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Colonial Cases

The lorcha Kiangning, 1881

The lorcha Kiangning

United States Consular Court, Shanghai
Denny, 18 July 1881
Source: North China Herald, 22 July 1881

Shanghai, 18th July.
Before O. N. DENNY. Esq., Consul-General, Acting Judicially.
  Re the lorcha Kiangning.
In this matter His Honour today delivered the following
 This is an application on the part of certain creditors of Mr. A. Jenkins, a citizen of the United States, residing at the port of Hankow, to have applied towards the payment of their claims, certain funds now on deposit in this Court, arising from the sale of the American lorcha Kiangning, the property of the said Mr. A. Jenkins, and sold on or about the 10th day of March last to satisfy two execution warrants issued out of this Court, and directed against the property of the  said Jenkins; the first of which is for the sum of $445, interest, and costs in favour of Geo. Derrick, rendered in October, 1877. The second is for the sum of $4,652.03, interest, and costs in favour of J. Maitland & Co.  
  It appears that on the 6th day of November, 1875, Jenkins was the registered owner of the said lorcha, and that on that day he signed the following promissory note:-
  "On demand, I promise to pay Tsuh-ping-yang the sum of sixteen thousand dollars (Mexican) for value received. (Signed Mr. Andrew Jenkins.," Attached to the same paper is the following: "It is hereby agreed between M. A. Jenkins and Tsuh-ping-yang that the said Tsuh-ping-yang accepts as security of the above note, the American lorcha Kiangning, and that if the said M. Andrew Jenkins fail to pay the above note, Tsuh-ping-yang is to have the Kiangning and she is to be transferred (Signed) M. Andrew Jenkins."
  On the same day, this document was attested by R.M. Johnson., then U.S. Consul at Hankow.  In the margin of this paper is the memorandum:
  "Left for record with me on Friday, December 21st, 1877, 3 o'clock and 5 minutes p.m. (Signed) I. F. Shepard, U.S. Consul."
  On the 5th day of January, 1878, a second document was executed by Jenkins and left for record with the U.S. Consul at Hankow, purporting to be another mortgage on the said lorcha in favour of the said Tsuh-ping-yang reciting the same note of agreement above referred to, with the additional sum included of $634.32, which was also paid by Tsuh-ping-yang, it is claimed, for account of the said Jenkins.  
  The petition of Chih-vee-hsien of Hankow alleges that Tsuh-ping-yang died in October, 1878, that he is the legal representative of the deceased, and has the right to the management of the estate for the heirs, and as such should receive the money in question, because of a prior lien by reason of the mortgages referred to.  Not only is the right of the said Chih-vee-hsien to appear as the legal representative of Tsuh-ping-yang denied by the judgment creditors of Jenkins; but it is alleged that the mortgages or pretended mortgages were made in fraud of the laws of the United States, and that this is an additional reason why the petitioners should not receive any portion of the funds referred to. The statements of the petitioner Chih-vee-hsien are so conflicting that they are unworthy of belief, but if they were accepted as true, upon his own showing he has no right to appear as the legal representative of the deceased.  Commenting upon the allegation of fraud in the transaction the learned Counsel for Maitland says in effect that the lorcha in question has been receiving the protection of the American flag in fraud of the navigation laws of the United States, which provide among other things that no vessel shall receive such protection unless it is wholly owned by citizens of the United States, and also commanded by a citzen thereof. Not only this, but it was also a fraud upon the Customs Revenue of the Chinese Government, inasmuch as the act enabled the Chinaman, the real owner of the lorcha, to evade the payment of legitimate charges upon the craft at each Customs barrier she passed in her trips up and down the Yangtsze.  While there can be but little doubt from frequent reports, that such frauds have been perpetrated, and while every precaution should be taken to prevent their repetition, yet the evidence will not warrant that such is the case in this instance.
  With regard to the mortgagee, the case seems to be quite different.  Jenkins says he got the money for which these documents were given as security from a Chinaman in his employ and not from the mortgagees, but added that he had a good reason to believe it was money belonging to the mortgagees.  That he did not receive it all at one time, but in different payments, and in sycee; neither did he receive it with his own hands, but that he was satisfied it was got for him; and that, too, from a person with whom he says he never had any business transactions except to borrow money, and neither did he keep any books in which such transactions were entered.  But perhaps the most improbable feature about the mortgage business is that Jenkins should hand over the possession of the craft, never taking note of her receipts or expenditures, and stipulating that all the earnings should go to pay the interest on the original indebtedness, and this to continue year by year, as it has for nearly six years, with no move on the part of the mortgagees or those interested to foreclose, the debt growing no less, while the only means which Jenkins seems to have with which to pay it fast becoming worthless.  I am of the opinion from what Jenkins says himself and from other circumstances connected with the transaction, that the execution of the mortgages referred to was his voluntary act, without consideration from the mortgagee or any other person.  For it does not appear that the mortgagee knew anything about their execution or record.  These documents, therefore, are void as against the claims of the judgment creditors to this proceeding.  
  The order of the Court is that the judgment of George Derrick, with interest and costs, be first satisfied out of the funds in hand, and that the remainder be applied towards the payment of J. Maitland's judgment.

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