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Colonial Cases

Chartered Bank of India, Australia and China, and others v. Smith and others, 1893

[banking]

Chartered Bank of India, Australia and China, and others v. Smith and others

United States Consular Court, Shanghai
Jones, 4 September 1893
Source: North China Herald, 8 September, 1893

U.S. CONSULAR COURT.
Shanghai, 4th September
Before A. D. Jones, Esq., Consul-General.
CHARTERED BANK OF INDIA, AUSTRALIA, AND CHINA, AND OTHERS, v. C. V. SMITH AND OTHERS.
  This was an application in a suit connected with the estate of Russell & Co. It appears that in July, 1891, the Chartered Bank of India, Australia, and China, the Comptoir National d'Escompte de Paris, and the Deutsche-Asiatische Bank, commenced an action in this Court against Messrs. W. H. Forbes, J. M. Forbes, S. W. Pomeroy, C. V. Smith, F. D. Bush, E. H. M. Huntingdon and C. A. Tome, trading altogether in partnership under the style of Russell & Co., for certain differences on exchange transactions.
  The Chartered Bank claimed Tls. 75,000 as damages, the French Bank Tls. 74,000, and the German Bank Tls. 25,000.
  Mr. A. F. Stokes appeared for the plaintiff, and Mr. H. S. Wilkinson for the defendants.
  Mr. Wilkinson said his application was to make absolute an order which had been made that the suit should be dismissed. He understood that Mr. Stokes appeared on behalf of the French and German Banks, but there was no appearance for the Chartered Bank. As Mr. Stokes did not appear for the latter, he supposed he (Mr. Stokes) would not be in a position to acknowledge service, and therefore it might be necessary to prove the service of the notice of the application.
  Mr. Stokes said he would admit the service of the document.
  Mr. Wilkinson remarked that it would not then, perhaps, be necessary for him to call the formal evidence. He also had to make an application in this case of another suit, viz., the case of Mr. Ma Kie-tchiong v. C. Vincent Smith, and others, trading ad Russell & Co., and in that suit the defendants moved that the suit be dismissed. He produced the motion papers signed with the consent of Mr. Dowdall, who was the counsel for the plaintiff, so that in that case the Court would have no difficulty. As for the present case, his application was that the suit should be dismissed generally against the whole of the defendants, and upon the Court's authority to do that he referred to Lindley on Partnership, 5th English edition, page 571.
  Mr. Stokes, on behalf 0f the Comptoir National d'Escompte de Paris and the Deutsche-Asiatische Bank, submitted that the first reason why the application should not be granted  was that nine of the defendants were not within the jurisdiction of the Court, and an order for costs could not  effectually be made against them. He differed from Mr. Wilkinson on the law, and contended that the only order His Honour could make - assuming he decided to make an order - would be one dismissing the applicant, Charles Vincent Smith, from the suit, and that before any such order could be made affecting the other defendants they would have to appear and make the application on their own behalf. The suit was by no means dead. The reason of the delay had been that the Banks had not wished to increase the expense which they had been put to unless they saw their way to getting a substantial satisfaction for any judgment they might obtain. They could proceed to judgment, but in so doing they would be put to the expense of appearing in Court and the Court fees, and until they were in a position to know  that there were assets which they could recover from, they did not want to have the expense.
 At present the only representative of the estate in Shanghai was the agent of the Official Assignee in America. Mr. Hannah was the trustee for all the creditors and as such he appointed Mr. Hunter as agent. Mr. Hunter, he thought, had collected some assets, but they (the plaintiffs) had no accounts, and they did not know whether there were funds from which they could recover anything. They were not prepared to admit that the agent of the assignee in New York had a right to those funds, and there was another possibility of  large assets which had not fallen to Mr. Hunter at all. It was a large asset which might eventually turn out to be the property of Russell & Co. As far as that property in Shanghai was concerned, he thought it was held in trust for some Chinese. The original trustee was a partner in Russell & Co., and one of the objects of the Banks in bringing that action was to show that that was an asset of Russel & Co.  Proceedings had been taken in Hongkong in reference to the matter, and one of the reasons there had been delay in this suit was that they wished to get a great deal of information which would come out on the hearing of that suit. He asked His Honour not to make an order in the terms prayed for.
  His Honour - By what time do you think you would have that information?
  Mr. Stokes replied that the suit in Hongkong was commenced at the same time as the one here, and had not yet been heard, but he dared say in six months it would be, and he would ask His Honour to adjourn the present application for six months. The suit was commenced in 1891, and as the applicant had waited two years  before coming to the Court he would not be prejudiced by waiting another six months.
  Mr. Wilkinson said he could not agree to that. As to the question of costs, he had to point out that the plaintiffs had not complied with the rule of the Court and deposited security for costs. He had not asked for costs, as he did not wish to complicate the matter by that, but he would point out that if there were to be any more delay it should be on the condition that reasonable costs were deposited.
  What Mr. Stokes claimed was that the suit should be kept open; that he might have a judgment against one of the partners of Russell & Co.; that having obtained that judgment he might then be in a position to go into the question of the funds available for the satisfaction of that judgment; and he proposed to take the assets which were in the hands of the assignee to get a declaration of the Court  that anything that had been collected by the assignee should go to pay the judgment-debt, and that the other creditors should not get anything until a later contribution, as well as that he should be able to get a judgment of the Court that a certain asset here, which had since the  date of the assignment  passed through several hands, should now be declared to be stamped with the liability of the debt to the plaintiffs.
  It was always requisite that any suit should be carried on with due diligence, and the plaintiffs had not shown why they should be treated with any greater indulgence. It was quite true that there was not a rule of that Court which laid down a time within which the plaintiff should proceed, but he submitted that the proper rule which applied was the one enforced for centuries, that where no time was named reasonable time was intended.
  His Honour - I don't think you need press that; I am with you on that point.
  Mr. Wilkinson, resuming, contended that no extenuating circumstances had been shown in the present case. The plaintiffs were keeping this case hanging over the defendants and the other creditors because they did not choose to carry on a suit they themselves had commenced in Hongkong. There was no intimation that the delay in Hongkong was due to any circumstances other than their own wish. Why was this case in Hongkong not finished? Because they did not press it.
  Mr. Stokes ought to have explained how there was any difficulty in carrying out the Hongkong suit. They now asked for delay here because the suit in Hongkong might bring out evidence which would be useful to them hereafter, but they had had two years in which to get evidence, and still Mr. Stokes said that as they had had two years they might as well have six months more.  The petition was filed on 6th July, 1891, and the answer was put in on 15thJuly.
  Mr. Stokes had urged that the partners were not here, but the fact was that the only partner who had been here was Mr. Vincent Smith, and when it became necessary for him to leave on the grounds of his health his evidence bearing on the present case was taken. Another argument was that as the other partners had not appeared they were not entitled to have the suit dismissed against him. There were good reasons why the other partners, having made an assignment of their property, should not appear. They were citizens of the State of New York carrying on business there, and that was the proper place to sue them.
  His Honour asked whether, seeing that the case involved more than $500, he could settle it alone.
  Mr. Wilkinson said he was not asking His Honour to decide the case on its merits; if the merits of the case were being gone into, no doubt they could not ask His Honour to settle it alone, but it was an interlocutary motion asking that as the plaintiffs had not proceeded with the case with due diligence it should be struck out. He had no objection to the order being made without prejudice to the plaintiffs being able to begin anew if they liked.
  Mr. Stokes said that his clients were substantial people and the costs would be all right. He suggested that the motion should be adjourned for six months, and them, if the suit had not been proceeded with, the defendants could ask that some order be made.
  Mr. Wilkinson said that if any time were given it should not be more than a fortnight.
  After some further conversation,
  His Honour said he would consider the case and give his decision another day.

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