The four persons who had paid money into the association for eight months, and who had received no benefit, sued the other four members who had ceased to pay their subscriptions after the failure in business of the trustee. The defence was that the only person responsible was this trustee, and that all the sums claimed had been paid to him by the defendants. The Acting Chief Justice, who heard the case, was of the opinion that the subscriptions not paid were due, and that the trustee had no authority from the other members to receive beforehand any contributions, and the Justice accordingly gave judgment for the plaintiffs.
The case was appealed, and counsel stated upon its coming up that it was appealed on a question of law. He related the circumstances of the case, and maintained that there was no contract between either of the plaintiffs and the four defendants jointly or severally, that they would pay a sum of $200. The only contract proved and shown, was a contract that each of the members would contribute to a common fund which he might not get in the first instance, but which he was certain to get some time. He therefore submitted that there was no contract at common law on which this action could be maintained, and that there was absolutely no means of deciding the issues in such a case.
To this statement, the opposing counsel replied by admitting that there was a certain amount of difficulty in working out the scheme as a whole, yet unless their Lordships held that these men were liable in this case, the prosecutors were practically deprived of any remedy at all. He submitted that this was against the whole intention of the association, which was in a certain sense for profit, for the mutual help of its members, and the common good of all. To hold that no action was maintainable individually, would be holding out a premium for dishonesty, because the man who got the first payment would then leave the Colony.
At this point the Justice remarked that this was what very often happened. In delivering his opinion, the Justice said that he thought the case was a claim for money lent, but it had been treated as a claim for the return of $50 from each of the defendants in respect of a money loan association. At the trial the defendants had denied that they had made any contract with the plaintiffs, and referred to the fact that certain meetings of the association had been held, and that the other meetings had not been regularly called in accordance with the articles of association. That being so, he held that there was no contract between the various members of the association, which would enable one member to sue another, and therefore he decided in favour of the appellants.
The Puisne Judge said that the contract entered into, was either one between the defendants and one of the plaintiffs, or else it was a mutual contract between the defendants, and the other members of the association. In the first case the plaintiffs could not recover, and if it was a mutual contract between all the members of the association, there ought to be a suit in equity to ascertain what were the various rights of the parties, and all the members of the association must be parties to that action. And so he also gave judgment in favour of the appellants, with costs. The money which had been paid into court, pending the appeal, would be paid out.
Whoever takes the trouble to follow these arguments, and the facts upon which they rest, ought to be convinced of several propositions: that it is very easy to make arrangements to pay out money to Chinese; that it is very easy not to get that money back again; that when there is a hitch in the intricate business of adjustment, it is not unlikely to take all the lawyers and Judges of a Crown Colony nine months to find out the law and equity, and that when the case has been decided it is difficult for an ordinary mortal to judge whether the decision was right or wrong!