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April 16, 1898.j
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CHINA OVERLAND RADET REPORT. with the history of the shares. Mr. Francis | Straits, but in February the Bank of China said that in March, 1891, the Bank of China, shares were returned to Mr. Belilios and re- Japan, and The Straits decided
On a deposited with the Hongkong Bank to some new issue of shares. These shares were account of his own which was designated "C" £10 shares. At that time plaintiff was in the account, and that transaction with the Houg- employ of a firm of brokers. Benjamin and kong Bank was of precisely the same nature as Kelly, and in the ordinary course of business the previous transaction with the Bank of Benjamin and Kelly seem to have applied for a China. Mr. Belilios had opened in his books two considerable number of these shares in the new accounts in respect of these transactions between issue-whether on their own account or on himself and the syndicate-the syndicate account account of their clients they were not in a and a special account called the marginal uc- position to say at the moment, but a consider- | count. In September, 1892, both these accounts able number of shares were allotted to them, were finally closed. In the marginal acconut and they got Mr. Hardoon, who was then a Mr. Belilios gave the syndicate credit for all the clerk in their employ, to consent to bare 50 of dividends received on the shares which he held these stares registered in his name. These 50 shares in the ordinary course
as marginal security. Ho charged them on the of business other hand with stamps and transfer fees in appear to have been almost immediately respect of certain of these shares. sold or disposed of by Benjamin and Kelly, them credit finally for the value of those shares He gare Mr. Hardoon was called on to execute the at the market rate of the day. The account ordinary instrument of transfer in respect | showed a balance of $11,250.91 in favour of the of these 50 shares, and he executed such au syndicate. and he divided that amount pro- instrument, a provisional certificate being portionately among four members of the syndi-| issued and the name of the purchaser left iu cate-G. S.Coxon, E. J. Coxon, H. W. Dicks, blank. That seemed to have been somewhere and E. H. Melbye. Their contention was that about the fourth or fifth of April, 1891. Iu
when he closed this account Mr. Belilios appro. June, 1891, Mr. Hardoon, in his position as priated to himself—took over in fact at the clerk, did not know what was being done with market rates of the day the whole of the shares these shares. He simply cousouted to his name which he held on account of the syndicate in being put in, and when called upon he simply this marginal account. Unless Mr. Belilios signed the transfer deed. He had no beneficial himself was able to give them information on interest in these shares, and was simply acting the subject, they did not know from whom Mr. on behalf of his employers. On July 13th. Belilios received these particular 50 Hardoon 1891, these shares seem to have passed out of shares. So far as they could see, Mr. George the hands of Messrs. Benjamin und Kolly, being | Coxen seemed to have acted as the broker deposited by defendant in the Bank of China. or agent or representative of the syndicate. In Japan, and the Straits. A letter of credit for the syndicate account Mr. Belilios only dealt £110,000 sterling was obtained by Mr. Belilios with the bank shares on which the advances upon the Bank of China, Japan, and The Straits were originally made. He carried down a bal on his own personal guarantee, and be deposited ance to the debit of the syndicate of $67,99172. with the Bank certain shares aud securities. an then he carried their respective proportions Mr. Belilios was not acting in that matter of that loss to the debit of the individual ac- entirely for himself. He was the representative counts of the members of the syndicate, as he of a syndicate consisting of a number of had previously carried to their credit their pro- persous interested in shares in Hongkong, per proportion of the amount shown in their he himself being one of the members of the favour on the settlement of the marginal ac- syndicate. On the 24th of June he entered count. Their contention was that as the result into an agreement with the syndicate, or the Mr. Belilios became the sale beneficial owner syndicate entered into an agreement with him, of theso 50 shares in Hardoon's name. In Janu- that in consideration of his obtaining for hin-ary, 1894, the Bank of China, Japan, and The self and for them this advance from the Bauk Straits made another call on these shares of £1 they would fleposit some Hongkong and Shang-per share which had to be paid in four instal- hai Bank shares in his hands to the full market value of the advance, and they would also furnish him with a marginal security equivalent to $25 per share on the 2019 bank shares in respect of which the transaction took place. On the first of July Mr. Belilios deposited with the Bauk of China 1,644 old and 375 new Hongkong Bank shares. That was the primary security, as it were, on which the money was advanced. He also ou the 9th and 13th deposited with the same bank and with four other banks, part of his marginal security-50 shares called Browns and 1,600 shares in the Bank of China itself, 800) of the latter being old and 800 new issues. Among the 800 new issues he deposited these 50 re- gistered in Hardoon's name. Their contentiou
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ments of five shillings each in the course of that year. Mr. Hardoon had notice of this call, and he wrote to Mr. E. J. Moses, a clerk in the employ of Mr. Belilios, stating that there was not in the possession of Mr. Belilios and to suppose that the shares were asking Mr. Belilios, or Belilios and Com. pany. to pay the call then due, and after some negotiation his request was complied with. On June 29th, the same year, Messrs. Johnson, Stokes, and Master wrote on Mr. Harduon's instructions calling upon Beli lios and C. to fill up the transfer paper and transfer the shares out of his name, and a reply was received stating :-" The shares in question were left with us by the Messrs Coxon and as they are absent from the colony, we regret wo cannot transfer them ont of Mr. Hardoon's After remarking that Belilios and Co. paid another call later on Mr. Francis added— The next step is that the Bank of China weut into liquidation in December, 1894.
The Chief Justice-Laye heard something
name.
was that although Mr. Belilios was acting in this matter for himself and a number of other gentlemen combined together in a syndicate, and who were the owners of these 2,019 shares, be on his own personal security and personal responsibility obtained this loan of £110,000 sterling, and that as be- tween himself and the Bank he was the sole borrower and he was the person who deposited Mr. Francis (contiuning)-Mr. Hardoon was the whole of these securities In October, 1891, | called upon to pay the balane still due on these a call was made on the new issue, and a per-shares, and ou his nou-yment an action manent certificate was issued in place of the provisional certificate which had originally been sent out.
about that before.
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was commenced and judgment obtained againt him. Immediate notice was given to Mr. Belilios, who was called upon to pay the moues, but this he refuse to do. contention
Their
was that Mr. Belilios was on the date of the liquidation the holder and the ab- solute over so far as the beneficial interest was concerned, of these 50 shares and that Mr. Hardoon was merely the registered owner, and that Mr. Belilios had recognised the relative positions of the parties by claiming and receiv. ing from Mr. Hardoon the dividend on the shares and by paying the call prior to the liquidation, and that this was a clear admission liability to indemnify Mr. Hardoon against these claims.
The Chief Justice---Who paid that call? Mr. Francis-I really cannot tell at the moment. We may succeed in getting it out in evidence. It would appear to have been-paid through Benjamin and Kelly. Mr. Hardoon know nothing about it. Continuing, Mr. Francis said that in January, 1892, some 600 shares in the Hongkong Bank which form part of the deposit were sold and the credit was renewri for another period and for a diminished amount of £72,000, odd, and in February the credit seemed to have been transferred to the Hong-of kong and Shanghai Bank. It would appear as if defendant obtained the necessary funds from the Hongkong and Shanghai Bank to clear off the Bank of China, Japan, and The
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point of law arose, and then be could deal with the latter, and after some argument this course was agreed upon, the case to take the usual course if no such agreement can be come to in
the meantime.
14th April.
No arrangement having been come to the hearing was continued.
Plaintiff, ou being sworn, corroborated various statements made by his counsel. He said that on receiving a summons for non-payment of the call on the 50 shares registered in his name in the Bank of China, Japan, and The Straits, be they should pay the call and transfer the shares wrote to Bellios and Co, aud suggested that
reply he got a letter from Mr. Moses, a clerk out of his nume into that of Mr. Belilios. In
Mr. Belilios could not undertake to get the in the employ of Belilios and Co., stating that shares transferred out of plaintiff's name, adding,
The shares are not his, as he could easily prove, and if you had insisted on the transfer at the proper time he would not have had to offer any payment. The fault was yours transferred out of your name before paying in not demanding that the shares be duly any dividend." He subsequently got an order from Belilios and Co. for $376.20 in payment of the claim, and the summons was withdrawn. He got a receipt from Jobuson, Stokes, and Master, and he sent it on to Belilios and Co. in June he received a notice from the Bank to pay the last instalment of five shillings on the call due. asked them to pay the amonat-£12 10%.--due. He informed Bellins and Co. and
and this was done. He subsequently consulted Messrs. Jubuson, Stokes, and Master about his position, and instructed them to write to Belilios and Co. ou his behalf asking that the 50 transferred. The reply was:-"The shares in shares which appeared in his name might be question were lodged with us by the Messrs. Coxon, and as they are absent from the colony we regret we cannot transfer them out of Mr. Hardoon's name." In July, 1895, he received a letter from the liquidator of the Company in regard to the list of contributories, and he for- warded it to Belilios and Co., getting the reply: do with the notice, as the business is yours, not "I have to inform you that I have nothing to mine." On receiving a letter threatening pro- ceedings he wrote to Belilios and Co. informing them that he had been served with a writ of summons, the claim being for £378 108., and adding, you are well aware that these shares
March, 1892, applied to me for the dividend are your property, and that you on the 9th of
paid in respect of the same, on the ground that you were the holders of such shares, which divi- dend I accordingly forwarded to you." Plaintiff iu this letter went on to say that he never had minded defendant of the call he had paid in any beneficial interest in the shares, and re- respect of them. He got a reply which said:
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The Chief Justice suggested that Mr. Francis and Mr. Robinson should endeavour to come to some agreement as to the facts on which the
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I did not receive the shares from you. They were deposited with me by another party as
matter." security for a debt. I do not know you in the Subsequently judgment was given against him in Eugland for £392 and costs, and as the result these legal proceedings were com. menced.
In reply to Mr. Robinson, plaintiff said he was not able to say whether the judgment had been satisfied or not. He had not paid the interest in the shares. When the shares were money himself.
He never had any teneficial first registered in his name be never made any enquiry as to the persons who were beneficially interested in them. Messrs. Benjamin and Kelly paid the first and second instalments. So far as he had any means of knowing, they were doing this as brokers. He signed his name to the blank transfer either on the 2nd or 3rd April. He did not know at the time the person to whem the blank transfer was to be handed. When the application for the dividend came on the 9th March. 1892, he knew that the shares were then with Belilios and Co. Before then he did not know where they were.
had never come forward to assist him in this By the Chief Justice-Benjamin and Kelly matter. He left them at the end of 1892 and went to Sassoon and Co.'s a few months after- wards. As to the execution of the judgment against him, the liquidator had agreed to wait until this suit was over.
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