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Colonial Cases

Smith Preston v. Maitland Bush, 1865

[shipping, charter]

Smith, Preston and Co. v. Maitland Bush and Co.

Consular Court, Shanghai
3 May 1865
Source: The North-China Herald, 6 May 1865

 

H.B.M. CONSULAR COURT.

SHANGHAI, 3rd May, 1865.

Before - Sir HARRY S. PARKES, K.C.B., H.B.M. Consul.

J. THORNE, -------------, Assessors.

SMITH PRESTON & Co. (London) versus MAITLAND, BUSH & Co. (Newchwang.)

The Plaint was to the following effect:-

That in about April 1863, the defendants, by their agents Maitland Maclean & Co. of Shanghai, instructed the plaintiffs to engage on time charter, in joint account with themselves and the firm of Maitland Maclean & Co., a certain vessel of about 350 tons register, to sail in Chinese waters; and the plaintiffs accordingly, by charter-party dated June 8th 1863, contracted with Henry Barnes, owner of the Vanda, for the hire of that vessel, subject to the conditions contained in the said charter-party, for and on behalf of the defendant and Messrs. Maitland Maclean & Co.; and the charter-party was accepted by them in about August 1863 and the vessel was employed by defendants and Maitland Maclean & Co. jointly up to the date of the expiration of the charter.  That the plaintiffs were not in any way interested in the charter, but on the refusal of the owner of the Vanda to accept the responsibility of the defendants and Maitland Maclean & Co., the plaintiffs inserted their names in the charter-party, and the plaintiffs, by reason of the loss arising from the working of the vessel, have sustained damage and loss to the extent of taels 5, 052.95, which sum should have been paid by defendants and by Messrs. Maitland Maclean & Co. jointly; and the plaintiffs sue for money payable by defendants to them, and for money due to them by the defendants, on account stated between them.  And the plaintiffs claim Taels 5,052.95.

Mr. MYBURGH said before proceeding with the case he would remark that Mr. Bush, the partner at present in Shanghai, knew nothing whatever about the case.  But Mr. Maitland his partner, who had managed the affair, was expected to arrive soon.  The claim was brought by Smith Preston & Co. for loss on a charter-party.  If Mr. Bush knew nothing about it the amount of the loss could not be determined.  He accordingly wished to wait until Mr. Maitland's arrival, unless the Court would refuse to assume jurisdiction and allow the case to be heard at Newchwang before the Consul there.  He thought the action should be tried at Newchwang, the defendant's place of business.  He would, at all events, ask for an adjournment of the case until Mr. Maitland's arrival.

Mr. LAWRANCE though Mr. Bush knew as much about the matter as Mr. Maitland.  He was here at the time and approved the transaction.  Then only question to be determined was the loss.

THE COURT thought the case had better be proceeded with.

Mr. MYBURGH said he had received no instructions from Mr. Bush, as the latter knew nothing about the case; and he did not see how he could be expected to defend.  He was bound, however, to deny the defendant's liability.

THE COURT thought that as the partners in the firm of Maitland Maclean & Co. were in Shanghai, the absence of Mr. R. K. Maitland, of the firm of Maitland, Bush & Co., might be dispensed with.

G. F. PRESTON said: - I am a partner in the firm of Smith, Preston & Co. of London.  I received instructions from Maitland, Maclean & Co. of Shanghai to charter a vessel.  This is a press copy of the letter of instructions (handed in.)  In con sequence of those instructions I chartered the Vanda in Liverpool.  This is a copy of the original charter=-party effected in the name of Smith, Preston & Co. (handed in.)  I think before I left England I had a private letter from Mr. Maclean informing me that Maitland, Bush & Co. were jointly interested in the charter of this vessel.  There was a loss on the charter.  This account shows the total loss up to the time of the expiration of the charter.  We paid L. 1,200 and L. 900 to the owner of the Vanda on account of this loss.  I also remitted L. 250 to him from Hongkong.

To Mr. MYBURGH:- To the best of my belief there is a letter from Mr. Maclean in existence, stating that Maitland, Bush & Co. were interested jointly with Maitland, Maclean & Co. I would not swear to this.  I had before I left England an impression that somebody else besides Maitland Maclean & Co. was interested in the charter.  Up to the time of Maitland Maclean & Co.'s failure I did not look to any body but them for the loss on the charter.  We have sent in a claim on the estate for half of the amount of that loss.

To Mr. LAWRANCE: - Until my arrival in China I did not know that it was Maitland, Bush & Co. who were interested with Maitland Maclean & Co.

P. MACLEAN said: - I was formerly partner in the firm of Maitland Maclean & Co.  In a letter dated August 4th 1863 is the first mention, I think, of any party but myself being interested in the charter.  The 'friends' alluded to in that letter were Maitland Bush & Co.  When the charter arrived here I wrote up about it to Maitland Bush & Co. after Mr. Maitland had departed from Newchwang.  The loss of which Mr. Preston complains, has all happened since our failure.

To Mr. MYBURGH:- The contract was distinctly between Maitland Maclean & Co. and Maitland Bush & Co., but the order for the charter went home entirely on Maitland Maclean's account.  In the letter of the 4th August the reference to 'my friends' was made to give additional weight to my complaints.  I have no recollection of Smith Preston & Co. having written asking the names of the persons who were jointly interested with me.  I have no recollection of writing to Smith Preston & Co. telling them that Maitland Bush & Co. were the persons interested.  Except from hearsay I do not know what was the agreement between Mr. Maitland of my firm and Mr. Maitland of the firm of Maitland Bush & Co.  The Estate of Maitland Bush & Co. is in the hands of Trustees.  Our firm is indebted to the firm of Maitland Bush & Co. in a larger amount than the amount claimed by Smith Preston & Co.

S. BRUERL said: - I came out here with a power of attorney from Smith Preston & Co., to act for them.  The first claim I sent in was for Taels 3,000 which had no connection whatever with the Vanda.

To Mr. MYBURGH: - I have received a dividend from Maitland Maclean & Co.  I do not know whether they can pay any further dividend.  I knew nothing about Smith Preston & Co.'s transaction regarding the charter-party, although I was at home at the time.

This closed the case for the plaintiffs.

Mr. MYBURGH again applied for an adjournment until the arrival of Mr. K. R. Maitland.  He argued that the contract for chartering the vessel was made between Maitland Maclean & Co. and Maitland Bush & Co., and that Smith Preston & Co. entered into it with the former, not being aware of the existence of any other charterer.  He (Mr. M.) understood that the agreement between Mr. R. K. Maitland and Mr. John Maitland was that the interest between the two firms was only to have arisen subsequently to making out the charter-party; and if this were so, it was highly important that Mr. R. K. Maitland should give evidence upon that point.  Mr. Bush knew nothing about the transaction except from hearsay.

At the wish of the Court the two following witnesses were called.

H. E. BUSH (examined by Mr. Myburgh) said: - I know now that a charter-party was entered into between Smith Preston & Co. and Maitland Maclean & Co.  I always understood that the agreement was between Maitland Maclean & Co. and ourselves, having no connection with Smith Preston & Co.  I did not understand that we were to be bound to a third party.

To Mr. LAWRANCE: - I undertake to swear that we did not give Maitland Maclean & Co. authority to make us in any way liable to Smith Preston & Co.  I deny our liability to Smith Preston & Co. even for half the loss.  We were liable to Maitland Maclean & Co., and this was set off by a sum they owed us.  The matter was merely between Maitland Maclean & Co. and ourselves. M I don't remember when the charter-party was made.

J. MAITLAND (examined by Mr. Lawrance) said: - We sent home an order to charter a vessel.  It was agreed by us in Shanghai that the charter of a vessel should be made on out joint account.  It was distinctly understood that it should be a joint account between us and Maitland Bush & Co.  The vessel was chartered expressly to trade with Newchwang.  All the transactions with reference to the charter have been on joint account.  The conversation referred to in our letter of August was between myself and Mr. R. K. Maitland.

To Mr. MYBURGH:-  It was our intention that Smith Preston & Co. should look to us alone, and that we should refer to Maitland Bush & Co. in case of loss. I fancy that it was the arrangement that Maitland Bush & Co. were to be liable to Maitland Maclean & Co. and not to Smith Preston & Co.

TO THE COURT: - The vessel was chartered in pursuance of a joint agreement entered into between myself and Mr. K. R. Maitland in the Spring of 1863.  When the vessel arrived we were jointly interested in her employment.  I swear positively that the agreement was not made after the arrival of the Vanda here.  It was made in the Spring of 1863, and the order was sent home in pursuance of that agreement.  I know nothing about the fresh agreement made in Hongkong.

Mr. MYBURGH had no doubt that his learned friend would allow that the rule as to election was very strict, and that if an election were made it was necessary to abide by it.  In this case the plaintiff had made no election, and had actually claimed against the estate of Maitland Maclean & Co. for their half share of the loss under the charter-party.  Having done so they were bound by their act, and therefore the defendants were only liable, if liable at all, for one half of the claim.

Mr. LAWRANCE said he was perfectly willing to leave it to the opinion of the Court whether, taking into consideration the manner in which the plaintiffs' claim on Maitland Maclean was made, there was any election.  The claim might not be allowed by the trustees of Maitland Maclean & Co.'s estate.

Mr. MYBURGH said that it was impossible for them to repudiate the claim for half of the loss sustained, as the whole instead of a part might have been claimed from them.  It was not necessary that the claim should be made on a solvent firm jointly interested with another in a co-partnership adventure.

Judgment was reserved.

Source: The North-China Herald, 13 May 1865

H.B.M. CONSULAR COURT.

Shanghai, May 10th, 1865.

Before SIR HARRY S. PARKES, K.C.B., H.B.M. Consul.

J. THORNE, J. LOVE Jr., Assessors.

SMITH, PRESTON & Co. (London.)

versus

MAITLAND, BUSH & Co. (Newchwang.)

This is a claim by Messrs. Smith, Preston & Co., charterers of the Vanda, on Messrs. Maitland, Bush & Co. of Shanghai, sub-charterers, for Taels 5,052.95, being loss incurred in the working of the said vessel.

The defendants deny their liability to the plaintiffs, on the ground that their agreement for the employment of the vessel was made with Messrs. Maitland, Maclean & Co. of Shanghai, now insolvent, and that they, the defendants, knew nothing of Messrs. Smith, Preston & Co. in the matter. 

The Court dissents from this view of the defendants, as the letters which passed between Messrs. Maitland, Bush & Co., severally dated the 17th of August and the 15th of September 1863, prove to the satisfaction of the Court that the Vanda was chartered and sent out from England on the joint account of these two firms, and the other evidence in the case establishes not only a community but an equality of interest between them in the transaction. 

As the case proceeded the Court became convinced that the motion of the defendants for a postponement - on the ground that the appearer, Mr. Bush, had no knowledge of the affair - was unnecessary, as the letters named are sufficiently to sustain the joint nature of the contract, and both passed through the office of the defendants at their place of business at Newchwang at the time that Mr. Bush was living there and conducting with his partner, Mr. K. R. Maitland, the business of their firm. It is not necessary to point out, however, that had it been otherwise, one partner would have been bound by the act of the other.

It appears that the plaintiffs have divided the loss sustained, and have claimed half, or Taels 2,526.48, from Messrs. Maitland, Bush & Co., and the other half from Messrs. Maitland, Maclean & Co.  It also appears that towards the close of the charter the Plaintiffs interested themselves in procuring employment for the vessel, and received her earnings to the amount, as was stated in Court, of $1,800, equal to Tls. 1,296.  Accepting this amount as correctly stated, and as a payment of account of the joint defendants, the original claim is reduced from Tls. 5,052.95 to Tls. 3,756.95, and the Court feels debarred under present circumstances for finding in favor of the plaintiffs for more than one half of the latter sum, in consequence of their having claimed equally from Messrs. Maitland, Maclean & Co. and Messrs. Maitland, Bush & Co., formal notice of which was given by the plaintiffs to the latter, in their letter of the 4th of January 1864.

The Court therefore enters judgment for the plaintiffs to the amount of Tls. 1,878.48.  Costs to be divided.

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