Mr. Wilson to Mr. Hay.

No. 550.]

Sir: I have the honor to acknowledge the receipt of the Department’s instruction No. 338, of February 7 last, on the subject of the settlement properties questions.

I have the honor, also, to confirm my telegram of the 26th ultimo.

An accurate translation of the law above mentioned is herewith inclosed. Articles I, II, and VII of the law seem effectually to remove all grounds for dissatisfaction as to the confirmation, past or future, of the titles. The law further appears to guarantee to the property freedom from all charges other than the rents, including free registration of transfers, subleases, mortgages, bequests, etc.

I am quite sure that the law supposes the property held under the perpetual leases to be the lands only. Article IV is designed, I believe, merely definitely to connect these properties, unique in Japan—that is, lands held under perpetual lease and, secondly, buildings standing upon such lands as well as subsidiary rights in the perpetual leases—with the machinery of registration. There is reason to believe that an imperial ordinance in that sense will very soon be issued. It will probably provide for the registration of transfers of perpetual leases at the kencho, and for that of subordinate rights and of houses, when their registration is desired, at the courts of registry. It will be noticed that there is to be indorsement of transfers upon the title deeds themselves in addition to registration.

It has been observed that the application to these properties of the laws relating to ownership makes them liable to be the object of servitudes, such as right of way. Even if this is not a natural consequence of the termination of extraterritorial jurisdiction, it could hardly have any practical importance or be a disadvantage on the whole to the leaseholders in the settlements proper. On the Yokohama Bluff, for instance, where there are also holdings of Japanese, should there be objection, if the question were raised it might possibly be claimed that the bluff was not within the settlements of the treaties. The point seems to me to have no importance.

Recent consultation with some of the American holders of perpetual leases in Yokohama, since the passage of this new law, leads me to believe that they are entirely satisfied with the confirmation of their [Page 360]titles, and that they find the condition of lands is quite free from objection; but that they adhere on the other hand to their belief that buildings should likewise be exempt. I invited any new arguments in support of that belief, and any possible objections to the law in its other two bearings, but nothing has been communicated.

* * * * * * *

I have, etc.,

Huntington Wilson.
[Inclosure.—Translation.]

law relating to rights of perpetual lease.

  • Article I. A right of perpetual lease established for a foreigner or a foreign juridical person by a deed of perpetual lease from the Government shall be regarded as a right in rem, and the provisions of the civil code relating to ownership shall be correspondingly applicable thereto.
  • A right of perpetual lease may be made the object of other rights in accordance with the provisions of the civil code.
  • In cases otherwise regulated by the title deeds, treaties, laws, or ordinances the provisions of the two preceding paragraphs shall not apply.
  • Article II. When a right of perpetual lease is transferred (or transmitted), such transfer (or transmission) can not be set up against third persons unless the fact has been recorded on the title deed by the local government office (chihocho) within whose jurisdiction the land is situated.
  • Article III. The registration tax shall not be imposed on the registration of a right of perpetual lease, nor on the registration of rights that have a right of perpetual lease for their object.
  • Article IV. Special provisions may be enacted by imperial ordinance with respect to the registration of a right of perpetual lease, or to the registration of rights that have a perpetual lease as their object, or to the registration of buildings on lands held under a perpetual lease.

supplementary regulations.

  • Article V. This law shall take effect from the date of its promulgation.
  • Article VI. The provisions of article 45 of the law for the operation of the civil codea shall be annulled from the date of the operation of this law.
  • Article VII. A right of perpetual lease, or rights having a perpetual lease as their object, that have been registered before the operation of this law as superficies, or as rights having a superficies as their object, respectively, shall have the same validity as a right of perpetual lease, or rights having a perpetual lease as their object, duly registered as such.
  1. Reference: Article 45 of the law for the operation of the civil code reads as follows: “45. As to a superficies created for an alien or a foreign juristic person the provisions of the civil code apply only so far as it is not otherwise provided by treaty or regulation.”