A BANK OF NEW ZEALAND APPEAL CASE.

Nelson Evening Mail, Volume XXVII, Issue 104, 4 May 1893, Page 4

A BANK OF NEW ZEALAND APPEAL CASE.

AX INCIDENT OF THE CHILIAN WAR. The Lank 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 IH'JI, and provisions were necessarily high, it was considered a good spec to ship New Zealand flour to Lima. In July 3801 the London Bank of Mexico and South America requested the Bank lot" New Zealand to instruct their Dunedin branch to hold at the disposal of the Hon W. 11. Reynolds £l,"J0,000, payable at !>0 days' sight, by drawing upon the London Bank of Mexico, iVe., against delivery of shipping cLeument.s and policy of insurance fui' 1100 tons of Hour and :iOO tons of barley shipped per s.s. Crusader, and the bank undertook to honour the bill, 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 quest of the other bank, .sent a cable message to Dimedin in terms propared by the London Bank of Mexico and t>'outh America. The goods were shipped, and Mr lieyuold s draft wa* honoured at LHmedm. 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 were really 1100 tons of 20001 b eoch, which it seems is the usual Now Zealand ton, instead of the Imperial ton of 22101 b. 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 flour and barley as security for the advance was reduced by £2000 in respect of freight payable at the port of discharge. They therefore declined to honour the draft of the Hon. W. H. Reynolds for £15,000, which was drawn at Dunedin on July 21, 1891. The Bank of New Zealand therefore brought an action in the Court of Queen's Bench before Lord Justice Bowen. They contended that they had done all that could be demanded of them in honouring the Hon. W. H. Reynold's draft, as requested, at Dunedin, and in forwarding sufficient shipping documents, according to the usages of the New Zealand trade. The defendants contended that the contract was an English one, made in England, to be decrded by English law, and that the " tons" meant tons of Imperial measure, and not the smaller New Zealand capacity, and that this short delivery justified them in declining to honour the draft, Lord Justice Boweu, 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 Duuedin. The plaintiffs' 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 flour was not sold in New Zealand by the ton, or indeed, anywhere, certainly not in England; andhe thought the loss ought to fall on the defendants' shoulders, though unwittingly, as the mistake had arisen through the ambiguous wording of the telegram. There would be judgment fjlfor the plaintiffs for £15,000, with interest from the due date of the bill, December 10, 1891, at 4 per cent. On the application of counsel, execution was stayed till the first day of next sittings, with a view to consider an appeal.