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Colonial Cases

Gilman, Bowman v. Oriental Bank, 1852

[bill of exchange - banking customs]

Gilman, Bowman and Co. v. Oriental Bank Corporation

Consular Court, Shanghai
1852
Source: The North-China Herald, Shanghae, 7 August 1852

 

BRITISH CONSULAR COURT.

Shanghae, August 3d, 1852.

BY OUR OWN REPORTER.

GILMAN, BOWMAN & Co. v. ORIENTAL BANK CORPORATION.

This was an action brought by the Plaintiffs to compel the delivery of £10,000 Bills of Exchange purchased of the Defendants.  It was tried before H.M.'s Consul, Rutherford Alcock, Esq., assisted by two Assessors.

Mr. A. Bowman stated, that having remittances to make, Mr. Gilman and he were considering the expediency of purchasing Bills of the Oriental Bank at 5s. 6 ½ d or bullion.  While in conversation on the subject, Mr. E. M. Smith came in at about half past 3 o'clock, (on Saturday last,) and stated that the Bank had raised their rate to 5s. 1d. Mr. Gilman said "that settles the question," and Mr. Smith being authorized to sell at 5s. 1d. G., B & Co. immediately closed with him for £10,000.

It is the custom of Shanghae, and to this the Bank has conformed, to send in particulars, pay the money and receive the Bills, the day before the despatch of the Mail for which the Bills are wanted.  G., B. & Co. have frequently bought of the Bank and the transactions have been so arranged.

About half past four o'clock, Mr. Langley wrote note No. 1 requesting me to send in particulars of his bills; to which I replied, particulars should be sent on Monday.  No special conditions to that effect having been made by F., B & Co. did not conceive they were requited to send particulars so quickly, but, as a matter of accommodation they did not object.  Some further correspondence passed on the subject of an additional amount we thought we might require, and which Mr. Langley said we might have if we ,liked, but as we finally deemed to take it, this need not be entered into.

All this correspondence, be it observed, took place after business hours on the Saturday afternoon, and the Bills were wanted for a Clipper to leave on Thursday morning.

Before nine o'clock on Monday morning, Mr. Langley wrote to say, he must immediately have particulars of the Bills, and the money before four o'clock that day.  The note was written in a discourteous style, upon which I commented, especially asking the meaning of a phrase in it, "about a game going on," and subsequently denying Mr. Langley's right at that period to make conditions about a contract previously concluded.

At about half past three, however, as I promised particulars of the Bills on Monday they were sent in, but not choosing to yield upon an important point of principle, we did not send the money, which however of course was ready for payment of the Bills - when tendered; The Bills were not offered on the Monday, nor the money demanded, but on the Tuesday morning, (this morning,) before nine o'clock, Mr. Langley wrote what I  cannot help calling a very impertinent note, asserting that as we had not sent the money, either we did not want the bills or had not the money to pay for them, whereupon about half past nine o'clock, I tendered the money to H.M.'s Consul, and demanded his aid in compelling the completion of the contract.

The evidence of the gentleman about to be examined will satisfactorily show the practice of the Bank and the custom of the port.  In effecting a sale the Bank or any one else has clearly thr right to make what conditions they please but they cannot impose unusual conditions, after the bargain has been concluded.  Contracts of this kind are constantly made long before the despatch of the mail, and nothing more is required than the completion of them in reasonable time.

Mr. Smith and other gentlemen will tell you that the day before would have been sufficient, but if the principle is admitted that either party may at their caprice, impose new conditions as to a concluded bargain; either party might get out of any bargain they had made, and the whole business of the Port would be thrown into uncertainty and confusion.

Mr. Bowman was then sworn to the correctness of the facts in the above statement.

Mr. Smith being called, proved the contract and corroborated generally the circumstances detailed in Mr. Bowman's statement with regard to the manner in which the bargain was concluded.  He said that according to the custom of the Port, purchasers of bills were not bound to apply for them till the day previous to the closing of the despatches for the Mail for which they were purchased.  The transactions are settled in a reasonable period before the departure of the Mail - the day before - the practice of the Bank was somewhat stricter than that of merchants, but he considered that the general rule.

On cross-examination - Mr. Smith denied having told Mr. Langley that there was a combination against the bank, but subsequently corrected himself on this point, and admitted that he had told the Agent that three parties were combining against the Bank; but he denied having named those parties to Mr. Langley.

On being asked whether he had told Mr. Langley that Messrs. Gilman, Bowman & Co. did not really want the bills, but bought them for re-sale to the Parsees and to "shut up the Bank" he positively denied having said anything of the kind, and expressed his astonishment at being asked the question.

Mr. W. H. Vacher being sworn, gave similar testimony as to the purchase of O. B. Bills for remittance at %s. 0 ½ d being under discussion when the rise of rate was reported.  It was customary to give particulars of bills a day or so before dispatch of the Mail.  G., B. & Co. Had frequently bought of the Bank and settled with them in this manner.  Could not remember having bought so much as £10,000 in this way, but remembered one case of about Drs. 20,000, on which occasion the Bills were not delivered till five days after settlement.  The Bank had been in the habit of sending in bills and receiving the amount sometimes at the time and sometimes afterwards.

Mr. Gilman also spoke to the discussion going on as to the purchase of O. B. Bills at 5s. 0 ½d when Mr. Smith reported the rise of rate upon which he said "that settles the question," and thereupon concluded the purchase.

Mr. Cunningham of the firm of Russell & Co. said he did not know much as to the practice of the Bank, as he had had but few transactions with them; but the custom of the Port was for the purchaser of the bills to send in particulars at his own convenience, provided he left sufficient time for the bills to be made out before departure of the Mail.  He considered three hours sufficient; but in some instances had delivered bills within one hour of the dispatch of the Mail.

Mr. Kay, of the firm of Blenkin, Rawson & Co., Mr. Mackenzie, of the firm of Mackenzie, Brothers & Co., Mr. Kennedy, of the firm of Smith, Kennedy & Co., and Mr. Dallas, of the firm of Jardine, Matheson & Co., all agreed in saying, that particulars of bills need not be given, according to the usage of the place, until the day before the despatch of the Mail; and Mr. Dallas took some pains to explain that, not only, the Oriental Bank had no right to insist upon the completion of the contract, except in reasonable time for the mail, but that the call for the money at eight hours notice was unreasonable, altogether contrary to the usages of the place.

Mr. Bowman was about to call several other witnesses as to the usages of the Port, but the consul said it was needless, the current of testimony running so completely one way.

At an early stage of the proceedings Mr. Langley on the part of the Oriental Bank, questioned the authority of the Court to deal with such a subject, and intimated that he should not be regulated by its decision.  He afterwards asked some questions as to the contract note, as if doubting its validity, but finally admitted its correctness.  He also made some remarks as to the banker's orders which had been tendered to H.M.'s Consul, and was informed by the consul that they were of the usual character.  The sum lay on the table of the Court.

The case for the Plaintiffs being closed, Mr. Langley addressed the court for the defendants.  He began by asserting that he knew the opinion of the Community was against him, but it was a Community of Merchants - there were seventeen then present, who, no doubt, would all express the same opinions; but if seventeen Bankers were asked, the result would be different.  He denied that the Bank was amenable to the rules by which Merchants regulate their business.  The Bank had rules of its own arising out of the nature of its business.

The Consul at the request of one of the Assessors, asked if these Rules had ever been made Public.  Mr. Langley replied they had not.

Mr. Langley then said, he stood there to protect the interests of the Bank - an important principle was at stake - merchants dealt in many articles, Bankers in money only.  They paid with one hand and received with the other.  Acting upon private information received during Sunday, he thought it necessary to call upon the Plaintiffs for the immediate completion of the transaction.  They did not comply with his requisition.  They sent in particulars so late on Monday that it was not possible to furnish them with the bills, and, therefore, he, in protection of the interests of the bank, and in consequence of the information he had received, cancelled the transaction.

Mr. Bowman demanded to know the nature of the information to which Mr. Langley alluded; but Mr. Langley declined to give any information on the subject.

The Court was then cleared and remained in deliberation, for, we think, upwards of an hour at the end of which period the following decision was read by H.M.'s Consul:

The Court is of opinion that the Contract entered into between Plaintiffs and Defendant for the purchase of certain bills by Messrs. Gilman, Bowman & Co. from the Corporation of the Oriental Bank, having no specific  stipulation as to time attached, it was open to either party to claim the fulfillment within any reasonable period; and the Court is further of opinion that the notification given by the defendant on the morning of the 2nd day after the contract had been  entered into afforded such reasonable period, and that the Plaintiffs failing to furnish the requisite particulars to place the defendant in a position to complete the contract within that time, he the Defendant cannot now be compelled to deliver the Bills.

Mr. Bowman asked, if the decision was unanimous - The Consul replied - Quite so.

  • On the morning after, should have been said, for Sunday in every Christian Community is a dies non. - ED. N. C-H.

 

Source: The North-China Herald, 7 August, 1852.

BRITISH CONSULAR COURT:  BOWMAN v. LANGLEY.

SINCE our own report was drawn up, we have been favoured with an official account of the trial, which we now publish for the information of our readers.

BRITISH CONSULAR COURT.

Shanghae, 3d August, 1852.

BOWMAN v. LANGLEY.

This was an action brought by the Plaintiff Abraham Bowman, the Representative of the Firm of Gilman, Bowman & Co., to compel the specific performance of an agreement entered into between him and the defendant Edward Langley, Agent of the Oriental Bank Corporation at Shanghae, for the purchase by the Plaintiff of Bank Bills to the amount of £10,000.

The Plaintiff rested his case on a Note dated 31st July instant, from Mr. E. M. Smith, the Bill Broker, who negociated the transaction, informing him that he had bought on Messrs. Gilman, Bowman's account from the Oriental Bank Corporation Bills  for £10,000 - 6 months' at 5s. 1d. The same afternoon Defendant wrote to Plaintiff requesting particulars of the Bills, to which Plaintiff replied he should have them on Monday.  About 8 o'clock on Monday following, the 2d instant, Plaintiff received a note from defendant requiring the particulars and the money for the bills before 4 o'clock that afternoon, but Plaintiff considering defendant had no right to dictate conditions upon an open agreement, did not send the money but furnished the particulars about half past 3 o'clock, and on the following morning received from Defendant a letter couched in strong language in which he declared the bargain to be off. Plaintiff upon this conceiving that both by custom of the Port, and in the absence of any stipulation for time in the notice of purchase of the Broker, if the particulars were given, and the money lodged within a reasonable time before the departure of the mail he was in order, brought his action to compel defendant to deliver the Bills.

The sum of £10,000 was paid into Court, in Bankers orders.

Various witnesses were called to prove the custom of the Port in Bill transactions, and their evidence went to show that particulars were generally sent in and the money paid (the latter not always) a few hours only before the closing of the mail, even on transactions that might have been settled many days previous.

For the Defence it was urged that admitting such to be the custom among Merchants, still Banking operations were of so distinct a nature to those of Mercantile, that it would be impossible to carry them on on the same basis.  Defendant contended he had a perfect right to exercise his judgment in a matter of time; he had given Plaintiff ample notice to complete the transaction and as the latter failed in doing so within the period mentioned, he considered the matter closed. Custom there might be among a particular class, but that it could be made to apply to or influence the transactions of another he demurred to; it mattered little to Merchants their money being locked up for a few days; but in the case of a Bank whose sole business lay in money operations, such a proceeding was utterly inconsistent; it was no argument to say he had on many previous occasions shown no such haste for the immediate closing of a transaction as in this case; as Manager of the Bank it rested with him to show leniency or not as he deemed suitable; he submitted therefore that he was justified in refusing to deliver the Bills.

The Court having summed up the evidence was of opinion that no specific time having been given it was open to both parties to close the transaction within a reasonable period.  That such reasonable period had been given by the defendant and the Plaintiff having failed to place the Defendant in a position to complete the contract within the time specified, he could not now be compelled to deliver the Bills.

Verdict for Defendant.

 

Source: The North-China Herald, 14 August 1852

ANY one who was present at the late trial [at] the Consular Court in the civil case recorded in our paper of last week, must have been struck with the unsatisfactory way in which the evidence was taken, or rather we should say, to give things their right names, neglected to be taken, on that occasion.

It is totally inadequate to the ends of justice, that after a witness has been examined, and even cross-examined, the Consul should then from memory put down just so much as he recollects or may consider sufficient for his own guidance in arriving at what, no doubt, he, the Consul, conscientiously believes to be [a] correct and legal decision of the case according to evidence.

We need not now refer to what we have said on a former occasion in regard to this trial.  Our present object is to obtain in a complete, and satisfactory mode of taking evidence in civil as well as criminal cases, so that there can be no room top doubt the accuracy of the grounds on which a decision is come to.

It is not right that all this trouble of taking down the evidence should fall upon the examining officer who presides in the Consular, or Vice-Consular Court. A scrivener should be employed who can take down with accuracy and some despatch, the evidence as it falls from the lips of each witness.  The depositions should at the termination of each witness's examination be read over to him - and when made correct, he should testify to its accuracy by his signature.

Were such a system adopted, which we understand, is pursued in all other Consular Courts in China, as well as throughout India, we should have reliable testimony to refer to.  The presiding judge would have leisure to annotate his own remarks and critical points of evidence, which he could, and should, read over to the assembled audience before the Court has cleared.  And it would en able him and the assessors to debate the points of evidence, and arrive at a verdict in accordance therewith.

Such is the course we consider ought always to be adopted under the existing provisions for the holding of Consular Courts.  But we cannot see, why, now that this Community is year by year increasing in numbers, we should not more nearly assimilate the practice of our civil and criminal Courts to the mode of holding them at home - and have a jury of five or seven gentlemen, to decide upon the evidence submitted to them.  This mode of action would be a great boon to H.M.'s Consul, and relieve him from an immense weight of responsibility, that must, unavoidably, attach to him through the present imperfect mode of procedure.  And not only so, but would exonerate him from any blame arising out of an erroneous verdict, and divide it amongst the members of the Jury: Besides placing the judicial system on a basis, in consonance with the principles of justice and equity adopted by the mother country, and by all highly civilized nations.

We are not either without an example of the - working of the latter mode - as it was forcibly exhibited at a late trial held at the United States Consulate, in the case of the late manslaughter at Woosung.  This, it is true, was a criminal case - but the system of taking evidence is one and the same in civil and criminal cases, why, therefore, depositions should be taken down in the one case, and not in the other, we cannot divine.  Although the taking of life or bodily injury is rightly visited with the severest penalties, human and divine - yet the injury to Society may be very great, by giving an erroneous judgment in civil cases, and we cannot take too great precaution to prevent the occurrence of such an injustice.

We have said enough, we trust, to arouse public attention to the importance of securing correct evidence in our Consular Court, in all cases, both civil as well as criminal.  We have been actuated but by one feeling - the love of Justice - and we shall rejoice to see that our remarks induce those who are in authority, to aid in adopting an efficient method of security this most important object.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School