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Colonial Cases

Bank of China, Japan and the Straits, Ltd v. Lepissier, 1895

[banking shares]


Bank of China, Japan and the Straits, Ltd v. Lepissier


Court of Appeal, Saigon
Source: North China Herald, 19 April, 1895






We subjoin a translation of the judgment recently given by the Court of Appeal in Saigon in favour of the above Bank in the appeal case brought by them against M. Lepissier for payment of a call on 30 shares in the said Bank registered in his name.

   Among other arguments M. Lepissier's counsel cited the judgment given in June last against the Bank by the United States Consular Court in Shanghai in a similar action, and which was based chiefly on the ground that the Directors had entered into business which was not authorised by the Articles of Association.

   The Court in Saigon decided that this question, even if it had been established, would not affect the point at issue in the present case and gave judgment accordingly.


   The Court having heard, at the public audience of 8th February, 1895, in their respective arguments M. Ternisien for the Bank of China, Japan and the Straits Limited, appellants, and M. Sambuc for M. Lepissier, respondent;

   The Crown Advocate having been heard;

   After having deliberated according to the law;

  Whereas it results from the character of the judgment appealed against, that the Bank of China, Japan and the straits Limited, a joint stock company having its head offices in London, having claimed from M. Lepissier a sum of £15 sterling, in consequence of a call decided upon by the Board of Directors at a meeting held on the 3rd of August, 1893, Lepissier declared first of all that he was no longer a shareholder, having sold his shares through the Hongkong and Shanghai Bank on the 11th June, 1892.

   Whereas in pretending that he was no longer a shareholder Lepissier filed a cross demand that it would please the Court:

- To order an enquiry into the actions of the Bank of Chinas and to nominate an administrator charged to take in hand the affairs of the Company, to find out the exact position and to proceed to its liquidation.

- To declare the Administrators and Directors of the Bank civilly and personally responsible for having illegally removed its Head Office from China (where it was originally) to London and to the disaster brought about by this change of the directors away from the control of the shareholders.

- To decree that the question is judged not partially but in its entire development and that consequently the Bank cannot proceed against the defendant for further calls.

   Whereas by preparatory judgment dated 6th March, 1894, the Court ordered the production of the Articles of Association, the minutes of the meetings of shareholders and, although the case was one of those foreseen by the Article 14 of the Code of Commerce, sundry balance sheets, the Register of Transfers and an exact statement of the position at the time.

   Whereas by final judgment dated 24th April, 1894, The Consular Court of France at Shanghai, omitting absolutely to adjudicate upon the counter-claim brought forward by Lepissier, contented itself with deciding the Bank of China's defence unfounded, rejected and condemned them in costs.

   Whereas a regular appeal has been made from that decision by the Bank of China, following an act of chancery dated 11th June, 1894.

   Whereas the first judge having omitted to adjudicate on the counter-claim of Lepissier, it is found implicitly rejected, and Lepsissier not having raised it again by appeal the Court is not bound by it, and ought to continue its examination to the principal claim brought forward by the Bank of China and Japan.

   As to allowing the claim in justice of the suit of the Bank of China.

   Whereas the Bank of China, being regularly constituted according to English law, has the right to ask French Courts to order the execution of conventions entered into between it and third parties under the jurisdiction of French tribunals, and this in terms of the Convention of 30th April, 18r52.

   As to the request being well found.

   Whereas the call has been made in conformity with the Articles of Association which bind Lepissier in his position of shareholder, as in terms of Article 18, the Directors can make calls when they think fit, that this formula excludes the rights of shareholders to contest the opportuneness.

   Whereas Lepissier is wrong in disputing his position as shareholder, as in fact he does not deny having bought on two occasions 15 shares, although he maintains having sold them;

   Whereas the sale of his shares to a third party did not release him from his position as a shareholder as far as the Company was concerned; the transfer in the Register of the Company alone relieving him from that position.

  Well now, whereas it follows from the evidence produced he still remains on the Register of Transfers.

   That the sale by him, made through the Hongkong and Shanghai Bank cannot be set up against the Bank of China, because in terms of Article 36 of the Articles of Association the Directors can oppose the transfer of all shares not fully paid up.  That Lepissier does not even justify himself by having made a step towards obtaining from the Bank of China authority to transfer his shares.

   As far as the bad management of the finances are concerned, the violation of the Articles of Association, the loss of a part of the capital started in the judgment and on which the defence of the respondent insists these facts are not established but if they were they would be without interest in the case.

   That in fact they could serve for the basis of a demand for the dissolution of the Company a demand which has not been brought before the Court, Lepissier having failed to appeal and which may therefore be considered as abandoned by him. But could not justify the refusal to pay the call, the Articles of Association empowering the Directors to make such calls when they think fit, and this without being obliged to establish before the shareholders the opportuneness of such a call and that it is well founded.

   For these reasons,

   Reverse the judgment against which this is the appeal.

   Order M. Lepissier to pay to the Bank of China, Japan and the Straits, Limited, the sum of £15 sterling plus interest at 10 per cent per annum in accordance with the Articles of Association of £7 10s. from 1st November, 1893 and on £7 10s. from 1st February, 1894.

   Condemn him besides in all the costs of the first instance and of the appeal which amounts to$308.50 of which $172.85 go to M. Ternisien and $135.65 to M. Sambuc for the fees paid into Court.

   Give official certificate to M. Sambuc that he reserves his rights against the Hongkong and Shanghai Bank who omitted to make the transfer of the shares sold through them.

   Also of the declarations made in his pleadings by M. Ternisien.

   Also of the declaration made by him that he reserves the right of asking from the Bank of China in the person of its Directors reparation for the prejudice which has been caused him by their illegal actions and by the extension given without right to their operations. Actions which have placed the said Bank in the hopeless situation in which it now finds itself.

   Order the repayment of the fine deposited.

   So judged, &c.

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