The Worthless Goods

1. Reading the Decision and Lunch in the Pub My interest in Wiseheart J.’s decision in the now classic case of Masterman Bank v. Seddon arose shortly after I arrived in Oxford in 1959. My object was to write a doctoral thesis on a banking facility known as the ‘commercial letter of credit’, which features in the export and import business. It facilitates international transactions by obtaining a bank’s promise to pay the price of goods. The vendor relies on the bank’s undertaking. The buyer, in turn, knows that the price is to be paid by the bank only if the vendor tenders the prescribed documents. Usually these include a carriage document, such as a bill of lading, evidencing that the goods have been shipped. ...

1. A Closer Look at the Facts of Seddon’s Case I knew jack was right. However, one point bothered me. In all trials, the judge’s decision is based on the facts proved to him. These, of course, might be at variance with what had really taken place. In some cases, the suppression of facts is intentional: the parties seek to cover up some sordid or illegal matter looming in the background. ...

Gray offered to obtain copies of the banking forms used in the Seddon case and of the correspondence between Seddon and his counterparty. His efforts, though, were fruitless: the Masterman Bank refused to discuss the subject. The lawyers, too, clammed up. They relied on the confidentiality principle. In principle, they were right. Still, G & M was a house of standing. Accordingly, the reticence of the M. Bank and of its lawyers struck me as odd. Why would they withhold innocent information from a potential correspondent or client like G & M? ...

1. The True Nature of the Deal Jack’s advice was sound. Although I had formed a reasonably clear picture of the background facts, I had come to a dead end. I had virtually decided to give the case a miss, when I had a stroke of good luck. Cases to be litigated before a court in London were usually discussed with a member of a law firm, a solicitor. His task was to obtain the required evidence, to assess the basic nature of the case and to form an initial impression. When his work was done, the law firm referred the file to a barrister. If the latter thought the ‘cause’ was sound, he would prepare the case for trial. ...

My investigation of the hidden facts of Seddon’s case had been time consuming. At the same time, it did not impede the progress of my doctoral thesis. Jack, the publican, looked at me with concern when I arrived exhausted after long hours of work. Frequently, he treated me to a cup of strongly brewed black coffee and looked at me disapprovingly when I had a nip of rum. A few days later, I called again on Dennis Gray. I noticed the twinkle in his shrewd eyes when he handed me his meticulous notes respecting the drafts of the first two chapters of my thesis. His body language, too, indicated he thought my treatment was starry eyed. ...

1. Unmasking My conversation with Dennis Gray convinced me that I had uncovered the seedy side of the Seddon case. Still, the picture was incomplete. I wanted to find out more about Seddon. What sort of a man was he? He was prepared to cut corners in his business dealings. But might he, nevertheless, be a decent man? As Jack had pointed out, most people carried out ‘little dishonesties’. Still, they did not turn against their sponsor. Seddon appeared to have done so. “Well,” I asked myself, “would it nevertheless be safe to leave him in charge of your home when you went for a trip abroad?” I felt the urge to meet him. ...

Shortly after my discovery of Seddon’s identity, I took the train to London. My main object was to get Dennis Gray’s comments on two further draft chapters of my thesis. In addition, I wanted to have his reaction to the truth about Seddon. Dennis Gray gave me a list of detailed comments about my thesis. When he finished, I referred to the Seddon case. He listened attentively to my narration but, all in all, took the story in his stride. ...

A few months later I Left England to take up a post in Singapore. After three years, I returned to England for a few months to carry out further research of English banking practice. The first person I called on when I arrived in London was Dennis Gray. He had aged during the ensuing three years and was getting ready to retire in a small village near Bath. Was it his place of birth? I thought it best not to enquire. ...