The Express.
London, England, 1853-12-20 00:00:00

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CLELAND V. THIS 171.11T1D 011 RRRRRRR SOCIETT.-ACTIOX

UPON ♦ POLICY.

This was an action upon a policy, dated the 17th January,
IMO, by which the defendants agreed to guarantee the
honesty and integrity of Mr. Frederick Sevin Lee to the
amount of 2,0001. he defendants, in answer to the action,
pleaded several pleas, and among other things, they alleged
fraud.
Mr. Serjeant Byles, Mr. Cowling, and Mr. Rose appeared
for the plaintiffs ; and Sir F. Thesiger, Mr. Montage
Chambers, Q.C., and Mr. Bevil' were for the defesdents.
The plaintiff., Messrs. Cleland and Day, wen Aillefitaa
sitizens, and at the time the eases of retie .nee,
they carried on business at Boats& as mereltemne. in
the spring of 1819, Mr. Cleland was in Lwaiera, and
whilst here he lodged in Cecil-street, Semi. mg VMS
there introduced to Mr. Lee. The plaintdis W OlMMlien
of establishing • London branch of their haus, nag sem
negotiation took place as to making Mr. Lee manager of
that branch. Mr. Cleland went back to Bolton, bet after-
wards there was some eorreependence with Mr. Lee, and
it was arranged that he should be the manager of the pro-
posed breach, upon his giving ample security for his honesty
and integrity. Lee apflird to the defendants to be security
for him, and they gave his. a paper containing a series of
questions. which paper he undertook to transmit to the
plaintiffs in America. They sent back their answers to
these questions, and the defendants, after inquiring of the
persons referred to by Lee, and making the other usual
inquiries in such matters, granted the policy. The plain-
tiffs bad transmitted to Messrs. Herndon and Co., of Liver-
pool, 2,0001., to he plated to their credit, and they had sent
to Lee six blank bills of exchange, they being drawn
by the plaintiffs and blank es to every other part.
Subsequently, they transmitted 2,0001. more, and
also acme more blank bills. There wee an agree-
ment and • power of attorney, which gave Lee
power generally to manage the business of the Breach este.
bliahment, and copies of these documents were sent to the
defendants, but they bad no information about the blank
bills. With two of these bills Lee drew out the first 2,0001.
and placed it in the Royal British Bank, and things went
until the 14th of June, 1850, when Lee wrote to the
iginistitrs, and confessed to having misappropriated • large
tttutaef money, and offered them security for it. The plain-
tiffs wrote to the defendants about the matter, and they also
sent • copy of Lee's letter to them. Subsequently an in-
vestigation was instituted, and the plaintiffs foes' that
they had lest by Lee 8,0001. or 6,0001, and this loss had
the effect of making them stop payment. Under these cir-
cumstances, the action was brought to recover from the
defendants the amount for which they were liable upon the
policy. There had been proceedings in Chancery, and as
the trial of the action was delayed until the present sitting,
evidence was called to prove these facts, and the plaintiff.'
counsel complained that although the action had been coma
minced so long ago, it wee not until recently that the defen-
dants had thought At to place upon the record • plea of
fraud, and for which plea, as he wee instructed, there
was not the slightest foundation.
Sir Frederick Meager, is his address to the jury, ex-
plained that this plea would have been pleaded earlier if
the defendants had not been prevented from having free ac-
me to some eorrespoadeces, and it was not until they bad

seen the correspondence that it was deemed necessaiy to
plead the ;ilea. In support of this plea he should show that
the plaintiffs had informed the defendants of the fact
of their having sent blank bills to Lee to do as he liked
with. Sack a proceeding must place great temptation in
the way of a man in Lee's position, and would very much
increase the rink upon a policy of this kind. This being so
the defendants ought to have been informed of it, and he
submitted that the concealment of that information
amounted in law to a fraud. The learned counsel intimated
his intention of reading some correspondence, and calling
several witneues in support of the defendants' cue.
The jury, however, at the conclusion of his speech, raid
that they had all made up their minds upon the matter, and
they gave a verdict for the plaintiffs, subject to a reference
to ascertain the amount.
COURT OF EXCHEQr
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