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Colonial Cases

Sen Tai Hong v. Schellhaus and Co., 1894

[sale of goods]

Sen Tai Hong v. Schellhaus and Co.

German Consular Court, Shanghai
29 January 1894
Source: North China Herald, 2 February, 1894

Shanghai, 29th January.
Before Dr. Eiswaldt, Vice-Consul, and Messrs. P. Arnhold and Justus Lembke, Assessors.
  This was a claim for Tls. 11,500 by the Sen Tai Hong, against Messrs. Eduard Schellhaus & Co. on account of the non-delivery of certain goods.
  According to the petition of the plaintiffs, the Sen Tai Hong, they carried on business at Shanghai.  On the b6th July, 1893, they purchased from the defendants by contract in writing 10,000 pieces Ellerton Imperial "A" flannel (American goods) in 500 cases of 20 pieces each, at the price of Tls. 3.10 per piece. The goods were shipped from America by steamer during July and August, 1893, and would become due in Shanghai before November, 1893.  Some time after the making of the contract the defendants requested the plaintiffs to release them from it, but the plaintiffs refused, and after some correspondence, on the 25th September, 1893, the defendants wrote to the plaintiffs that the goods would not be delivered. At the time the goods were deliverable in Shanghai the price of them was Tls. 4.25 per piece. On 9th November last, the plaintiffs' counsel wrote demanding delivery of the said goods, or in case of failure as compensation for non-delivery Tls. 11,500 being the difference between the price of the goods as agreed and the market price of such goods at the time when they ought to have been delivered. The plaintiffs therefore prayed that the defendants might be decreed to pay the plaintiffs the sum of Tls. 11,500 with interest and costs of the suit. The particulars of the claim were made up as under:
  To 10,000 pieces Ellerton Imperial "A"
         Flannel at present market price
          Tls. 4.25                                           42,500
  Less10,000 pieces of the same at
           Contract price Tls. 3.10               31,000

  Damage being difference in price     11,500

  The answer of the defendants, Messrs. Eduard Schellhaus & Co. was to the effect that between 27th June and 6th July last the defendants, having received from their agents in New York certain samples of flannel, sent to the plaintiffs who were large dealers in flannel and similar goods, to ascertain if the plaintiffs would purchase flannel according to the samples. The plaintiffs having come to the defendants' place of business were shown the samples and were informed that as this business in flannels goods was new business to them (the defendants) and they were unacquainted with the market price for such goods, that if the plaintiffs would name the fair market price at which they would purchase flannel as per sample, they (the defendants) would wire such offer to New York. Thereupon the plaintiffs named Tls. 2.87 per piece as the fair market price for flannel known as Ellerton Imperial "A" flannel and they offered to purchase 500 cases.
  The defendants, on the strength of the plaintiffs' representation that Tls. 2.87 was the fair market price, cabled to New York by cypher code offering to purchase 500 cases at Tls. 2.65 (i.e., Tls. 2,87 less Tls. 0.22 to cover duty, defendants' commission and charges.)
  The defendants alleged that the plaintiffs misrepresented to them the fair market price for such goods and deceived them, the fair market price in Shanghai for such goods at that time was Tls. 4 to Tls. 4.10.  The cypher used to express Tls. 2.65 was also used in the defendants' code to express other amounts, viz. Tls. 3.764, Tls. 4.63, Tls. 5.62, Tls. 5.61 and Tls. 7.65, according to the circumstances of each particular employment of the code. Defendants' agents in New York, knowing the true market price in Shanghai to be Tls. 4.10, interpreted the cypher used to express Tls. 2.65 to mean Tls. 3.64 and at this price they were unable to obtain the flannel, thereupon they cabled to the defendants a counter-offer of 200 cases at Tls. 3.85, using the cypher code.
  The cypher used to express Tls. 3.85 expressed amongst other amounts Tl. 2.86 according to the circumstances of each particular employment of the code, and the defendants, in consequence of the plaintiffs having mis-expressed the fair market price of the said goods to be Tls.  2.87, interpreted the counter-offer to be Tls. 2.86. The defendants thereupon, on 29th June last, sent for the plaintiffs and informed them that an offer of Tls. 3.10 (i.e. Tls. 2.86 plus Tls. 0.24 to cover duty, commission and charged) would be probably accepted for 200 case of the said flannel.
  The plaintiffs agreed to the proposal and the defendants cabled the offer to their New York agents the same day.  Having received no reply by 3rd July the defendants, at the request and on behalf of the plaintiffs, wired to the agents offering to accept 500 cases at the price named.  On 5thJuly the defendants' agent answered by cable accepting the offer, which they had understood to be Tls. 3.86 and not as intended and understood by the defendants Tls. 2.87.
  The defendants asserted that the mistake was entirely due to the misrepresentation of the plaintiffs. The defendants informed the plaintiffs of the cable message received from their agent in New York closing with the offer, and the defendants then asked that the transaction should be put in writing, which was accordingly done.  The defendants by a cable message received from their agents in New York dated 7th July, became for the first time aware that the agents had from their knowledge of the true market price of the goods interpreted message to mean an offer of Tls. 3.8 per piece. The defendants immediately on receiving this message informed the plaintiffs of the mistake or misunderstanding, and advised that the sale could not be carried out in consequence of the plaintiffs' misrepresentations as to the marker price of the goods.
  Counsel addressed the Court on both sides, and a representative of the plaintiffs was examined in support of their case. Mr. B. Buschmann also made a statement on behalf of the defendants, and the case was adjourned, for the purpose of obtaining further evidence, until the 19th of February.                   

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