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Colonial Cases

The Municipal Council v. Fogg, 1875

[taxation]

The Municipal Council v. W. H. Fogg

United States Consular Court, Shanghai
1875
Source: The North China Herald, 11 March 1875

 

SUMMARY OF NEWS

   A case having much local interest was entered on before the U.S. Consular Court, yesterday.  In form, it is simply a suit by the Municipal Council against Mr. W. H. Fogg for arrears of land-tax, which his agents refuse to pay because they say he is over-assessed.  The interest arises from the nature of the defence.  Mr. Twombly questions the whole status of the council, impugning the validity of the Land Regulations and denying his legal liability.  The Regulations, he contends, have not been signed by the Chinese Government, and have not been sanctioned by the United States Government, but only by their representative at Peking, and are therefore not legally binding. - However, he has always been willing to contribute his quota towards the maintenance of good order in the Settlement, but he refuses to pay the present demand as wrong on two grounds.  In the first place 6 mow out of the 14 which which he is charged are surrendered to the public, and in use as roads, or lying waste as foreshore to which his right is not recognized; in the second, he contends that the rate of valuation  is excessive.

   The Council are quite willing to reduce the assessment to 8 mow, if the title deed is revised, the excess cut off and the stated area reduced to the actual area of Messrs. Fogg and Co.'s compound.  (It was mentioned that this had been already done in another case.)  But the area stated on the title deed has always been taken as the standard for taxation, and the council adhere to it.  Mr. Twombly declines the alternative; - and hence the suit.  The case was only partially gone into yesterday, and stands adjourned till Tuesday.

 

Source: The North China Herald, 1 April 1875

LAW REPORTS Shanghai, 25th March

Before GEO. F. SEWARD, Esq., Consul-General.

W. S. WETMORE, F. F. HITCH, J. C. ALLEN, Assessors.

THE MUNICIPAL COUNCIL v W. H. FOGG

Claim for Tls. 350.70, Arrears of Land-Tax.

   This morning, the Court delivered the following judgment, which had received the unanimous assent of the associates:-

   The leading question which has been raised in the case is the one whether the Land Regulations are of binding effect upon citizens of the United States.

   The British treaty of 1842 contains the first stipulation s under gulch the port of Shanghai was opened to fir feign trade.  They are as follows:

   Article II. - His Majesty the Emperor of China agrees that British subjects, with their families and establishments, shall be allowed to reside, for the purpose of carrying on their mercantile pursuits, without molestation or restraint, at the cities and towns of Canton, Amoy, Fooshowfoo, Ningpo, and Shanghai; and Her Majesty the Queen of Great Britain, &c., will appoint Superintendents, or Consular officers, to reside at each of the above named cities or towns, to be the medium of communication between the Chinese authorities and the  said merchants, and to see that the just duties and other dues of the Chinese Government, as hereafter provided for, are duly discharged by Her Britannic majesty's subject.  

   The next stipulations are contained in the British Supplementary Treaty of 1842 and are as follows:-

   Article VII. -The Treaty of perpetual peace and friendship provides for British subjects and their families residing at the cities and towns of Canton, Fuchau, Amoy, Ningpo and Shanghai without molestation or restraint.  It is accordingly determined that ground and houses, the rent or price of which is to be fairly and equitably arranged for according to the rates prevailing among the people, without exaction on either side, shall be set apart by the local officers in communication with the Consul, and the number of houses built, or rented will be reported annually to the said local officers by the Consul for the information of their respective Viceroys and Governors, but the number cannot be limited seeing that it will be greater or less according to the resort of the merchants.

   The next are those of the United States Treaty of 1844, as follows:-

   Article XVII. - Citizens of the united States residing or sojourning in any if the five ports open to foreign trade shall enjoy all desirable facilities to obtain houses and lands suitable for their purpose, or to lease of the people lands on which to build houses and warehouses or shops, also hospitals, churches and cemeteries.  The local authorities of the two Governments will select in concert the sites, having due regard to the feelings of the people.  The parties interested will arrange between themselves the rates of rents, the proprietors on the one side not demanding exorbitant prices, the purchasers on the other side not insisting in an unreasonable manner on certain points, but each conducting with justice and moderation.

   The French Treaty, made at a later date in the sane year, contains stipulations which I translate as follows:-

   Article XXII. - Every Frenchman who, in conformity with Article II of this treaty, shall arrive at one of the ports open to foreign trade, may, whatever the length of his stay, rent houses and storehouses for the disposal of his merchandize, or rent land and build houses and storehouses himself.  Frenchmen may in the same way establish churches, hospitals, almshouses, schools, and cemeteries.  To this end, the local authorities, after having arranged with the Consul, will designate the quarters most suitable for the residence of the Frenchmen and the sites where they may place the buildings mentioned.  The terms shall be freely discussed between the parties interested, and regulated so far as may be by the average of local prices.  The Chinese authorities shall prevent their people from overcharging or requiring exorbitant rates, and the consul on the other side will take care that the Frenchmen use no violence to procure the consent of the proprietors.  It is moreover well understood that the number of houses and extent of grounds, to be set apart for Frenchmen in the ports opened to trade, shall not be restricted, and shall be fixed according to the need and convenience of those having rights.  If the Chinese desecrate or destroy the French churches or cemeteries, the guilty shall be punished with all the rigor of the laws of the country.

   These are the provisions of the first Treaties, and they are not varied essentially by later ones.

   It cannot be held, I think, that there is anything in these Articles which gives in specific terms to the Foreign Powers concerned the right to set up at this port Municipal regulations, that is to say Regulations for the establishment and control of a police force, and the administration of roads, sewers, public wharves, &c.

   The several treaties, however, provide that citizens of the several Foreign Powers shall be amenable only to the authorities of the respective countries, or to those authorities acting in conjunction with the native authorities.  The appropriate Articles of the United States Treaty of 1844 may be taken to indicate the spirit and scope of the provisions of all the Treaties in this respect.  They are as follows:

Article IV. - For the superintendence and regulation of the concerns of the citizens of the United States doing business at the said five ports, the Government of the united States may appoint Consuls, or other officers at the same timed, who shall be duly recognized as such by the officers of the Chinese Government, and shall hold official intercourse and correspondence with the latter, either personal or in writing, as occasion may require, on terms of equality and reciprocal respect.

Article XXI. -    *     *     *     Citizens of the United States, who may commit any crime in China, shall be subject to be tried and punished only by the Consul, or other public functionary of the United States thereto authorized according to the laws of the United States.    *     *     *

Article XXIV. -      *     *     *     And if controversies arose between  citizens of the United States and subjects of China, which cannot be amicably settled otherwise, the same shall be examined and decided conformably to justice and enquiry by the public officers of the two nation s acting in conjunction.

Article XXV. - All questions in regard to rights, whether of property or person, arising between citizens of the United States in China, shall be subject to the jurisdiction, and regulated by the authorities of their own Government.  And all controversies occurring in China between citizens of the United States and the subjects of any other Governments shall be regulated by the treaties existing between the United States and such Governments respectively, without interference on the part of China.

   These Articles, more or less, perfectly exempt all citizens of the United States from the control of the Government of China.

   It would be possible at this point to indicate the difficulties which, in the course of the development of foreign intercourse with Chiba and in view of these peculiar provisions of the treaties, might be expected to arise in the administration of Municipal affairs, at this and other ports of the Empire.  I am not, however, so much concerned now with these difficulties as with the means which have been taken to meet them.

   The first code of land regulations was prepared by Captain Balfour, H.B.M.'s Consul and Kung Mookew Intendant of Circuit at Shanghai, in 1845.  They were promulgated by the Attendant in a Proclamation, which has been translated as follows:

Proclamation.

   Kung Mookew, Imperially appointed Intendant of Circuit of Soochow-foo, Sung-keang-foo, and Taitsang-chow, and Superintendent of Customs in the province of Keangnan, again issues a Proclamation in accordance with the treaty.

   In the year 1842, the Imperial commands were received in reply to a Memorial permitting commercial intercourse being carried on at the five Ports of Kwangchow, Fuhchow, Heamin, Ningpo and Shanghai, allowing merchants and others of all nations to bring their  families to reside there, and providing that the renting of grounds  for the building of houses, must be deliberated upon and determined by the local authorities in communication with the Consul, both acting in conformity with the feelings of the local inhabitants, so that mutual and perpetual harmony might be attained.

   Hence it has been determined, in conformity with the feelings of the inhabitants and the circumstances of the locality of Shanghai, that the ground North of the Yang-king-pang and South of Le-kea-chang should be rented to English merchants, for erecting their buildings and residing upon, and some Regulations which have been agreed upon in reference thereto, and to which obedience is necessary, are hereinafter specified.

   This proclamation and the regulations mentioned in it were sent by the Intendant to Captain Balfour with a letter of which the following is a translation:-

I now take all the regulations first and last agreed upon by us in communication together, in accordance with the Treaty, which have already been separately published by me, the Tautai, and hung up in the Custom house, and specially forward a copy thereof, requesting that the Honorable Consul will examine into, translate, and publish them generally for the information of all renters of property North of the Yang-king-pang, that they may act in obedience thereto.  Wherefore I write this, wishing the consul daily happiness.

   The code of regulations thus framed and promulgated, was enlarged and extended in 1854.  It was stated in a notice issued by the consuls for Great Britain, the United States and France, that these amended Regulations had received the approval of their respective ministers, and of "His Excellency Woo, the chief local authority representing the Chinese Government at Shanghai."

   Another Code of regulations was prepared at Shanghai in  1860, by the community in public meetings assembled, with the advice of the Consular body, and the judge of the British Supreme Court, and proclaimed in 1869 by the Ministers of Great Britain, Germany, France, Russia and the United States.  They have more lately received the approval of the representatives of other Governments, and at different times that of all the foreign governments concerned.

   The Land regulations of 1845 and 1854, were then the joint issue of the local representatives of the Chinese Government, and of the foreign officials concerned.  The acts thus performed by the Chinese officials have remained unquestioned by the Chinese Government for a very long period, and being within the immediate view of the Government may be held to have been accepted by it.

   The acts thus performed by the representatives of the United States, and approved by the Government, by its Secretary of State, may be remarked upon as follows:-

The Minister and Consuls for the time being of the United States in China are authorized by an Act of Congress to make decrees and regulations for certain purposes.  I long since pointed out the limited scope of this authority, and my view was approved by the Government.  Without entering here upon the argument that was involved, I may say simply that it cannot be held to cover the case now in question.  It is moreover true that the procedure taken by the United States Officials in this case has not been conformed to the Act, and the Regulations would fall if based upon supposed procedure of this kind.

   It may, however, be held that the regulations should be regarded as the issue of the Chinese authorities, and that our action indicates only our approval of them.

   Instances of analogous action may be found in the Harbour and Pilotage regulations.  These were published by the territorial authorities.  Our approval was first procured, and is taken to mean that we admit the right of the Government to make the given regulations, and will support them as regulations, which are, and of right ought to be, of binding effect.

   We come now to the logical position.  What is there in the Treaties which may be construed to mean that China has yielded jurisdiction over her territory? What are all Municipal regulations but an assumption of a certain jurisdiction of the sort?  If we hold such jurisdiction, we do it then by delegation from China, which delegation is outside of Treaty stipulations, although it may be held to be a normal result from them.

   It will be at once said that we are treading upon delicate grounds, for, if we hold our municipal functions by delegation from China, she may at any time withdraw her consent to our exercise of them, and the whole municipal system falls.

   To this I answer that, while foreign Courts can enforce the regulations as the right and proper issue of the territorial sovereignty which the foreign governments have approved as such, foreign officials may in their political capacity defend the regulations and claim that they shall be held intact, as being part of an agreement or contract entered into between the sovereignties involved.  They have been solemnly framed and promulgated.  Properties have been bought, and moneys have been invested under them.  The comfort, convenience, health and good order of a vast population are at stake.  Under these circumstances, many cogent considerations can be adduced in defence of the Regulations and against the right of the Chinese to abrogate or change them without our consent.

   We are moreover so situated in virtue of the extraterritorial provisions of the treaties, that it would not be easy to enforce any regulations without our consent, and we are thus able to exert a certain pressure upon the authorities to uphold such regulations as we deem right.  The authorities have uniformly shown a disposition to give us all reasonable support and in Municipal matters and, if we act reasonably, may be expected to continue to do so.  The situation then is not one which need excite apprehensions.

   It will not be overlooked that the systems of municipal control existing at Shanghai and at other places in China are not uniform.  The Chinese have united with us here in framing and proclaiming Regulations.  At other ports they have leased lands outright, and in this and other ways have agreed to leave Municipal matters to the sole control of foreign authorities and residents.  But the fact that Municipal powers have been delegated elsewhere in some other way than has been done here, is not material, as long as we recognize the principle that such powers are to be considered as coming to us by delegation outside of the Treaties, and take due notice of the terms of the given delegation.

   I have no special knowledge of the method or methods under which Municipal matters are managed at the different foreign settlements of Japan.  As the treaties of Western states with that Empire are similar go those with China, we would expect that questions of Municipal Government would be met there in the same way as in China.  But being of later date, they ought to be more perfect, and should indicate to us the result of matured study in this connection.  Perhaps, then, the fact that Municipal matters there have been left more or less perfectly to the territorial authorities, will illustrate the principle which I have advanced.

   It was remarked in the course of the hearing of this case, that the Land regulations of 1869, have not received the formal sanction of the native authorities.  Upon this point I have to say that these regulations are essentially the same as the Code of 1854.  Moreover, they were communicated to the head authorities in 1869, and have never been objected to by them.  They have on the contrary been consistently sustained and enforced.  I see no reason therefore why the same legal effect should not attach to them as to those of an earlier date.

   So far as I am able to judge, the taxes now sued for were regularly assessed under the regulations.

   I believe also that I have no authority to review or correct the assessment.  I am nevertheless of opinion that assessments should not be based upon the title-deeds without reference to or consideration of the area actually occupied by the individual and the public.  Six fourteenths of the land of the defendant is in the occupation of the public, and he is taxed for the whole area at the same rate per mow as another bund lot holder, whose title-deeds call only for the area within fences, the real value per mow of the respective lots being admitted to be the same.  This is not just, and I trust that the Council will find it convenient to compromise with the defendant upon some equitable basis, as many preceding Councils have done, or to bring the question before the Ratepayers for instructions.

   In this case it will be appropriate for the Council to assume the costs of this suit, the defendant having continuously and consistently offered to settle the matter in an equitable way. 

   As a matter of law, however, I have no recourse, but to give the case with costs against the defendant.

 

Source: The North China Herald, 1 April 1875

THE MUNICIPAL COUNCIL v. W. H. FOGG.

   The case decided last week in the United States Consul Court, is one of the most interesting that has arisen here for some years - interesting both intrinsically and because it is the first deliberate attempt that has been made to assail, in any Court, the status of our Municipal Government.  It is to be regretted that the matter should have been forced to this extreme, and we sympathise with the anxiety shown by the Court that the case should be referred to another tribunal. 

   We do not see, however, that the Municipal Council could avoid pressing it to an issue, in face of the defendant's refusal to bring his case before the next ratepayers' meriting.  As all the formalities necessary to the assessment of his land were observed, and ample time had been allowed for payment of the tax.  Obviously, the Codicil would have failed in their duty, had they not pressed for payment; and we do not see that it was in their power to accept the defendant's proposal of a compromise. 

   With the individual hardship of the case they had nothing to do; they had simply to collect a tax which had been imposed and assessed under a regulation and a custom of thirty years standing.  And we cannot but regret that the defendant did not think it better to appeal for relief to his co-Ratepayers, rather than assail institutions which it is the general interest to uphold.  It may be answered that the action originality with the Council, but we are sure that action would not have been taken had Mr. Twombly intimated his intention of laying the matter before a general meeting of Ratepayers.  As it is, it will be a matter of general congratulation that the Court has seen its way to uphold our local; constitution.

   We have said that we sympathise with the Court in its anxiety to avoid deciding a case which placed it in a painful dilemma.  For, as a matter of fact, the loser must in either case be aggrieved.  If research convinced the Court that the land regulations were not legally binding, the necessity would ensue of upsetting - qua American citizens - the basis of our self-government. If it found itself able, on the other hand, to uphold these regulations, the alternative was to inflict an undoubted hardship on the Defendant.

   The points at issue are so well-known that it is hardly necessary to recapitulate them.  Almost every land-owner in Shanghai had s given up a portion of his property to form Municipal roads.  The original title-deeds, however, have not been altered, and continue to exhibit the full area of the original plot.  The custom has always been to assess the land tax on the areas shown in the title-deeds, with the evident result that land-owners pay, to the Municipality taxes on land which has been surrendered to Municipal use. The hardship is in most cases so trifling that it is probably worth the while of few only to contest it, and of those few none have apparently cared to do so.

   Mr. Twombly's, however, is an extreme case.  The property which he represents is a corner lot, and has therefore suffered the deduction of two roads- with the result that, out of 14 mow inscribed on the title-deed, he is really in possession of only 8 mow.  It is not surprising that he should chafe at paying for nearly double the area of land he really enjoys, and we fully recognise the fact that he has always been willing to pay such a tax as appeared to him to be just. What is regrettable is, that he did not bring the whole question before a meeting of ratepayers, and invite them to direct that assessments shall be made, in future, on the reduced and real area of properties. 

   Such a change would not be without inconvenience.  It would probably involve raising the rate of taxation, and it would unquestionably entail much additional labour in the Municipal offices - with the certain result, however, of more equable taxation.  Whether the ratepayers would think the gain sufficiently great to overpower the inconvenience, we will not venture to predict.  But we are quite clear that it would bah e been preferable to exhaust this, and every other mode of appeal, rather than attack a system of Municipal Government which has been carefully built up, and which does its work ecumenically and well.

   It must not be forgotten, moreover, that the alternative is already open, to Ratepayers, of rectifying their title deeds and reducing the titular to the actual area.  As the assessment is made on the area shown in the title-deed, the desired relief is thus at once attainable.  But Ratepayers have not generally cared to do this; they prefer retaining the larger area, in view of eventualities; and Mr. Twombly especially declines to circumscribe within his compound walls a right which, he contends, reaches over the foreshore to low water mark.  One cannot blow hot and cold with one breath. One can hardly claim ownership of land and yet refuse to pay for it.  If one elects, for any reason, to retain a nominal ownership of land practically surrendered, one can hardly refuse logically to pay taxes upon the land so claimed.  Otherwise, the remedy is at hand - get the title-deed amended.  This is one alternative.  An appeal to the ratepayers to alter the custom of assessment, is another.

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