(Plains claim dismissed) Shanghai, June 7.
The last hearing of this.case tok place on. May 31." The. remaining Witness having. given his evidence, Counsel for defendants and. Counsel for. plainti respectively concluded their" arguments. His "Lordship Thareupon gave Judgment verbally inthe following terms:
'In this action the plaintiff' Sun Pa Zung, who isa Chinese citizen and ihe owner and lessor of certain pre~ Inises_ known as 420 Foochow Road, Shanghai, sues the defendants Wen Wel Ca.' Lid, who are a British Timited "Watsity company and the lessees of the said premises under Lease written in" ihe. Chinese Tanguoge and dated April 24, 1000, claiming (1). possession of the said promises upon. a forfeiture for floged. breaches o¢ covenants. con-{ained inthe Lease, and. (2) mesne profits from. January 1, 1940, ull ossassion of the: said premises is delivered up to the plaintiff. I pro-pore in the frst place to deal with the question of the law applicable this ease.
Article 104 of the China Order Council, 1925, ays down that the civil jurisdiction of His Majesty's Courts in China 1s, as far as circumstances admit, to be exercised on the principles. of, and in conformity with, English law for the time being in force. There is, abundant authority for stating that "English law" in the Article must be Interpreted in the wider sense to include, not only the Internal. oF territorial Jaw of Eng Jand, but also the rules of conflict of laws as recognized in England, Tu Secretary of State for Foreign Agatrs v. Charlesworth, "Pilling Ca, (1901, A. C. 373), Lord Hobhous in delivering the Judgment of the Judicial Committee says (at p. 383) "The law of England recognizes the principle that the incidents of land fare governed by the law of its site. Therefore, by the terms of the order, look no further, Her Majesty would exercise her Zanzibar juris-Gletion on the principle that Zanzibar Jaw, "which is Mahomedan law, applies to this case." In Bartlett Barlett (925, AE. 37, Lord Sumner in delivering the judgment fof the Judicial Committee says. (at which apply tae to dispositions of foreign immovables and the law of the domielt to dispositions of for-ign movables, although they are at Jeast as much' part of the principles of the English law as are' the provision of the Wills Act." See als the ease of Hardoon v. Hardoot (1937, UCH, Jan—Mar,, 399. 94) heard in this Court. Dicey in his Conflict "of Laws (Sth Ed. p. 563) slates the principle as follows: "ANI rights over, or in relation to, an Immovable (land) are (subject to the Exceptions hereinafter mentioned) Koverned by the law of the country where the immovable is situate (lex sits).
'The principle referred to has been adopted and. applied by British Courts in China from the earliest times, As long ago as March, 1856, the following Notification appeared in' the Hongkong" Government Gazette:
Diplomatic Department 'A question having arisen as t0 ihe avy Sy" whiten "eontfacts entered: into on Chinese tore Hitory by Chinese subjects for the Serequlated, the matter hes" been The Caw Omcers of tne Crowes whose Spinton 1s a3 follows:
{gibunals and: sadicla" authorities We are of opinion that British
Ghd "peiscipies of publie® of nies lon taw as they are settled and Goncelved by the: common consent before any" Britis tonal la Gin nal questions that may come Telsting' & Ownership. or occupation houses or Tanda, being. dominions of, the the'lgw and custom natural justo. There is no Bret ied lhw't po, anonigeal pei few etl of Rees Ge fees ach iescnait ae akee Tie" prude wee splint ub, ity ohn Of Slade inti tae of Won Vi, "aake Sti" atte Wa%s phe tu Rigen whi Prove Sih te eatin Bolden Iiwee "shea see tad eae toned Tie Seti ili arch tee 2? eke Ghats Seer Wale, wey Box? of ara icteric aseees races tat i ale. 1 Have obese te, wees tne hire angus" Hassel sender ce of a Chinese director ander Chinese manager. No law or usage of any particular country is imported into the contract by Its terms, I therefore hold that this ease falls to be dealt with by the lex situs, that is to say, Chinese law; subject however {to the' possible application of another well-known rule, which I think 1 should be entitled to follow, that where Chinese law on a. particular point cannot be ascertained it must: the held to be identical with the English Law respecting the matter in question. (Dicey, Sth Ed. p. 859).
Under our English law, In con struing all written instruments the (grammatical "and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, 'oF some repugnance or inconsistency With the rest. of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no further.
Hailsham p. 254). This ordinary ule of construction applies (0 conditions and covenants the breach of which "may lead to a forfeiture, and the intention of the parties has bbe found from the language they have used. Conditions of this nature are entitled neither to favour nor disfavour, but a fair construction is to be put upon them according to the apparent intent of the contracting parties. Thus in the case of a covenant with a proviso for re-entry, the Court has to ascertain the meaning of the covenant without regard to the forfeiture, and then see, upon that ascertained meaning, whether a forfeiture has been incurred. But, subject to this principle, the Court Jeans towards a literal oF strict construction of a clause of forfeiture: fang, since the clause destroys or defeats the estate, It is subject to. the "subsidiary rule of construction that it is to be taken most strongly against the person at whose Instance it is introduced, that is, the lessor. Hence," before" the "forfeiture established, it must be clearly shown, fu the case of a condition, that the event specified in the condition has happened. (20 Hailsham p. 249). 1 not understand that the rules. construction as. applied in the Chinese Courts materially differ from those I have slated. Mr. Theodore Chen, who was called as ay expert witness on Chinese law, put the position thus: "If there is any doubt of the right of the landlord to fenter under the contract, the benefit of the doubt is given to the lessee. That is a rule of practice in the Chinese Courts at present."
Clause 1 of this Lease states that the lease is for a fixed period of two years ending January 31, 1941, Jand that "within such period neither party can terminate the lease." this Clause be taken literally, the other Clauses in the Lease—and particularly Clause 7 providing for re-entry by the lessor in the event fof a breach of covenant on the part of the Jessees—become absurd. But T feel that such would not be a correct construction "of the Lease. Clause 1, in my view, was drafted with the provisions of Article 453 of the Chinese Civil Code in mind. Jand the words quoted were inserted fin order to make it quite clear that during the term neither party should bbe at liberty fo terminate the lease by notice under the provision of that Article. 'The words were not intended to conflict, and should not be construed as conflicting, with the other Clauses of the Lease, As regard Clause 3 of the Lease, the' translation" "surrender" "sug:
Text read from the printed page and cleaned; old type leaves the occasional error.