Skip to Content

Colonial Cases

Wong Chun Kee v. Jardine, Matheson and Co., 1889

[sale of goods]

Wong Chun Kee v. Jardine, Matheson and Co.

Supreme Court for China and Japan
Hall AAJ, 11 May 1889
Source: North China Herald, 18 May 1889

Shanghai, 11th May 1889
Before J. C. Hall, Esq., Acting Assistant Judge.
  This was a case arising out of the alleged failure by the defendants to fulfil a contract with the plaintiff to deliver 20 tons of flints, which contract the plaintiff stated was supplemented by a verbal promise by the defendants' employee, Mr. Taylor, that the flints should be of the same quality as supplied to another Chinese dealer named Wu Chin Foo. When the plaintiff went to take delivery of the goods he found, as he alleged, that they were of an inferior quality, and so he refused to take them.  In his petition he prayed that the defendants should be decreed to deliver him the proper quantity of flints, or that they should pay him Tls. 300, of which sum he would have made a profit if the contract had been properly discharged, and he further prayed for the return of Tls. 100 which he had paid as "bargain money."
  Mr. C. Dowdall appeared for the defendants while the plaintiff was not professionally represented.
  The plaintiff having been cautioned, was examined through the interpreter, and said that he could not read English and was unacquainted with the contents of the petition which had not been explained to him by anyone.
  His Lordship said that the whole case appeared to turn on the question of warranty.
  Mr. Dowdall said that there was no warranty that the flints would be of any particular quality, but as a matter of fact he would ask his Lordship to hear evidence on the question of quality which his clients said was the same as that of the flints supplied to Wu Chin Foo.
  The examination of the plaintiff was then proceeded with as follows:- Messrs. Jardine, Matheson & Co. sold 300 tons flints to Wu Chun Foo; and I went there to purchase some of the same quality.  When I went to take delivery I found that they were not the same as those supplied to Wu Chun Foo, and I refused to take delivery.  I made the contract with Mr. Taylor in writing contract put in). I cannot read English writing; I took Messrs. Jardine, Matheson's word for it.  I spoke "pidgin" English when making the contract.  I did not know whether there was any mention in the contract that the flints were to be the same as Wu Chun Foo's.  I expected them to be of good quality; if they were of bad quality I would not take them.  If Jardine, Matheson & Co. did not "secure" that they were to be of good quality I would not take them.  When I bought them I said the flints were to be the same quality as Wu Chun Foo's.  Mr. Taylor said they were to be good cargo, and if not I need not take them.
  His Lordship said that there was no mention of quality in the contract, but he had no doubt that the plaintiff was acting in good faith when he said that he understood that the flints were to be the same as Wu Chun Foo's; and that being so if Mr. Dowdall wished to press the technical point under the Stature of Frauds, though his Lordship did not suppose he would, he would of course be at once entitled to a verdict for the defendants.
  Mr. Dowdall said he had no intention of raising a technical point.  He was not going to rely upon the Stature of Frauds at all, but upon the direct issue that the plaintiff said Mr. Taylor promised that the flints were to be of a certain quality which statement he denied.  Mr. Taylor's evidence was taken upon commission in Hongkong where his clients afforded the plaintiff opportunity to cross-examine Mr. Taylor, which was all they could do, but he was not cross-examined.
  Plaintiff - I never got a written contract from Jardine, Matheson & Co. for flints before.  I have dealt with them for flints through Chinese brokers in which case the contract was made by word of mouth.  I have bought other commodities from them before, lead, iron and sandalwood, on which occasion the contract was made by Jardine, Matheson & Co. entering it in their books.  On this particular occasion the contract was given to me when I paid Tls. 100 bargain money.
  M. Dowdall said that as the case now looked like an adjournment for the evidence of the dealers referred to by witness, to save time he would not rest his case upon the contention that the flints were the same As Wu Chun Foo's, but that his client made no promise beyond what was in the contract.  The plaintiff merely alleged that the flints were not the same as Wu's;' he (Mr. Dowdall) contended that his clients never promised that they should be the same quality.
  His Lordship intimated that he was inclined to believe plaintiff's evidence although as he said before if Mr. Dowdall pressed the Statute of Frauds as a defence he would give a verdict in his favour, though he believed that Messrs. Jardine, Matheson would not care for the case to be declared in their favour upon any technicality.  If Mr. Dowdall had any reason to doubt the plaintiff's evidence, his Lordship would be happy to hear him break it down in cross-examination; but as the case at present stood his Lordship might tell him that he believed the plaintiff was perfectly honest in coming into court and saying that the flints were to be the same as those received by the other Chinse buyer, and that he did not want to receive an inferior article.  His Lordship could see the reason of the misunderstanding, namely Mr. Taylor knowing as little Chinese as the plaintiff knew of English, and the latter being under the impression that the contract he made was as good as those previously in which he paid bargain money.
  Mr. Dowdall said his contention was that whatever contract was made it was not the contract which the plaintiff alleged; and he contended that the contract was simply the contract in the words written down, and he further contended that it was not true, as the plaintiff alleged, that any representation was made to him as to the quality of the flints, or as to their being like any other flints whatever.
  His Lordship - You hear what he says?
  Mr. Dowdall - I have heard his evidence.  But as it looks like an adjournment I will give up the point that the flints were the same as Wu Chun Foo's though I may add that Wu has taken some of them in performance of his contract.
  His Lordship - That is outside the point.
  Plaintiff, cross-examined by Mr. Dowdall (Handed counterfoil of contract note) - That is my signature.  I did not go to Jardine, Matheson & Co.  with the broker when I bought goods from the firm before.  The last time I bought from them was about five years ago when I purchased lead, but I do not recollect whether or not I paid them bargain money, I must refer to my book.  I said I got a receipt for the bargain money and I signed the contract because there was a price, 6 mace a picul in it.  When we pay the money on cargo in godown Messrs. Jardine, Matheson give us a delivery order.  The custom when buying goods to arrive is to send a Bank order and we get the delivery order in return.  If the buyer is a well known customer he does not send in the contract note with the Bank order, but if he is a stranger he sends it.  Other people do not pay bargain money, but Mr. Taylor does not trust me, and I paid him, upon which he handed me the receipt.  I have been doing business for over ten years with foreign firms.  I have never got a receipt from a foreign firm for money paid to them.  When I pay the money they give me a delivery order for the gods.  My dealings with foreign firms vary from two to five thousand taels a year.
  This concluded the cross-examination, and Mr. Dowdall said he did not propose to call any evidence.
  His Lordship said here was a technicality in English law upon which the defendants were entitled to a verdict if Mr. Dowdall pressed it. It was suggested by the plaintiff that there was a warranty which was not put in writing.
  Mr. Dowdall - My contention is that it is not true, as the plaintiff alleges, that there was anything like a warranty.  I give up the Statute of Frauds altogether.
  His Lordship - The plaintiff's statement is very clear on that pointy.  He says that Wu Chun Foo bought some flints, and that he (plaintiff) went to Messrs. Jardine, Matheson and ordered 200 tons of flints of the same quality, and that Mr. Taylor said if they were not of the same quality he need not take them.
  Mr. Dowdall - The plaintiff alleges a contract in the third paragraph of his petition, and he produces a note in the terms and of the same date as the third paragraph of his petition. He admits that he has signed the counterfoil of that note, and suggests that he thought it was simply a receipt given to him for his hundred taels bargain money.  He does not explain why he signed the counterfoil, which contains a statement of the contract so far as it is stated in the third paragraph of his petition. Now as to the statement in the third paragraph of the petition there is no dispute.
  In the fourth paragraph of the petition he says "in regard to such contract as is referred to in the foregoing paragraph." And in the fifth paragraph he says that the defendants promised to deliver to him flints of the same quality as the 300 tons delivered to Wu Chun Foo. I will read to you the evidence upon which we rely to rebut the statements in these paragraphs.  Then if it is not true that there was any such addition to the contract as alleged in the third paragraph there seems to be no other question.
   The answer to the petition admits that flints were tendered, but it does not say that the plaintiff represented to the defendants that he wanted the flints for any particular purpose so I contend that a tender to him of flints would be a satisfaction of the contract so far as it is written. Mr. Dowdall then referred his  Lordship to the paragraph in "Addison on Contracts," 6th edition, commencing with the words "Caveat  emptor," and read the following evidence given by Mr. Taylor upon commission in Hongkong:-
I am a salesman in the employ of Jardine, Matheson & Co.  I was in Shanghai November 24th, 1888.  I remember previous to that date selling 300 tons of flints to a Chinaman, through Mr. Wade, a broker. On that day I sold tons 200 to Wong Chun Kee.  There was a contract made and I gave him a memorandum of the sale.  I did not make any representation to the plaintiff as to the quality of the flints.  The statement that I promised to supply the same quality as that supplied to Wu Chun Foo is absolutely false.  I nether could or would have made any representation as to the quality of the flints and if he had asked me such a question I would not have done business with him. So far as I know the flints are of one quality, the only difference being as to the size and more or less coatings of chalk.  The bargain was concluded between plaintiff and myself in English without the help of any intermediary and there could not have been any misunderstanding.   
Mr. Dowdall in conclusion contended that plaintiff was laboring under a misapprehension.
  His Lordship said he believed that there was perfect good faith on both sides, but from the evidence which had been just read Mr. Taylor appeared to have mentioned Wu Chun Foo's name, and Mr. Taylor said he could not fulfil the plaintiff's order until he had fulfilled Wu Chun Foo's, which was calculated to lead the plaintiff to believe that his flints would be the same quality as Wu's. If it was not an actual stipulation of the contract, it was by implication, and though not a regular contract, was open to that construction between the parties, neither of whom accurately understood the other.  The defendants' case was perfectly unanswerable if the technicality was pressed.
  Mr. Dowdall sad he did not intend to press the point of law; his contention was that the evidence he produced in favour of the defendants was as good as the plaintiff's evidence; besides they had the written contract which might have contained the further stipulation as the plaintiff alleged, and which it did not.  He did not contend that the contract was excluded by the Statute of Frauds, but he had two things in his favour.  First the memorandum which did not contain what the plaintiff alleged; and secondly Mr. Taylor's evidence that there was no such extra agreement made by word of mouth when the contract was made.  Taking the evidence as of equal weight, he thought there was that in the plaintiff's case, which ought to prevent him succeeding on that point.  He contended that when a man signed his name, as the plaintiff had done to the counterfoil, and when he was able to read the figures, it was idle for him to pretend that he believed he was only signing a receipt; and not a contract, considering that during the ten years he had done business with foreigners he did not seem ever to have got a receipt before. Taking the whole case, he further contended that the plaintiff, upon whom the onus of proof lay, had failed to satisfy the Court that there was any such verbal agreement as that which was alleged.
  His Lordship sad that the case was an important one bearing as it does upon the mode of doing business between natives and foreigners.
  Judgment was deferred till Monday.
13th May.
  Judgment was given in the above case this morning.
  On taking his seat, his Lordship, addressing Mr. Dowdall, said - There is one question I should like to ask you.  I have looked through this book (contract book) and find very few instances indeed of Chinese contractors signing the counterfoils.  In fact, I think, out of some scores, I can only find one other instance.  What significance do you attach to that fact?
  Mr. Dowdall said, - When Messrs. Jardine, Matheson & Co. have a contract with a man who is not well known then they get him to sign the counterfoil.
  His Lordship then delivered his judgment as follows:-
  The facts of this case are as follows:- In November last the plaintiff entered into an agreement with the defendants to purchase a certain quantity of flints, to arrive, at a certain price, and paid down five-sixths of the money in advance, receiving at the same time a memorandum of particulars of the goods sold.  When the goods arrived he refused to take delivery of them on the grounds that they were not the quality he had contracted for, and he now sues in effect, for the return of his money.  His allegation is, that the defendants, in making the contract, promised to deliver the same quality and sort of flints as those contracted to be delivered by them to another merchant named.  This allegation the defendants deny; and no such promise is contained in the note given by them to the plaintiff.  But the plaintiff avers, that, as he understood it, the contracts here are, as a rule, verbal, and are in general concluded by the mere entry of them in the foreign merchant's books; that in this case he expressly stipulated with the defendants' agent, Mr. Taylor, that the flints were to be of the same kind as those to be delivered to one Wu Chun Foo, that this was promised by Mr. Taylor who said if they were not of the same quality he need not accept them; that it being the first time he had done business with Mr. Taylor that gentleman requested part payment in advance and gave him a receipt for the money; that it was in consideration of the aforesaid promise that he gave the order, and paid the bargain money.
  The plaintiff, who speaks English very imperfectly, and can neither read nor write it, was no represented by counsel.  No evidence beyond his own was tendered as to the mercantile customs alleged, nor as to the inferior quality of the flints.  The defendants rested their case on the ground that no such promise had been given, and did not contest the plaintiff's statement that verbal contracts are the mercantile usage of the place. They tendered no evidence beyond that of Mr. Taylor, taken by commission at Hongkong, in which he emphatically denied having made any such promise as that alleged by the plaintiff.   
  The issue between the two parties is thus narrowed down to a case of conflict of testimony.  I can see no grounds for regarding one of the parties as less truthful than the other, and the contradiction between them indicates, therefore, the existence of a misunderstanding.  I do not doubt Mr. Taylor's statement that he made no such promise.  I do not doubt Wong Chun Kee's statement that he understood and believed Mr. Taylor to have made it, and on that understanding paid the money. It is clear from the evidence of both parties that in the course of the negotiations some mention was made of Woo Chung Foo's contract for flints; and I think it probable that the two parties did not understand the reference to that contract in exactly the same way. Mr. Taylor says there could not have been any misunderstanding, the bargain having been concluded in English between himself and the plaintiff direct, without the help of an intermediary.  But having heard the plaintiff himself give, or attempt to give part of his evidence in such English as he is master of, I cannot adopt Mr. Taylor's opinion as to the impossibility of a misunderstanding in settling the terms of an executory contract in such a jargon.  I consider it not only possible but probable that there was a misunderstanding which prevented the minds of the parties from being ad idem, as to an essential term of the agreement they were seeking to form.  That seems to me more plausible than the alternative supposition that the plaintiff has acted in bad faith in refusing to take these flints, and concocted a falsehood as to the promise about their quality.  
  The two points relied on by the defence are first, the absence of any note of such promise in the memorandum given to the plaintiff, and secondly, the fact that he signed the counterfoil of the memorandum. These do not seem to me conclusive, for I am not satisfied that it was the intention of both parties that the whole of the contract between them should be set forth in the memorandum.  I see nothing improbable in the plaintiff's statement that he understood the note given him by Mr. Taylor to be merely a receipt for the money, which in fact, it partly was; nor is his further statement that in signing the counterfoil of the mote he was binding himself to the only part of which he understood, viz. the figures indicating the price which he was to pay.  
  I hold that the contract was vitiated by a mistake in the forming of it, which would entitle the parties to rescind it; and that the plaintiff was not bound to accept the flints tendered to him unless they were of the quality stipulated for.  I therefore give judgment for plaintiff for Tls. 100 and as the risk of making contracts in such an imperfect means of communication as "pidgin" English must be borne equally by the parties, there will be no costs.


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