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Colonial Cases

Comptoir D'Escompte v. Raphael, 1885

[banking]
 

Comptoir D'Escompte v. Raphael


Supreme Court for China and Japan
Rennie CJ, 22 December 1885
Source: North China Herald, 23 December 1885
 

LAW REPORTS.
IN H.B.M.'s SUPREME COURT FOR CHINA AND JAPAN.
Shanghai, 22nd December 1885
Before Sir Richard T. Rennie, Kt., Chief Justice.
THE COMPTOIR D'ESCOMPTE DE PARIS v. R. S. RAPHAEL.
  Mr. A. Robinson appeared for the plaintiff and Mr. H. S. Wilkinson (Crown Advocate) for the defendant.
  The pleadings were as follows:-
  The petition of the Comptoir d'Escompte de Paris, Bankers, the above named plaintiffs, shows as follows:-
- The plaintiffs carry on the business of Bankers at their branch in Shanghai aforesaid and are a French Corporation.
- The defendant is a British subject carrying on business as a merchant at Shanghai aforesaid.
- On or about the 1st day of May, 1885, the plaintiffs agreed to buy from the defendant, and the defendant through his broker R. E. Tong agreed to sell to the plaintiffs, the sum of Ten thousand Pounds sterling (Pounds 10,000), payment for the said sum of Ten thousand pounds to be made by the said Bank in Taels of Shanghai Sycee to be calculated at the rate of Four shillings and eleven pence half-penny British currency in exchange for credits or Bank paper to be approved by the plaintiffs and handed by the defendant to the plaintiffs and payable four months after sight.
- It was further agreed by and between the plaintiffs and defendant with reference to the said sale and purchase of Pounds 10,000, that if the defendant should hand to the plaintiffs in satisfaction of the said sim of Ten Thousand pounds sterling, drafts approved by the  said Bank and accompanied by securities commercially known as "Documents," then the rate of exchange at which the said Bank was to pay for the said sum of Pounds 10,000 was to be Four shillings and five-eighths of one penny per Tael.
- The defendant was by the terms of the said agreement to be entitled to deliver to the plaintiffs approved drafts for the said sums of Pounds 10,000 in manner aforesaid at any time before the end of the month of June 1855
- The defendant did not deliver to the plaintiffs approved drafts for the said sum of Pounds 10,000 or any part thereof before the end of the said month of June, 1885.
- The defendants afterwards, that is to say, in the early part of July, requested the plaintiffs to allow him further time for the delivery of he said Pounds 10,000 in manner aforesaid, and the plaintiffs consented to do so on the terms that the defendant should pay to the plaintiffs interest on the sum of Pounds 10,000 from the 30th day of June, 1885, until delivery, at the rate of Four Pounds Sterling per mensem per annum, to which terms the defendant assented.
- The plaintiffs have several times  demanded from the defendant approved drafts for the said sum of Pounds 10,000 in accordance with the terms of the agreement mentioned in the 3rd, 4th and 7th paragraphs of this petition, but the defendant has failed to deliver the same, and on the 11th day of November, 1885, his solicitor, in reply to a final application by the solicitor of the plaintiffs for delivery of the aid drafts, wrote to the latter declining on behalf of the defendant to furnish to the plaintiffs the drafts which he had contracted to deliver to them in manner hereinbefore appearing.
- The plaintiffs claim the sum of Taels Nineteen hundred and thirty four and fifty-two cents Shanghai Sycee (Tls. 1954.52) for loss on exchange, and interest on Pounds 10,000 at the rate of four Pounds per mensem per annum from the 30th day of June last until the 11th day of November, 1885, and interest at the rate of eight Taels per centum per annum on the amount due to the plaintiffs on the 12th day of September, 1885, from the last mentioned date until payment.
The plaintiffs therefore pray:
- That the defendant may be decreed to pay to the plaintiffs the sum of Tls. 1954.52 Shanghai Sycee with interest as stated in the 9th paragraph of this petition.
- That the plaintiffs may have such further or other relief as the nature of the case may require.
Dated at Shanghai the 18th day of November, 1885.
ROBINSON, Solicitor for the Plaintiff.
The defendant to this petition is RAPHAEL SIDKI RAPHAEL, of No. 5 Hankow Road.
The answer of Raphael Sidki Raphael, the above named defendant, to the petition of the above named plaintiffs.
- The defendant admits the allegations in the first and second paragraphs of the petition.
- As regards the allegations in the third and fourth paragraphs of the petition the defendant says that on or about the first day of May, 185, the plaintiffs and the defendant entered into a contract, through R. E. Tong as broker, whereby the plaintiffs agreed to buy from the defendant, and the defendant agreed to sell to the plaintiffs, credit or bank paper to the amount of ten thousand pounds sterling payable four months after sight at the rate of  four shillings and eleven pence half-penny per tael of Shanghai Sycee, or in lieu thereof drafts for a like amount accompanied by securities commercially known as documents payable four months after sight, at the rate of  four shillings and eleven pence and five-eighths of a penny per tael.
- As regards the allegations in the fifth paragraph of the petition the defendant says that the defendant was by the terms of the agreement hereinbefore referred to be entitled to deliver to the plaintiffs the credits, bank paper or drafts therein referred to at any time before the end of the month of June, 1885.
-As regards the allegations in the sixth paragraph of the petition, the defendant says that he did not deliver to the plaintiffs the credits, bank paper or drafts heretobefore referred to, or any part thereof, before the end of the said month of June.
- As regards the allegation in the seventh paragraph of the petition, the defendant says that during the said month of June it was agreed between the plaintiffs and the defendant that the defendant should have further time for the delivery of the said credits, bank papers, or drafts, and that in consideration thereof the defendant should pay to the plaintiffs during such further time subsequent to the 30th day of June, 1885, interest at the rate of four pounds sterling per centum per annum on this sum of ten thousand pound.
- As regards the allegations in the eighth paragraph of the petition, the defendant admits that the plaintiffs demanded that delivery of the said bank paper, credits or drafts should be made to them on the 30th of October, again on the 5th of November, and again on the 11th November, and that the defendant, denying his liability to deliver such bank paper, credits or drafts, refused to deliver the same and has not delivered the same.
- As regards the ninth and tenth paragraphs of the petition, the defendant admits that the plaintiffs have delivered to him particulars of their claim for Taels one thousand nine hundred and fifty-four taels and fifty-two cents therein referred to.
- In further answer to the said petition, the defendant says that on or about the 3rd day of August, 1885, the defendant, through the said R. E. Tong, informed the plaintiffs that he would not take any further time to deliver to the plaintiffs the said bank paper, credits and drafts, that he had not such bank paper, credits and drafts, and required the plaintiffs to "cover" the said contract, that is to say, to close the said contract on that date and to procure at then current rate the bank paper, credits or drafts to the amount named in the contract, charging the defendant with any loss and crediting him with any gain, or without producing such bank paper, credits or drafts to charge or credit the defendant with the difference between the contract rate for such bank paper, credits or drafts and the market rate ruling for the same on the said third day of August, to which the plaintiffs assented.
- At the time of the event in the eighth paragraph hereof mentioned, the rate of exchange for credits was four shillings and eleven pence and seven-eighths of a penny per Tael, and for drafts accompanied by documents was five shillings per Tael.
- And in further answer to the said petition, the defendant, while denying that he is indebted to the plaintiffs in any sum in respect of the matters aforesaid, brings into Court the sum of Tls. 150.15, and says that the said sum is sufficient to satisfy the plaintiffs claim.
- The defendant denies all the other allegations in the petition.
H. S. WILKINSON, Counsel for Defendant.
Dated 27th day of November, 1885,
  Mr. Wilkinson claimed the right to commence, but his Lordship decided in favout of Mr. Robinson's right to open the case.
  Mr. Robinson said this was a simple case of breach of contract, the contract consisting in an offer by the defendant to sell to the plaintiffs, bank paper or credits or what were called documentary papers - drafts accompanied by documents - to the extent of Pounds 10,000 Sterling, and the acceptance of that offer by the plaintiff.  Having briefly stated the facts, as set forth in the petition, he called Mr. Vouillement, the Manager of the Comptoir d'Escompte de Paris.
  EUGENE GABRIEL VOUILLEMENT sworn said - I am manager of the Comptoir d'Escompte de Paris.  I bought Pounds 10,000 sterling from Mr. Raphael on the 10th May through Mr. Tong.  He had all May and June to deliver it.  Such transactions as these are part of the ordinary business of an exchange bank.  I was at all times during the months of May and June ready to pay for the paper had it been tendered to me in the terms of the contract.  When the contract was made, it was bona fide intended by me that the defendant should deliver the paper.  He did not deliver the paper up to the 30th June. On or about that day I spoke to Mr. Tong, and told him the time was up for delivering the paper.  He asked me to grant more time, as Mr. Raphael had not been shipping teas or doing any business.  I told him I would give him further time on condition that he would pay 4 per cent interest on Pounds 10,000 until delivery of the bills.  He agreed to this condition.
  In the early part of August I saw Mr. Tong nearly every day.  I believe on or about the 3rd August Mr. Tong told me that Raphael had no paper to deliver me, and asked me as a kindness to try and buy Pounds 10,000 worth of credit bills for account of Raphael.  The rate was then 4s 11½d. I told him I would try, but never made an engagement to buy.  I said I would do my best, simply, and this was a favour to him, as h had no right heaver to request me to do so. I am perfectly certain that Mr. Tong so understood me.  Mr. Tong never on that or any other occasion told me that Mr. Raphael would not take any further time after that day to deliver to the plaintiffs the said bank paper.  On the contrary, Mr. Tong told me several times, "Wait a little while; it will be all right; Raphael will give you the paper."  That was in the beginning of October.  Supposing Mr. Tong had told me that Mr. Raphael did not want any more time to deliver, I should have said, "Very well; tell Raphael to bring the bills to the office at once, and the matter is finished."
  After the departure of the mail of the 7th August I saw Mr. Tong again.  He asked me if I had bought the paper for Raphael.  I said I could not get any.  I never bought any paper on Raphael's account.  From the 16th August to the 24th September I was confined to my room by sickness.  On the latter date I resumed management of the bank.  I remember speaking to Mr. Tong on or about the 30th September.  I told him to inform Raphael that as we were closing our books for the half-year I wanted Raphael's paper.  I believe he did so, because Raphael came round about an hour afterwards, and begged me to close the contract at 4s. 9½d. His loss would then have been Tls. 1403, plus the interest for three months on Pounds 10,000 at four per cent.  I answered Mr. Raphael that I could not accept that rate, as I was myself a buyer of credit bills at 4s. 9¼d. Mr. Raphael though for a long time, and begged me to give him some more time.  I did not agree at once to this, but on the following day I wrote him a letter in which I said I would give him until the end of the month (October.) I also wrote this letter dated the 8th October; and this, dated 2nd November [part line missing] informed by you (Mr. Robinson) that you had received a letter from the defendant's legal adviser stating that he declined to furnish the bills; and in consequence these proceedings were taken. The bank claims Tls. 1954.62 for loss of exchange on the 11th November, and interest on Pounds 10,000 at the rate of 4 per cent per annum from the 30th June to the 11th November, 1885
  The letters identified by the plaintiff were as follows:
Shanghai, 1st October, 1885.
R.S. Raphael, Esq., Shanghai.
  DEAR SIR, - On consideration of your request yesterday morning, I am prepared to allow you a further prorogation of your contract of Pounds 10,000 up to the 31st inst.
  Please hand bearer your cheque for Tls. 428.27, being interest on these Pounds 10,000 from the 30th June to 30th September, as per memo, enclosed.
  Should you not send in bills under your contract by the 31st October, we shall send you on that date a memo of the amount in taels, representing the difference between the drawing rate of Bank paper on the 31st Oct. next and the rate of your contract of the 1st May last, plus interest at 4 per cent per month for one month.
I am Dear Sir, &c.
Shanghai, 8th October, 1885.
R. S, RAPHAEL, Esq.
  SIR, - Referring to our letter of the 1st instant, I have now to insist on the interest therein claimed, Tls. 428.27, being paid into us before the close of Banking hors today.
  Should you not conform to this our repeated request, you will hear again from us in a way that you would probably prefer to avoid.
I am, Sir, &c'
Shanghai, 23nd November, 1885.
R. S. RAPHAEL, Esq.
  DEAR SIR, - Referring to my letter of 1st ult., which I confirm, I beg to remind you that, in terms of the contract of 1st May last, you have to send me Pounds 10,000 in Bank paper or credit bills for the mail leaving on the 5th inst., plus interest on same at 4 per cent per annum from 30th June last.
I am, Dear Sir, &c.
  Cross-examined by Mr. Wilkinson -
  By saying I bought Pounds 10,000 sterling I mean bills to that amount.  I gave settled contracts of this kind by paying or receiving the difference.  It is not usual at all, but it can be done if the bank chooses; it is very seldom done.  I think I have done it once. I do not know whether it is done by other banks.  Mr. Raphael told me on the 30th September that he had settled in this way with another bank at 4d. 9½d.  I spoke to Mr. Tong on o about the 30th June; but I do not remember whether it was mail day.  If mail day was the 26th June, it may have been then.  I do not recollect it being said that the interest should begin on the 26th.  He said the interest as very moderate, and accepted the rate very willingly.  There was no time fixed; he might have delivered them at any time within a reasonable time.  I would consider one or two months if it would have suited both of us.  
  On the 3rd of August Mr. Tong told me that as the rate was 4s. 11 7/8 Raphael would like to close his contract, and he said that Raphael had no bills to give me, and he asked me if I would be kind enough to buy Pounds 10,000 worth of credit bills for Raphael.  It was in the ordinary way of business; there was nothing unusual in the request.  I said something of that kind.  I may have said, "With pleasure." I do not remember whether I said anything further than these words, ""With pleasure." I am certain it was credit bills, because I could not have bought documentary paper for Mr. Raphael, and bank paper was 3/8d lower than credit bills, so it would not have done to buy bank papers.  I was to buy credit bills at the market rate.  I am perfectly certain that if I had bought lower than the market rate he would not have recognized the contract.  I did not buy any credit bills that day.  I did not buy any until after the 16th August. On the 3rd August I was open to buy at current rates, but I had none offered by the brokers.  I asked the brokers in the ordinary way of business if they had any bills to sell, and they said no. Pounds 10,000 would have been a large amount to get at that time. If credit bills had been abundant in the market Mr. Raphael would not have asked me to buy; he would have bought himself.  Mr. Tong never gave me to understand that if I did not buy these he would not give me the paper.  He could very easily have bought bills t 4s. 11½d and brought them to me; he could not have wanted me to buy at that rate; he wanted me to buy at 4s. 11 7/8d.
  After the departure of the mail of the 7th August Mr. Tong came to me and asked me if I had been able to buy, and I said no. On the 30th September Mr. Raphael came to my office in the morning.  I told him I wanted him to close up the contract.  He said, "Oh the rate is very low - you are a kind man" and so on.  He wanted to close at 4s. 9½d, but I refused saying that I was a buyer at 4s. 9¼d. I told him that rates were bound to go down.  He never gave me the least intimation that he thought he had any right to repudiate the contract at all. Neither he nor Mr. Tong ever said he considered the contract to have been closed on the 7th August; on the contrary in October Mr. Tong promised that Mr. Raphael would let me have Pounds 5,000 that month and Pounds 5,000 the next month.
  After I had sent the letter of the 1st October I constantly spoke to Mr. Tong about the business, and he would say, "You will get it all right;" but until after the commencement of these proceedings I am almost certain he never said anything to the effect that it was my fault that the contract was not covered as I had failed to buy on the 7th August. He knew perfectly well that it was only as a kindness that I undertook to try and buy.  I bought Pounds 2,000 worth of documentary paper on the 5th August, at 5s; on the 10th I bought Pounds 15,000; on the 13th I bought Pounds 4,000 at 4s. 11 5/8d; on the 7th I bought six months' documentary paper at 4s. 11¼d - Pounds 1500 worth. When Mr. Tong asked me after he 7th if I had bought, and I said no, he said something to the effect that in that case Mr. Raphael would cover himself.  As soon as the rate was below 4s. 11 7/8d, the matter was out of my hands; I should have had to receive fresh instructions from Mr. Raphael before I could buy.  I am perfectly certain that it was understood on both sides that I was to buy at 4s. 11 7/8d., and if I had bought at a lower rate Mr. Raphael would have repudiated the contract.  
  Up to the commencement of these proceedings neither Mr. Raphael nor Mr. Tong ever said anything to the effect that it was my fault that the contract was not covered, as I had not bought the credit bills on or about the 3rd August. Mr. Tong asked me to let Mt. Raphael off without paying the interest; he was willing to cover the contract, but he did not want to pay the interest.  The proposal to settle by paying the difference of 4s. 9 ½ d came from Mr. Raphael and not from me.  I am certain I refused the proposal, saying I could not accept that rate as I was a buyer at 4s. 9¼d. I may have offered to close the contract at 4s. 9d; I do not remember.  I told him I was drawing at 4s. 9d; but I do not know whether that was before or after he [line missing]
  Re-examined - [line smudged] If on contract at 4s. 9½d I should have considered myself liable to Mr. Raphael for the difference.
  The Court then adjourned for luncheon.
  On the sitting being resumed in the afternoon,
  Mr. Robinson read and put in a number of letters which had passed between the parties.
  Mr. Wilkinson then opened the case for the defendant in a few sentences and called:
  Raymond Ellis Tong, who said - I am a broker in Shanghai.  I have read the petition and answer in this case.  I am the person through whom the contract therein mentioned was made on the 1st May.  The 26th June was a mail day, and Mr. Vouillement asked me to tell Mr. Raphael that he must have the bills that day.  I pointed out that the contract was for delivery any time in June, but he said there was no mail on the 30th June and he most have the paper that day.  I went to Mr. Raphael's office and told him what Mr. Vouillement said.  Mr. Raphael said he was not prepared to deliver the bills as he had not got them, and the contract was for the whole of June.  He also asked me to get Mr. Vouillement to allow him time, as he had not got the bills.  I asked Mr. Vouillement to do so, and he agreed to it on condition that Mr. Raphael paid interest on the Pounds 10,000 at the rate of 4 per cent per annum.  All this took place on the 26th.
  On the 3rd August Mr. Raphael told me he did not see his way clear to ship any silk or tea, and as he had no paper he asked me to ask Mr. Vouillement to cover the Pounds 10,000 for him.  Mr. Vouillement said he would do so with pleasure. About a week afterwards I reminded Mr. Vouillement of it, and he said he had not done anything yet. I did not say anything after that for another week; I thought he was covering it. After the next mail I asked him again, and he said he had done nothing and there was no chance of doing anything.  I said "Mr. Raphael asked you to cover the thing and you undertook to do so.  Had you not undertaken it he might have covered it himself," I told Mr. Raphael, and he was annoyed.  He said, "I consider the contract is closed, because he promised to cover it and he has not done it, If he had not undertaken it I would have got bills and covered it myself." I went to Mr. Vouillement and told him what Mr. Raphael had said, and Mr. Vouillement said he would have covered it if he could.  Two or three days after that Mr. Vouillement became unwell, and I did not see him for a month or so. When he recovered I saw him several times about this matter.  I told him that Raphael did not intend to do anything, as he had expected Mr. Vouillement would cover the amount.  I spoke to Mr. Vouillement to be a little mild and make the case as easy as possible; and I said that rather than have any trouble between friends I would myself pay anything reasonable. Mr. Vouillement said no, he did not want to come to any arrangement; he wanted the Pounds 10,000. I had no interest in getting the matter settled except as a broker and a friend of both parties.  
  When I went to Mr. Vouillement on the 3rd August I did not give him any limit as to rate; and I did not limit him as to what the paper was to be.  I only asked him to cover, and he said, "With pleasure." I afterwards reminded him of this, and he said the words were, "With pleasure, if I can;" but I do not remember his saying anything more than, "With pleasure." My impression when I left him on the 3rd was that he would cover.  No time was mentioned, and when the market was fluctuating I did not tell him not to buy because the market was going down; Mr. Raphael left it entirely in his hands to cover.   After the 3rd August I did not ask Mr. Vouillement to give Mr. Raphael any more tome to fulfil [crease in paper].  On the 3rd August it could easily have been covered as bank paper was 4s. 11 ½ d., the contract price.  Pounds 10,000 is not a large amount to get in paper in Shanghai,
  In October Mr. Raphael said there might be something to be made out of tea, and he night require Pounds 5,000 in a mail or two.,  I told Mr. Vouillement that Mr. Raphael would give Pounds 5,000 worth of bills in discharge of the former contract.
  Cross-examined by Mr. Robinson - I am certain that when I asked Mr. Vouillement to cover the contract on the 3rd August he made no other reply than "With pleasure."  When I left I understood he had undertaken to buy Pounds 10,000 worth of paper; there was no limit of rate.  Neither I nor Mr. Raphael had any power to call upon Mr. Vouillement to buy paper.  A week afterwards he told me he had not yet bought it, and I reported that to Mr. Raphael.  Four or five days afterwards I saw him again and asked him what he had done, and he told me nothing, and that there was no probability of his doing anything. I then told him that Mr. Raphael thought he should have covered it as he had undertaken to do so; and had Mr. Raphael known it he night have protected himself.  I meant that f Mr. Vouillement had said he would not buy credit paper, Mr. Raphael might have got bank paper and covered it.  When I told Mr. Raphael that Mr. Vouillement had not covered it, and saw no prospect of doing it, Mr. Raphael was angry and said he considered the contract at an end, as Mr. Vouillement had undertaken to cover it and had failed to do so.
  I told Mr. Vouillement on the same day what Mr. Raphael had said.  Mr. Vouillement could have covered it in documents, credit bills or bank paper.  The object in asking Mr. Vouillement to cover was to get a better rate than Mr. Raphael could get himself.  It was easy to cover the contract; Pounds 10,000 is a very small amount; and with1/8d difference it would have been possible to get more than that, I believe.  I do not know if any credit bills to the extent of Pounds 1,000 were obtained about that time.  On or about the 30th December Mr. Vouillement asked me to go to Mr. Raphael and tell him that Mr. Voullement wanted the contract closed.  Mr. Raphael saw Mr. Vouillement, and he old Mr. Vouillement that he thought the contract was closed, and he was surprised that Mr. Vouillement had done nothing, and he wished the matter settled by arbitration. He did not tell me he had come to any arrangement with Mr. Vouillement.
  I did not tell Mr. Vouillement that Mr. Raphael would let him have Pounds 5,000 I October and Pounds 5,000 in the next month.  I only mentioned the sum of Pounds 5,000, and that had nothing to do with the contract of the 1st May.  Mr. Raphael never told me that he had on the 30th September offered to settle the contract at the rate of 4s. 9½d.
  By His Lordship - When I asked Mr. Vouillement to cover, I understood that he was to cover whether the rate went up or down - at any rate, If the rate had fallen heavily I should still have expected him to cover.  If he could not get credit bills he might have obtained bank paper, and M. Raphael could not have complained.
  Raphael Sidki Raphael, examined by Mr. Wilkinson, said - I am the defendant in this suit.  I have made similar contracts to that mentioned in the petition with other banks besides the Comptoir d'Escompte.  Sometimes I have settled them by giving the bills, sometimes by giving bank paper, and sometimes by paying or receiving the difference.
  About the 3rd August I told Mr. Tong to tell Mr. Vouillement that I was not in a position to give the bills and therefore he should cover himself.  I gave no limit, and left it entirely in his discretion as to what class of paper he should obtain to cover it.  Mr. Tong reported to me that he had seen Mr. Vouillement on the subject, and Mr. Tong told me that Mr. Vouillement had agreed to do it.  About a week afterwards I was informed by Mr. Tong that Mr. Vouillement had not covered but was going to cover.  About the 14th or 15th August I heard that Mr. Vouillement had not covered. I was very much surprised and annoyed, as I had missed the market.  I said so to Mr. Tong.  
  About the 30th September Mr. Tong came to me and told me that Mr. Vouillement was making a trouble, and I went to see Mr. Vouillement. I told him he ought not to have created such a trouble, and that I considered the contract finished.  He asked me to settle at 4s. 9d. I said that was not the rate, as I had just settled with another bank at 4s. 9 ½d; but I never offered to settle at 4s. 9½ d. I offered to submit the matter to arbitration.  I never asked him for more time.
  When I received the letter of the 30th September I told Mr. Tong to tell Mr. Vouillement that I had nothing more to do in the matter - I considered the contract as finished. If Mr. Vouillement had told me that he could not cover for me I could certainly easily have covered it, with bank paper at least.
  The Court then adjourned till Thursday, the 24th inst., at 1.30 p.m.

 

Rennie CJ, 24 December 1885

Source: North China Herald, 30 December 1885


LAW REPORTS.
IN H.B.M.'s SUPREME COURT FOR CHINA AND JAPAN.
Shanghai, 24th December, 1885.
Before Sir Richard T. Rennie, Kt., Chief Justice.
THE COMPTOIR D'ESCOMPTE DE PARIS v. R. S. RAPHAEL.
  Mr. A. Robinson appeared for the Plaintiff, and Mr. H. S. Wilkinson (Crown Advocate) for the defence.
  The Court opened at 1.30 p.m.
  RAPHAEL SIDKI RAPHAEL, the defendant, was re-called for cross-examination.  He said - I consider I was bound to deliver the paper up and during the first and second weeks of August, I considered I was liable to pay interest on the Pounds 10,000 up to the time I should receive an account from Mr. Vouillement. My lability was finished after I told him to cover.  I think my liability ceased on the third of August - or a day or two afterwards, when I should have received an account - on the date that he should have covered.  On the 14th or 15th of August I considered my liability to fulfil the contract of the 1st May at an end, because I had given an order to cover.  I had no power to order him to do it, but he agreed to do it, and I relied on his agreement.  I was told on the 14th or 15th August by Mr. Toeg that Mr. Vouillement had not covered it.  I was annoyed because I thought it would create trouble, and because I missed the favourable market.
  Mr. Robinson - If your liability was at an end, why should you feel annoyed?
  Defendant - I was naturally annoyed. I was annoyed because I had missed the market and had lost the opportunity of covering.  I believe on the 3rd August the interest rate for bank paper was 4s. 11½d, the same as my contract.  I did not cover it then, because I left it entirely in Mr. Vouillement's hands.  To the best of my recollection on the 14th or 15th August I told Mr. Toeg to tell Mr. Vouillement that I considered the contract at an end - but I am not certain.  I do not remember whether Mr. Toeg told me that he had told Mr. Vouillement.  I considered I was liable for interest up to the time that I should receive an account.  I did not ask for an account.  The first time I saw Mr. Vouillement after the 15th August was on the 30th September.  I went because Mr. Toeg told me that Mr. Vouillement was making trouble.  I said, "Mr. Toeg tells me that you are making trouble about that Pounds 10,000, and I do not see why you should make such a trouble for nothing being such a large bank.  I said, "I have nothing to settle with you, and I consider my contract is ended.  If you think you have any case I shall be very glad to leave it to arbitration."  He said, "I must have my Pounds 10,000 bills;" and he told me that as the market was going down I had better settle at 4s. 9d. I said, "I have nothing to settle, and your rate must be a mistake, as I have settled my September contact with another Bank at 4s. 9¼d." That was a contract for the end of September.  I had settled it on that day.  I do not remember his telling me that his own drawing rate was 4s. 9d. This conversation about rates took place after I had told him |I did not think I had anything to settle with him.  I did not at that interview ask him for further time to deliver the bills.
  I received Mr. Vouillement's letter of the 1st October on its date.  I was very much surprised at receiving that letter; but I made no reply to it.  I did not think it was necessary.  Mr. Toeg was there and I chucked he letter to him and said, "What is the meaning of this? I never asked for time."  I did not go to Mr. Vouillement about that letter.  I told Mr. Toeg to tell Mr. Vouillement that I considered my liability at an end; but I do not remember whether he came back and told me he had done so.  I received Mr. Vouillement's letters of the 8th October and 2nd November.  I told Mr. Toeg after receiving those letters to tell Mr. Vouillement that my contract was ended.  Mr. Toeg may have told me that he had done so; but I do no recollect exactly.  After the receipt of the letter of the 1st October, I did not, as far as I recollect, ask several persons to see Mr. Vouillement and try to settle the matter.  I do not recollect asking anyone.  I do not recollect asking either Mr. Toeg, Mr. Ezekiel, Mr. Gubbay or Mr. J. A. Taylor. I did not ask any of them to do so.  I spoke to Mr. Taylor on the subject, and asked his opinion about it; but I never asked him to try and settle it.  I never spoke to Mr. Ezekiel or Mt. Gubbay or any of them to try to settle the matter; I spoke to Mr. Taylor and asked his opinion. I did not know of Mr. Toeg, Mr. Gubbay, and Mr. Ezekiel going to try and settle it. I mentioned the matter to Mr. Taylor, and he may have gone to Mr. Vouillement about putting the matter into arbitration.
  Re-examined - When I say I considered myself liable up to the time of receiving an account, I mean up to the date of settlement, which would be mentioned in the account.  If Mr. Vouillement had not agreed to cover I would have covered myself. When I say I did not send Mr. Toeg to settle the matter, I mean I never authorized him to compromise it.
  By His Lordship - When I asked Mr. Vouillement, through Mr. Toeg, to cover the contract I mean I understood that he wished to put a stop to the time I had asked for, and to pay any loss sustained I n covering.
  Mr. Vouillement was then re-called.  In answer to is Lordship, he said - When Mr. Toeg asked me on the 3rd August to buy paper for Mr. Raphael and cover the contract if [I] could, I did not at all understand that he did not want his extension of time to go on any longer; I understood that he wished to buy at the current rate, 4s. 11½d. I understood that he wished simply to cover the contract if he could do so at a profit.  If I had bought at 4s. 11½d. I should have accounted to him for the profit, which would have been about Pounds 70 - I have no calculated it.  On the 1st May I sold over Pounds 30,000 of my own bank paper on London, and it was necessary for me to buy private paper to cover this.  I bought over Pounds 30,000 worth, of which the Pounds 10,000 from Mr. Raphael was part.  If I had known that he would not fulfil his contract I should have bought for the bank at the best rate I could get in order to cover it.  It would have been very easy for me to cover it had he intimated that he repudiated the contract.
  After Mr. Toeg asked me to buy paper on the 3rd August I did not require further instructions so long as the rate remained the same; it was not therefore necessary for me to say anything to Mr. Toeg till the rate fell.  It fell 1/8d on the 10th - to 4s. 11¾d; and about that time I told Mr. Toeg that I had not been able and would not be able to obtain the paper at the rate. Mr. Toeg said, "Very well, he (Mr. Raphael) will cover it himself." If he had told me then that I was to buy paper at any rate I could get it at, I should have done so; and if he had repudiated the contract I should have bought to protect myself; but he said "Very well; he will cover it himself."
  This completed the evidence, and counsel proceeded to sum up.
  His Lordship reserved his judgment.

 

Rennie CJ, 30 December 1885

Source: North China Herald, 6 January 1886


LAW REPORTS.
IN H.B.M.'s SUPREME COURT FOR CHINA AND JAPAN.
Shanghai, 30th December 1885.
Before Sir Richard T. Rennie, Kt., Chief Justice.
THE COMPTOIR 'ESCOMPTE v. R. S. RAPHAEL.
  Mr. A. Robinson appeared for the Plaintiff and Mr. H. S. Wilkinson (Crown Advocate) for the defence.
  In this suit, which was heard on the 22nd and 24th instant, the plaintiffs claimed Tls. 1854.52 as damage for the non-performance by the defendant of a contract entered into between he parties, whereby the defendant agreed to sell to the plaintiff Bank, credits or bank paper to the amount of Pounds 10,000, four months after sight, at the rate of 4s 11½d per tael or in lieu thereof of drafts for a like sum, with the same space of time, at the rate of 4s. 11 3/8 d per tael
  His Lordship this morning delivered the following
JUDGMENT.
  In this suit the plaintiffs claim damage from the defendant in respect of the non-performance by him of a contract to deliver certain bills of exchange purchased of him by the plaintiffs.  The defendant admits the contract and its non-performance by him, but alleges that he was in effect excused or exonerated from delivering the bills in question by a fresh agreement set forth in the eighth paragraph of the petition.  He contends that this agreement amounted to an absolute undertaking by the plaintiffs' manager to buy bills for him to cover the whole transaction.  The only question then, which I have to decide is, whether this special defence has or as not been established.
   I am of opinion that it has not.  On the evidence produced at the hearing I am satisfied that the alleged new agreement amounted to  no more than a conditional undertaking on the part of the plaintiffs' manager, at the request of the defendant, to procure, if he could, a sufficient nm of credit bills at the rate then prevailing, for the purpose of covering the defendant's liability to the Bank; and I do not think it is of material importance whether, on being asked by the defendant's broker so to do, the manager replied, "With pleasure," or "With pleasure, if I can."  It is quite clear that had Mr. Vouillement been enabled to effect the operation, it would have resulted in a small profit to the defendant, and relieved him from a liability which was subsequently proved to be an onerous one; but not having succeeded, Mr. Vouillement lost no time in giving the defendant's broker notice of his want of success.  According to the defendant's own evidence, he did not expect Mr. Vouillement to complete the operation before the 13th or 14th August, and he admits that he heard from his broker on the 14th or 15th that the contract had not been covered.  I think that on receipt of this intelligence he ought, had he desired to close the transaction, at once to have set about carrying out his contract, or at any rate settling with the Bank then and there the amount of difference of damages (if any) he had to make good.  
  I must add further, that while I find Mr. Vouillement's evidence thoroughly consistent, and his letters to defendant supporting his verbal evidence, the defendant's evidence does not appear to me to be equally consistent.  By his own admission he discussed with Mr. Vouillement on the 30th September a rate of exchange at which Vouillement claimed a settlement of the dispute between them; and I certainly think that if he had intended to contest the statements made in Mr. Vouillement's letter of the same date, he should have repudiated them at once in writing or in a personal interview with Mr. Vouillement.  There will be judgment for the amount claimed, with interest and costs.
  Mr. Wilkinson said that his Lordship had not noticed his contention that the defendant's contract had been entirely broken on the 3rd August.
  His Lordship said he had not thought it necessary to deal with that point, inasmuch as it as clear to him that the defendant had no such intent.  If, as a matter of act, the rate prevailing when the plaintiff's broker asked the plaintiff's manager to buy bills for him had been such as to show that a loss would result to the defendant and that he would consequently have had some difference or damages to pay to the plaintiffs, there might have been more force in Mr. Wilkinson's contention.  As it was, his Lordship had no doubt at all the defendant had desired the plaintiff's manager to do was to buy cover for him at a profitable rate.

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