De Be‚che v South American Stores (Gath & Chaves) Ltd, and the Chilian Stores (Gath and Chaves) Ltd

JurisdictionEngland & Wales
JudgeLord Chancellor,Lord Tomlin,Lord Russell of Killowen,Lord Macmillan
Judgment Date11 December 1934
Judgment citation (vLex)[1934] UKHL J1211-1
Date11 December 1934
CourtHouse of Lords
De Beéche (Since Deceased) and Others
and
South American Stores (Gath & Chaves) Ltd. and Others

[1934] UKHL J1211-1

Lord Chancellor.

Lord Blanesburgh.

Lord Tomlin.

Lord Russell of Killowen.

Lord Macmillan.

House of Lords

After hearing Counsel, as well on Monday the 22d, as on Tuesday the 23d, Thursday the 25th and Friday the 26th, days of October last, upon the Petition and Appeal of Teresa Irarrázaval de Beéche (Widow) (since deceased), of 45, Avenue Hoche, Paris, France, Teresa Beéche de la Motte St. Pierre (Married Woman), of Château de Montpoupon, Ceré-Indre and Loire, France, Hector Gregorio Beéche, of Château de Villers St. Paul (Oise) par Nogent-sur-Oise, France, Roberto Beéche, of 4, Rue de Marignan, Paris, France, and Elisabeth Beéche de la Verteville (Married Woman), of Château La Chapelle, Ceré-Indre and Loire, France, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 29th of November, 1933, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the South American Stores (Gath and Chaves), Limited, and the Chilean Stores (Gath and Chaves), Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 29th day of November, 1933, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.

Lord Chancellor .

My Lords,

1

The Appellants are the successors in title of the late Hector Beéche in certain buildings and sites in Santiago de Chile. Mr. Beéche was at all material times a Chilian subject though for the most part resident in Paris. By an instrument executed at Buenos Aires on 18th June, 1909, before the Chilian consul there he undertook to erect a building on a site forming part of his property in Santiago de Chile and granted a lease of the building from its completion to an Argentine company for twenty-five years at a rent for the first five years of £7,500 sterling per annum plus 10 per cent. of the cost of the building, increasing by £1,000 sterling for each subsequent period of five years. After stipulating for penal interest in the event of default in punctual payment the agreement provided in the fifth place as follows:—

"Payment shall be effected monthly in advance in Santiago de Chile on the first day of each month by first class bills on London at ninety days sight."

2

In 1912 the Argentine company transferred all its assets and liabilities, including its rights and liabilities under the above-mentioned lease, to the Respondents the South American Stores (Gath & Chaves) Limited, a company registered in England, hereinafter called "the South American Stores Company." On 4th September, 1913, Mr. Beéche by an instrument also executed at Buenos Aires before the Chilian consul there, ratified this transfer and authorised the South American Stores Company to sublet the premises to the other Respondents the Chilian Stores (Gath & Chaves) Limited, a company also registered in England and hereinafter called "the Chilian Stores Company." In the exercise of this authority the South American Stores Company by the same document sublet the premises to the Chilian Stores Company which also bound itself directly to Mr. Beéche to fulfil all the terms of the principal contract of lease. Both companies were to continue jointly bound to Mr. Beéche.

3

Meantime on 28th August, 1913, Mr. Beéche had granted a twenty-two years lease of other premises belonging to him at Santiago de Chile to the Chilian Stores Company. The rent was fixed at £600 monthly, with periodical increments, "payable in Santiago de Chile at the residence or office of the owner or his representatives monthly in advance on the first working day of each month in first class bills on London at ninety days sight." On 15th December, 1913, Mr. Beéche granted to the Chilian Stores Company a further lease of certain additional premises in Santiago de Chile for twenty years from 1st September, 1915, at a rent of £50 sterling per month with periodical increments, payable as in the preceding lease. Both of the two last mentioned leases were executed at Buenos Aires before the Chilian consul there. Finally on 3rd December, 1918, at Santiago de Chile Mr. Beéche granted a lease to the Chilian Stores Company of further premises in Santiago de Chile for sixteen years and ten months from 1st November, 1918, at a rent of £800 sterling per month with periodical increments, payable as in the two preceding leases. The Chilian Stores Company undertook to obtain a guarantee from the South American Stores Company for the strict fulfilment of all the obligations contained not only in this last mentioned lease but also in the two preceding leases of 28th August and 15th December, 1913. This guarantee was subsequently given by the South American Stores Company on 12th December, 1918.

4

It will thus be seen that in each of the four leases the stipulated medium of payment was "first class bills on London at ninety days sight" and the place of payment was in each case Santiago de Chile.

5

The rents reserved by the four leases were duly paid by the Chilian Stores Company up to and including 1st November, 1931, although the stipulated medium of payment was not adhered to. Since that date the Respondents maintain that they have been disabled by supervenient Chilian legislation from paying their rents as stipulated and they have deposited in court in Chile the amount of the rents in Chilian pesos at the current rate of exchange for sterling, subject to a 20 per cent. deduction directed by Chilian law.

6

The Chilian legislation in question consists of two statutes. The first of these statutes is dated 30th July, 1931, and by its first article establishes "control of the international operations of exchange and the transfer of funds abroad" and entrusts this control to a committee. The third article of the statute empowers the committee to prohibit inter alia "(a) any operation of international exchange which does not come within the regular and legitimate movement of the economical and normal financial requirements or the dealing with special requirements"; and provides that "the classification of the operations will rest with the said control committee." Article 4 enacts that "the Central Bank of Chile will be the only entity which can purchase and to which international exchange may be freely sold"; that other banking undertakings can purchase… international exchange… by permission of the control committee"; and that the operations with which the article deals "may only be carried out with the previous authorisation of the control committee." International exchanges are defined by article 6 as "every class of operations connected with bills of exchange, cheques, drafts, letters of credit, transfers of funds or orders for payment in foreign currency or national money if these are payable or should be completed abroad and every description of operations with bank-notes or foreign currency with credits existing abroad in favour of persons domiciled or residing in Chile or with personal securities in foreign currency by undertakings domiciled abroad." By article 7 it is provided that "without the previous authorisation of the control committee it is not permissible [ inter alia] (a) To enter into contracts in the country in foreign currency nor require fulfilment of contracts of this description of currency entered into outside the country subsequent to this law." Article 13 imposes penalties for breach of the statute.

7

The second statute, which is dated 20th April, 1932, annulled the previous statute. Article 1 subjected "all international exchange transactions" to the provisions of the Act and defined international exchange transactions as denoting "the purchase and the sale of all kinds of currency and gold in any form and the bills of exchange, cheques, drafts, letters of credit, telegraphic orders and documents of any other nature requiring the transfer of funds from Chile or vice versa." By article 2 the control of international exchange transactions was vested in an exchange control commission; article 3 provided that "only the Central Bank of Chile shall buy and sell international exchange"; article 4 required the commission to "consider the particulars which may justify authorising the respective applicants to acquire instruments of international exchange and it shall fix the amount which each applicant may...

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21 cases
  • Regazzoni v K. C. Sethia (1944) Ltd
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    ...arise out of such a transaction". More than a hundred years later in De Beéche v. South American Stores Ltd. and Chilean Stores Ltd. [1935] A.C. 148 at page 156 it was said in this House "It cannot be controverted that the law of this country will not compel the fulfilment of an obligation ......
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    ...Ralli Bros has ever since 1920 been treated as authority for that proposition. In De Beéche v. South American Stores (Gath & Chaves) Ltd [1935] AC 148, 156 it was said (per Viscount Sankey): “it cannot be controverted that the law of this country will not compel the fulfilment of an obligat......
  • Ryder Industries Ltd (Formerly Saitek Ltd) v Timely Electronics Co Ltd
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    • Court of Final Appeal (Hong Kong)
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    ...Ralli Bros has ever since 1920 been treated as authority for that proposition. In De Beéche v. South American Stores (Gath & Chaves) Ltd [1935] AC 148, 156 it was said (per Viscount Sankey): “it cannot be controverted that the law of this country will not compel the fulfilment of an obligat......
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1 books & journal articles
  • Establishing the Content of Foreign Law: A Comparative Study
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    • Maastricht Journal of European and Comparative Law No. 20-1, March 2013
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