Chang Yen-Mao v. Moreing
High Court of Justice Chancery Division
London Times, March 2, 1905, p. 3; 120 L. T. Jour. 313 (1905)
After suppressing China’s Boxer Rebellion of 1899 to 1901, foreign powers imposed a humiliating settlement on the Chinese imperial government. As a result of that settlement, the Chinese Mining and Engineering Company of Tien Tsin (Chinese company) (plaintiff) agreed to sell its mines to Moreing (defendant), an English firm, in exchange for Moreing stock guaranteed to be worth at least $375,000. Title to the mines could not pass without the approval of Chang Yen-Mao (plaintiff), a high Chinese government official. Chang objected to the contract’s lack of any terms protecting the Chinese company’s right to the promised consideration. Moreing’s agent signed a memorandum containing the terms Chang demanded. The agent deceitfully assured Chang that the memorandum would be binding on Moreing. In reliance on that assurance, Chang approved the title transfer. In fact, the agent knew that the memorandum was not binding. Moreover, Moreing had already watered its stock, thereby reducing the value of the Chinese company’s stake in Moreing to approximately $106,000. Chang and the Chinese company sued in the chancery division of England’s high court to undo the fraudulent transaction.
Rule of Law
Holding and Reasoning (Joyce, J.)
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