J
July 5, 1909.]
exercised his power of sale wrongfully, and in such a way as to compel the Court to set it aside? The result would be that a wrongful exercise of the power of sale would be equivalent to foreclosure, and if redemption were made the condition of setting aside this sale, it would treat this action for the recovery of the balance of the loan as a foreclosure action, which it is not, and the plaintiff and the defendant as mortgagee and mortgagor, which they have all along been most strenuously contending they are not. The effect of the judgment I gave is that that revives, and with it the ordinary rights and obligations incident to a mortgage.
I maintain my opinion that in this case redemption should not be made the condition of setting aside the sale. The result is that the sale is set aside simply, which entails the follow ing consequences:-First, that the relation of mortgagor and mortgagee between I i Po Yung and the Hip On is restored each with his normal rights. Secondly, that the question which Kwok Yik Ting has raised-Who is to compen- sate him for the improvements which he has made and the expenditure he has incurred in creating buildings on the property-must be answered in the following way. It does not concern Li Po Yung, at least at present. The mortgagee and Kwok Yik Ting have chosen to enter into a sale which has to be set aside, he and his pur. chaser must arrange matters between them as best they can. The question is not before us, and is irrelevant to the present action. The same remarks apply to the mortgage to the Hongkong Fire.
I am quite satisfied, after the very exhaustive arguments that were addressed to the Court on the point. that my previous ruling on the matter of the release of Li Po Kam and its effect on Li Po Yung was erroneous and must be reversed. The appeals of the plaintiffs and of Kwok Yik Ting are both dismissed with costs, and the appeal of Li Po Yung is allowed with costs.
Mr. Justice Gompertz in the course of his judgment said-It follows that in my view the sale should only be set aside on certain terms. It would no doubt be convenient to settle the decree in Chambers, but I think the proper order might be outlined as follows:-(1) An account to be taken of what is due under the mortgage for principal and interest: (2) An inquiry as to what allowance Kwok Yik Tiny should have for improvements, which have increased the value of the property: (3) Li Po Yung to be credited with an occupation rent of the annual value of the unimproved land, as from the date of the sale.
LEAVE GRANTED TO APPEAL TO THE PRIVY COUNCIL.
In the action in which His Excellency the Governor appeared as plaintiff, claiming for the performance of a specific contract, and in which His Honour the Chief Justice entered judgment for the defendant, Hon. Sir Henry erkeley, -K.C., Acting Attorney-General. instructed by Mr. F. B. L. Bowley (Crown Solicitor), applied for leave to appeal to the Privy Council.
Sir Henry Berkeley stated that this was an application for leave to appeal to the Privy Council against the judgment of His Honour the Chief Justice. It would be within the
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CHINA OVERLAND TRADE REPORT.
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A COMPRADORE'S LIABILITIES. The appeal was continued against the decision of the Chief Justice in the action in which Messrs. S. J. David and Co. proceeded against their compradore, Chan Ut Chiu, to recover $648,816.
Messrs. D. MacNeil and C. G. Alabaster, instructed by Messrs. H. J. Gedge and A. Jack. son (of Messrs. Johnson, Stokes and Master). appeared for the appellants (plaintiffs), while 110n. Sir Henry Berkeley, K.C., and Mr. M. W. Slade, instructed by Mr. J. Scott Harston (of Messrs. Ewens and Harston), represented the defendants.
Was
Mr. MacNeil informed the Court that this was an appeal from a judgment delivered by the learned (hief Justice on December 23rd of last
in year. The action arose the following circumstances: Messrs. S. J. David and Co. were claiming against their compradore a sum of $648.816 odd, which they said he had agreed to pay them in respect of certain losses in business which the firm Lad done with Chinese. The agreement upon which Messrs. David relied, as appeared from the terms of the reply subsequently filed by the plaintiffs, to be found in two documents; one instrument of mortgage made between the compradore and Mr. Abraham Jacob David, a partner in the plaintiff firm, and the other an agreement made between the firm and the compradore. After referring to the pleadings, Mr. MacNeil stated that at the hearing learned counsel for the plaintiffs produced these two documents and called a witness to prove the losses alleged in the claim, and to show how defendant called no witnesses, and rested the they were made up. Learned counsel for the
conditions of his case entirely upon argument
an
as to the construction of the two documents
Sir Henry Berkeley—I did not abandon the At the close of the right to call witnesses. plaintiff's case I moved the Court that they had no case. The case of the defendant has rested, therefore, entirely on argument as to the construction of the agreements, Counsel for the defendant did not go into that branch of the defence which has no relation to the agreements. Upon those arguments as to the construction of the two documents the Chief Justice gave judgment in favour of the defendant, and it is from that judgment this present appeal is now being brought.
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Mr. MacNeil, proceeding, said he did not feel it incumbent upon him to prove that Chinese compradores guaranteed their ens tomers. And with the greatest possible respect to the learned judge who tried the case in the court below he should decline to search for occult principles" on behalf of his clients. It did not seem to him, after having made some attempts in this direction, that if one went ever so deep one would get further than the old Common Law Mortgage. He respectfully submitted to the court that all the principles of law of mortgage which could be made ap- plicable to the case of the plaintiffs in this matter had been placed before their Lord. ships already, and if they had not he would endeavour to put them before the court. The effect of the Chief Justice's judgment was that a man accepted an engagement as compradore upon the expressed condition (a) That he shall enter into a mortgage and into an agreement making him responsible for all money owing under that mortgage: (b) And who has agreed that his property should not be redeemed unless he paid certain losses on Chinese contracts as well as certain other monies; (c) Who has agreed that his property could be sold if he did not pay money owing on the mortgage; (d, Who has declared after giving a power of sale, that the power of sale could only be exercised by a person who was entitled to give a discharge for money owing on the mortgage;
Who (e) has laid it down that the mortgagees might Sir Henry Berkeley-Then as the only demand payment; (f) Aud if they did it, were available judge of the Fall Court?
to demand payment in writing; (g) And who has specifically contracted in the agreement to be fully responsible for all monies and losses mentioned in clause 8, except one loss which is owhere mentioned in the other agreement except in general words which cover equally losses on Chinese contracts; (h) That $55,000 should be held until he has paid what is owing under the mortgage to the firm's satisfac. tion. The offect of that judgment was that a person in those circumstances had not agreed to pay anything under the mortgage, and that,
recollection of His Honour the Chief Justice that this action was originally set down to be heard before the Full Court, but owing to an objection taken by Mr. Justice Gompertz the action was heard by the Chief Justice sitting alone. Counsel understood that the Chief Justice was sitting alone as the Full Court.
The Chief Justice-I
judgment how I sat.
intimated in my
Sir Henry Berkeley - As Full Court? The Chief Justice - No..
The Chief Justice--Yes.
Mr. Slade-Or to put it in another way, as the only available Court in the Colony. The case was set down before you as being before the
Full Court.
The Chief Justice-I don't think it matters much. Either there was no Full Court then or there is no Full Court now.
Leave to appeal was granted on the usual conditions as to payment of costs.
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Counsel submitted, would be a difficult finding for their Lordships to support.
The case stands part heard.
Tuesday, June 29th.
Mr. MacNeil proceeded with his argument. The points he wished the Court to have in ita mind when it came to the construction of the agreement were-First, that it was a simple ordinary transaction; second, that the docu- ments setting forth that transaction were pre- pared by an experienced and capable draftsman ; third. that the parties were A firm and ก compradore; fourth, that the compradore was engaged by the firm upon condition of his executing the mortgage and agreement; fifth, that the
mortgage and agreement contained an enumeration of
the compra- dore's duties, because (1) it was impossible to say that they were fully enumerated in the agreement, and (2) because one of them was enumerated in the redemption clause, namely, the duty of paying Chinese losses; Sixth, that inasmuch as the firm would not engage a compradure except upon condition that he entered into this mortgage and agreement it might be assumed that they considered his doing so would make it a little more certain that he would perform his dutie if they allowed him to take them up. In fact, the terms of the mortgage and agreement did make it a little more certain that the compradore would perform his duties, the conclusion being that this mortgage was intended to secure the perfor points Counsel desired their Lordships to have mance of the compradore's duties. Those were
in mind when they came to consider the docu ments. It was not stated that the firm asked the compradore to be their compradore.
The hief Justice -There is this fact, if the
firm did not get this compradore they would have got another on the same conditions. don't think that aspect can be overlooked.
The Puisne Judge-There is one other point, and I don't know whether it was touched on in the Court below. It occurs to me that apparently these losses took place at a time when, so to speak, the bottom had dropped out of the market. Can you assume that he intended to secure the firm in all their contracts, or was it not intended to secure them against the default of occasional customers?
Mr. MacNeil said it would be difficult to read
that into it. These agreements were drawn up in contemplation of the ordinary course of busi- ness, That was to say, a man put up a small security to do a big business which everyone hoped was going to be done profitably. But a time of sudden disaster was liable to come, and then it was that the security proved totally inadequate. He quite understood what the Puisne Judge meant, and agreed with it, but these deeds were drawn up in contemplation of the ordinary course of business, and the ordinary course of business must involve the possibility of sudden disaster. Coming to the first point of construction, Counsel said he was prepared to maintain that this mortgage contained an absolutely unambiguous covenant to pay the losses under Chinese contracts, and for this simple reason that the mortgage contained an enumeration of the compradore's duties, and " duties meant things which the compradore was bound to do, and if he chose to state in an agreement or a mortgage what his duties were he was compelled to perform his duties. If อ man entered into the service of someone else to perform certain duties (the arrangement might be verbal), he undertook to do those duties when he entered that man's service. If, on the other hand, a party embodi- ed the arrangement in writing the duties undertaken in writing just as they would have been undertaken verbally in the first mentioned case. He maintained with great confidence that the compradore had undertaken expressly and without the smallest shadow of ambiguity to pay the losses incurred on Chinese contracts. It more required, the mortgage deed gave express power to demand from the compradore the payment of hinese losses. He would submit, further, that there was an equally expressed under- taking, quite free from ambiguous terms, in clause 8 of the agreement.
were
was
Mr. MacNeil, proceeding after tiffin, said the words in clause 8 of the agreement 88
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