Since 1922, the accused's company has. made such credit arrangements with the Hongkong & Shanghai Banking Corporation, the complainants in this case, and a considerable amount of business was done in this way' between the parties. Towards the Intter half of 1926, however, the defendant company: began to fail to meet its obligations. to the complainants, under this, or other, credit arrangements, and, by November, the bank took the matter up, and went and inspected the godown of the accused, in accordance with the-terms of the trust receipts; it was then found that part of the goods covered by the trust receipts, dated respective ly June 18, July 6 andql0, August 7 and 20, September 25, October 13 and 27 and November 4, were missing, whereupon the' bank Jdemanded immediate payment. The defendant company, however, was. no longer able to pay all at once, and asked for an extension of the credits, promising to pay the whole debt when the company would be replenished with fresh capital, which they were then trying to get. This, however, did not materialize, and the company went into liquidation in March, 1927.
"In the meantime, the bank made certain inquiries, and found out that some of these missing goods, covered by the trust receipts, hi been sold by the defendant com. pany, but the proceeds of such sales were never paid to the bank, hence the present. action, The Law Discussed "The charge read as follows: "That the accused, having by various. documents, called trust receipts, obtained possession of the said goods belonging to, or pledged to, the complainants, and, having under taken to hold the goods and/or the proceeds of the sale thereof, in {trust for the complainants, the defendants fraudulently misappropriated,, and/or conspired to misappropriate the goods, and/or the proceeds of the sale thereof. to the value of approximately Tis, 10,000, contrary to Article 391 of the Provisional Criminal Code; or, altertively, with having, by means of the said trust receipts, obtained possession of the said goods belong {ing to the complainants, and, havin undertaken to administer. the. sale thereof as agents for the complainants, the defendants fraud-lently, in breach of their duty; sold the said goods and misappropriated the proceeds to the value of, approximately, Tis, 16,000; with-four accounting for the same to the complainants, contrary to Article 383 of the Provisional Criminal Code?
"The above mentioned facts were admitted by the accused, who, however, pleaded not. guilty, and the question now to be decided is whether, according to the existing law of China, facts will warrant a conviction on either of the two alternate charges preferred by the complainants. Article $01 reads: Whoever appropriates to his own use any property which has come under his management, or control, or is held under the joint-ownership of himself and some other person, or which, being subject to a right of ownership, pledge, of other rights in rem, residing in another person, has come into his possession in accordance with any lew or ordinance, or under a contract, or through the management of the affairs of others, shall be punished, ete.
Text read from the printed page and cleaned; old type leaves the occasional error.