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Colonial Cases

Myers v. Carmichael, 1876

[debt recovery]

Myers v. Carmichael

Consular Court, Chefoo
Morgan, September 1876
Source: The North China Herald, 16 September 1876



Before JAS. MORGAN, Esq., Consul and Judge.


   This was a suit brought by the plaintiff to force the defendant to give an account of his receipts since May, 1875.  The main points of the case are sufficiently apparent from the Petition and Answer appended below.

   The Court directed the clerk to open proceedings by reading the pleadings.

   Plaintiff suggested that he be allowed to open his case, and introduce  the pleadings in the course of his remarks, as this would save time, and serve to place the matter more clearly before the Court.

   The COURT - The clerk will read the pleadings, and we will then proceed to decide on an issue for trial.

   The clerk then read the petition, as follows:

  1. - In the month of April, 1870, the plain tiff and the defendant entered into partnership together for a term of ten years from the first day of the said month, as general Practitioners in medicine and Surgery at Chefoo.
  2. - The joint agreement between the plaintiff and the defendant relative to the said partnership was contained in a letter from the plaintiff to the defendant, and a letter from the defendant to the plaintiff, dated respectively the 21st of April, 18870; a letter from the plaintiff to the defendant dated the 9th of June, q870.  One of the terms of the  said partnership, as expressed in the said letter of the 9th of June, 1870, was that the partnership books of account should be made up regularly every month, so as to show a correct balance sheet if necessary.
  3. - In the month of September, 1875, the defendant instituted a suit in this Honorable Court against the plaintiff, praying for a dissolution of the  said partnership, and that an account might be taken of the receipts of the partnership practice from the 1st of April, 1870, to the 30th of June, 1873, and that the plaintiff might be ordered to pay to the defendant t what might be found to be due to him upon the taking of such account; and on the 28th of November, 1875, judgment in the said suit was given in favour of the defendant, and the dissolution of the said partnership as from the date of the petition  in the  said suit was decreed, and it was also decreed that an accountant should be appointed to settle what monies were due to each partner.
  4. - The plaintiff appealed from the said decree to Her Britannic Majesty's Supreme Court for China and Japan, at Shanghai, and by an order or decree of the said last mentioned Court, made on the 12th of May, 1876, the s aid decree of this Court was reversed, and the defendant's petition in this Court was dismissed with costs.
  5. - No account has been taken between the plaintiff and defendant relative to their said partnership business since the month of May, 1875.
  6. - Since the day of the said decree of Her Britannic Majesty's said Supreme Court, the plaintiff has applied to the defendant to assist him in taking an account of the said partnership business from the date of the last settlement of account, an d has sent him an account of his (the plaintiff's) receipts since June, 1875, but the defendant has taken no notice of the plaintiff's said application, and declines to hold any communication with him.
  7. - The defendant has since the said month of May, 1875, received various sums of money on account of the  said partnership business, but he has not in any way accounted for the same, and as the plaintiff believe has appropriated the same to his own use.
  8. - The plaintiff does not desire that the said partnership shall be dissolved, but only that such measures shall be taken as will secure to him his share of the earnings of the said partnership business.
  9. - The plaintiff states that the defendant has signed receipts for such for and on behalf of the firm of Carmichael and Myers since the 10th of Sept., 1875, and notably during the month of June, 1876, when he signed a receipt for and received the money due from the late firm of Messrs. Holmes, Wadman & Co., in liquidation of their debt to the said firm of Carmichael and Myers.

   The plaintiff therefore prays -

  1. That an account may be taken under the direction of this Honorable Court of said partnership business, and of the receipts and disbursements b y the  said partners respectively in respect thereof since the ------ of -----------, 1875, or such other day as to the Court shall seem meet, and that the defendant may be ordered to pay to the  plaintiff such  sum (if any) as may be found to be due to him, upon the taking of such account, the plaintiff being ready and willing and hereby offering to account in the premises as may be just.
  2. - That the defendant may be restrained by the order and injunction of this Honorable Court from collecting, getting in, or receiving the assets of the said partnership, or in any manner interfering or intermeddling with the same, and that a receiver may be appointed to collect and get in the debts and effects of the said partnership from time to time, and thereout to pay all necessary disbursements on account of the said partnership business, and to divide the residue from time to time between the plaintiff and the defendant, and that for the purposes aforesaid, all necessary and proper directions may be given.
  3. - That the plaintiff may have such further, or other relief as the nature of the case may requite.

   The defendant to this petition is John Richard Carmichael, of Chefoo, Doctor of medicine.

   Chefoo, 4th July, 1876.

   The answer of the defendant.

   In answer to the petition of the above named plaintiff, I, John Richard Carmichael say as follows:-

  1. - I admit the statements contained in the 1st, 2nd, 3rd, 4th, and 5th paragraphs of plaintiff's petition.
  2. - The reason why no account has been taken since the month of May, 1875, is because I instituted a suit for dissolution of partnership against Dr. Myers for what I considered dishonest practices on his part, which said suit is still going on, inasmuch as I have appealed from the decision of the Supreme Court at Shanghai to the Privy Council, and I hold that no account can be taken until that appeal is settled.
  3. - I have no objection to an account being taken of the earnings of the practice, provided it does not prejudice my appeal, from its commencement in 1870 up to the date from which the Chefoo Court decreed that a dissolution of partnership should be granted in my favour on account of the untrustworthy conduct, &c., &c., of Dr. Myers, in fact I have always been asking for such an account, but have hitherto been denied.  I am willing to bring into that account all that I have received of money earned by the partnership prior to that date (September, 1875.)
  4. - I admit having received from the Trustee of the Estate of Messrs. Holmes, Wadman & Co. the sum of $8 8 cents, which was earned by the partnership for 1874, and I am willing to bring that into any account that may be taken of the earnings of the practice prior to the decreed dissolution by this Honourable Court dating from September, 1875.

The plaintiff in this case is W. Wykeham Myers, residing at Chefoo.

   The COURT then proceeded to fix the issue as follows:

   Plaintiff alleges that by reason of the decree of the Supreme Court in Carmichael v. Myers, the partnership between himself and defendant still exists.  That, therefore, he is entitled to all the tights of partnership and to his share of the proceeds of practice.

   Defendant asserts that the cause Carmichael v. Myers being on appeal is not yet decided, and, therefore, he is not bound to give accounts or make payments prior to the decision of the Pricy Council.

   Plaintiff handed in judgment of the Supreme Court reversing decision of the court below in Carmichael v. Myers, and urged strongly that there was no evidence that the defendant had appealed.  It had been stated that the defendant had obtained leave to appeal, but even of this there was no evidence before the court.

   Defendant stated that he was willing to swear that he had appealed, and had paid into Court $2,500 as security for appeal.

   Plaintiff stated that defendant had applied to the Court above, some time ago, to have the preparation of the record of appeal suspended, and of this sort of thing could take place from time to tome the appeal could certainly not be looked upon as an accomplished fact; at least until the petition of appeal was served, the appeal could not be said to be going on.  Prior to this, the defendant could at a moment withdraw and, if the plaintiff had incurred any expense, he would not be able to recover, as it would be open to the other side to say that he had no formal grounds for assuming that the appeal was going on. Leave to appeal, with the subsequent vacillations which had been shown by defendant, or by those who asserted they were authorised to act for him, was surely not to be taken as evidence that defendant had actually appealed.  The effect of such a conclusion would be to tie the plaintiff down for an indefinite time, and in the event of the appeal not being carried on he would have no redress.  Besides, defendant had not even deposited all that is necessary before his appeal can be said to be in train.

   Defendant denied this, and being sworn, deposed - I have appealed to the Privy Council, and deposited $2,500.  As far as I am concerned, the appeal is going on; the above sum being the amount required, I have paid it.  I am aware that something more has to be deposited, but I have not been informed how much.  To the best of my knowledge and belief the preparation of the record is not suspended.  I am at present communicating with the Supreme Court regarding the preparation of the record of appeal, and hand in this letter, in evidence marked A. (Hands in the following letter):-


8th August, 1876.

   SIR, in reply to the queries contained in your letter of the 5th inst., I am instructed by Mr. Mowat to inform you,

  1. That the expense of preparing the copy of the record has to be borne by the appellant. A reference to my previous letter will, I think, show that this is the case.  If an appellant succeeds in the Court above in obtaining a reversal of the decision appealed from with costs, the amount paid by him for the preparation of the record would be allowed him in the taxed costs against the respondent.
  2. That the only expense now to be incurred in the Supreme Court is the expense of preparing the record.  How much this will amount to it is impossible to say, depending as it does on the length of the record.  The Court charge for copying the record is $1 for the first 100 words, and half-a-dollar for every further 100 words.
  3. I have the honour, &c.  T. G. SMITH, Chief Clerk.

   Defendant continued - I wish to hand in two other letters from Mr. Mowat.  I have not got them at present, but will produce them hereafter.

   Cross-examined - I swear I never deliberately instructed my Counsel, Mr. Rennie, to ask for the suspension of the record of appeal.  I did ask my Counsel as far as he was concerned, not to move further until he heard from me.  - Defendant also stated that if Mr. Rennie had applied for the suspension of the record of appeal, he had done so on his own responsibility.

   Plaintiff asked that this be put upon the record.

   Defendant urged that as this was merely a passing remark and irrelevant, he, therefore, objected to its being put on the record.

   The COURT said that it thought the remark was irrelevant, but on being urged by the plaintiff, directed the latter to frame the statement in the form of a question.

   The Plaintiff did so, as follows: - "Supposing your counsel, Mr. Rennie, to have asked for the suspension of the record of appeal, was this done bon his own responsibility?"

   The COURT ruled that this question, being hypothetical, could not be put.

   Plaintiff handed in, and requested the Court to note his objection to its ruling.

   Plaintiff now hands in a copy of a letter addressed to the Law secretary by Mr. Wainewright, and Mr. Mowat's answer to the same.

   The following is Mr. Wainewrights's letter to the Law Secretary:-

Shanghai, 5th August, 1876 

   SIR, I was informed by you, some weeks ago, that the preparation of the record of appeal (to the Privy Council) in the suit of Carmichael v. Myers had been suspended at the request of Mr. Rennie, the appellant's Counsel.  I now beg to inquire whether such suspension still continues, and if so whether any and what grounds have been put forward on the part of the appellant in explanation of his not proceeding.

I am, &c., R.  E,  WAINEWRIGHT  

R. A. MOWAT, Law Secretary and Acting Deputy Chief Judge.

H.B.M.'s Supreme Court for China and Japan.


Shanghai, 5th August, 1876.

   SIR, - In reply to your letter of to-day's date, I have to say that the suspension in the preparation  of the record in the cause Carmichael (appellant to Privy Council) v. Myers, respondent, still continues, and that no grounds have been out forward by the appellant in explanation of his not proceeding.  Dr. Carmichael, I may mention, did address me under date the 20th ult., inquiring whether he could himself undertake the transmission of the record, and, as I understand his letter, its preparation also.  On the 23rd, I caused him to be informed that this was impossible, and that such duty devolved on the registrar of the Court above. (I had a day or two previous informed a friend of his, who called upon me at his instance, what the Court charge for preparing the record was).  I have heard nothing from Dr. Carmichael since.

 I am, &c. R. A. MOWAT.

   Defendant stated that the letter marked A, handed in by him, was of later date, as were also the two others he purposed putting in afterwards.  He had not communicated with Mr. Rennie for some time.  He had seen him up here for a short time, but had not referred to him about the matter, and reiterated his assertion b that he had appealed, and had every intention of prosecuting it.

   The COURT - The defendant's sworn statement as to the appeal is evidence that this is going bon, and, therefore, at present orders that both parties ;produce - 1st, an account for receipts from May to September 10th, 1875, as plaintiff had an absolute right to his share of these receipts; and 2ndly, another account from September 10th, 1875, to August 31st, 1876, as the rights to a share of these receipts was only conditional on the appeal being dismissed.

   Plaintiff urged that even supposing the fact of defendant having actually appealed being established, and proved to this Court, surely defendant had no right to appropriate partnership monies, and put it to his own use, in some instances using plaintiff's name to acquire that money.  Again, a great bulk of the payments for the year 1875 were from annual con tracts, and, therefore, even if the decision of the Chefoo Court were to stand good, plaintiff would be entitled to his share of those contract payments which became due on December 31st, 1875.  Yet defendant had coolly placed all these sums to his private account.  The case thus stands then, that if the defendant's argument holds good, the decision of the inferior Court will be in force,  whilst that of the superior is suspended; but there was even no evidence that the defendant had appealed; all we had heard was that he had got leave to appeal; but then, if Mr. Mowat's letter meant anything, the preparation  had been suspended on  behalf of defendant, and we had certainly no evidence that this request for suspension has been withdrawn.   Again, if plaintiff be allowed to have possession of these partnership monies, it would be open to him to use them for the prosecution of this suit.  Plaintiff also called on defendant to produce a letter written by him (plaintiff) on the 6th June last, offering to account, and asking defendant to do the same.  Defendant strongly objected to this letter being put in.  Plaintiff  said he had two reasons for wishing it, one was to show that he had given his partner every facility for getting an account since the delivery of the judgment at the Supreme Court, and that defendant had taken no notice of him.  Another reason was to show how untrustworthy the statements of the defendant t were, and that no credence could be put on what he said.  For, here, in spite of the receipt of this letter, dated June 6th, of which he had taken no notice, and of the petition in this suit, dated July 4th, the defendant for over a month put  forth an advertisement, under date of July 18th, in the North China daily News, stating that he had been debarred from getting an account by the decision of the Supreme court.  This advertisement then was a wilful and malicious misstatement.

   The COURT ruled that the advertisement referred to was quite irrelevant, and the plaintiff could not be permitted to allude to it.

   The letter, however, was after discussion admitted, plaintiff strongly urging its admissibility, and defendant resisting its admission, and was as follows:-

Chefoo, 6th June, 1876

H. R. CARMICHAEL, Esq., M.D., F.R.C.S.

   SIR, - Referring to our letters of partnership agreement exchanged in the early part of 1870, I beg to draw your attention to the clause which provides for the monthly settlement of our business accounts.  I beg also to remind you that from or about May, 1875, up to the present date, no settlement of our account has been come to.  I have, therefore, to request that you will at your earliest convenience assist me in complying with the said terms of our partnership agreement.  With this view I enclose a balance sheet, showing (subject to correction) my receipts on account of our practice since June, 1875.  I shall be obliged by your forwarding me a similar document, and also making any suggestions you think useful for the further progress of this necessary investigation. The day-book, from which the enclosed sheet is made up is at your service.  There will, I fancy, be no difficulty in getting temporary access to our day-book proper, or the ledger, both of which you are aware are at present in Shanghai.  Should you think it more convenient or likely to secure our object more speedily, I shall be glad to nominate an accountant friend to examine the accounts, you doing the same.  I shall also be glad to hear from you with reference to our pecuniary standing for the years 1870-1-2 and 1873, and assist in making any further examination of the accounts for the said years that may be necessary, specially striving by rigid re-examination and further search for errors, should any exist, to get these accounts in as complete and final condition as possible.

I am, &c., W. WYKEHAM MYERS.

   Defendant urged that if this letter was admitted, he be permitted to make a sworn explanation of his reasons for not answering it; which was permitted by the Court.  He then deposed as follows:

   One reason was that I had accused Dr. Myers of dishonesty, and, therefore, could not well hold communication with him.  Another reason why I could not assent to go over the accounts with him was because past experience had shown me that he had always given me wrong accounts, and I thought that the method suggested by him could not lead to any good for either of us.  Those receipts of practice which I had had from him before had been so largely deficient that I could not accept any others as correct; moreover, at that time I had appealed or intended to appeal to the Privy Council.

   Plaintiff now wished to cross-examine defendant on the above statement, but the Court ruled that this was unnecessary.  Plaintiff urged that he was by law entitled to cross-examine on any deposition given in the suit, and asserted that by doing so he would be able out of the defendant's own mouth and from the letter itself to show how utterly groundless were the reasons now given.

   The COURT held to its ruling, and plaintiff handed in an objection in the above terms, which was noted on the record.

   Plaintiff was going to read from Lindley on Partnership, but

   The COURT ruled that matters must now stand over until the accounts had been handed in.

   Both parties drew the attention of the Court to the fact that in order to make these accounts as directed, it would be necessary to have access to the partnership day-book, which was in Shanghai, as the entries for a portion of the time were contained in the said book.

   The COURT informed the parties that application would be made to the Supreme Court for the day-book, and on its receipt, access would be permitted to it.

   The COURT then adjourned for such time as would enable the parties to comply with its order, of which notice would be given.


The North China Herald, 30 September 1876


September 12th.

 Before JAS. MORGAN Esq., Consul and Judge.


   The adjourned hearing of this case was resumed this morning, but the proceedings were merely formal, as by the kindly and able mediation of Mr. Morgan. H.B.M.'s Consul, the parties to the suit had been induced to accept a form of Arbitration of all matters in dispute, which promises to put an end to the unseemly and vexatious litigation that has prevailed for more than a year.

   The following is a summary of the terms of arbitration:-

  1. - Each party to nominate an Arbitrator, and the two Arbitrators to decide upon an Umpire, before negociations commence.
  2. - Accounts to be made up to date, and balance, on whichever side it may be, paid.
  3. - Dr. Carmichael to withdraw his leave to appeal against the decision of the Supreme Court in "Carmichael v. Myers," and the Arbitrators to decide whether, in consideration of such withdrawal, Dr. Myers shall pay any of the costs incurred up to date, and if so, what proportion.
  4. - Before the end of the year, Dr. Myers, as entitled by the partnership agreement, to go on two years' leave, on 1/3rd of net proceeds of practice.
  5. - At the expiration of Dr. Myers' two years leave, the partnership to cease, and the Arbitrators to decide what sum (if any) shall be paid by one party to the other, in consideration of the partnership being dissolved before the time specified in the original agreement.
  6. - This arbitration to be made a "Rule of Court."

   The following is the order made by the Court: - "That the reference to arbitration of all matters in dispute between the parties to this suit dated 9th September, 1876, be made a Rule of Court, and be executed and carried into effect according to the terms thereof."

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