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Colonial Cases

Sun Kee v. Evans and Company, 1898

[sale of goods]


Sun Kee v. Evans and Company

Supreme Court for China and Japan
Hannen CJ, 7 June 1898
Source: North China Herald, 13 June, 1898




Shanghai, 7th June.

Before Sir Nicholas J. Hannen, Chief Justice.


   This was an action in which the plaintiff, a silk merchant and broker of Shanghai, sought to recover from Messrs. Evans and Company, of 32 Nanking Road, storekeepers and dealers in piece goods, Tls. 1,304 for goods delivered. The petition of the plaintiff set out that the goods were delivered to the order of the defendants for shipment to England but in the answer defendants had filed payment was refused on various grounds, the principal of which was breach of contract involving loss of profit, and loss through damage to the goods alleged to have been caused through the negligence of plaintiff's agents. Mr. J. C. Hanson appeared for the plaintiff, and Mr.  Nelson defendant.

   The petition and answer having been read,

   Mr. Nelson said that the parties had for some time had business transactions and on the 21st of November 1895 a contract was entered into whereby the plaintiff undertook to deliver fifteen cases - equal to three thousand pieces - of silk handkerchiefs to the defendants at Tls. 163 per case. The contract further stipulated that the pieces should weigh between nine and nine and a quarter ounces, a somewhat unusually heavy weight and difficult to obtain. They were destined for the London market and it was agreed that they should be delivered in the months of December 1895 and January and February 1896.The first lot of the cases, however, was not delivered until February 28th,1896, when they were forwarded to London followed by two other consignments amounting to nine cases in all during April and May. 

   On delivery by the plaintiff, the handkerchiefs were examined in defendants' godown, weighed and finally packed and sent to the steamer. The system was to make up the handkerchiefs into small packages which were labelled with a chop known as "The Spinning Girl," chop which belonged to the plaintiff; but it was understood that it was to be used exclusively for goods consigned by Messrs. Evans. Having passed the Customs the packages were placed in wooden cases and soldered up. Of the nine cases three were to the order of Messrs. Rylands & Co., and five to Messrs. Boyd & Co. but upon their being opened in London it was found that the silk was stained and the consignees refused to accept them at the price agreed on. Some were returned and sold by the defendants' agents at a loss. Their contention was that the goods must have contained a certain amount of moisture and the gold border on the labels on the packages had come off on to the silk. As they were packed by the plaintiffs' servants  for  delivery to the purchasers no blame in any case could attach to his clients. The contract was made that the goods were to be delivered F.O.B. and the plaintiff was accordingly responsible for any loss or damage that might be incurred prior to their delivery in the steamer.

   Mr. Nelson then called Mr. Evans, a considerable time being taken up in dealing with correspondence which had passed between the parties and the agents and consignees in London. It was on this alone that defendants' counsel relied though there was no question of fact in dispute. Mr. Hanson admitted the authenticity of the letters, but remarked that they had to rely in the fact that they had come from the defendants' own agents.

  His Lordship expressed the opinion that the onus lay with the defendants to prove that the damage was caused by Sun Kee or his agents.

   Mr. A. M. A. Evans then went into the box and spoke to making the contract for delivery during a certain period which was not carried out. When he received the news from his agent that the goods had been received in a damaged state he sent for Sun Kee and told him of it, showing him samples of the damaged silk. He could not tell how the damage was caused but wanted witness to pay the bill and sue him for the damage in the Mixed Court, a suggestion he could not countenance.

   At this stage Mr. Hanson proposed that His Lordship should pronounce whether plaintiff was liable and then they could go into the accounts in Chambers to see to what extent he was indebted.

   His Lordship observed that the letters would not prove what caused the damage or whether Sun Kee was liable. It seemed to him that evidence should be given showing his liability.

   Mr. Evans continued his evidence and in reply to Mr. Hanson said he claimed as a set-off, for loss of profit that he would have made had the whole of the cases been delivered at the time they were arranged to be. Sun Kee never told him in February that he was ready to deliver the whole lot. He came to him and said he wanted money about China New Year but of the silk he sent very little was up to the stipulated weight and it was inspected and the light pieces rejected. He admitted writing to London and  saying that the silk had been most carefully selected and inspected and was of first-rate quality. The silk was packed by Sun Kee's men in the presence of one of witness' employees, but he was not there himself. Sun Kee paid the coolie hire and all expenses attendant on its delivery in the steamer but witness paid the freight and insurance. He had no independent evidence or sworn testimony from home as to the condition of the silk when received. Messrs. Boyd & Co. made an unfounded claim for damages and when pressed to go to arbitration they withdrew and afterwards cancelled their order, alleging that the goods were not up to standard.

  Mr. Albert Burkill, silk inspector, of the firm of Burkill and Sons, next gave evidence. He spoke to receiving on Friday last samples of the damaged goods and submitting them to a careful examination. He thought that the stains must have been caused though the silk when packed containing moisture which had caused the gold paint on the chop to come out on to the silk. He had not come across a similar case before as in their own business they had an arrangement by which silk was always thoroughly dried before packing.

   The plaintiff was next examined, completing the evidence it was proposed to call. He said he was quite prepared to have delivered the whole of the silk contracted for in February. About the time of China New Year he went to the defendant and told him he had the cargo ready and asked for payment. Mr. Evans could not pay him so he took the cargo to Mr. Dudgeon who made him an advance upon it. He wanted money as he had to pay the dealers. The cargo was delivered to Mr. Evans after New Year.

   With regards to the chop "Spinning Girl," it was used by Mr. Evans to suit his own convenience but he had never guaranteed it as "secure." The packages of silk were made up by his men but they were placed in the packing cases for shipment by the defendants' servants.

   The further hearing of the case was adjourned till half-past ten next day.

.  .  .  

8th June.

   The hearing of this action which commenced on Tuesday was resumed.

   Mr. Hanson addressed the Court for the plaintiff and said that for Mr. Evans to make out his claim he had got to show that the handkerchiefs or silk pieces were damaged, to prove the cause of the  damage he had to prove that his client was liable for that damage. The whole thing was thus perfectly clear but most certainly the defendant had not proved his case as stated in his answer.

   His answer stated that on the arrival of the goods they were found to be damaged, but as a matter of fact it must have been weeks before the damage was discovered. With regard to the evidence as to the damage, he did not want to trouble the Court with all the letters on the subject, but he thought he had already read quite enough to show that Mr. Evans wrote explaining most fully as to the cause of the damage. Nothing in the shape of an affidavit or declaration on the part of Mr. Evans' agents had come out. Only two letters written by Messrs. Boyd & Co. and Messrs. Rylands & Co. were produced showing that the cases were delivered to them in a damaged state and with regard to Messrs. Boyd they heard that a claim was made which was found to be unfounded. 

   Therefore the only evidence that they had to rely on was the letters sent out by Mr. Evans' own agents in which particulars were given as to the damage. Looking into these they found that one if the cases was not shipped under this contract at all but under a contract shipped in January. It might possibly not be one of their cases at all. Mr. Evans thought that must be a mistake. That might or might not be so but if he was mistaken about one case, he might just as well be mistaken about the others. Evidence like that could not be relied upon. Nothing had come out from home as to the cause of the damage and Mr. Evans did nothing to ascertain the cause until last Friday when he asked Mr. Burkill to make a report on a sample. The sample which for anything they knew might have been taken out of the mistaken case had been lying about here a year and a half in Mr. Evans' office with the ticket pinned on it, and it was on this sample that Mr. Burkill had made his report. Mr. Burkill said he had never had a case like this to report in but expressed the opinion that the silk when packed must have been damp and the gold on the chop running, caused the stain.

   N ow Sun Kee told Mr. Evans that he could not secure the "chop" so that if the handkerchiefs were damaged through this cause it was clearly not the plaintiff's fault. He was merely asked to pack the goods which was done under the direction of the defendant. Apart from Mr. Burkill's theory it was possible that the silk got damp on the steamer, or when the goods were opened by the Customs in London or while lying in some warehouse in London. Apart from any of these considerations, however, supposing the silk was damaged and caused as Mr. Burkill suggested even then he contended they were not liable, as the defendant had exercised direct rights of ownership. In support of this contention he quoted the 34th and 35th sections of the Sale of Goods Act.

   His Lordship interposed and remarked that even if the property had actually passed to the defendant, Sun Kee was acting as agent and if he negligently packed the silk so as to account for the damage the Act in question would not help Sun Kee.

   Mr. Hanson continuing showed that after they were packed Mr. Evans accepted them. With regard to the claim for non-delivery of the other cases Sun Kee had stated that he was quite prepared to deliver them in February but Mr. Evans at that time refused to take them although he afterwards accepted delivery, and paid for them without saying a  word about claiming for non-delivery. So far also from Mr. Evans suffering any loss of profit through the late delivery they had letters from, London showing that the market at the time was glutted and that to realise a fair profit the goods would have to have been held. In conclusion Mr. Hanson submitted that Mr. Evans had not made out his clam and asked for a verdict for the plaintiff with costs, Tls. 350 which was agreed to on another account, together with interest at seven per cent.

   Mr. Nelson for the defence argued that reliance should be placed on the ecvindence as contained in the correspondence with regard to the damage, as it would be a most expensive matter in a small suit like this to have to get a Commission in London and probably the cost of the same would have swallowed up the whole of the subject matter of the claim. 

   The first point he had to prove was with regard to the damage to the handkerchiefs and as the cases were entirely packed by Sun Kee or his servants, the damage could not possibly have been caused by Mr. Evans or his servants. Now it was absolutely impossible to know the exact moment at which the damage took place but if Mr. Burkill's view of the matter was correct, and he contended it was, the process of discolouration would begin very quickly because they would be packed very tightly, and they could not tell exactly the moment when there would be partial discoloration and even if opened in a couple of days or so a slight stain might have been made quite sufficient to spoil the handkerchiefs. The contract was specifically made F.O.B. the meaning of which was clearly explained to the plaintiff and it was his duty in packing them to have used every care and protection.

   With regard to the chop why did not the plaintiff tell Mr. Evans that he could not secure it? The chop in question, "The Spinning Girl," was used by special arrangement for Mr. Evans, and if he thought there was any danger in using it and he knew he had to pack the goods himself why did he not point out to Mr. Evans that it was possible that the stuff would come off? He contended that the plaintiff's statement that he could not secure the chop was simply an afterthought.

   Mr. Hanson said the goods might have been damaged by opening by the Customs but he maintained that the damage must have taken place here and that it was Sun Kee's fault in not using greater care. He was a man of experience in the silk trade and knew that Mr. Evans was opening up a new and special line, and it was his duty to have taken every precaution in the performance of his contract. 

   Now with regard to the contract and the delivery in December, January and February, Sun Kee said that before China New Year he was prepared with the cargo and went to Mr. Evans for money which was refused. He then said he went to Mr. Dudgeon who made him an advance on it, but why was not Mr. Dudgeon there to speak as to the silk brought to him? All they knew was that on the 28th February the last day of his contract the plaintiff took his silk to Mr. Evans and on examination it was found only sufficient to fill three cases of the stipulated weight per piece. This statement was just another of his afterthoughts. The simple matter was plaintiff entered into a contract which he could not fulfil hence the difficulty which had arisen. Had he delivered the goods during the time he contracted to they would have been sold before the glut in the market. He asked for judgment on the counter claim, though there might be some necessity for arguments in Chambers to assess damages.

   His Lordship in giving judgment said: In this case as it has been heard, the defendant beginning and concluding is responsible for the onus of proof, and what he has to prove is that affirmatively Sun Kee was negligent, or in default, in the packing of these goods in some way as to cause the damage. The only positive evidence I have got on this subject is the evidence of Mr. Burklill and the evidence certainly does not prove distinctly in the affirmative that it was Sun Kee's fault. 

   Supposing however that Mr. Burklill's evidence might still be perfectly accurate and therefore consistent with Sun Kee being in the default, as that is the only evidence I have to go upon, I cannot make out that it affirmatively proves that Sun Kee was negligent in the packing and that through that all this has taken place. That disposes of the claim for damages.

   Now with regard to the other claim for the non-fulfilment of the contract it is manifest that Mr. Evans never thought of introducing claims until this action was brought and with regard to that the same is true as with regard to the claim for damages; it is for Mr. Evans to prove that he has sustained loss and he has not affirmatively proved it. On the contrary it seems to me that there would have been no profit at all if the goods had been delivered in  the time stated in the contract. 

   I therefore find judgment for the plaintiff for Tls. 1,304 less Tls. 350 allowed, and I also find for him on the claim for interest and the costs of the action.

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