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Colonial Cases

Ningpo bankers v. Bohstedt and Co, 1864

[jurisdiction]

Ningpo bankers v. Bohstedt and Co.

United States Consular Court, Shanghai
1864
Source: The North-China Herald, 6 August 1864

 

The Taotai of Ningpo has been guilty of a singular disregard of the treaty, in closing with his official seal the hong of a foreign firm who were engaged in a law suit with some Chinese bankers.  The following decision was given by the U.S.A. Consular Court.

Inasmuch as the testimony in the case fails to show that the position and authority of defendant's compradore differed in any respect from those of compradores generally, except on the principle that foreign houses generally are responsible for all debts contracted by their compradores; and as the court does not regard this principle established either by law or equity, it decides that the plaintiffs have failed to sustain their claim against the defendant, and are therefore liable for the costs of the suit.

Comments on the case will be found in our leading column.

...

THE brief sketch which we give in another column, of an action brought by some Chinese bankers at Ningpo against Messrs. Bohstedt & Co., to recover a large sum borrowed by the latter's compradore, hardly conveys at first glance a sense of the full importance of the case.  The details which have reached us, exhibit the conduct of the native officials throughout the affair in so extraordinary a light, that we should imagine it would not improbably become the subject of a remonstrance at Peking.  On the other hand, it must be admitted that foreign merchants have, to some extent, laid themselves open to similar actions, by the intense confidence which they have been in the habit of reposing in their compradores, and the powers they have allowed them.  This confidence and these powers have been so great, that the Chinese have naturally come to look on these servants as almost independent agents, who were entitled to conclude on their own account, engagements which were binding on the firm.

In the case under notice, the compradore to Messrs. Bohstedt's firm appears to have borrowed from some Chinese bankers at Ningpo a sum of $47,000, representing that he  did so on behalf of the firm; whereas the latter had not only not authorized, but were entirely ignorant of the transaction.  He had for some time been deficient in his cash, and probably borrowed this sum to cover his defalcations. 

In due time, application was made to Messrs. Bohstedt for payment, and when they repudiated the debt, a suit was commenced against them in the U.S.A. Consular Court, in the endeavour to compel them to pay it.  In the meantime, the Taotai actually went to the length of closing and putting his seal on Messrs. Bohstedt's gosowns, and issuing a warning to all natives who might be indebted to them, to withhold lpayment of the sums due intil the action pending hasd been decided. And it was only on the U.S.A. Consul declaring that he would not pronounce judgment until these restrictions had been withdrawn, that His Excellency could be induced to retract.

These are the facts of the case as they have reached us, and it must be admitted that they are sufficiently startling.  To the Ningpo Taoutai, we imagine, belongs the honor of having been the first to assert the principle that it lies within the province of native officials to exercise summary jurisdiction over a foreign hong, situated in the foreign settlement, if the latter becomes involved in a dispute with Chinese.  We have hitherto laboured under the impression that, according to the eleventh article of the American treaty of Tien-tsin,

Citizens of the Unsuited States, either on shore or in ant merchant vessel, who may *** injure the property of Chinese, or commit any other improper act in China, shall be punished only by the Consul or other public functionary thereto authorized, according to the laws of the United States.

But this principle evidently has no place in the code of the Ningpo Taotai.  He arrogates and exercises the right, not only of punishing American citizens, but of punishing before trial, and that too according to Chinese custom, instead of American law.  The sealing the hong of a foreign merchant, not only without reference to, but against the protest of, his consul is a stretch of assumption on the part of a native official which cannot be allowed to pass unnoticed.  A representation of the case will no doubt be made to Mr. Burlingame; and we presume the latter will consider the expression of an ample apology by the Taotai to the Consul, as the least possible reparation that can be offered for so gross a violation of the treaty.  If such an act on His Excellency's part be allowed to pass unnoticed, his next will probably be to arrest some foreign who is engaged in dispute with a native, and try him in his own court.

On the evil of entrusting to a compradore so much power that he is able to make use of the name and credit of the firm he serves for his own purposes, we have already frequently dwelt. The case of the Oriental Bank compradore sufficiently shewed that Chinamen consider a native holding that position has full power to enter into a transaction on behalf of his master; and the case under review furnishes another instance to the same effect.  It is evident that some decided measures are necessary to convince native merchants and bankers that the compradore is not the independent agent they imagine; and that it is necessary for their own protection, that they should require the signature of the firm he represents, as a proof that the transaction is really one on which the latter have authorized.

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