Stuart for J. 0. Anderson, 'Much legal argument took place before Judge P, Grant Jones in H.M. [Supreme Court last Wednesday in a case brought by the China Realty Company, Fed. Inc., against Mr. J. 0. 'Anderson and Dr, C. T. Kew, seeking the foreclosure or sale.' and/or possession of two properties, known as the British Flower Shop, situated in the French Concession, the "private "residence of Dr.
The case arose out of a series of mortgages alleged to have been carried out by the first defendant, Mr. Anderson, on the two properties, these mortgages having been eventu: ally transferred to the plainti™ com: pany, and totalling $131,856.37.
'Mr. "Newman opened the case by reading out a number of affidavits signed by a number of persons io support plaintiffs' claim, the mortgage having become payable fon December 19, 1935, The first defendant had been notified that falling payment on this date, legal action would be taken. The affidavits showed, declared Mr. Newman, that lainufls had no occasion to identity and occupied by the British Flower Shop. One affidavit showed that Dr. Kew was held merely to be the proprietor of the shop. Me. Newman then Tead out portions of the agreed cor~ Fespondence relating to the case.
Mr, Newman said that the sysiom of the transfer of the registration of real property in Shanghai was quite different to that in England, upon Which all the eases from which he would quote had been decided. All the cases concerning the giving of notice of ownership were based on the system of land transfer in vogue in England. With regard to the French Consular Lot, after having several previous owners this property eve {ually passed into the hands of the Chartered Bank, as mortgagees and eventually to Messrs. Markham, Kew fand Anderson, and was finally registered in the name of the Credit Foncier de l'Extreme Orient. The latter issued a declaration of trust in favour of the Tai Yuen Bank, on Instructions from the appropriate parties. The Tal Yuen Bank therefore appeared in the eyes of the Credit Foncier, as the beneficial owners of the property.
Plaintifis knew that the beneficial ownership of the property was the hands of the Tal Yuen Bank at the time of the transfer, and. the only people who could instruct the Credit Foncier Company to transfer was the Tai Yuen Bank. The Tai Yuen Bank issued the necessary instructions to the Credit Foncier company. and the deed of ownership was eventually transferred to his clients. In further confirmation of this transfer having been effected, the British Consular Lot adjoining was transferred to the China "Realty company in 1929 on the direct instructions of Dr.
According to the doed of ownership the only" persons who could for the French Consular Lot to the China Realty Company" were the Credit Foncier company. The defendant Dr. Kew, alleged Mr. Newman, was in the same position as an equitable but negligent mortgagee in possession of deeds of ownership.
At the time of the original mort. gage, continued Mr. Newman, on December 30, 1927, no legal estate was vested in Dr. Kew, and time subsequent to that had hho been in possession of the legal slate. All that he had ever been entitled to claim was an equitable interest.n the property. Mr. Newman then quoted a similar case of Cavender ¥. Bultecl, which was at first decided on insufficient evidence. Later, the defendant was recalled and gave certain evidence which completely changed the complexion of the case. The case now being heard was very similar in character this case.
After Me, Newman had read out the whole of this ease, Mr. Reader Harris said that a partner in a firm could mortgage his share in the concern, but he could not give power fo the mortgagee to walk in and close the business.
Mr. Newman: The test of a partner ship. is the intention of the parties to share both losses and profits The Judge: T would say that the test of a partnership is the actual intention of the parties to act partners.
"The case recently quoted, said Mr. Newman, made it quite clear that in order to' succeed defending counsel would have to show that" plaintiffs knew that there was a partnership in existence and that each was in possession of the property, atthe time of the original mortgage. There had Been no legal change in ownership since then and plaintiffs did not know that the arrangement was anything more than a business being in occupation of their mortgagor's proerly. Dr. Kew had successfully hid: den his position as a partner right
Mr. Reader Harris contended that it was up to plaintiffs to ask the Credit Foncier who were the beneflcial owners of the property before taking on the mortgage, Mr. Newman said that according the local custom the Credit Fon "leier could not take any instructions other than from the person to whom they had given the declaration of trust and if asked could not give such Information. Plaintifis' contention was that Dr. Kew did not exist as a party in the matier as far as the Credit Fon-ler were concerned.
The question was whether plaintiffs had notice of Mr. Anderson's "infirm= ity" to pledge the property of the second defendant, One of the first things that Dr. Kew would be expected to do if he'were the owner of the property would be to make some enquiry as to who was paying the municipal taxes, but he had never shared in paying any of the land taxes of the properly. Dr. Kew could not now be allowed to say that plaintiffs did not make sufficient enquiry before signing the mortgage. and that he was part owner of the property. His own valuation of the property was $320,000. Dr. Kew, alleged Mr. Newman, undoubtedly knew of the mortgage, by Anderson. but only took action after the value of the land went down.
Mr. Newman later quoted from other legal work, but then informed the court that he had made a mis quotati "Iam extremely sorry." he said, "but Tam misquoting from this book. This passage will Mgure Ina ease that will be before Your Lordship next week."
Inv. MeDonald: 1 hope this will be taken into account when the costs are assessed.
Text read from the printed page and cleaned; old type leaves the occasional error.