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Colonial Cases

Pender and Co. v. Gutschow and Co., 1870

[account stated]

Pender and Co. v. Gutschow and Co.

North German Consular Court, Shanghai
27 May 1870
Source: The North-China Herald, 2 June 1870



May 27th, 1870.

Before W. ANNECKE, Esq., Consul-general, and

E. HUBENER, Esq., Th. PROBST, Esq., Assessors.

PENDER & Co., Manchester, v. C. GUTSCHOW & Co., Shanghai.

Claim for Tls. 6023.14, with interest, on account stated.

   Mr. Bird appeared for plaintiff; and Mr. Ahlers represented defendants.

   The action was brought for recovery of the proceeds of two shipments of goods, belonging to a Leeds firm, advanced upon by the plaintiffs and consigned by them to the defendants in Shanghai, on the understanding that the net proceeds of such goods, when sold, should be remitted direct to the plaintiffs.

   The defendants acknowledged the agreement, but,

1st claimed a set-off as to £500.

2nd pleaded a tender of the balance in Hamburgh.

The claim of set-off was in respect of commissions, which might have accrued to the defendants, from the sale of goods promised to be consigned to them, under an agreement alleged to have been entered into between the plaintiffs and Mr. F. Gutschow of Hamburgh, acting for defendants.

   Mr. BIRD said he would show that the goods in question were despatched on an express understanding that the proceeds should be remitted in Bank bills, direct to the plaintiffs.  He produced, in support, letters of various dates - one of February 2nd 1866, addressed to Messrs. Gutschow & Co., stating that plaintiffs had despatched the goods, and requesting remittances for same to be sent direct to them.  The defendants in acknowledging that letter said, "We fully understand that the net proceeds of these shipments shall be remitted to you."  Another letter from Messrs. Gutschow to his clients, dated 6th May, said "We acknowledge receipt of your favor on 8th March, enclosing letter and B L from Jors & Co., to our care; we not that proceeds are to be remitted to you in first class Bank bills, which shall be carried out."    From other letters which he handed in, he submitted it was perfectly clear that, on the sale of these goods, the proceeds should have been remitted as first stated.

   It was not denied by defendants that they did not carry out this agreement, but, on the contrary, referred the plaintiff to Hamburgh for payment.  Now it was noteworthy that, when they referred for payment to Hamburgh, there was no mention of any counter claim. Bit the reason given was that they had chosen this course in order to allow their friends, already heavy losers, a better rate of exchange. It was when referred to Hamburgh that plaintiffs first heard of this counter claim, through Messrs. F. Gutschow & Co.; but, so far as his clients were concerned, he submitted that the dealings were only with Messrs. Charles Gutschow & Co., of Shanghai.  From the expressions used in the letter "their friends" &c., it could not be argued that F. Gutschow & Co. of Hamburgh was a branch of, or had a partnership connection with C. Gutschow & Co., of Shanghai, but were only ordinary correspondents. 

   He would put the claim thus: A. could not set off against B. a claim he had against C., a distinct third party; and, therefore, no claim against Messrs. F. Gutschow & Co., had against his clients was in any way connected with this case.  But, whether the Court was inclined to allow or disallow this claim of set-off for L. 500, he thought it was clear, in the first place, that his clients were entitled to payment of the balance at once; whereas the defendants had not yet paid a shilling.  The plaintiffs were not bound to go to Hamburgh for payment, and had done so merely as a matter of favour.  If the defendants had a counter claim, why did they not deduct it and remit the balance? 

   As to the agreement alleged to have been made, through which this set-off was claimed, he must plead entire ignorance of it, as he had no mention of it in his instructions; but he would appeal to the Court, and to the two assessors, who were mercantile men, that it was not reasonable to send the plaintiffs back again to Hamburgh for payment; and that, at any rate, judgment ought to be given for the balance after deducting the £500.  The right to contest the agreement said to have been made he would reserve for his clients, when the agreement itself was produced.

   Mr. AHLERS handed in a copy of the agreement in question, as entered into by their agent in Hamburgh with plaintiffs; and also letters referring to the case.  For defendants, he acknowledged the liability for the capital sum claimed, but rebutted the claim of Tls. 375.67 interest thereon.  As against the first arrangement made for remittance of proceeds, the correctness of which we put forward by Mr. Bird he admitted, he handed in a letter from plaintiffs, dated 18th November 1869, from which he inferred that plaintiffs agreed to accept payment in Hamburgh, through F. Gutschow, as proposed to them.  He also handed in a letter of F. Gutschow, dated Berlin, 15th November, 1869, as proof that the sum had been offered.

   Mr. BIRD said he could not, of course, at that time accept the copy as conclusive, though he had no wish to throw doubt on its authenticity; as he had already said his instructions did not extend to it.  He might notice, however, upon looking at the copy that it was only signed by Frank Gutschow, and not as agent for the Shanghai firm.  He submitted, therefore, that defendants had failed to prove the alleged agreement entitling them to the set-off claimed.

   The COURT asked if Mr. Bird would accept the authenticity of the document; if so, the effect on the decision would be at once made known; but if not it would be necessary to have the original from Hamburgh.

   Mr. BIRD could scarcely do so; he was entirely ignorant of the existence of any such arrangement.  But rather than have the whole case postponed, he would consent to let the question of set-oft stand over until the original agreement could be procured from Hamburgh, and let judgment go for the balance.

   The COURT then gave judgment for L. 1,500, with interest from the time of liability on the part of defendants, at the rate of six per cent per annum.  It was a special rule in German law that no higher rate could be claimed.  Further, plaintiffs could bring the other £500 into Court at another time.

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