, and an inquiry may be had as to whether any contracts were entered into contrary to the expressed dissent of the compradore. The next inquiry asked for is, whether the defendants have released any of the contractors from their engagement, or have
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that
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For the suretyship
should be prepared to hold that the provision of the agreement that the compradors can recover his commission from the Chinese customer, imp ses a duty on the firm to acquaint the compradore immediately a bargain is entered
iuto.
I am therefore of opinion that this deed does create a contract of raretyship only, and that the plaintiff, the surety of the compradore,