CO129-361 - Public Offices - 1909 — Page 189

This Document is the Property of His Britannic Majesty's Government.]'

C.O.

15123

AFFAIRS OF CHINA.

[March 1.]

SECTION 3.

Rcce Kro 5 MAY 09

187

CONFIDENTIAL.

(8643]

No. 1.

Foreign Office to Mr. Hanson.

Dear Mr. Hanson,

Foreign Office, March 1, 1909. I HAVE had a further conversation with the Germans about jurisdiction in the Concessions in China. I explained to him all the system as you had described it to me, and he posed the following as examples of the difficulties that beset the present position:-

What is the situation when a mortgagor wishes to transfer his equity of redemption to a third person and the third person repudiates the obligations of the mortgage deed? or if the third person attempts to sell the land irrespective of the mortgage, or to mortgage it to a new party, ignoring the existing mortgage?

Are all these cases provided for in the mortgage deed, and when such third person is a foreigner is it quite certain that a foreign Court will enforce upon him the terms of the original mortgage deed?

Again, cases might arise where the foreign Court was bound to enforce against a person of its own nationality provisions of his own law that ran counter to the terms of the deed of mortgage.

E.g., A.B. (British) mortgages his land to the Hong Kong and Shanghae Bank; A.B. transfers his interest to P.Q. (a German). P.Q. borrows 5001. from the Deutsche Bank and spends it on improving the premises; the Hong Kong Bank have to sue P.Q. in the German Court to enforce the mortgage; the German Court will be bound to treat the German Bank as having a lien on the premises which ranks before the Hong Kong Bank's mortgage.

Similarly, under certain conditions, interest due on a mortgage enjoys the same security as the secured principle.

Would you let me know whether in your opinion these are good points, and what you take the answer to be?

I should be so much obliged if you would.

Very truly yours, (Signed)

C. J. B. HURST.

Minutes.

Apparently all the information we have bearing on the marked passage of Mr. Hurst's Minute (annexed) is contained in the 5th paragraph of Inclosure 1 of Sir J. Jordan's despatch No. 103 of the 2nd March, 1908.

From this it would appear that there is no clear case of a British Consular officer's having approved the German requirements at Hankow except by mistake or under a misapprehension.

Besides Hankow the only other German Concession is at Tien-tsin, and from the whole tenor of Mr. Ker's despatch to Sir J. Jordan of the 7th September, 1908 (Inclosure 4 in Sir J. Jordan's No. 433 of the 30th September), it is clear, although not expressly stated, that no case has arisen there.

Under these circumstances we need perhaps not send to Peking to inquire.

Mr. Hurst.

I

agree.

Foreign Office, March 3, 1909.

Foreign Office, March 3, 1909.

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R. C.

B. A.

C. J. B. H.

F. A. C.