CO129-186 - Public Offices & Others - 1879 — Page 101

Nota de man she lo

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any of such bills, to the effect that on payment "thereof at maturity the above-mentioned bills "of lading and shipping documents shall be "delivered to the drawees or acceptors thereof, and such authorisation on my part shall be "taken to extend to cases of acceptance for "honour." Then a further clause is: "I further "authorise the Oriental Bank Corporation, or

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any manager or agent thereof, on default being made in acceptance or presentment, or in payment at maturity of any of the above bills,

" to sell the said goods or a competent part "thereof, and to apply the net proceeds (after deducting usual commission and charges) in payment of such bills with re-exchanges and charges, the balance (if any) to be placed

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against any other of my bills which may at the * time be in the hands of the said Corporation, and, subject thereto, to be accounted for to the proper parties." Evidently showing that this document in all its parts was intended for the benofit of the Banking Corporation and for their additional security. Then it goes on: I

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further authorise the said Corporation, or the

"holders of the said bills for the time being, at any "time before their maturity, to accept payment: from the drawees or acceptors thereof if

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required so to do, and, on payment, to deliver "the said bills of lading and shipping documents "to such drawees or acceptors; and in that event the said Corporation or the holders of

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said bills are to allow a discount thereon for

"the time they may have to run at the Bank of England minimum rate of the day if taken up

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in London, or if in India, Ceylon, China,

Japan, Mauritius, or Australia, at the current

"rate of discount of the day," &c. Then, Lastly, it is mutually agreed that the delivery

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of said collateral securities to your Corporation shall not prejudice your rights on said bills

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"in cases of dishonour, nor shall any recourse taken thereon affect the title of the Corporation

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to said securities to the extent of my liability "to your Corporation as above." That doen- ment is signed by the Respondent alone, and there is a schedule describing the particulars of the bills.

Now their Lordships would point out that in the first place the bill of exchange, of which mention is made in that letter of hypothecation,

is in terms a bill of exchange drawn expressly with reference to the letter of credit dated the

26th February 1874. It is a bill of exchange drawn in pursuance of the terms of that letter of credit, and was endorsed upon it at the time the letter of hypothecation was given as part of one and the same transaction.

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What passed at the time appears on the case of the Respondent; it is there stated in paragraph 7: "At the same time that the Respondent signed the said letter of hypothe- "cation he endorsed the said bill of exchange "to the Appellants; and the Appellants, on "the receipt of the said bill and letter of hypothecation, endorsed a notice of the drafts against the credit on the said letter of credit and returned it to the Respondent, and the Respondent received the value of the bill of exchange in account with the Appellants." The letter of credit therefore is clearly connected with the letter of hypothecation; and it seems

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to their Lordships perfectly plain that the letter of hypothecation was intended by both the parties to be merely an additional security to the bank, giving them an option to do the various acts specified in the different clauses of it, should they think fit 80 to do, but in no way gotting rid of the letter of credit or disconnecting it from the transaction. The learned Counsel argued that the letter of

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