1929-05-01 — Page 4

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COLONIAL TREASURER CROSS-

EXAMINED

SATISFIED THAT YEO CHEQUES WERE FORGERIES.

GOVERNMENT AS AN ORDINARY CUSTOMER.".

YESTERDAY'S SUPREME COURT `

PROCEEDINGS.

The Colonial Treasurer, Mr. C. McI. Messer, gave evidence during yesterday's hearing of the case in which the Government is suing the Hong Kong and Shanghai Bank for the re-crediting of the sum of over $260,000, the money involved in the Yeo frauds. .

Owing to the difficulty of the Jury hearing Mr. McI. Messer, His Lordship occupied a seat next to his throne and the Colonial Treasures gave his evidence on "the opposite side of the Court to the witness-box. As a consequence, the Press were accommodated below the Jury."

Even 10, it was most difficult to catch the replies' of Mr. Messer, and our reporter had to rely largely upon lip-reading

During the afternoon sitting, the fans failed. Then the lights went out for a few seconds and the sound of electric bells being rung frantically outside the Court indicated that the fifté had also failed..

→

His Lordship, Counsel, Jury, and witness breathed a sigh of relief when the Court "adjourned.

ANOTHER ADJOURNMENT ORDERED.

Mr. Messer said that Prosa East! Account cheques were made out by Mr. Barton who signed them arst and then sent them to witness for signature: Mr. Black had nothing to with them.

sion.

"No Argument."

tion.

(To witness): It would be within your contemplation that you should Inform the bank-Not as a legal contract, but I should do, it thought the cheques had been ab stracted for fraudulent purposes.

So you will agree with me that in the case of cheques being "sur- ruptitiously extracted from a cheque book in Treasury custody, like action would be taken by you -If I knew they had been extracted.

The same afternoon -If I found they had been improperly extract- ed, yes.

Previous Letters,

to

Is the duty of looking after the cheque books left entirely Tsang 1-Under Mr. Black. I would not interfere unless for some special reason.

You are the head of the depart- ment; did he have that duty – Тел.

As one of your deputies, would it not have been his duty, if he discovered that cheques had been extracted, to refer the matter to you 1-To Mr. Black. That is, if he thought they had been wrongly ex tracted.

Should such a report have been made by Mr. Black If there had been appearance of cheques having been extracted in improper circum- stances.

On previous occasions, there had been latters and telephone messages between the bank and your depart ment with regard to the propriety of honouring cheques-Yes, but they referred to cheques which had been issued correctly. The payees had neglected to cash them and they were stale."

Underlying that course of action has been the safeguarding of both. parties -Certainly; if we can help them, we do so, and if they can give us assistance. they do.

Departmental Order,

Trang On Wing joined the Trez-

These messages from the bank sury in Angust, 1920, on transfer were issued because there exists a ment from the Imports and Ex- mutual understanding to protect ports Office. He had performed his each other's interests Yes, to pro- duties to witness' entire satisfac-tect their interests as well as mine. The state of affairs-mutual inter- Referring to what Mr. Sheldon communication between the Trea- termed the contractual relations sury and the bank has been in between the Treasury and the Hong existence for many years -For The counterfoils of the cheque Kong and Shanghai Bank, witness years, books, from which the cheques said he was not aware of any con- were extracted, were handed to Mr.tract between them in regard to Messer, who said that the shortage the custody of the cheques, or of was first brought to his notice on any contract to the effect that January 18,1998. He instructed cheques issued by the Back to the Mr. Black to go to the Hong Kong Treasury should not be allowed tơ Bank, get the cheques, and not to get into the hands of strangers. On the day of the discovery, that enter into any argument or disens-Nor had he heard of any contract cheques had been used improperly which made it a condition that the you issued & departmental order cheque books be kept in the safe with regard to cheque books --- when not in use. The contractual Yes. relations were the ordinary relations Does it read to this effect: between a banker and customer. "Government cheque books must, Cheques on the Treasury were in future, be issued daily and re- About ten days before the end prepared by Tsang On Wing and his turned- daily to the cashier or ac- of the year 1927, just after an order assistant, and witness had no oc-j-countant who will examine them had been given to the Bank for 200 casion to find fault with the manner with regard to audit numbers and cheques, 400 cheques were received. in which they were prepared. see they are locked up when not Taang On Wing spoke to witness Quite a number of people had in use-Yes; the audit numbers in the main office, saying that the access to the safe during office hours, are really the serial numbers. Bank had sat 100 cheques instead During the tiffin interval, the che- of 200, and added We are 60ques were returned to the safe, and short or words to that effect."1 he considered that they were in took it to mean that he only re good Custody with the presence of quired 60 more cheques." Witness an Indian guard and another person said he replied that as the Bank in the office during that hour. had sent the book, it did not mattor.

Witness also asked the assistant auditor, Mr. Dullin, ta go to the Bank as it was the custom to sead an auditor when anything was

wrong.

זי

Not Tsang's Writing. Mr. Sheldon: When he said he was cheques short, or used words to that effect, did you gather that he meant by those words that 50 cheques were missing from the cheque-book ?—Not at all.

Therefore, I suppose, you did not gather that the 60 cheques had beeri extracted—I had no idea of that..

More Suppositions. After the tiffin adjournment, Mr. Messer was again cross-examined by Mr. Jenkin. He admitted that there was a genuine cheque written hurriedly by Teang, which was not in his usual neat handwriting.

And the Cashier, by examining these numbers, can see that no. cheques have been improperly ex- tracted 1-Yes. They would be lock- ed up during the tiffn hour.

It came ns a surprise to you to find that for some time previous to the loss of the cheques, the cheque books had been left lying about Not as a surprise, because I had seen them.

You know of it 1-But I took no notice.

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Can you advance any rational theory or explanation as to why Tsang did not, on numerous op portunities, when you were present in his company communicate the oc- currence to you -He did.

Did he ever bring the book to you with the altered numbers on it ?

No.

Did he ever tell you that he had a book which contained only 670 cheques No,

Although he had received that book on November 2. he said no- thing to you about it until only ten days before the end of Decem- ber 7-Yes.

He speaks good English 1-Yes... You never misunderstand him at all-His English would not be as good as that of an educated English- man.

Tanng volunteered absolutely no- thing to you at all?-No.

On his return from the bank, Mr. Black reported what he had dis- covered 1-Yes.

Did you institute any inquiries to find the means by which the serial numbers had been altered 1-No.

Did Mr. Black say anything about 30 cheques being missing 1-1 can't remember.

Did he make any report about the cheques I can't say

When did you first learn that

there were a number of cheques. missing-From the stubs.

Mr. Black's Silenco,

Did Mr. Taang maintain that two books were sent from the bank with 36 cheques missing from each 1- Yes.

I repeat, you knew of it 7-Yes. Mr. Jenkin: Apart from the

And took no action I-No. legal aspect of the case, do you re-

Why, then, was the departmental cognise any obligation on the part order. issued -Because I did not of the Treasury due to the Hong know who would go into my office. Kong Bank with regard to the

Why was it issued-to prevent cheque books issued They send in forgery 1-To prevent any farther The stubs of the cheque books their notes which I countersign occurrences such as was discovered were brought to witness's office by On Government Service."

on the previous day. Mr. Black, when be came back from.

I asked whether it was to pre- But do you recognise any, duc the Bank. When witness saw the obligation? I regard myself under vent forgery. Your answer means disputed cheques be immediately no formed the opinion that the hand-

special obligation, only the the same thing?-Yes.

The order has been followed from ordinary thing between customer writing in the bodies of the cheques and bank.

then until to-day 1-Yes, as far as was not that of Tsang On Wing.

When Mr. Proctor, a member of overnight had the only thing ex-

Suppose the Treasury was rifled I know. of the Bank's staff, visited witness's tracted was the current reserve book! office and brought the three dis- from the safe 1--I should probably interval -No. puted cheques with him they did inform the bank but I should not The cheque books are kept in the fof the fact -If be realised it had not have much conversation. He put it as an obligation. If I found safe -No, in the drawer of a desk remembered saying, "the signature it out I should certainly let the bank of which Mr. Black and I have the son why he did not communicate to your room, the only thing you re-

Can you give me a rational reag was a darn sight too neat for me. i know. and must have had a very steady Why 1-To assist them in case any Land."

Wrong Figures.

cheques went astray.

Not Kept in Safe.

But it is of sufficiently high stand- ard to permit his bringing me a Is the safe locked during the tiffin book within, say, two days of its being altered and acquainting me

been altered.

key...

That changed routine will also be you the loss of the cheques 7--It is suppose. he never thought it was of

And that was the first time you heard the allegation-Yes.

After the shortage was discover- ed 1-Yes.

Mr. King came along shortly afterwards Some little time after. Throughout the happenings in collect Tsang saying was that the his? Yes. That was one of the things I remember. It was in‘his mind that two books had been sent short from the bank

for the protection of the bank as very hard to give a reason, but I handwriting on the cheque was not To assist them in what manner well as yourself --For the preven- To stop cheques in order to prevent tion of fraud. fraud being carried out.

"Mutual Duties."

Mr. Sheldon: Did you have any doubt that the signature was a forged signature -Ño doubt"át, all; Was it clear to Mr. Praetor at the end of that interview that you had no doubt-It must have been. would it not occur to you at dhee Yes.

Names of Payees.

If such an accident occurred,

You regard it as your duty to prevent fraud whenever you can Certainly. It is every man's duty. The duty of all reasonable men

sufficient importance..

Not of sufficient importance 1-It is a matter of Chinese mentality. It is very hard to any what a Chi- nese brain thinks.

Would Have Told Bank.

If he had communicated the loss to you, you would have reported it to the bank -If there was any doubt about the way the loss occur red.

4:

Apart from the constant contact he had with you from day to day, from December 22 onward, there were obvious opportunities of making known his discovery to you?—Yes,. I suppose so.

I cross-examined Mr. Black za to way he maintained silence when be went to the bank and one reason There is no doubt now that the he gave was that he did not want cheques were lost No.

to be inveigled into a discussion His Lordship: If you had been with the people at the bank. He told on December 2 that the cheques said you gave him strict instruc- had been lost, you would have men- tions to maintain silence at the tioned it to the bank? That the bank. You have not stated that in cheques had been extracted from Court No. the book, I mean 7

Witness: Yes."

So that, whatever the remainder that there was high probability of What did you do when you re- of the Hong Kong Bank thought on those cheques being put to an im-ceived a new book from the bank January 19, it was clear that Mr. proper use Of course, if they I looked at the receipt but did not Proctor knew that you had re were the only things extracted from look at every individual cheque in pudiated that signature before that the safe.

the book letter was written ?-It should have I put it to your that if that oc- If you had a book in front of you been clear.

curred to your mind, that would for three days and the numerals on Was there any conversation, about be the main incentive for your com- the cover were altered, would it the possibility of the cheques have municating with the bank To stop arouse suspicions in your mind -If ing been obtained by a trick fraud, exactly,

I noticed it, but I do not know believe there was.

There is a mutual duty in those because I have never had a case. Anything definite-No, nothing circumstances between Bank and If the numerals on the cover of definite.

customer-I would not call it a the book before you had been alter

Nor did Mr. Black tell us why. duty or an obligation, bat to informed to a broken hundred, and you

he received such instructions -No. Mr. Jenkins I suggest that if a You expected him to say nothing On January 19, Mr. Grayburn the bank would be a natural thing recollected "having acknowledged

the receipt of 600 cheques, would report had been made in the first about the handwriting at the beak? rang witness up on the telephone to do. and the following conversation took You could not conceive that any the broken hundred cause your place it would have shown what-My instructions would not admit place, said Mr. Messer. Mr. Gray- properly-minded man would fail to suspicions to be increase1-It is occurred and would prevent like cir- discussion. When he came back he burn said: "What about those acquaint his bank with the loss of hard to say,

If the book was a month old and cumstances in the future ?-Prob said they tried to force him to talk

ably. cheques 1-If the books had been

about the matter. If he carried cheques, the signatures are gen stolen, be should inform them.

had been constantly before you and

You had that order typed on out my instructions, he would, hayə uine." Witness replied "They are You will agree that any customer, you noticed that the numbers had January 18, 1998. You would have said nothing. not." Mr. Grayburn: "At any rate Mr. Black in our office said that if he acted correctly and properly, been altered, that would increase had it typed on December 2 had

You understood that anything he would take that course -Certain your suspicion 1-Yes.

you known I can't say.

said was the result of being prac- was his signature." Witness re

ly.

Taang speaks to you several times plied: "Mr. Black says it is not "

What do you mean I probably tically forced out of him Yes. You do not doubt that it would a day Yes..

would have done.

Did he tell you that he had been and rong off.

be the duty of a customer to take His assistant, Teung, has access

His Lordship: I think that is a forced to speak but would admit difficult question to answer, that course any time such circum- to you 1-Less than Tsang.

The nothing-He did not admit it. He Mr. Messer afirmed in reply to stances arose What is duty f It Tsang can come into my office at conditions were not the same. You said they asked, "Is not that your Mr. Sheldon, that he

con- would be a common act of cour- any time. There is nothing to stop must remember, Mr. Jenkin, that own signature £2 vinced that the disputed cheques tesy.

him in the proper performance of on December 2 things were dif Is that all 1-That is all I re- were forged the first time he set his His Lordship: Is this a question his duties.

ferent The cheques had been collect.Met eyes upon them. That conviction of law?

Your relations with the officials Counsel: You understood the of the bank up to this occurrence forged by January 18 word "short as used by Teang had always been friendly 1-Pe to mean that 60 cheques were need-ly You have thought a lot About this led to complete the year That "At this stage, the hearing was ad- case 1-Yes.

what I understood.

journed until this, morning.

Unshaken Conviction.

Mr

You would stop at his desk and had remained unshaken through Mr. Jenkin; Yes, My Lord; it talk to him about his duties 1-To

prises out of the relationship be- see what he was doing. Witness said be had always found tween bank and customer and is Mr. Black competent and dutiful, the implied duty under terms of and his services were satisfactory. contract,

"Chinese Mentadity."