Concluding proceedings in the First] Special District Court of Shanghai (hough an appeal has been entered and is to be heard shortly), an interesting judgment has been' given in fan important case. This was a suit by Pathe Orient, Ltd. represented by Mr. John Ritchie, against the Shanghai Commercial and Savings Bank, represented by Tung Cheng-tao. Mr. anal. G. MeDonald, with Messrs. LO. Yang, K. W. Chang, and Yeh, appeared for the plaintifis, and Messrs. Wu Ling-kwan, Wang. Fu-zang. Chen Tsung-yin, and Wat Chung-wan for the defendants.
The judgment follows:—The defendant shall, on behalf of Carson Lee, pay to the plaintiff! the sum of $10,186.71, with interest from the date of filing of the action to date of payment, and with Court} costs. Interest at 5 per cent. per} mage yt, sez ce, Sa, ieee cots. ce al" fee uk cuales Fiat ce ast ser tata poe "ge a ear oan cee, cane Series one eas Seen ae a See ce ore ieee nine Scale tite seen eae ars acted Orde Sha ace a rai at See fae Se aha Pin of See Messrs. Lowe, Bingham & Mathews, hack a Sine jas since been sss te iti cee an Sask Jonly a guarantor and as such the seid] Carson Lee could avail himself of the defence of refusing performance until the plaintiffs have brought action against the customers and exhausted all means of levying execution on the customers' property. When Carson Lee resigned the plaints, there was a verbal arrangement to the effect that the plain-fitts would collect all outstanding feccounts and that Carson Lee would assist in collecting the bad debts. Although there was no written contract to this effect, nevertheless, there was such "inference from. the! otters" or correspondence between plaintifis and Carson Lee and between Chin and. Mr. McDonald. The plaintiff failed to collect the accounts and also failed to render a statement to Carson Lee of the bad debts. The plaintiffs, on the other hand, notified all customers that Car-ison Lee had severed his connection from the plaintiffs and had Jauthority to represent the plaintiffs. For this reason, the said Carson Lee twas unable to collect the accounts {from the customers, So it is evident that it was the plaintif—s who failed {to carry out the contract.
The plaintifis were also Hable to [carson Lee for commission. Granted that the plaintiffs had taken action against the principal debtors _and levied on their property, the said Car-ison Lee could also set up a set-off by way of commission. Since the plaintiffs have refused to pay him commission, the said Carson Lee could, of course, refuse payment as guaran-for.
'As the defendant is a guarantor of Carson Lee, it could certainly set lup all defences that may be set up by the said Carson Lee. On the! above grounds, the defendant asks for dismissal of the plaintiffs' claims and produces correspondence in support of its contentions, "The Court gave as its reasons:—Whether or not the plaintifis can! enforce the guarantee executed by the defendant is dependent upon the terms of the guarantee and also upon the terms of the agreement entered into between the plaintiffs and Carson Lee. Upon examination of the guarantee bond executed by the defendant, the Court finds that th are (we conditions:—(1) The Bank ud undertakes to perform all the obligations and pay all the moneys.
due under the contract entered between Carson Lee and. the plain tif; such obligations are limited—to $18,000. (2) In case of default on the part of Carson Lee, the bank agrees to reimburse the plaintiffs of all accounts due from Carson Lee, upon receipt of a certified statement is~ sued by Messrs. Lowe, Bingham Matthews, to thi extent of $15,000.
This Court has itself made a trans tion of the guarantee bond, since the fendant hat agreed and undertak to perform all obligations on _the part of Carson Lee to be performed. and has agreed and undertaken to do #0 upon receipt of a certified statement issued by Messrs. Lowe, Bingham & Matthews. So the Court finds that there is a special agreement reached between the part. lies and by—such agreement the defendant has waived its right to require the plaintiff to Srst take proceedings against the principal debtor. The defendant cannot now assert ite right which has been eek" recompense. Witness st ted it. J. H. Blakelock, of the SIN. that he would try to obtain recom-Health Department, who found in He held no funds, and no) his post mortem that circumstances iced were such as consistent with death Mr, Recks stated to the Court that from natural causes. the Council two Tsong Liang-tsoong. a boy em-remedies, trying to "pass the buck" to Algar ployed at Sinza Police Station, Ca, The Council should apply to Stated that on the morning of May the Chinese Court to restrain the 15 he found Sgt. Sanford lying untenants from using dangerous _ma-conscious in the lavatory at the stachinery, he conti tion, and immediately reported his This order was in the nature of a Alscovery. Sgt. Austin stated that mandamus, Mr. Reoks stated, and not he went to the scene and found Sgt. Sanford unconscious: he regained for @ Registrar to make. If the latter did make the order, Mr. Reeks con onselousness within 20 minutes, and tinued, he would do' so knowing that was then sent to hospital. Detective-it could not be carried out. The Sgt. S.J. Gazeley said that he actenant for the time being was the companied Sgt. Sanford to hospital, virtual owner, and could not be re-and. that during the journey the moved by Messrs. Algar & Ca. Algae Latter complained of severe pains in Ca, had no remedy: they could not the head. to the Special District Court to enforce Bye-Law 20—this was up to the. Council. The order requested was. for the work to be done within 48 hours, which left the defendants powerless, and was grossly unjust, he concluded.
Sub-Inspector Firth stated that Knew of no unusual circumstances: inv connection with the late Sgt. Sanford sand Sgt DS. Munro, of West Hongkew. Station, who had Kknown the deceased for about four years, made a similar statement Mr, McNeill stated that Mr. Kent] Det. Set. MRL. Lingard stated admitted his firm took a fee and yet! that he had known deceased for just had no control of the property. Many over two years. Sanford, he con-of this nature had been before tinued, was very enthusiastic over this Court, and there was one Rugby football, and witness had seen which Judge King, then Registrar, him, play during three seasons. He had said that the registered owners had seen Sanford the some hard were the proper people to approach. knocks.
There was only one thing for the "During the last three days of his Council to do, he continued, and that rife, Sanford told witness that he was was to make application in the prop-feeling "pretty awful all over Bis} body" but could not give any ex-"There was no evidence that Messrs.
Bistation of ths. Sanford bad Algar & Ca, could not carry out the Epoken. in monosyHlables, but made repairs: all they stated was that they this clear. Witness had visited San-could not force their tenants to do ford in hospital frequently: the last this, Mr, MeNeill concluded. occasion was just after 2 am. on, Sune 6. when he was told Sanford The Registrar then stated that he would make an order against Algar had died at 140 am Eo. 10 commence the repairs within. as stated. "he Registrar then gave his verdict ours. paths ite and cen aay aaa eect Mi ne Seat a Sate os Core See ga See Gras tt can the property of the principal debtor, ict a Sie Rane fe oes, year ie 8 ithe bs ie arr rir ay feel Bae Sees cee Ser Same eat a bie i eae Carson Lee and the plaintifis, it is clear that the said Carson Lee was waived as provided in Section 1 of] Article 748 of the Code, Upon examination of the compra-dare agreement of the principal debtor, Carson Lee, the Court finds that, under Article 3, it provides that} the said Carson Lee undertook to be responsible for the due performance! by each Chinese customer of every contract, transaction, or business entered pio between the plait and such Aistomer for the purchase or Jsale of goods on commission or Otherwise and undertakes on demand to pay and make good to the plain-all losses the plaintiff may suffer by reason of the non-performance of] any such transaction or business. with any such customer.
It also provides that the said Carson Lee is only responsible for such orders as approved and chopped by him. Article provides that the said Carson Lee Shall provide security for the due Joerformance of all his obligations by the deposit of cash or securities, or by.
bank guarantee in the sum of $15,000. It also provides that the, plaintiff shall have power from time to time to pay or recoup itself out Jor such security or bank guarantee Jany sums to which it may from time time be or become entitled to be paid by the said Carson Lee.
From the above it is also clear that ithe said Carson Lee has also waived Ibis right to require the plaintiff frst to take proceedings against the customers. There have been decisions to the effect that, where there is a provision that the guarantor shall pay upon Jdemand, such provisions should be, construed as a waiver of the right fio require the creditor first to take Proceedings against the principal deplor. (Reference: Decision No. 1418, 6th year: No. 1783, 12th year). So the defendant's contention" that ican' avail itself of any defence that may be set up by Carson Lee cannot prevail. The defendant also
and September 21, and contends that the said Carson Lee came to a verbal arrangement with the plaintiff.
'Counsel for plaintiff, in answer this, states that there' was an exchange of correspondence after Aug. 1, but that such correspondence was nothing more than mere attempts on the part of all parties to bring about an amicable settlement. The plaintiff also points out that there was correspondence before October 26 fand that on the larier date a definite agreement was reached whereby both parties agreed that the certified statement of Lowe, Bingham & Matthews shall be binding on all parties concerned. The plaintiffs contention was borne out by the guarantee bond of October 28 in which it is slated-—"We are in receipt of your Netter of October 26 and note that you have come to an are rangement with Mr. Lee whereby you will return our guarantee bond of March 29 in exchange for another guarantee for $15,000." So the Court bound to accept the statement of the plaintiff.
'AS regards the defence of a set-off, the Court finds that, under Artil 834, no set-off can be set up unless the' same is due and mature by. the time it is set up. The commission claimed by Carson Lee is, under "Article 5 of the Agreement, not due until all the accounts are collected. JAs the plaintiff has not collected its accounts, such commission is not yet due, The defence in this regard cannot prevail. None of the defences put up can prevail, and the Court has therefore ordered the defendant to pay the amount as claimed, together with interest permitted by Inw.
In view of the above the Court Jands that the plaintiffs' action is well founded and has given its judgment Ju accordance with Article 81 of the Civil Procedure. The defendant may int to the Second Branch of the Kiang High Court.
Text read from the printed page and cleaned; old type leaves the occasional error.