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57631
108
No. 93.
CEYLON.
THE GOVERNOR to THE SECRETARY OF STATE.
(Confidential.)
(Received 23rd November. 1917.)
[Answered by No. 94.]
Ceylon, 18th October, 1917. SIR,
WITH reference to paragraph 2 of your Confidential despatch of the 16th May, 1917, I have the honour to enclose, for your information, a copy of a letter, dated 6th October 1917, which has been received from the Custodian of Enemy Property, and to request that you will be so good as to agree to a further exten- sion of time being granted, up to the 31st December, 1917, to Mrs. Mary de Silva and Mr. Philip de Silva to settle their debts to Messrs. Freudenberg & Company.
I have, &c.,
JOHN ANDERSON,
SIR,
Governor, &c.
Enclosure in No. 93.
(No. 167.)
6th October, 1917.
Mr. Philip de Silva and Mrs. Mary de Silva.
WITH reference to your No. 1166/W, of 28th June last, I have the honour to inform you that the liquidators of Freudenberg & Company have applied for a further extension of time, up to 31st December next, in which to liquidate the debts of Philip de Silva and Mrs. Mary de Silva.
2. The liquidators write as follows
"C
We gather that the great increase in the cost of materials and dynamite, etc., the shortage of freight, and the consequent drop in the price of plumbago, have had the effect of preventing the above named from settling the amount due to this firm.
LA
We may inform you that the boilers purchased from Messrs. Hoare & Company are in process of erection, and it is expected that when the work is completed the de Silvas will have no difficulty in immediately reducing their debt, and will be able to finally settle same within the above- mentioned period."
3. In view of these statements, and of the fact that the sale of Freudenberg's buildings will not be completed before 17th January, 1918, I advise that the extension asked for be granted.
The Honourable
The Colonial Secretary.
57631
SIR,
No. 94. CEYLON.
I am, &c.,
A. S. PAGDEN, Custodian of Enemy Property.
THE SECRETARY OF STATE to THE GOVERNOR. (Confidential.)
Downing Street, 29th November, 1917.
I HAVE the honour to acknowledge the receipt of your Confidential despatch of the 16th October,† and to inform you that, in view of the fact that it is anti- cipated that the sale of Messrs. Freudenberg's buildings will not be completed before the 17th of January, 1918, I see no objection to a further extension of time being granted up to the 31st December, 1917, to Mrs. Mary de Silva and Mr. Philip de Silva to settle their debts to Messrs. Freudenberg & Company. I have, &c.,
WALTER H. LONG.
61976
No. 95.
CEYLON.
THE GOVERNOR to THE SECRETARY OF STATE. (Received 17th December, 1917.)
[Copy to Foreign Office, 31st December, 1917. L.F.] [Answered by Nos. 98 and 99.]
(Confidential.)
SIR,
Ceylon, 31st October, 1917. WITH reference to my Confidential despatch of the 16th October, 1917,* in which I recommended the grant of a further extension of time, up to the 31st December, 1917, to Mrs. Mary de Silva and Mr. Philip de Silva, to settle their debts informa- your to Messrs. Freudenberg & Company, I have the honour to enclose, for tion, a copy of a letter, dated 20th October, which has been received from the Attorney-General regarding the agreement dated 28th February, 1914. entered into by Mrs. Mary de Silva with Freudenberg & Company.
2.
As pointed out by the Attorney-General, even after the debts alluded to above have been settled, Mr. de Silva (or rather his mother) would under clause 7 of the agreement in question be under a perpetual obligation to supply Freuden- berg & Company with plumbago at a price below the current market rate. in the event of that firm being re-established in Colombo after the War.
3. I strongly recommend that, as soon as the debts referred to in paragraph 1 above are fully liquidated, the agreement should be declared void, as being injurious to the public interest, under section 13 of Ordinance No. 4 of 1917† (a copy of which
is enclosed for ease of reference), and that no conditions whatever should be attached to such termination.
4.
I shall be glad if you will be so good as to communicate your decision to me by telegraph.
(No. 156.)
SIR,
Enclosure 1 in No. 95.
I have, &c.,
JOHN ANDERSON,
Governor, &c.
The Freudenberg Liquidation.
Colombo, 20th October, 1917.
I HAVE the honour to draw attention to the present position of the case of Mr. Philip de Silva. I understand that the liquidators expect to collect the remainder of the amount due from Mr. Philip de Silva under the arrangement which they have made with him, and which has previously been reported, by the end of the year. Philip de Silva will then be free of any further obligations to the Freudenbergs so far as their advances to him are concerned. It has, however, been previously pointed out that even when all these advances are liquidated he would, under his contract with Messrs. Freudenberg & Company, be bound to continue supplying them with plumbago indefinitely at Rs.20 below the current market rate. 2. To put the matter a little more exactly, it is not Philip de Silva, but his mother, Mary de Silva, who is under this obligation. The pits which he controls are all in his mother's name, and he carries on business as her attorney, but as throughout this matter he has been referred to as the person concerned, it is more convenient to continue so to refer to him.
3. The obligation referred to is contained in Article VII. of the agreement of 28th February, 1914, a copy of which is annexed.
4. The legal position with regard to this obligation appears to be as follows: The obligation is a future and contingent obligation, and, as such, if capable of being fairly estimated, is enforceable forthwith in the liquidation under section 24 of the Enemy Firms Liquidation Ordinance, No. 20 of 1916. It is obvious, how- ever, that, if when Philip de Silva's debt is fully liquidated action is taken under that section, the court will hold that the liability is not one capable of being fairly estimated, and will direct that no account should be taken of it in the liquidation.
* No 48. + Not reprinted.
* No. 89.
† No. 93.