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Colonial Cases

United States v. Bascom, 1899

[embezzlement]


 

United States v. Bascom

Chen Lai-ming v. Bascom

United States Court for China
Lobinger J, 18 September 1899
Source: North China Herald, 26 September 1899


 

U.S. COURT FOR CHINA.

Shanghai, Sept. 18.

Before Hon. C. S. Lobinger, Judge.

U.S. v. F. C. BASCOM.

  The defendant, F. C. Bascom, carrying on business in Kiangse Road as an accountant, was charged with embezzlement, the complainant being a Chinese named Chen Lai-ming.

  Dr. F. E. Hinckley, District Attorney, with whom was Mr. W. S. Fleming, conducted the prosecution, while the defendant as represented by Mr. J. W. Rice.

  Dr. Hinckley, in the opening statement, said that the evidence would show that the accused was an accountant carrying on business in Kiangse Road. He was approached in January, this year, by Chen Lai-ming, the complainant, with regard to a loan on lot B.C. 7986, of which Chen was the owner. The dealing between Mr. Chen and the defendant resulted in a loan of Tls. 8,000 by Bascom, no third party being mentioned. A mortgage was executed by Chen, conveying the property to Bascom conditionally. The Court would see from the form of mortgage that it was taken as a mortgage by both parties. The loan was for the term of six months, from January 19. According to the terms of the agreement, which were expressed in the mortgage, Chen gave notice towards the end of the term that he was prepared to repay. He made these representations by himself and through Mr. C. J. White and Messrs. Platt, Macleod and Wilson.

  The defendant agreed to conclude the loan, and he did so in writing to the firm of solicitor. On the date named, however, he made the excuse that the papers were not in his possession, but were in the hands of a third party who was absent from Shanghai. As this was unusual, Bascom was pressed to state in whose hands the papers given by Chen were, the latter not having received any information at all that a third party was interested in the matter. Bascom replied that there was a certain Mr. A. Strauss, a German, who had been caked to the colours and reported at Tientsin.

  Enquiries were made in Shanghai, but no such person as Straus could be traced. In these circumstances, Chen began a suit in the United States Court for the return of the documents. The petition in that matter had not been answered.  On the other hand it was found out that the third party to whom the defendant had handed the documents was not a German, but the Societe Franco-Chinese de Credit.

  Dr. Hinckley went into the practice adopted as regards loans, and continued that the first loan which the defendant obtained from the Societe was for Tls. 10,000, and he made a further loan from the same Societe for Tls. 14,000. In connection with the loan, the defendant proposed to the complainant that he would loan him a further Tls. 2,000, but he did not say at that time that the papers were not in his possession. He urged Mr. Che to make a new loan and to extend the time, the papers to remain in the defendant's supposed possession. Chen was not prepared to go on with it, so he insisted on the return of the papers.

  When it became known that the defendant had not the papers, he old Chen that there was no use in making trouble about it as the party who had the documents was away from Shanghai. A suggestion was made by Mr. White that an advertisement should be inserted in the papers in order to ascertain the whereabouts of the third party, but the defendant threatened Chen and said if he took that course it would prove very serious for him.

  Evidence was given by Mr. R. F. Gregson, barrister, of the firm of Platt, Macleod and Wilson. He stated that in July 14 Chen Lai-ming, the complainant, went to the office and gave instructions to arrange for the repayment of the loan to the defendant and recovery of the title deed and the other documents. A letter was written he said, to the defendant informing him of the instructions, and on July 21 he replied that he would meet a representative of the firm on the following Tuesday. He wrote later on, however, saying that he  had not the documents in his possession, but that the man who had them would be back in Shanghai within a week. Other letters of a similar character were written by the defendant. Mr. Gregson dealt with the practice followed in Shanghai as regards loans.

  Dr. Hinckley said that Mr. Pingrin, the manager of the French company, had been subpoenaed, but he had not put in an appearance. He therefore proposed to put in the depositions taken at the hearing of the other Court, and this was not objected to by Mr. Rice.

  Mr. C. H. C. Platt, at present the manager of the French company, produced a loan register, giving particulars of the two loans contracted by the defendant.

  The complainant then gave evidence, stating that he was the proprietor of the Kee Cheng-yuen Bean and Oil Mill, situate in Soochow Creek.  B.C. Lot No, 7986 as registered in the name of C. J. White, but he was the owner of it. He detailed the negotiations which took place between the defendant and himself in January in regard to the loan of Tls. 8,000, he depositing with Bascom the title deed, the declaration of trust, and a declaration of valuation as security. He did not know whose money it was, but he was told that the defendant had money. The declaration of trust was signed by witness and Mr. White. His valuation of the property was Tls. 40,000.  He did not authorize the defendant to transfer the documents to any other person, neither did he authorize him to borrow money on his property. He did not know that there was such a loan on his property.

  The next witness was C. J. White, stock broker, and the registered owner of B.C. Lo No. 7986. He said he had nothing to do with the negotiations of the loans in January. He knew that when the term of the loan had expired Chen was ready to repay the loan. Witness was told by the defendant that he had passed on the documents to a man named Strauss, who was in Tientsin, but witness could find no trace of such a man.

  In answer to Mr. Rice, the witness said he was still registered as the owner of the property, and he had not taken legal advice as to his possession. He should certainly not transfer the lot on the instructions of the defendant.

  In reply to Dr. Hinckley witness said that he would not transfer considering the present circumstances of the case.

  Wong Chu-lin also gave evidence.

  Mr. Rice then addressed the Court on behalf of the defendant, after intimating that he did not propose to call any evidence. Referring to the second count of the charge, that of false pretences, he said that the charge must fail because there was no evidence of false pretences. The falsity of the pretence must be established, and that had not been done.

  With reference to the charge of embezzlement counsel said the District Attorney had apparently fallen back on the word "conceal," but no concealment had been proved. Bascom never had denied the fact that he had re-mortgaged the title-deed, and that he might not have given the correct name had nothing to do with the charge of concealing. The concealment that was apparently relied upon by the Government was with reference to the re-mortgage. If there was anything wrong in the actions of the defendant it was in the re-mortgage of the document, but the section was never intended to cover anything like the circumstances in this case. The crime was the concealment of the title deeds, and no evidence had been given that this had been done.

  Argument by Counsel was heard in the afternoon.

  Mr. Rice, for the defence, urged that the loss, if any, would be the defendant's loss and the facts did not reveal that there had at any time been an attempt to commit fraud. The same thing was done hundreds of times in Shanghai. Title deeds passing through three or four hands wound up at the bank for security for an overdraft. There was no analogy between conditions here and conditions in the United States. The evidence showed that the defendant had seriously made efforts to meet his obligation, and that he had no intention of getting as much cash as he could, and bolting. In the circumstances, the Court could not say that there had been any attempt to defraud.

  Dr. Hinckley, replying for the prosecution, pointed out that it was not a case of title deeds having been deposited in a bank for safe keeping, but of defendant's using them for his own gain. Such action as this was damaging to the reputation of American businessmen in China. It was fundamental to the transaction that he should have undertaken it only with the knowledge and consent of the complainant. As for the defendant not having left the jurisdiction, Counsel pointed out that defendant was not given a chance of leaving.

  The Court adjourned in order to allow Counsel to file arguments.

Shanghai, Sept. 22.

Before Hon. C. S. Lobinger, Judge.

Chen Lai-ming v. F. C. Bascom.

Judgment was delivered in this civil action, brought in connexion with a loan on certain papers deposited with the defendant.

  His Honor said that no appearance had been entered on the part of the defendant to the bill which was filed on August 18, and no demurrer, plea, or answer had been filed. An order taking the bill pro confesso was entered on September 19, and no proceedings had been had or taken by the defendant since that order was entered. It thus appeared that the facts and matter alleged in the bill must be taken as true, and the same being supported by the testimony of Andre Pingrin, "herebefore taken herein by stipulation," the judgment concluded, now, therefore, it is accordingly considered and decreed that the defendant, Frank Cecil Bascom, comply with his contract of January 19, 1914, executing an instrument of conveyance re-assigning to the plaintiff all the rights, title and interest in B.C. Lot No. 7986 registered in H.B.M.'s Consulate-General at Shanghai, China, and that the defendant deposit with the clerk of this Court all papers and documents relating  to or affecting the title to said property and now in the possession of defendant or under his power or control all of the same to be delivered to plaintiff upon his depositing with the Clerk the sum of Tls. 8,000 with interest thereon as alleged in the bill up to July 19, 1914, less any amount of interest lost by plaintiff as alleged in Paragraph 5 of the bill; and that plaintiff recover his costs herein.

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