81
to permanent reserve fund account and the bal?" ance of $13,275.70 to 1
new profit and loss account.
Messrs. C. DIRECTORS,
J. S. Van Buren and Ho Tung now retire, but offer themselves for re- élection.
AUDITORS.
The accounts have been audited by Mr. F. Henderson, who offers himself for re-election. Mr. W. H. Gaskell has been invited to assist Mr. Henderson at the next audit, and his áp- pointment requires confirmation.
HART BUCK, Chairman.
Hongkong, 16th January, 1901.
BALANCE SHEET FOR THE YEAR ENDING 31ST DECEMBER, 1900. LIABILITIES.
0.
$ Capital account, 100,000 shares of $10 each 1,000,000.00 Fund for equalisation of dividends
25,000.00
Unclaimed dividends.......KLASYKLER Bundry creditors
Profit and loss account-
Amount carried forward from
last year
For the year 1900
ASSETS.
Amount invested in property
Amount invested on mortgage
Secured loans......
$ 4,873.83 231,557.63
Investments in public companies-125 shares of the Hongkong and Whampoa Dock Co., Limited
Rents due and accounts receivable
Office furniture ......
Cash in Hongkong and Shanghai
Bank
Casli in hand....
..855,021 09 63.36
864.50 585.15
THE HONGKONG WEEKLY PRESS AND
SUPREME COURT.
Friday, 18th January,
IN SUMMARY JURISDICTION.
BEFORE HIS HONOUR T. SERCOMBE SMITH (ACTING PUISNE JUDGE.)
GASKELL V. STEVENS & co. The Acting Puisne Judge gave Judgment as
follows:-
On 6th June, 1900, the defendants wrote to the plaintiff asking him if he would (1) go tho- roughly into Mr. Hall's books; (2) give his opinion as to the manner in which the books had been kept and whether from the materials at hand they could be properly written up; (3) point out and note any irregularities in the books. The question of remuneration was to be gone into in a day or two.
On the 7th June the plaintiff replied saying (1) that he would be pleased to go into Mr. Hall's books and accounts; (2) that he would not be able to give an opinion as to the manner in which the books had been kept until he had thoroughly 236,431.46 looked into them and completed the work; (3) that if the defendants-had full particulars of $1,262,881.11 all transactions entered into by their firm dur
ing Mr. Hall's management there was no doubt 459,932.98 that the books could be properly written up and 393,540.65 an account rendered. 241,009.62
0.
103,806.25 9,007.16 500.00)
55,084.45 $1,262,881.11
PROFIT AND LOSS ACCOUNT.
To general charges
To rown rent.
To fire insurance
To repairs
Dr.
To furniture account-Depreciation
To allowance to General Managers to cover office rent and salaries of secretary and clerks
To remuneration to directors 5
per cent commission on net profits ($231,557.63)
To remuneration to General Man- agers, 5 per cent. commission on net profits ($231,557.63) To dividend of 10 per cent. on
$1,000,000
$11,577.88
11,577.88
100,000.00
To transfer to permanent reserve
fund.
To balance to new account
100,000.00 13,275.70
Cr.
By amonnt carried forward from 1899 By profit on sales of properties and invest-
ments
By renta
By interest
By transfer fees
On the 8th June the defendants replied send ing books, vouchers, etc., etc., and offering to place at plaintiff's disposal other books and docu- ments in daily use at the office.
1
These three letters were preliminary to the formation of any contract between the parties and constituted what I may call the negotiations between them.
The books, etc., sent with and referred to in the third letter enabled Gaskell to estimate for himself the nature and extent of the labour and skill which he would be called on to expend and to make an offer to the défendants if he $ 2,579.38 thought it worth his while. 4,107.5
C.
2,009.85
1,877.40
200.00
4,000.00
[January 28, 1901.
$1,066.77
Feb. 17, 100 tons of coal Aug. 12, cheque to Chartered Bank 3,831.12 4,897.89 This amount will therefore have to be written off before opening fresh books," eto, etc.
When this error in regard of Roque's account had been corrected, the balance sheet, so far as I can judge, was accepted as substantially accurate and there remained only a question relating to the accounts of the S. S. Loyal,
On the 18th December Gaskell wrote "Your letter of this date enclosing manifests of S. 8. Loyal has come duly to hand, also the statement of accounts I rendered to you made up in accordance with the firm's Cash Book, Bank Pass Book, etc, which were in use during the period of Mr. Hall's management.
“As already mentioned to Mr. G. R. Stevens, the books and accounts having been kept in such a disgraceful manner during Mr. Hall's management, are absolutely worthless as records of fact; the vonchers are mixed up and many missing.
"I shall be pleased to do my best to reconcile my statement of account of S. 8. Loyal with the manifests you have sent me, but it must be borne in mind the statement I sent you was made up from amounts shown in your compradore's cash book and the Hong- kong bank pass book during Mr. Hall's term of management of your business. Before com- mencing this work I shall be glad to receive cheque in settlement of my account."
The Court is not versed in the manner of making up a ship's accounts: but assuming that those accounts cannot be properly made up without the production to the accountant of the ship's manifests, I consider that Gaskell was within his rights in saying, as he practically did say in the last latter quoted, “In the materials which you either sent to me or offered to place at my disposal, I find that no ship's manifests are included and my contract was to furnish a correct statement of accounts from the materials which you either sent or offered. That I have done and I will not do extra work except for extra remuneration."
After taking five days to consider matters Gaskell on the 13th June wrote as follows:
I have looked into the books kept by Mr. F. Subsequently on 27th December, C.-W. Mar- W. Hall during his management of your busi-shall, manager of the defendant firm, wrote ness and find that many serious mistakes have been made."
"Will you go through Loyal account with me? Name your own time! Perhaps this office would be best as I have books here. This is all we want to get to the real bottom of in the meantime. That is to say in company with you. So soon as this has been done Mr. Stevens will be satisfied: I have got it out pretty well, but it will require your verification as a docu-
He continues: "To arrive at a correct state- ment of account for the twenty-one months of Mr. Hall's management would necessitate a large amount of labour, and would probably take about two months' continual work, day and night. My fee for undertaking the task would be $1,000, $500 of which payable in advance andment of importance." the remaining $500 payable on my handing you the work completed."
It appears to me that the words "so soon as this has been done Mr. Stevers will be satisfied" admit the satisfaction of Mr. Stevens with every account except that of the steamer Loyal. But the oral evidence and this last letter, as read in the light of Gaskell's letter of the 18th December, indicate that the request to go through the Loyal accounts was a re- quest to Gaskell to do what he had already legitimately declined to do, viz. compare his statenient of the Loyal accounts with the
236,431.46
In this letter Gaskell offers to furnish a cor- rect statement of account (based of course on $251,2 5.65 the materials supplied or offered) for the twenty- one months of Mr. Hall's management upon $ condition that he is to receive $1,000, of which 4,873.83
one half was to be paid in advance and the other 191,997.05 half when he handed over the work completed. 51,104.50 That offer was accepted and such acceptance 3,136.27 clinched the contract. The phrase "the work
194.00 completed" means a finished correct state-Loyal's manifosts. $251,205.65
ment of account."
Under date 5th November, 1900, Gaskell wrote: "In accordance with your instructions to me I have now the pleasure to hand you herewith the following accounts made up to the 31st December, 1899:-
No. 1.-Balance Sheet.
No. 2.-Profit and Loss Account. No. 3.-Statement giving particulars of house account.
No. 4.—Statement giving particulars of T. L.
He adds that the accounts have been very carefully gone into.
The N.-C. Daily News states that news has just arrived that the Christians in the district of Chenchou, Eastern Honan, have been per secuted anew. As affairs had quieted down the converts began meeting together in each other's house for worship. All went well till the nephew of Yuan Shikai, Governor of Shantung, ar- rived in the district. This person immediate-Stovens account, ly headed a move against the Christians. He enlisted a band of 700 men and began to sieze the converts and, dragging them to the temples, On the 12th November, after an interview compelled them to go through the forms of with Mr. G. R. Stevens senior, who drew his idolatrons worship. Under pain of having their attention to certain items in the Balance Sheet homes destroyed, the converts were forbidden to and the Profit and Loss account, Gaskell wrote: meet together again. Two of their numberPlease find enclosed herewith statements were sent down to ask advice and help of the giving particulars of the amounts debited and missionaries. It is rather significant that a credited to 8. S. Dagmar and S. 8. Loyal dur- "movement such as this should be inaugurated by ing the period of Mr. Hall's management of
of one of the parties to the fam your firm. With reference to the $5,000 appear
Compact. It is satisfacing in the balance sheet as due to Mr. Victor officials on the spot had Roque, I find that this sum has been paid by
your firm as follows :
close relati
tory ́disbanded the 700
The Court is accordingly satisfied that on the 27th December the accounts rendered by Gaskell had been accepted by G. R. Stevens & Co. as substantially correct and that the Loyal ac- counts were not impugned as unsatisfactory because they were based on the materials sup- plied or offered to Gaskell to work upon, but because they did not tally with the manifests."
In the face of this acceptance by G. R. Stevens & Co. it was useless to point out a few items here and there which the defendants -considered to be incorrect. Before accepting, such alleged errors should have been referred to Gaskell and the materials for corresting them furnished to him. With the origin materials at his disposal Gaskell has dore what he contracted to do. He has exercisel the bounden ordinary amount of skill and know- ledge incident to his profession as an account- ant. He has carried out his work in substance and effect according to the intention of the parties. If any inaccuracies have arisen from inherent difficulties in the work itself he is still entitled to his remuneration. He was, I think, bound to afford the defendants a reasonable opportunity of inspecting his work to
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