January 13, 1898. ]
THE FRENCH AT HAINAN,
On the 4th January the French man-of-war Descartes had been in the harbour of Hoihow for ten days, and the Surprise, after two days in port, had left for a cruise round the island Several more vessels were daily expected. Everything was quiet, except that the natives were in great fear of a conflict. The non-com- batants preferred to receive the French without resistance. In the military quarters no excite- mont was noticeable, from which it would seem that the authorities recognised that the taking of Hainan by the French was a foregone con- clusion. The occupation, however, had no taken place up to the 4th January, but was regarded as probable.
SUPREME COURT:
10th January,
IN ORIGINAL JURISDICTION.
BEFORE SIR JOHN CARRINGTON (CHIEF .
JUSTICE).
TSANG YEE MUI V. TAM CHAK U, ALIAS
TAM CHUN.
CHINA OVERLAND TRADE REPORT.
to be the true and lawful attorney of them and of each of them for them and in their names or in the name of Kwong Hop Wo or otherwise to demand sue for recover and receive of and from the company and the architect or either of them all moneys due or to become due and payable under the said contract whether in re- spect of the said contract price or in respect of any extras or additions to be paid for under the said contract with power to demand and to receive the certificates of the architect from time to time and to ondorse the same in the names of the contractors or in the name of Kwong Hop Wo and to give in such names or name or otherwise full and effectual discharges acquittances and receipts for all moneys due or to become due and payable under the said con- tract as aforesaid.
2. The surety shall be entitled to retain for his own use and benefit absolutely out of all moneys received by him under this agreement a sum equal to five per cent. on the amount of such moneys and in the event of any moneys payable under the said contract being received by the contractors.or either of them the con- tractors shall be jointly and severally liable to pay forthwith to the surety a sum equal to five per cent on the amount of the moneys so received by them or either of them.
3.-If the contractors shall become entitled The plaintiff, who is a widow residing in
to any extra payments by reason of their com- Yuen Shing Lane, sought to set aside an agree-pleting the work within the contract time the meut charging certain property as security to the defendant, who resides at 36, Hollywood Road.
Mr. J. J. Francis, Q.C., (instructed by Mr. H. J. Gedge, f Messrs. Johnson, Stokes, and Master), appeared for the plantiff, and Mr. M. W. Slade (instructed by Mr. C. D. Wilkinson)
for the defendant.
The evidence and arguments were heard on the 26th November.
His Lordship delivered the following, written judgment:-
The facts of this case are not in dispute be tween the parties, and the case was argued on the petition and answer. The only evidence placed before the Court was the agreement on the construction of which the questions at issue between the parties are now raised.
The facts may be shortly stated as follows, On the 4th September, 1896, two men named Cheung Kwai Shun, alias Cheung Shun, and Tang Hing Tong, alias Tang Yee Mai, who were then carrying on business as building contractors under the firm name of Kwong Hop Wo, entered into a contract with the Hongkong Land Investment and Agency Company, Limited, to pull down and rebuild certain houses for the sum of $17,500 payable in in. stalments of $2,000 each. The work was to be completed within 14 months from the 1s August, 1896, and there was a stipulation that in the event of the work being completed before the expiration of the 14 months, the contractors were to be paid the sum of $30 for each day in which it stood so completed.
M
The defendant found the security required of the contractors for the due performance of the contract, and, in consideration of this service and with a view to secure his proper remunera- tion for it, an agreement in writing was en- tered info on the 1st October, 1896. The par- ties to this agreement were the contractors of the first part, the defendant (referred to as the surety") of the second part, and the plain- tiff (who is the mother of Tang Hiug Tong alais Tang Yee Mui, one of the contractors, and who is referred to as the mortgagor") of the third part. After recitals relating to the con- tract and to the finding of security by the defendant the agreement proceeds as follows:-
And whereas the contractors have agreed with the surety and with the mortgagor that in consideration of the services so rendored by the surety to the antractors as aforesaid the surety shall be entitled to the remuneration hereinafter mentioned to be secured by the mortgagor in manner hereinafter appearing. Now it is hereby agreed between the parties
lcreto as follows:-
T
surety shall receive such payments and shall retain or shall have paid to him by the 'con- tractors one equal sixth part of the amount of such extra payments.
4. After the completion of the work under the said contract the contractors shall pay to the surety a salary or remuneration of fifteen dollars Chinese month on the last day of every such montli so long as the contractors remain partners or trade or carry on business under the name of Kwong Hop Wo.
per
5.-The mortgagor bing the registered owner of the remaining portion of Inland Lot No. 687 hereby agrees to charge the said re- mining portion of the said Lot to the extent of four thousand dollars in favour of the surety as security for the due performance of this agree ment by and on behalf of the contractors, and the mortgagor further agrees that she will at the request of the surety execute a legal mortgage to bim of the said premises as security for such due performance as aforesaid.
No inortgage was called for or executed under the last of these stipulations, but the agreement was registered in the Land Office as a charge upon the remaining portion of Inland Lot No. 687.
The defendant, in accordance with the terms of the agreement, received two instalments of 82,000 each, and retained his commission of 5 per cent. on those sums. No other moneys were received under the building contract by
the defendant or any one else.
Before the completion of the work under the contract the contractors became insolvent and ceased to trade or carry on business under the name of Kwong Hop Wo or otherwise. In Pecember, 1896, the Hongkong Land Invest ment and Agency Company, Limited, cancelled
the contract.
In these circumstances the plaintiff seeks in her petition to have it declared by the Court that she is not indebted to the defendant in the sum of $4,000 or in any sum of money in re- spect of the agreement, and that the remaining portion of Inland Lot No. 687 is not subject to any charge in favour of the defendant in re- spect of the agreement. She further asks that the defendant may be ordered to enter in the Registry of the Land Office a certificate of satisfaction in respect of the charge already registered.
The defendant in his answer resists this de- mand, and says that, in breach of the agreement, he was prevented by the default of the con- tractors from receiving the other instalments and the extra payments payable under the building contract and retaining therefrom the sums se- 1.-The surety shall have handed to him by cured to him by the agreement as remuneration Mr. William Danby (hereinafter called "the for the services rendered by him. He submits, architect") or by the contractors all certificates therefore, that he has a charge on the pro- for payments to be made ander the said con- perty comprised in the agreement to the tract and such certificate shal) (if necessary) | amount which, but for the default of the con- be endorsed by the contractors, and the contrac-tractors, he would have received under the tors hereby constitute and appoint the surety agreement.
21
As I have already indicated, the decision of these questions turns upon the construction of the agreement. What is its true meaning and effect so far as the obligation of the plain- tiff is concerned? Did she undertake, as Mr. Slade op behalf of the defendant contends, to secure the defendant in the receipt of remuners- tion in respect of all sums of money which might properly be receivable under the building contract or did she only, as Mr. Francis on her behalf contends, engage that the defendant should receive remuneration in respect of all snus of money actually received under the contract?
In n'answering these questions it is necessary to consider carefully the language of the agree ment. The stipulations relating to the remuneration of the defendant are contained in paragraphs 2, 3, and 4. Paragraph 2 has reference to the principal sums payable under the building contract. It provides that the defendant is to retain for his own use absolutely 5 per cent. on all moneys received by him under the agree- ment, and also that, in the event of the con. tractors receiving any moneys under the build- ing contract, they were to pay him a like percentage on them. In both these cases the words us d imply actual receipt of moneys and do not cover the case of moneys which might or ought to be received. If this be so, the finding on this part of the case must be that, before determination of the building contract, the defendant received 84,000 under the agree- ment, on which he retained his 5 per cent. remuneration, and the contractors received no moneys under the building contract, and there- fore nothing is due to the defendant on account of this stipulation.
But then it was argued on behalf of the defendant that if a party enters into an arrange- ment which can only take effect by the continu auce of a certain existing state of circumstances, there is an implied engagement on his part that he shall do nothing of his own motion to put an end to that state of circumstances under which alone the arrangement can be operative. In support of this contention the case of Stirling v. Maitland, 5 B. & S. 840., was cited. In that case an insurance company covenanted with the plaintiff for valuable consideration to appoint him their agent at Glasgow, together with A. B. Seton, and that if the plaintiff should be dis- placed from the agency, they would pay him a certain sum, and the company having transferred their business to another company and wound up their affairs and dissolved themselves, it was held by the Court of Queen's Bench that this was a displacement of the plaintiff within the meaning of the covenant. But it is to be observed that the ground of the decision in that case was that the company had by their own voluntary act put an end to the state of things under which alone the covenant could operate, and it was clearly recognized by the Court-see the observations of Crompton, J., at p. 849 and of Cookburn, C.J., at p. 852—that if the displacement had been the consequence of the involuntary, act of the company—” as, for instance, a bankruptcy "—the result might have been different. Some other cases referred to by Mr. Slade turn upon the same point, namely, that the putting an end to the contract was the voluntary act of the party sought to be charged. In the present case the act of the contractors by which the building contract was determined was the involuntary act of insolvency, and there is no allegation by the defendant that this insolvency was brought about by improper means in fraud of the contract or of the agree- It cannot therefore be said that the con- ment. tractors wrongfully put an end to the contract and that therefore they, and consequently the plaintiff who became their surety, are liable in respect of the remuneration of the defendant under the agreement in the same manner as if the building contract had been carried out to its completion.
'It was said by counsel on both sides during the argument that the parties to the agreement, when entering into it, contemplated the carry- ing out of the building contract to its completion. No doubt this was so it is the same presumably with every contract. But this contemplated event has not taken place in the present instance; tho building contract has not run its course but has been prematurely brought to an end by a contingency which I hold not to have
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