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Colonial Cases

Hogg v. Krauss, 1879


Hogg v. Krauss

Krauss v. Brown

Supreme Court for China and Japan
French C.J., 30 May 1879
Source: The North China Herald, 3 June 1879




Shanghai, 30th May.

Before G. FRENCH, Esq., Chief Justice.

In Bankruptcy.


   Mr. WAINEWRIGHT appeared for the petitioner.

   Mr. ROBINSON appeared for the defendant.

   This was an action instituted by William Hogg, by his representative Richard Carpenter Brown, against A. A. Krauss, trustee of the estate of Edward Jenner Hogg, bankrupt, for redemption or foreclosure of a mortgage on a number of properties in Shanghai.

   The petition was filed in November last, but the hearing had been delayed owing to the greater part of the evidence having to be taken by commission in England.  The commission had only recently returned, and today was fixed for the hearing. .    .     .     .

   Mr. ROBINSON applied for the hearing to be adjourned until after the first meeting of the creditors of the defendant under his bankruptcy had been held.  The Court was asked to make a decree for an account as between Mr. W. Hogg and the defendant.  By that decree the Court was also asked to direct that the property mortgaged be reconveyed to the defendant after he had paid the principal and interest.  He contended, however, that as a petition for bankruptcy had been filed against Mr. Krauss, he, in consequence, had ceased to be trustee in the estate of Edward Jenner Hogg.

   His LORDSHIP inquired whether Mr. Krauss had resigned his appointment as trustee.  It was quite competent for him to do so, apart from the circumstances in which he was now placed.

   Mr. ROBS ONION said Mr. Krauss had not formally resigned the trusteeship, but he thought he had resigned by filing a petition in liquidation.

   His LORDSHIP repeated that it was competent for Mr. Krauss to resign, apart from the question of liquidation.  This he could do under the 2nd subsection of section 83 of the Bankruptcy Act, 1860.

   Mr. ROBINSON thought if Mr. Krauss had resigned, the plaintiff would have had good grounds of complaint against him, he having been a party to the suit and then voluntarily withdrawing, throwing the plaintiff into the difficulty of leaving hymn without a defendant.

   His LORDSHIP did not think that could be thrown into Mr. Krauss' teeth.  Under the circumstances he would virtually be resigning for the purpose of expediting the trial of the suit.

   Mr.  WAINEWRIGHT opposed the application for an adjournment, and said he could not see any objection to the suit going on in the present position of affairs.  Mr. Krauss was still the trustee of the estate of Edward Jenner Hogg, and further delay would simply be a hardship to the petitioner.  There would be ample opportunity for the new trustee, if one was ultimately appointed in [place of Mr. Krauss, to protect the interests of the estate.  He must ask for the case to proceed, and all he wanted at present was a decree of accounts.

   Mr. ROBINSON replied that according to the rules the Court could take judicial notice of its own transactions, and it was w ell known that a petition for liquidation was filed by Mr. Krauss on the 28th April last, under which meetings had been held, resulting in a resolution that his affairs should be liquidated in bankruptcy and not by liquidation; and the Oriental bank Corporation had filed a petition, which was set down for hearing on the 5th June, to adjudicate Mr. Krauss a bankrupt.  The Court must therefore assume such adjudication would take place, as its own records showed it.  He maintained that under the 83rd and 125th sections, Mr. Krauss had under the circumstances ceased to be a trustee, but supposing his argument on that point was over-ruled, it was certain that he would be adjudicated bankrupt on the 5th of June, when he would cease to be a trustee, and as a matter of convenience he urged that the case should be adjourned.  They would only get into confusion if they proceeded now, knowing that Mr. Krauss must certainly cease to be a trustee in a few days, and then he would no longer be defendant in the suit.

   His LORDSHIP failed to see what objection Mr. Wainewright could have to an adjournment for a few days, and suggested that Mr. Krauss should resign and a new trustee be appointed.

   Mr. ROBINSON thought that would give rise to difficulties.  Either the committee of Inspection or the trustee would have to call a meeting of the creditors, which would take time - more time, in fact, than would elapse before Mr. Krauss was adjudicated bankrupt.

   Mr. WAINEWRIGHT failed to see the slightest reason why the suit should be suspended.  Mr. Krauss had been aware of his position and he had not resigned his trusteeship nor had he yet been adjudicated a bankrupt; therefore he was before the Court as the defendant in the suit, and properly so.  Mr. Krauss had been in office since May, 1878, and knew all the details of the position of affairs, and it would be a great hardship on the petitioner if he was at the eleventh hour told that he would have to delay his suit until another trustee was appointed.  He submitted that a decree against Mr. Krauss would be good, and there would be ample time for the new trustee to pay off the mortgages if he thought proper to do so.

   Mr. ROBINSON said another trustee might take a different course entirely to that Mr.  Krauss was taking.

   Mr. WAINEWRIGHT could not say whether he would be the adviser in the event of another trustee being appointed; and, therefore, the course of action might be entirely different.

   His LORDSHIP was of the opinion that a short delay would be best for all parties.

   Mr. WAINEWRIGHT was sorry he could not fall in with his Lordship's suggestion.  The suit had already been considerably delayed, and his instructions were to push it on, and he saw no reason for an adjournment till some other person was appointed trustee.  He was only asking for a decree if accounts, on what he conceived to be his strict legal rights.

   His LORDSHIP   said it was a pity Mr. Krauss had not resigned.

   Mr. ROBINSON said some weeks ago he had forms printed to call the creditors together to appoint a new trustee, but he had hoped affairs would be arranged in England so as to avoid either liquidation or bankruptcy.  He merely desired to direct the attention of his Lordship to the fact that Mr. Krauss had presented a petition for bankruptcy and was about to be adjudicated a bankrupt.  As soon as that took place he would certainly cease to be trustee and there would be no defendant to the suit; and the grounds upon which he put his application for an adjournment were these - that by section 125, all the provisions of the act so far as they were applicable were applied to liquidations by arrangement in the same manner as if the word bankrupt included a debtor whose affairs were under liquidation, and Mr. Krauss' affairs were under liquidation.

   Mr.  WAINEWRIGHT urged that they were not.

   Mr. ROBINSON said his contention was that Mr. Kraiss' affairs were under liquidation, and that if they substituted those words for the word bankrupt - that is, if the 125th section was read with the 83rd section - no reasonable construction could be put on the two provisions other than that of a disqualification of the trustee in precisely the same manner as if he had been adjudicated a bankrupt.  Moreover, as a matter of fact, the Court had unlimited power, under the 74th rule, to adjourn suits at its discretion.

   His LORDSHIP - How would it be, Mr. Wainewright, if we proceed today, and Mr. Krauss turns out not to be trustee at the present time.

   Mr.  WAINEWRIGHT - That is my affair.  I submit that until Mr. Krauss has been adjudicated a bankrupt, a decree against him would be good, and he has not yet been adjudicated bankrupt.

   His LORDSHIP - And you would run the risk of a decree being made against the person who might not be the trustee of the mortgagor.

   Mr. WAINEWRIGHT was willing to run that risk, and as to what his learned friend had said about the disqualification of Mr. Krauss as a trustee, he pointed out that if they imparted the 125th section into the 83rd section, as had been suggested, when they came to look as to what was the order of adjudication in bankruptcy, they were informed that the appointment of trustee under the liquidation was to be equivalent to an adjudication in bankruptcy.  There had been no appointment of trustee under Mr. Krauss' liquidation, and therefore there was nothing equivalent t to an adjudication in bankruptcy.

   In answer to his Lordship, Mr. ROBINSON admitted that no trustee had been appointed for the liquidation of Mr. Krauss' affairs.

   Mr.  WAINEWRIGHT said the argument of Mr. Robinson did not therefore apply.  Mr. Krauss was still trustee of the estate of the mortgagor, and until he was adjudicated bankrupt an order against him was good.

   His LORDSHIP said he would consider his decision and deliver it at 10.30 a.m. today.

31st May.

   This action, instituted by William Hogg, by his representative Richard Carpenter Brown, against A. A. Krauss, trustee of the estate of Edward Jenner Hogg, a bankrupt, for the redemption or foreclosure of a mortgage on a number of properties in Shanghai, was before the Court on the previous day.  Mr. Robinson then applied for the hearing to be adjourned on the ground that Mr. Krauss, owing to his liquidation and pending bankruptcy, had ceased to be the trustee of the mortgagor, and his Lordship took until this morning to consider the point.

   His LORDSHIP now said - This is a suit by a mortgagee against the trustee in bankruptcy of the mortgagor, for redemption or foreclosure of the mortgaged property and it came on for hearing yesterday.  Upon its coming on for hearing Mr. Robinson, on behalf of the defendant, objected to the defendant being sued in the character of trustee in bankruptcy of the mortgagor, because he contended that the defendant no longer filled that character in which he alone was seeds, and he based his objection on two grounds.

   First, he said that the trustee of the mortgagor had been unable to meet his pecuniary arrangements, and that at a meriting of his creditors it had been resolved that his affairs should be liquidated in bankruptcy, under the Act of 1869.  Further, he said that a petition had been presented to this Court by a creditor of the defendant to adjudicate him a bankrupt; and, also, that the petition had been served on the defendant.  I will take the last objection first. The Act says, in the 5th subsection of the 83rd section, that if a trustee under liquidation be adjudged bankrupt, he shall cease to be trustee.  In this case the trustee has not been adjudicated bankrupt, and there is nothing in the act which says the presentation of a petition and service of it on the bankrupt shall be tantamount to an adjudication; therefore that ground of objection, I think, fails.

   The comes the second objection as to whether the circumstance of its having been resolved that the affairs of the defendant should be wound up under liquidation, under the Act of 1867 - whether that is of itself a cause for his vacating the office of trustee.  In support of that objection Mr. Robinson had referred to subsection seven of the 125th section of the Bankruptcy Act of 1869.  It appears to me that that clause only applies where a trustee under liquidation has been appointed.  In this case Mr. Robinson himself admitted, in reply to a question, I think, from me, that there had been no trustee appointed under this liquidation.

   Under these circumstances, it seems to me that the two objections fail, and that the defendant at present fills the character of trustee of the mortgagor.  That being so, Mr. Wainewright, you will go on with your case.

   Mr. WAINEWRIGHT proposed to first read the petition and then the evidence taken by commission in England, which, he thought, fully made out a case for the relief asked.

   His LORDSHIP said he had read the petition and also the evidence.  He asked whether Mr. Robinson had any further objections to raise; if not they might take them as read.

   Mr. WAINEWRIGHT did not know what course his learned friend was going to take.

   Mr. ROBINSON said he was simply present to watch the proceedings, and to see that the plaintiff proved his case properly.

   His LORDSHIP said under those circumstances they had better have the petition and evidence read, and proceed in regular order.

   Mr. ROBINSON said it might save time if he said at once that he objected to the Power of Attorney.  It was a Power of Attorney executed in London to be used abroad, and it was not stamped.  Under 17 and 18 Victoria, section 28, documents not stamped could not be received in evidence until the stamp fee and a penalty had been paid.

   Mr. WAINEWRIGHT said as his friend seemed fond of technicalities he might point out that 33 and 34 Victoria, Chapter 39, repealed the section just read by him.  However, he did not wish to waste time, and the same section was virtually re-enacted by the 16th section of the Stamp Act of 1870.  He presumed Mr. Robinson would also raise the same objection to the Deed of Mortgage, which was not stamped, and under which the suit was brought.  This would open up the whole question as to the necessity of stamping such deeds executed in England, relating to property in China, and which were to be produced in Courts out here.

   His LORDSHIP - If the documents were executed out here for use out here they would not requite to be stamped.

   Mr.  WAINEWRIGHT - And I submit that documents executed in England relating to property our here do not require to be stamped for use in Courts out here.

   Mr. ROBINSON maintained that both the Power of Attorney and the Deed of Mortgage must be stamped before they could be used in evidence in the case, and it was doubtful whether either of them was capable of being stamped now.

   Mr.  WAINEWRIGHT said, as a matter of fact, but of course he could not now use it in evidence, that he had a letter before him from Sir Edmund Hornby, his Lordship's predecessor, in which he said he had had hundreds of documents before him which were not stamped.

   His LORDSHIP - Then this is res nova.

   Mr. WAINEWRIGHT - I don't think this point has ever been raised before.

   Mr. ROBINSON - It has not in my experience.  I don't remember it ever being mentioned before.

   Mr. WAINEWRIGHT read the 16th section of the Stamp Act of 1870, the one supporting Mr. Robinson objection, and submitted that its operation was confined to Courts sitting in the United Kingdom, that it was strictly local and had no application to Courts in China.  He also read the 17th section, which he thought was more in favour of Mr. Robinson's contention than the 16th, and submitted that these two sections must be read in conjunction with each other, and also in connection with other sections he should refer to.

   He then read No. 1 Regulation made by the Minister at Peking under the China and Japan Order in Council, directing that all deeds were to be registered in H.M.'s Consulate, and then cited the 26th section of the Stamp Act, which imposed a penalty of £10 on an official who registered an unstamped document.  If, therefore, the Stamp Act applied to China, the Consular officials had a heavy and terrible reckoning before them, and the penalties due by them to the revenue must be something appalling from his own experience of unstamped documents registered.  The Mortgage Deed in the suit was registered in the Consulate on the 3rd Dec., 1873, and, therefore, if the Stamp Act applied, somebody was liable for a penalty of £10 for its registration.

   Mr. ROBINSON did not think Mr. Wainewright's argument would terrify the officers below very much.

   His LORDSHIP said however hard-hearted it might appear to be, he should be obliged in construing the Act to disregard the clause as to the penalty and let it take its course.

   Mr. WAINEWRIGHT maintained that the Court in reading the 16th section of the Stamp Act could not substitute "Courts in China" for "Courts in the United Kingdom," and that the Act had no application beyond the Courts of the United Kingdom.  As proof that it was intended that the Stamp Act should not apply here, he explained that the Court had no machinery for stamping or collecting the fees therefor.

   Mr. ROBINSON POINTED OUT THAT THE Order in Council distinctly stated that the law of England was to be administered in this Court - the Statute Law, the Common Law, and the Rules of Equity were to be their guide.  For instance the Statute of Limitations applied, and why, therefore, should not the Stamp Act.  If it was not so, the law must have been very much misunderstood, for he had never received a Power of Attorney from England which was not stamped.

   Mr. WAINEWRIGHT said his experience was just the reverse.  He had several that were unstamped.

   Mr. ROBINSON was of the opinion that it was the exception and not the rule for Powers of Attorney not to be stamped.  He could produce twenty-five in the course of half-an-hour and they were all stamped.  He had never seen an unstamped one before today, and if Mr. Wainewright's view of the Act was correct, it was strange it had never occurred to professional gentlemen at Home to save their clients the expense of stamping.  It would be worth while to inform them on the point if the Act was held not to apply.

   Me. WAINEWRIGHT said his connections in England knew it already.  The profession at Home as a rule had very vague ideas as to the geographical position of Shanghai, or anything about the place, and a fee of 6s. 8d. was charged for stamping.

   In answer to his Lordship, Mr. Robinson said his contention was that by the Order in Council this Court was made a Court of the United Kingdom, and that these documents consequently could not be tendered as evidence unless they were duly stamped.

   His LORDSHIP said it was simply a question of paying the stamp duty and the penalty, and when they were paid the documents could be admitted.

   Mr. WAINEWRIGHT replied that that was his view of the matter if the Stamp Act should be held to apply.

   Mr. ROBINSON said it was questionable whether the Power of Attorney was an instrument that could be stamped now.  His impression was that it could not.

   His LORDSHIP said, to speak candidly, if he did hold that the documents should be stamped, he should refer the matter to the Secretary of State, so that the money paid for the fee of stamping and penalty could be repaid if he directed it wrongfully to be paid.

   Mr.  WAINEWRIGHT replied that it was a difficult matter to get money out of Somerset House when it once got there.  The fee for stamping, he believed, was £3.2.6, and the penalty was £10.

   His LORDSHIP decided to consider the question, and if he held that the Stamp Act has application in Shanghai and the documents were capable of being stamped, Mr. Wainewright could pay the fees and the penalty.  As he had already said, if he did so decide, he should submit the matter Home.

   Mr. WAINEWRIGHT then read the petition, and said that as no answer had been filed he took it that no specific defence could be raised.  He was then sworn and proved the signature of the mortgagee to the Power of Attorney, and next read the evidence taken by commission in England.  The principal witnesses examined were Mr. William Hogg and Mr. Edward Jenner Hogg, the mortgagee and mortgagor, and both of them deposed that the mortgage was a bona fide transaction and that the amount of the mortgage was well as the interest had not been repaid.  On this evidence he asked for a decree of foreclosure in the usual form.

   His LORDSHIP asked Mr. Robinson, how about a sale?

   Mr. WAINEWRIGHT said his Lordship's question took him by surprise.  The mortgagor neither had nor asked for a sale, and he thought if he had intended to do so it should have been pleaded.

   His LORDSHIP thought he had power to order a sale.

   Mr.  ROBINSON was of the same opinion, and remarked that he had made a note of the point, but had not gone into it fully.

   Mr. WAINEWRIGHT claimed that he should have had notice of a sale was to be asked for.

 A sale had not been asked for by the mortgagor.  His Lordship had just invited him to ask for it, but that was all so far.

   His LORDSHIP said he threw out the hint in fairness to the creditors.

   Mr.  ROBINSON suggested that as the question of the admissibility of the Power of Attorney and the Deed of Mortgage was standing over for consideration, His Lordship should name a day on which he would give his decision on that point, and in the meantime the mortgagor could consider whether he felt justified in asking for a sale.

   Mr.  WAINEWRIGHT pointed out that according to a citation from the Bankruptcy Act given by Seton, page 369, his Lordship could not order a sale unless the consent of the first emcumbrancer was obtained, and he was sure the consent of the first encumbrancer could not be obtained in this instance.

   His LORDSHIP said if those words were in the Act, the question of sale was at an end.

   Mr. WAINEWRIGHT explained that the property was odds and ends of individual moieties, scattered here and there, and was most complicated.  It would be extremely difficult to carry out a sale if one were e considered.

   Mr.  ROBINSON agreed with Mr. Wainewright as to the complications of the property, and thought if a sale were ordered it would not be a good speculation for the creditors, unless they could command a very large amount of capital to buy up all the others interest which was almost impossible.

   After some further discussion it was decided that the case should stand over until Wednesday next, when his Lordship will deliver his decision as to the application of the Stamp Act and the admissibility of the Power of Attorney and Mortgage Deed, and Mr. Robinson will then be prepared to say whether he will ask for an order for sale or the usual decree of foreclosure.



Source: The North China Herald, 10 June 1879



Shanghai, 4th June.

Before G. FRENCH, Esq., Chief Justice.


   Mr. WAINEWRIGHT appeared for the petitioner.

   Mr. ROBINSON appeared for the defendant.

   This case has been before the court twice previously.  On the last occasion it was adjourned for his Lordship to consider the question of the application of the Stamp Act in Shanghai, to two unstamped documents which Mr. Wainewright proposed to use as evidence, and to which Mr. Robinson objected on the ground that they must be stamped before they could be admitted as evidence.

   His LORDSHIP said - The question in this case is whether two documents which had been executed in  England for use here and  which had not been stamped, ought to be stamped under the Stamp Act of 1870, in order to render them receivable in evidenced in this Court. 

   The suit was instituted by the mortgagees of property in Shanghai by his attorney, Richard Carpenter Brown, against the trustee in bankruptcy of the mortgagor for redemption or foreclosure of the mortgaged property.  The mortgage was executed in England in 1873 by the mortgagor Edward Jenner Hogg, and the Power of Attorney was also executed in England in February, 1878, by the mortgagee, appointing Brown his attorney for the purpose, among other things, of bringing this action.  A commission had issued from this Court for the examination of witnesses in the United Kingdom on behalf of the plaintiff.  Under that commission witnesses were examined as to the execution of the mortgage by the mortgagor and the amount of mortgage money due. Neither the mortgage nor the Power of Attorney were stamped. Upon their being tendered in evidence it was objected that they were not receivable in evidence inasmuch as they had not been stamped in accordance with the Stamp Act of 1870; and the question is whether they ought to be stamped in accordance with the provisions of that Act in order to render them receivable in evidence in this Court.

   If the question had been whether this mortgage were receivable as evidence in an English Court of justice, I think there would be no doubt that it would be required to be stamped as required by the Stamp Act of 1870. Wright v. The Commissioners of Inland revenue, 25 L.J. reports, N.S. Exchequer 49, is an authority to the effect that under the Stamp Act of 13 and 14 Victoria, chapter 97, a stamp duty is payable in England on conveyances  executed in England  of land situated abroad.  There, the lands were situated in Australia, and it was held that the Stamp Act of 1850 applied. 

   Then, does this mortgage require to be stamped in accordance with the provision of the Act of 1870 in order to render it receivable in evidence in this Court?  I think not.

   It seems to me that the 16th section of the Act of 1870 applies only to Courts of Civil Judicature in any part of the United Kingdom.  The Act imposed terms upon which a document which ought to have been stamped or which was insufficiently stamped, could be properly stamped and admitted as evidence, and those terms, it seems to me, cannot be carried out here.  The Imperial legislature could, if it had thought fit, have extended the provisions of that act expressly here, but it has not done so; and as the words of the Act confine its application to Courts of Justice in the United Kingdom, and as the terms prescribed by the Act for rendering unstamped or insufficiently stamped documents admissible in evidence cannot be complied with here, I think the objections fails.

   I am of the same opinion, on the same grounds with reference to the Power of Attorney, that the objection as to its non-admissibility in evidence because it is not stamped fails.  Under these circumstances, the only question is now as to the terms of the decree.

   Mr. WAINEWRIGHT said that was so.

   Mer. ROBINSON - An ordinary decree for redemption or foreclosure.

   His LORDSHIP - Then you don't ask for an order for sale?

   Mr. ROBINSON replied that he and the trustee had gone through the property with the deed, and they were of opinion that a sale would not be for the good of the estate.

   His LORDSHIP said under those circumstances there would be the ordinary decree for redemption or foreclosure.

   Mr. WAINEWRIGHT said he would draft a decree, and he and Mr. Robinson would submit it to his Lordship in Chambers.

   Mr. ROBINSON asked if he was to understand by his Lordship's decision that conveyances executed in England, relating to land out here, did not require to be stamped for the purpose of being used in evidence in this Court.

   His LORDSHIP replied that his decision was given secundum materiam subjectam.


Source: The North China Herald, 10 June 1879


  2. Shanghai, 5th June.

    Before G. FRENCH, Esq., Chief Justice.

    In Bankruptcy.


       Mr. MYBURGH appeared for the petitioning creditors.

       Mr. ROBINSON appeared on behalf of the debtor.

       This was a petition filed on behalf of the Oriental Bank Corporation to adjudicate Alfred Adolphus Krauss a bankrupt.

       The petition was as follows:-

    1. - That Alfred Adolphus Krauiss of Shanghai, in the Empire of China, resides and until lately carried on business in co-partnership with Charles Shaw, Christopher Nicholson, and William Woolley King, within the jurisdiction of this Honourable Court, that is to say, at Shanghai aforesaid.
    2. - That the said Alfred Adolphus Krauss is indebted to your petitioners in the sum of Tls. 46, 531.95, being the balance due to your petitioners in respect of Bills of Exchange purchased, loans and advances granted, and interest, after deducting the assessed value of certain securities held by your petitioners.
    3. - That your petitioners do not nor does any person or persons on their behalf hold any security on the debtor's estate or any part thereof for the payment of the said sum of Tls. 46,531.95.
    4. - That the said Alfred Adolphus Krauss committed an Act of Bankruptcy within six months before the presentation of this petition.
    5. - That the Act of bankruptcy committed by the said Alfred Adolphus Krauss was that on the 28th April, 1879, the said Alfred ADOLPHUS KRAUSS presented his petition to this Court and therein alleged that he was unable to pay his debts and was desirous of instituting proceedings for liquidation of his affairs by arrangement or composition with his creditors, and therein submitted to the jurisdiction of this Court in the matter of such proceedings.
    6. - That your petitioners on or about the 29th February, 1879, received a notice to attend a general meeting of the creditors of the above-named Alfred Adolphus Krauss, summoned to be held at No. 10, Yangtze Road, Shanghai, at two o'clock in the afternoon of the fourteenth day of May, one thousand eight hundred and seventy-nine.
    7. - That such general meeting was held at the place and time aforesaid and your petitioners represented by John Robertson, their manager at Shanghai, were present thereat, in pursuance of the said notice.
    8. - That the general meeting of the fourteenth of May one thousand eight hundred and seventy-nine was adjourned to the twenty-first day of May, one thousand eight hundred and seventy-nine, in accordance with the provisions of the said Act.
    9. - That at the adjourned general meeting which was held at No. 10, Yangtze Road aforesaid, at two o'clock in the afternoon, your petitioners, represented as aforesaid, being present thereat, the statutory majority of the creditors then assembled resolved inter alia that the affairs of the said Alfred Adolphus Krauss should be administered in bankruptcy, but no resolution for the adjournment of the said meeting was passed.

       Your petitioners therefore humbly pray that on proof of the requisites in that behalf on the hearing of this petition, the said Alfred Adolphus Krauss may be adjudicated a Bankrupt.

       Mr. MYBURGH  said he understood his learned friend Mr. Robinson would admit the allegations in the petition except the  second paragraph, and in regard to that the  f=debtor wished to have particulars of the assessment of the security held by the petitioners - the  debtor merely wished to know how the sum of Tls. 46, 531.95 was arrived at.

       His LORDSHIP - You have mentioned the sum in general terms, and the debtor wants full particulars.

       Mr. ROBINSON - We want to know the mode of the assessment and how they arrive at the sum of Tls. 46,531.95.

       His LORDSHIP - Will you admit that the petitioners are creditors for an amount not less than £50.

       Mr. ROBINSON said he would admit that subject to being supplied with particulates hereafter, which he presumed was sufficient for the purpose of Mr. Myburgh to adjudicate the  debtor a bankrupt.

       His LORDSHIP thought the admission had better come from the debtor himself.

       Mr. ROBINSON replied that the debtor was present and would make the admission.

       In answer to his Lordship, Mr. Krauss admitted that the petitioners were creditors of his to an amount not less than £50, and he had also admitted that he had filed a declaration in the Court admitting his inability to pay his debts.
       It was then arranged that the petitioner should supply the debtor with the particulars of the assessment of the security held by then before noon on Monday.

       Mr. MYBURGH on these facts, asked for an order of adjudication to be granted.

       Mr.  ROBINSON, on behalf of the debtor, had no objection to offer to the order being granted.

       His LORDSHIP - The order will be granted.

       Mr. MYBURGH - And the Registrar, I presume, will be trustee, until a trustee is appointed by the creditors.

       His LORDSHIP - Yes.

       Mr. MYBURGH  explained that at the adjourned meeting of the creditors of Mr. Krauss, held under the liquidation proceedings, a resolution was passed, resolving that his affairs should be administered in bankruptcy, and he (Mr. Myburgh) was entrusted with the registration of the resolution.  From inadvertence he had omitted to register it, forgetting that he had been entrusted with its registration, and he now applied for leave to register it.  Strictly peaking, he  said, it was not necessary to register a resolution of this kind, but if his Lordship granted him leave to do so he should then move that the statement of affairs, and the proofs and proxies produced in the liquidation proceedings be transferred to the bankruptcy proceedings.  He produced authorities in support of his application.

       Mr. ROBINSON offered no objection to the application.

       His LORDSHIP granted leave for Mr. Myburgh to register the resolution, and also made an order whereby the documents referred to were transferred from the liquidation to the bankruptcy proceedings; and the costs of the petitioner and debtor were ordered to be paid out of the estate.

       The next question was the selection of a day for the first meeting of the creditors under the bankruptcy to be held.

       Mr. ROBINSON pointed out the usual notice would have to appear in the London Gazette and in the local paper which was considered out here the same as the London Gazette.  He said that Mr. Charles Shaw, one of the largest creditors, resided in London, and on behalf of the debtor he suggested that the meeting should be held about the first week in August - say the 10th of that month.

       In answer to his Lordship, Mr. ROBINSON said Mr. Charles Shaw had carried on an independent business in London and Liverpool, and his affairs were being wound up under liquidation.  Mr. Charles Shaw was also a co-partner with Mr. Krauss, and was a creditor of Mr. Krauss to the amount of Tls. 140,000 on an account stated and settled some time ago.  In April, from the 14th to the 28th, Mr. Shaw was nitrified of the affairs of Mr. Krauss, and a telegram had been sent informing him that the creditors had decided to proceed in bankruptcy.  His object was to protect the debtor and avoid the possibility of Mr. Shaw stepping in and interfering with any decision the creditors might come to, because his vote in the election of a trustee could turn the scale one way or the other.

       Mr. MYBURGH   wished to avoid delay.  His clients wanted the matter pushed on and settled as soon as possible, and he thought Mr. Shaw had had time to send out a Power of Attorney.

       In answer to further questions by his Lordship, Mr. ROBINSON said nearly all the creditors resided or were represented in Shanghai.  The amount due to unsecured creditors was about Tls. 77,000, exclusive of Mr. Shaw's claim.  Mr. Shaw had some security, but he thought it was likely to be questioned by the other creditors.  So far as the debtor was concerned, the sooner the meeting was held the better it would be for him, and he did not care how soon it was held so long as it was put on record that he had attempted to protect Mr. Shaw.  The proceedings could not be put through too fast for Mr. Krauss.

       His LORDSHIP said there was an interim trustee, and he could not see how the creditors would suffer by a delay.

       Mr. ROBINSON - There is an interim trustee, but that does not matter much.  In reality there are no assets to take possession of.  There is some landed property, but that is mortgaged.

       His LORDSHIP - Do you think, Mr. Myburgh, that the creditors would be prejudiced by delay.

       Mr. MYBURGH replied that he could only speak for one creditor, and he had no further abjection to offer to a delay than the one of general inconvenience.

       His LORDSHIP suggested that the meeting should be held on the 24th July, and ultimately that date was decided upon.


    Source: The North China Herald, 12 August 1879



Shanghai, 7th August.

Before H. S. WILKINSON, Esq., Acting Assistant Judge.

In Bankruptcy.


   Mr. MYBURGH appeared for the Oriental Bank Corporation, who are the petitioning creditors, with a claim of Tls. 46,531.95.

   Mr. ROBINSON appeared for the bankrupt.

   Mr. LINDSAY, the Trustee, appeared in person.

   Today was fixed for the public examination of the bankrupt, who was a partner in the firm of Messrs. Shaw, Ripley and Co.

   ALFRED ADOLPHUS KRAUSS, s worn, was examined by Mr. MYBURGH. He deposed - I have had extensive dealings with the Oriental Bank Corporation for many years.  They were, in fact, my bakers.  As such they were in the habit of granting me facilities for doing business, that is, giving me accommodation.  I have always been on friendly terms with the managers of the Oriental Bank Corporation.  I do not recollect calling at the Oriental Bank when the present manager, Mr. Robertson, first arrived in Shanghai, and asking him to extend to me the same facilities and accommodation that the previous managers had been in the habit of according me.  I think I called on Mr. Robertson but not with the object of asking him for facilities or accommodation.  I did not ever ask for permission to overdraw my account at the bank, but I did overdraw it without permission.  No conversation ever passed between me and the bank on the subject that I remember. It was on the 14th December, 1878, that I overdrew my account.

   Although the Oriental Bank Corporation were my bankers, when I wanted to sell bills I did not ask them to buy them.  On the 27th June, 1878, I received an order from Mr. Charles Shaw of London to remit him a certain sum of money.  The order came by telegram on the 27th June.  I replied by telegram on the 28th:-

Please authorise our drafts to you, to provide for the purpose mentioned in your telegram.  Please send us credit to enable us to comply your order.

To that telegram I got an immediate reply.  It was:-

You may value on us according to your telegram; do so immediately.

That was, in my opinion, a credit.  Drawing upon a man and remitting money top him, I should say could be called a loan on a bill without security beyond the names of the acceptor and the drawer.  I do not think it is suspicious to draw in that way.  It is the custom to invariably discount bills in that way at Home.  This was not an ordinary business transaction, but I consider it was a business transaction.  I have drawn clean bills for the last thirteen or fourteen years.  I have drawn and remitted simultaneously by wire when instructed by Mr. Shaw to do so.  St the time the above telegrams were sent I did not know how Mr. Shaw's credit stood in London.  I had no reason to believe it was not good.  It did not appear strange to me that supposing his credit was good in London he should telegraph to China for a small sum like £6,200.  When Mr. Shaw wanted the money, he might not like to ask for it in London, if even his credit was good there.  For the purpose of carrying out the order he gave me, I sold bills for £6,458 12s. 3d. the bills were bought by the Oriental Bank Corporation.  I disclosed no facts to them until after Charles Shaw's failure, when I was asked by the Oriental Bank to give information respecting the telegrams sent and the transaction generally, and I did so.  This was after Mr. Shaw's bankruptcy, but we had not got into Court.

   I think it quite possible, as a business man, that if the bank had known the nature of the telegrams before they bought the bills, that they would still have bought them.  I handfed the bills to a broker, and did not deal with the bank direct.  I did not give the broker any particular instructions so far as I remember.  The bills I sold were both documentary and clean bills, but the bills representing the £6,458 were all clean bills.  The first bill on account of the £6,458 was sold, I think, on the 5th July, 1878.  The bills were drawn out in the usual way, and were, I believe, all for an odd amount.  The bill of the 5th July was for £1,270 4d. 9d., and there was another the same day for £716 19s. 4d.   These were on account of the £6,458, and were clean bills.  Then there was a bill against documents for £296 12s. 1d.; and on the next day another bill against documents for £805 19s  9d., and another against documents for £1,329 1s 9d. These were bills against documents.

   On the 9th July, 1878, clean bills were drawn on account of the sum of £6,458, for £970 18s 4d, £1,020 17s 11d and £898 14s 7d.; and on the 17th July, 1878, another clean bills was drawn for £1,580 17s 4d.  There were this six clean bills given amounting together to £6,458 12s 3s., and all these bills were for odd amounts.  It has been the custom with us for the last thirteen years to draw clean bills for odd amounts.  I cannot give any reason for doing so, except general orders from Home thirteen years ago.  It was not done for the purpose of making these bills look as if they represented the balances of accounts.  It was simply done to prevent two bills being for the sum and done under order.  The proceeds of the six bills were remitted by telegraphic transfer, I think.

   Mr. MYBURGH. - I should like to know the names of the banks that made the telegraphic transfers, and the names of the broker in each transaction.

   BANKRUPT continued - On the 5th July, 1878, £1,100 were remitted through the National Bank of India.  I do not know the broker's name; I did not pay him.  I was not liable for the brokerage, and therefore did not take the broker's name.  The bank paid the brokerage.  M<r Ferguson was the broker who sold the bills.  I think he sold all of them, both the documentary and clean bills, but I am not sure.  The remittance of £1,100, through the National Bank, was at the rate of 5s. 2 ¼ d.  On the 9th July I remitted £3,300, rate 5-2 ¼, though the Hongkong and Shanghai Bank; and on the 12th July I remitted £1,300, at a rate of 5s. 2 1/4d., through the National Bank of India.  None of the remittances were sent through the Oriental Bank.  The Oriental Bank was not avoided.  They were the buyers.  I do not think I told the brokers that the Oriental Bank had bought the bills.  I did not instruct the brokers as to which banks they were to obtain transfers at.  My offices are next door to the Oriental Bank.   If a bank is known to be buyers, it is not likely that the brokers would go to that bank to sell.  It is not natural that they should go to the nearest bank under the circumstances; they would go where they could get the highest rate.  I cannot answer for what brokers do.  I did not give them any instructions as to the banks they should go to, and I do not think I asked them whether they went to the Oriental bank.

   In addition to the three remittances I have mentioned I remitted $600 on the 20th July, through the Hongkong and Shanghai Bank, the rate being 5s. 2 5/8 d.  The six clean bills I sold amounted to £6,458 12s. 3d., but the amount remitted was £6,300.  The six bills were all drawn on Mr. Charles Shaw's general account.  On the 20th July I advised account sales showing a loss against Charles Shaw and Co. of £240 5s. 2d., which I placed to their debit.  Under ordinary circumstances I should have drawn on Charles Shaw and Co. for this loss of £240. 5s. 2d. 

   About this time, July, 1878, I was shipping both tea and silk.  On the 19th July, I shipped 40 bales of silk, and on the 27th July I shipped 14 bales more.  I drew bills against these goods on Charles Shaw and Co. and sold them to the Oriental Bank.  The whole of the 54 bales were shipped on our account, that is on Shaw, Ripley and  Co.'s account.  I gave the bank a memorandum of the silk shipped which was not on our account.  There was some by  a Chinaman and some by Mr. Cromie.  On the 24th August, 1878, Mr. Cromie shipped 24 bales of silk, thorough our firm, and we drew bills on Charles Shaw and Co. and sold them to the Oriental bank.  On the 22nd June there was a lot of 10 bales, shipped by the Sunda, through our firm, by a Chinaman named Tee San.  We drew on this lot also and sold the bills to the Oriental Bank.  These two transactions are included in my statement of accounts under the head of the Oriental Bank.  The Chinaman's name does not appear, but it will appear in Shaw, Ripley and Co.'s book debts as soon as the Oriental Bank furnish the account sales. The Oriental Bank sent me a memorandum showing the loss on the shipments of silk before I made my statement of accounts in bankruptcy, but it only gave the gross amount and I could not make up the accounts from that.

   The Chinaman has not proved against the estate.  I cannot say whether he is a debtor or a creditor until I get the account sales. I gave the bank particulars of these two transactions.  After my failure I told them that the shipments were all on our account except these two.  With the exception of these two shipments no third party was interested in any of our shipments of silk.  Some of the shipments  were on joint account with Charles Shaw and Co.

   By Mr. ROBINSON - I have been afforded no further facilities by the Oriental Bank since mer. Robertson was manager, other than I received before.  It has always been my practice  during the time I have been in partnership with Mr. Charles Shaw to sell clean bills on him.  I have done this every year.  I was enabled to do so on the Shanghai market up to the end of July, 1878.  In the early part of 1878, in January and April, I sold similar bills on Mr. C. Shaw to the Hongkong and Shanghai Bank and the Chartered Mercantile Bank, and these bills were met - they were duly honored.  During the whole of my experience of Mr. C. Shaw not one of his bills was dishonoured until these bills for the £6,458 were dishonored.  These six clean bills, with the other bills I have mentioned, were placed in the hands of brokers to sell in the open market in the ordinary course of busies.   When I sold these bills I had no suspicion whatever that Mr. C. haw would be unable to meet them.  I had, in the months of May and July, remitted him Tls. 31,000 - Tls. 23,000 in May and Tls. 8,000 in July.  With regard to Tee San's account and Mr. Cromie's account they appear in our books at present as balanced by the drafts, and until I receive the account sales it is impossible to say whether they are debtors or creditors, or to what extent in either case.

   Re-examined by Mr. MYBURGH - The proceeds of the other bills I sold I do not remember whether they were remitted by wire or not, as in this case, but I think it is very probable they were.  I had authority to draw on Mr. Charles Shaw.

   Mr. MYBURGH - Then what necessity wad there for telegraphing for his credit?

   BANKRUPT - I wanted his authority confirmed.  I thought perhaps it might be said his authority referred only to documentary bills, and I wanted his authority for clean bills too, to show the banks in case they asked for it.  I have wired once or twice to him in the same way before.

   By the TRUSTEE - The Tls. 31,000 I remitted in May and July was a portion of the purchase money of property in Shanghai and Hankow bought by me from Mr. C. Shaw.  This money was remitted by Mr. Bland, who held a Power of Attorney from Mr. Shaw to receive it.  I made a report of the value of the property in Shanghai and Hankow for Mr. Shaw.  In that report I valued the property in Shanghai at Tls. 33,000 and that at Hankow for Tls. 9,000, making Tls. 42,000 in all.  I have made no further remittance on account of the purchase money beyond the Tls. 31,000.

   Mr. ROBINSON asked permission to ask the bankrupt a question on behalf of Mr. Shaw, who was not present and whose interest, he thought, out to be protected.

   His HONOUR asked whether Mr. Robinson appeared to protect the interests of Mr. Shaw.

   Mr.  ROBINSON, in reply, said he conceived it to be the bankrupt's duty to protect Mr. Shaw, the bankrupt being his partner in business.  He would put the question and then His Honour could reject it, if it was not admissible.

   Mr. ROBINSON then put the question to the bankrupt.  When you bought the Shanghai and Hankow property from Mr. Shaw did not Mr. Shaw stipulate that you should give him a certain mortgage for the balance of the purchase money?

   His HONOUR said that was a question that could not be put in any case.

   Mr. ROBINSON explained that the trustee had interfered in the examination, and it was very possible he would contest the ownership of this property; therefore, it was desirable that the statements in regard to it should be completed as far as possible.

   His HONOUR was of the opinion that they had nothing to do with affording protection to Mr. Shaw.  If the matter had arisen distinctly out of the previous examination, he would have allowed the question to be out ands answered.  He did not think it arose out of the previous examination and therefore it could not be allowed.

   Me. ROBINSON said he only wanted his HONOUR's ruling on the point that he was not allowed to ask the question.

   His HONOUR then inquired whether there was any other creditor present who wished to examine the bankrupt.

   Me. ROBINSON said that as there were no other creditors present in addition to the creditors who had already examined the bankrupt, he begged to move that the bankrupt to pass his public examination.

   His HONOUR -Does the trustee object to the bankrupt passing his public examination?

   The TRUSTEE - I have received no instructions from the Committee of Inspection, or from the creditors, as to the bankrupt being allowed to pass.

   His HONOUR - On your client's behalf, Mr. Myburgh, do you object?

   Mr. MYBURGH - No. I do not see how I can.

   The TRUSTEE - I don't know what will be the effect of Mr. Robinson's motion would be at all.

   His HONOUR - Have you no legal adviser.

   The TRUSTEE - No, I have no adviser at all.

   Mr. ROBINSON - I do not understand the Trustee raises any objection to the bankrupt passing.

   Mr. MYBURGH - The Trustee, a few minutes ago, was apparently not aware that he could ask the bankrupt questions at any time he liked.

   His HONOUR - Then do I understand the trustee does not object to the bankrupt passing his public examination?

   The TRUSTEE - No, I do not object.

   His HONOUR - Then there will be a decree that the bankrupt do pass his public examination.


Source: The North China Herald, 10 October 1879



Shanghai, 6th October.

Before H. S. WILKINSON, Esq., Acting Chief Judge.

In Bankruptcy.

In the matter of EDWARD JENNER HOGG, bankrupt.


   Mr. Krauss, as the trustee of the estate of Edward Jenner Hogg, instituted proceedings to test the right of the creditors to the proceeds of the sale of furniture in the house occupied by the bankrupt at the time of his failure, and forming part of what is known as Chau-foong property, belonging to the bankrupt's brother, Mr. William Hogg, residing in London, and for whom Mr. R. C. Brown, the defendant, acted as agent.

   Mr. R. C. Brown, through his Attorney Mr. R. E. Wainewright, now moved that his evidence on the above-mentioned motion be taken forthwith, notwithstanding that the case on the motion had not yet been opened.

   In support of this motion Mr. Brown filed an affidavit declaring that he believed himself a necessary and material witness, and that his evidence was necessary to a proper determination of the case.  He had arranged to leave Shanghai by the steamer leaving for Japan on the 8th instant, and it was very important that he should leave at that time.

   Mr. Wainewright appeared in support of the motion.

   Mr. ROBINSON said at the time the motion was filed he appeared for Mr. Krauss, who was then the trustee of the bankrupt.  Since then, however, Mr. Krauss had unfortunately become bankrupt himself and Mr. John Cooper had been appointed trustee in his place.  Now, he appeared for Mr. John Cooper.

   Mr.  WAINEWRIGHT failed to see any grounds, in justice, by which Mr. Brown could not be examined.  The motion set forth that he was a necessary and material witness, and his affidavit stated that he was about to leave Shanghai, and that it was important he should go.  There were no good grounds why Mr.  Brown's mouth should be closed at the present time.  It was true that Mr. Brown had already given some evidence on the subject matter of the motion, because he was examined in May, 1878, in connection with the bankruptcy.  That, however, was long before this motion was filed, and so far as that examination was concerned he e=was examined entirely in the dark as to the tactics of the trustee.  Moreover, at that time, he (Mr. Wainewright) was away in Hongkong and Mr. Hannen appeared on his behalf, and he was not allowed to ask him all the questions he wished to.

   In answer to his Lordship, Mr. WAINEWRIGHT said he looked upon these proceedings in the nature of an action.  He then referred to the cases of ex parte Dicken, in re Pollard, L.R. 8 Ch, page 377; ex-parte Musgrave, in re Wood, L.R. 10 Ch, page 94, and then went on to say that it would be a disadvantage of Mr. Brown was not allowed to be examined now, urging that Mr. Brown should not be placed in a worse position than of he were a defendant in a suit.

   Mr. ROBINSON submitted that this application on the part of Mr. Brown should not be acceded to because it opened the door to great irregularities and great inconveniences.  Mr. Wainewright had said that Mr. Brown had not been examined on this motion.  But Mr. Brown was examined on the very same subject on the 25th and 27th May, 1878, and as far back as the 11th May, 1878, he was aware that the trustee claimed the proceeds of the sale of the furniture.  Mr. Brown was perfectly aware that the examination was adverse to himself' he had Counsel to assist him, and the witness (Mr. Brown) had all the protection he was entitled to.  His next objection was that it was contrary to practice for a witnessed to be examined before the case was opened.  Such a course was not only contrary to all practice, but it was inconvenient, and ought not to be encouraged.  The motion was made solely on heal of Mr. Brown, and whether it was granted or not he maintained that Mr. Brown should pay the expenses of it.

   His LORDSHIP overruled the objections raised by Mr. Robinson to the motion, and the examination of Mr. Brown was proceeded with.

   RICHARD CARPENTER BROWN, sworn, deposed - I have been a merchant and broker in Shanghai.  Now I am nothing at all, being about to leave Shanghai for good.  I distained on the Chau-foong property.  I acted ass Mr. W. Hogg's agent.  I did sign a warrant to Mr. W. Meller, but it was not acted upon.  I distained personally.  I have received confirmation of the distrait from Mr. W. Hogg since it was made.  It has been confirmed by this Power of Attorney from Mr. W. Hogg.  It is dated 26th June, 1878.  It was sent out to me last year.  I believe I received it in 1878.  Mr. Edward Jenner Hogg received a telegram relating to the distrait. I saw it, and I believe the words were "Distrait confirmed."  When the commission was sent to England this Power of Attorney was sent with it.  It was not returned, and I had to telegraph for it to Mr. William Hogg and it was then returned to me by post.

   In my examination on the 25th May, 1878, I said I took possession of Chau-foong on or about the 11th January.  By taking possession, I mean that I moved my office there, and collected the rents of Mr. William Hogg both of the Chau-foong property and his other property generally.  From that time I was Mr. William Hogg's agent.  Mr. Edward Jenner Hogg suggested that I should remove there as the books were there, and it would be better for me to acquire knowledge of the way in which the rents had been collected.  By the rents of Chau-foong property I mean 18, Nanking Road, 18a, Nanking Road, and for a short time the rent of the passage called Maiden Lane. I did not remove my office to Cha-foong with any other motive than that I have mentioned, and I collected the rents under power contained in a letter from Walters and Gush to Burman who transferred his authority to me. I had no letter ordering me to go into the house and take possession.

   The total proceeds of the sale of distress were Tls. 3,710.35.  Out of that I paid the following expenses: - Mr. Meller, for appraising, Tls. 172.66; Mr. Taylor, for selling, Tls. 248.24; Court and Consular fees, Tls. 29.40 ($40).  I retained for Mr. William Hogg Tls. 3,112.50, and I handed to Mr. Wainewright Tls. 147.55 to be paid into Court.

   Cross-examined by Mr. ROBINSON - I signed a warrant to Mr. Meller, but it was not acted upon.  I paid him the Tls. 172.66 for appraising the furniture before the sale took place.  I cannot recollect whether Mr. Meller appraised before or after the distrait.  I think his appraisement must now be in Mr. Francis' possession.  He is not the agent of Mr. William Hogg, and I think I gave it to him with a bundle of papers relating to the furniture generally. 

   I do not know who collected the rents for the Chau-foong property for the months of November and December previous to my taking possession in January, but should say it was Burman.  I had no other written authority to collect the rents than that conveyed in the letter from Mr. Burman to me dated 11th January, 1878, and the one from Messrs. Walters and Gush, dated 31st August, 1878, addressed to Mr. Burman.  The Tls. 147.55 were paid into Court on the 16th May, 1879.  Throwing my memory back, I believe Mr. Meller appraised before the distrait took place, but I really don't recollect.

   Re-examined by Mr. WAINEWRIGHT - I have rendered accounts to Mr. William Hogg from the time I took charge of his property and signed as his agent.  I tendered his accounts monthly.   He has never objected to me proceedings, but on the contrary he has written out expressing himself very much pleased with my management of his property.

   This concluded the examination of Mr. Brown.

   Mr. ROBINSON applied that Mr. Brown being about to leave Shanghai should give security for the fulfilment of any decree the court might make.

   Mr. Wainewright said Mr. F. R. Francis would give the necessary security.

   Mr. ROBINSON promised to draw up the bond.

   It was then arranged that the question of the costs of this application should stand over until the motion was disposed of.

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