Reports of Cases Argued and Determined in the High Court of Chancery: From the Year MDCCLXXXIX to DCCCXVII : with a Digested Index

Francis Vesey · Great Britain. Court of Chancery

Jan 1844 · C.C. Little and J. Brown

Ratings and reviews

East India Co. v. Henchman, i Ves. Jun. 287 (p. 286 of this document) EAST INDIA COMPANY v. HENCHMAN. [1791, MAY 3.] DEMURRER allowed, the bill not connecting the fraud with the transaction sufficiently. General charge of combination to defraud too loose. Charge, that Defendant was appointed resident at the East India Company's factory at M. not a sufficient charge, that he was factor. (a) Every thing well pleaded is confessed by demurrer, (b) [p. 289.] Servant taking by collusion more than belongs to his office must account: So must a stranger upon a bargain with a servant, which is a fraud on the master. Factor buying goods, which he ought to furnish as factor, taking the profits, and dealing with his constituent as a merchant instead of taking factorage duty or a stipulated salary, must account: So must a manufacturer who obtained by collusion an unfair price, (c) [p. 289.] THE bill was for an account of all sums disbursed and received by Defendant on account of certain contracts mentioned in it; and that he might be declared a trustee of all profits appearing on the Loading... Loading... 288 EAST INDIA COMPANY V. HENCHMAN. [1791. mended to the Counsel for Plaintiffs to amend : but they declined it, and pressed for a decision. Mr. Mitford, for the demurrer. This is not a subject, upon which the Court will entertain jurisdiction to give the relief prayed. The bill respects transactions, which took place during the first residence of Defendant in India. It means to say, that the Board of Trade empowered by the Company colluded with the Defendant in a contract for supplying the Company with silk at certain rates; it being principally his own manufacture, for which he established works: that notwithstanding these contracts entered into by the Board of Trade, yet Defendant is to be considered as trustee for the Company; and is to derive no advantage from the transaction. The bill does not charge, that he acted as a factor. Attorney General [Sir A. Macdonald], Solicitor General [Sir John Scott], and Mr. Mansfield, for plaintiffs. Defendant acted [ * 289 ] expressly contrary to his covenant. By this * combination he was to be buyer for the Company, and seller for himself. The profits made were for the benefit of the Company, which is one case: the contract was a mere color, under which he bought from the natives; and under pretence of supplying the Company charged them nearly double. Lord CHANCELLOR. I wonder, they did not charge, that he exercised this trade under the orders of the Company; and that by the color of this contract he took the profits, as if it was his own; whereas it was the trade of the company. That seems to be the natural charge. They confess every thing well pleaded by the demurrer. The question is as to the point of fraud. They have stated, that the object, appearing by the letters a fair transaction, was not a fair transaction ; but that there was a secret understanding, by which Defendant was to take a contract upon terms, both parties knew to be injurious ; and that both were to share the benefit. They say, this was the design; but it is not clear to me, that they have connected that design with the contract so executed : for if so, it would be difficult to maintain, that, if a servant enters into a contract, by which he is to gain more, than according to honesty he ought, must not account. That point will do, if charged sufficiently; for if a servant will by collusion take greater profits, than belong to his office, that is a fraud, upon which an account may be demanded. It is so also in the case of a stranger; for if a stranger enters into a fraudulent bargain with a servant, acting on behalf of his master, to obtain a power only given by betraying the master, an account upon that fraud could not be resisted. But I do not see, that the bill has charged him upon that head, so as to involve him as a stranger ; nor how his character of servant will involve him. The demurrer only drives at the bill, because it is so long, that