1896-12-26 — Page 4

conduct of the partice, while the evidence of Cheong Koon Bing on the same points cannot be reconciled with anch condnot.

Before I proceed to consider that sonduct it may be well to mention two or three facts in

the сала,

Bath Mr. Darby, and Cheong Koon Bing say that they saw Cheong Kaf on the 27th March, 1802, bat Mr. Darby does not speak of any conversation taking place with him. At the interview of the 97th March and on the following day Cheong Koon Bing de Livered to Mr. Darby Chinese promissory notes

namely, whether the arrangement for charging Kan Bing Tol's account with the losses on the Kwong Fak and Wing Tang Yan bills was or was not socompanied with a release of Choong Koon Sing from liability in respect of those bills. In other words, the conversation is con- sistant with aither contantion. I cannot help thinking it strange that Choong Kood Bing did not isko Kin Bing Tel to see Mr. Darby: who had made the alleged agreement, and seek an explanation from him,

In auswer to this letter Mr. Darby wrote and Cheong Koon Sing signed the following letter

These four letters, then, are consistent with and support the contantion of the plaintiffs as to what took place at the interview of the 37th March, 1809 they are inconsistent with and tend to rebat the contention of the defendants with respect to the same matter.

In scordance with the request made in Cheong Koon Bing's letter of the 31st May, 1892, the Bank on that date debited the soconut of Kan Sing Toi with the sum of $97,292.23 being the amount in local currency of Tia 70,000, the face value of the bills drawn by the two Banks with which he was connected. The and other soonrities which he had obtained from

Bank was empowered to make this charge by the terms of a general letter of hypothecation the Tan Shing, Kwan Yu, and Kang Ta

Hongkong, 1st April, 1892. Hanko and which amounted in value to about The Manager, the Bank of China, Japan, and the given to it by Kan Sing Toi on the 25th $100,000. These documents were merely kept Susia, Lal, Fresent

August, 1991. It is material to observe that by the Bank for safe custody and were realised

Dear Sir--In reply to your letter of 30th March the entry was not accompanied by any car from time to time by Cheong Koon Singleting that you hold me responsible for Taels 150,000, rasponding entry in the Compradore's Liabi- and the proceeds paid by him to the Bank in being amount of defa on Insolvent firms in Bhang lity Account, reducing pro tanto the amount discharge of his liability on the bills and bal, I now beg to hand you promisory notes to the of his liability, as it would have been note. The whole amount was got in with the value of $71,800 made out in your favour by respon if the Bank had intended to relieve him from alble Chinese firmos. Please return me later on disability in rospact of the bills in question. exception of some fox thand dollars-Mr. honoured acceptances for a like amount Yours Interest on the amount was charged in the Darby says "inside of 85,000."

faithfally,

Compradore's Liability Account and not-ex-

The ten bills were all dishonoured in oon- sequence of the failure of the drawers at

Shanghai. The banks in Hongkong by which they were drawn also enapanded payment from time to time, the latest about two months after the 27th March, 1892. "The promissory note of the Kwan Yu Bank was not paid. Kan Bing Ton ascended from the colony one or two

months after the same

I come now to the consideration of the con

CHIONO KOON SING.

•

"a K. s.

I shall shortly hand you further cover, fa, soncept in an isolated instance-in Han Bing Toi's a posible, but I hope the Bank will not pres me sooount. Mr. Darby says that Cheong Kai too much.

"on more than ons gocasion asked the Bank not to press him for an immediate softiement, in the hope that there might be some margin on Kan Bing Tol's securities." There was never any such margin, and the liability of Cheong Koon Sing was never in any way reduced by the arrangement for debiting Kan Sing Tol's ac count. On the 30th June, 1884, the entry received from the head office in London, written was, apparently in accordance with instruction

the socount

duct of the Bank and of Cheche Kooa Sing asha throwing light apon the privadings at the interview of the 27th Marek.

On the 30th March, 189, the Bank opened an account in their books called the "Com- pradore's Liability Account.” In this sccount they debited Cheong Koon Sing with the amount of all the diherpured bills, including those of the Kwong Fak and Wing Tang Yan Banks, and the unpaid note, and with interest and other charges In respect of them, and credited him with payments made in reduction of his liability. Kr. Darby says that Cheong Koon Bling was not furnished with a copy of the account, but that he knew of the existence of the account and could have seen it at any time or obtained a copy of it. This statement is both reasonable in itself and consistent with what I take to be the characters of the mon ecnearned. It must be remembered that Mr. Darby

speaks of Cheong Koon Singe sa s cep able and efficient servant of the Bank, while Cheong Koon Bing on his side speaks of his always finding Mr. Darby straightforward in his dealings with him. It must also be remem- bored that he was at the Bank every day en- gaged in the performance of his duties, and no doubt in constant intercourse with Mr. Darby. In those viroumstances it was only natural that Cheong Keen Sing should be made acquainted with the particulars relating to such an impor tant transaction, in regard to which he sad tho Bank were co-operating towards the reduction of lils large liability to them. In the plaintifs' petition it was alleged that detailed accounts of the transactions and of the moneya dua by Cheong Hoon Sing were furnished to Cheong Kai dinging ale lifetimo, but at the hearing it was admitted on the part of the plaintiffs that this allegation could not be sustained and that the accounts were only furnished to his execu tore, the defendants. This, no doubt, wAR AI

|

There is no evidence on the point, but it seems to me probable that the postscript of this lottar was added at the instance of Cheong Koon Sing.

Subsequently, Mr. Darby at the request, as says, of Cheong Koon Sing-wrote and Cheong Hoon Blog signed the following latter

The Bank of China, Japan, and the Straits, Lda

Hongkong, 31st May, 1892. The Manager, the Bank of China, Japan, and the

Sumits, Ld., Present. Dear Sir, With reference to the Chinese bills purchased by you from me, drawn by the Wing amounting to Teels 20,000 and for which Kan Shing and Kwong Fook banks on Shanghai, Tung Yea Toy is able either as drawer or guarantor, I shall be much obliged if you will dabit Kan Shing Toy's count in your books with the amount now stand ing at my debit in respect of these bills, and such entry shall not in any way release me from my ro sporaltility as your compradore in the matter. I am, dear sir, your faithfully,

CHEONG KOON BINO,.

Next Mr. Darby wrote and Cheong Keon Bing signed the following latter. Mr. Darby states that Cheong Hoon Sing got this latter written because he was afraid that the letter of the 31st May, 1899, might let him in for liability on any deficiency that might arise on Kan Bing Tol's "sccount.

Hongkong, 3rd June, 1892. The Manager of the Bank of China, Japan, and the

Straits, Ld., Present.

.

Dear Sir,-Referring to your having debiied Kan Shing Toy's account with the following entries:

$21,777.78 equivalent at 73 of Tls. 20.000

27,777778 13,888.89 27,777.78

FI

1)

};

20,000

23

"

19

D

10,000

5

"" 20,000 507.222.23 equivalent at 72 of Tis. 70,000 being unpaid bills drawn by the Wing fung Yan bank and the Kwong Fook tank, for which Kan Shing Toy is liable at drawer, endorser, or guarantor and payment of which was pure bank remains Agree my position

the the same as if no mich debit entry had been nude on your books, and I also agree;

(1)--To make good any deficiency-up to bus nos which there may be in Kan Shing Toy's soccunt after realisation of the securities held by you, which securities you may

may dispose of whenevar. you plause, without reference in any way to me.

During the years 1892-94 payments of large sume of money were made by Cheong Koon Sing to the Bank in liquidation of bis liability, and there were also various transactions between in Eaigon, of which Cheong Koon Sing had the parties, especially in regard to a property obtained an assignment from the Kwan Yu and Kang Tal Banks. It does not appear to be necessary for me to refer to these matters in detail.

boɑn no"defanos for the latter to say that the Bank had made an arrangement with him by which his ability was to be met in another way, Even if the case were otherwise on this point, it may be observed that the contract of guarantee contains no stipulation, that the Bank is not to interfere with the remedios over of Cheong Koon Bing against the drawers of Chinese bill making default, although of courte It would be inequitable for it so to inter fore and it might rendar stself liable to doing. This view Choong Koon Sing by of the matter is not, in my opinion, affected by the letter of Cheong Koon Slag of the Slet May, 1892. It is true that in that letter he asks the Bank to charge the account of Kan Sing Toi, but there was nothing in that to supersede sny legal rights that ho might have against Kan Bing Tol, the latter having been no party to the arrangement anggested in that lattor. I do not this, therefore, that the first ground of defence can be supported.

Then, to take the second ground, was the effect of the arrangement such as to discharge the surety by giving time to the principal debtor

The rule of law as to the discharge of the Surety by the giring of time by the creditar to the principal debtor is old and well settled. It is thus stated in the work to which I have already rotorrad, at p. 369,"If the creditor, without the consent of the auraty, enter into binding agreement with the principal debtor to give him further time for payment the surety will be discharged. This is the case, even though no injary could accrue to the surety, for he himself is the fit judge of what is or is not for his own benefit. It is not, however, every agreement or promise made by the creditor which will have the effect of discharging the surety. In the first place, an agreement. by the creditor to the principal debtor will not discharge the surety, and never did wo give time to other at law of in equity, anless it be of a binding character and unless made on valuable consideration." Such an agreement may be either in express words or implied from the conduct of the parties.

hability, The question to be determined fa, whether the Bank, in agreeing to debit Kan Bing Tol's account with the amount of the bills

am now yoforting, intended

take. to which a further security in lieu of the original soon- rity, that in to say, the liability of Cheong Koon Sing for the bills, or whether they "marely In- tended to take a mourity additional to that liability. It is evident that this is in the main question of fact, and it will be gathered from what I havo already said that there was no in- tention on the part of the Bank to release the ilability of Cheong Koon Bing and to socept a further or additional security in lion of it. I think that what the Bank really did was to agree to have recourse to any margin available on Kan Bing Tol's account as an additional security to the claim which they already had against Cheong Koon Bing, and that such recourse was not by way of substitution for that claim. And it is clear that the taking of security which is merely additional to, and not in lion of, that originally taken from the debtor will not discharge the urety. It was said by North, J., in Clarke v. Birlay, 4 G.D., 497, It has never been held that the mare. acceptance of additional security, unscoom- panied by a gontract to give further time, would produce the result of releasing the And in the case of Rouse v,. The sarety." Bradford Banking Company, Limited, 70 D.T., N.B., 430, Lindley. LJ made the following remarks:The question whether a creditor of two or mare persons has released. one of them and converted the others into his sole debtors by what is called novation is question of intention, and an intention to look to them for payment, especially when requested to do so by their co-debtor, is quite consistent with an intention to look to them as a mere matter of ecarenience without releasing him. To ano cood on this ground, what the plaintiff the suraty in that casaj has to show is conduct in consistent with a continuance of his liability, from which conduct an agreement to release Dealing with bim may be inferred. the new firm and treating thom sa debtors, and proving against their estate, is quite consistent with not releasing the plaintiff.

Cheong Kal died in the month of January, 1894, and probate of his will was granted to the In the case now before the Court thero wan

It follows from these observations on the law defendants. Not long afterwards they gave not, according to the evidence of either Afr. of the case that, in my opinion, the defence has notice in writing to the Bank to determine the Darby or Choong Koon Sing, any express pro- failed and the plaintiffs are therefore entitled bond. The notios expired on the 22nd Septem. miso or understanding made or given at the in- to judgment. The question then is for what bor, 1894, and the Bank furnished the defenterview of the 27th March, 1892, to give time to amount that judgment is to be entered. The dants with an account, made up as on that date, Cheong Koon Bing. The case is not so clear as plaintiffs contend that they am antitled to have showing the particulars of their claim against to an implied agreement. Taking Mr. Darby's Judgment for 8100,000, being the full amount the estate of Choong Kai. The writ was issued evidence, I think it could reasonably be inferred secured to them by the band while the de- soms days bafore the expiration of the notice, from what was said and done at the interview fondants on their elde submit that, if the but it was agreed between the parties st the that any margin that might exist on Kan Sing accounts are carefully examined, it will be found. bearing that the accounts should be treated as Toi's account was to be applicable in payment that the plaintifs are indebted to Cheong Koo if they had been made up on the date of the

of the bills of the Kwong Fak Bank; that the Sing and not Cheong Koos Sing to then, issue of the writ.

shares held by the Bank on that account would Then there have been dealings between the Brak Choong Koon Sing remained in the amplay. have to be realized in order to find out whether and Cheong Keon Sing mbsequent to the 2nd ment of the Bank as their compradors until the any much margin was available and that, pead-September, 1894, especially with respect to liquidation of the old Bank on the 8th Septem- ing such realization, Cheong Koon Sing was the Salgon property, and it was admited by ber, 1884, according to Mr. Darby, and anti! not to be called upon to make good the amount Mr. Francis that there should be a reference for

of those bills, or, the 4th October, 1893, according to himself,

, in other words, was to have adjustment of the accounts between the parties He admitted that he had not during that time time given to him for that purpose. If we subsequent to that date. But the accctats are taxed Mr. Darby with bad faith in departing rely on Choong Koon Sing's evidence, this somewhat complicated, and I think it will be from the agreement of the 27th March, 1800, inference is still more clear. But assuming more convenient that the parties shorld go be- although he must have known by October, 1894, that time was given, the question arises whether fore the Registrar in order that he may settle what the claim of the plaintiff's and the defence the implied agreement by which it was given them and certify the amount for which judg of the defendants were compoctively

was of a binding sharmotor and made on a mont is to be entered and execution issued. But, These are the facts of the case as I find them. valuable consideration? I am unable to think in order to save time, it is desirable that I should It remains to consider what are the rights and that it had any such binding effect. As Mr. express, for the guidance of the Registrar, my obligations in

of these facts. It was well arrangement to prevent the Bank from repudi. in controversy between the parties and also upon

and enforcing its remedies some other points. said, by Mr. Drumond in the course of his sting it the next

very sgainst all the pushes to the single remedies address that "the law formed

cover no trace of any consideration moving from small part of the case, and that the main diff. culty was in deciding to the affect of the Choong Koon Sing to the Bank to induce it evidence." The position of the parties in the to make the arrangement. It was a case of his snit may be broadly stated as follows. The taking something from the Bank, by way of defendants do not deny the execution by their relief of his own position, and giving it nothing executor of the bond of suratyship, nor do they in return. For even if Cheong Koon Sing's dispute that the losses the dishonoured bills statement is accepted that, if the arrangementhind noto come within the scope of the bend and not been made, he would have taken possession that they are therefore in the first instance of and realized the promissory notes which Kan able to the Baule for those losses, but they Bing Toi had about him, I do not see that his contand, first, that the Bank has, by its con- forbearing to do this constitutes a valuable con- duct in the matter, discharged them in consideration on his part for giving him time, struction of law from tlust liability, and, secondly, There is no pretence that this forbearance was that, if they era not so discharged, on the true at Mr. Darby's request, and, further, there is state of the decounts between them, Cheong nothing to show that Choong Koen Bing had Koon Bing is not indebted to the Bank but the any right to demand the delivery to him of the Bank is indebted to him, and therefore they in promissory notes or that Kan Bing Tei would tare are pot indebted to the Bank.

have delivered them to him if he had so de- wanded them.

omixion to do something which it would have exceeding the above mentioned sum of $47,222.9 growing out oint of law of the parties as Francis argued, there was nothing in the opinion upon various items of claim which aro

been botter for the Bank to do; but it may bo pointed out that the bond of Cheong Koon Bing and Cheong Kai contained an express stipulation that it should not be necessary for the Bank to notify any auch ontrios to Cheong Kal or to inform him of any losses sustained by the Bank through Chaong Koon Sing Further, Mr. Darby says that Cheong Kai know of the oristance of this so count; that he often came to the Bank int connerion with this business; that he frequently bad conversations with him on the subject; and that he was kept acquainted with the state of affairs from time to time. The charging of Cheong Keon. Sing in the account with the losses on the Kwong Fak and Wing Tang Yan billa at so carly a date after the 27th March is, In the absence of fraud on the part of the Bank-which is not alleged by the defendants consistent with M. Darby's version of the events of that day hat is inconsistent with

·Chuong Koòn Sing's rendering of them,”

The bart avont of importance took place on the same day as the opening of the ability account, namely, on the 30th March, 1892. On that day the following letter in the handrit Ing of Mr. Darby and signed by Mr. Inchbald wus addressed to and signed by Cheong Hoon Sing-

The Bank of China, Japan, and the Straita, Ld. Hongkong, 30th March, 1892. Mr. Cheng Koon Sing, Compradore, the Bank of China, Japan, and the Straits, Ld. Proscut. Dear Sir, I have the regret of confirming to you my verbal statement of the 27th inst. that the drawer of our Chinese remittances en Shangtial would not meet their acceptances if the dmwers of the Idlis ffled under the pressure of the "run" which was taking place on the four Chinese banke

Wing Tong Yan Kesa Yo

Kung Tal Kwong Fook

(2)To make good to the Back, should they call apon toe to do so, the deficiency slown by the Bank's books in respect to the aforesaid unpaid bills on the date at which such call is made, such paymens to release my guarantee of Kan Shing Toy's account as given in paru. 1.-I an, dear sir, yours faithfully,

CHEONG KOON SING, Compradore.

I will promsntly consider what is the effect of these four letters. But it is necessary in the first instance to determine whether say effect at all should be allowed to the three of them which are written by Mr. Darby and signed by Cheong Koon Sing. Mr. Darby says that he fully explained theae letters to Cheong Koon Sing before they were signed, and in particular that he went over the first of them line by line with him." With regard to this letter Cheong Koon Sing at first said, in reply to Mr. Drun mond, that Mr. Darby "explained the contents of the letter to him in pidgin English he told him something about Tis. 70,000." At this point Mr. Francis interposal with no objection that, the defendants not having pleated any defence of trand misrepresentaion the part of the Bank, evidence could act be giren to show that this letter had boon obtained by aty fraud or misrepresentation on Mr. Darby's part. The Court, howevoz, al lowed the examination to continue, and Cheong Koon Sing then modified his previous statement by saying that Mr. Darby "said only a few words in pidgin English." With regard to the second of the three letters, he says that it was not explained to him that he was asking the Bank to dehit Kau Sing Toi's account with

w

A

To take the disputed items in order, I under. stood at the hearing that the plaintiffs aban doned any claim to compound interest. Then, as regards simple interest, it was held by the Court of Exchequer in Ackermann : Ehren. sporger, 16 M. & W., 99, that "a party who guarantees the payment of a bill is liable for all that the principal would be liable for," inchid- ing the payment of interest on the bill, if over- dus. I think, therefore, that Cheong Kroon Bing, and consequently the defendants, are liable for the payment of interest on the bills as from the date of their maturity! This question of interest is regulated by sec 57 of the Bill of Exchange Ordinance, 1885. It appears from this enactment that the plaintiffs are not entitled le claim, as they do, both interest and re- oxchange, and they must dleet on which of thesa claims they will proceed before the Re gistrer. It will be seen" also from the terms of protesting are in the same position on this point the enactment that the expenses of noting and us the interest

Tis. 70,000 and that he was still to remain liable for it," and that if he had known that all this was in the letter, be would not have pat I have been since informed by wire that the Yuen his signature to it." With regard to the third Loout Hong has been closed and that the Bhiu Tai of the three letters, he says Mr. Darby said Hong lus filled.

In other words, I have to look to you for payment low words, but in substans he asserts that it

September, 1994. All entries relating to was not explained to him. With respect to in ue at ores of the following drafts pitechased direct each of the three letters he makes the statement from you: [Here follow particular of the bills, not including those of the Tau hing Bank, which have that he thought it was "of ne importance, so already been given in this judgment. The Taue signed it.” Shing Book

apparently not included because it was thought that, as Lo Hok Pang was not connected with that Bank, it would not close Ita doors,]

You have recourse against Yek Mow for Tis. 20,000 And this security soems to be good.

Now, as Mr. Francis argued, there is mo allegation of fraud or misrepresentation made against the phintiffs in the pleadings, nor is thors in the aridence of Cheong Koon Sing any

The last bill for Tls: 20,000 on Shift Tal has por prez oharga' of bad faith or misrepresentation part of his own contrast. And if noties wo

been accepted.

the

The letter of him to the defendants,, embjest to exception on the

The f of these defences was formulated by Mr. Drummond in the following tend 27th March, 1992, it is necessary to consider But besides the arrangement mado on the That the effect of the arrangement made between the creditor (the Bank), the debtor the effect of Cheong Koan Bing's letter of the (Cheong Koon Bing), and Kan sing Tol was to 1st April, 1892, and the 3rd Jane, 1892. There It was contended by the defendants that the discharge the surety,, Cheong Kai, first, by de was no answer sent by the Bank to other of plaintiffs had accepted the Saigon property, priving him of a remedy to which he was these letters, but, having regard to the fast promissory nota for Tis, 10,000, and certain shares entitled, or, in other words, by making that they were written by Mr. Darby, I think it as equivalent to cash, and that Cheong, Koor material alteration in the debtor's position must be taken that the Bank assented to the Bing's indebtedness was reduced socordingly. without the cent of the suraty and without proposals made in them. In the postoript to I think, however, that they did not succeed any reservation of the rights of the creditor the first of these letters Cheong Koon Sing in this contention, and that the plaintiffs against him; secondly, by giving time to the says "ho will shortly hand the manager farther should only be debited, in respect of these items, debtor; and thirdly, (3) by discharging the cover, bat he hopes the Bank will not press with the amounts which they have realized debtor and (b) by taking substituted security.

him too much." But, taking it that the Bank or, with reasonable diligence, ought to have With regard to the point as to depriving the acceded to this request, it appears to amount realised. Any woourition not yet realized the anrety of e remedy to which he was entitled, it got to a binding agreement to give him time, plaintiffs must either surrender to Cheong was said, in further explanation, that before the but to no more than a promiss to refrain from Koon Sing, or as he may appoint, or take aver agreement the debtor could have sued. Kan unduly pressing him, and it is clear law that absolutely at a valuation to be made by the Sing Toi, but that the effect of the agreement" mere passive inactivity, or omission to press Registrar. was to preclude him from doing that after the debtor, as distinguished from an agree All reasonable costs and expenses incurred by words.

ment giving time, will not discharge the the plaintiffs in realizing or endeavouring to Let us take these points in their order. In surety de Colyer on Guarantees, p. 372 realise, or in keeping alive, sonrities delivery d de Colyar's Law of Guaranteer, second edition, p. Or, Lord Hatherley said in the Oriental to them by Cheong Koon Sing are to be allow d 351,under the beading of conduct of the ore Financial Corporation v. Overend, Gurney & Co. The accounts are to be taken se on the 29 ad ditor which discharges the auroty," there occurs L.R., 7 Ch. 150, It is not simply neglecting variation of the terms of the contract between effect upon the surety, but there must be a date in the plaintif books, in the ordinary the following passage-First, any material to une the principal which would have any subject-matter of the suit made prior to 1 het the creditor and the principal debtor will al positive agreement with the principal that the course of business, are to be deemed binding on

drsditor will postpone the ways discharge the surety; and, secondly, a

of the 3rd June, ground of fraud or evident mistake. Judges ont variation of those terms which ie od material subsequent period.

be due will also discharge the surety if it clearly ap. 1882, while it embodies an agreement by Cheongs to bo ontered for the amount found pears that he became surety on the faith of the Koon Bing that his liability in respect of the to them on the basis of this account, but the

total amount is not to exceed $100,000. In: original contract, or if he has made those terms Kwong Fak and the Wing Tong Yau bills was

not to be affected by the making of the debit terest at the rate of eight per cent, per sun um against Mr. Darby. Bul certainly these giron to the surety of the terms of the contract entry with regard to them in Kan Bing Tol's is to be payable on the principal cum adjuk ged sssertions of his go very near such a charge. between the creditor For the reasons, however, which I have already and after an autor and the principal debtor, sccount, szgratis on it two subsidiary agree. Zrom the date of the commencemen, of the genit

d the guarantor,

mants to make good deficiencies on the account to the date of judgment. given with sospect to the relative credibility be is held to have become surety on the faith of in respect of the bills. I think the express The taking of the socounts will extend to the of these two witnesses, I accept the state the original agreement. In the present one reservation made in this letter of the Bank's dealings of the parties, sequent to the ment of Mr. Darby ihat he explained the the earety had express notine of the terms of rights against Cheong Koon Sing must have 22nd September, 1894. If his account ramulin the contrast made between the creditor and the ite das oporation, and prevents the jetter and in reduction of the amourt for which judgment of opinion that Cheong Koon Sing is tea shrewd principal debtor, as set out both in the letter of its implied acceptance by the Bank from hav. is entered, interest will/abate and execution be letters to Chrong Koon Bing Further, I am and experienced a man of business to put his agreement end in the bond, and, therefore, if the ing the effect of granting time to the debtor se, issued for losser eum nocordingly. en demand, which I fatructed you to cash on 27thstand the purporty I am also of opinion, from net, of the terms of that contract, the onse

algnature to slatter of which he did not under raditor made any variation, whether material or sa to discharge the surety.

The next contention on the part of the de- This letter of course made it perfectly clear various features of vidange in the case, saprot falls within the rule thus laid down and fendants is that the Bank discharged the surety that the Bank bold Cheong Koon Sing liable sily from the sccodat given by himself of his the surety is discharged. But the question is, by discharging the principal debtor. This Reference WAR not made at the hearing to for the losses occasioned to the Bank by the education, training, and business career and was there any such variation made by the contention. In onded upon, the statement of that portion of the prayer of the plaintiffs dishonouring of the Kwong Faks and Wing fromny observation at the bearing, that Chopng aroditor! What we the terms of the con- Cheong Koon Bing as to what was sald by Mr. potition which saks for an order for the sta T'ung Yan bilis, and, if the idea of frand Koon Bing has mialmized his knowledge trast on this point? They wore that Cheong Darby at the conclusion of the interview of the of the premier mortgaged by Cheong Kad to excluded, it is entirely inconsistent with the of the English language, both "poken, Koon Sing was "to be responsible for and pay 27th March, 1882. Even if this aridence in the Bank and the application of the proceeds in fact the Bank having in any be wriffion. It matter for obser: when the same should fall al its extent, it may payment of the judgment, and as I feel sonde hire from that Kabllity. It was written by Mrvation that there is nothing sufair or an Chinese hank notes, bills, etc., which might be whether Mr. Darby seurance to Ohsong

Fon one or two points connected with Darby, with a alleged to have stran that conidionable as regards Cheong Koon Bing in received or purchased by him or his employés Keon Bing are flotantly definite te amount the mid ng of such an order, I will reserve releass. In cross-examination Cheong Koon the letters; they merely give effoot to the ar for the Bank. Putting out of view for the to release of him from liability for the bills of beat to the plaintifs to move the Court for Sing was asked whether he had made any re-rangemont which Mr. Darby says was made a moment the question of the release of the the two banks in question. But it is unnecessach order, if they desire to do so. presentation to Mr. Darby as to his duplicity tween the three parties concerned on the 27th principal debtor, which falls under another wary to determine this point because I have al The plaintifs will have their costs of auit, In acting in this way and he admitted that he March, 1893. Dn the other hand it may be head of the defence, as stated above, it may be ready intimated an opinion that I am not pre- including the costs of and incidental to the had not. Then he was anked why he had not asked, is it fair of reasonable of Cheong Koon seked what variation of the contract was pared to sooopt Cheong Koon Sing's evidence sprlication made by the defendants for the done so, but he could make no answer to the Bing to desire or endeavour to declaim an adeffosted by the arrangement made at the inter in this matter.

fasue of a colomission. This order is, of course, purpose. He says that when be received the mited liability in respect of the bill of the two view of the 27th March, 1892 P. According

'to The list ground of defence put forward is without prejuice to the order made by the letter he got a Portuguese olerk of the Bank banks in quetion because the Bank, in his and his own showing, Cheng Keon Sing was not that the Bank discharged the suruty by taking Court with rolerence to the costs of the former to explain it to him, and he was trembled sad for his advantage, une making an effort to party to the arrangement. It was made an ubitibuted security. By this I understand the trial

that Hability discharged with the moneys of firely by Mr. Darby and Kan Bing Tol. And defendants to contend that the Bank sgroed Throughout this fadigment used by his mind when he found that the question Kan Bing Tolf Ikwan avm; for hit Benefit, as to its effect being to, deprive Chears Koon that, instead of having recourse to Choong tortas "the Bank and the plainting in relat bills, which had boon settled between Me going (coming to Mr. Darby) beyond the au- Sing of a remedy to which he has entitled Koon Bing for the making good of the lose ends to the original plainti bank, but it is tà Darby, Kai Sing Foi, and himself on the thorlsscan girán by Kan Sing foi, because the against Kan Bing. Tol, I can And no occasioned to them by the parchies of the be understood that the judgment and execution 27th March, 1802, was, rafeed again,. He rang Yan taball to the Kwong Fak bile, Af the Bank was proinded by the arrangement they grond, bars, woourse, to moh margin na Jabar, is het ons

Bank was charging on big nooount the Wing real gromid for this contention. If even wang Fak and the Wing Fang Yan bila, enars for the benefit of the Bank of China and Inchbald, and he relates a short conversation the same time, cennot help thinking thus it from sing: Kan Bing. Tot until his share had might made on Kan, Sing: Tofa, säranes, noe tiff in the date, ezag Which took place between them. Without would have been more prudent for the Bank to been realised, Cheong Koon Sing was no party count acter realisation of the shares and other going into details, it is sufficient to say that this have allowed on directed Cheong Koon Bing to Conversation throws no light, whatever on the have the letters ritten by some person but in question in controversy in this pars ef lze cose, thale smployment,

I shall be glad of an answer as soon as posible, so that I may take the necessary steps to secure the Ikusk's interests. I am, dear sir, yours faithfully,

CHANTREY INCHHALL,

Manager. ereret que quals with the Bank's local advance of I would also reraind you that you have not yet $10,000 to Kwna XL guaranteed by the Hok Pang,

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If any difficulty arises in settling the accounts, either party is to be at liberty to apply in Cham bars for directions

to and was hot bound by that arrangement scoprities deposited with the Bank an dores for Printed, and Panie

eers was nothing to prevent hits from mins one has new DOTICAN CI Kan sing Tei feniwilly, and 13 wond, haya | Hability, was nabvilised kako nema apitong