December 31, 1896.1
CHINA OVERLAND TRADE REPORT.
to Cheong Koon Sing, and that the defend- ants were not indebted to the plaintiff bank under the bond or indenture of charge dated the 25th August, 1891.
ment of all losses, damages, and expenses which
ould
ed or sustained by the plaintiff ban unders letter of agreement or bond, such sums of money, losses, damages, and ex- penses not exceeding in the whole the sum of On the 18th July, 1895, the plaintiffs, having ob- $$100,000............. The petition then proceeded to tained leave of the Court for that purpose, filed a rilege that in the months of February replication to the defendants' answer. The repli- and March, 1892, the plaintiff bank par- cation stated that Kan Sing Toi was a partner in through Cheong. Koon Sing, as compra- and manager of the Wing Tung Yan Bank and dore, from Chinese banks in Hongkong, eleven a partner in the Kwong Fuk bank; that he bills or drafts drawn on Shanghai; that these was thus personally liable to the plaintiff Bank bills or drafts were dishonoured, involving a and to Cheong Koon Sing for the sum of loss to the plaintiff bank of $298,105.29 for $97,222.23, being the amount of the bills pur- principal and interest, loss on exchange and re-chased by the plaintiff bank from those banks; exchange, and expenses of noting and pro- that, at the request of Cheong Koon Sing and testing and otherwise; that on the 8th March, with the consent of Kan Sing Toi, the plaintiff 1892, the plaintiff bank lent, through Cheong bank debited the account of Kan Sing Toi with Koon Sing, to a Chinese bank on its promissory that amount in order that if at any time, by note the sum of $10,000, but the note on being the realization of the shares and securities held presented was not paid; that Cheong Koon Sing by the plaintiff bank in respect of that account, had repaid to or recovered for the plaintiff bank there was left any margin to the credit of Kan the sum of $148,684.87 on account of these losses, Sing Toi over and above his debt to the plain leaving a balance of $161,544.38 still owing by tiff. bank on that account, it might be applied him to the plaintiff bank, which he had refused in reduction of his liability on the bills and of to pay; and that the defendants, on application the liability of Cheong Koon Sing; and that made to them for that purpose, had also refused Cheong Koon Sing agreed that his liability to to pay this balance. The petition concluded the plaintiff bank in respect of the bills should with the prayer that the defendants might be not be released or in any way diminished by declared indebted to the plaintiff bank in the reason of Kan Bing Toi being so debited. The sum of $100,000 and be ordered to pay it out of replication then dealt with the allegations of the estate of Cheong Kai, with interest thereon the answer that certain sums should have been at 8 per cent. per annum from the 10th Septem- credited to Cheong. Koon Sing, and it con- ber, 1894; and that the property mortgaged by cluded with the statements that, upon the true Cheong Kai to the plaintiff bank might be state of the accounts, Cheong Koon Sing was ordered to be sold and the proceeds applied in pay- still indebted to the plaintiff bank in the sum ment of the amount due to the Bank.
of $161,544.38 that any securities which the plaintiff bank held in respect of that debt would, upon payment of it, be transferred to Cheong Koon Sing or as he should appoint; and that the defendants, as executors of Cheong Kai, were indebted to the plaintiff bank in the sum of $100,000, part of the said sum of $161,544.38, and for interest. It is to be ob- served that the answer of the defendants was amended by stating in various ways the effect of the arrangement made between the plaintiff bank and Kan Sing Toi after the filing of the replication, and therefore the replication does not deal with those amendments.
&.
This is the substance of the pleadings between the parties. There was no settlement of issues, but I think it will be apparent from & perusal of the pleadings that the principal question in controversy between the parties was as to the effect of the agreement made between the plaintiff bank and. Kan Sing Toi upon the liability of Cheong Koon Sing and therefore upon the position of Cheong Kai as his surety. Accordingly at the hearing the contest, both as regards evidence and argument, was mainly centred round this point.
By their answer, which was filled on the 15th Nov., 1894, the defendants admitted the writing of the letter of agreement and the execution of the bond by Cheong Koon Sing and Cheong Kai. They also admitted the purchase and dishonour of the bills and the non-payment of the pro- missory note given to the plaintiff bank for the loan of $10,000, but they denied that Cheong Koon Sing was responsible for interest or was liable to pay more than the actual loss sustained by the plaintiff bank on the bills. They stated that on the 31st May, 1892, by an agreement made between the plaintiff bank and Kan Sing Toi, customer of the Bank, the account of Sing Toi with the Bank was debited with a of $97,222.23, being the amount due in respect of the dishonoured bills that Cheong Koon Sing had no responsibility in respect of this account, which was commenced before he became compradore to the plaintiff bank; that the securities held by the plaintiff bank on this account were more than sufficient to cover the sum of $97,222,23; and that the plaintiff Bank released Cheong Kai from all liability in re- spect of the sum of $97,222.23 by debiting the account of Kan Sing Toi with that amount, and thus showing the intention to make Kan Sing Toi responsible for and to obtain payment of the deficiency on the bills from him in stead of Cheong Koon Sing or Cheong Kai." By
amendment of their answer made, pursuant the manager, of the: Bank, that since the in- to an order of the Court, on the 10th August, stitution of the suit the Bank had been wound 1895, the defendants enlarged their defence up and its assets, rights, and liabilities (including on this point by stating that by an agree. all its rights in respect of the matters in con- ment made subsequent to the 25th August, 1891, troversy in this suit) assigned to a new com- with Kan Sing Toi by the plaintiff bank, at pany called "The Bank of China and Japan, the request of Cheong Koon Sing and without Limited." It was accordingly ordered that, the consent or knowledge of Cheong Kai, toon the application of the plaintiffs, the further debit the
On those pleadings the cause was heard be- fore Sir Fielding Clarke, the late Chief Justice, on the second and third days of September 1895. It then appeared from the evidence of Mr. Darby, the accountant, and Mr. Inchbald,
503
and the case was conducted with much ability be counsel on both sides.
The evidence consis
the part of the plaintiffs of the affidavit Mr. Campbell already mentioned and of the de beno, esse examination of Mr. Darby, the accountant of the Bank, taken before the Registrar. On the part of the defendants, Cheong Koon examined and cross-examined at considers. length. A number of documents were pro duced in evidence by Mr. Darby and Cheong Koon Sing respectively. The evidence on the one side and on the other is conflicting respects and especially with regar nature and incidents of the arranger between the Bank and Kan Sing Toi. propose to state the substance of the evidence and to set forth the reasons which have weighed. with me in accepting the version of facts which I have adopted.
many
the made
The Bank had formerly been s trust and loan agency under the name of "The Trust and Loan Company of China, Japan, and the Straits, Limited." 1891 the com-
J
pany was converted into a bank under the name of the Bank of China, Japan, and the Straits, Limited. Mr. Darby joined the Bank as accountant about the time of its establish- ment, and Mr. Inchbald became manager ap- parently in the early part of 1892 Until August, 1891, the Bank had no compradore, but on the first day of that month they engaged the services of Cheong Koon Sing as compradore, and his elder brother, Cheong Kai, became surety for him. Cheong Kai had been the compradore of the Hongkong Club, and was apparently possessed of considerable property. On the 25th August, 1891, Cheong Koon Sing and Cheong Kai signed the letter of agreement and executed the bond mentioned in the petition. The bond contained a clause reserving the right to Cheong Koon Sing and Cheong Kai, or either of them, to determine it on giving to the obligees six months' notice in writing of their intention to do so. On the same day Cheong Kai executed the indenture of charge and mortgage men- tioned in the petition.
F
S
No question arose between the Bank and Cheong Koon Sing for some months after he had entered on the performance of his duties, and indeed it may here be said that Mr. Darby speaks of him generally as having dis- charged his duties to the satisfaction of the Bank. In the months of Fobtuary and, March, 1892, the Bank purchased from five Chinese banks in this colony, through and on the recommendation of Cheong Koon Sing, eleven bills or drafts on Chinese banks and firms at Shanghai. One of these bills subsequently paid in Hongkong and it is there- fore unnecessary to take further account of it. The remaining ten bills were drawn by the banks on the dates and for the amounts mentioned below. They were in the English language. The first of the bills was drawn in favour of the Bank, but the remaining nine were drawn in favour of Cheong Koon Sing and endorsed by him to the Bank. This was done by direction of Mr. Inchbald, in order to prevent any question arising as to whether the bills had or had not passed through the hands of Cheong Koon Sing
Tsau Shing.
26th Feb., 1892.
Loft $97,222unt of Kan Sing Toi with the sum | hearing should be adjourned sine die, and that Wing Tung Yan 27th Feb., 1892.
the plaintiff bank took a substi- tuted security, and thus discharged Cheong Kai from all liability," that "the agreement made with Kan Sing Toi by the plaintiff bank, at the request of Cheong Koon Sing and without the consent or knowledge of Cheong Kai, was an arrangement which materially affected the posi- tion of Cheong Kai, and discharged Cheong ai from all liability," and that "the agree- ment made with Kan Sing Toi by the plaintiff bank, at the request of Cheong Koon Sing and without the consent or knowledge of Cheong was an agreement in effect giving time to oon Sing by an implied agreement and Cheong Kai from all liability." The hen proceeded to speci several sums of hich the defendants submitted should credi by the plantiff bank to Cheong which I need not at present tion and it concluded by stating rding to the true state of the accounts een them, the plaintiff bank was indebted
Do.
Do. Do.
Do.
the plaintiffs should have leave to amend:}
Kwan Yu..... their petition by stating therein the assignment
Do. of rights to the new Bank. This was accord- Kang Tai ingly done, and the defendants amended their answer by adding a paragraph in denial of the alleged assignment and of the right of the Bank Kwong Fuk.. of China and Japan, Limited, to carry on and continue the suit in the name of the plaintiff bank. It may at once, however, be said that this denial was not followed up, and that the fact of the assignment was sufficiently proved by an affidavit of Mr. Campbell, the liquidator of the plaintiff bank, which the plaintiffs had obtained leave of the Court to use at the near- ing. For the sake of convenience the expression the Bank" will hence forward be used to de- note the plaintiff bank.
Taels. Taels, 20,000
-20,000
20,000 >
7th March, 1892
20,000
40,000
27th Feb, 1892..
10,000
20,000
7th March, 1892 -
10,000
1st March, 1892 3rd March 1892 24th March, 1892 12th March 1899
20,000
20,000
60,000
14th March 1892 - 10,000
0.000
Beside these bills the Bank also, on the recommendation of
on the 8th March, 1892, $10,000 to the Kwan Yu promissory note for that amount disbursed by
bills and note was $244,067
At the time of *The cause came on for hearing before me on
in the colon the 9th October last, when it was agreed by Was the the parties that it would be more convenient Bh that it should be entirely re-heard, and accordingly done. The hearing lasted six days, nese
oon
De
No comments yet.
Private notes are available after approval.