I'm going for a despotic conquest in this game (only one city as well). When I destroyed the French, the German settler spawned next to one of my units. Again not 100% but I thought the spawn rules avoided placing new settlers right next to the player but I could be wrong.
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EDIT - when you destroy a civ by getting their settler it says "German civilization destroyed by !". In v05 of the DOS game it was "German civilization destroyed by barbarians". No actual difference in gameplay, just the text.