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Colonial Cases

Hanson v. Watson, 1899

[succession]


 

Hanson v. Watson

Supreme Court for China and Japan
Hannen CJ, 8 May 1899
Source: North China Herald, 12 June 1899


 

LAW REPORTS.

H.B.M.'S SUPREME COURT.

Shanghai, 8th May.

Before Sir Nicholas J. Hannen, Chief Justice.

HANSON v. WATSON AND OTHERS.

   Judgment was delivered in this case, which arose out of an application made by Mr. J. C. Hanson, (Messrs. Dowdall, Hanson & McNeill), as the representative of Mrs. Watson, for a grant of administration of her late husband's estate.

   Mr. H. P. Wilkinson opposed on behalf of Mr. Thomas Graham Watson, and Mr. Platt on behalf of Messrs. John Dunlop Watson and George Best Watson, brothers of Mr. Andrew Vane Watson who died intestate, and Jane Anne Watson his sister.  The suit involved important issues.

   His Lordship said -

   This is a case in which John Currie Hanson makes an application as the representative of Mrs. Watson for a grant of administration to her of her late husband's estate.

   It is opposed by Mr. Thomas Graham Watson, Mr. John Dunlop Watson, Mr. George Best Watson, and Miss Jane Anne Watson, brothers and sister of the deceased. 

   The deceased was Andrew Vane Watson who was domiciled in Scotland and died on the 8th of November, 1898, intestate and without issue or parents him surviving, but leaving Emma Watson his widow. The said Andrew Vane Watson was at the time of his death entitled to an undivided share in a certain lot of land situated in the Foochow Road, Shanghai, within the area previously marked out as a British Settlement, and known in the book for the registration of land kept at Her Britannic Majesty's Consulate as lot No. 59, register No. 46.  The exact claim of the plaintiff is for a grant of letters of administration to him as the attorney of the said Emma Watson and for her use and benefit and until she shall duly apply for and obtain letters of administration to be granted to her of the estate and effects of the said Andrew Vane Watson situate within the jurisdiction of the Court.

   The grant of administration was opposed by John Dunlop Watson, George Best Watson, and Jane Anne Watson on the ground that they together with Thomas Graham Watson were next of kin surviving the said Andrew Vane Watson, but in the argument of the case they merely claimed to have joint administration with the plaintiff and seemed to base their claim upon the possibility of there being property belonging to the estate other than the piece of land before mentioned.  Administration to the plaintiff was also opposed by the said Thomas Graham Watson, who claimed that administration ought to be granted to him and him alone on the ground that he was the lawful next of kin and heir according to Scots law of the said Andrew Vane Watson.

   The facts of the case are not in dispute and a great many of the arguments and contentions are common to all parties. It is agreed by everybody that the land in question is what is called immobilia and that the law if England and probably of every other country is that immobilia are subject to the law of the place where the land is situated.  Now the place where this land is situated is China, and under ordinary circumstances the law applicable to its devolution would be the law of China, but it is said that this law ought not and cannot be applied in the present case. It is contended that the law of China is a non-Christian law and that it is of a nature which is quite opposed in some of its aspects to our notions of right and justice.

   For instance, it is said that in the accession of land the son of a concubine would be considered before the legitimate daughter of a wife. It is also contended that to apply Chinese law would be disastrous to a large portion of British land-holders in Shanghai. I am told that by Chinese law a man cannot devise his landed property by will; if this is so, as a large portion of land in Shanghai belonging to British subjects has passed by will, to hold that Chinese law governs its devolution would be to invalidate the title to a large portion of the land here. 

   That the law with regard to land is not necessarily the lex loci where the country of its situation is a non-Christian one and where British subjects have extraterritorial rights seem to be shown by the cases of Turkey and Morocco. In Turkey is has been considered necessary  by special provision of a treaty to affirm that all matters connected with the land and its ownership shall be determined by the Turkish tribunals, and in the case of Morocco it has been considered necessary to stipulate that the law of Morocco shall apply to land owned by British subjects there; from this it may, I think, reasonably be inferred that land in non-Christian countries where extraterritoriality exists does not apart from Treaty come under the law or the authorities of the place.

   Again, if we consider the reason why the common law of England says that the lex loci applies to immovables, we find that the reason does not apply to land situate here. Mr. Dicey, in his book on The Conflict of Laws, points out that the only law where immovables are concerned which is effective is the law of the place, and Mr. Westlake, in his Private International Law, page 188, says:

"The principle of the forum situs, in its application to the land itself is incontrovertible, since only the authorities that exist on the spot can employ force to give possession or take it away.   .   . "

But this is not true with regard to Chinese law and Chinese authorities as applied to land in Shanghai. The Chinese Courts and Chinese authorities have no jurisdiction over any property, whether movable or immovable, belonging to a British subject. 

   It would be useless for a British Court when adjudicating with regard to land in France to say that it passed to A when the law of France said that it passed to B; for the French Court and French authorities would see that the land passed to B no matter what the English Court had decided; but the case here is entirely differennt. If an English Court decides that A is entitled to land in succession to the deceased owner the Chinese Courts and Chinese authorities cannot in any way interfere, although that decision may be entirely contrary  to the Chinese law upon the subject. When a piece of land in Shanghai is acquired by a British subject from the original Chinese owners the Chinese title-deeds are brought to the Consulate, they are sent to the Chinese authorities, and if they are found in order what is called a Taotai's title-deed is handed to the British subject through his Consular authorities.

   If this piece of land is transferred from a British subject to any other foreigner the transfer is executed in the Land Register of Her Majesty's Consulate-General and the Taotai (the territorial Chinese official) is informed that he may know from who to claim the ground rent. The British Consular authorities have always maintained, and successfully maintained, that the Chinese authorities have no right to do anything more than take note of and register the transfer. The Chinese authorities, once the land has passed into the possession of a British subject, have nothing more to do with it, have no jurisdiction over it, can make no regulation concerning it, and are no longer, in fact, in any way interested in it, except to receive the small ground rent amounting to some 14 shillings an acre. It is true that in some of the title-deeds (of which that relating to the lot mentioned above is not one) forfeiture clauses are contained; but in practice these have never been enforced and their existence does not seem to affect the question now under consideration, because these forfeiture clauses cannot be enforced by the Chinese authorities but only through the British Court by the British authorities. I therefore think that I am justified in holding that the Chinese law does not affect the devolution of land belonging to a British subject, although that land is situated in China.

   But although I hold that the Chinese law does not apply in such a case as the present, yet as the subject matter is undoubtedly immovable the lex loci according to the common law of England must be applied to it; we have therefore to ascertain what the lex loci is. Mr. Wilkinson on behalf of the defendant Thomas Graham Watson, has contended that the law of China being put aside the law of the domicile of the owner should be the law to govern in this case. He alleged many reasons which have pressed me very much for applying the lex domicilii. He pointed out that a man probably knows how the law of his domicile will dispose of his immovable property if he does not direct by will how it shall be distributed, but he may be quite ignorant how any other law will dispose of it, and he argued that the intention of the owner of property who dies intestate will be best carried out if we apply the lex domicilii. This may be so, and it may be more consonant with justice that the lex domicilii should be applied, but I think that for me to determine on such cases as the present that the lex domicilii applies would be making and not interpreting the law.

   What has been the practice here in Shanghai where land has been owned by British subjects for more than 50 years? For a long period it was treated as personalty, and at first it is probable that this way of looking at the land owned by British subjects here was correct; for most, if not all, the land which was first leased was leased by merchants and formed part of the partnership property. So long as it formed part of the partnership property it was properly treated as personalty.  As years went on partners in firms went home but left some of their money in the houses and land upon which their business had been conducted, and left to the continuing partners the land and houses which belonged to them; but it did not occur to them or to anybody else at the time that this turned the land from personalty, as it may be contended that it had been before, to realty as it is contended that it became afterwards. The law officers of the Crown have now determined that for probate duty purposes the land here is realty, not personalty; but during the whole of this time sales, leases, and mortgages of land have taken place and have been carried out in accordance with the law of England as notified by the Orders in Council.

   If the law of the domicile of the owner is to govern the case of succession to land here it must also govern the mode of transfer of land. Now British subjects in Shanghai come from all parts of the Empire, some of them from Canada, some from Australia, some from Scotland, some from Ireland, and some from Her Majesty's Indian Empire. Many of these do, and all of them may, own land in Shanghai. According to Tootal's Trusts the British subject does not lose his domicile of origin by residing in China; the result of this is that the transfer of land here in Shanghai, if we hold that the law of domicile is to govern, we shall have to enquire on every occasion what the method of land transfer in the country of the domicile of the owner is; so that no piece of land could be safely transferred from a British subject without first enquiring what that British subject's domicile was, and next what the law of transfer is in, - it may be the French provinces of Canada, it may be Scotland, Ireland, or some other part of Her Majesty's dominions. This does not seem to me to be reasonable, and whether it is reasonable or not it is certain that it has not been the practice here. I cannot be quite sure, but I think I am right in saying that in no case has the law of the domicile of the owner of land been considered when dealing with it.

   But suppose it is held that the Chinese law applies. There is no such thing as a law regulating the devolution or dealing with land throughout China. The land is subject to local customs and the custom of the family owning it. If we were to ask any Chinese magistrate what was the law relating to such land as the land in question in this case, he would want to know what the custom was with regard to it, and it would never occur to him to disregard what had been the custom in dealing with it ever since this kind of tenure had come into existence. I think therefore that whatever way we look at it we come back to the same result, namely, that for my present purpose the lex loci in Shanghai is, in fact, that law which has been followed ever since land here has been owned by a British subject, i.e., the law of England.

   I therefore hold that the property in question in the present case is of the nature of immobilia. That it is subject to the lex loci, that the lex loci is the law of England applicable to immovables in England as modified (if it has been modified) by Orders in Council.

   The form of administration is reserved; costs of the parties to come out of the estate.

 

Source: North China Herald, 3 July 1899

 

LAW REPORTS.

H.B.M.'S SUPREME COURT.

Shanghai, 24th June.

Before Sir Nicholas J. Hannen, Chief Justice.

HANSON v. WATSON AND OTHERS.

  This was a sitting for argument of the question whether the property in dispute in this case should be treated as realty or personalty. Mr. J. C. Hanson (Messrs. Dowdall, Hanson and McNeill), appeared for Mrs. Watson, the widow, and Mr. John Dunlop Watson and Miss Jane Anne Watson, brother and sister of the late Mr. Andrew Vans Watson, who died intestate. Mr. H. P. Wilkinson appeared on behalf of Mr. Thomas Graham Watson, and Mr. W. A. C. Platt (Messrs. Stokes and Platt) on behalf of Mr. George Best Watson.

  The suit involved important issues, and it will be recalled that on the 8th of June his Lordship gave judgment that English law applied in the administration. Against this, it is understood, notice of appeal to the Privy Council has been given, on the ground that Scots law applied.

  Mr. Hanson said that when His Lordship gave his decision the other day he reserved for future consideration the question whether the property in the case was in the nature of personalty or realty. He (Mr. Hanson) wished to contend that it was in the nature of personalty, and Mr. Wilkinson and Mr. Platt would argue on the other side. It would have been no use discussing the point until His Lordship's decision as to the law had been given because, for instance, if it had been held that Chinese law applied then there would have been no necessity to argue whether it was personalty or realty according to English law. The action was opposed by Mr. Wilkinson on behalf of the Scotch heir-at-law; the English heir-at-aw simply came in before with one of his brothers and sister to oppose the application, on the ground that they generally were entitled as next-of-kin, but on the present point Mr. Platt only represented the heir-at-law, he (Mr. Hanson) having been asked to represent the other brother and sister. It was very curious that the question should never have been judicially decided in that Court before, as it was one on which there was a very great difference of opinion amongst the lawyers in Shanghai. He thought that that was only natural, because the way land was held here was quite different from any tenure of land that apparently was known according to English law, because the land here was not part of British soil. It was not held from the British sovereign but was land in a foreign country from a foreign sovereign. As his Lordship stated in his judgment the other day, for a great many years land held by British subjects here was always treated as personal property, while, as his Lordship stated in his judgment, in more recent years it might be contended that it was held to be real property. As an example of it having been treated as personal property, he the other day came across a deed dated the 28th of July, 1882, which was a conveyance of land made by Mr. Myburgh as administrator for one Mr. Goole who had died intestate which contained a recital that "whereas landed property in Shanghai is treated as personal property," and accordingly it was conveyed as personalty.

  His Lordship - It states there in that deed that the Supreme Court treats the land here as personalty, that is for the purpose of probate duty? There has been no decision of the Supreme Court?

  Mr. Hanson - No.

  His Lordship - It was at that time treated so far as probate was concerned, but the fact that the law officers of the Crown have since treated it as realty and not personalty would be against you. I do not think that the way property is treated for the purpose of probate can have anything to do with it, otherwise you are out of Court.

  Mr. Hanson said he was only stating it as an instance of what His Lordship had previously said. He would refer to the point about probate duty later on. He had also found a conveyance of a large estate last year, in which Mr. Platt's firm were acting for the purchaser, and there the property was transferred as "leasehold." 

  The learned advocate then proceeded to examine the means by which British subjects acquired the right to hold property in Shanghai. They did not, he contended, get it under the Treaty of Nanking, which merely provided that British subjects with their families and establishments, should be allowed to reside for the purpose of carrying on trade at certain cities. They first got the right to acquire land under the treaty dated the 8th of July, 1848, signed at the Bogue, which was afterwards abrogated by the treaty of Tientsin.  By Article 11 of the latter they acquired the right of "buying or renting houses, and of leasing land "in certain cities." The land the subject of the present discussion was acquired before the treaty of Tientsin. Mr. Hanson then read and put in the translation of the deed under which the land was bought. It was dated the 5th of January, 1848, and recited that the firm of Henderson, Watson & Co., purchased the land from Woo and others on the understanding that it should remain in their possession so long as they paid to the Chinese government an annual sum of 1,500 cash per mow, and in the event of the firm wishing to part with it then the sellers of it would take it back. Looking at the treaties and the form of the title deed, he thought it was intended that British subjects were to hold land rather for the purpose of trade, and temporarily. It was also to be observed that in the deed the word "heirs" was not mentioned at all. If they were to have regard to the rules of English law relating to property in England the word "heirs" was necessary in a grant of an estate of inheritance. Under the Conveyancing Act the word "heirs" must be used or the words "in fee simple." After referring to authorities, he contended that the interest in the land in question was an interest unknown to English law of real property, and to all intents and purposes it was analogous to a lease for a thousand years, that is, it was a chattel real.

  His Lordship - Do you not think it is more like a lease in perpetuity?

  Mr. Hanson - Yes, it is.

  His Lordship - What do you say to a lease in perpetuity; do you not know of such a thing in England?

  Mr. Hanson - I have never heard of it.

  His Lordship - There are what are called feu rents in Manchester.

  Mr. Hanson - Yes, in Manchester there are lands held subject to a perpetual rent charge.

  His Lordship said that the present seemed to him the nearest thing to a lease in perpetuity.

  Mr. Hanson went on to remark that the Treaty of Tientsin made the distinction of "buying or renting houses and leasing lands." As his Lordship was aware, it was often the custom in Shanghai to own the house without owning the land. There was nothing in the Order in Council which referred to the registration of land or the way in which it was to be dealt with, except in the case of mortgages, when they had to be registered. But there was something in the Land Regulations, which of course were binding on a British subject, namely, in Article 5, where it said that all transfers of land must be made at the Consulate where the land was registered. The practice in the Consulate in case of death had been to recognise the legal personal representative as the proper person to transfer, and he had never known a case where the heirs-at-law had been required to come in.

  His Lordship - I do not think we can go quite that length. When you say that you know of none I quite agree with you. I know of no instance in which the Consulate, when land is transferred, asked for the heir-at-law, they always ask for the legal representative; that is so. As to whether a passing clause in the Land Regulations can make a law as to how we are to transfer our land, I think that is going rather a long way.

  Mr. Hanson - The result is that land is dealt and transferred here with great facility.

  His Lordship - It is not on account of that clause in the Land Regulations.

  Mr. Hanson - Land is dealt with and transferred at the Consulate with the same facility exactly as Consols are transferred at the Bank of England at home. I am aware that, in a great many cases, transfers at the Consulate are supplemented by deeds of conveyance or assignment, but I think in the great majority of cases where land is bought or sold the transfer of land at the Consulate is usually treated as sufficient. As for probate duty being no longer charged here, I do not think that is a reason that it should necessarily be treated as realty, that is to say freehold property. Probate duty is not now charge because land is regarded as simple immoveable property situate in a foreign country and not because it is of any particular tenure. 

  Continuing his argument, Mr. Hanson said that, if the property were to be treated as real property, then they had the English law of primogeniture, which was essentially a feudal institution. Unless it were very clear that the law of real property applied to land in Shanghai, a cosmopolitan place, which existed more or less solely for mercantile purposes, it would be absurd. If it were treated as real property for one purpose it must be treated as real estate for other purposes, and there would be some curious results. If it were real estate they might have people entailing property, and they could not disentail it, because there would be no place to register the deed to comply with the Act.

  His Lordship - Do you think that the whole of Shanghai would collapse if they could not disentail it?

  Mr. Hanson remarked that it might produce some curious results. In conclusion he urged that the nature of the property was so peculiar and unknown to English law that it should be treated as more analogous to a chattel real, which was personal property.

  His Lordship, supposing that the property were real, drew attention to the possible effect of the Real Property Representative Act.

  Mr. H. P. Wilkinson, on the other side, said, that his contention at the first hearing was that the property was Scottish immobilia, and His Lordship had held that it was not Scotch. His case was still the same, but now he had to deal with the question whether the property was heritable or not. Mr. Hanson had contended that the particular tenure in this case was unknown to English law; on that he (Mr. Wilkinson) thought his learned friend was mistaken. One of the earliest forms of English law was subinfeudation, and the transfer of this property from the original Chinese owners was by practically the same process. They had a perpetual fixed service reserved and nothing more, fixed once and for ever; the same "annual low rent" therefore, paid by the Chinese owners to the Chinese Government, was to be paid by the foreign renter. Messrs. Henderson, Watson & Co. stepped into the shoes of the Chinese owner who parted with his entire interest in the land; nothing more was to be paid to him. This tenure by perpetual lease was known to Roman Law, where ephytensis the lands of corporations, were granted to individuals to be held by them in perpetuity as long as a fixed rent was paid. Such tenants had an actio in rem and could not be ejected save on failure to pay the rent reserved.  

  His learned friend had contended that, from the wording of the title deed, it might appear that the foreign renter merely got a life interest.  He did not think the title deed could be so read, and even if it were, a life interest was freehold. Personalty was of two kinds: certain mobilia, and limited interests in immobilia. A perpetual lease was not a "term," there was no estate over. It could not be said that this was a leasehold by English law, for it was wanting in one necessity of a leasehold - nothing was left.  There was nothing that the grantor could sell or dispose of to anyone else. There was no term, and the tenancy might go on to the end of time. 

  From the wording of the deed itself it would be seen that a grant was in perpetuity to Messrs. Henderson, Watson & Co., a corporation. The firm had registered transferred conveyed some time since their interest to an individual or individuals. Mr. Wilkinson having referred His Lordship to the Inheritance Act as to the meaning of "lands" as there given, referred to the provisions of the treaties, and pointed out that the word "price" as well as rent was used, and drew the attention of the Court to the fact that the first Consular deeds issued as translations of the Chinese title deeds were not in legal terns and that the modern Consular deeds were more carefully drawn, and all contained the word "heirs."

  Mr. W. A. C. Platt, on the same side, contended that the tenure was on all fours with what at home was called a fee simple subject to a rent charge. The Court was not deciding what the tenure was as between the Chinese original grantors and the grantees, the former had no doubt parted with all their interest, and the grantees had obtained either a lease in perpetuity or a fee simple; the Court was deciding as to how this property should descend on the death of a British subject intestate, that is whether as between his representatives it should be treated as realty or personalty. If the tenure was to be judged solely by English law, it was similar to a fee simple, subject to a rent charge. *(See Harrison on Chief Rents, where a form of such a conveyance was in the appendix, and which only differed from the present form by having the words "fee simple" in it.)  Judged strictly by English law, it might be said that the original grantees took only a life interest, which was of the nature of realty.

  Mr. Hanson having briefly replied,

  His Lordship announced that he reserved judgment.

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