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Colonial Cases

Eames v. Stubbendorff, 1864

[jurisdiction]

Eames v. Stubbendorff

Prussian Consular Court, Shanghai
1864
Source: The North-China Herald, 23 January 1864

 

THE STUBBENDORFF case, as stated in the Minutes of the Municipal Council, published in our daily issue of the 7th Inst., has created considerable interest on the settlements.  That the subject of a treaty power should be less amenable to justice, that the subject of a government without any consular representatives in China, appeared at the first blush so unaccountable, that it called for instant comment and energetic action.  For several reasons this was requisite - in order to secure the punishment of every one whose commercial transactions lay him open to legal attack, and, moreover, for the satisfaction of Prussian merchants in China, than some of whom there are no foreign residents more universally or deservedly respected.

It is evidently the interest of every legitimate trader to have the principles of trade clearly defined.  But more especially in such a case as that to which we now allude, is it necessary that a broad band of demarcation be drawn between the Merchant and the Adventurer.  We do not, however, feel called upon to write either a vindication of, or a eulogium upon, the character of the Prussian mercantile community in China.  Such is by no means required at our hands. We wish to draw attention more especially to the point of Consular law now involved, since it was through the Prussian Vice-Consul's alleged want of power of arrest that the Stubbendorff difficulty arose.  The plaint laid by Mr. Eames before the Municipal Council was as follows:

I claim against H. Stubbendorff on contract, the sum of Tls. 1,000.  And whereas the said Stubbendorff is a Prussian subject, and the Prussian Consul has no power to enforce payment of said demand, I pray &c.

On receipt of this Plaint, the Chairman investigated the case, but came to the conclusion that the Municipal Council was powerless in the matter, as Mr. Stubbendorff was under the protection of a treaty power.  A letter from a partner in the house, and signed to the name of Stubbendorff & Co., appeared in the North China and Japan Marker Report of the 8th instant.  In this latter, which, by the way, was somewhat ambiguously worded, it was stated that the Prussian Vice Consul had refused to take any action, even as an arbitrator, in the matter. 

Were we to judge by analogy from the instructions issued to, and the power vested in, the Consuls of the other Treaty Nations, we should imagine that the Prussian Consul at Shanghai would have had the requisite authority over the subjects of Prussia. For the present, however, we pass over without remark the law as laid down in the Consular instructions issued to the representatives of other powers, and proceed directly to the consideration of the authority vested by Prussian law in the Prussian Consul.  Our authorities upon this subject are the Allgemeine Dienst-Instruction fur die Koniglich Preussischen Consular Beamten, and Konig's Preussischen Consular-Rgelement.  The first of these works being the General Service Instructions for Prussian Consuls, and the latter, The Prussian Consular Rules by Konig.  From the former of these works we take the following passage, which bears directly on the case.  Under the heading of "Mode of Procedure on the Consul in lawsuits of Prussian subjects," after laying down the course to be adopted when disputes arise between such subjects themselves, the instructions proceed thus:-

When our countrymen have become involved in lawsuits with the natives, he (the Consul) must assist them with good advice, and full information as to the rules and regulations prevailing, also with regard to the choice of a lawyer.  Indeed, if such should be demanded, he will himself take the place of the latter, and in every way do his best to obtain a speedy settlement of the affair.

It would thus appear that the Prussian Vice Consul would have been fully borne out, had he acted in the matter as magistrate, while at the same time, he would have complied with thr spirit as well as the letter of his instructions had he consented to arbitrate in an informal manner.  The powers of the Consul are by no means limited wither in cases connected with debt, in which Prussian subjects appear both as plaintiffs and defendants, or in cases wherein a Prussian becomes involved as a plaintiff or defendant with the subject of some other power.  In such cases, if the debtor be a Prussian, the Consul has the power of opening a Concursprocess, which is conducted in the following manner.

The aggregate property of a debtor who cannot render complete satisfaction to his creditors, is attached, and the above mentioned Concours opened by the Judge (Consul) in whose district the debtor may dwell.  The following are the points laid down for the consideration of the judge:-

  1. The opening of the Concours.
  2. The examination of the property and estimate of its value.
  3. The ascertainment of liabilities.
  4. The distribution of assets.

In ordinary cases of debt, it would seem that full power is possessed by the Prussian Consul.  We need not enter into the regulations laid down as to the cases in which a concours may be at once opened, even at the request of a single creditor.  We pass on to a clause which applies more especially to the case in hand.

The opening of a concours is especially called for when a merchant who is liable for drafts, or against whom drafts are pending or running, tries to absent himself.

In such a case, the most stringent measures are this provided against any attempted escape, although it is manifest that many instances must occur in which the Consul cannot be positive as to whether fraud is intended.  We should imagine that the clause quoted above would have been sufficient authority for the Prussian Vice Consul at this port to have gone upon the Stubbendorff case - such action not necessarily implying any attempt at absconding from the creditors, but being taken as a measure of ordinary precaution.  Whether therefore as an arbitrator, or as a Consul sitting judicially, the Consular Instructions seem to us to provide full authority for the exercise of jurisdiction in cases of debt.

We have thus established the fact that the Prussian Consul is entrusted with power sufficient to justify him in entering on a case such as that to which we have referred.  We may go even farther, and quote instructions applicable in every particular to the Stubbendorff affair.  Thus, under the head of "Deviations from the usual mode of procedure where foreign subjects are concerned," we meet with the following passage:-

In cases wherein men who are not Prussians are concerned, it is customary for the Consul not to decide independently, but that judgment be pronounced by Commissioners.  As a general rule two Commissioners should be nominated for the accused, and two for the plaintiff, and the Court thus constituted examines and decides the case.

Lest, however, it should be imagined that the nomination of Commissioners or Assessors invalidates in the least the right of the Consul to try and decide upon cases, it is immediately added:-

But it is usual to consider these commissioners as possessing authority only with the sanction odf the Consul.  With this notification, the Prussian Consul will not hesitate to appoint a commission even in cases where the plaintiff is not a Prussian, as he (the Consul) is at liberty not to conform the decision of the same should it appear to him illegal.

Full provision is likewise made for arrest in cases where any reasonable fear exists lest the debtor should remove either himself or his effects out of the reach of his creditors.  The plaint in this case was not against Messrs. Stubbendorff & Co. - indeed Mr. Eames, as the representative of the plaintiff Sin-Chow-Fan, indicates Mr. H. Stubbendorff, as though he alone in his private capacity had brought himself within the power of the law.  Doubtless if the Prussian Vice-Consul chose to adjudicate in the matter, he could have made the house answerable for the claim against Stubbendorff.  But the fact still remains that the personal arrest of the debtor would have been perfectly allowable, seeing that he was supposed to have been on the point of leaving Shanghai.  To procure arrest, the following course of procedure is requisite.  The plaintiff must state accurately the nature of the claim - he must prove that circumstances exist sufficient to make him apprehensive of danger resulting from procrastination - he must supply surety or bail.  All this was done in the case to which we refer.  We are therefore surprised that, knowing that such a passage as the following was in existence, any hesitation should have been felt in immediately initiating proceedings.

On the strength of such petition thus substantiated, the Consul has to adopt the requisite measures to have the person of the accused arrested or else placed under surveillance.

The arrest having been thus effected, both plaintiff and defendant are summoned, and an investigation held.  The object of this investigation is twofold, viz: to estimate the  damage likely to accrue to the accused from the arrest, and consequently the amount of bail to be tendered by the plaintiff; and in the second place to give the accused an opportunity of bringing  forward reasons why the arrest should be dissolved.  Should no valid reason be assigned for quashing the proceedings, the Consul directed to issue a Notification to that effect, to asses the amount of surety, and to indicate the manner in which the trial is to be conducted.

We have been insensibly led into an exposition of Prussian Consular law - a design which at first we by no means entertained.  Our object in entering upon the question is to prove that the Prussian Consular Court had the power of dealing with the Stubbendorff case, and that almost every circumstance in that case is fully provided for by the Consular instructions.  The liability of an English or American subject is well known, and has never been questioned.  It is a matter of surprise to us, therefore, to find that the Prussian Vice-Consul alone refrains from asserting the power conferred by his position.  The anomaly appeared most startling, that, whereas a Prussian subject could obtain the arrest of a debtor or of one who had in any way injured him, no matter to what nation the offender might have belonged, he himself might contract debt with perfect impunity, and, unless absolutely taken when committing an outrage, defy the authority of his own Consul and of the Municipal Council.  By the extracts quoted above, and by the sketch given of the law of the case, we have endeavored to combat to excessive modesty of the Prussian Vice-Consul.  It is to be hoped, therefore, that should any future call be made upon him in his official character, he will feel justified in acting up the power with which he is unconsciously vested.

Source: The North-China Herald, 16 April 1864

CONCEIVING that the remarks which appeared in the North-China Herald of the 23rd January, may have injured him in the opinion of the mercantile community at home, Mr. Stubbendorff has desired that the letter which appears in our advertising columns, may be made public through the same medium.  In order to throw more complete light on a subject which attracted some attention at the time, we also publish the judgment of the Prussian Consular-General Court in the action which was brought against Mr. Stubbendorff by Lin-show-fan, in pursuance of the claim which gave rise to the remarks we have alluded to. 

It will be remembered that last January Mr. Eames laid before the Municipal Council a claim for Tls. 7,500 against Mr. Stubbendorff, of behalf of Lin-chow-fan, in consequence of a declaration by the Prussian Consul of his inability to prevent the departure of Mr. Stubbendorff for Japan, before the matter had been decided.  This declaration by the Prussian Consul appeared to us to affect so gravely the mercantile interest of the port, that we took occasion, in the issue of the North-China Herald alluded to, to express our belief that it was unfounded, quoting various paragraphs from Prussian legal books in support of out opinions.  It appears from Mr. Stubbendorff's letter, that he conceived we intended to animadvert on his conduct in leaving Shanghai while the dispute was unsettled, but we think a re-perusal of our remarks will convince him that their tendency was merely to show the evil which might arise in case the Prussian Consulate really possessed so little power as it had represented itself to, in his case.  But since Mr. Stubbendorff has again placed his name before the public, it may interest them to know somewhat more of his personal interest in the matter, than we have hitherto thought it necessary to lay before them.

Mr. Stubbendorff, his compradore, and Lin-chow-fan appear to be the only persons fully acquainted with its merits; we are, therefore, compelled to rely principally on Mr. Stubbendorff's own statements, for an explanation.  It appears that his compradore, being of speculative disposition, dealt largely in cotton; but his transactions were, to great extent, fabulous.  That is to say, he sold where he had not bought and bought without money to pay, according to his anticipations of a rise or fall in the market.  He, on one occasion, bought a large quantity from Lin-chow-fan, which he re-sold to his employer.  This cotton gave rise to the dispute which caused Mr. Stubbendorff much anxiety.  He paid a portion of the proceeds to the Chinese vendor but when the latter claimed the balance due, objected that he did not know him in the transaction, and that the bargain had been conducted between himself and his compradore.

The Prussian Consular Court, it will be seen, supported him in this view of the case and thereupon the compradore, conceiving himself designated as the legal claimant, lodged a plaint against Mr. Stubbendorff for the amount due.  The latter, however, brought a counter-claim in two or three thousand Taels more than the sum demanded from him, and eventually induced the compradore to withdraw the plaint by paying him five hundred Taels to let the matter drop.  Whether the latter's claim was so exaggerated that he was glad to get Tls. 500, instead of the Tls. 7,500 originally claimed as the balance of the price of the cotton, or whether Mr. Stubbendorff's counter-claim was so excessive that he preferred baying Tls. 500, to endeavoring to recover the balance of Tls, 2,000, which he alleged to be due to himself, it is impossible to say. Probably the truth lies half way; both parties had exaggerated the amounts really due, and the compromise represented very nearly a fair settlement of the dispute.  It is to be regretted, in Mr. Stubbendorff's interest, that the decision of the Consular Court prevented any elucidation of the latter, by checking the case at its commencement.  We are surprised also, that he did not think it worth while to write a short exposition of it, instead of merely objecting to us that we betrayed a harsh spirit in our observations, through ignorance of the other side of a question which had never yet been made public.  It would have been wiser had he explained wherein our error lay.

Source: The North-China Herald, 16 April 1864

PRUSSIAN CONSULAR COURT.

LIU-CHOW versus STUBBENDORFF.

The following judgment was delivered in the above case by Baron von Radowitz.

"That the defendant be not bound to enter into the suit, and that the plaintiff's claim for Tls. 6,500 with interest, be rejected.

GROUNDS OF JUDGMENT.

Plaintiff enters a claim against the defendant for Tls. 6,500 with interest, being the balance due from the sale of 1,000 bales cotton, on 9th October, 1863.

Defendant objected that plaintiff was not legitimated to the suit, as it was not through him, but through a third person, that the transaction was carried on and, consequently, he was not bound to acknowledge the suit.

When the case was brought into Court, plaintiff deposed as follows.  That it was not with the defendant himself that he closed the bargain for the 1,000 bales of cotton, but with his compradore, named Weng-kwai; but still, it should be considered as done in the name of the defendant through his compradore, and furthermore, he received the first payment of Tls. 7,000 in two bank bills, also through the compradore, and he had been promised the remaining amount by defendant himself.  Plaintiff refers to the custom in Shanghai, according to which foreign merchants are accustomed to buy from native producers through their compradors, and in such a case it is sufficient to make an entry in the comprador's book, which was sometimes signed by the Chinese vendors and sometimes not.

Defendant alleged against this statement that he closed the transaction in question with his compradore Weng Kwai only.  And also, the first payment of Tls. 7,000 was made by him to the order of the compradore who may have given them to the plaintiff; but he denied having given a personal promise to pay the remainder.  Furthermore, defendant denied that such was the custom of the place, as stated by the plaintiff, but said that he used to close bargains with Chinese producers direct, and enter them in a separate book, which was then usually signed by the Chinese vendor.  As for the transaction in question, having been closed by his own compradore, he only made an entry of it in his memorandum book, which he produced.  The defendant's former compradore (Weng Kawi) was brought by the plaintiff as wirness.  He produced his own contract book, which contains an entry about the said transaction, the beginning of which, as read by the translator, is as follows: - "Weng-Kwai, F. Stubbendorff's compradore, buys from Liu-chow-fan," and states that, although the transaction had taken place between himself and Liu-chow-fan, still he considered himself as dealing in the name and by order of the defendant, and not as contracting on his own account.  A special authority of the defendant, which authorizes him in the contract, the witness had not produced.

Under these circumstances, the judge deems it necessary, before he gives a judgment, not only to examine without prejudice for the facts stated, whether the defendant is bound at all to enter upon the suit, but also to suspend his judgment until he be prepared, from the opinion of the representatives of the Shanghai merchants, to certify the customs of the place.  For if, by the principle of the general law, the statements of the defendant, namely that he had not dealt with the plaintiff, but with another person who was not in possession of that special authority, be justifiable; still it would be of importance in this special case, to know the usual custom of this place in transactions carried on through the medium of compradors who have not got a special authority.  Correct understanding on this subject might greatly influence the judgment.

The questions laid by the judge before the respective representatives of a German, English, and an American firm in Shanghai, were.

1. The customs of the place in buying transactions, between Shanghai firms and native producers, through compradors of the firms in general.

2. The customary proceeding in business of this kind.

3. Whether the entry about the transaction in question in the compradore's contract book, was according to the customs of the place, and whether it might be looked upon as binding the firm to the Chinese seller.

In two of the answers received regarding this subject, the custom of Shanghai firms acting through compradores, was denied.  The third one stated that Shanghai firms did a good deal of their business direct with the Chinese producers, but several, also, through the compradores.

Regarding the closing of such bargains direct with the Chinese producers, the opinions have been unanimous, that a signature of the Chinese seller in the book of the firm, would be a necessary requisite.  In the event of a contract being made through the compradore, the first two opinions given, considered the position of the compradore merely that of a broker; and, in this case, thought it necessary to have the contract signed in the firm's book.  It is stated that no particular rule exists in the firm for transactions through comnpradores; it is also further stated that compradores used sometimes to enter such transactions in their books and sometimes not.

The entry, in the compradore Weng-Kwai's book, as previously mentioned, was pointed out, by all three opinions, as not binding the firm to the Chinese producer.  The opinion of the third, which states that the business of some firms is done by compradores, demands, for the liability of the firm in contracts with the compradore, a particular wording like the following. "Proof of the firm's having ordered," or assumed the transactions would be requisite to bind it.

Finally, as to the question of the defendant "whether, if a compradore offer to the firm certain merchandise which the firm then accepts, without having anything to do with a third person, would the compradore of the unknown seller be responsible for the fulfilment?"  As to this, the three opinions stated "that in such cases the compradore only, was to be looked upon as the responsible party."  By these opinions, corresponding in the essential parts, it is sufficiently proved as a general custom of the place, as the plaintiff asserts, does not exist; and further, that, as the circumstances which, according to the custom of the place, would be binding, do not exist, so neither do the conditions which the law requires in a legal contract.

The judge can feel no doubt that the defendant is not bound to answer to the suit, and must therefore decide as before stated.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School