TIMARU FLOUR IN THE QUEEN’S BENCH.

Evening Star, Issue 9124, 3 May 1893, Page 3

TIMARU FLOUR IN THE QUEEN’S BENCH.

The Bank of New Zealand has just had a slice of good luck in winning an action which involved a large sum of money. When the Chilian war was'being waged in 1891, and provisions were necessarily high, it was considered a good spec, to ship New Zealand flour to Lima. In July, 1891, the London Bank of Mexico and South America requested the Bank of New Zealand to instruct their Dunedin branch to hold at the disposal of the Hon. W. H. Reynolds £15,000, payable at ninety days’ sight, by drawing upon the London Bank of Mexico, etc., against delivery of shipping documents and policy of insurance for 1,100 tons of Hour and 300 tons of barley shipped per Crusader, and the hank undertook to honor the bill on presentation, whether drawn by the Dunedin branch of the Bank of New Zealand or by Mr Reynolds. The same day the Bank of New Zealand, at the request of the other hank, sent a cable message to Dunedin in terms prepared by the London Bank of Mexico and South America. The goodswere shipped, and Mr Reynolds’s draft was honored at Dunedin. When the vessel reached Chili the war was over, and Hour was down in value. The London Bank of Mexico and South America further complained that the “ tons ” of flour shipped was really 1,100 tons of 2,0001b each, which it seems is the usual New Zealand ton, instead of the imperial ton of 2,2401b. They also declared that the agreement with the Bank of New Zealand implied that the bank should not advance the whole of the £15,000 without making provision for the freight, and that, having advanced the whole, the value of the Hour and barley as security for the advance was reduced' by £2,000 in respect to freight payable at the port of discharge. They therefore declined to honor the draft of the Hon. W. ~H. Reynolds for £15,000, which was drawn at Dunedin on July 24. 1891. The Bank of New Zealand therefore brought an action in the' Cpurt of Queen's Bench, before Lord Justice Bowen. They contended that they had done all that could he demanded of them in honoring the Hoii. W. H. Reynold’s draft, as requested at Dunedin, and iu forwarding sufficient shipping documents, according to the usages of the New Zealand trade. The defendants contended that the contract was an English ope, made in England, to be decided by English Jaw, and that the f ‘toas” meant tons of imperial measure, and not the smaller Nejv Zealand capaoity, and that this short delivery justified them In declining to honor the draft, Lord Justice Bowen, in delivering judgment at the conclusion of the argument, said it was not necessary to pause to consider his judgment, as his view of the law was clear. He thought that the defendants were responsible because of the ambiguity of the telegram which they caused to be sent to Dunedin. The plaintifls’ manager there had acted without any impropriety or negligence, and fulfilled his contract in forwarding the documents to Lima according to the recognised mercantile and business method. The defendants might have known, if they had chosen to inquire, that Hour was not sold iu New Zealand by the ton (imperial), or, indeed, anywhere, certainly not iu England ; and he thought the loss ought to fall on the defendants’ shoulders, though unwitting, as the mistake had arisen through the ambiguous wording of the telegram. There would be judgment for the plaintiffs for £15,000, with interest from the due date of fhe bill, "December 1 |o,'|B9E at‘4’percent. 1 Off the application of counsel, execution was stayed till the first day of next sittings, with a view to consider an appeal.