1927-08-30 — Page 4

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SHARE TRANSACTIONS DURING 1925

FINANCIAL CRISIS.

LOCAL SHAREBROKER SUES HIS CLIENT.

COUNTER-CLAIM FOR DAMAGES AND BREACH OF CONTRACT.

COUNSEL'S OPENING FOR PLAINTIFF.

A case of very considerable interest to sharebrokers, and their clients came before the Acting Chief Justice (Mr. J. R. Wood) at the Supreme Court yesterday. The hearing is expected to last several days and it involves transactions in shares during the crisis

of 1023.

The plaintiff, Mr. M. A. Razack, a sharebroker of 10, Ico House Street, is represented by Mr. C. G. Alabaster, K.G. (instructed by Mr. J. M. Remedios, of Mears d'Almada and Nephew), and the defendant, Mr. P. N. Cooper, a merchant of 18, D'Aguilar Street, Hong Kong, who is represented by Mr. F. C. Jenkin, ipatrueted by Mr. D. McCallum

THE CLAIM.

account

The claim is for 833,518.98, being 87,923,50 balance due and owing to the plaintif on account dated April 28th, 1920, $1,730.08 on dated May 21st, 1925 $91,338, the difference due and owing to the plaintiff on the sale and purchase of 3,000 shares (new) in the Hong Kong Tramway Company, Limited; $141.09 intcreat due and owing to the plaintiff on the said sum of $21,838; and $2,456.76 the differ- ence due and owing to the plaintif on the purchase price and interest thereon on the sale price of 500 ahares (combined) in the Green Island Cement Co., Ltd.

COUNTER-CLAIM AND- DEFENCE.

"Plaintif Accounted For Everything."

He contended that the plaintiff' | bad. necounted, for everything, but in the circumstances they had no credit for $13,000 as the defendant alleged.

+

Dealing with the facts, Mr. Alabaster continued that on June 20th, about noon," the defendnut went to the plaintiff's office and asked if he could sell back to him the 3,000 Trams at 37 per share aa ho could not deliver them before March Settlement. The plaintif replied that the market rate was 837, but that he bad 1,000 which he could let Mr. Cooper, have at

37.

at. Cooper went out for about ten minutes to ascertain the price and on returning he gave an order to the plaintiff to buy the 1,000 at $37, and instructed him to buy a further 3,000, if posisie aucceed- at 837 or else at 371. The"

FUAL

ed in obtaining another 2,000 shares THE PLAINTIFF'S CASE.. At $37 from the late Mr. J. S. Opening the case for the plain, Ferry, who died a sport time ago. Hff Mr. C. G. Alabaster, K.C., said On Sunday morning, June 18, the chaint was in connection with the tram strike started, and at & certain share transactions in the meeting on the fellowing day of the year 1925, commencing in 1994. It sharebrokers? Association, it

10 postpone the June was the year of the strike and the decided closing of the Stock Exchange for Settlement until June 23rd in con- a temporary period caused some sequence of the strike and the confusion in Stock Exchange circles.closing of certair, banks

The defendant had entered into three purchase contracts with refer ease to 700 Lands and 100 Docks. which he had to complete on the April Settlement Day. Mr. Cooper was in the French Hospital at the time and Mr. Razack was away, Mr. Seth was appointed by the Sharebrokes Association to carry through that settlement.

Defendant Not In a Position To Pay."

Didn't Want the ghares. The defendant then told the

that FL plaintiffs brother

the

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that after June 20th relations be came very strained between plain Sectiement day had been postponti and defendant, and that he Arculli to sue for he won't want the "shares" plaintiff later took the contracts to

the detendant saying he must sign,. as he (plain) and made himself personay hable sad he had bought the shares on nis (defendants) denite instructions.

an interruption occurred how Shortly before the Settlement ever, and the plaintiff left the con- Day, Mr. Hazack went to see air. tracts with the defendant for him Instead Cooper in hospital. Jur. Cooper to sign, which he agreed to do alter anid he was not in a position to pay, thinking the matter over. for the shares. Later Mr. Cooper of receiving the signed contracts seat a note to Mr. Seth authors- nowever, the plaintiff received n ing him to sell at a certain ptice. note which read in part As the Sir. Seth did not get the price, he Settlement day is postponed I ad being entitled to sell whether he not agree with your action in the could get the specified price or not. maiter, which please note." Mr. Cooper asked for the Lands" to be sold at 86 and the Docks at 120. The Lands were sold at Di and the Docks at 118, leaving a balance due of $12.95250 from the defen

+

The defendants have fled counter-claim which asks for dam

of for 'breach ages

contract. There is also a counter-claim for repayment of $18,877, less the two of 83:592.50 and Reveral Sums $2,458.75 admitted by the defendant to the plaintif dant to be due to the plaintiff. obtain the price authorised in the Alternatively there is a claim for note he would have got $1,500 specife performance of the tract and damages for delay.

The statement of defence which has been filed and which was read by Mr. Alabaster when opening the case in as follows:

Con

(2) The defendant denies that

if Mr. Seth had been able to

As a result, solicitors were con suited," and in correspondence, the defendant stated he had actually produced 3,000 Trams for which he wanted cash or a good cheque. This was denied by the plaintiff.

The last item on the claim, said Mr. Alabaster, was 2,136.75, which was not disputed.

PLAINTIFF'S ETIDENCE

the April Settlement of $7,552, instructed t which did not include brokerage fees and stamps.

Replying to this, plaintif said he was going to call attention to a slight mistake he had made in his evidence.

Mr. Jenkin: What you said in your evidence was that "to the best of my recollection. I told my brother to waive the brokerage."

Plaintiff That is the correct ve sinn. I was rather excited at the

time.

Mr. Jenkin: It is not a matter of recollection but a matter of in struction.

Mr. Jenkin proceeded to examine witness as to how he arrived at the figure of $495 brokerage, and wit- ness said he charged 50 cents on 700 Lands, making 3350, and 13 rents on 100 Docks which made

* 426.

Mr. Jenkin pointed out that there more. Mr. Razack returned a few days after the Settlement. The "The examination in chief of plain-was a discrepancy in the figures, defendant had come out of hospital and admitted that he was liable till began shortly before the tibia a it had been shown that there

was continued was another figure.

Mr. Jenkin said that the Lands for the sum of $12,952 30. The adjournment, and admission was made to Mr. Ratack again in the afternoon, after which

Α

PIANOS

on 300 Lands, because under con- tract the price was 1194. Another entry showed brokerage at $100, at 50 cents per share, the price being 1034.

There was further cross-examina- tion on the matter of brokerage fees in respect of the Lands and Docks, and plaintiff was asked to show where they were recorded

Mr. Jenkin then asked for re- cords showing the forced sale, and the brokerage chargeable thereon. Macac at the time of the forced. Plaintif replied, that he was in

sale, which was dealt with by Mr. Sath and that there were present in the office his brother, and his son,

and a Chinese assistant.

Plaintiff was unable to supply Mr. Jenkin with definite answers regarding certain matters of broker- age on the forced sale and in respect of the Lands and Docks, and Mr. Jenkin observed: You must know your own books i

Plaintif: I do not. I am not a

book-keeper. My son does not know them either. My brother used to keep my books, and he has been away for sometime, and the muddle has occurred.

In answer to Hisfordship, plali- tiff said that he kept his own books now, but had only begun keeping from Shanghai.

the sum of $3,818,95 or any other Defendant paid a cheque $4,000 on/Ar. F. C. Jenkin (for the defence) should have been charged at 13 them recently, following hia return ́,

sum is due by him to the plaintif

XO

1925

cross-examined.

cents, and the Docks at 60 cents.

Plaintiff was asked if he did not know his brokerage off "pat," and replied that it sometines got out of his head.

Asked when the mistake in the

Mr. Jenkin suggested that plain- tiff rust have been looking through them since 1925 in connection with

this case

account on May 18th, and he was

In answer to Mr. Alabaster, Mr.

on June and (2) As to the first item of the given a receipt for the sum, being Hazack said that claim of 87,926.50 the defendant part payment of account for April 1992, Mr. Cooper told him to buy saye as follows: There was

On June 2nd he made a further 1000 Trame al-$37, and he even tually got them from Mr. R. S. account stated between the parties payment on account, the receipt Perry at that rate, on condition for April, 1925, for the above sum

being made cut for May 18th, but arising out of transactions between be idr. Alabaster, was told that that the shares went direct to Mr. the parties and dus for completion the $1,000 was not paid until June Cooper. Witness returned to the on the April Settlement Day (April 2nd 25th, 1925).

The defendant had set up a most 2,000 Trams at $37, and nit. Cooper the whole thing is imagination with | brother's. fault that there was a

The sum of $7,23.60 was agreed extraordinary story,

because he

ottice, made out the contract for

Questioned regarding the amount charging of the brokerage fees bad of 87,508 and the brokerage in con- namely the been discovered, plaintiff said Mr. nection with same, to him two weeks ago.

Mr. Alabaster in his opening, wit- Remedios (solicitor) pointed it out balance from $12,952 referred to by Mr. Jenkin; I put it to you. that mess said that it was not his

as being due by the defendant to said that an April 18th the sum of later the same day witness was regard to the charging of the mistake. He told his brother it

$7,599 was due.

Of this he had paid 25,000, leaving only 42,522 due, He said that if his instructions had been carried out he would have saved himself only $1,500 yet said that Mr. Razack was willing to compromise, to the extent of taking over 85,000 less instead of $12,952, leas $1,500.

ОД

Mr. Jenkin: Is your case now that this figure was arrived at be- cause you told your brother to de- not a specified fate of brokerage 3.

Plaintiff I did do. I must have told him.

In further reply to Mr. Jenkin, plaintiff said he told his brother to deduct $425.

It was pointed out that $430 was shown, and he asked how the 85 error had crept in.

signed the chit for receipt, but

wae 50 cents a share, and the mis the plaintiff and of this sum defen-

Plaintif It is not. surprised to see the contract back brokerage feest

take to the brokerage was his, as Mr. Jenkin: You said brokerage | he told his brother the amount to dant has paid to the plaintif the

at the office. The tram strike took

was charged at 50 cents, and now deduct. sum of $5,000, leaving a balance dus

place on that day, and next day Bettlement Day was postponed in- of 8,2,599,50.

His Lordship commented that (3) As to the second item of the

definitely by the Stock Exchange you say you made a mistake. You

What was the plaintiff had said that he took off claim, namely $1,730.08, the defen-

and the Sharebrokers Association know it is 35 cents.

the 85,000, leaving a balance of $7,852 Witases said that he went to see brokerage you waired

Docks?

on the amount of 812,952. dant says: There was no account

Mr. Cooper and Mr. Cooper said: stated between the parties as

What is the good of buying these

Plainti: I think $75. Mr. Jenkin: Mr. Cooper filed his The alleged on May 21st, 1925.

shares for me. Settlement is post afidavit two years ago, setting out defendant owed plaintiff the sum of

. Strained. Eelations.

poned."

Witness replied "You fully his case. "He said that there 828,730.08 against delivery by the

In June relations between the gave me orders on Saturday, and was an agreement between you that plaintiff to the defendant of 500

the business was done on Saturday. shares of the Hong Kong and parties suddenly became strained,

you would accept $7,552 That was Whampoa Dock Company, Limited. With regard to the item of $91,338 What difference does the postpon two years ago and you have two This account Was agreed and in connection with Trams, Mr. ment of Settlement Day make."

Witness left the office, and Mr. Years to think out your accounts settled by the payment by the Cooper had to find 1,500. Tramway

over the difference of $230. Had he delivered the Cooper agreed to sign the contract. defendant of the sum of $27,000 shares.

Plaintiff I have been away. A little later, however, witness

Mr. Jenkin This is not a mat against such delivery on May 1st, shares he would have received

$06,002.50. He was in a position received a letter from Mr. Cooper, 125.

Plaintiff replied that it must have (4) As to the third and fourth to deliver 500, but not the other part of which was to the effect thatter of personal recollection. It is items of the claim, namely, 821,538 1.000 so he wished to borrow the as Settlement was postponed he your werd against Mr. Cooper's.

You said that you had deânitely been a clerical error. Mr. Cooper would try to arrange instructed your brother to waive Mr. Jeakin: You told your and $141,02 interest thereon, the shares. defendant

Mr. Alabaster said he under- what he had promised. Juna the says-On Settlement Day (June 23rd) there stood that the practice of borrow- Later witness saw his solicitor, the brokerage which would account brother to deduct 8495, and in do-

in making the deduction, b was due by the plaintiff to the fig was as follows. Someone who Mr. el Arcall, and showed him the for the $425, Was your brother aing so he makes a mistake of 85 Plaintiff He was in my office in In answering further questions, defendant the sum of $90,470.50 had the shares would agree to loan chit. He also told Mr. el Arculli broker Mr. Jenkin added.

plaintiff said that there was owing. against delivery by the defendant his certificates for say three months to take up the case: against Mr. of 3,000 shares (new) in the Hong at the market price of the day and Cooper, for the recovery of 87,559 charge of my books.

Plaintiff admitted, in reply to 812,962. Of this amount there bad Kong Tramway Company, Limited at the end of the period the per- which was in connection with the further questions, that 75 cents on been payment on account of 84,000, The June Settlement Day was, by son accommodated gave him the sale of 700 Lands and 100 Docks,

Plaintiff further stated that there the Docks might not be the correct and by cheque received $1,000 Ordinance, postponed until July certificates back and received the

was no agreement between him and brokerage fee, and Mr. Jenkin com- leaving a balance of 87,952

Plaintiff replied to another que 23rd upon which day the defendant money advanced, daly tendered to the plaintiff the The lender of the shares had the Mr. Cooper as to the payment of mented that the Docks were sold said 3,000 shares, but the plaintis use of the money for three months that money, but Mr. Cooper wrote at 119, which would be 50 centsation that he was prepared to make, failed and refused to accept de and the borrower got the chanes of to his (plaintiff's) soliciter on Jane share "A curious mess you have an allowance of 8425 on brokerage

made."

(waiving this amount) on account Plaintiff: I don't think so.

of the "forced sale. He did, not livery of the same, or pay the being able to buy cheaper during sard, kad following that a lot of agreed price of $90,479.50:

Mr. Jenkin suggested that plain- agree that he was so financially the period. The cost of the loan of correspondence took place. July the 1,000 shares was $52,000... 23rd was the date arranged by the tiff could not account how balance embarassed through the strike that Fallure to Beturn $18,877.

In the March Settlement defen Government as Settlement Day for of 8135 was made up, and that in the 8425 would have made Moreover, the plaintiff failed and dant was unable to fulfill his obliga- the June Bettlement. refused to return to the defendant tions and was not in a position to Mr. Cooper came to plaintiff's order to square up this 8430, plain material difference to him

tiff's brother had made an error in Referring to Part II of the the sum of $18,877-monies of the return the shares which in the office with soothe Tacs shares for the brokerage

claim, and plaintiff said that pre defendant held by plaintiff as mar- meantime had doubled owing to sand tendered the Tram for

admitted that there vious to the redemption of the gin in connection with the transse change in the Company's scrip. delivery. tion, The sum of $18,877 is still He was also unable to fulfill að. -Plaintiff said to him "I do not must have been some mistake. The Docks Mr. Cooper agreed to take due to the defendant by the plain other transaction ander June con have to take any Trams from you mistake was first discovered about certain shares up as plaintif told

a fortnight ago.

him (Mr. Cooper) it would help tiff and the defendant will ask tract and as a result wanted a loan You owe me a cheque. leave to counter-claim therefore and of 3,000 new shares to be paid in Mr. Cooper then replied. In answer to Mr. Jenkin, witness him financially. Mr. Cooper came also for damages for the aforesaid the June Settlement. The figure have the Trams here and if you do said that the charges of the Stock to the office and said all he could

Exchange and the Sharebrokers" get was 822,000 and 85,000, failure and refusal by the plaintiff to be paid was agreed at $00,479.50. not take them up I will get you".

Association were the same.

It was pointed out that recorda to fulfil bis obligations and, take. Mr. Alabaster continued that Plaintiff challenged him to pro- delivery of the said 3,000 shares. there was also a dividend of $400 duce the Trams, but they were not when it was pointed out that is with regard to Mr. Cooper's tran The defendant denies the alleged which they received on defendants' forthcoming. Present in the office two lists produced the charges were sactions appeared in the books en- purchase of 2,000 and 1,000 shares account for Docks They agreed to at that time were Mr. Perry, since different, plaintiff said they should titled Bad and Doubtful Debts

and Loan and Options" of the said Hong Kong Tramway give him a rebate of $223, for deceased, Mor Lorario, & clerk, also questioned as to whether he could Mr. Jenkin suggested that wit Company Limited, being made, general brokerage on the whole since deceased, a Chinese clerk which is not admitted, were made transaction. He gave them a plaintiff's brother and plaintiff's at his request or on his behalf cheque for $4,825 which they added son. The brother was now away (5) As to the fifth and last item to his credit for the sale of some from, the Colony, and had been for of the claim, namely, $2,486.78 the now Provident shares."!

a considerable time: defendant admits this sum is due. The seven items totalled $90,479 50, (6) Whilst admitting that the and his Lordship would see that by sum of $2,692.50 (paragraph-2) and Edding them together with the the sum of $2,456.79 (paragraph 6) exception of the first two, 232,000

CROSS-EXAMINATION.

any

produce any brokerage record, news should get a little more lami- plaintif Laid brokerage fees were liur with his books over night, and only entered in a general way in reserved the remainder of his cross the accounts book. There was no examination until this morning, special brokerage book, kept parti- when he will deal with Part II. of cularly for this purpose the Court adjourned until to Mr Jenkin, opening his

Quoting from a record-book cross. examination, said that he would banded in, Mr. Jenkin said that in day.Ita anticipated that the cabe are due by him, to the plaintiff, the and. $27 307.50, they botalled deal with claim by claim. In con one place it was shown that the will occupy several more days, as defendant claims from the paintin $21:112, which was the other half bection with claims Mr. Jenkin brokerage payable by Mr. Cooper there are still a number of witnesses

ponted oat that Counsel had said, was $250, at 10 cents per share to call the sum of 216,677 Layes of the counter-claim:

claim.

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