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Colonial Cases

Hyde, Hertz and Co. v. Gordon Bros, 1876

[debt recovery]

Hyde, Hertz and Co. v. Gordon Bros

Consular Court, Hankow
Hughes, 8 September 1876
Source: The North China Herald, 23 September 1876



Hankow, 8th September

Before P. J. HUGHES, Esq., H.B.M.'s Consul.

GEORGE CLARKE, Esq., A. WARRICK, Esq., Assessors.


   Mr. F. JERDEIN, attorney for the plaintiffs. Conducted the case on their behalf.

   The petition was as follows:

   The petition of Wiloliam Warner Hyde and Henry Hertz, merfchants, trading under the style of Hyde, Hertz and Co., the above-named plaintiffs, shows as follows:-

  1. - That on 3rd August, 1876, the plaintiffs wrote to Messrs. Gordon Bros., handling account current, which shows a balance in favour of the plaintiffs of Shanghai Tls. 237.07.
  2. - That on 10th August, 1876, the plaintiffs applied through their agents, Messrs. Jerdein and Co., for payment of the above sum, which was refused on the ground that Messrs. Gordon Bros., declined to recognise an item of Sh. Tls. 298.34, loss sustained by the plaintiffs on Teas which had been false packed by Messrs. Gordon Bros' godown, during the time the latter firm were acting as agents for the plaintiffs.

   The plaintiffs therefore pray:-

1st. That an account may be taken of what is due for principal and interest on the above claim of Shanghai Tls. 237.07.

2nd. That the defendants may be decreed to pay to the plaintiffs the amount which shall be so found due within one calendar month.

3rd. That the plaintiffs may have such further or other relief as the nature of the case may require.

The defendant to this petition, is, William Grant Gordon, of Hankow, merchant, trading under the style or firm of Gordon Brothers.

   William Warner Hyde and Henry hertz, both of Shanghai, merchants, trading under the style or firm of Hyde, Hertz and Co., the plaintiffs.

By their Attorney, F. JERDEIN.

   The answer was:-

   The answer of William Grant Gordon, merchant, trading under the style or firm of Gordon Brothers, the above-named defendant, is as follows:

1st. - The defendant denies any indebtedness to the plaintiffs, on the contrary, he claims the sum of Taels sixty-one 27/100 (Tls. 61.27) balance of account.

2nd. - The defendant denies that any Teas belonging to the plaintiffs were false packed in his godown; moreover, he affirms that they had they been so, the fact of the plaintiffs having made no claim until twelve months after the Teas were supplied, relieves him of all responsibility.

(Signed) W. G. GORDON, Hankow, 25th August, 1876.

   Mr. JERDEIN read the petition and answer.

   The CONSUL then said the real questions were:-

  1. - Were the parcels of tea false packed in defendant's godown as alleged?
  2. 2. - Is defendant responsible for the damage, amounting to Shanghai Taels 298.74, so incurred?

   Mr. JERDEIN (sworn) handed into Court a wharf certificate, stating the tea to have been country damages, a broker's certificate to the same effect, account sales and invoices  of the tea in question.  The certificates were admitted by consent.  Mr. Jerdein was not cross-examined by defendant.

   Mr. MAJOR, (examined by Mr. Jerdein) said - I am a partner in the firm of Major and Smith.  The wharfinger's certificate is the one usually granted in cases of country damage.  A similar certificate might have been issued if the packages had been stained or outside damaged, but not if they were stained by salt-water.  The fact of country damage is arrived at by testing a small quantity.  If it is found salt, that is considered sufficient proof of sea damage.  Similar corticated of country damage or sea damage are accepted by the trade  In my opinion, a claim cannot be sufficiently established on a "country damaged" certificate, as such a certificate would be granted for tea damaged in any way on board the steamer, except by sea.  A "country damaged" certificate is not conclusive that damage was done before shipment.  The damage might have occurred on board the cargo boat, or in anyway, except by salt-water.  Tea is often re-packed in the trade, and it is the godown-man's duty to look after it; but not being an expert the godown-man could not detect a small quantity of  damage.  What I am saying here, I merely state as my opinion, I am not certain about the matter.  When tea is all damaged, and Government find it out, it is destroyed, but I am not aware whether the owner is bound to hand it over to the Customs for destruction.  When  damaged tea is discovered going in to London it is destroyed by Government; but after it is in the godown, Government, in my opinion, has nothing more to do with it.  A very small quantity of water or bad tea in a box might damage the whole box.  In Hankow, it is usual to select ten chests of tea from a chop, five of which are weighed, and if satisfactory, the chop is passed.  If doubtful, more are opened.  If there is a large quantity of damaged tea in a chop, and godownman finds it out, it is his duty to give information of it.  Such cases are known to have happened.

   Cross-examined by Mr. GORDON. - I am aware that London wharfingers issue three different kinds of certificates for damaged tea, "Saltwater damaged," "Country damaged," and "False packed."  False packing would mean that some other article than tea was found in the box, such as boots, hats,  sand, &c.  very inferior tea, of a lower quality than the original, would constitute  false packing.  A £false packed£ certificate generally specifies the sort of packing.  False packed is not the same as "country damaged."  It would be almost possible to get a clean bill of lading for wet boxes if the wet was not perceived. It would not be possible for a large amount of tea in a chop to be "country damaged," and the godown man, on turning the shop out, not to find it out.  It would be possible for it to be to godown-man's interest to repack damaged tea, but not probable.  In my opinion, tea sent home in the originals boxes generally arrives all right, when repacked it is more sensitive, and may suffer damage going home.  The opinion of the trade is that there is danger in sending home tea in the original boxes.

   Mr. JERDEIN - If it can be proved that bad tea was put into the boxes, can it be called "false packing?"

   Mr. MAJOR - No.

   Mr. W. G. GORDON (examined by Mr. Jerdein) - I am the chief partner in the firm of Gordon bros.  On the 190th June, 1875, Mr. Hyde, then stopping with me, bought 404 ½-chests tea.  Mr. Hyde left on the 12th June, giving orders for 200 ½ -chests to be repacked into boxes in my godown.  These boxes, 673 in number, with the 200 ½ -chests were shipped in the Craigforth for London.  I had an agreement with Messrs. Hyde, Hertz & Co. for 1% commission, with the usual terms for looking after their business.  Godown and proper godown-men were to be provided.  The godown-man paid his subordinates.

   Mr. JERDEIN then put a question relative to the state of accounts between Mr. Gordon and his godown man.

   Question objected to by the Court.

   Mr. GORDON - I have no recollection of Mr. Hyde informing me when here this tea-season, that a claim would be brought.  There were other matters of account standing over with Messrs. Hyde, Hertz & Co. arising out of the shipment of tea.

   This finished the plaintiff's case.

   Mr. GORDON then made a statement on oath, as follows:-

   The tea in question was purchased from Keng-Pow of Hop-Loong Hong (Yang Lin-chang) by Mr. Hyde, on the 10th June, 1875.  The tea was taken into Gordon Bros. godown (wood floor) on the day of purchase,  weighed on the 11th by C. W. Gordon, and inspected and passed by Mr. Hyde, the weight musters (drawn by his own tea boy) being taken by him to Shanghai on the 12th June.  Mr. Hyde having decided to go to Shanghai on the 12th June, left instructions that v200 ½-chests of the order and  half the chop should be repacked intro boxes and shipped to London per Craigforth.  Accordingly, the boxes were purchased by us, and the 200 ½-chests repacked with every care in the usual way into 673 boxes, on the 14th instant, and shipped per Craigforth on the following day.  Invoice of the tea was sent to Hyde, Hertz & Co., on the 18th June, in the usual way.

   The first notice of any claim in respect of the above tea is contained in Messrs. Hyde & Co.'s letter of 28th June, 1876, and the claim itself was sent from Shanghai on the following day.  (Letters handed in to Court.)  I am almost certain that Mr. Hyde made no mention of it during his stay here this year. The terms "false packing," and "country damage" are entirely different as far as they are understood in connection with the tea trade.  The former meaning that the packages contain s tones, sand, clay, inferior tea, stalks, or rubbish, while the latter signifies damage by fresh-water, caked, mouldy or badly heated.  In London, warehousmen grant the following certificates: -  Salt water damage, Country damage, false packing - each signifying a distinct description of damage.

   The tea was bought, inspected, and passed by Mr. Hyde without assistance from me, and the charge of 1% inspecting commission included in invoice by Mr. Hyde's order was returned to Hyde, hertz & Co., as per account (produced.) I received no remuneration whatever for packing the tea in boxes, the exact cost being charged invoice (produced.)  The 1% commission allowed by special agents who buy their own teas is a set off against office work, board, lodging, &c., and no remuneration for buying or inspecting teas, commission agents in such cases incurring no responsibility whatever.  Such damage as is certified to might easily have occurred on board the steamer or in the London warehouse.  One year and three weeks was the time that elapsed from the date of shipmen  to the time that the claim was sent in.  It is usual for teas to be inspected immediately on arrival in London, and if this had been done, the damage must have been discovered last September.

   Mr. EVANS (examined by Mr. Gordon)said I am a partner in the form of Evans, Gough & Co., and have been 15 years in the tea trade in Hankow.  It is usual in London warehouses to grant separate certificates for false packing, country damage, and salt-water damage.  Stones, rubbish, or very inferior tea, constitute false packing.  The term "country damage" implies that the tea is mouldy or wet, the warehouseman thinking that  it has been wetted in China.  If country damage occurred from water on the steamer it would appear, I think on the boxes.  I think no cause on the steamer would induce the warehouseman to give a country damaged certificate.  Tea might be packed insufficiently fired, and, in consequence have certificate returned as country damaged.  Hankow packed tea, repacked into boxes, without being fired, might arrive home damaged.  This was even probable.  I am of opinion that, if the tea was in a badly heated state, the warehouseman would not give a certificate of country damage.  If the tea were mouldy, I think they would give a certificate of country damage.  It is the custom for special agents to come here in the tea season to buy tea.  As a rule they buy their own teas.  I should not consider myself liable for the purchase or inspection of tea bought by a special agent, unless specially requested to do so, and paid for it.  Mt firm do not attempt to inspect tea bought by agents living with me.  It is clearly understood that we are not liable.  I do not look at tea ordered to be repacked, my only business when the inspector has left port is to see that the boxes are good.  It is impossible for tea that is country damaged to be repacked without the godownman finding it out.  It is highly improbable that such a discovery would not be reported by the godownman.  In repacking, country damaged tea would not be put into packages.  It is not likely that a Tea-dealer would bribe the godownman.  With reference to what was said about examination at home, I believe they are more particular now at wharves than they used to be.  I have had no experience of this.

   Cross-examined b y Mr. JERDEIN - I recognize the Wharf Co.'s certificate shewn, as that usually given for country damage.  If the boxes had been stained the certificate would have stated so, but if they had been externally stained they would not have been taken on board at Hankow.  If stained (not by salt-water) the ship would have been responsible; if by salt-water, Insurance Co., if uninsured.  On the certificate produced, a fair claim could be made for country damage, ordinarily, on seller of tea; under the present circumstances, a fair claim cannot be made.

   By the COURT - When country damage certificates have been sent out to me, they have been sent for a claim to be made on the seller.  No inference has ever been made that we were responsible.  I have never heard of a case of a claim made in China for false packing, based on certificate for country damage given at home.

   Mr. ARTHUR SHEWAN (examined by Mr. Gordon) said - I am agent in Hankow for Messrs. Turner & Co.  I know that different certificates are issued for country damage, salt-water damage, and false packing.  Country damaged would imply that the tea was caked, musty, or damaged by fresh-water.  False packing means that the boxes are packed with straw, stones, &c.  Immediately the tea is in the broker's hands, in London, it is customary to examine it.  During this inspection they discover any damage that may have occurred.  On discover of this, the warehouseman makes it known to the owners though the brokers.  (Mr. Gordon here handed a certificate to witness.) I should consider this as a certificate of false packed tea.  They are not more strict at home now in passing tea than formerly.  Mouldy tea would not be passed.  Hankow packed tea re-packed intro boxes would probably go out of condition on the way home.

   By the COURT - It is not possible for false packed tea to receive a certificate of country damage.

   Mr. JERDEIN here said that he used the term false packed, to mean badly packed, not technically.

   YANG LING-CHONG Keng Pao (examined by Mr. Gordon) said - I am a tea broker of Yang Ling-chong hong.  On the 10th June, 1875, I sold 404 ½-chests tea to Mr. Hyde for Tls. 23.3 per picul.  It was Hankow packed.  The teaman told me it was Hankow packed, otherwise I should not have known.

   By the COURT - I told Mr. Hyde it was Hankow packed.

   LONG LOK-CHAI (examined by Mr. Gordon) said - I have been seventeen years godownman to Mr. Gordon.  I remember the chop of tea in question.  Two hundred ½-chests were repacked into boxes.  I repacked 4 ½-chests at a time, and repacked them into boxes.  I found no damage in them.  If damage had been found I should have reported it.  The tea was Hankow packed.  I saw that it was repacked in proper condition.  I know it was Hankow packed from the look of the boxes.

   Mr. GORDON produced books and copy of invoice to prove that the 1% commission for inspecting on the chop was returned to Messrs. Hyde, hertz & Co., and that the amount charged for repacking, viz., Tls. 168.8.2, was the same as that charged by the godownman.

   Cross-examined by Mr. JERDEIN - The return of the 1% inspecting commission is not singular to this case.

   Mr. GORDON then stated that he refused the claim on the following grounds: - The plaintiffs' claim is for false packing, whereas the dock certificates on which the claim is based speak to country damage.  Even if the claims made had been for country damage, he would have refused it, as the damage could not possibly have occurred in his godown; as any damage of the kind named which existed in the ½-chests prior to the repacking, must have been discovered, as the tea was turned out; and the theory that damaged tea was willingly placed into a few of the boxes by our godownman is too preposterous and improbable to argue, especially as there appears to be no question as to the damaged tea being identical with the sound, so far as leaf is concerned.  Mr. Hyde bought, passed, and inspected the tea himself; he, Mr. Gordon, had repacked it into boxers for Mr. Hyde, as a friend; he would not have done so as a responsible party. Such damage as is certified to might easily occur either on board the steamer or in the London warehouses, if stored for any length of time.  It is far from uncommon for boxes packed up-country to arrive in London our of condition; and the fact of the chop in question being repacked in Hankow, prior to being put into boxes, would render the tea doubly sensitive to damage. The length of time which has elapsed from the date of shipment until the claim was made, one year and three weeks, absolved him from responsibility, even were he otherwise liable.  The custom of the trade in London is to have the teas inspected on arrival.  If this was done with the tea in question, the damage must have been discovered last September, and certificates forwarded at once.  If, however, inspecting on arrival was neglected, or postponed for an indefinite period this must surely be at the risk of the owners of the tea.

   The COURT then, with the assent of both Assessors, gave judgment for the defendant, with costs

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