Judgment was given by Judge G.
King in H. M. Supreme Cour on Jandery 29 in the ease in which General Yang Chun-chang sued H. 7. Wade for Tis, 90,000 alleged damages, $1,500, and costs in respect ofthe loss of the str. An Lan on account of defendant's alleged misrepresentation. In his judgment, his Honour decided that' plaintiffs claim for damages must fail but he found for plaintiff' in the sum of '$1,500, No order as to costs was made, Counsel who appeared in the case were Mr, John McNeill for the plaintiff and Mr, E, L, Hartopp for thy defence, In his judgment, Judge King said:
This is an action in tort by which the plaintiff claims the sum of $1,500 and damages for the loss of the str. An Lan on account of misrepresentation made by the defendant, Tt seems desirable to me in the first place to find the facts as shown lby the evidence. On consideration lof all the evidence I find as a facti—That the plaintiff? was for-ruerly a general in the 10th Division of the Nationalist Army and is now the second in command of the reorganized 10th Division of the Nationalist Army. That the steamer An Lan, the subject matter of this action, was captured by the 20th Division in the year 1926 when the Nationalist Army was advancing [from Canton towards the north and that at the time of, its capture General Wang was in command the 10th Division, and that he was Jexecuted by the Nationalist Government in 1027. That the plaintiff, othe execution of General Wang, stopped into his shoes and when the 10th Division was reorganized he became second in command of the division, "'That the plaintiff in the year 1928 decided to employ the [steamer in commercial enterprises Jand sent her to Shanghai, appoint Ing Koo Meng-yung his agent to carry out his wishes. That the Ia*ter entered into negotiations with Hthe defendant and one Berthet. to put the steamer under a foreign flag for the purposes of trading up the Yangtze, the foreign necessary to protect the from possible interference by the Wuhan authorities. That the steamer was registered in the French Consulate-General at Shanghai on March 1, 1928, that permission to fly the French flag was withdrawn on May 23, 1928, and that the registration was. finally cancelled on or about June 4, 1928. And finally that the steamer did sail from Shanghai on May 24, 1928, and was seized on or about May scler thaets meet thorities then in power at Hankow, that is the Wuhan authorities. On these facts as found it seems to me that I can deal with one of the de-Hfences of the defendant namely that the plaintiff is not entitled to bring this action, as the steamer is not his property but properly belongs to the Nationalist Government. The claim of the plaintiff is based on a custom in China that the command der of a unit which, captures property from an enemy becomes the owner of that property, and as General Wang was in command of the 10th Division when the steamer was captured at Ichang he became its owner and when he was executed his rights passed to the plaintiff who succeeded him in the command of the 10th Division. The ancient and well-known case. of "Armory Delamitie though it does riot support in every aspect the popular saying "findings is keepings" at any rate does lay down the proposition that the possessor of property has ai sight 0 it good against all the world except person who proves he is the rightful'owner. There has tiation of this action for rights of [him that he hed made arrangements I shall now deal with "would. be Jownership adverse to that of the plaintiff to have been made. It has }been suggested that this steamer was the property of the Nationalist [Government but no claim has been made to this Court by that Government: "Therefore, it seems to me that I-can hold that the plaintiff has proved sufficiently his ownership to this steamer to bring an Jaction for damages in respect of it, T next turn to the claim of the plaintiff which falls under two Heads (a) a claim for $1500, and (b) a claim for damages for the ess of the steamer of the use of [which he has been deprived.
Before dealing with the evidence Jon which his claims must stand or fall, however, it is necessary that T enunciate the law with reference to misrepresentation on which those Jclaims are based. 'That law may [be summarized as follows:—"Making a witfully false statement with intent that the plaintiff' shall act in reliance on it ani with the result that he does so act and suffers harm in consequence," ie. (a) there must be a false statement of fact (b) the statement must be wilfully false (c) there must be the intent that the statement should be acted on (d) there need be no intent to cause loss to, the plaintiff all that is necessary is that the damage is the nataral and probable cause of the plaintif® acting on the defendant's statement and finally (e) it is no defence for the defendant to say that the plaintiff was negligent of foolish in acting on the statement.
Now having stated the law the next step is to analyze the evidence which T do not propose to do at great length but to summarize the salient and material points only. On the arrival of Kwo, the agent of the plaintiff, in Shanghai he got touch through one Chen with the defendant to have the steamer put under a foreign flag. The defend Jant at an interview with Kwo stated he would try and arrange the matter, and subsequently an agreement of February 4, 1928, was drawn up between the plaintiff" and one Berthet, a French citizen, by which the latter agreed to have the ship registered in the French Consulate-General in Shanghai, As to the effect of this agreement, T desire to offer no comment on the position of Mr. Berthet as ho is not subject the jurisdiction of this Court. Tt is obvious that the agreement not Mhaving been made between plaintiff Jand defendant cannot in English aw bind the latter but it is interesting to note the wording of clause 9 which mentions his name, The subsequent negotiations after the signing of this agreement were Jeonducted practically entirely by the defendant. Berthet hardly ever Jcomes into the picture.
The various letters as to the question of the service fees as to th registration of the steamer at th French Consulate-General and the question of @ French captain were all written by the defendant either to Kwo or to Hong, his legal ad-wiser, and all payments for Consular registration and on behalf of the steamer wore made to the defendant.
The defendant notified Hong on March 2, 1928, that all consular and Jeustoms formalities had been completed and that the ship could stare Heading. As a matter of fact the steamer had been registered by Berthet in the French Consulate-Genoval on March 1. There was delay in the steamer leaving Shanghai due to the first captain (Captain Hemery) leaving and the finding of another French captain and other causes, Captain de Bisschop iwas engaged on May 18 and the steamer did not finally leave for Hankow till May 24.
Now the case for the plaintiff is not based, as it cannot be, on the Jabove agreement but on letters of February 6, February 9, March 2, 1028, and on the conduct through-Jout of the defendant all of which it is alleged show that there was a Jeontract between the defendant amd plaintiff and that the former became Jan agent of the latter. To this the defendant replies that the letters [parties together.
To test the soundness of the contention.of the plaintiff-it is-necessary fo seratinize the evidence to have the steamer registered at ithe, French Consulate-General, and that the service fee will be $600 a month payable quarterly in advance; in reply by a letter of February 9, Hong states he is instructed to accept the terms of the service fee, and that this letter and the letter of February 6, are to form part of the agreement made on February 4. Finally on March 2, defendant writes to Hong that all consular and customs formalities Thave been completed. So much for the letters. It is of some value at this stage to consider the opinions }of various parties as to the position fof he defendant in the matter.
we says that after the agreement matters were entirely in Wade's hands that Berthet's name was put in the agreement at Wade's request, that he relied on Wade, and he is sued because Wade was introduced to him. Berthet. says that though both he and Wade are responsible, the latter is responsible because he wrote the letters and that he (Berthet) only dealt with details of the registration. Bisschop says that hho thought Wade represented the Chinese. Wade says that Berthet is the person who is responsible, but he makes various suggestions as to his own position, jas that of a go-between, a channel of information as being bound as to Berthet's honesty by Clause 9 of the agreement, that he hiad @ sort of moral obligation when he heard the ship could not fly the French. flag, and that he was a sort of! agent for Yang.
After reviewing carefully all the! parol evidence the comespondence, the circumstances under which clause 9 was inserted im the agreement of February 4, the position the people engaged and the motives influencing them, T come to the conclusion that the ' defendant, did enter into an agreement with the plaintiffs agent for the registra. tion of the steamer and that such agreement is apart from the agreement of February 4, 1928, between plaintiff and Berthet. Having come to this conclusion, "I must now consider whether it has been proved! that the defendant made the misrepresentation complained of and forther whether the misrepresent tion comes within the principles of law which have been sct out previously. The misrepresentation alleged is that the defendant stated that the steamer could be and had been registered in the French Consulate-General. Tt is true that it was registered there on March 1 and. equally true that permission. was withdrawn on May 23 to fly the French flag. Mr. Barvaud, a French advocate pmetising in "Shanghai, stated that one of the conditions for registration is that the owner must be French. Mr. Berthet when ner in which to effect registration and it seems to me that he must] Thave been told as to the necessity of a French owner,'a view which if borne out by the transfer to himself from the plaintiff and the declaration of trust he himself] signed on February 4, 1928. It seems tome hardly possible, seeing the relations between—Berthet and the defendant, that the latter was not also aware of the demand of French law. The curious letter of May 23, 1928, from the defendant to the French Consulate-
General bears this out. Equally so it seems to me that the dafendav was always aware that Berthet was not the owner of the steamer. The Inevitable conclusion to which T am driven is that the defendant when he made the statement in his letters of February 6 and March 2 5 to registration knew that that! registration could not be properly obtained and that it could be can celled if and when the French authorities discovered the true facts. The argument that on March 2 the ship was actually registered and therefore there could not be a misrepresentation is not sound when the essence of the contract between the parties was the protection to. be afforded to the plainiift by. the use; the French flag. Of what value was registration at all when _that registration could be cancelled at any. moment? In my opinion, therefore, there was. misrepresentation by the defendant on that he made a equally so tis regards the claim for damages by loss of the steamer, The contention of the defendant is that, whatever might have occurred before, he did, directly ho knew there was a doubt as to the flying of the French flag, inform Captain Ma and Captain de Bisschop that the steamer could not leave Shang hai under the French flag till matters were adjusted, This be claims was at an interview on May 22 at office, He further denies that he had any interview with Kwo on May 23 at his office in which he was stated to have made no mention of any difficulty as to the flag. Finally by the evidence of de Biaschop hho shows that Kwo was informed on the night of May 23 on the [steamer that the steamer could not eave under the French flag. It is admitted by counsel for the plaintiff that if Kwo had been informed that would have been sficlent to absolve the defendant and, therefore, the importance of these interviews cannot be exaggerated. In the course of the trial T expressed surprise that Ma was not being called, and an adjournment was obtained by the plaintiff for this purpose, but the cannot be located now and. the ease was closed without his evidence being taken, 1 consider that this is peculiarly unfortunate for his evi" dence would have been valuable not only throughout the ease but particularly with reference to these interviews of May 22 and 23 and that on the steamer of the might of May 28 and-as to the question of the flag flown during the voyage to Hankow, What is the result of his evidence not being taken? T have the evidence of Berthet, de Bisschop, fand the defendant as to the inter. view of "May 22 with Ma and nothing to contradict it. 1 have the evidence of Kwo as to" the intere view of May 23 balanced by "the evidence of the defendant who directly denies it, and the evidence of de Bisschop. have the evidence of de Bisschop as to what happened on the steamer on the night of May 23 denied by Kwo.
Perhaps T may be permitted to express the opinion that the émportance of the evidence varies as to each of the above occasions. As to the interview of May 22 even if ceccopted the evidence tendered behalf of the defendant, assuming that, Ma's evidence was comtradietory, T should still hold that Ma and de Bisschop were not agents of the plaintiff so that information given {eo them in taw was not information given to the plaintiff. As to. the Interview of May 23 at defendant's office Ma's evidence becomes more important for as it is the evidence before me balances with the result that T cannot uphold the plainti whose case in law must be proved beyond doubt. As to the interview on the steamer on the night of May 23 and the evidence of what transpired as to the use of the French flag during the voyage wp the Yangtze Ma's evidence would all important. Here as T have said de Bisschop's evidence ie contradioted by Kwo a8 to. what hap. pened on the night of May 28, I¢ {is not easy then in the absence of Ma to determine which party T shall believe, and T must examine the more closely the motives of the witnesses and their respective positions. Kwo was the agent of the plaintiff, de Bisschop at that time one of the captains of the steamer.
What motive has the latter to come and tell the Court what he did? As far as T can sce he would have had no motive to mislead the Court. "He was after the seizure of the steamer and till is ina position which renders him i ent of the parties to the suit, He {was not called on behalf of the plaintiff though in the defence was designated as one of the agents of the plaintiff' and it was claimed that notice of the inability to fly the French flag was given to him, He was called by the defendant who had' a proof of the evidence he would give only a few days before his evidence was actually given He emphatically states that the reagott he went on the steamer was to that the Pinch Consul-General's orders. were obeyed, that the French flag should not be flown. T-did not admit, evidence as to the painting out of the French. flag: on the ship's sides which was tendered on behalf
Text read from the printed page and cleaned; old type leaves the occasional error.