DALIAN MARITIME COURT

PEOPLE??S REPUBLIC OF CHINA

CIVIL JUDGMENT


 

Plaintiff:           FORTUNE UNIVERSAL INC.

Address:          2506 Florence Ave, Arcadia, California, United States of America.

Legal representative: Shao Xiangchun, Chairman of the Board of Directors.

Agent ad litem: 	Mao Yanguo, lawyer of Dalian Huaxia law office.


Defendant:         DALIAN JIHANG SHIPPING AGENCY CO., LTD.

Address:          A-4016, Hengtong Edifice, Zhigong Street, Zhongshan District, Dalian City, People??s Republic of China.

Legal representative: Guo Xiuli, general manager.


After this court entertained the cases of dispute over compensation for freight losses with respect to an agency contract between the Plaintiff, FORTUNE UNIVERSAL INC. (hereinafter referred to as Plaintiff), and the Defendant, DALIAN JIHANG SHIPPING AGENCY CO., LTD. (hereinafter referred to as Defendant), Judge Xiao Yan, Judge Bu Yuchun and Judge Shen Yanjun constituted the collegial panel legally and heard the case in open sessions. The Plaintiff??s agent ad litem Mao Yanguo and the Defendant??s legal representative Guo Xiuli attended the court hearing. Now the case has been concluded.


The Plaintiff alleged that in December 2000, JILIN ZHONGGU INTERNATIONAL CO., LTD. (hereinafter referred to as ZHONGGU CO.) entrusted the Defendant on behalf of the Plaintiff with booking and handling formalities for the carriage of 3 containers of mung beans from Dalian to USA. The Defendant accepted the entrustment and arranged to have the cargo loaded on m/v Chang Jin Tianjin, which departed on January 3rd, 2001. The Plaintiff agreed to and accepted the suggestion of the Defendant that the freight be paid to the Defendant and then transmitted to the carrier because in this way the Defendant could get a cheaper price. The Plaintiff remitted the freight US$4890 to the Defendant on January 16th, and entrusted them to pay to the carrier. The Defendant received the money but didn??t pay to the carrier as they promised. On January 17th, the Plaintiff received the B/L from the Defendant. m/v Chang Jin Tianjin arrived at the Port of Long Beach, USA on January 23rd, 2001. When the Plaintiff was going to take delivery of the cargo, the agent of the carrier demanded them to pay freight because the carrier hadn??t received it at the port of departure and there was a ?°Freight forward?± clause in the B/L. So the Plaintiff paid the freight US$4890 again. As the Defendant didn??t carry out their promise to pay the freight to the carrier, the Plaintiff phoned and faxed to them many times to ask for the freight, but they didn??t reply. So the Plaintiff proceeded against the Defendant and requested that they compensate for the Plaintiff??s freight and other relevant losses.

The Defendant pleaded that it was Hu Hongliang, but not the Plaintiff, that entrusted the Defendant with booking and handling formalities for the carriage. Hu Hongliang acted for himself. The Defendant had neither faxed to the Plaintiff or ZHONGGU CO., nor promised to pay the freight to the carrier. Though the fax message received by the Plaintiff and ZHONGGU CO. showed that the sender??s fax number was the Defendant??s, maybe it was Hu Hongliang who used the Defendant??s fax machine. Because the Defendant??s accountant Li Jun had quit the job and they couldn??t find him, they couldn??t identify Li??s signature. Even if the signature were true, the fax was invalid for lack of the Defendant??s stamp. The Defendant  collected a list of Hu Hongliang??s debts that showed the Plaintiff??s US$4890 was paid to discharge a debt for Hu but not paid for freight. It was in the presence of the Defendant that Hu Hongliang called the Plaintiff and asked them to remit the money to the Defendant. The Defendant didn??t know what Hu said to the Plaintiff. After offsetting Hu??s debt of RMB40587, the remaining amount of the freight was no more than RMB2261.79. The balance should be returned to Hu, but not to the Plaintiff. The Plaintiff??s assertion that the money was the freight to the carrier was groundless. It should be rejected.

The Plaintiff argued against the pleadings of the Defendant, saying that Hu Hongliang was irrelevant to this case. Even if he played a role, he acted for the Defendant.


It was established by the court after the examination and hearing that the Plaintiff and ZHONGGU CO. concluded a contract for the sale of goods on December 22nd, 2000. They agreed in the contract that ZHONGGU CO. sells 60MT of mung beans to the Plaintiff under the term F.O.B. Dalian; Payment: T/T; Destination port: Los Angeles, USA. The Plaintiff entrusted ZHONGGU CO. for booking, packing and Customs Procedures and inspection. ZHONGGU CO. entrusted the Defendant and the Defendant accomplished them. On December 28th, ZHONGGU CO. received a fax message from the Defendant??s fax machine that indicated: ?°The arrangements were as follows: M/V Chang Jin Tianjin, V.053E; B/L SITD053E803/20X3; Destination Port: LONG BEACH; Departure on January 3rd, 2001; Description of Goods: Mung Beans; Quantity: 60MT; Freight: US$1630X3=US$4890.00. Please transmit the fax message to the American company before the festival, so that they may pay the freight?±. The fax message also indicated the Defendant??s RMB and US dollar accounts. There was the Defendant??s accountant Li Jun??s signature in the fax. Then ZHONGGU CO. transmitted the fax to the Plaintiff. After the goods were loaded on board, the Defendant got the negotiable B/L (No.SESDLLB803) indicating ?°Freight to collect?± from the carrier SESCO GROUP INC. The B/L showed that: the shipper was ZHONGGU CO.; the consignee was the Plaintiff; the ship was M/V Chang Jin Tianjin (V.053E); the port of departure was Dalian; the port of destination was Long Beach, USA; the cargo was 60MT of mung beans in 3 containers; the date of loading and issuing the B/L was January 3rd, 2001. At the same time, the Defendant received the agency fees of RMB4080. The Defendant didn??t transmit the B/L to the Plaintiff. On January 15th, the Plaintiff received a fax message from the Defendant??s fax machine that repeated the contents of the fax message dated December 28th and asked the Plaintiff to pay the freight to them. The Plaintiff paid the freight through Los Angeles branch of Bank of China to the Defendant. After receiving the freight, the Defendant delivered the B/L to ZHONGGU CO. and ZHONGGU CO. delivered it to the Plaintiff. But the Defendant didn??t pay the freight to the carrier. M/V Chang Jin Tianjin (V.053E) arrived at Long Beach on January 23rd, 2001. When the Plaintiff was going to take delivery of the cargo, they were told that the carrier hadn??t received the freight at the port of departure and there was a ?°Freight to collect?± clause in the B/L, so they should pay the freight of  US$4890. The plaintiff paid the freight and took delivery of the cargo. But the defendant hadn??t returned the freight to them. Therefore the Plaintiff brought an action against the Defendant and claimed to the Defendant to compensate for the freight and its interests, counting from January 23rd, 2001 to the date of payment at the corresponding loan interest rate for US dollars issued by the People's Bank of China, and pay the acceptance fee. The plaintiff added claims in the court hearing that the Defendant should compensate for their flight tickets for asking the freight plus notary fee. But they didn??t hand in the acceptance fee.

This court froze the account of the Defendant at the request of the Plaintiff during the trial. In hearing this case, the court demanded the Defendant to provide the sample of their accountant Li Jun??s signature to identify the signature in the fax, but the Defendant didn??t. ZHONGGU CO. submitted two letters to this court in order to explain and prove that the Defendant suggested that they pay freight to the carrier in order to get a cheaper price, so the Plaintiff accepted the suggestion. The Defendant presented no evidence which could prove that the two fax messages were sent by Hu Hongliang. Furthermore, the Defendant presented no evidence which could prove that even if the fax messages had actually been sent by Hu, Hu acted for himself only. Besides, the Defendant presented no evidence which could prove that the US$4890 from the Plaintiff was to pay for Hu Hongliang??s debts. The Plaintiff and the Defendant both declared they didn??t know where Hu was.

The above facts could be ascertained on the basis of the evidence submitted during the cross-examination, including: the same Bs/L submitted by both the Plaintiff and the Defendant; two faxes and two freight payment vouchers submitted by the Plaintiff; the sales contract in this case, the Customs declaration, the consignment bill of the containers and the shipping order submitted by the Defendant; the letters of explanations submitted by ZHONGGU CO. with another sales contract and payment voucher as proof; and the court??s investigation and the records of the hearing.

It was held by this court that this case was about the dispute over compensation for freight losses with respect to an agency contract. Although the contract between them was not in writing, yet, the act of the Defendant who offered by fax and the Plaintiff who accepted by performing an act dealing with matters regarding a contract was in conformity with the legal requirements for a contract. The offer became effective when the Defendant??s fax arrived at the Plaintiff??s. When the Plaintiff remitted the freight to the Defendant on January 16th, 2001, the acceptance became effective and the contract was made. Although the Plaintiff had duties to conclude the contract of carriage and pay the freight as the buyer of the F.O.B. contract, they entrusted the seller with booking and the latter then entrusted the Defendant. The fact that the Defendant had told the Plaintiff to pay the freight (not other fee) to his account showed obviously his intention to pay the freight directly to the carrier on behalf of the Plaintiff. The intention was exact, definite, true and valid. It was an offer by which the Defendant should be bound. The remittance of the freight by the Plaintiff showed that they had accepted the offer and entrusted the Defendant to pay the freight to the carrier. It was an acceptance of an act that showed the Plaintiff??s true intention. It was valid. So the Plaintiff and the Defendant reached an agreement and the relationship of a new contract for paying the freight to the carrier was formed between them. When the Plaintiff paid the freight in accordance with the contract, the Defendant should also have carried out their promise and paid the freight to the carrier. But the Defendant didn??t carry out their promise, so they should be liable therefor. The Defendant declared that Hu Hongliang but not the Defendant who sent the fax messages, but the Defendant submitted no relevant supporting evidence therefor. Even if Hu had been involved in this case, still the Defendant had submitted no evidence to prove Hu acted for himself only. It was reasonable for the Plaintiff to believe that the fax messages were sent by the Defendant, because they received the fax messages in the Defendant??s name from the Defendant??s fax machine. The Plaintiff couldn??t judge whether the faxes showed the Defendant??s intention. When the Plaintiff accepted the fax messages and paid the freight to the Defendant, the relationship of a contract for paying the freight was established. The Defendant should compensate for the Plaintiff??s losses which resulted from the Defendant??s breaching of contract. Furthermore, the Defendant had received the freight and their accountant Li Jun did sign the fax messages. Though the Defendant argued they didn??t know the signature was true or not, but they ought to be able to identify their accountant??s signature. They had the duty to submit Li Jun??s signature on other papers, but they refused to do so. The Defendant also argued that the fax messages were invalid for lack of their business stamp. This was not reasonable because it was inconsistent with the relevant regulations, rules, and trade practice that the employer should be responsible for the consequences of the acts of his employees within the scope of their business functions. The Defendant had no other evidence to prove the list of Hu Hongliang??s debts. Even if the debt were true and Hu wanted to discharge it with the Plaintiff??s freight, Hu and the Defendant??s agreement was invalid owing to the lack of the Plaintiff??s consent. So the Defendant??s declaration that the freight was paid for Hu??s debt had no basis. The Plaintiff alleged that the Defendant should compensate for the freight losses and its losses of interests because the Defendant and the Plaintiff had concluded a contract for paying the freight and the Defendant breached the duties to pay the freight to the carrier. This allegation as it was based on facts and legally well founded should be accepted. The Plaintiff??s claim of the interests from the day on which they paid the second freight was reasonable and should be supported. The plaintiff??s additional claims that the Defendant should compensate for their flight tickets for this case shouldn??t be taken into consideration in this trial because they hadn??t handed in the acceptance fee. The Plaintiff and the Defendant hadn??t concluded an agreement on applicable law. Because the place of the Defendant??s domicile and the places in which the facts of this case occurred were both in the territory of the People??s Republic of China, the law of the People??s Republic of China shall apply in accordance with principle of closest connection. In accordance with Article 64 (1) of the Civil Procedure Law of the People??s Republic of China, Article 145 (2) of the General Principles of the Civil Law of the People??s Republic of China, Article 8, Article 11, Article 13, Article 16 (1), Article 22, Article 26 (1), Article 107 and Article 406 (1) of the Contract Law of the People??s Republic of China, this court hereby decides:

The Defendant DALIAN JIHANG SHIPPING AGENCY CO., LTD. shall compensate for the freight losses of US$4890 suffered by the Plaintiff FORTUNE UNIVERSAL INC. and its interests from January 23rd, 2001 to the day on which this judgment becomes effective at the corresponding loan interest rate for US dollars issued by the People's Bank of China.

The compensation shall be paid within 10 days after the day on which this judgment becomes effective, failing which the court will enforce Article 232 of the Civil Procedure Law of the People??s Republic of China.

The acceptance fee of RMB1620 and the preservation fee of RMB 208 (both prepaid by the Plaintiff FORTUNE UNIVERSAL INC.) shall be paid by the Defendant DALIAN JIHANG SHIPPING AGENCY CO., LTD.

If refuses to accept this judgment as final, the Plaintiff may appeal to the Higher People??s Court of Liaoning Province by submitting an appeal petition with 2 copies to this court within 30 days of the date of service of this judgment, while the Defendant may appeal within 15 days thereof.




Presiding Judge:     Xiao Yan

Judge:    Bu Yuchun

Judge:  Shen Yanjun

Certified true copy

Sep 27th, 2001

Court clerk:      Sun Guang