The Express.
London, England, 1868-02-21 00:00:00

INITIALt

ZQUITY COURT.
Ware Vise-Chancellor Sir W. Page Wood.) 41
UM V. GR—POLISH BONDS.
The following extraordinary ciroumstanose IMO din.
closed by the pleadings and evidence in this edit :
In June, 064 the plaintiff, Mr. Barnet Lawrence
Phillips, of New Bend-etrese, was introduced by Paul
Testa, a merchant, of London, to Prince finborminaky, a
Polish nobleman, who was deafens of disposing of some of
the securities whisk are well-known in commercial Gleam
as "Gages Polonaises," or Polish bonds, being instruments
which pass from hand to hand by delivery only. Plaintiff
understood that they had been duly created, and were
valid and legal instruments ; that they had been acquired
by the Polish belligerents during the war in Poland in
1863; but that the Russian government claimed them,
and might attempt to seize them. In December, 1864,
plaintiff, being at Berlin, mentioned the subject to the
defendant, Engine Doglike' whole a Belgian accost, resi-
ding at Liege, and he said he thought the bonds could be
negotiated at Amsterdam. Plaintiff said that the
question of the liability of the bonds to seizure
was fatly discussed between hiuiself and Dognee,
The price plaintiff stipulated for was one-third of the price
on the Stook Exchange at Amsterdam, and plaintiff said
Dognee well knew that the depreciated value was owing to
the risk of seizure. On the 9th of December plaintiff wrote
to him offering the bonds at 33 per cent. On the
nth Dognee wrote, demanding • promise of sale
during a period of from one to two months, by
which there would be held at his disposal all the
bonds to the amount of a nominal value of 50,000/. lie
also asked to have a certain amount of the bond, remitted
to him. In the same letter occurred this passage--" Is
the 33 per cent, of which you speak on the nominal value,
or on the quotation of price of bonds of the same kind,
but on which there does not rest the stain of the
origin of these r Plaintiff applied to Tests, but he declined
to send the bonds itbroad. Several letters passed and on
the 15th February the plaintiff wrote as follows :—" I
have laid your last letter to me before the agent of the
Polish Bonds Committee, who has undertaken to give me
a reply in the course of to-morrow. I am sure, however,
the parties will not allow the bond/ to go out of their
possession excepting against payment. I ripest, the con-
ed of the Russian government here has attached • quan-
tity of these bonds in the City of London. The bonds
about which we are negotiating are deposited with • mem-
ber of parliament at the West-end, in whose bands they
=mot be attached." Tee follow ing pluaage occurred in one of
the plaintiffs letters of the Bth of March, %` I have told you
that there are some of the bonds which have been stolen,
deposited, and which are on the market, but no one has
the bonds which lam offering to you." Dognee, in expla-
nation of this, said that when the plaintiff and
he met on a second occasion in Berlin, in
January, 1865, plaintiff told him that a large
number of bonds similar to those be wished Downie
to sell had been stolen from the government, and that
that accounted for the low price at which sonic were being
sold in Holland. _ _

Finally, in March, 1365, Dognee came to London, and
was introduced by the plaintiff to Testa, and an agree-
ment was come to, whereby bonds for the nominal value
of 25,000 silver rouble were to be banded by Testa to the
plaintiff, to be delivered by him to Damns to be
negotiated. Plaintiff was to give Testa his ac-
ceptince which (as pLiintiff said) was not to be
negotiated by Testa, as • security ; acd Dognee was to
deposit an acceptance of a London banker with a third
party, the defendant Green, also by way of security. On
the 2nd of May a letter, signed by the plaintiff and Dog-
tee' was addressed and handed to Mr. Green, containing
the terms of an agreement whereby it was understood that
the plaintiff kept at the disposal of Dove. Polish bonds
of the nominal value of 2,000,000 silver roubles
at ths price of one-third the ordinary Amsterdam quota-
tion, which varied at the rate of GO per cent ; the plaintiff
to allow Dognee • commission of 1 1.6 per cent. on all sales
effected. To facilitate the negotiation plaintiff was to
deliver that day to Dugan bonds for the nominal value of
25,000 roubles, in guarantee of which Dognes was to
deposit a bill of exchange for 1)001., accepted by the Euro-
pean flank, and duly endorsed. It was, however, understood
that Bogner, mu allowed to retire the draft in returning
within a fortnight the bonds in question. If, on the
other hand, after the fortnight, they were kept by lhognee,
the draft was to be remitted to the plaintiff in settlement
of the prim of sale. On the seine day plaintiff gave Testa-
his acceptance for GOOF., and the draft, also fee 1)00/., was
deposited with Green. Tho bonds were not handed
over the mime day, and on the following
day, the 3rd of May, Doguke wrote to the plaintiff,
complaining that the agreement had not been fulfilled, and
threatening legal proceedings, the result of which would
be, as he said, to destroy the value of the property pro-
ud. I by your friends, or at least to reduce it very much.
I hew perfectly where the titles are, and all the details
of the affair." On the 4th of May he wrote • similar letter
to Testa, threatening proceedings. On the sth of May,
Downs, who was then at Calais, received the bonds for
25,000 roubles from Testa, and sent a receipt to the plain-
tiff. At the expiration of the fortnight, the plaintiff
was served with • notice, dated the 17th of May.
on behalf of Hogue., saying that he renounced keeping the
bonds, and intended to claim the deposit, and that he
would immediately return them, if be were not prevented
from so doing through a seizure wade of the bonds at
Berlin.
Testa having negotiated tbs plaintiff's acceptance, and
Green having been served with notice not to givo up the
draft, the plaintiff bled this bill on the oth of
June, Isos, alleging that the seizure of the bonds
was • collusive proceeding, concocted by Tests and Dognee
with a view of defrauding him, and praying that Testa
might be decreed to deliver up the acceptance, or Milem-
nify the plaintiff, and that Green might be ordered to
hand over the security. The 1)001. had aims been paid into
court.
Testa denied then was any understanding that plain.
tiff's acceptance should not be negotiated.
Dognne said that as son as he received the bonds be sent
them to his Dutch brokers, who forwarded them to Berlin.
where they were seized by the polite authorities on the
ground that they were part of • number of bonds which
had been stolen in 1863 from the Imperial Russian Trea-
sury at Warsaw ; and in support of this Mr. Becker, of
Berlin, deposed that on the 14th of May he under-
took to sail 22 Polish bonds for 35,500 roubles
for Van Hall, of Amsterdam, that he sold seven
to the amount of 14,250 roubles ; and that on
the morning of the 9th Messrs. Krause,his bankers,
informed him that the bonds he had delivered to them for
sale had been recognised by their cumbers as part of • lot
which had bean stolen, and the police authorities had
seized them. Both defendants denied all oollusion, and
claimed the right, one to use plaintiff's aoceptanoe, the
other to have HUI money in court.
Mr. Drum, Q.C., and Mr. Locock Webb were for the
plaintiff ; Mr. Jason Smith for the defendant Green ; Mr.
C. X. Rowell for Testa; and Mr. Kay, Q.C., and Mr. F.
Waller for DOWI6O.
In cross-examination in court, Hogan admitted he was
told the bonds were liable to seizure, but said he believed
them to be perfectly valid, and explained the phrase
" stain of origin" as meaning simply the fact of their being
Polish securities. It further appeared (in the view of the
nail) that Dognee throughout was the agent of Mr. Van
Hall, a banker, through another Mr. Van Ilall, the broker
above mentioned, sad that since the above transactions
Mr. Van Hall had been in treaty for the whole amount
of shares, including those that had been alleged to have
been stolen.
The Vice-Chancellor gave judgment this morning.
Alluding to the fact that them bonds had been
always claimed by the Russian government, but
that the agents of that country had had to
abandon those which they bad seized in this
country, his Honour said that the result was that the
greatest caution became necessary in dealing with them.
Van Hall was in feet the person substantially interested
in the whole contest, and Dognee was his agent, and that
Dognes was thoroughly aware of the liability of the bonds
to seizure was clear, not only from the price, which was the
grand test, but from the correspondence. Throughout there
was great pressure on the part of Dopes, or rather of
Van Jun but ultimately the transaction of the sth of
May was carried out. The real substance of that agree-
ment was an option to purchase--a delivery of the articles
for the purpose of Dognee's being able to effect
a sale for those for whom he was acting—and
an option of declining to purchase, but in that event
an tto return the bonds. The consequence
was the onus was entirely thrown upon Dope* to
state why he did not return the bonds. Thomthis point
treating Van Hall, and not Dognia, as the interested,
what account was given of the • of these docu-
ments I They were sent to Holland and thence to Berlin,
where • person named Becker stated that they
were seized whilst in the hands of Krauss, his bankers.
Beyond that, there was actually no evidence, except the
receipt of the Petunia's polies. But as to what were the
grounds of this seizure, whether that the bonds were
stolen or not, or whether the Harlin police seized
them as agents of the Rumba government or not, the
court was wholly maintained. Mere then two years bad
teempleed sine, them Insmatices had taken place, the
ealy mos who iambi solids them, the hanker Krause, had
not ham produerd. amid whoa his Resent found that these
get,
with
requiring the greatest caution in
darding with Asa, bad been tabu aa near as possible to
the audaa treader, and had beta seized with
i
so Bleb emphmstica as to the afreemoimema of their dia-
appetiser, ha Gould not but held Ven lia/1 liable to the
eaturequestat et the shares not bowleg bees refereed. The
doom, thruelore, *mild be that Mr. bees would take his
oasts out of the SOK. and the midst would be paid to
the plaintiff. Davie meet pay the mole el the mit, ex-
cept to far as they_ were emelianed by maids( Tells a
Wt. The Plaintiff to pq Teak& me* and to be en.
titled to have Green's costs over apart Dalai&

COURT OF QUEENS BENCH.
SEOOND COURT.

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