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Colonial Cases

Mercantile Collection Agency v. Wai Quai Chee, 1898



Mercantile Collection Agency v. Wai Quai Chee

Mixed Court, Shanghai
5 September 1898
Source: North China Herald, 12 September, 1898



Shanghai, 5th September.

Before U. K. Cheng, Esq., Magistrate, and the Rev. E. T. Williams, U.S. Assessor.


   This was an action involving an important ruling.

   The plaintiffs were the Mercantile Collection Agency of Shanghai, otherwise Mr. A. Docter, and the defendant a native merchant. The claim was for the recovery of Tls. 1,800 for which the plaintiff sought judgment on the ground that he had purchased the debt from another Chinese. It would appear that the defendant owed a sum of money to one Wong Sing-yun, a lumber-yard proprietor,  and he had sold his debt to Docter for a consideration equal to less than fifty per vent of the amount said to be due, Docter instituting the present proceedings to recover the whole sum.

   Plaintiff said that the defendant had not denied the debt to him but said that he was bankrupt and only able to satisfy his creditors by way of a composition. At the same time he could prove that the man was receiving money from various contracts he had in hand.

   The Magistrate - Are you agent for this man Wong?

   Plaintiff - I am suing as principal.

   The Magistrate - How much did you pay for the debt?

   Plaintiff - Nine hundred taels.

   The Magistrate - How much is the whole claim?

   Plaintiff - Eighteen hundred taels.

   The Magistrate - How did you pay for the debt, by cheque?

   Plaintiff - Yes, on the Hongkong and Shanghai Bank.

   The Magistrate - Not one of these certificates, but a regular bank cheque?

   Plaintiff - Yes, if the Court requires it, it can be seen.

   The Magistrate then proceeded to question in the vernacular the defendant and the man who sold the debt, and expressed his opinion afterwards  that the claim was not satisfactory and that it would be wiser for the man to pay back the money Docter had given him and let him sue the defendant himself.

   Rev. E. T. Williams - On what grounds do you urge him to pay back this money?

   The Magistrate - I believe this man is trying to cheat.

   Plaintiff - But when I called on defendant he admitted the debt to me.

   The Magistrate - The statements of the two men differ and your man can't prove this account. You might be very likely cheated by taking his word of honour in this way.

   Plaintiff - I took his word that he was owed the money. Do you require the book-keeper to come here to certify to these debts? He could easily be brought, if the Court wishes them to be proved correct.

   The Magistrate - I cannot accept them as proved.

   Plaintiff - What would you accept as proof?

   The Magistrate - Make the accountant come.

   Plaintiff - We can do that.

   The Magistrate - I had better make this man pay back what he had received.

   Plaintiff - I can always make him do that if he has lied and told me of something that does not exist.

   The Magistrate - I think this man has cheated you.

   Plaintiff - He is good enough for it, he is in business here. But this man has admitted that he owed it.

   Rev. E. T. Williams - If Mr. Docter agrees to accept the claim I don't see why he should not proceed with it.

   Plaintiff - I have reason to believe that it is a good claim. If he has sold me something that does not exist, I can always make him pay me back.

   Rec. E. T. Williams to the Magistrate - What makes you think it is not correct? If Mr. Docter prefers to have his money back that is all right, but if he prefers to run that risk that is entirely his affair.

   The Magistrate - I do not consider it is a good claim. I can make him pay the money back.

   Plaintiff - But I prefer it otherwise. He can always be made to pay me back if he has sold me something that does not exist. The defendant had admitted the debt and said he was bankrupt and could only pay $200 per thousand. I presume, however, the books of accounts will be accepted as evidence here, as they would be in any other Court.

   The Magistrate - I will lock him up and let him pay you back the money.

   Plaintiff - Why not prove the books incorrect or not first? If the books are correct I maintain it is a good claim.

   The Magistrate - He does not know how it stands. I think he is trying to cheat you.

   Plaintiff - We will get the book-keeper here and he will become my witness.

   The Magistrate - I don't want you to lose any money over this matter.

   Plaintiff - Oh, I will guarantee I will lose no money by it.

   The Magistrate - It is my duty here to look after both foreigners and Chinese and I don't want a foreigner cheated by a man like this.

   Plaintiff - Chinese books as well as foreign books are accepted as evidence in any Court in the world. I will guarantee in the end it will be seen that the defendant owes every cent of this money and that I have brought a just and true claim.

   The Magistrate - Their statements do not agree at all, and I think he is trying to cheat you. I will dismiss the claim as a bad claim.

   Rev. E. T. Williams - I shall have to object to that. Will you say on what ground you decide that the claim is not a just one?

   The Magistrate - I can make him return to Mr. Docter the money he has received.

   Rev. E. T. Williams - But Mr. Docter does not want you to do anything of the kind. He is quite prepared to run the risk.

   Plaintiff - Quite prepared. May I also ask on what ground you dismiss the claim?

   The Magistrate - On the ground that this is a bad claim.

   Plaintiff - Is it not sufficient for this Court if I am satisfied? I, in any event, would be the only sufferer. I have brought claims before that were bad, but in this case I believe it is perfectly just.

   The Magistrate - Well, then let this man send in his petition and sue the defendant himself and prove to me whether it is good or not.

   Plaintiff - That is one way of doing it, but I don't see where I come in as plaintiff. He would be acting as agent for me in that case.

   The Magistrate - Let this man sue against the other and get the money back.

   Rev. E. T. Williams - Do you object to the   sale of a claim from one party to another?

   The Magistrate - I wish to avoid all the cheating business that is going in. I don't want to dee any cunning fellow that might come along cheating foreigners.

   Plaintiff - I think I can protect myself. If the Court refuses to hear the case that is another thing, and I have nothing to do but enter an appeal.

   The Magistrate - I don't decline to hear any case, but I believe this to be a bad claim.

   Rev. E. T. Williams - Do you object to the sale of this claim by Mr. Docter?

   The Magistrate - I say that it is a very bad claim.

   Rev. E. T. Williams - Yes, according to one man's word but not according to another's.

   The Magistrate - Whether it is good or bad I don't see that it has anything to do with a foreigner at all. If Docter has paid Tls. 900 for the claim then this man has cheated him. It is my duty to protect Docter and I will lock this man up until he was refunded the money.

   Rev. E. T. Williams - It does not follow that there has been any cheating. The case has not been proved.

   Plaintiff - I ran the risk voluntarily. I am twenty-one years of age, and I don't think he could force me to do very much if I was not inclined to do it. If the Court requires the book-keeper to correct these accounts we will produce him. He has chosen to sell me the debt and I have paid him money for it.

   Rev. E. T. Williams - Will the Court say definitely whether this sale is a legal sale or an illegal sale?

   The Magistrate - I consider this to be a purely Chinese claim and nothing whatever to do with foreigners. If Mr. Docter has been cheated I can get the money back for him.

   Rev. E. T. Williams - You maintain then, that this man had no right to transfer this claim?

   The Magistrate - Yes. If you want this money back I will lock him up and get it back for you.

   Plaintiff - The Court holds that transfers from Chinese to foreigners are illegal?

   The Magistrate - Yes.

   Plaintiff - He cannot transfer this to me?

   The Magistrate - No. 

   Rev. E. T. Williams - Is that Chinese law?

   The Magistrate - It is the practice so far as I know.

   Rev. E. T. Williams - Chinese custom?

   The Magistrate - Yes, Chinese custom.

   Plaintiff - That decision of course will require an appeal to a higher authority. I understood that the matter had been definitely settled.

   Rev. E. T. Williams - The old magistrate agreed that it was perfectly legal to bring such claims and that is the reason several have been brought in this Court. I understand you are not willing to take the same position as Mr. Chang?

   The Magistrate - No.

   Plaintiff - I think the parties should have been notified of any decision of that kind. It is rather late in the day to bring up a decision like this. I think a proper official notification should be sent to the Consul.

   Rev. E. T. Williams - Will the Court send a dispatch to the American Consul-General, embodying its views on this question?

   The Magistrate - Yes, I will see to it.

   Rev. E. T. Williams - It remains for the plaintiff to appeal if he wishes.

   Plaintiff - I give notice of appeal.

   At the conclusion of the hearing Mr. Docter asked for the return of certain Court documents, and also for a decision in a case concluded eight months ago. He had written several times for the return of these documents, he added, but had not received them.

   The Magistrate undertook to consider the cases referred to and remarked with regard to the papers that he had not refused to send them back. He would look into this matter.


Source: North China Herald, 19 September, 1898


THE following judgment has been delivered in this case, a full report of which appeared in pour issue of the 6th instant.


American Mercantile Collection Agency v. WEI KUEI-KI.

This case is the one in which the American firm, the Mercantile Collection Agency, sued a Chinese, Wei Kuei-ki, for a debt of something over Tls. 1,800, which for a long time he refused to pay. According to the testimony of the Mercantile Collection Agency this claim they bought from the Cheng Tai Lumber Co., for Tls. 900. Inquiring of the witness for the plaintiffs Wang Sung-yun he testifies that he is a shareholder or partner in the Cheng Tai and because Wei Kuei-ki was owing the Cheng Tai over Tls. 1,800 he sold the account to the Mercantile Collection Agency and received from them a cheque for Tls. 900. 

And according to the testimony of Wei Kuei-ki he had done business with the Cheng Tai for very many years and during these years had never entirely cleaned up his accounts, that the whole amount of his debt was not more than Tls. 400.  As for the Mercantile Collection Agency, he knew nothing of it.

   So each testified.

   On examining the Chinese law as to debts I find no statute permitting the institution of suits in this fashion by persons buying claims.

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