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Colonial Cases

Li Cheng-Yu v. Jardine, Matheson and Co., 1885

[interpleader]

Li Cheng-Yu v. Jardine, Matheson and Co.


Supreme Court for China and Japan
Rennie CJ, 30 November 1885
Source: North China Herald, 2 December 1885

LAW REPORTS.
IN H.B.M.'s SUPREME COURT FOR CHINA AND JAPAN.
Shanghai, 30th November
Before Sir Richard T. Rennie. Kt., Chief Justice, and R. A. Mowat, Esq., Assistant Judge.
LI CHENG-YU v. JARDINE, MATHESON & CO.
  This was an appeal against an order of interpleader issued on the 1st December, 1884.
  Mr. Drummond appeared for the plaintiff; Mr. Dowdall for the defendants; and Mr. Wainewright on behalf of one Kow Ku-san.
  This case, which has been before the Court for about fifteen years, originally arose out of the sale by Messrs. Jardine, Matheson & Co., the mortgagees, of the steamer Dragon.  After paying off the mortgage there was a surplus remaining of some five or six thousand taels, and for this there appear to have been three claimants, said to be partners in the firm of Holmes & Co., the mortgagers.  Out of these, Mr. Holmes, is an American citizen, while the other two, Li Cheng-yu and Kow Ku-san, are Chinese.  Messrs. Jardine, Matheson and Co., while willing to pay the money to the rightful claimant, wished to guard themselves against paying one claimant and then being sued by another and compelled to pay the money a second time.
  Preliminary proceedings were taken in the Supreme Court by Li Cheng-yu; but either because Si Edmund Hornby, the then Chief Justice, refused to issue an order of interpleader to enable the three claimants to fight out the question of their respective claims in the British Court, or for some other reason, the case did not come on for hearing. The money was in the Hongkong and Shanghai Bank, where the interest has accumulated till the amount is now about Ts. 10,000.
  Li Cheng-yu has since proceeded against Mr. Holmes in the American Court, and against Kow Ku-san before the Chinese authorities, and has obtained in each case an order debarring the defendant from making any claim for the money.  On behalf of Kow Ku-san, however, it is now contended that the trial and decision against him were informal; and it appears that Mr. Holmes also still maintains his right to prosecute his claim in the British Court.
  On the 1st December, the Assistant Judge, on the application of the defendants, issued an order of interpleader as between Kow Ku-san and Li Cheng-yu, making Kow Ku-san the plaintiff and Li Cheng-yu the defendant. Mr. Drummond applied for leave to appeal to the full Court against this order, and the necessary order for the hearing of his appeal was granted by the Chief Justice on the 27th June, 1885.
  Mr. Drummond, in supporting his appeal against the order of interpleader, said such an order had never been granted by this Court in a case where the interpleaders were foreigners, not under the jurisdiction of the Court; indeed he believed that all three Chief Justices, Sir Edmund Hornby, Mr. French, and Sir Richard Rennie had refused to grant orders of interpleader in such cases.
  The Chief Justice said he had never either refused or granted such an application.
  Mr. Wainewright believed that such an application never had been either refused or granted.
  The Chief Justice said it had been refused by Sir Edmund Hornby in this very case some fifteen years ago.
  Mr. Drummond said he had appealed against the order of interpleader in this case simply in order to decide the question whether this Court had power to serve an order of interpleader upon a foreigner out of the jurisdiction of the Court.  If the Court had this power, then all that followed from the issue of the order would be regular; if not, the subsequent proceedings would rest upon an infirm basis.
  The Chief Justice wished to know what was Mr. Drummond's objection to the issue of an order of interpleader.  He thought it would be the most satisfactory course for all parties.  He said originally Messrs. Jardine, Matheson & Co. had been anxious to pay the money into Court, and relieve themselves of all responsibility; one of the methods which occurred to them being the issue of an interpleader.  However, Sir Edmund Hornby had decided that an interpleader could not be issued against foreigners outside the jurisdiction of the Court, and had refused to receive the money into Court.  The result had been a deadlock; and he thought if Mr. Drummond persisted in his objection to the order of interpleader, the result would be to place hem just where they were before - at a dead lock.
  Mr. Drummond said his client had gone to considerable trouble and expense in taking proceedings against Mr. Holmes in the American Court, and had ultimately obtained a decision barring Mr. Holmes from ever claiming the money which was the subject matter of this dispute.  He had also proceeded against Kow Ku-san in the Chinese Court, and had obtained a similar decision.  If an order of interpleader were issued, all his time and trouble would have been wasted, and he whole matter of the respective claims would have to be fought over again in this Court, where it would be exceedingly difficult to produce evidence as to Chinese law - for the matter as between Li Cheng-yu and Kow Ku-san would, of course, have to be decided entirely by Chinese law.
  Mr. Wainewright denied that any proper decision had been given in a Chinese Court against his client, Kow Ku-san.
  The Chief Justice said that what occurred to him was his. The Court had no knowledge of any decisions having been given against Mr. Holmes or Kow Ku-san; and if Mr. Drummond persisted in his objection and satisfied the Court that they could not issue an order of interpleader against foreigners, the position would be this.  The Court had notice that there were two other claims for the money which was the subject matter of this suit - one a claim by an American, and the other a claim by another Chinaman.  Would it be possible for the Court to hear and decide upon the claim of Li Cheng-yu without hearing Mr. Wainewright on behalf of his client?  He imagined that in such a case Mr. Wainewright would take some other steps to enforce his claim, and they would arrive once more at a dead lock.  In the course of further argument he strongly urged upon Mr. Drummond that it was to his client's interest hat an order of interpleader should issue.
Mr. Drummond, in reply, submitted that it was for him to consider what was to the interest of his client.  It seemed to him that the only question for the Court to decide was whether they could issue such an order or not; and he had certainly understood His Lordship to express a wish on a previous occasion that this question should be argued before him and settled.  He apprehended that if it was decided that such an order could not be issued, any steps which Mr. Wainewright would take would not result in any thing which would amount to his getting an interpleader.
  The Assistant Judge pointed out to Mr. Drummond that if an interpleader were issued he would still be enabled to produce evidence as to the decisions given against Mr. Holmes and Kow Ku-san in the American and Chinese Courts.
  Mr. Drummond contended that the issues which would be tried under such an order would practically re-open all the questions which had been tried in the American and Chinese Courts and decided in his client's favour.
  The Chief Justice said his Court was not anxious to decide cases between Chinese, and if Mr. Drummond opposed the issue of an order of interpleader the Court would probably not be disposed to issue such an order on the application of Mr. Wainewright; but the Court was bound to protect the British defendants, and his Lordship seriously warned Mr. Drummond that if he persisted in opposing the issue of such an order, he would be placing grave difficulties in the way of his case being heard at all.
  Mr. Drummond thought his Lordship was going too far in assuming that Kow Ku-san would take any steps to prevent his case being heard.
  Mr. Wainewright said if an order of interpleader were not issued, his client would certainly proceed against Messrs. Jardine, Matheson & Co. for the recovery of the money which they had claimed.
  His Lordship again warned Mr. Drummond that if he persisted in opposing the order, serious difficulties would be placed in the way of his case being heard at all.
  Mr. Drummond said that after such an expression from his Lordship he had no alternative in the interest of his client, but to withdraw his opposition.
  The Assistant Judge remarked that the general question of the right of the Court to issue an order of interpleader against a foreigner not under the jurisdiction of the Court remained undecided.

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