HENTHORN v. FRASER
                 [1891 H. 226]
Contract by Letters--Acceptance of Offer by Post--Time or Acceptance--With-
  drawal or Offer.
  H., who lived at Birkenhead. called at the office of a land society in
Liverpool, to negotiate for the purchase of some houses bolonging to them.
The secretary signed and handed to him a note giving him the option of
purchase for fourteen days at $750.  On the next day the secretary posted
to H. a withdrawal of the offer.  This withdrawai was posted botween 12
and 1 o-clock  and did not reach Birkenhead till after 5 P.M.  In the mean-
time H. had, at 3.50 P.M., posted to the secretary an uncondsitional accept-
ance of the offer, which was delivered in Liverpool after the society's office
had closed, and was opened by the secretary on the following morning :--
  Held, that where the circumstances under which an offer is made are
such that it must have been within the contemplation of the parties that,
according to the ordinary usages of mankind, the post might bo used as a
means of communicating the acceptance of it, the acceptance is complete
as soon as it is posted.
  Held that in the present case, as the parties lived in different towns, an
the offer was not made by post.
  Held, that a revocation of an offer is of no effect until brought to the
mind of the person to whom the offer was made, and that therefore a
revocation sent by post does not operate from the time of posting it.
  Held, therefore (reversing the decision of the Vice-Chancellor of the
County Palatine), that a binding contract was made on the posting of His
acceptance, that the revocation of the offer was too late, and that R. was
entitled to specific performance.
IN 1891 the Plaintiff was desirous of purchasing from the
Huskisson Benefit Building Society certain houses in Flamank
Street, Birkenhead.  In May he, at the office of the society in
Chapel Street Liverpool, signed a memorandum drawn up by the
secretary, offering $600 for the property, which offer was declined
by the directors; and on the 1st of July he made in the same
way an offer of $700, which was also declined.  On the 7th of
July he again called at the office, and the secretary verbally
offered to sell to him for $750.  This offer was reduced into
writing, and was as follows :--
  " I hereby give you the refusal of the Flamank Street property
at $750 for fourteen days.
  The secretary, after signing this, handed it to the Plaintiff,
who took it away with him for consideration.
  On the morning of the 8th another person called at the office,
and offered $760 for the property, which was accepted, and a
contract for purchase signed, subject to a condition for avoiding
it if the society found that they could not withdraw from the
offer to the Plaintiff.
  Between 12 and 1 o'clock on that day the secretary posted to
the Plaintiff, who resided in Birkenhead, the following letter:--
  "Please take notice that my letter to you of the 7th instant,
giving you the option of purchasing the property, Flamank Street,
Birkenhead, for $750, in fourteen days, is withdrawn, and the
offer cancelled."
  This letter, it appeared, was delivered at the Plaintiff's address
between 5 and 6 in the evening, but, as he was out, did not
reach his hands till about 8 o'clock.
  On the same 8th of July the Plaintiff's solicitor, by the Plain-
tiff's direction, wrote to the secretary as follows:--
  "I am instructed by Mr. James Henthorn to write you, and
accept your offer to sell the property, 1 to 17, Flamank Street,
Birkenhead, at the price of $750.  Kindly have contract pre-
pared and forwarded to me."
  This letter was addressed to the society's office, and was posted
in Birkenhead at 3.50 P.M., was delivered at 8.30 P.M. after the
closing of the office, and was received by the secretary on the fol-
lowing morning.  The secrstary replied, stating that the society's
offer had been withdrawn.
  The Plaintiff brought this action in the Court of the County
Palatine for specific performance.  The Vice-Chancellor dis-
missed the action, and the Plaintiff appealed.
  Farwell, Q.C., and T. R. Hughes for the appeal:--
  We say that a binding contract was made when the Plaintiff's
letter of acceptance was posted : Dunlop v. Higgins (1) ; Harris's
Case (2) ; Adams v. Lindsell (3).  We do not dispute that, though
  (1) 1 H. L. C. 381.               (2) Law Rep. 7 Ch. 687.
                     (3) 1 B. & Al. 681.
the option was given for fourteen days, it could be withdrawn
within that time: Dickiinson v. Dodds (1) ; but if a binding con-
tract is entered into, there cannot be a withdrawal.  Where an
acceptance is to be signified by doing some particular thing as
soon as that particular thing is done there is a contract: Brogden
v. Metropolitan Railway Company (2).  Where it must be in the
contemplation of the parties that an answer will be sent by post,
the posting an acceptance makes a contract.  In the case of
Househod Fire and Carriage Accident Insurance Company v.
Grant (3) it was considered that, according to the usages of
mankind, an acceptance would be sent by post; and it was
held that posting an acceptance made a contract, though the
acceptance was never received.  Here, as the parties lived in
different towns, it was to be expected that the Plaintiff would
post his answer.  In Byrne v. Van Tienhoven (4) a withdrawal
was held too late which waa not received till after the offer had
been accepted though it was posted before the acasptance ; and
so in Stevenson v. McLean (5) it was held that a withdrawal of an
offer was of no effect until it reached the other party.
  Neville, Q.C., and P. O. Lawrence, for the Defendant:--
  We submit that the Vice-Chancellor has drawn a correct
if that be so, the acceptance will not date from the posting.
Dunlop v. Higgins (6) went on the ground that it was the under-
standing of both parties that an answer should be sent by post.
In Brogden v. Metropolitan Railway Company, Lord Blackburn
puts it on the ground "that where it is expressly or impliedly
stated in the offer that you may accept the offer by posting a
letter, the moment you post the letter the offer is accepted."  It
would be very inconvenient to hold the post admissible in all
cases.  Here, Liverpool and Birkenhead are at such a short distance
from each other, that it cannot be considered that the Plaintiff
had an authority to reply by post.  If the offer had been sent by
post that would no doubt, lie held to give an authority to reply
  (1) 2 Ch. D. 463.                 (1) 5 C. P. D. 344.
  (2) 2 App. Cas. 666, 691.         (5) 5 Q. B. D. 346.
  (3) 4 Ex. D. 216.                 (6) 1 H. L. C. 381.
by post; but the offer was delivered by hand to the Plaintiff,
who was in the habit of calling at the Defendants' office, and
lived only at a short distance, so that authority to reply by post
cannot be inferred.  The post is not prohibited ; the acceptance
may be sent in any way; but, unless sending it by post was
authorized, it is inoperative till it is received.  Suppose, imme-
diately after posting the acceptance, the Plaintiff had gone to
the office and retracted it, surely he would have been free.
  [LORD HERSCHELL:--It is not clear that he would, after
sending an acceptance in such a way that he could not prevent
its reaching the other party.  Possibly a case where the question
is as to the date from which an acceptance which has been re-
ceived is operative may not stand on precisely the same footing
as one where the question is whether the person making the
offer is bound, though the acceptance has never been received
at all.  More evidence of authority to accept by post may be
required in the latter case than in the former.]
  Dickinson v. Dodds (1) shews that a binding contract to sell to
another person may be made while an offer is pending, and that
it will be a withdrawal of the offer.
  [LORD HERSCHELL:--In that case the person to whom the
offer was made knew of the sale before he sent his acceptance.]
  Farwell, in reply.
1892. March 26.  LORD HERSCHELL:--
  This is an action for the specific performance of a contract to
sell to the Plaintiff certain house property situate in Flamank
Street Birkenhead.  The action was tried before the Vice-Chan-
cellor of the County Palatine of Lancashire who gave judgment
for the Defendants.  On the 7th of July 1891 the secretary of
the building society whom the Defendants represent handed to
the Plaintiff in the office of the society at Liverpool, a letter in
these terms:--"I hereby give you the refusal of the Flamank
Street property at $750 for fourteen days."  It appears that the
Plaintiff had been for some time in negotiation for the property,
                       (1) 2 Ch. D. 163.
and had on two previous occasions made offers for the purchase
of it, which were not accepted by the society.  These offers were
made by means of letters, written by the secretary in the office
of the society, and signed by the Plaintiff there.  The Plaintiff
resided in Birkenhead, and he took away with him to that town
the letter of the 7th of July containing the offer of the society.
On the 8th of July a letter was posted in Birkenhead at 3.50 P.M.,
written by his solicitor, accepting on his behalf the offer to sell
the property at $750.  This letter was not received at the De-
fendants' office until 8.30 P.M., after office hours, the office being
closed at 6 o'clock.  On the same day a letter was addressed to
the Plaintiff by the secretary of the building society in these
terms:--"Please take notice that my letter to you of the 7th
inst. giving you the option of purchasing the property, Flamank
Street, Birkenhead, for $750, in fourteen days, is withdrawn and
the offer cancelled."  This letter wss posted in Liverpool between
12 and 1 P.M., and was received in Birkenhead at 5.30 P.M.  It
will thus be seen that it was received before the Plaintiff's letter
of acceptance had reached Liverpool, but after it had been posted.
One other fact only need be stated.  On the 8th of July the
secretary of the building society sold the same premises to
Mr. Miller for the sum of $760, but the receipt for the deposit
paid in respect of the purchase stated that it was subject to
bein able to withdraw the letter to Mr. Henthorn giving him
fourteen days' option of purchase.
  If the acceptance by the Plaintiff of the Defendants' offer is
to be treated as complete at the time the letter containing it was
posted, I can entertain no doubt that the society's attempted
revocation of the offer was wholly ineffectual.  I think that a
person who has made an offer must be considered as continuously
making it until he has brought to the knowledge of the person
to whom it was made that it is withdrawn.  This seems to me to
be in accordance with the rcasoning of the Court of King's
Bench in the case of Adams v. Lindsell (1), which was approved
by the Lord Chancellor in Dunlop v. Higgins (2), and also with
the opinion of Lord Justice Mellish in Harris's Case (3)  The
       (1) 1 B. & Al. 681.              (2) 1 H. L. C. 381, 399.
                       (3) Law Rap. 7 Ch. 587.
very point was decided in the case of Byrne v. Vani Tienhoven (1)
by Lord Justice Lindley, and his decision was subsequently fol-
lowed by Mr. Justice Lush.  The grounds upon which it has
been held that the acceptance of an offer is complete when it is
posted have, I think, no application to the revocation or modifi-
cation of an offer.  These can be no more effectual than the offer
itself, unless brought to the mind of the person to whom the
offer is made.  But it is contended on behalf of the Defendants
that the acceptance was complete only when received by them
and not on the letter being posted.  It cannot, of course, be denied,
after the decision in Dunlop v. Higgins (2) in the House of
Lords, that, where an offer has been made through the medium
of the post, the contract is complete as soon as the acceptance of
the offer is posted, but that decision is said to be inapplicable
here, inasmuch as the letter containing the offer was not sent by
post to Birkenhead, but handed to the Plaintiff in the Defen-
dants' office at Liverpool.  The question therefore arises it what
circumstances the acceptance of an offer is to be regarded as
complete as soon as it is posted.  In the case of the Household
Fire and Carriage Accident Insurance Company v. Grant (3) Lord
Justice Baggallay said (4) : " I think that the principle established
in Dunlop v. Higgins is limited in its application to case in
which by reason of general usage, or of the relations between
the parties to any particular transactions, or of the terms in
which the offer is made, the acceptance of such offer by a letter
through the post is expressly or impliedly authorized."  And in
the same case Lord Justice Thesiger based his judgment (5) on the
defendant having made an application for shares under circum-
stances "from which it must be implied that he euthorized the com-
pany, in the event of their allotting to him the shares applied for,
to send the notice of allotment by pcat."  The facts of that case
were that the defendant had, in Swansea, where he resided, handed
a letter of application to an agent of the company, their place of
business being situate in London.  It was from these circumstances
that the Lords justices implied an authority to the company to
  (1) 5 C. P. D. 344.                   (3) 4 Ex. D. 216.
  (2) 1 H. L. C. 6S1.                   (4) Ibid. 227.
  (5) 1 Ex. D. 218.
accept the defendant's offer to take shares through the medium
of the post. Applying the law thus laid down by the Court of
Appeal, I think in the present case an authority to accept by
post must be implied.  Although the Plaintiff received the offer
at the Defendants' office in Liverpool, he resided in another town,
and it must have been in contemplation that he would take the
offer, which by its terms was to remain open for some days, with
him to his place of residence, and those who made the offer must
have known that it would be according to the ordinary usages of
mankind that if he accepted it he should communicate his
acceptance by means of the post.  I am not sure that I should
myself have regarded the doctrine that an acceptance is complete
as soon as the letter containing it is posted as resting upon an
implied authority by the person making the offer to the person
receiving it to accept by those means.  It strikes me as some-
what artificial to speak of the person to whom the offer is made
as having the implied authority of the other party to send his
acceptance by post.  He needs no authority to transmit the
acceptance through any particular channel ; he may select what
means he pleases, the Post Office no less than any other.  The
only effect of the supposed authority is to make the acceptance
complete so soon as it is posted, and authority will obviously be
implied only when the tribunal considers that it is a case in
which this result ought to be reached.  I should prefer to state
the rule thus: Where the circumstances are such that it must
have been within the contemplation of the parties that, accord-
ing to the ordinary usages of mankind, the post might be used
as a means of comminunicating the acceptance of an offer, the
acceptance is complete as soon as it is posted.  It matters not
in which way the proposition be stated, the present case is in
either view within it.  The learned Vice-Chancellor appears to
have based his decision to some extent on the fact that before
the acceptance was posted the Defendants had sold the property
to another person.  The case of Dickinson v. Dodds (1) was
relied upon in support of that defence.  In that case, however,
the plaintiff knew of the subsequent sale before he accepted the
offer, which, in my judgment, distinguishes it entirely from the
                (1) 2 Ch. D. 463.
present case.  For the reasons I have given, I think the judg-
must be reversed and the usual decree for specific per-
formance made.  The Respondents must pay the costs of the
appeal and of the action.
LINDLEY, L.J.:--
  I quite concur.  I am not prepared to accede to the argument
that because the offer was not made by post there was no autho-
rity to send an acceptance by post, and the Viffce-Chancellor, in
my opinion, fell into a mistake by acceding to it.
  KAY,  L.J.  :--
  On the 7th of July, 1891, the Defendants gave to the Plaintiff
who was then in their office in Liverpool, an offer in writing to
sell him certain real property at Birkenhead, where the Plaintiff
resided.  The Plaintiff had been on several previous occasions
at their office on this or like business.  He was not able to
write beyond signing his name.  On the 8th of July his solicitor
wrote by his direction sccepting the offer.  This letter was
posted at 3.50 P.M., and arrived at 8.30 the same evening.
This was after office hours, and it was not opened till 10 o'clock
next morning.  In the meantime the Defendants wrote with-
drawing their offer on the same 8th of July, and posted their
letter between 12 and 1 P.M.  This was received at 5.30 the
same evening.  On the same 8th of July the Defendants entered
into a contract to sell the same property to another person
with an express condition if they were able to withdraw their
offer to the Plaintiff.
  The question is, was the withdrawal in time or too late.
  Dunlop v. Higgins (1) has decided that, where a letter sent by
post was a proper mode of acceptance, the contract was complete
from the time that the letter was posted.  In that case the
letter was actually received, though, by fault of the Post Office
there was some delay in its transmission.  Upon receipt of it,
the offer was withdrawn.  The question was the same as in the
present case, except that the withdrawal was after the actual
                         (1) 1 H. L. C. 381.
receipt of the acceptance which was trcated as being too late. It
was held that, by posting the letter in due time, the party by
the usage of trade had done all that he was bound to do.  He
could not be responsible for the delay of the Post Office in deliver-
ing the letter, and therefore there was from the time of the
posting a valid acceptance.  It might have still been doubtful
whether posting a letter of acceptance in time would amount to
an acceptance if the letter was never received.  The ordinary
rule is, that to constitute a contract there must be an offer, an
acceptance, and a communication of that acceptance to the
person making the offer : per Lord Blackburn in Brogden v.
Metropolitan Railway Company (1) ; and see per Lord Bramwell (2).
It may be that where the communication is in fact received, the
contract may date back to the time of posting the acceptance,
but there is considerable reason for holding that if never received
the posting might be treated as a nullity.  The point was so
decided in Britigh and American Telegraph Company v. Colgon (3) ;
and see the judgment of Lord Bramwuell in Household Fire and
Carriage Accident Insurance Company v. Grant.  However, in
the last-mentioned case, which is a decision binding upon this
Court, the Court of Appeal, Bramwell, L.J., dissenting, held,
that the posting of a letter of allotment in answer to an ap-
plication for shares constituted a binding contract to take the
shares though the letter of allotment was not received.  In his
judgment, Thesiger, L.J., refers to the cases in which the deci-
sion in Dunlop v. Higgins (4) has been explained by saying that
the Post Office was trcated as the common agent of both con-
tracting parties. That reason is not satisfactory. The Post
Office are only carriers between them.  They are agents to
convey the communication, not to receive it.  The communica-
tion is not made to the Post Office, but by their agency as
carriers.  The difference is between saying "Tell my agent A.
if you accept," and "Send your answer to me by A."  In the
former case A. is to be the intelligent recipient of the accept-
ance in the latter he is only to convey the communication to the
person making the offer which he may do by a letter, knowing
  (I) 2 App. Cas. 692.       (3) Law Rep. 6 Ex. 108.
  (2) 4 Ex. D. 233.              (4) 1 H. L. C. 381.
nothing of its contents.  The Post Office are only agents in the
latter sense.  All that Dunlop v. Higgins (l) decided was, that
the acceptor of the offer having properly posted his acceptance,
was n ot responsible for the delay of the Post Office in delivering
it; so that after receipt the said party could not rescind on the
ground of that delay.  I cannot help thinking that the decision
has been treated as going much further than the House of Lords
intended.  Baggallay, L.J., in his judgment in Household Fire
and Carriage Accident Insurance Company v. Grant (2), treats
it as applicable "to cases in which by reason of general usage,
or of the relations between the parties to any particular trans-
actions, or of the teruis in which the offer is made, the acceptance
of such offer by a letter through the post is expressly or im-
pliedly authorized."  If for authorized the word " contemplated"
is substituted, I should be disposed to agree with this dictum.
But I would rather express it thus : " Posting an acceptance of
an offer may be sufficient where it can fairly be inferred from
the circumstancas of the case that the acceptance might be sent
by post."
  Is that a proper inference in the print case?  I think it is.
One party resided in Liverpool, the other in Birkenhead.  The
acceptance would be expected to be in writing, the subject of
purchase being real estate.  These and the other circumstances
to which I have alluded, in my opinion, warrant the inference
that both parties contemplated that a letter sent by post was a
mode by which the acceptance might bs communicated.  I think,
therefore, that we are bound by authority to hold that the contract
was complete at 3.50 P.M. on the 8th of July, when the letter of
acceptance was posted, and bsfore the letter of withdrawal was
received.
  Then what was the effect of the withdrawal by the letter posted
between 12 and 1 the same day, and received in the evening ?
Did that take effect from the time of posting ?  It has never
been held that this doctrine applies to a letter withdrawing the
offer.  Take the cases alluded to by Lord Bramwell in the
Household Fire and Carriage Accident Insurance Company v.
Grant (3).  A notice by a tenant to quit can have no operation
  (1) 1 H.L.C. 381.       (2) 4 Ex.D. 227.        (3) 4 Ex.D. 234.
till it comes to the actual knowledge of the person to whom it
is addressed.  An offer to sell is nothing until it is actually
received.  No doubt there is the seeming anomaly pointed out
by Lord Bramwell that the 3ame letter might contain an accept-
ance, and also such a notice or offer as to other property, and
that when posted it would be effectual as to the acceptance, and
not as to the notice or offer.  But the anomaly, if it be one,
arises from the different nature of the two communications.  As
to the acceptance, if it was contemplated that it might be sent
by post, the acceptor, in Lord Cottenham's language, has done all
that he was bound to do by posting the letter, but this cannot be
said as to the notice of withdrawal.  That was not a contem-
plated proceeding.  The person withdrawing was bound to bring
his change of purpose to the knowledge of the said party, and as
this was not done in this case till after the letter of acceptance
was posted, I am of opinion that it was too late.
  The point has been so decided in two cases : Byrns v. Van
Tienhoven  (1), and Stevenson v. McLean (2), and I agree with
those decisions.
  Solicitors : G. Dalby, Birkenhad ; Miller & Williamson, Liver-
pool.
  (1) 5 C. P. D. 344.                          (2) 5 Q. B. D. 346.
                                                                  H. C. J.
    HARVEY AND ANOTHER  .  .  .  .  .  .  .  .  .  .PLAINTIFFS;

    FACEY AND OTHERS .  .  .  .  .  .  .  .  .  .  .DEFENDANTS.
      ON APPEAL FROM THE SUPREME COURT OF JAMAICA
 Contract--Negotiation by Telegram--Incompleteness--Acceptance of offer not
                             proved.
  Where the appellants telegraphed, " Will you sell us B.H.P?  Telegraph
lowest cash price," and the respondant telegraphed in reply, " Lowest price
for B.M.P. #900," and then the appellants telegraphed, " We agree to buy
B.H.P. for #900 asked by you.  Please send us your title-deed in order
that we may get early possession," but received no reply :--
Held, that there was no contract. The final telegram was not the
acceptance of an offer to sell, for none had been made.  It was itself an
offer to buy, the acceptance to which must be expressed and could not be
implied.
APPEAL from a decree of the Supreme Court (June 18, 1892)
setting aside a decree of Curran, J. (February 8, 1892)  which
dismissed the suit, which was one for specific performance of an
alleged contract in writing.
  The facts are stated in the judgment of their Lordships.
  The respondents, Facey and his wife, denied the contract, and
pleaded sect. 4 of the Statute of Frauds.
  The question decided in appeal was whether the three tele-
grams set out in the pleadings constituted a binding agreement
of sale and purchase.
  The way in which the appeal came before their Lordships was,
that on the 5th of July, 1892, the Supreme Court gave leave to
appeal against so much of the decree as was based on L.M.
Facey's want of authority to sell. On the 15th of March, 1893,
special leave was granted by Her Majesty to appeal in respect of
the damages awarded, but at the same time liberty was given to
the respondents to contest the contract.
  Present:--THE LORD CHANCELLOR, LORD WATSON, LORD HOBHOUSE,LORD
MACNAGHTEN, LORD MORRIS, and LORD SHAND.
  Sir Horace Davey, Q.C., and F. Safford, contened that they
did, being in themselves a memorandum of contract sufficient to
satisfy the statute.  Facey's telegraphic form contained his
signature, and he had authority to make it; and the telegram
received by the appellants, which contained the names of the
sender and receiver written by the telegraph clerk in the ordinary
course of his business, constituted a sufficient signature within
the meaning of the statute.  Assuming the telegrams and tele-
graphic forms to be sufficient to satisfy the statute, they contended
that the Court of Appeal was right in holding that they proved
a binding agreement.  As regards the power of L. M. Facey to
sell, the property had been purchased with his money, and the
wife was mere trustee for the husband, who had always acted as
owner and had power to bind his wife's interest (if any), or at
least to bind his own.  They contended that so much of the
decree as declared the telegrams constituted a binding contract
should be affirmed, and that it should bs held that the Mayor
and Council of Kingston bought subject to the said contract in
its entirety, or so far as it was enforceable.
  Farwell, Q.C., and Stewart Smith, for the respondents, in pur-
suance of leave reserved, contended that the judgment of
Curran, J., should be restored, and the judgment of the Appeal
Court discharged.  Apart from the question of L. M. Facey's
authority to sell, the claim under the circumstances to specific
performance, and the effect of the Statute of Frauds, the initial
difficulty in the case was that the telegrams on the face of them
did not disclose a completed contract.
  F. Safford, replied.
  The judgment of their Lerdships was delivered by
LORD MORRIS:--
  The appellants instituted an action against the respondents
to obtain specific performance of an agreement alleged to have
been entered into by the respondent Larchin M Facey for the
sale of a property named Bumper Hall Pen.  The respondent
L. M. Facey was alleged to have had power and authority to
bind his wife the respondent Adelaide Facey in selling the pro-
perty. The appellants also sought an injunction against the
Mayor and Council of Kingston to restrain them from taking a
conveyance of the property from L.M. Facey.
  The case came on for hearing before Mr. Justice Curran who
dismissed the action with costs, on the ground that the agree-
ment alleged by the appellants did not disclose a concluded
contract for the sale and purchase of the property.  The Court
of Appeal reversed the judgment of Curran, J., and declared that
a binding agreement for the sale and purchase of the property
had been proved as between the appellants and the respondent
L.M. Facey, but that the appellants had failed to establish that
the said L.M. Facey had power to sell the said property without
the concurrence of his wife the said Adelaide Facey, or that she
had authorized him to enter into the agreement relied on by the
appellants; and that the agreement could not therefore be specifi-
cally performed, and the Court ordered that the appellants
should have forty shillings for damages against L.M. Facey in
respect of the breach of the agreement, with costs in both Courts
against L.M. Facey in respect of the breach of the agreement.
  The appellants obtained leave from the Supreme Court to
appeal to Her Majesty in Council, and afterwards obtained special
leave from Her Majesty in Council to appeal in respect of a
point not included in the leave granted by the Supreme Court,
but the Order in Council provided that the respondents should
be at liberty at the hearing without special leave to contest the
contract alleged in the pleadings and afiirmed by the Court of
Appeal.
  The appellants are solicitors carrying on business in partner-
ship at Kingston, and it appears that in the beginning of
October, 189l, negotiations took place between the respondent
L.M. Facey and the Mayor and Council of Kingston for the sale
of the property in question, that Facey had offered to sell it to
them for the sum of #900, that the offer was discussed by the
council at their meeting on the 6th of October, 1891, and the
consideration of its acceptance deferred ; that on the 7th of
October, 1891, L.M. Facey was travelling in the train from
Kingston to Porus, and that the appellants caused a telegraph to
be sent after hiui from Kingston addressed to him "on the train
for Porus" in the following words : " Will you sell us Bumper
Hall Pen? Telegraph lowest cash price--answer paid; "that
on the same day L.M. Facey replied by telegram to the appel-
lants in the following words: " Lowest price for Bumper Hall
Pen #900"; that on the same day the appellants replied to the
last-mentioned telegram by a telegram addressed to L.M. Facey
"on train at Porus" in the words following: "We agree to buy
Bumper Hall Pen for the sum of nine hundred pounds asked by
you.  Please send us your title deed in order that we may get
early possession."  The above telegrams were duly received by
the appellants and by L.M. Facey.  In the view their Lordships
take of this case it becomes unnecessary to consider several of
the defences put forward on the part of the respondents, as their
Lordships concur in the judgment of Mr. justice Curran that
there was no concluded contract between the appellants and
L.M. Facey to be collected from the aforesaid telegrams.  The
first telegram asks two questions.  The first question is as to the
willingness of L.M. Facey to sell to the appellants ; the second
question asks the lowest price, and the word " Telegraph" is in
its collocation addressed to that second question only.  L.M.
Facey replied to the second question only, and gives his lowest
price.  The third telegram from the appellanta treats the answer
of L.M. Facey stating his lowest price as an unconditional offer
to sell to them at the price named.  Their Lordships cannot
treat the telegram from L.M. Facey as binding him in any
respect, except to the extent it does by its terms, viz., the lowest
price. Everything else is left open, and the reply telegram
from the appellants cannot be treated as an acceptance of an
offer to sell to them; it is an offer that required to be accepted
by L.M. Facey.  The contract could only be completed if
L.M. Facey had accepted the appellant's last telegram.  It has
been contended for the appellants that L. M. Facey's telegram
should be read as saying "yes" to the first question put in the
appellants' telegram, but there is nothing to support that con-
tention.  L.M. Facey's telegram gives a precise answer to a
precise question, viz., the price.  The contract must appear by
the telegrams, whereas the appellants ars obliged to contend
that an acceptance of the first question is to be implied.  Their
Lordships are of opinion that the mere statement of the lowest
price at which the vendor would sell contains no implied contract
to sell at that price to the persons making the inquiry.  Their
Lordships will therefore humbly advise Her Majesty that the
judgment of the Supreme Court should be reversed and the
judgment of Curran, J., restored.  The appellants must pay to
the respondents the costs of the appeal to the Supreme Court
and of this appeal.
  Solicitors for appellants :  Tippetts & Son.
  Solicitors for respondents :  Worthington, Evans & Son.
         [IN THE COURT OF APPEAL.]
   CARLILL v. CARBOLIC SMOKE BALL COMPANY
Contract--Offer by Advertisement--Performance of Condition in Advertisemen
 --Notification of Acceptance of Offer--Wager--Insurance--8 & 9 Vict.
 c. 109--14 Geo. 3, c. 48, s. 2.
  The defendants, the proprietors or a medical preparation called " The Carbolic
  Smoke Ball," issued an advertisement in which they offered to pay 100l. to any
person who contracted the influenza after having used one of their smoke balls
in a specified manner and for a specified period.  The plaintiff on the faith of
the advertisement bought one of the balls, and used it in the manner and for
the period specified, but nevertheless contracted the influenza :--
  Held, affirming the decision of Hawkins, J., that the above facts established
a contract by the defendants to pay the plaintiff 100l. in the event which had
happened ; that such contract was neither a contract by way of wagering
within 8 & 9 Vict. c. 109, nor a policy within 14 Geo. 3, c. 48, s. 2; and that
the plaintiff was entitled to recover.
  APPEAL from a decision of Hawkins, J. (2)
  The defendants, who were the proprietors and vendors of a
medical preparation called " The Carbolic Smoke Ball," inserted
in the Pall Mall Gazette of November 13, 1891, and in other
  (I) 1 E. & E. 213.                 (2) [1892] 2 Q. B. 484.
newspapers, the following advertisement: "100l. reward will be
paid by the Carbolic Smoke Ball Company to any person who
contracts the increasing epidemic influenza, colds, or any disease
caught by taking cold, after having used the ball three times
daily for two weeks according to the printed directions supplied
with each ball.  1000l. is deposited with the Alliance Bank,
Regent Street, shewing our sincerity in the matter.
  "During the last epidemic of influenza many thousand car-
bolic smoke balls were sold as preventives against this disease,
and in no ascertained case was the disease contracted by those
using the carbolic smoke ball.
  " One carbolic smoke ball will last a family several months,
making it the cheapest remedy in the world at the price, 10s.,
post free.  The ball can be refilled at a cast of 5s.  Address,
Carbolic Smoke Ball Company, 27, Princes Street, Hanover
Square, London."
  The plaintiff, a lady, on the faith of this advertisement, bought
one of the balls at a chemist's, and used it as directed, three
times a day, from November 20, 1891, to January 17, 1892 when
she was attacked by influenza.  Hawkins, J., held that she was
entitled to recover the 100l.  The defendants appealed.
  Finlay, Q.C., and T. Terrell, for the defendants. The facts
shew that there was no binding contract between the parties.
The case is not like Willims v. Carwardine (I), where the
money was to become payable on the performance of certain
acts by the plaintiff; here the plaintiff could not by any act of
her own establish a claim, for, to establish her right to the
money, it was necessary that she should be attacked by influenza---
an event over which she had no control.  The words express an
intention, but do not amount to a promise: Week v. Tibold. (2)
The present case is similar to Harris v. Nickerson. (3)  The
advertisement is too vague to be the basis of a contract; there is
no limit as to time, and no means of checking the use of the
ball.  Anyone who had influenza might come forward and de-
pose that he had used the ball for a fortnight, and it would be
  (1) 4 B.& Ad. 621.                  (2) 1 Roll. Abr. 6 (M.).
                   (3) Law Rep. 8. Q.B.D. 286.
impossible to disprove it.  Guthing v. Lyn (1) supports the view
that the terms are too vague to make a contract; there being no
limit as to time, a person might claim who took the influenza ten
Years after using the remedy.  There is no consideration moving
from the plaintiff:  Gerhard v. Bates (2).  The present case differs
from Denton v. Great Northern  Ry. Co. (3), for there an overt act
was done by the plaintiff on the faith of a statement by the
defendants.  In order to make a contract by fulfilment of a
condition, there must either be a communication of intention to
accept the offer, or there must be the performance of some overt
act. The mere doing an act in private will not be enough.
This principle was laid down by Lord Blackburn in Brogden v.
Metropolitan Ry. Co. (4)  The terms of the advertisement would
enable a person who stole the balls to claim the reward, though
his using them was no possible benefit to the defendants.  At
all events, the advertisement should be held to apply only to
persons who bought directly from the defendants.  But, if there
be a contract at all, it is a wagering contract, as being one where
the liability depends on an event beyond the control of the
parties, and which is therefore void under 8 & 9 Vict. c. 109.
Or, if not, it is bad under 14 Geo. 3, c. 48, s. 2, as being a policy
of insurance on the happening of an uncertain event, and not
conforming with the provisions of that section.
  Dickens, Q.C., and W B. Allen, for the plaintiff. [THE COURT
intimated that they required no argument as to the question
whether the contract was a wager or a policy of insurance.]
The advertisement clearly was an offer by the defendants; it
was published that it might be read and acted on and they
cannot be heard to say that it was an empty boast which they
were under no obligation to fulfil.  The offer was duly accepted.
An advertisement was addressed to all the public--as soon as a
person does the act mentioned, there is a contract with him.
It is said that there must be a communication of the accept-
ance ; but the language of Lord Blackburn, in Brogden v.
Metropolitan By. Co. (4) shews that merely doing the acts indi-
cated is an acceptance of the prposal.  It never was intended
  (1) 2 B. & Ad. 262.                 (3) 5 E. & B. 860.
  (2) 2 E. & B. 476.                  (4) 2 App. Cas. 666
that a person proposing to use the smoke ball should go to the
office and obtain a repetition of the statements in the advertise-
the advertisement to the effect that the use of the preparation
must be with their privity or under their superintendence.  Where
an offer is made to all the world, nothing can be imported beyond
the fulfilment of the conditions.  Notice before the event cannot
be required; the advertisement is an offer made to any person
who fulfils the condition, as is explained in Spencer v. Hard-
ing. (1)  Williams v. Carwardine (2) shews strongly that notice
to the person making the offer is not necessary.  The promise is
to the person who does an act, not to the person who says he is
going to do it and then does it.  As to notice after the event,
it could have no effect, and the present case is within the
language of Lord Blackburn in Brogden v. Metropolitan Ry.
Co. (3)  It is urged that the terms are too vague and uncertain
to make a contract; but, as regards parties, there is no more
uncertainty than in all other cases of this description.  It is said,
too, that the promise might apply to a person who stole any one
of the balls.  But it is clear that only a person who lawfully
acquired the preparation could claim the benefit of the adver-
tisement.  It is also urged that the terms should be held to
apply only to persons who bought directly from the defendants;
but that is not the import of the words, and there is no reason
for implying such a limitation, an increased sale being a benefit
to the defendants, though effected through a middleman and the
use of the balls must be presumed to serve as an advertisement
and increase the sale.  As to the want of restriction as to time,
there are several possible constructions of the terms; they may
mean that, after you have used it for a fortnight, you will be safe
so long as you go on using it, or that you will be safe during the
prevalence of the epidemic.  Or the true view may be that a
fortnight's use will make a person safe for a reasonable time.
Then as to the consideration.  In Gerhard v. Bates (4), Lord
Campbell never meant to say that if there was a direct invitation
to take shares, and shares were taken on the faith of it, there was
  (1) Law Rep. 5 C.P. 561.             (3) 2 App. Cas. 666.
  (2) 1 B.& Ad. 621.                   (4) 2 E.& B. 476.
no consideration.  The decision went on the form of the declaration,
which did not state that the contract extended to future holders.
The decision that there was no consideration was qualified by
the words "as between these parties," the plaintiff not having
alleged himself to be a member of the class to whom the promise
was made.
  Finlay, Q.C., in reply.  There is no binding contract.  The
money is payable on a person's taking influenza after having
used the ball for a fortnight, and the language would apply just
as well to a person who had used it for a fortnight before the
advertisement as to a person who used it on the faith of the
advertisement.  The advertisement is merely an expression of
intention to pay 100l. to a person who fulfils two conditions;
but it is not a request to do anything, and there is no more
consideration in using the ball than in contracting the influenza.
That a contract should be completed by a private act is against
the language of Lord Blackburn in Brogden v. Metropolitan Ry.
Co. (l).  The use of the ball at home stands on the same level
as the writing a letter which is kept in the writer's drawer.  In
Denton v. Great Northern Ry. Co. (2) the fact was ascertained by
a public, not a secret act.  The respondent relies on Williams v.
Carwardine (3), and the other cases of that class; but there a
service was done to the advertiser.  Here no service to the de-
fendants was requested, for it was no benefit to them that the balls
should be used : their interest was only that they should be sold.
Those cases also differ from the present in this important parti-
cular, that in them the service was one which could only be
performed by a limited number of persons, so there was no diffi-
culty in ascertaining with whom the contract was made.  It is
said the advertisement was not a legal contract, but a promise in
honour, which, if the defendants had been approached in a proper
way, they would have fulfilled.  A request is as necessary in
the case of an executed consideration as of as executory one:
Lampleigh v. Braithwait (4); and here there was no request.
Then as to the want of limitation as to time, it is conceded that
the defendants cannot have meant to contract without some
  (1) 2 App. Cas. 692.                 (3) 4 B.& Ad. 621.
  (2) 5 E.& B. 86.                     (4) 1 Sm. L.C. 9th ed. pp. 153,157, 159.
aid by the advertiser as proof of his sincerity in the matter--that
is, the sincerity of his promise to pay this 100l. in the event
which he has specified.  I say this for the purpose of giving point
to the observation that we are not inferring a promise; there is
the promise, as plain as words can make it.
  Then it is contended that it is not binding.  In the first place,
it is said that it is not made with anybody in particular.  Now
that point is common to the words of this advertisement and to
the words of all other advertisements offering rewards.  They
are offers to anybody who performs the conditions named in the
advertisement, and anybody who does perform the condition
accepts the offer.  In point of law this advertisement is an offer
to pay 100l. to anybody who will perform these conditions, and
the performance of the conditions is the acceptance of the offer.
That rests upon a string of authorities, the earliest of which is
Williams v. Carwardine (1), which has been followed by many
other decisions upon advertisements offering rewards.
  But then it is said, " Supposing that the performance of the
conditions is an acceptance of the offer, that acceptance ought
to have been notified."  Unquestionably, as a general proposition,
when an offer is made, it is neoseary in order to make a binding
contract, not only that it should be accepted, but that the accept-
ance should be notified.  But is that 3o in cases of this kind ?
I apprehend that they are an exception to that rule, or, if not
an exception, they are open to the observation that the notifica-
tion of the acceptance need not precede the performance.  This
offer is a continuing offer.  It was never revoked and if notice
of acceptance is required--which I doubt very much, for I rather
think the true view is that which was expressed and explained
by Lord Blackburn in the case of Brogden v. Metropolitan Ry.
Co. (2)---if notice of acceptance is required, the person who
makes the offer gets the notice of acceptance contemporaneously
with his notice of the performance of the condition.  If he gets
notice of the acceptance before his offer is revoked, that in prin-
ciple is all you want.  I, however, think that the true view, in a
case of this kind, is that the person who makes the offer shews
by his language and from the nature of the transaction that he
  (1) 4 B. & Ad. 621.               (2) 2 App. Cas. 666, 691.
does not expect and does not require notice of the acceptance
apart from notice of the performance.
  We, therefore, find here all the elements which are necessary
to form a binding contract enforceable in point of law, subject to
two observations.  First of all it is said that this advertisement
is so vague that you cannot really construe it as a promise--that
the vagueness of the language shews that a legal promise was
never intended or contemplated.  The language is vague and
uncertain in some respects, and particularly in this, that the
100l. is to be paid to any person who contracts the incrcasing
epidemic after having used the balls three times daily for two
weeks.  It is said, When are they to be used?  According to
the language of the advertisement no time is fixed, and, constru-
ing the offer most strongly against the person who has made it,
one might infer that any time was meant.  I do not think that
was meant and to hold the contrary would be pushing too far
the doctrine of taking language most strongly against the person
using it.  I do not think that business people or reasonable
people would understand the words as meaning that if you took
a smoke ball and used it three times daily for two weeks you
were to be guaranteed against infiuenza for the rest of your life,
and I think it would be pushing the language of the advertisement
too far to construe it as meaning that.  But if it does not mean
that, what does it mean ?  It is for the defendants to shew what
it does mean ; and it strikes me that there are two, and possibly
three, reasonable constructions to be put on this advertisement,
any one of which will answer the purpose of the plaintiff.
possibly it may be limited to persons catching the "increasing
epidemic " (that is, the then prevailing epidemic), or any colds
or discases caused by taking cold, during the prevalence of the
increasing epidemic.  That is one suggestion ; but it does
not commend itself to me.  Another suggested meaning is that
you are warranted free from catching this epidemie, or colds or
other diseases caused by taking cold, whilst you are using this
remedy after using it for two weeks.  If that is the meaning,
the plaintiff is right, for she used the remedy for two weeks and
went on using it till she got the epidemic.  Another meaning,
and the one which I rather prefer, is that the reward is offered to
any person who contracts the epidemic or other disease within a
reasonable time after having used the smoke ball.  Then it is
asked, What is a reasonable time ?  It has been sugge3ted that
there is no standard of reasonableness; that it depends upon the
reasonable time for a germ to develop!  I do not feel pressed
by that.  It strikes me that a reasonable time may be ascer-
tained in a business sense and in a sense satisfactory to a lawyer,
in this way; find out from a chemist what the ingredients are;
find out from a skilled physician how long the effect of such
ingredients on the system could be reasonably expected to
endure so as to protect a person from an epidemic or cold, and
in that way you will get a standard to be laid before a jury, or a
judge without a jury, by which they might exercise their judg-
ment as to what a reasonable time would be.  It strikes me, I
confess, that the true construction of this advertisement is that
100l. will be paid to anybody who uses this smoke ball three
times daily for two weeks according to the printed directions,
and who gets the influenza or cold or other diseases caused by
taking cold within a reasonable time after so using it; and if
that is the true construction, it is enough for the plaintiff.
  I come now to the last point which I think requires attention--
that is, the consideration.  It has been argued that this is nudum
pactum--that there is no consideration. We must apply to that
argument the usual legal tests.  Let us see whether there is no
advantage to the defendants.  It is said that the use of the ball
is no advantage to them, and that what benefits them is the
sale;  and the case is put that a lot of these balls might be stolen,
and that it would be no advantage to the defendants if the thief
or other people used them.  The answer to that, I think, is as
follows.  It is quite obvious that in the view of the advertisers
a use by the public of their remedy, if they can only get the
public to have confidence enough to use it, will react and
produce a sale which is directly beneficial to them.  Therefore,
the advertisers get out of the use an advantage which is enough
to constitute a consideration.
  But there is another view.  Does not the person who acts upon
this advertisement and accepts the offer put himself to some
inconvenience at the request of the defendants? Is it nothing
to use this ball three times daily for two weeks according to the
directions at the request of the advertiser?  Is that to go for
nothing?  It appears to me that there is a distinct inconvenience,
not to say a detriment, to any person who so uses the smoke ball.
I am of opinion, therefore, that there is ample consideration for
the promise.
  We were pressed upon this point with the case of Gerhard v.
Bates (1), which was the case of a promoter of companies who
had promised the bearers of share warrants that they should have
dividends for so many years, and the promise as alleged was held
not to shew any consideration.  Lord Campbell's judgment when
you come to examine it is open to the explanation, that the real
point in that case was that the promise, if any, was to the original
bearer and not to the plaintiff, and that as the plaintiff was not
suing in the name of the original bearer there was no contract
with him.  Then Lord Campbell goes on to enforce that view by
shewing that there was no consideration shewn for the promise
to him.  I cannot help thinking that Lord Campbell's observa-
tions would have been very different if the plaintiff in that action
had been an original bearer, or if the declaration had gone on
to shew what a socie/te/ anonyme was, and had alleged the promise
to have been, not only to the first bearer, but to anybody who
should become the bearer.  There was no such allegation, and
the Court said, in the absence of such allegation, they did not
know (judicially, of course) what a socie/te/ anonyme was, and,
therefore there was no consideration.  But in the print case,
for the reasons I have given, I cannot see the slightest difficulty
in coming to the conclusion that there is consideration.
  It appears to me, therefore, that the defendants must per-
form their promise, and, if they have been so unwary as to expose
themselves to a great many actions, so much the worse for
them.
  BOWEN, L.J.  I am of the same opinion.  We were asked to
say that this document was a contract too vague to be enforced.
  The first observation which arises is that the document itself
is not a contract at all, it is only an offer made to the public.
                (1) 2 E.& B. 476.
The defendants contend next, that it is an offer the terms of
which are too vague to be treated as a definite offer, inasmuch
as there is no limit of time fixed for the catching of the infiuenza,
and it cannot be supposed that the advertisers seriously meant to
promise to pay money to every person who catches the infiuenza
at any time after the inhaling of the smake ball.  It was urged
also, that if you look at this document you will find much vague-
ness as to the person with whom the contract was intended to
be made---that, in the first place, its terms are wide enough to
include persons who may have used the smoke ball before the
advertisement was issued ; at all events, that it is an offer to the
world in general, and, also, that it is unreasonable to suppose it
to be a definite offer, because nobody in their senses would con-
tract themselves out of the opportunity of checking the experi-
ment which was going to be made at their own expense.  It is
also contended that the advertisement is rather in the nature of
a puff or a proclamation than a promise or offer intended to mature
into a contract when accepted.  But the main point seems to
be that the vagueness of the document shews that no contract
whatever was intended.  It seems to me that in order to arrive
at a right conclusion we must read this advertisement in its plain
meaning, as the public would understand it.  It was intended to
be issued to the public and to be read by the public.  How
would an ordinary person reading this document construe it ?
It was intended unquestionably to have some effect, and I think
the effect which it was intended to have, was to make people use
the smoke ball, because the suggestions and allegations which it
contains are directed immediately to the use of the smoke ball
as distinct from the purchase of it.  It did not follow that the
smoke ball was to be purchased from the defendants directly, or
even from agents of theirs directly.  The intention was that the
circulation of the smoke ball should be promoted, and that the
use of it should be increased.  The advertisement begin by
saying that a reward will be paid by the Carbolic Smoke Ball
Company to any person who contracts the increasing epidemic
after using the ball.  It has been said that the words do not
apply only to persons who contract the epidemic after the publi-
cation of the advertisement, but include psrsons who had pr-re-
viously contracted the influenza. I cannot so read the advertise-
ment. It is written in colloquial and popular language, and I
think that it is equivalent to this: "100l. will be paid to any per-
son who shall contract the increasing epidemic after having used
the carbolic smoke ball three times daily for two weeks."  And
it seems to me that the way in which the public would read it
would be this, that if anybody, after the advertisement was pub-
lished, used three times daily for two weeks the carbolic smoke
ball, and then caught cold, he would be entitled to the reward.
Then again it was said: "How long is this protection to endure?
Is it to go on for ever, or for what limit of time?"  I think that
there are two constructions of this document, each of which is
good sense, and each of which seems to me to satisfy the
exigencies of the present action.  It may mean that the protec-
tion is warranted to last during the epidemic, and it was during
the epidemic that the plaintiff contracted the disease.  I think,
more probably, it means that the smoke ball will be a protection
while it is in use.  That seems to me the way in which an ordi-
nary person would understand an advertisement about medicine,
and about a specific against influenza.  It could not be supposed
that after you have left off using it you are still to be protected
for ever, as if there was to be a stamp set upon your forehead
that you were never to catch influenza because you had once
used the carbolic smoke ball.  I think the immunity is to last
during the use of the ball.  That is the way in which I should
naturally read it, and it seems to me that the subsequent
language of the advertisement supports that construction.  It
says:"During the last epidemic of influenza many thousand
carbolic smoke balls were sold, and in no ascertained case was
the disease contracted by those using " (not "who had used")
"the carbolic smoke ball," and it concludes with saying that one
smoke ball will last a family several months (which imports that
it is to be efficacious while it is being used), and that the
ball can be refilled at a cost of 5s.  I, therefors, have myself
no hesitation in saying that I think, on the construction of this
advertisement, the protection was to enure during the time that
the carbolic smoke ball was being used.  My brother, the Lord
Justice who preceded me, thinks that the contract would be
sufficiently definite if you were to read it in the sense that the
protection was to be warranted during a reasonable period after
use.  I have some difficulty myself on that point; but it is not
necessary for me to consider it further, because the disease here
was contracted during the use of the carbolic smoke ball.
  Was it intended that the l00l. should, if the conditions were
fulfilled, be paid ? The advertisement says that 1000l. is lodged
at the bank for the purpose.  Therefore, it cannot be said that
the statement that 100l. would be paid was intended to be a mere
puff.  I think it was intended to be understood by the public as
an offer which was to be acted upon.
  But it was said there was no check on the part of the
persons who issued the advertisement, and that it would be an
insensate thing to promise 100l. to a person who used the smoke
ball unless you could check or superintend his manner of using
it.  The answer to that argument 3eems to me to be that if a
probably does so because it pays him to make them, and, if he
has made them, the extravagance of the promises is no reason in
law why he should not be bound by them.
  It was also said that the contract is made with all the world---
that is, with everybody ; and that you cannot contract with
everybody.  It is not a contract made with all the world.  There
is the fallacy of the argument.  It is an offer made to all the
world; and why should not an offer be made to all the world
which is to ripen into a contract with anybody who comes for-
ward and performs the condition ?  It is an offer to become liable
to any one who, before it is retracted, performs the condition,
and, although the offer is made to the world, the contract is
made with that limited portion of the public who come forward
and perform the condition on the faith of the advertisement.  It
is not like cases in which you offer to negotiate, or you issue
advertisements that you have got a stock of books to sell, or
houses to let, in which case there is no offer to be bound by any
contract.  Such advertisements are offers to negotiate---offers to
receive offers---offers to chaffer, as, I think, some learned judge
in one of the cases has said.  If this is an offer to be bound then
it is a contract the moment the person fulfils the condition.
That seems to me to be sense, and it is also the ground on which
all these advertisement cases have been decided during the
century ; and it cannot be put better than in Willes, J.'s, judgment
in Spencer v. Harding. (1)  " In the advertisement cases," he says,
 lhre never iwasany doubt that the advertisement amounted
to a promise to pay the money to the person who first gave in-
formation. The difficulty suggested was that it was a contract
with all the world.  But that, of course, was soon overruled.  It
was an offer to become liable to any person who before the offer
should be retracted should happen to be the person to fulfil the
contract, of which the advertisement was an offer or tender.  That
is not the sort of difficulty which presents itself here.  If the
circular had gone on, 'and we undertake to sell to the highest
bidder,' the reward cases would have applied, and there would
have been a good contract in respect of the persons."  As soon
as the highest bidder presented himself, says Willes, J., the
person who was to hold the vinculum juris on the other side of
the contract was ascertained, and it became settled.
  Then it was said that there was no notification of the accept-
ance of the contract.  One cannot doubt that, as an ordinary
rule of law, an acceptance of an offer made ought to be notified
to the person who makes the offer, in order that the two minds
may come together. Unless this is done the two minds may be
apart, and there is not that consensus which is necessary accord-
ing to the English law--I say nothing about the laws of other
countries--to make a contract.  But there is this clear gloss to
required for the benefit of the person who makes the offer, the
person who makes the offer may dispense with notice to himself
if he thinks it desirable to do so, and I suppose there can be no
doubt that where a person in an offer made by him to another
person expressly or impliedly intimates a particular mode of
acceptance as sufficient to make the bargain binding, it is only
necessary for the other person to whom such offer is made to
follow the indicated method of acceptance; and if the person
making the offer, expressly or impliedly intimates in his offer that
it will be sufficient to act on the proposal without communicating
           (1) Law Rep. 5 C.P. 561, 563.
acceptance of it to himself, performance of the condition is a
sufficient acceptance without notification.
  That seems to me to be the principle which lies at the bottom
of the acceptance cases, of which two instances are the well-
known judgment of Mellish, L.J., in Harris's Case (1), and the
very instrictive judgment of Lord Blackburn in Brogden v.
Metropolitan Ry. Co. (2), in which he appears to me to take
exactly the line I have indicated.
  Now, if that is the law, how are we to find out whether the
person who makes the offer does intimate that notification of
acceptance will not be necessary in order to constitute a binding
bargain?  In many cases you look to the offer itself.  In many
cases you extract from the charactsr of the transaction that noti-
fication is not required, and in the advertisement case it seems
to me to follow as an inference to be drawn from the transaction
itself that a person is not to notify his acceptance of the offer
before he performs the condition, but that if he performs the
condition notification is dispensed with.  It seems to me that
from the point of view of common sense no other idea could be
entertained.  If I advertise to the world that my dog is lost, and
that anybody who brings the dog to a particular place will be paid
some money, are all the police or other persons whose business it
is to find lost dogs to be expected to sit down and write me a note
saying that they have accepted my proposal?  Why, of course,
they at once look after the dog, and as soon as they find the dog
they have performed the condition.  The essence of the trans-
action is that the dog should be found, and it is not necessary
make the contract binding there should be any notification of
acceptance.  It follows from the nature of the thing that the
performance of the condition is sufficient acceptance without the
notification of it, and a person who makes an offer in an adver-
tisement of that kind makes an offer which must be read by the
light of that common sense reflection.  He does therefore, in his
offer impliedly indicate that he does not require notification of
the acceptance of the offer.
  A further argument for the defendants was that this was a
    (1) Law Rep. 7 Ch. 587.        (2) 2 AW. Cas. 666, 691.
nudum pactum--that there was no consideration for the promise
--that taking the influenza was only a condition, and that the
using the smoke ball was only a condition, and that there was no
consideration at all ; in fact, that there was no request, express
or implied, to use the smoke ball.  Now, I will not enter into an
elaborate discussion upon the law as to requests in this kind of
contracts. I will simply refer to Victors v. Davies (1) a
Serjeant Manning's note to Figher v. Pyne (2), which everybody
ought to read who wishes to embark in this controversy.  The
short answer, to abstain from academical discussion, is, it seems
to me, that there is here a request to use involved in the offer.
Then as to the alleged want of consideration.  The definition of
" consideration " given in Selwyn's Nisi Prius, 8th ed. p. 47,
which is cited and adopted by Tindal, C.J., in the case of Lay-
thoarp v. Bryant (3), is this :  " Any act of the plaintiff from which
the defendant derives a benefit or advantage, or any labour,
detriment, or inconvenience 3ustained by the plaintiff, provided
such act is performed or such inconvenience suffered by the
plaintiff, with the consent, either express or implied, of the de-
fendant."  Can it be said here that if the person who reads this
advertisement applies thrice daily, for such time as may seem to
him tolerable, the carbolic smoke ball to his nostrils for a whole
fortnight, he is doing nothing at all--that it is a mere act which
is not to count towards consideration to support a promise (for
the law does not require us to measure the adequacy of the con-
sideration).  Inconvenience sustained by one party at the request
of the other is enough to create a consideration.  I think, there-
fore, that it is consideration enough that the plaintiff took the
trouble of using the smoke ball.  But I think also that the
defendants received a benefit from this user, for the use of the
smoke ball was contemplated by the defendants as being in-
directly a benefit to them, because the use of the smoke balls
would promote their sale.
  Then we were pressed with Gerhard v. Bates. (4)  In Gerhard
v. Bates (4), which arose upon demurrer, the point upon which
the action failed was that the plaintiff did not allege that the
  (1) 12 M. & W. 758.                    (3) 3 Scott, 238, 250.
  (2) 1 M. & G. 265.                     (4) 2 E. & B. 476.
promise was made to the class of which alone the plaintiff was
a member, and that therefore there was no privity between the
plaintiffs and the defendant.  Then Lord Campbell went on to
give a second reason.  If his first reason was not enough, and
the plaintiff and the defendant there had come together as con-
acting parties and the only question was consideration it
seems to me Lord Campbell's reasoning would not have been
sound.  It is only to be supported by reading it as an additional
reason for thinking that they had not come into the relation of
contracting parties ; but, if so, the language was superfluous.  The
truth is, that if in that case you had found a contract between
the parties there would have been no difficulty about considera-
tion; but you could not find such a contract.  Here, in the
same way, if you once make up your mind that there was a
promise made to this lady who is the plaintiff, as one of the
public--a promise made to her that if she used the smoke ball
three times daily for a fortnight and got the influenza, she
should have 100l., it seems to me that her using the smoke ball
was sufficient consideration. I cannot picture to myself the
view of the law on which the contrary could be held when you
have once found who are the contracting parties.  If I say to a
person, "If you use such and such a medicine for a week I will
give you 5l.," and he uses it, there is ample consideration for the
promise.

  A. L. SMITH, L.J. The first point in this case is, whether
the defendants' advertisement which appeared in the Pall Mall
Gazette was an offer which, when accepted and its conditions per-
formed, constituted a promise to pay, assuming there was good
consideration to uphold that promise, or whether it was only a
puff from which no promise could be implied, or, as put by
Mr. Finley, a mere statement by the defendants of the confidence
they entertained in the efficacy of their remedy.  Or as I might
put it in the words of Lord Campbell in Denton v. Great Northern
Ry. Co. (1), whether this advertisement was mere waste paper.
That is the first matter to be determined.  It seems to me that
this advertisement reads as follows : " 100l. reward will be paid
                        (1) 5 E. & B. 860.
by the Carbolic Smoke Ball Company to any person who after
having used the ball three times daily for two weeks according
to the printed directions supplied with such ball contracts the
increasing epidemic influenza, colds, or any diseases caused by
taking cold.  The ball will last a family several months and
can be refilled at a cost of 5s."  If I may paraphrase it, it means
this:  "If you"--that is one of the public as yet not ascertained,
but who, as Lindley and Bowen, L.JJ., have pointed out, will
be ascertained by the performing the condition---" will hercafter
use my smoke ball three times daily for two weeks according to
my printed directions, I will pay you 100l. if you contract the
influenza within the period mentioned in the advertisement."
Now, is there not a request there ?  It comes to this: " In con-
sideration of your buying my smoke ball, and then using it as
I prescribe, I promise that if you catch the influenza within a
certain time I will pay you 100l."  It must not be forgotten
that this advertisement states that as security for what is being
offered, and as proof of the sincerity of the offer, 1000l. is actually
lodged at the bank wherewith to satisfy any possible demands
which might be made in the event of the conditions contained
therein being fulfilled and a person catching the epidemic so as
to entitle him to the 100l.  How can it be said that such a
statement as that embodied only a mere expression of confidence
in the wares which the defendants had to sell?  I cannot read
the advertisement in any such way.  In my judgment, the
advertisement was an offer intended to be acted  upon, and when
accepted and the conditions performed constituted a binding
promise on which an action would lie, assuming there was con-
sideration for that promise.  The defendants have contended
that it was a promise in honour or an agreement or a contract in
honour---whatever that may mean.  I understand that if there is
no consideration for a promise, it may be a promise in honour,
or, as we should call it, a promise without consideration and
nudum pactum; but if anything else is meant, I do not under-
stand it,  I do not understand what a bargain or a promise or an
agreement in honour is unless it is one on which an action
cannot be brought because it is nudum pactum, and about
nudum pactum I will say a word in a moment.
  In my judgment, therefore, this first point fails, and this was
an offer intended to be acted upon, and, when acted upon and
the conditions performed, constituted a promise to pay.
  In the next place, it was said that the promise was too wide,
because there is no limit of time within which the person has to
catch the epidemic.  There are three possible limits of time to
this contract.  The first is, catching the epidemic during its
continuance ; the second is, catching the influeuza during the
time you are using the ball; the third is, catching the influenza
within a reasonable time after the expiration of the two weeks
during which you have used the ball three times daily.  It is
not necsssary to say which is the correct construction of this
contract, for no question arises thereon.  Whichever is the true
construction, there is sufficient limit of time so as not to make
the contract too vague on that account.
  Then it was argued, that if the advertisement constituted an
offer which might culminate in a contract if it was accepted,
and its conditions performed, yet it was not accepted by the
plaintiff in the manner contemplated, and that the offer contem-
plated was such that notice of the acceptance had to be given
by the party using the carbolic ball to the defendants before
user, so that the defendants might be at liberty to superintend
the experiment.  All I can say is, that there is no such clause
in the advertisement and that, in my judgment,  no such clause
can be read into it; and I entncirely agree with what has fallen
from my Brothers, that this is one of those cases in which a
performance of the condition by using thesee smoke balls for two
weeks three times a day is an acceptance of the offer.
  It was then said there was no person named in the advertise-
ment with whom any contract was made.  That, I suppose, has
taken place in every case in which actions on advertisements
have been maintained, from the time of Williams v. Carwar-
dine (1), and before that, down to the present day.  I have
nothing to add to what has been said on that subject, except
that a person becomes a persona designata and able to sue, when
he performs the conditions mentioned in the advertisement.
  Lastly, it ws said that there was no consideration, and that
                         (1) 4 B. & Ad. 621.
it was nudum pactum.  There are two considerations here.  One
is the consideration of the inconvenience of having to use this
carbolic smoke ball for two weeks three times a day; and the
other more important consideration is the money gain likely to
accrue to the defendants by the enhanced sale of the smoke balls,
by reason of the plaintiff's user of them.  There is ample con-
sideration to support this promise.  I have only to add that as
regards the policy and the wagering points, in my judgment
there is nothing in either of them
                                            Appeal dismissed.
  Solicitors :  J. Banks Pittman; Field & Roscoe.
                                                     H. C. J.
    SYNGE v. SYNGE.
Husband and  Wife--Contract in Consideration of Marriage--Promise to
leave House to intended Wife for Life--Promiser putting it out of his
Power to perform Promise--Immediate Right of Action--Claim of
Damages--Measure of Damages--Power of Court to make Declaration of
Right--Power to decree Conveyanee after Death of Promiser.
   The defendant before, and as an inducement to, his marriage with the
plaintiff promised in writing, as part of the terms of the marriage, to leave a
house and land to her for her life.  The plaintiff consented to the terms
proposed, and the marriage took place; but the defendant subsequently
conveyed the property by deed to a third person.  In an action to recover
damages for breach of contract:--
  Held, that as the defendant had put it out of his power to perform the con-
tract there had been a breach, in respect of which the plaintiff had an im-
mediate right of action to recover damages, and that the measure of such
damages was the value of the possible life estate to which the plaintiff would
be entitled if she survived the defendant.
  Held also that where a proposai in writing to leave property by will,
  faith of it, if the proposai relates to a defined piece of real property the Court
  has power to decree a conveyance of that property after the death of the
  person making the proposal against ail who claim under him as volunteers.
  APPEAL from a judgment of Mathew, J., on further considera-
tion.
  The claim in this action was on an ante-nuptial promise, made
by the defendant in consideration of marriage, to leave by will
to the plaintiff a certain house and land for her lifetime.  It was
alleged that the defendant had conveyed his whole estate and
interest in the property to third persons, and thereby incapaci-
tated himself from keeping  his promise; and the plaintiff claimed
a declaration that she was entitled to a life estate in the premises
commencing on the death of her husband, and that the convey-
ance thereof was subject to her life estate, and in the alternative
the plaintiff claimed damages for breach of agreement.  The
agreement relied on was contained in a letter from the defendant
to the plaintiff written a short time before the marriage; but the
learned judge was of opinion that the result of the evidence was
that the letter did not amount to a contract, but only to an
pression of an intention on the part of the defendant to leave
the house and land to the plaintiff, and that she had so understood
it. He accordingly gave judgment for the defendant.
  The plaintiff appealed.
  1893.  Nov. 30. Bucknill, Q.C., and Blake Odgers, Q.C., for the
plaintiff.  There was a binding contract to leave the property to
the plaintiff, and on the faith of which the marriage took
to by the plaintiff, and on the faith of which the marriage took
place.  For breach of such a contract damages are recoverable :
Needham v. Kirkman (l) ; Goilmere v. Battison (2), sub nom.
Goylmer v. Paddiston. (3)
  The defendant has put it out of his power to carry out his
promise, and there is therefore an immediate right of action to
recover damages for breach of  contract:  Hochster v. De la
Tour (4); Short v. Stone (5); Ford v. Tiley (6); Frost v.
Knight. (7) (They also cited Maddison v. Alderson. (8)]
  Coleridge, Q.C., and W. Howland Roberts, for the defendant.
The learned judge was right in the view that there was no bind-
ing contract.  Even if there were a promise, it would be con-
ditional on survivorship, and it does not follow that there will be
a breach.  These considerations are opposed to the idea that
there is an immediate right of action, and there are no cases of
an action brought before the death of the promiser.  The form
of the question asked in Needham v. Kirkman (1) shews that
before the death of the promiser there could be no breach.  (They
cited also In re Parkin. (9)j
  Bucknill, Q.C., in reply.
  1894. Jan. 17.  KAY, L.J., delivered the judgment of the
Court. (10)  The questions which arise in this case are these:--
  1. Was there a binding contract ?
  2. Was it such a contract as could be enforced in equity, or
was there a remedy in damages for the breach of it?
  (1) 3 B.& A. 531.                 (7) Law Rep. 7 Ex. 111.
  (2) 1 Vern. 48.                   (8) 8 App. Cas. 467.
  (3) 2 Vent. 353.                  (9) [1892] 3 Ch. 510.
  (4) 2 E.& B. 678.                 (10) Lord Esher, M.R., Lopes, L.J.,
  (5) 8 Q.B. 358.                   and Kay, L.J.
  (6) 6 B.& C. 325.
 3. Has the time arrived at which such remedy can be
asserted?
 4. If the remedy be by way of damages, what amount of
damages should be given ?
  The action was tried by a judge without a jury, so that all
questions both of fact and law are open on this appeal.
  It will be convenient to consider the questions in the order in
which they are stated.
  The alleged contract is contained in a letter of December 24,
1883, by the defendant to a lady whom he was desirous to marry,
and is in these words:---
  " You my love thoroughly understand the terms (and I dare-
say have told Mr. Woodruff on which we are to put a stop to all
this bother by becoming one another) which are that I leave
house and land to you for your lifetime. . . . True it is possible
but highly improbable that I might come in for the title and
should be much better off.  Should such a thing happen we
could see what I ought and would do for you."
  There seems to be no doubt that the house and land referred
to were the house and a small piece of land at Ardfield in
Devonshire, worth it is said about 60l. or 70l. a year, in which the
defendant was then residing with two daughters by a former
marriage.  The defendant was not then Sir R. Synge.  He suc-
ceeded to the title afterwards.  The lady who is the plaintiff had
some property of her own of which Mr. Woodruff was trustee
He was not a solicitor.
  The construction of the letter is plain.  It is a statement of
the " terms " as to property on which the defendant proposed to
marry the lady.  The marriage took place on January 5, 1884,
ten days after the date of the letter.
  It is argued that the plaintiff did not understand it to be a
binding promise, and did not so treat it.  (The judgment then
dealt with the evidence, and continued:---]
  The learned judge who decided this case has held that the
letter was not treated by the lady as a contract, although by the
advice of Mr. Woodruff she preserved it.  The inference, how-
ever, that she accepted the terms and married on the faith of the
promise in writing, seems to us irresitible.  We cannot, with
deference to the learned judge, agree in his view that she treated
the letter as a mere statement of intention by which the intended
husband was not to be bound. The law relating to proposals of
this kind before marriage was thus stated by Lord Lyndhurst, L.C.,
in Hammersley v. De Biel (1): "The principle of law, at least of
equity is this--that if a party holds out inducements to another
to celebrate a marriage, and holds them out deliberately and
plainly, and the other party consents, and celebrates the mar-
riage in consequence of them, if he had good reason to expect
that it was intended that he should have the benefit of the pro-
posal which was so held out, a Court of Equity will take care
that he is not disappointed, and will give effect to the proposal."
  We are of opinion that the proposal of terms in this case was
made as an inducement to the lady to marry, that she consented
to the terms, and married the defendant on the faith that he
would keep his word, and that accordingly there was a binding
contract on the defendant's part to leave to his wife the house
and land at Ardfield for her life.
  Then, secondly, what is the remedy ?  Marriage is a valuable
consideration for such a contract of the highest order, and where,
as here, the contract is in writing, so that there is no question
upon the Statute of Frauds, in the language already quoted, a
Court of Equity will take care that the party who marries on the
faith of such a proposal "is not disappointed, and will give effect
to the proposal."
  In Hammersley v. De Biel (1) the proposal was made on behalf
of the intended wife's father, by his authority, and was reduced
into writing, and was to the effect that the father would pay
down 10,000l., to be settled on the intended husband and wife
and their children, the husband to secure a jointure of 500l. a
year to the wife if she survived him ;  and then followed the pro-
vision on which the question arose, by which the father " proposes
for the present to allow his daughter 200l. per annum for her
private use, . . . . and also intends to leave a further sum of
10,000l. in his will to Miss Thomson, to be settled on her and her
children."  After the father's death, without having made the
promised provision by will, the only child of the marriage--his
                 (1) 12 Cl.& F. 45, at p. 78.
mother having died before her father--instituted a suit in equity
against his grandfather's executors to recover 10,000l. out of his
assets.  Lord Langdale, M.R., held that by acceptance the pro-
posal had "ripened into an agreement," and that the plaintiff
was entitled to the relief he prayed--i.e., to the sum of 10,000l.,
with interest at 4 per cent. from the end of one year after the
father's death, on the footing of a legacy.  Lord Cottenham, L.C.,
affirmed this decision, saying this (1) : " I propose, first, to con-
sider whether there was any such agreement previous to the
marriage of the plaintiff's father and mother as was binding on
the late Mr. Thomson to give an additional 10,000l. as the portion
of his daughter.  If it be supposed to be necessary for this pur-
pose to find a contract, such as usually accompanies transactions
of importance in the pecuniary affairs of mankind, there may not
be found in the memorandum, or in the other evidence in the
cause, proof of any such contract; and this may have led to the
defence set up by the defendants; but when the authorities on
this subject are attended to, it will be found that no such formal
contract is required."
  This was affirmed in the House of Lords by Lord Lynd-
hurst, L.C., Lord Brougham, and Lord Campbell, without calling
upon the respondents.  We have examined the case closely,
because it is of the highest authority, not merely as a judgment
of the House of Lords, but it was decided by some of the best
equity lawyers of that time.  Lord St. Leonards has criticized the
decision on the ground that the memorandum in that case might
have been construed as a mere expression of an intention, not
as a definite propoasl which could by acceptance ripen into a
contract: Sugden's Law of Property, p. 53.  But he does not
intimate a doubt that the decision was right if the propossl was
not merely of an intention which might be changed.  Therefore,
a definite proposal in writing so as to satisfy the Statute of
Frauds to leave property by will, made to induce a marriage,
and acceptsd, and the marriage made on the faith of it, will be
enforced in equity.
  Then, what is the remedy where the proposal relates to a
defined piece of real property ?  We have no doubt of the power
             (1) 12 Cl. & F. 45, at p. 62, n.
of the Court to decree a conveyance of that property after the
death of the person making the proposal against all who claim
under him as volunteers.
  It is argued that Courts of Equity cannot compel a man to
make a will.  But neither can they compel him to execute a
deed.  They, however, can decree the heir or devisee in such a
case to convey the land to the widow for life, and under the
Trustee Acts can make a vesting order, or direct that someone
shall convey for him if he refuses.  And under the like circum-
stances, the Court has power to make a declaration of the lady's
right.
  But counsel do not press for such relief, or ask for a declara-
tion to bind the house and land.  The relief they ask is damages
for breach of contract.  It seems to be proved that the grantees
of the property under the deeds executed by Sir R. Synge took
without notice of the letter; they acquired, as we understand,
the legal estate by the grant.  If there was any valuable con-
sideration moving from them, no relief in the nature of specific
performance could be given against them ; and it is suggested
that the property, being partly leasehold, according to the de-
cision in Price v. Jenkins (1), there was such valuable considera-
tion. It is not necessary to examine this argument, as counsel
elect to ask for damages only.
  Sir R. Synge had all his lifetime to perform this contract;
but, in order to perform it, he must in his lifetime make a dis-
position in favour of Lady Synge.  If he died without having
done so, he would have broken his contract.  The breach would
be omitting in his lifetime to make such a disposition.  True, it
would only take effect at his death ; but the breach must take
place in his lifetime, and as by the conveyance to his daughters
he put it absolutely out of his power to perform this contract.
Lady Synge, according to well-known decisions (Hochster v.
De la Tour (2); Frost v.Knight (3) ), had a right to treat that con-
veyance as an absolute breach of contract, and to sue at once for
damages; and as this Court has both legal and equitable juris-
diction, we are of opinion that such relief should be granted.
  (1) 5 Ch.D. 619.                       (2) 2 E.&B. 678.
                  (3) Law Rep. 7 Ex. 111.
  We have not before us the materials for assessing such damages.
The amount must depend on the value of the possible life estate
which Lady Synge would be entitled to if she survived her
husband.  Their comparative ages would, of course, be a chief
factor in such a calculation.  There must be an inquiry as to the
proper amount of damages.
  Sir R. Synge must pay the costs of the action here and in the
Court below.
                                     Appeal allowed.
  Soliciters for plaintiff: Torr, Janeway, Gribble, Odie, & Sin-
clair, for Eastly, Jarman, & Eastly, Torquay.
  Solicitors for defendant :  Wood, Bigg, & Nash, for Kitson
Mackenzie, & Hext, Torquay.
                                                   A. M.
                    ROOKE v. DAWSON.
Charity--Administration--Announcement of Scholarship--Contract or
Invitation--Refusal to elect--Action by Candidate--Consent of Charity
Commissioners--Charitable Trusts Act, 1853 (16 & 17 Vict. c. 137) s. 17.
  A trust deed provided that a scholarship should be awarded to the
pupil leaving the M. School and going to University College, London, who
should pass the best examination in subjects to be determined upon from
time to time by the duly appointed examiners for the scholarship; the
trustees announced an examination for june, 1894, which was held by a
duly appionted examiner, and in which the Plaintiff obtained the highest
number of marks.  The announcement of the examination contained no
offer or statement that the scholarship would be awarded to the pupil who
passed the best examination.  The trustees having declined to award the
scholarship to the Plaintiff, this action was commenced against them
claiming a declaration that the Plaintiff was entitled to the possession and
enjoyment of the scholarship, and an order directing the Defendants to
put the Plaintiff in possession :--
  Held, that the trusts of the deed could not be imported into the announce-
ment of the examination; that there was nothing in the nature of a
contract between the Plaintiff and the trustees, and that, as the Plaintiff's
alleged individual equitable right involved the partial execution or adminis-
tration of the charitable trusts, the certificate of the Charity Commissioners
was necessary before the action could be proceeded with.
  Rendall v. Blair (1) discussed and explained.
MOTION.
entitled to the possession and enjoyment of a scholarship founded
by a trust deed of January 1854, of which the Defendants were
the present trustees; the only question raised by the present
application was, whether the cartificate of the Charity Commis-
sioners, pursuant to sect. 17 of the Charitable Trusts Act, 1853
was necessary before the action could be proceeded with.  The
facts material for the purposes of this report, as set forth in the
statement of claim, were as follows:--
  By the deed of January, 1854, it was provided that the trustes
for the time being should at all times thereafter stand possessed
of a capitsl sum of #l000, and the securities or property in or
                   (1) 45 Ch.D. 139.
upon which the same might from time to time be invested, as a
fund or endowment for the support of a scholarship in connection
with the Protestant Dissenters' Grammar School at Mill Hill,
Hendon, in the county of Middlesex, to be called the Bousfield
Scholarship, upon the trusts and subject to (amongst others) the
following rules: (1st.) That the scholarship should be of the
value of such net yearly income as the said capital sum of #l000
when invested should produce.  (2nd.) That it should be tenable
for three years from the time of the scholar elect entering at one
of the colleges thereinafter mentioned, provided he should
continue his studies at such college as aforesaid.  (3rd.) That
the holder should pursue his studies during such three years at
University College, London (or, if intended for the ministry), either
there, or at New College, London, and, on his ceasing to do so, he
should forfeit and vacate the scholarship for the then unexpired
portion of the three years, and the scholarship should, on such
forfeiture, be again bestowed as thereinafter provided.  (6th.)  That
on any avoidance thereof, except as in the 8th rule mentioned,
the scholarship should be awarded to the pupil leaving Mill Hill
School, and going to such college as aforesaid, who should pass
the best examination in subjects to be determined upon from
time to time by the examiner or examiners for the scholarship.
(7th.) That the examination should be held at some time within
the first seven days of June.  (8th.) That when any vacancy
should occur, by death or other means within a period of three
years from the last avoidance of the scholarship, if no half-
yearly payment should have become due to the scholar elect so
avoiding it, then the next highest boy at the last examination
who was dnly qualified to hold the scholarship should succeed
thereto, but if there should be no such boy, or if any half-yearly
payment should have been made or become due to the scholar
so avoiding the scholarship, the scholarship should remain
vacant till the following June.  (9th.) That the examiner or
examiners for the scholarship should from time to time be chosen
by the trustees for the time being, subject to the approval of the
committee of the said school.
  In June, 1893, the scholarship having become vacant, an
examination was held by examiners duly appointed in accordance
with the provisions of the trust deed; at this examination the
Plaintiff and three other duly qualified candidates presented
themselves, and as the result of the examination, the Plaintiff
was placed third in order of merit.
  In September, 1893, the candidate who had been placed first
in the examination resigned the scholarship;  but the Defendants
did not give notice of such resignation to the next highest
candidate, nor award him the scholarship ; but they announced
instead that another examination for the said scholarship would
be held in the year 1894.
  An examination was accordingly held in June, 1894, by a duly
appointed examiner, and at this examination two duly qualified
candidates presented themselves, namely, the Plaintiff and
another.  The Plaintiff passed the best examination, obtaining
570 marks, while the other candidate obtained only 496 marks.
The Plaintiff duly entered as a student at University College,
London, on the first day of the October term, 1894, and was still
pursuing his studies at that college.
  By a deed poll of November, 1894, the candidate who had been
second in the examination of June, 1893, renounced and dis-
claimed all title to or interest in the said scholarship.
  The Plaintiff submitted that, under the circumstancas above
stated, he was entitled to the enjoyment of the said scholarship,
and he alleged that he had applied to the Defendants to award
the same to him accordingly, but that the Defendants refused to
award the said scholarship to him, or to recognise any right or
title of the Plaintiff in or to the same.
  The Plaintiff, after alleging his willingness to perform and
fulfil all the conditions of holding, and enjoying the scholar-
ship, claimed "A declaration that under the circumstances
above stated he is entitled to the possession and enjoyment of
the said Bousfield Scholarship, subject to his performing the
conditions in the above stated indenture expressed."
  " An order directing the Defendants forthwith to put the
Plaintiff in the possession and enjoyment of the said scholarship
accordingly."
  The writ was issued on the 18th of December, 1894, the foot-
note stating that the Defendants wers sued as trustees.
The Defendants now moved to stay all further proceedings, on
the ground that an order or certificate of the Charity Commis-
sioners authorizing the action, had not been obtained under
sect. 17 of the Charitable Trusts Act, 1853.
  Farwell, Q.C., and Micklem, for the Defendants :--
  The proper way of raising this objection appears to be by a
motion to stay proceedings: Hodgson v. Forster (1).
  The only interest of the Plaintiff is as an object of the charity,
and the claim involves a partial administration; the consent of
the Charity Comissioners is, therefore, necessary: Braund v.
Earl of Devon (2) ;  Benthall v. Earl of Kilmorey (3).
  The fact that administration is not expressly asked for by the
statement of claim makes no difference, because that claim, in
effect, asks to receive the funds of the charity: Tudor's Charitable
Trusts (4).  [Blandford v. Thackerell (5) was also referred to.]
  The judgments of Lords Justices Bowen and Fry, in Rendall v.
Blair (6), are not intended to overrule Braund v. Earl of Devon;
the basis of these judgments is contract, a common law right, and
the remedy for breach of it.  No contract is pleaded or hinted
at in the claim;  nor that there was any implied promise to give
the scholarship to the boy who obtained the highest marks, as
in In re Nettle's Charity (7); no such promise or contract can be
imposed as was done in Spencer v. Harding (8) or Carlill v.
Carbolic Smoke Ball Company (9).  The claim makes out an indi-
vidual equitable right, which involves the construction of the
trust deed, and, therefore, the partial administration of the
charity. All further proceedings should therefore be stayed
until the consent of the Charity Commissioners has been
obtained.
  Levett, Q.C.,  and Wurtsburg, for the Plaintiff, contra :--
  The certificate of the Charity Commissioners is not necessary.
The object of sect. 17 of the Charitable Trusts Act, 1853 was to
  (1) W.N. (1877) 74.                    (5) 2 Ves. 238.
  (2) Law Rep. 3 Ch. 800.                (6) 45 Ch. D. 139.
  (3) 25 Ch. D. 39.                      (7) Law Rep. 14 Eq. 434.
  (4) 3rd Ed. p. 477.                    (8) Ibid. 5 C.P. 561.
                     (9) [1893] 1 Q.B. 256.
stop actions being commenced against charities for the sake of
making costs, and generally to prevent the assets of a charity
from being wasted by fruitless and frivolous actions; to protect
the charity as was stated in Holms v. Guy (1). It was never
intended to interfere with a private right.
  The Plaintiff's case here is founded on a contract with the
Defendants, arising out of the notice of an examination to be
held, and the conduct of the Plaintiff in coming in to be
examined : Williams v. Carwarding (2).  The announcement of
the examination tacitly imported the  provisions of the trust
deed, and constituted an offer to award the scholarship to the
boy who obtained the highest marks.  As soon as the examiners
certified that the Plaintiff was the better of the two candidates,
it was just the same as if his name had been inserted in the
trust deed, and he can bring an action to assert his individual
equitable right.
  The Plaintiff is not attempting to administer the charity.
The result of the observations of Lords Justices Bowen and Fry,
in Reddall v. Blair (3), shew that whenever any person can say,
" I am an object of the charity," he can maintain an action with
reference to the charity, to enforce his individual equitable
right, without the consent of the Charity Commissioners, and on
this point Braund v. Earl of Devon (4) is overruled.  [Fisher v.
Jackson (5) was also referred to.]
Farwell, in reply :--
  The question of contract arising out of examinations was
unsuccessfully raised in Thomson v. University of London (6).
  [He was stopped.]
CHITTY J. :--
  The Plaintiff asks for a declaration under the circumstancas I
will mention--that he is entitled to, what is termed, possession
and enjoyment of the scholarship in question, and for an order
directing the Defendants, who are sued only as trusted to put
  (1) 5 Ch. D. 901.               (4) Law Rep. 3 Ch. S00.
  (2) 4 B. & Ad. 621.             (5) [1891] 2 Ch. 84.
  (3) 45 Ch. D. 139.              (6) 33 L. J. (Ch.) 625, 635.
him in possession as it is termed and enjoyment of the scholar-
ship.  "Possession " of the scholarship is not a proper term.
Enjoyment of the scholarship means, payment out of the charity
estate of some $50 a year from the investments, which, if the
Paintiffis right he would be entitled to as one of the objects
of the charity.  "Possession " is used in the statement of claim
for the purpose of bringing the case, if possible, within the
range of the anthorities such as Holms v. Guy (1).  I am
referring to cases where the plaintiff is in possession of some
real property, and seeks to defend that possession as against
trespassers and others.  [His Lordship then shortly stated the
circumstances under which the action was brought and on which
the Plaintiff relied, and continued :--]
  For the purpose of bringing the case within the scope of those
cases which I have already mentioned, the Plaintiff has argued
at the Bar, that he has a case of contract against the Defendants.
I have already referred to the circumstance that the Defendants
are sued as trustees of the charity, and it would not be right to
proceed with the suit in that form, if the case were one of
contract binding the Defendants personally to some obligation.
It is quite clear that if a person who is a trustee, either of a
charity or a private trust, were to order a man to do repairs on
the trust property, or employ a servant to sweep out a house
part of the trust estate, he would, unless there was something to
the contrary in the contract, be personally liable on the contract
just as any other of Her Majesty's subjects.  It would be in vain
for him, unless it was an action for specific performance, to say,
I am trustee and I cannot pay you out of the trust fund, and
therefore I am not liable at all.  In fact, the circumstance that
he was a trustee would be immaterial.
  Now the point made is that there was a contract, such as is
found in the cases of an offer of a reward or the like.  There,
when a public offer is made to all the world  proposing that
some service should be done, and the service is performed, there
is a contract in point of law.  There may be offers not resultung,
when the offer is accepted, in a contract.  An excellent illustra-
tion of that proposition is offered by Spencer v. Harding (2).
  (1) 5 Ch. D. 901.                  (2) Law Rep. 5 C. P. 561.
In that case the defendants sent out a circular as follows :  " We
are instructed to offer to the wholesale trade for sale by tender
the stock in trade of" A., amounting to so and so " and which
will be sold at a discount in one lot.  Payment to be made in
cash."  It was held that this did not amount to a contract or
promise to sell to the person who made the highest tender.
The judgment of the Court was that this was, to use Mr. Justice
Willes' words (1) : " A mers proclamation that the defendants are
ready to chaffer for the sale of the goods, and to receive offers for
the purchase of them."  Applying the principles of that case to
the present, is there a contract ?  In my opinion there is nothing
more than a proclamation that an examination for a scholarship
will be held, and there is no announcement that the scholarship
will be awarded to the scholar who obtains the highest number
of marks.  Consequently by coming in and submitting to the
examination the Plaintiff did not do that which resulted in
a contract.  It is plain the Plaintiff could not state that the
announcement included the term that the scholarship would be
awarded, in all events, to the boy who got the highest number
of marks.  That would be a most improbable announcement to
be made by trustees in the position of these Defendants.  But
whether probable or not, according to the allegations here,
which I understand are true, the announcement was simply the
announcement I have stated, and it was not coupled with any
statement to the effect that the boy who had the greatest
number of marks should have the scholarship.
  The learned counsel for the Plaintiff argued that they were
entitled to eke out this imperfect statement, on which alone the
supposed contract is founded, by reference to the trust deed.
the examination to be held.  When the case is considered om
its merits, the meaning is, that according to the charity deed,
the Defendants were bound to award the scholarship to the boy
who had the greatest number of marks.  That is a distinct
question, and that question necessarily involves the adminis-
tration of the trusts of the charitable deed--not the administra-
tion of all the trusts, for that was not meant by any of the
                    (1) Law Rep. 5 C. P. 564.
judges who used the term, but what is well known in this Court,
the partial administration or execution of the trusts.  I am far
from saying that if the Plaintiff had made out a case of contmct,
such as would have justified his suing in an action at Common
Law, he could have maintained this claim.  But it is not neces-
sary to press that matter now, because I hold that the case
presented by the statement of claim, deliberately and carefully
framed, does not present a case of contract.
  The case presented by the writ is really neither more nor less
than  this: "I am an object of the charity, and as such I sue for
the enforcement of the charitable trusts."  That brings the case
precisely within Braund v. Earl of Devon (1).  There an attempt
was made to present the case in favour of the plaintiff as a private
trust, as distinct from a charitable trust, and for that purpose
reliance was placed on Blandford v. Thackorell (2).  But in Bland-
ford v. Thackerell there were two distinct things.  There was
an attempt on the part of the testator to create a charitable trust,
which failed; but there remained a good private trust which
was capable of being enforced.  As was pointed out by both the
Lords Justices in Braund v. Earl of Devon, the plaintiff's case
was neither more nor less than this: "I am an object of the
charity."  Braund v. Earl of Devon remains wholly unaffected
by the judgment of Lord Justice Bowen and Lord Justice Fry in
Rendall v. Blair (3), where those two Lords Justices overruled
Mr. Justice Kay's decision, Lord Justice Cotton dissenting.
There the plaintiff was the master of a charity school, and he
was, as is shewn by Lord Justice Bowen's judgment (which was
the leading judgment of the two Lords justices who overruled
the decision of the Court below), appointed by contract with
managers, whose authority was not in question, to be the school-
master, and as such schoolmaster was in possession of the school-
house.  An important point in the case was the undertaking
which the Court of Appeal obtained from the plaintiff's counsel,
which was, that they gave up all claim to relief except on the
ground that the alleged managers, who were seeking to disturb
the plaintiff in the possession of the school-house, had been
improperly appointed.  The substance of Lord Justice Bowen's
  (1) Law Rep. 3 Ch. 800.  (2) 2 Ves. 23S.  (3) 45 Ch. D. 139.
judgment is that the plaintiff was suing by virtue of a common
law right.  The case resolved itself into this: that the plaintiff
was in possession of the school-house.  It was immaterial as against
an ordinary trespasser whether he had a title or not.  He was,
by virtue of his possession, entitled at common law to bring his
action of trespass, and, by virtue of that common law right, he
would be entitled to the equitable remedy by injunction to
prevent a threatened trespass.  Having regard to the under-
taking given, the plaintiff's case, in the result as presented,
was :  There are trespassers, persons calling themselves managers
who are not managers, who are endeavouring to interfere with
my common law right which is incident to my possession.  Lord
justice Fry agreed with that judgment, adding only one word
of explanation, and the explanation was that he did not intend
to confine the principle of the judgment to cases of common law
right only, but extended it to individual equitable rights not
relating to the administration of the trusts of the charity.  .That
was, for the purposes of the decision, a dictum--a dictum, however,
in which Lord Justice Bowen immediately concurred in a short
second judgment.  But I take Lord Justice Fry's words as they
stand, and the point is this: he does not confine the principle
to mere common law rights, but he says (carefully guarding
himself) that where there is an individual equitable right not
relating to the administration of the trusts of the charity, the
sanction of the Charity Commissioners would not be required.
What exact cases the Lord Justice was referring to it is not
necessary for me to consider in detail-= pcasibly the case of an
equitable right to specific performance of a contract ; and there
may be otheer.  Some others have occurred to me, but I do not
think it is necessary to pursue the matter further.  This proposi-
tion was laid hold of by the Plaintiff's counsel to shew that
wherever any person can say, " I am an object of the charity," he
can maintain an action in regard to the charity without the
consent of the Charity Commissioners.  In other words, the
proposition is forced to this extent that by this incidental
observation the two Lords Justices overruled the decision of
their predecessors in Brand v. Earl of Devon (1).  The Lords
                        (1) Law Rep. 3 Ch. 800.
Justices did not even mention that case, and had no intention
of overruling it.
  Coming back to the case before me, I find this case, though of
an alleged individual equitable right, is of the nature I have
already stated, and does relate to and does involve the partial
execution or administration of the trusts of the charity deed.
  The result is that, in my opinion, the action cannot procced
without the certificate of the Charity Commissioners, and the
motion must be allowed.  I will not limit the time, but yon
must proceed with due diligence.
  Solicitors for Plaintiff:  Rooke & Sons.
  Solicitors for Defendants : Pennington & Son.
  W. C. D.
            HENDERSON & CO. v. WILLlAMS
Bailor and Bailee--Warehouseman--Estoppel--Property in Goods obtained by
      Fraud--jus tertii--Trover--Measure of Damages.
  The owner of goods lying at a warehouse was induced by the fraud of F. to
instruct the warehouseman to transfer the goods to the order of F., and the
goods were accordingly placed at F.'s disposal.  F. then sold the goods to an
innocent purchaser, who, before paying the price, obtained a statement from
the warehouseman that he held the goods at the purchaser's order.  On the
discovery of F.'s fraud, the warehoussman refused to deliver the goods to the
purchaser.  In an action by the purchaser against the warehouseman :--
  Held, that the warehouseman, having attorned to the purchaser, was estopped
from impeaching his title, that the refusal to deliver was a conversion, and that
the measure of damages was the market vaiue of the goods at the date of the
refusal.
  Per Lord Halsbury: The true owner, having enabled F. to hold himself out
as the owner, could not set up his title against that of the purchaser: per
Lindley L.J. it should bo so held on principle, but quaere whether the facts
were distinguishable from those of Kingsford v. Merry (1 H.& N. 503.)
  Kingsford v. Merry (1 H.& N. 5O3), Attenborough v. London and St.
Katharine's Dock Co. (3 C.P.D. 450), and Biddle v. Bond (6 B.& S. 225)
discussed.
  IN this case appeals were brought by the plaintiffs and the
defendant against a judgment of Cave J., without a jury.  The
action was for damages for the wrongful detention or conversion
of 150 bags of sugar.  The defendant by his defence denied that
the sugar was the property of the plaintiffs.  The facts were as
follows.  The plaintiffs were sugar merchants of Hull.  The
defendant was a warehouseman carrying on business at Hull and
Goole.  On June 3, 1894, one Fletcher, by pretending that he
was Robinson, negotiated a purchase of 150 bags R.A.V. sugar
From Messrs. Grey & Co., sugar merchants, of Liverpool, they
believing that they were dealing with Robinson, a well-known
customer of theirs, through Fletcher as his agent.  On June 6
Grey & Co. sent to the defendant, who then held the 150 bags
of sugar in a warehouse at Goole, the following telegram :
" Transfer to order of Fletcher, Leeds, 150 F.A.V."  The de-
fendant replied on the same day by a letter, in which, after
referring to some other sugar, he proceeded: "I have your
telegram to transfer the balance (150 bags) to Mr. W. Fletcher, of
Leeds, at whose disposal I have placed the sugar.  Please note."
  On the same day and before the receipt of this letter, Grey
& Co. wrote to the defendant, with reference to these l50 bags
of sugar, as follows: "Please hold these to the order of Mr. W.
Fletcher, Leeds, and accept his instructions for delivery.  Freight
and landing charges to our account."  Fletcher, having com-
mitted this fraud upon Grey & Co., then negotiated with the
plaintiffs to sell tbe sugar to them, together with some other
sugar which was in the defendant's warehouse, for cash.  At this
time Fletcher was indebted to the plaintiffs in the sum of 131l.,
for which he had given a cheque which had been dishonoured;
and, as Fletcher required to be paid for the sugar in cash, the
plaintiffs, before concluding any contract with him, sent down to
the defendant to ascertain if the sugar proposed to be sold to
them by Fletcher was in his warehouse to Fletcher's order.  The
defendant sent back to the plaintiffs the following document,
signed by him :  " Memorandum.  J.  L. Williams to  Messrs.
Henderson & Co., Hull.  June 7, 1894.  R.A.V. 150 bags of
sugar.  G.R. 36 bags of sugar.  Star 50 bags of sugar, lying at
Goole.  I hold the above on account of W. W. Fletcher, Leeds,
and will deliver same to your order on receipt of his transfer
in your favour."  The plaintiffs were not satisfied with this
document, and again communicated with the defendant who
then wrote across the above-mentioned memorandum as follows:
" I hold the within at your order and disposal."  Thereupon
the plaintiffs purchased the sugar mentioned in the memorandum
from Fletcher at the price of 301l. 7s. 5d.
  The plaintiffs deducted from the price of the sugar the sum of
l3ll. 16g. for returned cheque and expenses, and also a further
small sum of 1l. 15s. 6d. (as to which no question arose), in
respect of some previous transaction, and handed to Fletcher a
cheque for the balance, 167l. l5s. lld., which he cashed in due
course.  Grey & Co. having discovered Fletcher's fraud upon
them, induced the defendant to detain the 150 bags and indem-
nified him for so doing.  The defendant accordingly refused to
deliver these 150 bags to the plaintiffs, but he delivered to them
the 36 and 50 bags (which were of the value of 100l.), to
which Grey & Co. made no claim.
  Cave J. held that the defendant could not set up the title
of Grey & Co. against the plaintiffs; but with regard to the
measure of damages, he held that the plaintiffs were only
entitled to the money which they had in their pockets before
the sale--namely, 167l., less 100l., the value of the sugar which
was not in dispute, treating Fletcher's indebtedness for this
purpose as of no value, and he accordingly gave judgment for
the plaintiffs for 67l.  The plaintiffs appealed against the latter
part of this judgment, and asked for judgment for the market
value of the goods, which was agreed at 216l. 12s. 6d.
  The defendant appealed against the whole of the judgment.
  Forbes, Q.C., and Lacey Smith, (Scott Fox, with them), for the
plaintiffs.  The measure of damages is the market value of the
goods at the time of their conversion.
  (They were stopped.]
  Pickford, Q.C., and T. Willes Chitty, for the defendant.  The
defendant sets up the title of Grey & Co. as a defence to the
action, and Attenborough v. London and St. Katharine's Dock
Co. (1) shews that this defence is open to him.  The substantial
question, therefore, is whether Grey & Co. have a good title as
against the plaintiffs.  It is submitted that they have.  The
property in the goods never passed out of Grey & Co.  Fletcher
obtained the right of possession by a fraud, but no property
passed to him; and if the defendant had delivered the goods to
the plaintiffs, Grey & Co. could have taken them out of their
hands: Cundy v. Lindsay (2) : Higgons v. Burton. (3j
  Forbes, Q.C., in reply.  The cases cited on behalf of the
defendants are distinguishable from the present on two grounds;
1. Because the real owner of the goods instructed the defendant
to hold to the order of Fletcher, and those instructions were acted
on; 2. Because the defendant attorned to the plaintiffs' title.
Both the defendant and Grey & Co. are therefore estopped from
denying that the plaintiffs are the true owners: Stonard v.
  (1) 3 C.P.D. 450.                (2) 3 App. Cas. 459.
               (3) 26 L.J. (Ex.) 342.
Dunkin (1); Hawes v. Watson (2); Gosling v. Birnie (3); Knights
v. Wiffen (4); Gillett v. Hill (5); Burkinshaw v. Nicolls (6); In re
Bahia and San Francisco Ry. Co. (7); Balkis Consolidated Co. v.
omkiugsun (8)
  Pickford, Q.C., in reply upon the further authorities, contended
that they were inconsistent with Biddle v. Bond (9) and Kings-
ford v. Merry. (10)
  (LINDLEY L.J. referred to Rogers, Sons & Co. v. Lambert &
Co.  (11)]
                                    Cur. adv. vult.
  Dec. 19.  LORD HALSBURY.  This is an appeal from my brother
Cave's judgment in an action in which the plaintiff sues in
trover a warehouseman.  The real parties to the transaction
which gave rise to this litigation are Grey & Co. on the one
hand, the original owners of the goods, and the plaintiffs, who
are persons entitled to those goods by a transfer made to them.
The action arises out of the right to 150 bags of sugar which
belonged to Grey & Co.  By a fraud Grey & Co. were induced
to send a telegram to Mr. Williams, of Goole, directing him to
transfer to the order of Fletcher, of Leeds, the 150 bags of sugar
now in question.
  [His Lordship then referred to the letter of June 6 from
Williams to Grey & Co., acknowledging the receipt of the tele-
gram and the letter from Grey & Co. to Williams of the same
date confirming the telegram.]
  Mr. Williams having duly carried out the instructions con-
tained in the telegram and letter, Mr. Fletcher, who was a
fraudulent person, entered into negotiations with the present
plaintiffs for the purpose of a sale of the sugar to them.  The
sale was effected and the transaction concluded in a manner
which I will describe presently.
  I pause here to consider what was at this time the relstive
  (1) 2 Camp. 344.                  (6) 3 App. Cas. 1004, 1026.
  (2) 2 B.& C. 54O.                 (7) Law Rep. 3 Q.B. 584.
  (3) 7 Bing. 339.                  (8) [1893] A. C. 396.
  (4) Law Rep. 5 Q.B. 660.          (9) 6 B.& S. 225.
  (5) 2 C.& M. 530.                 (10) 1 H.& N. 503.
                 (11) [1891] 1 Q. B. 318.
situation of the parties.  Grey & Co., the real owners of the
goods, had placed with full powers of disposition these sugars in
the name of Mr. Fletcher. If the question now to be determined
was whether or not any property passed under these circumstances
to Mr. Fletcher, I should say that, inasmuch as Fletcher was
only the designated consignee and not a person purporting to
enter into a bargain or a contract at all, no such property would
pass at all; and I think that that view would be in accordance
with the decision in Kingsford v. Merry (1), with respect to
which I have to say a word or two presently.  But that is not
the position in which I regard the transaction so far.  It appears
to me that quite apart from any contract which might be affirmed
or disaffirmed afterwards, the question here is whether the true
owner of the goods has so invested the person dealing with
them with the indicia of property as that when an innocent
person enters into a negotiation with the person to whom these
things have been entrusted with the indicia of property the true
owner of the goods cannot afterwards complain that there was no
authority to make such a bargain.  I think a confusion has
arisen as to the kind of inferences to be drawn from the case of
Kingsford v. Merry (1)--a confusion of two totally different things.
If a contract is induced by fraud, that contract may be affirmed
or disaffirmed, and, until it is disaffirmed, any person dealing on
the faith of that contract is protected, because until it is dis-
sffirmed it is a perfectly good contract.  I think it was made
out before us that here there was no contract at all, and if the
case had turned upon that question alone I should say that no
property had passed.  But that is not the only question.  There
may be a question where, although no property had in fact
passed, yet the true owner has allowed another person to hold
himself out as the owner in such a way as to make an innocent
person enter into a contract, which contract being performed
cannot be set aside. The case of Kingsford v. Merry (1), as to
which, as I say, a considerable amount of misapprehension has
existed before now, was a case in which, in truth, there was
neither a holding out nor was there, in fact, a contract.  What-
ever the true facts of the case may have been, the Court of
            (1) 1 H.& N. 503.
goods, than a delivery to an agent or servant of Leask would
Exchequer, which tried the case in the first instance, was under
the belief that the question before the Court was whether or not
a contract obtained by fraud until disaffirmed was capable of
giving a good title to an innocent holder for value; and upon
that ground the case in the Court of Exchequer was decided.  It
is within my own knowledge that more than one member of the
Court of Exchequer complained that after they had given a
decision upon that hypothesis the parties upon the case going
up to appeal, agreed to a statement of facts which did not repre-
sent the facts in evidence before them.  The matter when fought
before the Court of Exchequer was, of course, upon the facts as
proved at the trial.  The question as it came before the Court of
Exchequer Chamber was upon a statement of facts in writing
agreed upon between the parties.  Now, let us see what was the
ratio decidendi of the Court of Exchequer Chamber.  The Court
of Exchequer Chamber said: " The judgment of the Court of
Exchequer appears to have been founded upon the assumption
that the plaintiffs would have been warranted, by tbe circum-
stances stated in the case, in treating the transaction between
them and Anderson as a contract of sale which by reason of the
fraud of Anderson they might disafirm, if they please, or affirm,
and proceed as for goods sold and delivered, but that their right
to disaffirm was subject to any intermediate right which a bona#
fide vendee or pawnee from Anderson might acquire.  We are,
however, of opinion that upon the facts stated in the case the
plaintiffs and Anderson never did stand in the relation of vendor
or vendee of the goods, and that there was no contract between
them which the plaintiffs might either affirm or disafiirm.  It is
stated in the evidence set out in the case,that the plaintiffs gave
the delivery order to Anderson and dealt with him as they did,
credit as a sub-contractor by purchase from tbe contractor with
them. There was no privity of contract between thein and
Anderson, and it was only as representing himself, as claiming
under Leask, that they gave him by the delivery order the means
of possessing the goods.  Such a delivery, under the circum-
stances of this case, would no more pass the property in the
pass the property to such agent or servant. But upon the facts
it appears that Anderson had no authority from Leask to receive
but only to inspect the goods, and that Anderson obtained the
transfer to himself without authority and by false pretences, and
mere possession with no further indicia of title than a delivery
order is not sufficient to entitle a bona fide pawnee of the person
fraudulently obtaining possession from the the owner to resist
the claim of the latter in an action of trover."
  It is manifest that if these were the facts which the Court of
Exchequer Chamber assumed as the basis of their judgment, no
relation between these parties existed at all, any more than in
the case of a person who might have stolen a delivery order and
presented it at the proper office. But it is remarkable to
observe that in giving that judgment, and upon the argument in
that case, it is expressly distinguished from those cases in which
a person has given the indicia of title to another so as to enable
him to pass as the true owner; and a long line of authorities, of
which I have only selected two, establishes conclusively that
where that is the case it is no longer a question of affirming or
disaffirming any contract between the owner of the goods, but a
question whether the owner of the goods has by his conduct
allowed the person who has either cheated him or to whom he
has intrusted goods to hold himself out as the owner so as to
give a good title to a bona# fide purchaser for value.  In Williams
v. Barton (1), Best C.J., after dealing with the facts of that
case, which are not material to my purpose, and after speaking
of the power of obtaining a good title in market overt, says:
" This exception in our law proves that if a person acquires the
possession of property in any mode, other than that of sale in
market overt, he cannot keep it against the owner; it proves at
the same time, that, as commerce is now carried on, the pur-
chaser or pawnee should have the same protection sgainst him
who permits another to deal with his property, as if it were his
own." And again, in Dyer v. Pearson (2), Abbott C.J. says,
referring to the case before him:  " We all think that there
ought to be a new trial in this case.  The question which I left
  (1) 3 Bing. 139.                        (2) 3 B.& C. 38.
to the consideration of thejury does not appear to me to have
embraced the whole case. The general rule of the law of
England is, that a man who has no authority to sell, cannot, by
making a sale, transfer the property to another.  There is one
exception to that rule, namely, the case of sales in market overt.
This was not a sale in market overt and therefore does not fall
within the exception.  Now this being the rule of law, I ought
either to have told the jury, that even if there was an unsus-
picious purchase by the defendants, yet as Smith had no
uthority to sell, they should find their verdict for the plaintiffs ;
or I should have left it to the jury to say, whether the plaintiffs
had by their own conduct enabled Smith to hold himself forth
to the world as having not the possession only, but the property ;
for if the real owner of goods suffer another to have possession
of his property, and of those documents which are the indicia of
property then perhaps, a sale by such a person would bind the
true owner."
  Now, I have thought it right to deal here as if the only parties
to this question were the true owner of the goods and the
purchaser for value.  The question, of course, arises here in a
different form, although perhaps only circuitously.  Here the
warehouse-keeper has been induced to attorn to the ownership
of the fraudulent person Fletcher, and in that character to
transfer to Fletcher and to Fletcher's order the property
intrusted to his charge ; and I am of opinion that it would be
impossible for him to resist an action by the person to whose
title he bas attorned if no other question existed in the case.
  This is an action in which it is admitted that the warehouse-
keeper is acting under the indemnity of Grey & Co., and I have
thought it right to trace the question up to its source, and to
treat Grey & Co., the true owners, as the persons who are the
practical defendants in this case.  Treating Grey & Co. as the
defendants in this case, I am of opinion that upon these facts
they have no answer.  The real truth is that Grey & Co. are the
persons who have permitted this fraud to bs committed, by
intrusting the goods to the order and disposition of Fletcher;
and apart from the authorities to which I have already referred,
I think that it is not undesirable to refer to an American
authority, which, I observe, was quoted in the case of Kingsford
v. Merry (1), Root v. French (2), in which, in the Supreme Court
of New York, Savage C.J. makes observations which seem to
me to be well worthy of consideration.  Speaking of a bona# fide
purchaser who has purchased property from a fraudulent vendee
and given value for it, he says: "He is protected in doing so
upon the principle just stated, that when one of two innocent
persons must suffer from the fraud of a third, he shall suffer
who, by his indiscretion, has enabled such third person to
commit the fraud.  A contrary principle would endanger the
security of commercial transactions, and destroy that confidence
upon which what is called the usual course of trade materially
rests."
  It appears to me, therefore, that when once the correspondence
is looked at upon which these goods were committed to Fletcher,
to his order and disposition, and Fletcher was invested with a
full power of disposition, it is impossible to argue that this was
not a holding out, by the true owner of the goods, of Fletcher
as capable of giving a good title.  It is admitted that the
present plaintiffs dealt bona fide with the person who was thus
in the complete dominion of the property in question, and was,
under these circumstances, and from this correspondence, held
out by the true owners of the goods as the owner, and with
whom therefore any contract made innocently by a bona# fide
purchaser for value would be protected.
  That brings me to the only remaining question, namely the
question of damages; and I confess I am wholly unable to
understand the mode in which these damages were assessed.  If
I am right in the conclusion at which I have arrived, the truth
is that the plaintiffs here were entitled to the market value of
the goods. It is immaterial in what form the payment was
made.  If I were to go into that question I should say that
the extinguishment of Fletcher's debt and the return of his
cheque would be an ample consideration ; but I protest against
being involved in any such inquiry.  These goods were under
these circumstances the goods of the plaintiffs.  They ought
to have been delivered, and were refused.  That is a conversion
(1) 1 H.& N. 503.  (2) 13 Wend. 570, and see Kent's Comm. ii. 514.
of these goods; and it appears to me, therefore, that the ordinary
rule of law applies, that the plaintiffs complaining of conversion
of their goods are entitled to the market value of those goods at
the time of the conversion.  For these reasons, I am of opinion
that upon the plaintiffs' appeal the verdict should be increased
to the sum claimed by them as the market value, namely,
215l. 12s. 6d., and that the defendant's cross-appeal should be
dismissed with costs.
  LINLEY L.J. In this case a Liverpool sugar merchant,
named Grey had 150 bags of sugar belonging to him warehoused
in his name in the defendant's warehouse at Goole.  On June 6,
1894, Grey was induced by the fraud of one Fletcher to authorize
the defendant to hold these bags of sugar according to Fletcher's
order.  On the same day Fletcher agreed to sell them to the
plaintiffs; but before the plaintiffs paid him for them they in-
sisted on having them transferred into their own name.  This
was done on june 7, and the defendant informed the plaintiffs
that he held the sugar at the plaintiffs' order and disposal.
Thereupon the plaintiffs paid Fletcher for the goods.  Grey
afterwards discovered that he had been defrauded, and he gave
notice to the defendant not to part with the bags of sugar.  The
defendant, being indemnified by Grey, has refused to deliver
them to the plaintiffs, whereupon they bring this action to
recover their value.  The defendant defends this action for and
on behalf of Grey.  Cave J. has decided that the plaintiffs are
entitled to recover damages for the non-delivery of the sugar.
For reasons, however, which he gave he refused to allow the
plaintiffs the market value of the sugar.  Hence the plaintiffs
have appealed, and they contend that they are entitled to the
market value of the sugar.  The defendant has also appealed,
upon the ground that the plaintiffs were not entitled to the
sugar. It will be convenient to dispose of the defendant's
appeal first.  He contends--(1.) that he is not estopped from
setting up Grey's title;  and (2.) that his title is better than that
of the plaintiffs.  I am of opinion that the defendant is wrong
upon the first point, even if he is right on the second.  The
distinct attornment by the defendant to the plaintiffs on June 7,
1894, clearly, in my opinion, estopped the defendant from deny-
ing the plaintiffs' title.  The cases cited by Mr. Forbes, be-
ginning with Stonard v. Dunkin (1) and ending with Knights v.
1WiQffn (2), are conclusive on this point, and any other decision
would be most mischievous in a business point of view.  Mr
Pickford, in his very able argument for the defendant, urged
that Attenborough v. London and St. Katharine's Dock Co. (3) was
an authority to shew that there was no estoppel in this case.
But there the defendants had not attorned to the plaintiffs, and
the attornment makes all the difference.  With respect to the
second point there is more difficulty.  If there were no estoppel,
and the Court had to decide whether Grey or the plaintiffs had
the better title to these 150 bags of sugar, my judgment would
be in favour of the plaintiffs, if it were not for the case of Kings-
ford v. Merry. (4)  The case stands thus: Grey authorized the
defendant, his agent, to hold the sugar to Fletcher's order, and,
before that authority was revoked, the defendant acted upon it,
and transferred the sugar to the plaintiffs, who are bona# fide pur-
chasers of it for value from Fletcher, without notice of anything
wrong.  It seems to me that, whether Fletcher was the owner of
the goods or not, still, as he was expressly authorized to dispose
of them, it would be contrary to principle to hold that Grey
could recover the sugar from the plaintiffs.  But Mr. Pickford
cited Kingsford v. Merry (4) to shew that Grey could do so.  I
have looked carefully through the report of that case.  An order
was there given by the plaintiffs to their warehouseman in sub-
stance like the order given by Grey to the defendant on June 6
in this case.  I understand that this order comprised the goods
sued for.  I also understand that this order was acted upon by
the warehouseman before it was revoked, just as was the case
here. He had transferred the goods into the name of the
defendant, who was a bona# fide pledgee for value from the person
whose orders were to be obeyed.  The decision of the Court was,
nevertheless, in the plaintiffs' favour, on the ground that no
property passed from the plaintiffs to the person to whom they
gave the delivery order, and that, no property having passed to
  (1) 2 Camp. 344.                 (3) 3 C.P.D. 450.
  (2) Law Rep. 5 Q.B. 660.         (4) 1 H.& N. 503.
him, he could confer none on the defendant. The case was
treated as if it were the case of a sale of goods by a person who
had obtained possession of them by false pretencas.  Such a
person, having no title, can confer none, except by sale in
market overt: see Cundy v. Lindsay. (1)  I confess I find great
difficulty in distinguishing the facts of Kingsford v. Herry (2)
from the facts of this case, although I think too little attention
was paid to the authority given and acted upon before it was
revoked.  But perhaps the order to which I have referred did
not include the goods sued for.  On the ground, however, of
estoppel by attornment the defendant's appeal must be dismissed
with casts.  As regards the damages, I am unable to adopt the
view taken by Cave J. The value of the 150 bags of sugar was
215l.  Fletcher sold to the plaintiffs other sugars, and the price
of the whole came to a little over 300l.  Fletcher was indebted
to the plaintiffs on other transactions, and they held a dis-
honoured cheque of his.  Instead, therefore, of paying Fletcher
300l. odd, the plaintiffs deducted the amount of the dishonoured
cheque and paid Fletcher the balance--167l. odd.  Cave J. has
deducted the price of the other sugars from this sum, and has
given the plaintiffs only 67l.  But, if he went into these calcula-
tions at all, he should have deducted the price of the other
sugars from the 300l. odd, and not from the 167l. odd.  If this
had been done the judgment would have been for 200l. odd, and
the plaintiffs would, no doubt, have been satisfied. In my
opinion, however, the defendant being estopped from denying
the plaintiffs' title, this action ought to be treated as an action
to recover the value of goods belonging to the plaintiffs.  The
ordinary rule ought, therefore, to be adopted and the proper
measure of damages is the market value of the 150 bags of sugar
at the time of their wrongful conversion by the defendant.  This
value is 215l., and the judgment ought to be for this sum and
the plaintiffs must have the casts of their appeal.
   A. L. SMITH L.J.  These are cross-appeals---by the defendant
to have judgment entered for him---by the plaintiffs to have the
damages awarded increased.  The plaintiffs are sugar merchants
  (1) 3 App. Cas. 458.                    (2) 1 H. & N. 503.
and the defendant ia a warehouseman at Hull and Goole, and in
order to bring out clearly the point raised it appears to me that
it will be convenient to treat the action as an old action of
trover to recover damages for the conversion of 150 bags of
R.A.V. sugar, to which the defendant has pleaded not guilty
and not possessed.  The material facts lie in a small compass.
[The Lord Justice stated the facts, and continued :--]
  The first question which arises is whether the defendant is
estopped from denying what he traverses by his plea of not
possessed, namely, the plaintiffs' right to possession of the 150
bags as against the defendant at the date of the refusal to
deliver.  1t appears to me that if he is, the defendant's appeal
to have judgment entered for him fails, and, subject to a point
upon the damages, the judgment for the plaintiffs must stand.
The principle upon which an estoppel in pais is created is laid
down in the well-known cases of Pickard v. Seara (1), Freeman v.
Cooke (2), and Cornish v. Abington (3), and need not be stated
here, for it is familiar to all lawyers.  It is upon this principle
that many warehousemen in like circumstances to those of the
defendant have found themselves estopped from denying the
plaintiff's title, and from setting up a title in a third person,
and, as examples, I will take the cases of Stonard v. Dunkin (4);
Hawes v. Watson (5); Gosling v. Birnie (6), in which Tindal C.J.
stated " the defendant is estopped by his own admissions; for,
unless they amount to an estoppel, the word estoppel may as well
be blotted from the law." The admission in the present case,
namely, the statement by the defendant that he held the sugar
at the plaintiffs' order and disposal is certainly no less strong
than in Gosling v. Birnie (6); and, lastly, the case of Knights v.
Wiffen (7), in which the principle upon which an estoppel in
pais arises is again enunciated, and it is again pointed out how
it applies.  To gte rid of these authorities, which, in my opinion
are conclusive in the plaintiffs' favour, Mr. Pickford  in an ex-
cellent argument for the defendant, suggested that as they were
mostly cases prior to the case of Biddle v. Bond (8), in which it
  (1) 6 A.& E. 469.                  (5) 2 B.& C. 540.
  (2) 2 Ex. 654.                     (6) 7 Bing. 339.
  (3) 4 H.& N. 549.                  (7) Law Rep. 5 Q.B. 660.
  (4) 2 Camp. 344.                   (8) 6 B.& S. 225.
was held that the estoppel against a bailee from disputing the
title of his bailor and setting up a jus tertii ceases when the
bailment is determined by what is equivalent to an eviction, the
above cases were no longer law.  But this is not so ;- for Black-
burn J. who delivered the judgment of the Court in Biddle v.
Bond (1), took care to state that the Court in no way questioned
those cases, and that learned judge pointed out at the same
time in such clear language what those cases had decided that I
will repeat what he said.  He said : " Several cases were cited
on the argument at the bar, and more might have been cited,
such as Stonard v. Dunkin (2), Gosling v. Birnie (3), Hawes v.
Watson (4), in which a bailee, who by attorning to a purchaser
of goods in effect represented to him that the property has
passed to him (though such was not the fact), and thereby
induced him to alter his position and pay the price to his
vendor, has been held estopped from denying the property of
the person to whom he has thus attorned by setting up a title
in a third person inconsistent with the representation on which
he had induced the plaintiff to act.  We in no way question
that those cases were rightly decided."  It was next argued that,
if this were not so, the case of Attenborough v. London and St.
Katharine's Dock Co. (5) had overruled them.  This case when
looked at will be seen to fall short of any attornment by the
bailee to the bailor.  All that had taken place was that the dock
company had issued warrants making the wine deliverable to
Dolaro or his assigns ; there was no statement that they would
hold the wine to his order and disposal or its equivalent.  This case
leaves untouched the oses above referred to, and consequently
the authorities are clear that 1n the circumstances of this case
the defendant is estopped from denying the plaintiffs' right to
the possession of the 150 bags of sugar at the date of the defend-
ant's refusal to deliver to the plaintiffs, and from attempting to
set up the title of Grey & Co.  Both the pleas, therefore, of not
guilty and not possessed are disproved.  This being so, and the
action being undefended, in my judgment it follows that the
plaintiffs are entitled to the market value of the 150 bags of
        (1) 6 B. & S. 225.             (3) 7 Bing. 339.
        (2) 2 Camp. 344.               (4) 2 B. & C. 540.
                      (5) 3 C. P. D. 450.
sugar at the date of refusal to deliver, which is 300l., less the
100l. of sugar actually delivered, i.e., 200l.  I do not propose
to discuss the point so much argued at tbe bar, as to whether
Messrs. Grey & Co., after their order of June 6, 1894, could or
could not set up title to the 150 bags of sugar, for, in my judg-
ment, as the estoppel  point is clear, it is  immaterial whether
they could do so or not.  My brother Cave came to the conclu-
sion that the plaintiffs were entitled to 67l., and no more.  He
appears to have thought that the plaintiffs were only entitled to
damages which resulted from the representation made by the
defendant to them, and he proceeded thus :  " The plaintiffs had
in their pockets 167l. when the representation was made, and
upon the faith of that representation they parted with this
money; they have received 100l. worth of sugar against their
l67l.  Therefore, their damages are 67l., the debt of Fletcher
to them never being worth anything."  I cannot agree in this.
I would point out that this is not and never could have been an
action for damages founded upon misrepresentation, for the defend-
ant's certainly was not fraudulent.  The action is, as I began with,
founded on trover and nothing else.  The plaintiffs succeed in
that action, it is true, upon an estoppel by misrepresentation ; but
the action in which they succeed is none the less an action of
trover, and, consequently, the measure of damages is, as I have
above stated, the market value of the goods at the time of the
refusal to deliver, which works out at about 200l., after giving
credit for the sugar received, i.e., 100l. For the above reasons
the defendant's appeal fails, and must be dismissed with costs.
The plaintiffs' cross-appeal as to damages succeeds, and must be
allowed with costs, and judgment must be entered for the plaintiffs
for 215l. 12s. 6d., which is the proper amount when the figures are
worked out.
                Defendant's appeal dismissed; plaintiffs' cross-
                    appeal allowed.
 Solicters for plaintiffs: Pritchard & Sons, for A. M. Jackson
& Co., Hull.
 Solicters for defendant:Wynne, Holmes, & Wynne, for Simpson,
North, Harley, & Birkett, Liverpool.
                                            H. C. J.
          [IN THE COURT OF APPEAL.]
               THE SATANITA.
Admiralty-- Collision--Damages--Contract overriding Limitation of Liability
Merchant Shipping Act Amendment Act, 1862 (25 & 26 Vict. c. 63), s. 54.
  The defendant entered his yacht for a race on the condition that " while
sailing under the entry"  he would  obey and  be bound by certain  rules.
By one of the rules the owner of any ysoht, disobeying or infringing any of
them, was liable for " all damages arising therefrom."
   Whilst sailing under these rules, and in breach of one of them, the defend-
ant's yacht, through improper navigation without the actual fault or privity
of the defendant, ran into and sanck another yacht.
  The plaintiffs, the owner, master, and crew of the yacht which had been sunk,
sued the defendant for the damage sustained by the collision.  The defendant
counter-claimed for a stay of proceedings on payment into court of a sum
equal to 8l. per ton of the registered tonnage of his yacht with interest, as
being the amount for which he was answerable under s. 54 of the Merchant
Shipping Act Amendment Act, 1862 :--
  Held, by the Court of Appeal (Lord Esher M.R., Lopes and Rigby L.JJ.),
that, at the material time, a contract existed between the owners of the com-
peting yachts by which the defendant became liable for all damages arising
from the infringement of the rule, and therefore (reversing the decision of
Bruce J.) the defendant could not, as against the plaintiff, the owner of the
  yaeht sunk, set up the statutory limitatlon of liability.
APPEAL by plaintiffs, the owner, master and crew of the yacht
Valkyrie, against a decree of Bruce J. pronouncing, in an action
of damage by collision, that the defendant, the owner of the yacht
Satanita, was entitled to limit his liability.
 The material facts were:--
 On July 5, 1894, about 10:30 A.M., the Valkyrie and the
Satanita--registered cutters of 106 and 117.02 tons respectively
                     (1) 8 P. D. 218.
--were manoeuvring to get into position for starting for the
fifty-mile race for the Muir Memorial Challenge Cup, at the
Mudhook Yacht Club Regatta, in the Clyde, when the Satanita,
on the port tack, ran into and sank the Valkyrie, which was
close-hauled on the starboard tack.
  The entry, dated June 29, of the Satanita for the regstta was
signed by the defendant, and contained the following clause:
" I undertake that, while sailing under this entry, I will obey
and be bound by the sailing rules of the Yacht Racing Association
and the by-laws of the club."
  The rules of the Yacht Racing Association, adopted by the
club, provided among other things as follows :---
  Rule 17: ". . . . Five minutes before the start the prepa-
rative fiag shall be lowered, a blue peter hoisted, and a gun
fired; after which the yachts in the race shall be amenable to
the rules.  At the expiration of five minutes exactly the blue
peter shall be hauled down, and a second gun fired as a signal to
start.  .  .  .  "
  At the time of the collision the first gun had been fired and
the yachts were awaiting the second gun.
  Rule 18 : " When two yachts are apprcaching one another, so
as to involve risk of collision, one of them shall keep out of the
way of the other as follows, viz. :---
  " A yacht which is running free shall keep out of the way of a
    yacht which is close-hauled.
  "A yacht which is close-haul on the port tack shall keep
   out of the way of a yacht which is close-hauled on the
   starboard tack. . . ."
  This is the same as art. 14 of the Regulations for Preventing
Collisions at Sea, substituting " yacht " for " sailing ship."
  Rule 24: ". . . If a yacht, in consequence of her neglect of
any of these rules, shall foul another yacht . . . she shall forfeit
all claim to the prize, and shall pay all damages.
  Rule 32 : " Any yacht disobeying or infringing any of these
rules, which shall apply to all yachts, whether sailing in the
same or different races, shall be disqualified from receiving any
prize she would otherwise have won, and her owner shall be
liable for all damsges arising therefrom.  .  .  ."
  The plaintiffs, in an action in personam in the Admiralty
Division of the High Court, charged the Satanita with a breach
of rule 18, and alleged that by the terms of the entry and in
consideration that the owner of the Valkyrie would race with the
defendant under these rules, the defendant agreed that if the
Satanita fouled the Valkyrie in conseqnence of her neglect of
any of the rules, the Satanita would pay all damages, and that
for the infringement of the rule the defendant had agreed to,
and had, become liable to the owner of the Valkyrie for all the
damages arising therefrom.
  The defendant denied that he had entered into any such
agreement as alleged and, by paragraph 4 of the defence (which
by consent was treated as a counter-claim), alleged that: "if
the said collision and damage was caused by the improper navi-
gation of the Satanita which, for the purpose of this action
only, the defendant admits to have been the case, the said
collision and damages occurred without the actual fault or
privity of the defendant, and he brings into Court the sum
of 952l. 7s. 4d., being the amount of damages in which the
defendant is answerable under the statute in that behalf (1)
calculated at the rate of 8l. per ton on the registered tonnage
of the Satanita, including interest thereon at the rate of 4l.
per cent. per annum from July 5, 1894, until payment into
Court.  .  .  ."
  At the trial on December 18, before Bruce J., assisted by two
of the Elder Brethren of the Trinity House, the evidence of the
defendant, and of the master of the Satanita, shewed that, in
(1) The Merchant Shipping Act             merchandise, or other things
Amendment Act, 1862 (25 & 26 Dict.        whatsoever on board any
c. 63) :--                                other ship or boat ;
Sect 54: "The owners of any ship         be answerable in damages in respect
... shall not, in cases where all or     of (such) loss or damage . . . to an
any of the following events occur,       aggregate mount  exceeding eight
withou their actual fault or pri-        pounds for each ton of the ship's
vity....                                 tonnage; such tonnage to be the
  " (4.) Where any loss or damage is   registered tonnage in the case  of
  by reason of the improper              sailing ships . . ."
  navigation of such ship as               [This Act is repealed by the Mer-
  aforesaid caused to any otther         chant Shipping Act, 1894, of which
  shIi, or bot, or to aQny<goods>       thbecorrebsponding sectio is 503.]
accordance with the rules of the regatta (1), the Satanita was
being steered by an amateur, and that the defendant, the owner
of the yacht, though he was on board, took no part in the
navigation.  The plaintiffs thereupon abandoned the charge that
the collision occurred with the actual fault or privity of the
defendant, and the substantial questions raised were: whether,
by the entry and racing regulations, a contract had been created
between the owners of the yachts, and whether the contract, if
any, was to pay all damages. Without regard to the statutory
limitation of liability.
  Bruce J. held that, even if there was a special contract, there
waa no evidence of any intention to waive the protection of
the statute, and that the words " all damages "  in the rules
meant only such damages as could be recovered in the ordinary
course of law, so that the defendant was entitled to limit his
liability under s. 54 of the Merchant Shipping Act Amendment
Act, 1862.
  The plaintiffs appealed.
  Sir Walter Phillimore, Joseph Walton, Q.C., and Lauriston
Batten, for the plaintiffs, the owner, master, and crew of the
Valkyrie.  The defendant cannot claim the benefit of s. 54 of the
Merchant Shipping Act Amendment Act, 1862, for, though it is
not disputed that the yacht is registered as a British ship under
the Merchant Shipping Acts, it is submitted that any statutory
right of limitation the defendant might have had is ousted by
special  contract.
  The effect of the defendant signing the entry of his yacht was
to create a contract between the defendant, as a yacht owner, and
the committee, rendering him liable to the committee for damage
to property of the committee such as buoys, boats, or mark
vessels, and further to create a contract between himself and all
the yacht owners entering for that day, without regard to the
particular race, rendering his yacht, if she neglected any of the
(1) According to the programme        Clyde, or Clyde Corinthian, Yacht
of the Mudhook Regatta it was a       Clubs,and,if any person not a member
condition that:--                     touch the tiller,or in any way assist
"Yachts to be steered by a member     in steering,the vessel will be dis-
of the club,the Royal Northern,Royal  qulified."
rules and thereby fouled another yacht, liable, under the 24th
rule, to "pay all damages," and rendering himself--under the
32nd rule--" liable for all damages arising therefrom."
  A alo ous cases of contracts formed in this way, shewing that
it is for the parties concerned to sue and not the committee,
are : cases of mutual insurance associations, as illustrated by
Gray v. Pearson (1), Evans v. Hooper (2) ; cases of restrictive
covenants on the sale of an estate in lots: Nottingham Patent
Brick and Tile Co. v. Butler (3) ; cases of composition deeds, and
cases of undisclosed principals.
  As by the terms of the special contract the defendant became
liable to pay " all" damages, he thereby waived any right to
limitation under the Merchant Shipping Act, for, if the words
only mean  " all damages recoverable by law," they are not
required, as these could be recovered in any event.  The owner
of the Valkyris claims under rule 32;  and if s. 54 of the Merchant
Shipping Act, which is confined to damage caused by improper
navigation, is to be applied to restrict the meaning of the words
" all damages " in that rule to 8l. per ton, then this inconsistent
result will follow-= that the same words when applied to the
breach of a rule, not the result of improper navigation, must be
read differently and mean what they say---" all damages."  In
other words, the contract between the parties is not cut down
by the Merchant Shipping Act; it goes beyond and is outside
that Act, which was not intended to apply to contracts of this
nature, but rests on grounds of public policy to encoursge the
owning of sea going British ships: see the recital to the Act
of 53 Geo. 3, c. 159, limiting the shipowners' liability for damage
by collision.
  There is nothing unreasonable in this view, as, at such a
regatta as the one in question, there are a number of yachts of
all sizes collected together in a confined space, and for the
particular race in which the accident occurred it was compulsory
that the helmsmen should be amateurs.  Yacht racing under
such circumstances is notoriously dangerous, and each yacht
owner may fairly look to the recovery of all damages consequent
  (1) L. R. 5 C. P. 568.                     (2) 1 Q. B. D. 45.
                        (3) 16 Q. B. D. 7 78.
on disobediance to the rules by which all have agred to be
bound.
  Sir R. E. Webster, Q.C., Pollard, and G.C. Colville, for the
respondent (defendant), the owner of the Satanita.  The de-
fendant's yacht, a sailing ship registered under the Merchant
Shipping Acts, broke the 18th rule of the Yacht Racing Asso-
ciation, which is equivalent to art. 14 of the Regulations for
Preventing Collisions at Sea; and for the damage caused by
such improper navigation, the defendant, by s. 54 of the
Merchant Shipping Act Amendment Act, 1862, is not answer-
able in damages to an aggregate amount exceeding 8l. per ton of
the Satanita's tonnage.
  The positive provisions of the statutes limiting the liability of
shipowners existed before any sailing rules were embodied into
regulations for preventing collisions at sea.  These rules have
nothing to do with limitation of liability, and only amplify that
practice of seamen, neglect of which, before the rules existed,
was deemed evidence of negligence in the navigation of a
sailing vessel.  In respect of the consequences of that negli-
gence, without the actnal fault or privity of the owner, the legis-
lature has thought fit to limit his liability--that is, his liability
is limited in respect of " all damages wrongfully done by a ship
to another whilst it is being navigated": The Warkworth. (1)
There is no evidence that the defendant specially contracted
himself out of the statute, and there is no consideration for any
such contract. The rules of the Yacht Racing Association
cannot make a contract between two owners of yachts.  They do
not address the plaintiff or defendant, but are the terms under
which the committee allow a yacht owner to enter ;  at most, they
amount to a contract between each yacht owner and the com-
mittee, that, if the committee has to pay damages, the yacht
owner will be liable for those damages to the extent, in the case
of improper navigation, of the limit provided by law, and will
not dispute his legal liability on the ground, for example, that
the person who did the damage was an amateur helmsman not
his servant.  But whether there is a contract or not, the liability
is limited, and the words "all damages " in rule 24 must be
  (1) 9 P.D. 145, judgment of Brett M.R., p. 147.
construed according to the existing law and be read "any
damages" just as the previous words "forfeit all claim to the
prize " must mean " any claim."  So the special conditions in
rule 32 cannot affect the statutory enactment, and the words
" all damages "  in that rule must also be read as " any damages "
--that is, any damages recoverable by law, and by law the
defendant is  declared not to be " answerable in damages "
beyond 8l. per ton.  In an ordinary bill of lading there is no
reference to the statute, but the liability of the shipowner is
nevertheless limited. Assuming that there was a contract
between the plaintiff and the defendant, still the provisions of
the Act will override that contract, for the limitation is to be
construed in favour of the shipowner: see per Coleridge C.J. in
Wahlberg v. Young. (1)
  In the case of the contract of suretyship the liability of the
surety is restricted to the legal consequences; so a covenant
for quiet enjoyment is not a covenant to indemnify against all
persons, but only a covenant against persons having lawful title :
Nash v. Palmer (2); so an undertaking to indenonify against all
costs and charges and expenses in and about the formation of a
company is only a covenant  " to indemnify against lawful
claims: per Cresswell J. in Lewis v. Smith. (3)  In order that
the general provisions of the Merchant Shipping Act may be
overridden by a particular contract, the intention to do so must
be manifest, or the implication be irresistible: Conservators of
Thames v. Hall. (4)
  Joseph Walton, Q.C., in reply.  The question what the damages
are in a case of collision arising from improper navigation is not
affected by s. 54 of the Merchant Shipping Act, for, wherever
there are more claimants tham one, the actual damages cach
there are more claimants than one, the actual damages cach
claimant has sustained by the collision are ascertained and assessed
in full in the Admiralty Registry with due regard to the doctrine
of remoteness of damage, and if the fund prove insufficient, then
only a percentage of those damages is paid out to each claimant,
bscause under the statute " all " the damages are not recover-
able.  Under this contract, however, they are, and the damages
  (1) 15 L. J. (C.P.) 783, at p. 785.   (3) 9 C. B. 610.
  (2) 5 M. & S. 374.                    (4) L. R. 3 C. P. 415.
are not confined to the consequences of improper navigation, but
extended to the consequences of breaches of such rules as relate
to not crossing the starting-line too soon, or giving way as the
outside yacht, &c., some of which rules, though they confiict
with the ordinary rules of navigation, are nevertheless binding
on all yachts taking part in the regatta, and if broken, entail
as a consequence a liability to " all " the damages arising
therefrom.
  LORD ESHER M.R.  This is an action by the owner of a yacht
against the owner of another yacht, and, although brought in
the Admiralty Division, the contention really is that the yacht
which is sued has broken the rules which by her consent governed
her sailing in a regatta in which she was contesting for a prize.
  The first question raised is whether, supposing her to have
broken a rule, she can be sued for that breach of the rules by
the owner of the competing yacht which has been damaged; in
other words, Was there any contract between the owners of those
two yachts ?  Or it may be put thus :  Did the owner of the yacht
which is sued enter into any obligation to the owner of the other
yacht, that if his yacht broke the rules, and thereby injured the
other yacht, he would pay damages ?  It seems to me clear that
he did; and the way that he has undertaken that obligation is
this.  A certain number of gentlemen formed themselves into a
committee and proposed to give prizes for matches sailed between
yachts at a certain place on a certain day, and they promulgated
certain rules, and said :  " If you want to sail in any of our matches
for our prize, you cannot do so unless you submit yourselves to
the conditions which we have thus laid down.  And one ofthe
conditions is, that if you do sail for one of such prizes you must
enter into an obligation with the owners of the yachts who are
competing, which they at the same time enter into similarly
with you, that if by a breach of any of our rules you do damage
or injury to the owner of a competing yacht, you shall be liable
to make good the damage which you have so done."  If that is so
then when they do sail, and not till then, that relation is imme-
diately formed between the yacht owners.  There are other con-
ditions with regard to these matches which constitute a relation
between cach of the yacht owners who enters his yacht and sails
it and the committee; but that does not in the least do away
with what the yacht owner has undertaken, namely, to enter
into a relation with the other yacht owners that relation con-
taining an obligation.
  Here the defendant, the owner of the Satanita, entered into a
relation with the plaintiff Lord Dunraven, when he sailed his
yacht against Lord Dunraven's yacht, and that relation contained
an obligation that if, by any brcach of any of these rules, he did
damage to the yacht of Lord Dunraven, he would have to pay
the damages.
  Now the defendant admits that his yacht, the Satanita, broke
the rules.  It is not material at present to consider which rule
was broken, but, as a consequence of breaking the rule, his yacht
ran into Lord Dunraven's yacht and sank it.  That is conceded.
  Now comes the question, What damage is he liable for?  He
had entered into a relation with Lord Dunraven under these
rules.  It is quite a different relation from that which exists
between the two owners of two ships sailing on the ocean, for
the only relation which exists between the two ships is that, by
reason of their contiguity on the ocean, one of them shall not
by negligence run into the other.  Rules grew up, known to all
sailors, long before the statute was passsd, which, amongst other
things, held that any ship which violated those known rules was
acting negligently towards the other ship, but the only relation-
ship existing was that she was not to do her any injury by
negligence.
  This is a relation which arises from two things or persons
being contiguous to each other; for if you choose to drive a
tandem across Salisbury Plain as fast as you like and sway it
about from one side to the other, you are doing no harm to
anybody if there is nobody else on Salisbury Plain ;  but if there
is somebody else on Salisbury Plain, so near to you that by
reason of your contiguity you are likely to run into him and
damage him, then there arises a duty upon you not to be
negligent, but to drive with rcasonable care so as not to run
into him.
  So it was with a ship on the sea.  She may go round and
round in a circle and sail in any way she pleases if there is no
other ship near her. But the moment there comes another ship
so near to her that, if she navigates without due and reasonable
regard for the other ship, she may injure her, then the relative
duties immediately arise.  Besides those duties which by
universal custom determine what would be negligent steering or
sailing, the Act of Parliament was passed which stated that
when two sailing ships are approaching one another so as to
involve risk of collision then each of them is to do certain
things. Those rules do really fix what under those circum-
stances will be negligence, unless the rules are broken by reason
of inevitable accident.
  With regard to the rules governing this particular regatta,
the committee could not make any rule which would affect
ships which were not going to take part in this regatta.  I
cannot agree with counsel for the defendant that a vessel coming
up or down the Clyde would be bound to take notice of the
rules of this regatta.  They have nothing to do with them.
They are entitled to sail in and out according to the usual mode
of navigation.  They ought not to sail according to these rules,
even though they knew that the regatta was being held, and
even although they knew all the rules of the regatta they would
not be bound to observe them.  On the contrary, they ought to
observe the ordinary rules of navigation.  If, whilst they are so
sailing, they do interfere with the regatta, it will be for the
yachts sailing in the regatta to take care of themselves and
observe the ordinary rules of navigation with regard to these
vessels which are not sailing under the regatta rules, and if that
spoils their match it cannot be helped.  But vessels taking part
in the regatta have undertaken an olbligation to each other
which is this, namely, Whether what you do is, or is not,
contrary to the ordinary rules of navigation, if it is contrary to
these rules, I have agreed with you, and you have agreed with
me, that we shall both observe these rules, otherwise you cannot
have any claim against me under these rules, and if I do that
which is a breach of these rules, you can have a claim against me
in respect of the breach of these rules.
  There are some of these rules, as has been pointed out, which
alter the ordinary rules of navigation between these parties who
have agreed to sail according to these altered rules, and if one
of them breaks these altered rules, he is, by these rules, to have
a claim maintained against him.  Then comes the question,
What is that claim ?
  We have to construe the rule which is applicable in this case,
and that is rule 32.
  I know that the plaintiff has relied in a sense upon rule 24;
but I think the governing rule in this case is rule 32, which
runs as follows : " Any yacht disobeying or infringing any of
these rules, which shall apply to all yachts, whether sailing in
the same or different races "--I do not construe that part of the
rule, because I do not think it is material--" shall be disqualified
from receiving any prize she would otherwise have won"--that
condition by which they have agreed with the comiuittee, the
persons who give the prizes, that they shall be disqualified from
receiving any prize, does not affect the owners of other yachts.
  Now we come to this: "And her owner shall be liable for all
damages arising therefrom."  Cam that mean an obligation
which they have undertaken to the committee ?
  If a yacht runs into one of the other yachts, as was done on
this occasion, how can that damage the committee ?  The com-
mittee have no interest in the yacht, they have not to pay for
the loss of the yacht, and have nothing to do with the yacht,
except that they have allowed her to run in the race for a prize;
and if she won the race the committee has entered into an
obligation to give her a cup, or money, or whatever it might be ;
but the committee is not damaged, and cannot be damaged.
me clcar that it is the owner of the yscht which has been sailing
against this yacht, or at all events in the regatta.  You must
read in "to any other yacht which he may damage" for "all
damages arising therefrom."  If rule 24 is looked at, it seems to
me to make it clearer that that must be the meaning  because it
says:  " If a yacht, in consequence of her neglect of any of these
rules, shall foul another yacht"---that is the thing which does
the injury to the other yacht owner =-" she shall forfeit all claim
to the prize, and shall pay all damages."  What meaning are we
to put upon those words, " all damages " ?  If it had been " shall
pay damages" it would have been a futile rule, because if the
rule was broken negligently the yacht owner would be liable to
damages.  Why is the word " all" put in ?  Nobody has been
able to suggest any meaning to this word "all " except that it
must be all the damages caused by the fouling.  All the damages
to whom ?  All the damages to the owner whose yacht has been
injured.  To my mind it is plain and clear.  It is all damage
caused to the owner of another yacht by reason of an injury
having been done to that yacht.  On the other hand, as the
liability is for injury done to the yacht, if a yacht owner is going
to make a present of valuable jewels to a lady after the race is
over, and has the box containing them on his yacht at the time,
or is allowing a lady to be on board during the race, with boxes
of dresses or jewels or the like, I have no doubt that the loss of
those jewels or dresses would be a thing which the other party
could not contemplate as a possible result of what he was doing,
and therefore he would not be liable.
  I cannot see how to construe that word " all " without saying
that the effect of it is clearly to do away with the limitation
contained in the Merchant Shipping Act ; and although it cannot
be denied tbat this limitation, if it were not for these words of
the rule, would apply, it is a mere accident, for the Merchant
Shipping Act was not intended to apply to all yachts, and cer-
tainly not to racing yachts, and they are only brought in by the
section in this Act defining what ships are to be considered as
within the statute.
  It is always agreeable to think that a rule which one feels
obliged to lay down can have a reasonable foundation, and I
think it can in this case.
  The yachts under these rules are to be steered by amateurs.
The yachts which come in to compete do not know what yachts
are coming against them, and therefore cannot possibly know
the sailor-like capabilities of the owner of a yacht, or of his
amateur friend.  Then they are not in the condition that they
would be if the yachts were to be sailed by a master, and there-
fore have not that protection that the yacht is going to be steered
and sailed by a capable sailor.  Here the yacht may be in fault
by reason of the incapacity of a person as to whose capacity the
other yacht owners have no means of judging.  I think, there-
fore, it was very reasonable, to say that if you do enter into such
a game as this to be played by an incapable person, if he does
commit a fault to the injury of the other, you must pay all the
damages, and not be limited either to 8l. or to 15l. a ton, other-
wise, although yon might have a most valuable yacht, if she
were sunk by another yacht of a very small tonnage, there would
be no real remedy at all.  Those reasons seem to me to make
the rule a most reasonable protection against gentlemen who
will have their little gambol with their yachts, and I have a
strong conviction that the interpretation which we are proposing
to put upon it is reasonable and right, and I think, therefore,
that this appeal must be allowed.
  LOPES L.J.  If we were not differing from the learned judge
below, and if this were not important in the sense of involving a
large amount of money, I should not think it necessary to deliver
any judgment of my own, as I should be prepared to adopt the
judgment of the Master of the Rolls; but in the circumstances
I will shortly express my view of this case.
  The questions are, first, was there a contract ?  Secondly, what
was the contract ?  Now it is admitted that the Satanita and the
Valkyrie had been entered for the fifty-mile race in the regatta
of the Mudhook Yacht Club on the Clyde, that they had
respectively agreed to obey the rules of the Yacht Racing
Association, that the yachts had become amenable to those rules,
that the Satanita violated one of those rules, and that it was the
18th rule which was violated.  (The learned judge read the rule,
and continued :--]
  We therefore start with this, that rule 18 was infringed, and
that the owners of both these yachts adopted these rules and  in
point of fact, sailed their yachts under them.
  As to the first question, I have no doubt that there was a
contract.  Probably a contract with the committee in certain
cases, but also a contract between the owners of the competing
yachts amongst themselves, and that contract was an under-
taking that the owner of one competing yacht would pay the
owner of any other competing yacht injured by his yacht all the
damages arising from any infringement or disobedience of the
rules.
  In my opinion, directly any owner entered his yacht to sail,
this contract arose ;  and it is clear that the owners of the
Valkyrie and the Satanita did enter their respective yachts and
did sail.  Therefore, there was a contract, and under rule 32
damages became payable ; but it is said that the damages are
limited under the Merchant Shipping Act.  In order to decide
that, we must look at rule 32; for, though I do not overlook
rule 24, I base my judgment on the meaning of rule 32.  [The
learned judge read the rule, and continued:--]  It is said
by counsel on behalf of the Satanita that that means all legal
consequences--all damages recovemble by law--and therefore
only means damages limited by the Merchant Shipping Act.
If that is the true construction of the rule, I can see no
necessity for the insertion of the words "all damages arising
therefrom," because the damages limited by the Merchant Ship-
ping Act would have followed; and this anomaly would also
arise, that there would be damages of one kind when there was
improper navigation, and damages of another kind if the injury
was caused otherwise than by improper navigation.  I cannot
stand why we are not to give full effect to the words " all damages
arising therefrom."  Any other construction wonld, I think, be
contrary to the true meaning of these words.  It is said that the
words must be given their ordinary meaning, unless the giving
of that meaning leads to an absurdity.  Does giving that mean-
ing to the word "all" lead to absurdity here?  On the contrary,
I think that that word "all" was used deliberately and for a
purpose.  These yachts were not to be steered by a professional
steersman, but by amateurs, and it was natural, in those circum-
stances, that the owner of one yacht should not be exposed to
the great risk which might arise to his yacht by reason of
another yacht being steered, it may be, by an incompetent
steersman, of whose competency the owner of the other yacht
had no knowledge.  It seems to me to be a reasonable ground
for introducing this word.  It cannot, therefors, be said that the
construction which we propose to give the words leads to an
absurdity.
  The case was suggested by counsel for the Satanita of a
lady falling into the water and damaging her dress.  It is said
that if we give this large construction to the word "all," we
should be including a case like that; but the lady would not
be a party to this contract, and therefore could not recover under
this rule.  I am of opinion that the judgment of the learned
judge in the Court below must be reversed.
  RIGBY L.J.  I am of the same opinion, and, out of deference
to the learned judge, will shortly state my reasons.
  The first question is that of contract or no contract.  It appears
to me that all that is necessary to constitute a contract between
the yacht owners is to bring home to each of them the know-
ledge that the race is to be run under the Yacht Racing Associa-
tion rules, and that they, the one and the other, deliberately enter
for the race upon those terms.  In this case we have a written
document, signed by cach yacht owner, which, if there were any
doubt at all, would render it abundantly clear that he was per-
fectly well aware of the bargain he was entering into.In no
other way than that does it appear to me to be material.
  The contract did not arise with any one, other than the
managing committee, at the moment that the yacht owner
signed the document, which it was necessary to sign in order to
be a competitor.  But when the owner of the Satanita on the
one hand, and the owner of the Valkyrie on the other, actually
came forward and became competitors upon those terms, I think
it would be idle to say that there was not then, and thereby a
contract between them, provided always that there is something
in the rule which points to a bargain between the owners of
yachts. Under rule 24, "If a yacht, in consequence of her
neglect of any of these rules, shall foul another yacht, or compel
other yachts to foul, she shall forfeit all claim to the prize,and
shall pay all damages."  To whom is the owner of that yacht to
pay those damages?  He cannot pay them to the club, nor do
I think the club could recover them.  The true and sensible
construction is that he must pay the owner of the yacht fouled.
  Under the 32nd rule a breach of any of the rules renders the
owner liable for "all damages arising therefrom."  I am pre-
pared to acquiesce in the suggestion that those words must be
treated according to their ordinary meaning; but there can be
no doubt that the ordinary legal meaning of damage includes
damage to a vessel sent to the bottom.  The argument that if
we give the full meaning to the words "all damages" we may
be including damages which are remote, is, I think, removed by
the fact that this is damage clearly within the ordinary meaning
of the law.
  As to the limitation under the Merchant Shipping Act, if the
damage does not amonnt to the limit, it is paid in full, and all
that the section says is, that under certain circumstances the
owner of the ship in default shall not be answerable in damages
beyond a certain amount.  If we were dealing with that class
of case here we should have to apply the section to the case of
yachts; but when we come to the actual contract entered into,
what can be clearer than the meaning of the word " all" ?  " All
damages arising therefrom."  It means what it says.  To get
out of that meaning you must introduce a great deal more than
the argument for the defendant would allow.  You must say
damages, which would be the legal consequence if there were
no such contract as we are now dealing with.  On the whole I
am of opinion that the parties who drew up these rules inten-
tionally put the words in, and that the yacht owners contracted
themselves out of that accidental benefit which was given to
them by the Merchant Shipping Act.  I agree that the judg-
ment below must be reversed.
  Solicitors for plaintiffs :  Waltons, Johnson, Bubb & Whatton.
  Solicitors for defendant:  Thomas Cooper & Co
  (1) By the decreee of the Court of        kyrie, the defendant was entitled to
Appeal (settled May 31), the Court          limit his liability.  As regarded the
reversed the decision of Bruce J., so       master and crew of the Valkyrie, the
far as it pronounced that, as against       Court dismissed their appeal without
the plaintiff, the owner of the Val-        costs.
                                                     T. L. M.
GRAINGER & SON  .  .  .  .  .  .  .  APPELLANTS ;  H. L. (E.)
                           AND
WILLIAM LANE GOUGH (SURVEYOR OF
                                  RESPONDENT.
  TAXES)  .  .  .  .  .  .  . .
Revenue--Income Tax--Trade exercised within United Kingdom--Assessment
  in Name of Agent--"Factor, Agent, or Reeciver having the Receipt of
  Profits or Gains"--Income Tax Act 1853 (16 & 17 Vict. c. 34) Sched. D--
  Income Tax Act 1842 (5 & 6 Vict. c. 35) ss. 41-44.
  A foreign merchant, who canvasses through agents in the United
  Kingdom for orders for the sale of his merchandise to customers in the
  United Kingdom, does not exercise a trade in the United Kingdom within
  the meaning of the Income Tax Acts, so long as all contracts for the sale
  and all deliveries of the merchandise to customers are made in a foreign
country.
  This principle applied to the business of Roederer of Reims, wine
merchant, and the dcisions of the Queen's Bench Division and Court of
Appeal ([185] 1 Q. D. 71) reversed (Lord Morris dissenting).
  Semble: the words in the Income Tax Act 1842 s. 41 "having the receipt
of any profits or gains" apply to "factor" and "agent" as well as to
" receiver."
THE follolwing were the material facts appearing in a case
stated under 43 & 54 Vict. c. 19 s. 59 by the Income Tax
Commissioners for the City of London.
  At a neeting of the commissioners, Grainger & Son appealed
on their own behalf against assessments for each of the years
1884, 1885, and 1886 of 3000l. made as follows : " Louis
Roederer of Reims, champagne shipper in the name of
Grainger & Son, agents, 108, Fenchurch Street," under the
following circumstances :--
  Louis Roederer is a wine merchant and champagne shipper,
whose chief place of business is at Reims, in France, and has
for many years shipped large quantities of champagne to Eng-
land in the course of his business.  The appellants, Grainger &
Son, carry on, at 108, Fenchurch Street, London, an extensive
business of their own as wine merchants.  They are also agents
in Great Britain for the sale of Roederer's wine, and they
appoint other persons in towns other than London as sub-
agents.  The business transacted by the appellants on hehalf
of Roederer has been carried on in England for many years,
and is very extensive.  The orders are sought in the name of
Louis Roederer, and when received are transmitted by the
appellants to Roederer at Reims, and he exercises his discre-
tion as to executing these orders.  In every instance he
forwards the wine direct to the costomer in England free on
board at Reims, and at the latter's risk and expense.  The
wine is invoiced by Roederer to the costomer in Roederer's
name as vendor. No other wines are sent to this country
except those ordered through the appellants as aforesaid.  The
amounts due in respect of the wine so sold are collected by
Grainger & Son at 108, Fenchurch Street on behalf of Roederer,
and receipts are given for and on his behalf ; but the customers
frequently remit the amonnt of their invoices direct to Roederer,
as hereinafter mentioned.  The appellants are entitled to a
commission upon all orders received from Great Britain, if
executed, and have no other interest in the sale.  Roederer has
registered a series of trade-marks in Great Britain, as appears by
a print of the Trade Marks Journal annexed, and forming part
of this case.  He keeps a large stock of wine at Reims
especially for sale in Great Britain, and known as " reserve for
Great Britain"; but neither he nor the appellants for his account
keep any of this stock in England.  In case of default in pay-
ment by any customer, proceedings are taken in the English
Courts in the name of Boederer, and proof in bankruptcy is
made in Roederer's name against any bankrupt debtor.  The
appellants receive money, that is to say cash, from the pur-
chasers of wine here on account of Roederer; but the money so
received sometimes but rarely exceeds the commission due to
the appellants, and then only to a comparatively small amount.
They, on his behalf, occasionally incur and pay for him other
charges which absorb such excess.  Roederer usually draws
on his customers in England direct.  In addition to this
cash, the appellants receive English and foreign drafts and
cheques on English banks and on French houses payable to
Roederer in respect of  orders fulfilled by him, and forward
them to their principals, who send receipts to their cus-
tomers therefor.  It appeared from the course of business that
the appellants are paid their commission by a per contra account
in their ledger, in which the amounts received by them on
account of Roederer are set off against the amount due to them
for commission.  The appellants had paid the income tax on
the commission.
  The appellants on their own behalf, and not on behalf of
Roederer, contended upon the above-mentioned facts--1. That
Roederer was not a person exercising a trade within the United
Kingdom either in the terms of Sched. D of 16 & 17 Vict.
c. 34 alone or read with s. 41 of 5 & 6 Vict. c. 35.  2. That
the appellaiits were not agents within the terms of s. 41
of 5 & 6 Vict. c. 35, and they claimed that the assessment
should lie discharged, or that their names should be erased
therefrom.
  The Commissioners of Taxes were of opinion that the assess-
ment was rightly made, and confirmed it accordingly, but at
the appellants' request stated the above case for the opinion
of the High Court.
  The case having been remitted by the Queen's Bench Divi-
sion to the Crown for amendment by finding further facts, the
commissioners found as follows :--
  2. That Roederer exercises and carries on the trade or busi-
ness of a wine merchant in Great Britain except so far as the
facts stated in the caae and in this amendment prove a different
conclusion in point of law.
  3. That offers and proposals for the purchase of wine are not
only received by Grainger & Son in England, but orders are
sought by them as agents on behalf of Roederer as their
principal.
  4. That such orders are given by customers to Grainger &
Son and received by them ; but the appellants allege that
Roederer in his arrangements with them as his agents has
reserved a right to reject any particular order.  In the opinion
of the commissioners, this right is in fact intended to protect
Roederer in cases where there is doubt as to the pecuniary
position of the costomer giving the order.  No special notice is
given to the costomers of the above-mentioned right reserved.
  5. In the Post Office London Directory, under: the head
" Trades--Wine Merchants," is inserted the following : " Roe-
derer, Louis, Reims, champagne merchant (Grainger & Son,
agents), 21, Mincing Lane, E.C.," which had been inserted by
the authority and with the knowledge of the appellants.  The
appellants admitted that it was well known that Roederer's
English agents were the appellants, at whose office orders would
always be received, and that Roederer's do an extensive trade
in the United Kingdom, and have done so for many years, and
have habitually made contracts in the manner described in the
original case.
  6. The commissioners find that the wine is sold to the
customers as it lies "In Reims Cellar " or "Pris en Cave."
Where wine is so sold the customer pays the cost of packing,
carriage from the cellars, and takes all risk.  The packing and
arranging for transit is, however, actually performed by persons
employed by Roederer, and the customer is charged by Roederer
with a sum in respect of such work under the designation,
" Pour emballage, &c."
  7. The invoices of the wine are made out and sent by
Roederer to the appellants, who in their turn forward them to
the customer.  A form of the invoice is hereto annexed.
  8. The commissioners find that the direct payments to
Roederer by cheques or drafts to his order are more frequent
than payments made through Grainger & Son, and that in
addition to cash some cheques on behalf of Roederer are paid
to and cashed by Grainger & Son.  The receipts for all money
paid either to Roederer or through Grainger & Son are sent by
Roederer to the customers direct, and a form of receipt is hereto
annexed and forms part of this case.
  9. The appellants produced the circulars and documents
hereto annexed as specimens indicative of the manner and style
of business transacted by them on behalf of their principal
Roederer.
  These documents are sufficiently referred to in the judgments.
  The Queen's Bench Division (Mathew and Cave JJ.) were of
  The appellants are not agents within the meaning of the Act
of 1842, ss. 51, 44.  They have no " receipt of profits or gains."
The profits must be received within the jurisdiction by a taxable
person. They are not so received. The appellants have no
dominion over the wine or any document of title.  Such money
as comes to their hands, if in excess of their commission, which
is not usually the case, is transmitted.  They have no means of
making a return of moneys which have never passed through
their hands.  " Profits and gains " are the balance of receipts
over expenses, and they neither have such balance nor the
means of knowing the amount.  The term " receiver " is used
for the first time in s.40.  But the appellants are not receivers
or factors or agents within the meaning of the Act of 1842
ss. 40, 41, 42, 43 or 44, or the earlier Acts, 39 Geo. 3 c. 13;
43 Geo. 3 c. 122;  or 46 Geo. 3 c. 65.  In all the Acts the
receiver or the agent is the person through whose hands the
money passes and who is in a position to make a return.  The
remedy by distress shews that the Legislature contemplated an
agent who had the money in his hands to pay the tax.
  Sir R. B. Finlay, S.-G., and Danckwerts, for the respondent.
Roederer does carry on business here within the meaning of
the Acts.  If one of the firm came over to England, solicited
orders, and sent them for approval to Reims, there can be no
doubt that a business was carried on in this country.  It can
make no difference that this is done by an agent and not a
partner.  Sect. 53 of the Act of 1842 provides that where there
are several agents only one shall be charged on behalf of himself
and the others.  It is clear that it was intended to emnbrace all
agents who solicit and obtain orders for their principals.  If the
appellants' contention was to prevail, foreignets would never
allow their agents to have control of profits.  The British
merchant would be taxed and the foreigner would escape.  To
obtain orders through an agent is to trade, and it does not
matter where the contract is actually concluded.  As to what
constitutes carrying on a business, see Turner v. Evans. (1)
Erle J. says : " A vine merchant . . . . without the appurte-
nances of a shop, or counting-house, &c., and without clerks,
  (1) 2 E. Q B.512i  22 L.J. (Q.B.) 412; and in Chancery,2 D.M.&G.740.
  May 1. LORD HERSCHELL.  My Lords, the appellants are
wine merchants carrying on business in the City of London.
They act as agents in this country for certain purposes, which
will require careful consideration, for M. Louis Roederer, a
wine merchants, whose chief place of business is at Reims, in
the Republic of France.  Two questions arise for determina-
tion : first, whether #. Roederer exercises any trade, e1np~y-
whether, if so, he is liable to be assessed to the income tax in
the name of the appellants as being his agents within the
meaning of s. 41 of 5 & 6 Vict. c. 35.
  The first step to be taken is to ascertain with accuracy what
are the facts in the present case.  I say this because one of the
learned judges in the Court of Appeal expressly relied on the
fact that contracts were habitually made in this country by
M. Roederer, and another member of the Court seems to have
regarded the finding in the case that " the appellants are agents
a finding that sales by Roederer took place in this country.
Standing by itself, the finding would probably have this mean-
ing.  But it does not stand alone.  The whole of the facts
found must be considered in conjunction with one another; as
well those in the mended as in the original case.  The nature
of the appellants' agency is plain enough.  They canvas for
orders for Roederer's wine, and receive a commission on all
orders from Great Britain, if executed.  The functions of the
sub-agents whom they appoint are the same.  When ordsrs
are received they " are transmitted by the appellants to Loius
Roederer at Reims, and he exercises his discretion as to exe-
cuting the said orders."  This is the statement in the original
case.  In the amendment it is stated that" orders are sought by
them as agents on behalf of Louis Roederer as their principle,
that such orders are given by customers to Messrs. Grainger &
Son, and received by them ; but the appellants alleged that the
said Louis Roederer in his arrangments with them as his
agents has reserved a right to reject any particular order."
The commissioners add that, in their opinion, this right is, in
fact, intended to protect Roederer in cases where there is doubt
as to the pecuniary position of the customer giving the order,
and that no special notice is given to the customer of the right
so reserved.
  The commissioners appended to the amended case certain
documents produced by the appellants as specimens indicative
of the manner and style of business transacted by them on
behalf of M. Louis Roederer.  One of them is an order addressed
to the appellants.  It commences---"Please ship per G. & J.
Porter," and then specifies certain quantities and descriptions
of Roederer's wine.  The appellants in reply to this write:---
"In compliance with your obliging order of yesterday we shall
have much pleasure in requesting M. L. Roedeler to ship for
your account, through Messrs. G. & J. Porter of Calais," the
wine specified.
  Taking the findings together, I think it clear that no contracts
to sell wine were ever made by the appellants on behalf of
Roederer.  All that they did was to transmit to hi1n the orders
received, and until he had agreed to comply or complied with
them there was no contract.  He was under no obligation to
the persons giving the orders to the appellants to execute any
one of them.  I think the statement in the original case was,
having regard to the documents, a perfectly correct one, and
that it is not accurate to speak of Roederer's having reserved
to himself a right to  reject any particular order.  An order
given to a merchant for the supply of goods does not of itself
create any obligation.  Until something is done by the person
giving the order which amounts to an acceptance there is no
contract.  It is clear that the appellants in receiving an order
did not accept or purport to accept it on Roederer's behalf so as
to constitute a contract, and that they had no authority so
to do.
  The learned Solicitor-General, in his argument, for the
Crown, did not contend that any contracts  were made in this
country by M. Roederer, either personally or through his
agents; indeed he admitted the contrary.  Mr. Danckwerts
did argue that there were such contracts.  His argument was
an ingenious one.  He called attention to certain price-lists
which were distributed by the appelants amongst persons
likely to give orders, and contended that as soon as an order
was given to them by a person receiving one of those lists a
contract to supply the specified quantity at the price named in
the list was complete, subject only to a right on the part of
Roederer to disavow it.  I think it impossible to accede to this
contention.  In my opinion, this would not be understood by
any one in the trade to be the effect of giving an order for
specified in such a price-list.  The transmission of such a
quantity of the wine described at the price named, so that as
soon as an order is given there is a binding contract to supply
involved in any number of contractual obligations to supply
wine of a particulsr description which he would be quite
unable to carry out, his stock of wine of that description
being necessarily limited.  I entertain, I confess, a very clear
opinion that the Solicitor-General was quite right in arguing
the case on the assumption that no sales were made in this
country.
  Taken in  unection with the facts stated, I think the finding
that the appellants " are agents in Great Britain for the sale"
of Roederer's wine means no mire that this, that they are
engaged by him to canvass for custom, to seek to obtain from
persons in this country orders for his wine.  The wine is sold
to the customers as it lies in Reims cellar or "Pris en Cave "
The customer pays the cost of packing and cacarriage from the
cellars and takes all risk.  The delivery to the purchase, there-
fore, takes place in  France.  The wine is invoiced to the
purchaser in Roederers name as vendor, the nvoice being sent
to the appellants, and by them transmitted to the purchaser.
The amounts due in respect off the wines sold are sometimes
times remitted by the appellants on behalf of Roederer and some-
to the appellants in cash or in cheques on London banks,
cashed by them, the moneys so received are credited to
Roederer against the amount of the commission due to them
and charges incurred by them on his behalf.
  Taking it to be the fact as in my opinion it undoubtedly is,
that contracts for the sale of wine are not made by Roederer
in this country, and that the delivery by him to purchasers always
takes place in France, it appears to me that the case differs
widely from any that have hitherto been decided.  In all pre-
vious cases contracts have been habitually made in this country.
Indeed, this seems to have been regarded as the principal test
whether trade was being carried on in this country.  Thus, in
Erickson v. Last (1), the present Master of the Rolls said
"The only thing which we have to decide is whether, upon
the facts of this case, this company carry on a profit-earning
trade in this country.  I should say that whenever profitable
contracts are habitually made in England, by or for foreigners,
with persons in England because they are in England, to do
something for or supply something to those persons, such
foreigners are exercising a profitable trade in England even
though everything to be done by them in order to fulfil the
contracts is done abroad."
  All that the appellants have done in this country on behalf
of M. Roederer has been to canvass for orders, to transmit to
him those orders, when obtained, and in some cases to receive
payment on his behalf. Beyond this he has done nothing in
this country, either personally or by agents.  Does he, then,
exercise his trade within the United Kingdom?  It has been
sometimes said that it is a question of fact whether a person so
exercises his trade.  In a sense this is true; but, in order to
determine the question in any particular case, it is essential to
form an idea of the elements which constitute the exercise of a
trade within the meaning of the Act of Parliament.  In the
first place, I think there is a broad distinction between trading
with a country and carrying on a trade within a country.
Many merchants and manufacturers export their goods to all
parts of the world, yet I do not suppose any one would dream
of saying that they exercise or carry on their trade in every
country in which their goods find customers.  When it is ssid,
then, that in the present case England is the basis of the
business, that the wine was to be consumed here, and that the
business done would remain undone but for the existence of
              (1) 8 Q.B.D. 414
the customers in England, I cannot accept this as proof that
M. Roederer carries on his trade in this country.  It would
equally prove that every merchant carries on business in every
country to which his goods are exported.  Moreover, the pro-
position would be just as true if English customers gave their
orders personally at Reims. Something more must be neces-
sary in order to constitute the exercise of a trade within this
country.  How does a wine merchsnt exercise his trade?  I
take it, by making or buying wine and selling it again with a
view to profit.  If all that merchant does in any particular
country is to solicit orders, I do not think he can reasonably
be said to exercise or carry on his trade in that country.
What is done there is only ancillary to the exercise of his trade
in the country where he buys or makes, stores, and sells his
goods.  Indeed, I do not think it was contended that the
solicitation of custom in this country by a foreign merchant
would in all cases amount to an exercise by him of his trade
within this country.  The learned counsel shrank from
maintaining that if, for example, he sought custom only by
sending circulars to persons residing here, or advertised in
British newspapers, he could on that account be said within
the ruling of the statute to be exercising his trade in this
country.  They relied on the circumstance that he had appointed
agents in this country who regularly solicited and received orders
and transmitted them to M. Roederer.  If in each case the
other circumstamces are the same, the contract of sale being
made abroad, and the delivery taking place there, I find myself
quite unable to see how the mode in which orders are solicited
and obtained, whether by an agent or by circulars or adver-
tisements, can make the difference, and cause the trade in the
one case to be exercised, and in the other not to be exercised
within this country.  If the mere employment by a foreign
merchant of an agent to solicit  and to transmit orders does
not amount to an exercise of his trade in this country, I do
not think that it becomes an exercise of his trade here if, in
addition, the agent in some cases receives the price of the
goods sold for transmission to his principal.  Still less does it
appear to me material that in the London Post Office Directory
there was inserted by the authority and with the knowledge of
Grainger & Son (but not, I may observe, so far as is stated; by
the authority or with the knowledge of Roederer) : " Roederer
Louis, Reims, champagne merchant (Grainger & Son, agents),
21 Mincing Lane "
  For these reasons I have come to the conclusion that the
taxing section does not apply in the present case.  This view
renders it unnecessary to decide the question whether the
appellants are agents within the meaning of s. 41 of 5 & 6 Vict.
But I must say that, as at present  advised;  I cannot adopt the
view that the words " having the receipt of any profits or
gains " control the word " receiver" only, and not the words
" factor " and " agent."  The word " agent" obviously cannot
extend to every agent for whatever purpose he may be employed,
as, for example, to an advertising agent.  This was felt by
Cave J., who said that it meant an sgent " for the purpose of
exercising the trade in question if it was a trade."  But if the
word " agent " must lie in some way controlled, why introduce
words for the purpose instead of treating it as controlled by the
words which follow, and which may not only be made to control
it without doing any violence to the language used, but seem
to me to be naturally applicable to it, especially on a considera-
tion of all the terms of the section?  At the same time, I am
not disposed to put so narrow a construction on the section as
was contended for by the appellants.  In the case of a trade
exercised in this country, I think any agent who received, for
the foreigner exercising such trade, moneys which included
trade profit would be within the provisions of s. 41.
  It was said that if M. Roederer was not liable to income tax
in this case it would give foreigners an unfair advantage over
British traders.  This does not appear to me to be the case.  I
do not think such considerations can legitimately influence our
decision ; but if they are to be introduced, I think it would be
much more prejudicial to British traders if we were to lay down
this country only, they carry on business in every other country
from which they obtain orders for their goods through solicita-
tion by an agent, or, indeed, in any other way; for I do not
think it can logically or reasonably make any difference in
principle what the method of soliciting custom may be.
  I think the appeal should be allowed with costs both here
and in the Courts below.
  LORD WATSON.  My Lords, this appeal raises two questions
upon the construction of the Income Tax Acts.  Did Louis
Roederer, who is a champagne merchant residing and carrying
on business in France, during the years 1884, 1885, and 1886
exercise his trade in this country, within the meaning of
Sched. D of the Act of 1853?  If so, did the appellants,
Grainger & Son, act during that period as his agents in such
sense as to make them answerable under s. 41 of the Act of
1842 for doing everything necessary in order to the assessment
and payment of duty upon the profits or gains arising from the
exercise of his trsde vithin the United Kingdom?  The facts
upon which the answers to be given to these questions depend
have been stated by the Commissioners of Taxes for the City of
London, in a special case which was amended by them upon a
remit from the Queen's Bench Division.
  Louis Roederer supplies large quantities of champagne from
his cellars at Reims to consumers in the United Kingdom.
He has no place of business in this country, and keeps no stock
of wine here, either by himself or by an agent.  During the
three years for which income tax is claimed his name was
inserted in the London Post Office Directory under the head
" Trades " in these terms :  " Roederer, Louis, Reims,  champagne
merchant (Grainger and Son, agents), 21, Mincing Lane, E.C.,"
that being the address of the appellants  who carried on business
as wine merchants upon their own account, and also acted,
during the period in question, as his agents.  Beyond receiving
payments in cash or bills on his account, as will be presently
noticed, the appellants' agency was limited to soliciting order
for champagne, either by themselves or through sub-agents
who were appointed by them.  These orders, when recieved,
were not accepted by the appellants, who had no authority to
that effect, but were transmitted by them to Louis Roederer at
Reims, who invariably reserved the right to reject any order
forwarded to him.  The necessary result of that course of
dealing was, that until Roederer had accepted the order there
was no contract which could bind him, or afford a right of
action against him to the person who gave it.
  When an order was accepted, the wines were packed in
Reims at the expense of the customer, to whom they were
then forwarded direct at his cost and risk.  An invoice was
made out at Reims charging the price of the wine, according
to current lists furnished to the customer by the appellants,
together with expenses of packing, &c., which was sent to the
paying by bill or cheque on Paris to have these drafts made
out to their own order, and then to indorse them to Louis
Roederer, so as to enable him to identify each remittance with
the customer who sent it.
  The appellants were remuneratsd for these services by a
commission upon the orders which they procured.  In some
cases customers of Louis Roederer made payment to them in
cash; but the money thus received by them rarely exceeded
the sum due to them as commission, and then only to a small
amount. The appellants also received English and foreign
drafts and cheques in favour of Louis Roederer, for which they
gave acknowledgments to the customer.  These drafts and
cheques were forwarded by them to Louis Roederer, who then
sent a receipt direct to the customer.
  These facts appear to me to raise a question in regard to the
nature of the trading connection between Louis Roederer and
his customers in the United Kingdom which is not covered by
any previous decision.  In Tischler v. Apthorpe (1) and in
Pommery v. Apthorpe (2), the foreign wine merchant traded
in this country through an English agent, who sold his
wine in England and received the price; making delivery to
the buyer either from the stock which had been sent to him by
his principal, or by directing a consignment to be sent from
Reims.  In Werle & Co. v. Colquhoun (3) the decision of the
  (1) 52 L.T. (N.S.) 814.             (2) 56 L.J. (Q.B.) 155.
                     (3) 20 Q.B.D. 753.
Court of Appeal was baeed upon the express ground that the
foreign wine merchant exercised his trade in England by
making contracts there for the sale of his champagnes through
his English agent.  Erichsen v. Last(1), although it did not
relate to the wine trade, was a decision of the same class.  The
telegraph company whose profits were assessed to income tax
had its principal seat of business in Copenhagen, but it had
offices and agents in various parts of the United Kingdom,
where its agents made contracts for the transmission of mes-
sages through its wires, and received payment for sending
them.  I agree with the opinion expressed in that case (2) by
Cotton L.J., that whenever a foreigner, either by himself or
through a representative in this country, "habitually does, and
contracts to do, a thing capable of producing profit and for the
purpose of producing profit, he carries on a trade or business,"
and that the profits or gains arising from these transactions in
the United Kingdom are liable to income tax.
  There is, in my opinion, a very broad distinction between
the case of a foreigner making contracts in England with his
English customers for the sale of his wines, either personally or
through a representative, and the case of his making similar
contracts with these  customers in his own country.  In the
present instance the orders forwarded to Louis Roederer were,
in law, nothing more than offers to purchase until the contract
between him and each offerer was completed by his acceptance
at Reims; and he fulfilled his part of the contract by making
delivery of the wine sold to the purchaser, and at his risk, in
Reims.  The trade of Louis Roederer consists in the sales of
his champagne and it is from these sales that his profits or
gains are derived. Accordingly, the first and main question to
be considered in this appeal is, whether that which was adtually
done within the United Kingdom in relation to and for the
promotion of his business by Louis Roederer, or by the appel-
lants on his behalf, amounts to an exercise of his trade within
the meaning of Sched. D.
  There may, in my opinion, be transactions by or on behalf of
a foreign merchant in this country so intimately connected
  (1) 8 Q.B.D. 414.                (2) 8 Q.B.D. 414, at p. 420.
with his business abroad that without them it could not be
successfully carried on, which are nevertheless insufficient to
constitute an exercise of his trade here within the meaning of
Sched..D.  In illustration of that view, I may refer to Sulley
v. Attourney-General (1), which was decided in the Exchequer
Chamber by no less than six very eminent judges.  An American
firm carried on a business in New York, vhich consisted in the
resale there of goods purchased on their account in England.
One of the partners, who resided in Nottingham, bought the
goods required by his firm, and paid for them with money
remitted to him from New York.  It was held, in these circum-
stances, that the firm did not exercise its trade in the United
Kingdom in such sense as to bring its profits within the scope
of the Income Tax Acts.  One reason assigned for the decision
was that the firm's transactions here did not involve any profits
or gains, which were wholly dependent upon the resales effected
by the firm on the other side of the Atlantic.  The learned
judge recognised the principle that purchasing of stock in this
country, with the view of trading in it elsewhere, does not of
itself constitute an exercise of the trade in the United Kingdom
when that department of the business from which profits or
gains are directly realised is carried on in another country.
  If any substantial distinction could be drawn between can-
vassing through agents in this country for orders which are
sent to Reims for acceptance or rejection, and the systematic
purchase of goods in the English market for the purpose of
trading with them in America, I am disposed to think that the
distinction would not be unfavourable to the contention of the
present appellants.  There is no substantial difference between
obtaining orders for wines, according to the method pursued by
Louis Roederer, and attracting customers to Reims by adver-
tising, and sending circulars to the trade in England.  Such
things are done by British merchants in foreign countries,and
are also done by foreign merchants in Britain, in the interest
and for the promotion of their home business. If their business
consists, as that of Louis Roederer does, in the sale of wines or
other merchandise, neither the British nor the foreign merchant
                  (1) 5 H.& N. 711.
can, in my opinion, be said to exercise his trade beyond the
limits of his own country, so long as all contracts for the sale
of their goods and all deliveries to the purchaser are made
within these limits.
  The fact that some payments were made in cash to the
appellants, and that they also received and forwarded drafts
indorsed to Louis Roederer by buyers of his champagne,
although it might have been of importance if he had exercised
his trade in this eountry, does not appear to me to have a
material bearing upon the question already discussed. When
a trade is carried on in a foreign country, snd British customers
not only purchase but take delivery there, I do not think that
the employment of an English agent to collect and remit the
debts due to him by these purchasers can be regarded as an
exercise of his trade in tis country by the foreign merchant.
  I am therefore of opinion that your Lordships ought to
reverse the judgments of the Appeal Court and of the Queen's
Bench Division, and to find and declare that Louis Roederer
did not, in the years 1884, 1885 and 1886  exercise his trade in
the United Kingdom. In that view, it becomes unnecessary to
consider the question whether the appelants, as his agents, are
responsible in termms of s. 41 of the Act of 1842.  But having
heard a full argument upon the point, I desire to say that I am
not prepared to hold, with the learned judges in the Courts
below, that the words "having the receipt of any profits or
gains" as they occur in that clause refer only to a "receiver."
The context of the Act appears to me to indicate that they
ought to be read as applicable to each and all of the persons
enumerated.
  LORD MACNAGHTEN. My Lords, I have had an opportunity
of considering the judgments which have already been delivered
by my noble and learned friends, and I have nothing to add
except that I concur in the motions proposed, and for the reasons
which have been stated.
  LORD MORRIS.  My Lords, I am of opinion that the judg-
ment of the Court of Appeal, affirming the judgment of the
Queen's Bench Division, should be affirmed.  It is unneceasary
for me to repeat all the facts of the case.  The first and main
question is, Did Louis Roederer exercise a trade in England ?
There can be no definition of the words " exercising a trade "
It is only another mode of expressing " carrying on a business";
but it certainly carries with it the meaning that the business or
trade must be habitually or systematically exercised and that
it cannot apply to isolated transactions.  There is no special
meaning to the words "exercising a trade," and it must
be considered with regard to what would be its ordinary or
popular meaning, and that must in each case depend on the
facts of that particular case; and we are not to canvass what
might be a logical outcome from any decision when it is the
facts of the particular case that are solely decided on.  I have
heard no suggestion of any plainer or more intelligible meaning
for the words " exercise his trade " than the words themselves
convey.
  Now, the leading facts of the case are: Roederer is an
extensive wine maker at Reims, in France.  He ships, and for
years has shipped, large quantities of champagne to England.
The appellants are his agents in England.  The offers or
proposals for the purchase of Roederer's wines sre sought for
and received by the appellants from customers as such agents.
As between Roederer and the appellants, he reserves the right to
reject any particular order--a right stated in the case as intended
to protect Roederer in case of doubt of the solvency of the
customer.  No special notice is given to the customer of such
right being reserved.  The invoices of the wine when shipped
are sent by Roederer to the appellants, who forward them to
the customers.  Direct payments by draft or order are made to
Roederer more frequently than they are made to the appellants,
and the receipts are sent by Roederer direct to the customers.
Exhibits 1, 2, and 5 shew the mode of dealing.  Exhibit 5
gives the initiation of the transaction : it is addressed by the
appellants to the proposed customer, and states they are
instructed by their principal, Roederer, to inform him, &c.; it
then goes on to say, " Mr. L. Roederer will be prepared to ship
champagne," and solicits orders for the wines now offered by
Mr. Roederer at the prices referred to in an accompanying list.
Roederer's stamp is affixed at the foot.  Exhibit No. 1 shews
an order addressed to the appellants and requesting shipment,
while Exhibit No. 2 gives the reply of the appellants thus:
" In compliance with your obliging order of yesterday we shall
have much pleasum in requesting Mr. L. Roederer to ship for
your account," &c.  These exhibits thus evidence an offer by
the appellants as the agent of Roederer of wines at fixed pricas,
an order fro1n the customer for a certain quantity, and an
acceptance by the appellants.  There is thus a completed con-
tract between the customer and Roederer through his agents,
the appellants, controlled perhaps by the limit of authority
given by Roederer to the appellants, which limit is unknown to
the customer. The question in this case is not whether the
customer could recover from Roederer on any breach of the
contract by reason of the limit of authority, but whether as a
matter of fact Roederer is exercising his trade, in other words
carrying on business in England.  I am very clearly of opinion
on the facts that he is exercising his trade in England, and I
consider the insertion in the Directory is a most material and
important fact, for the appellants, with whom we are dealing,
authorize the statement in the Post Office Directory under the
head of " Trades---Wine Merchants," as follows : " Roederer,
Louis, Reims, champagne merchant (Grainger & Son, agents),
21, Mincing Lane, E.C."--an averment by the appellants that
Roederer carries on the business of a wine merchant at 21,
Mincing Lane, and that they are his agents there.  On the
facts stated in the special case I entertain no doubt, as the
Queen's Bench Division and the Court of Appeal entertain no
doubts, but that Louis Roederer exercises his trade of a wine
merchant within the United Kingdom, to wit, in London,
  On the other question, whether the appellants were agents
within the tsrms of s. 41 of 5 & 6 Vict. c. 35, I am not prepared
to hold that the words "having the receipt of any profits or
gains" are applicable only to their imediate antecedent word
a " receiver," and are not applicable to the word " agent."  I
consider they are applicable to and control the word " agent. "
as well as the word "receiver," and there is no reason why an
agent should be chargeable who was not in receipt of profits or
gais; but in the present case the appellants were in fact, as
agents of their principal, Roederer, in receipt of moneys which
included profits and gains, and, being so, come within the
operation of s. 41 of 5 & 6 Vict. c. 35.
  LORD DAVEY.  My Lords, I am of opinion that this appeal
should be allowed, for the reasons which have been already
stated by your Lordships who first addressed the House; and
were it not that we are differing from the Court below, and that
your Lordships are not unanimous, I should not find it necessary
to add any observations of my own.
  The question is whether, on the facts found in the original
and amended cases stated by the commissioners, Mr. Roederer
exercises a trade within the United Kingdom within the
meaning of s. 2, Sched. D of the Income Tax Act, 1853.  I
need not again analyze in detail the statements in the cases;
but I will merely state that the substance and effect of them
appears to my mind to be shortly this: First, neither Messrs.
Grainger & Son nor the sub-agents appointed by them have
any authority to make contracts for the sale of Mr. Roederer's
wines.  Their function in this part of the business is confined
to soliciting and collecting orders for wine which are forwarded
to him in Reims for execution by him if he thinks fit.
  Secondly, all contracts for the sale of wine are made in Reims
by Mr. Roederer himself, and the goods are invoiced in his
name to the customer.  In every instance they are delivered
free on board at Reims at the expense and risk of the customer.
  Thirdly, the ordinary course is for the customers to pay Mr.
Roederer direct in Reims by cheques or drafts to his order.
But Messrs Grainger and Son receive some cash and cheques
on Mr. Roederer's account in London, though to an amount
which rarely exceeds the commission due to them.  Receipts
for all money paid, either to Mr. Roederer or through Messrs.
Grainger & Son  are sent by Mr. Roederer to the customers
direct.  A form of receipt is annexed to the amended case.
  Now, what does one mean by a trade, or the exercise of a
trade?  Trade in its largest sense is the business of selling,
with a view to profit, goods which the trader has either manu-
factured or himself purchased.  I cannot doubt, upon the facts
found, that all Mr. Roederer's sales to his English customers
are made at Reims for delivery in that place, and the goods
sold are, in fact, delivered to the customers in Reims.  So far
as I can see, not a single bottle of wine is ever sold or delivered
by Mr. Roederer, either personally or through his agents, in th1s
country. It was, I think, admitted, and it cannot, in my
opinion, be denied, that the mere fact of a foreigner selling his
goods to English customers does not constitute an exercise of
his trade within this country, although he is trading with this
country.  But it was argued that the habitual employment of
agents to obtain orders and transmit them abroad constitutes
the act of selling to English customers an exercise of trade in
this country.  I am unable to accede to that argument.  Can-
vassing for custom is no doubt ancillary to the exercise of
trade, and it may be assumed that Mr. Roederer's trade with
this country is increased by the employment of agents for that
purpose, as it might be by systematic advertisement.  But
Mr. Roederer's trade is selling his champagne ;  and he exercise
that trade where he makes his sales and the profits come home
to him.  Nor do I think it makes any difference that it is
within the scope of Messrs. Grainger's authority to collect
moneys for Mr. Roederer to the extent stated in the case.  It
is, in my opinion, no more than if Mr. Roederer were for the
convenience of his customers to open a banking account in
London to which they might pay what they owe him.
  I forbear to comment on the earlier case which have been
decided on this section, because they all differ in the vital
respect that sales of goods were in those cases made in England.
The caee of Sulley v. Attorney-General(1), so far as it goes, is
in the appellants' favour.
  In the view which I take it is not necessary to decide the
other point which has been rail, whether Messrs. Grainger &
Son are such agents as described in sect. 41 of the Act of 1842.
I will only say that I think the words " having the receipt of
any profits or gains," &c. the, should grammatically be read with
                   (1) 5 H.& N. 711.
the words " factor, agent,  or receiver " and not with " receivecr "
only ; and that " having the receipt of any profits or gains"
does not mean " any part of the profits or gains," but " the
taxable profits or gains of any business," &c.  I feel great doubt
whether, on the facts of the present case, Messrs. Grainger &
son were such agents ; but it is not necessary to decide that.
           Orders appealed from and determination of the
             Commissioners reversed with costs here and
             below: with a declaration that Louis Roederer
             was not a person exercising a trade within the
             United Kingdom in the terms of Sched. D
             of 16 & 17 Vict. c. 34; cause remitted to the
             Queen's Bench Division.
                        Lord's Journals, May 1, 1896.
  Solicitors for appellants : Irvine & Borrowman.
  Solicitor for respondent: F. C. Gore, Solicitor of Inland
Revenue.
                 [HOUSE OF LORDS]
CLARKE. . . . . . . . . . . . . . . . . .    APPELLANT;
                       AND
THE   EARL   OF   DUNRAVEN   AND
  MOUNT-EARL . . . . . . . . . .
                 THE " SATANITA."
Admiralty--Collision--Damagee--Contract overriding Limitation of Liability
--Merchant Shipping Act Amendment Act 1862 (25 & 26 Vict. c. 63) s. 54.
Two yachts were entered by their respective owners for a club rase, eaeh
owner undertaking with the club to be bound by the club sailing rules.
By the rules the owner of any yacht disobeying any of the rules was to he
liable for " all damages arising therefrom."  One of the yachts in breach
privity of the owner, ran into and sank the other yacht:--
   Held, that there was a contract between the owners upon which the
owner of the damaged yacht culd sue the owner of the other, and that
upon the true construction of the rules the words " all damages " excluded
the operation of s. 54 of the Merchant Shipping Act Amendment Act
1862 which limited the liability to 8l. per ton.
  The decision of the Court of Appeal ([1895] P. 248) affirmed.
THE Mudhook Yacht Club having advertised a regatta to be
held on the Clyde in July 1894, the appellant entered his yacht
the Satanita  and the respondent entered his yacht the Valkyrie
for a first-class race in the regatta, each owner signing a letter
to the secretary of the club undertaking that while sailing under
the entry he would obey and be bound by the sailing rules of
the Yacht Club Association.  Those rules contained a number
of regulations to be observed in races, and among them rule 18
which corresponded to art. 14 of the Regulations for Preventing
Collisions at Sea.  By rule 24, " . . . . If a yacht, in consequence
of her neglect of any of these rules, shall foul another yacht, or
compel other yachts to foul, she shall forfeit all claim to the
prize, and shall pay all damages."  By rule 32, " Any yacht
disobeying or infringing any of these rules, which shall apply
to all yachts whether sailing in the same or different races,
shall be disqualified from receiving any prize she would
otherwise have won, and her owner shall be liable for all
damages arising therefrom."
  While sailing under the entry the Satanita, without the
actual fault or privity of the owner, broke the 18th rule and
ran into and sank the Valkyrie.  The respondent and the
master and crew of the latter vessel brought an action in the
Admiralty Division against the appellant claiming damages.
The appellant paid into court a sum as the amount of damages
for which he was answerable under the Merchant Shipping Act
Amendment Act 1862 c. 63 s. 54 (1), calculated at the rate of
8l. per ton on the registered tonnage of the Satanita.  Bruce J.,
before whom the action was tried, held that even if there was a
special contract binding the appellant, the words in the rules
"all damages" were not so express as to override the statutory
limitation. The Court of Appeal (Lord Esher M.R., Lopes
and Rigby L.JJ.) reversed this decision, holding that as against
the respondent the appellant was not entitled to limit his
liability, and condemned him in the damage proceeded for by
the respondent and in costs. (2)
  The defendant brought the present appeal.
  Nov. 13, 16.  Sir R. T. Reid, Q.C., and E. H. Pollard, for
the appellant. By the Merchant Shipping Act Amendment
Act 1862 c. 63 s. 54 the owner of any ship---where without his
actual fault or privity any loss or damage is by reason of the
improper navigation of the ship caused to any other ship, goods
or merchandise thereon--shall not be answerable in damages to
an aggregate amount exceeding 8l. per ton of the faulty ship's
registered tonnage.  This limitation of liability was well known
and long established when these Yacht Sailing Rules were
drawn up, and must have been in the contemplation of the
persons who drew the rules, as well as of the owners of yachts
who race.  Agreements as well as statutes are construed with
  reference to the existing state of the law, and where it is
  intended to waive a protection of the law very clear and express
  words must be used to shew the intention.  Assuming that

  (1) Repealed by the Merchant Shipping Act 1894 c. 60, of which the
  corresponding section is 503.            (2) [1895] P. 248.
there was a contract between the appellant and respondent and
that the contract was broken by the improper navigation of the
Satanita, the contract must be construed with reference to
the statutory limitation of liability, and there being no words
shewing clearly an intention to waive the protection, the appel-
lant is entitled to claim it.  The words " all damages " mean
any damages, all kinds of damages, the word being used in the
plural, not in the singular.  Liability in full might, it is said,
attach in cases where the statute does not apply, for some
breach of the sailing rules which does not amount to improper
navigation ;  but a breach of the sailing rules would be evidence
of improper navigation, and where the damage happens by
" improper navigation " within the meaning of the statute,
the operation of the statute is not excluded except by express
words. In construing an agreement by which one person
undertakes for a money consideration to render services to
another, for instance the obligation of a railway carrier, the
words are construed most strictly against the contractor, for if
he intends to limit his liability he must clearly express the
intention.  But there is no such principle of construction in a
case like the present where each party undertakes similar obli-
gations: the onus is on the person seeking to make out the
liability.  It is in the highest degree unlikely that owners of
yachts would intend to race with unlimited liability.  Some of
the yachts are of small value and enter for small races, which
are sailed at the same time with the largest.  Is it likely that
the owner of a small yacht would deliberately make himself
liable for many thousands of pounds for injuring one of the more
valuable yachts or a mark-boat ?
  Sir Walter Phillimore, Jogeph Walton, Q.C., and L. Batten,
for the respondent, were not heard.

  Nov. 19. LORD HALSBURY L.C.  My Lords, in this case the
controversy between the parties appears to me to be reduced
to a somewhat narrow point. No doubt there are considera-
tions which apply equally to merchant vessels and to yachts
which might have induced the parties to enter into a different
contract from that which I think they have entered into.  No
doubt the persons who drew up the terms on which the
different competitors were to race were different persons from
those who are now litigants at your Lordships' Bar; but I
think it cannot be doubted that the substance of it is that the
persons who are going to race agree to race upon these terms
with each other.
  That being so the whole question turns upon what is the
contract.  It has been urged upon us that unless the parties
used very clear language they must be supposed to be con-
tracting according to the known state of the law with regard
to ships coming into collision.  I do not deny that considera-
tions of that sort are intelligible and reasonable.  On the other
hand, I think it cannot be denied that the case of yachts is
different from that of merchant vessels.  I do not say that such
a consideration would be conclusive ; but remember that these
are competing vessels, and where you are speaking of these
first-class yachts competing in a yacht-race you might as well
value a race-horse by its weight, so many pounds of flesh, as
speak of the value of a yacht according to its tonnage.  Of
course, it may be said in respect to merchant ships also, that
that is a very rough test of the value of the ship, and that the
object of it is to limit the risk.  That is true also ; but the con-
ditions under which merchant ships sail and yachts sail are
different.  Merchant ships must be on the seas at all times and
in all weathers, both by day and by night, and it may well be
that the considerations that would induce people, so to say, to
diminish the stakes upon which they were running their vessels
would not be applicable to the case of yachts, which presumably
are intended to race in conditions of light and of weather in
hich they are not exposed to the same risks.
  My Lords, I only put these matters forward as considerations
which may be properly urged on both sides; but in truth the
whole question must come back to what is the language vhich
the parties have used, and what is the meaning of that
language.
  Now, apart from any other consideration, looking to the fact
that part of the contract is that disobedience of the rules shall
make the party who is guilty of the disobedience liable to
damages--"all damages"--if I am to assume that the parties
must have known what the condition of the law was in refer-
ence to ordinary merchant ships, I think the balance is in
favour of those who contend that it would have been proper
and appropriate, if they had intended to have that limitation of
liabitity, to put some words in the contract to place it beyond
doubt.  These words are not legal words--they are popular
words: you pay "all damages" if you disobey the rules.  I
cannot help thinking, therefore, that the true intention of the
parties (which, after all,is the thing we have to look at) is to be
found in the language they have used ; and, having regard to
the considerations I have referred to, it appears to me that the
word " all " has no significance at all unless it is intended to
be used in its popular and natural meaning, and that the
expression that they are to pay " all damages " does not mean
damages as limited by the Merchant Shipping Act.  If I am
to look at the language of the contract--though I do not say it
is one of those cases which you can pronounce to be absolutely
clear (I can quite understand a different view being taken for
the reasons I have pointed out)--to my mind the intention of
the contract is that the parties are not to be bound by the limi-
tation of the Merchant Shipping Act, but that all damages are
to be paid by the person disobeying the rules.
  Under these circumstances, my Lords, I do not see my way
to disagreeing with the judgment of the Court of Appeal; and I
therefore move your Lordships that this appeal be dismissed
with costs.
  LORD HERSCHELL  My Lords, I am of the same opinion.
I cannot entertain any doubt that there was a contractual
relation between the parties to this litigation.  The effect of
their entering for the race, and undertaking to be bound by
these rules to the knowledge of each other, is sufficient, I think,
where those rules indicate a liability on the part of the one to
the other, to create a contractual obligation to discharge that
liability.  That being so, the parties must be taken to have
contracted that a breach of any of these rules would render the
party guilty of that breach liable, in the language of rule 24, to
"pay all damages," in the language of rule 32, to be " liable for
all damages arising therefrom." The language is somewhat
different in the two rules; but I do not think they were in-
tended to have, with regard to payment or liability to damages,
any different effect.  It is admitted that the appellant broke
one of those rules, and; having broken or disobeyed that rule, it
is quite clear on the assumption of a contract such as I have
described, that there arose the liability to " pay all damages,"
or " to be liable for all damages arising therefrom."
  But then it is said that under the Merchant Shipping Act, if
one vessel is injured by the negligent navigation of another, the
vessel that does the injury is only liable to the extent of 8l. per
ton unless there has been default on the part of the owner, and
that the liability under these rules must be limited in the same
way and to the same extent.  My Lords, it is to be observed
that the liability created by the contract is not a liability which
exists at common law.  It is a breach of any of the rules that
is made the foundation of the liability.  The common law
creates liability in the case either of navigation which is neg-
ligent at common law, or navigation which is to be deemed
negligent as being a breach of a statutory rule.  That being
so, it seems to me at the outset very seriously open to doubt
whether it is possible to contend that a limitation of the common
law liability in a particular case, namely, the negligent naviga-
tion vithout default of the owner, is applicable at all to a liability
which is created by contract between the parties in a given
event, which event is not that upon which the limitation is
imposed by the words of the statute.  It was ingeniously argued
by Sir Robert Reid that a breach of these sailing rules would lie
an element in considering whether there had been negligence
at common law, and I should not be disposed for a moment to
dispute that there are circumstances under which that might
be the case ;  but, after all, it would not be necessary in order to
establish a liability under these rules to enter into any such
question at all.  Proof of breach of the rule would be enough
to prove liability.  My Lords, I a1n not satisfied that there are
no cases in which a liability would not arise under these rules
where there would be no liability at common law.  If that be
so, it seems to me that the contention of the appellant would
have a very strange result.  A breach of the rule proved--prima
facie liability--then the party who admits the breach of the rule
says, " But I propose now to ask you to enter upon the inquiry
whether there was negligent navigation, because if I can succeed
in shewing that my yacht was negligently navigated I shall cut
down the liability which otherwise there would be nothing to
restrict."  My Lords, that seems to me in itself a cogent con-
sideration when one is inquiring whether these words "all
damages " can be cut down in the manner contended for on the
part of the appellant.  I do not see my way to put a restriction
upon words which prima facie do not import any restriction,
and which have no necessary reference to the provisions of the
Merchant Shipping Act creating limited liability, inasmuch as
the liability of the person who enters into this contract is not
made to depend upon the circumstances in respect of which a
limit is imposed by the Merchant Shipping Act.
  My Lords, it has been said that a contract such as the Court
below have held to exist is a very unlikely contract for the
parties to have entered into. I confess I am not satisfied of
that either.  The parties here are yacht owners who are
entering their yachts for a race in which other yachts will be
engaged.  I do not think there is anything extraordinary in
their entering for that race upon the terms that they shall be
liable for all damage because the contract gives of course the
correlative right of being entitled to all damage.  The question
to whom that contract would be an advantage would depend
on the size of the injured vessel and the injuring vessel in the
particular case which could not be foreseen; therefore it does
not seem to me extraordinary that a contract of this sort should
be entered into.  And again, whilst it is a most uncommon thing
for merchant vessals engaged in an adventure to be actually
navigated by the owner, that is not at all an uncommon thing
in the case of yachts.  Of course, if the yacht were navigated
by the owner and there were negligent navigation, he would be
liable for all damages; and that may have been a consideration
which led to a contract of this description being made a con-
dition of yachts entering for the race.  It puts upon a level,
upon an equality as regards liability to one another, a yacht
which is being navigated by the owner and a yacht which is
being navigated by some other person on his behalf or employed
by him.  Therefore, there seems to me to be nothing mon-
strous, nothing absurd, in the contract which has been held to
exists by the Court below, which would justify this House,
or any tribunal, in saying that the parties never could have
intended to enter into a contract of this description and that
--I do not care whether that was the reason why the provision
in question was inserted ;  but when you seek to cut down what
is the prima# facie meaning of a contract, and to impose a limi-
tation upon the general words which are used in it, if you seek
to do so by considerations such as those which have been urged
upon your Lordships with great force by the learned counsel
for the appellant, then you must make it manifest that it is a
contract which there could be no reasonable ground for the
parties to have entered into.
  My Lords, there is one other consideration which weighs
with me also.  Amongst these sailing rules there are rules
which are a mere repetition of the ordinary navigation rules.
Now, it is very difficult to understand what effect the insertion
of these particular rules would have unless it be to make a
breach of them result in a liability to pay all damages.  They
exist, and they would have applied, as being amongst the
ordinary rules of navigation, whether they had been among
these sailing rules or not, unless they were excluded by agree-
ment between the parties.  The parties have chosen for some
reason or other to insert these among the sailing rules by which
they have become contractually bound, and from a breach of
which this liability was to arise.  I am not sure that I have
heard any reason for their insertion unless it be this, that they
become then not only the ordinary sailing rules, but part of
a contract a breach of which creates a liability to pay "all
damages," to which the statute does not extend.
  My Lords, whether all the results of these rules have been
contemplated may be a question.  It may be that when they
are scrutinised in the light of the occurrence that took place
here, it may be thought desirable, or necessary, to make altera-
tions in them--with that your Lordships have nothing to do--
your only function is to construe the rules as they stand ; and
so construing them I find myself quite unable to differ from
the judgment of the Court below.
  LORD MACNAGHTON.  My Lords, I am of the same opinion
  I do not think that the appellant can avail himself of the
limitation of liability prescribed by the Merchant Shipping Act.
from " means what it says, and that the generality of this
expression is not to be cut down or restricted by anything
outside the rules.
  The learned counsel for the appellant do not, I think, get
rid of the difficulty (if there be any difficulty), or advance their
argument in the least, by translating the word " all" into the
word " any," as they proposed to do.  They have still to qualify
the expression  " any damages "  by the words  " recoverable
by law."
  I do not see why the language which the framers of the rules
have adopted should be changed, or why the language, as we
find it, should not have its full and ordinary signification.  It
does not lead to any absurd or unreasonable result.  In fact,
as the learned judges of the Court of Appeal point out, when
you consider the conditions of amateur racing and the qualifica-
tions, or possibly in some cases the want of qualification, of the
helmsman the result according to the respondent's construc-
tion of the rule is only what one would suppose must have
been intended.  On the other hand, if the appellant's view is
adopted, you have this consequence--amomalous certainly, if
he breaks both the sailing rules and the statutory rules of
navigation; if he only breaks the sailing rules, his liability is
unlimited : the minor offence carries the heavier penalty.
There is less danger in transgressing the law than in departing
from the rules of the game.  The suggestion that every
breach of the rules is improper navigation so as to attract
the statutory limitation of liability is more ingenious, I think,
than sound.
  I agree that the appeal must be dismissed.

  LORD SHAND.  My Lords, I concur.

  LORD DAVEY. My Lords, I concur, and I have nothing to
  add to the reasons which have been given.

            Order appealed from affirmed and appeal
               dissmissed with costs.

                  Lords' Journals November 19, 1896.
  Solicitors for appellant:  Thomas Cooper & Co.
  Solicitors for respondent:  Waltons, Johnson, Bubb & Whatton.
                 JOHNSON v. BOYES.

Vendor and Purchaser--Sale of Land by Auction--Refusal to accept highest
  Bidder--Cheque for Deposit--Statute of Frauds (29 Car. 2, c. 3), s. 4.

  Defendants advertised a freehold public-house for saie hy auction, under
conditions providing that the highest bidder should be the purchaser, and
that he should immediately after the sale pay to the auctioneer a deposit
of 10 per cent. on the amount and in part payment of his purchase-
money, and sign an agreement in the form annexed to the conditions, the
form stating that the deposit had been paid.  The plaintiff, a married
woman with means at least sufficient to pay for the property, despatched
her husband to bid for it.  She did not, however, entrust him with the
cash necessary to pay the deposit.  The property was knocked down to
him at 4900l.  He had a banking account of his own (which, however,
was not in credit to the amount of 490l.) and tendered his cheque for 490l.,
the amount of the deposit.  One of the vendors, however, recognised him
as one who had recently openly sworn that he had nothing in the world
except the clothes he stood up in, and on that vendor's instructions the
cheque was refused; the husband was not allowed to sign the contract,
although he protested that his wife " would find the money to-morrow" and
that he was buying for her, and the property was sold to anne one else at
an enhanced price.  The plaintiff thereupon sued the vendors for damages
for breach of contract that the highest bidder should be the purchaser, and
for refusing to allow the auctioneer to accept th cheque for the deposit, or
to allow her husband to sign the contract.  The Court found that if
the cheque had been accepted the plaintiff would have provided funds to
meet it.
  Held, that a vendor who offered property for sale by auction, on the
terms of printed conditions, could be made liable in damages to a person
who accepted the offer and complied with conditions if those con-
tions were violated by the vendor, and that the Statute of Frauds would
be no defence: see Warlow v. Harrison (1858) 1 E.& E. 295, 317;
Carlill v. Carbolic Smoke Ball Co., [1893] 1 Q.B. 256:
  But held, that no custom had been proved obliging a vendor to accept,
in payment of a deposit, the cheque even of a person in credit, although
such a course was usual;  and that no such custom could bind a vendor to
accept a cheque from a pauper; that the conditions meant that the deposit
was to be paid in cash, and the vendors were not bound to wait till the
next day for it or to sign the contract until this condition precedant had
been performed.

  THE defendants were trustees for sale of a freehold public
house called the White Hart, at South Mimms, and by advertise-
ment and otherwise they gave notice that it would be offered for
sale by public auction on May 24, 1898.  The conditions of sale
under which the property was sold provided that the highest
bidder should be the purchaser, and that he should immediately
the amount and in part payment of his purchase-money and
should sign an agreement to complete the purchase according
to the conditions in a form subjoined, which form stated that
the deposit had been paid.  The plaintiff, Mrs. Johnston, a
married woman having separate estate, instructed her husband
to attend the sale and to bid for the property as her agent.  He
bid 4900l., at which price the property was knocked down to
him as the highest bidder, and he then went up to the
auctioneer's rostrum in order to sign the contract and to pay
the deposit of 490l. at the rate of 10 per cent. on the purchase-
money required by the conditions of sale.  Boyes, one of the
defendants, was standing near the auctioneer, and he recognised
Johnston as a person who had shortly before been a party to
certain proceedings at Barnet County Court, of which Boyes
was registrar.  At these proceedings Johnston had sworn that
he had nothing in the world but the clothes he stood up in, and
was entirely dependent upon his wife.  Johnston tendered his
own cheque in payment of the deposit, which the auctioneer,
upon the vendors' instructions, refused to accept, nor was
Johnston allowed to sign any agreement.  The property was at
once put up for resale, and realized 4950l.--an advance of 50l.
upon Johnston's bid.  It was proved at the trial of the action
that Mrs. Johnston was a lady of means, and that it was her
intention to put her husband's banking account in funds, and
that the cheque would have been met.  The plaintiff issued the
writ in this action on May 27, 1898, claiming damages against
the defendants for breach of an alleged contract that the
highest bidder at the auction sale of the White Hart should be
the purchaser thereof, and for refusing to allow the auctioneer
to accept her husband's cheque in payment of the deposit, or
to allow him to sign the usual agreement for sale on her behalf.
  Tindall Atkinson, Q.C. and F. P. Onslow, for the plaintiff.
The action is not brought for specific performance, and there-
fore no question as to the Statute of Frauds is involved.  The
plaintiff says she has lost by the wrongful refusal of the
defendants to allow her husband to sign a contract to purchase
the property and to pay the required deposit in accordance with
the conditions of sale, and for this loss she claims damages
Where a person publicly offers to do something if any one comes
forward and complies with certain conditions, there is a binding
contract with the person who complies with the conditions :
Carlill v. Carbolic Smoke Ball Co. (1)
  [COZENS-HARDY J. Could the defendants, as trustees for
sale, accept payment of the deposit by cheque ?]
  Certainly.  If the cheque was dishonoured, they could put an
end to the contract.  It is the universal practice to accept
cheques at auctions in payment of deposits.  People attending
auctions do not know what the property will be knocked down
for, and therefore cannot tell what the amount of the deposit
will be.  They cannot be expected to carry large sums in gold
  [COZENS-HARDY J.  Is a tender by cheque sufficient? See
Blumberg v. Life Interests and Reversionary Securities Corpo-
ration.  (2) ]
  It has been held to be a reasonable custom for auctioneers to
accept cheques in lieu of cash for deposits : Farrer v. Lacy,
Hartland & Co. (3)
  If the objection had been to the cheque as a cheque, it would
not have been a good tender; but we say the receipt of the
deposit was refused in order that the vendors might sccept a
better offer for the property.
  Where chattels are advertised for sale by auction on printed
conditions the vendor is liable, if he breaks the conditions at
the suit of a member of the public who accepts the offer and
complies with the conditions, and in such a case "the Statute
of Frauds, which relates only to direct sales and not to con-
tracts relating to or connected with them," does not affect the
case :  Warlow v. Harrison. (4)
 (1) [1893] 1 Q. B. 256.                (3) (1883) 25 Ch. D. 636; (1885)
 (2) [1897] 1 Ch. 171; [1898] 1 Ch.   31 Ch. D. 42.
27.                                     (4) 1 E. & E. 295, 317.
  [They also referred to Spencer v. Harding. (1)]
  Eve, Q.C., A.R. Ingpen, and F.A. Milne, for the defendants.
A cheque is not a legal tender as a rule: Blumberg v. Life
Interests and Reversionary Securities Corporation. (2)  It is
certainly not a good tender when cash is demanded, as it was in
this case.  Farrer v. Lacy, Hartland & Co. (3) does not decide
that there is such a custom as obliges a vendor or the auctioneer
to take a cheque for the deposit from a solvent person--much
less a person known to be impecunious.  There is, on the other
hand, no authority for an auctioneer or other agent employed
to receive money to take anything but cash, unless it is in
accordance with the usual course of business to take a cheque:
Pape v. Westacott. (4)  It is not the usual course of business to
take cheques from persons who are notoriously impecunious;
and if the auctioneer or Boyes had, with the knowledge they
possessed, taken Johnston's cheque, and any loss had occurred,
  he would have been personally liable for any loss.
  The vendors were not bound to wait to see whether the
cheque was honoured. If they had done so and it had been
dishonoured, the expense of a fresh sale would have been
occasioned, and a smaller price might have been obtained than
the one which was got by at once going on with the sale.  In
Warlow v. Harrison (5) what was offered for sale was a horse.
This is an attempt to establish a verbal contract for the sale o
land, and give the go-by to s. 4 of the Statute of Frauds.
  Tindal Atkinson, Q.C., in reply.  In Warlow v. Harrison (5)
s. 17 of the Statute of Frauds was set up as a defence; but s. 4
in like manner only relates to direct sales of land and not to
contracts relating to or connected with them.
                                    Cur. adv. vult.
  April 28.  COZENS-HARDY J.  This is a very unusual action.
The plaintiff, who is a married woman, claims damages under
the following circumstances:  The defendants, who are trustees
for sale, offered the White Hart Inn for sale by auction
  (1) (1870) L.R. 5 C.P. 561            (3) 25 Ch. D. 636; 31 Ch. D. 42.
  (2) [1897] 1 Ch. 171; [1898] 1 Ch.    (4) [1894] 1 Q.B. 272.
  27.                                   (5) 1 E.& F. 295, 317.
on May 24, 1898.  By the first condition of sale the highest
bidder was to be the purchaser, and by the second condition
the purchaser was immediately after the sale to pay to the
auctioneer a deposit of 10 Per cent. on the amount and in part
a ment of his purchase-money  and sign an agreement to
complete the purchase.  The form of agreement to be signed
states that the deposit has been paid.  Mr. Johnston attended
the auction, and on behalf of his wife, the plaintiff, bid for the
property which was knocked down to him as the highest
bidder at the price of 4900l.  The plaintiff complains that by
the defendants' direction Mr. Johnston was not allowed to sign
the contract, and the property was sold to some one else for
4950l., and the plaintiff claims damages on this footing.  In
point of law I think such an action can be maintained.  A
vendor who offers property for sale by auction on the terms of
printed conditions can lie made liable to a member of the public
who accepts the offer if those conditions be violated : see
Warlow v. Harrison (1) and the recent case of Carlill v. Car-
bolic Smoke Ball Co. (2)  Nor do I think that the Statute
of Frauds would afford any defence to such an action.  The
plaintiff is not suing on a contract to purchase land: she
is suing simply because her agent, in breach of the first and
second conditions of sale, was not allowed to sign a contract
which would have resulted in her becoming the purchaser of
the land.  I think this conclusion results from the decision of
the Exchequer Chamber in Warlow v. Harrison. (1)  That was
not a case under s. 4 of the Statute of Frauds, but the observa-
tions of Martin B. (3) as to s. 17 seem to me to be applicable
to the present case.  It is, therefore, necessary to consider
whether the facts proved have established a breach of the con-
tract alleged by the plaintiff.  When the property had been
knocked down to Mr. Johnston he went to the auctioneer's
rostrum with a view to signing the contract.  But Mr. Boyes,
who is one of the defendants, and was the solicitor conducting
the sale, recognised him as a man who in the previous week
had appeared in the county court, of which Mr. Boyes is thc
  (1) I E. & E. 295.                    (2) [1893] 1 Q. B. 256.
                       (3) I E. & E. 317.
registrar, and sworn that he had nothing in the world but
the clothes he stood up in.  Mr. Boyes thereupon told the
auctioneer not to take his cheque, and threatened that if he did
he would be held liable for the consequences.  Some further
discussion took place, partly in the auction-room and partly in
the ante-room, to which the auctioneer and his clerk and
Mr. Johnston and the defendants retired, the result of which
was that the refusal to accept the cheque was persisted in.
Although Mr. Johnston said that " The missis would find the
money to-morrow " Mr. Boyes said he must have the cash
to-day, and, as Mr. Johnston did not provide the cash, the
'matter was treated as at an end so far as he was concerned,
and a contract was immediately afterwards signed for sale to
another gentleman at the increased price. Mr. Johnston
swears that several publicans stated in the presence and hearing
of Mr. Boyes that they would cash his cheque, and he also
denies that there was any conversation in the ante-room.  I
am unable to believe his evidence, and believe the evidence of
Mr. Boyes and the auctioneer. I think, however, that Mr.
Johnston did state, before the transaction was put an end to,
that he was buying, not on his own account, but on behalf of
his wife, and I think that if the cheque had been accepted,
although Mr. Johnston had at the time no assets to meet it,
the plaintiff would by her own cheque have provided funds for
the purpose.
  These being the facts which I find, do they entitle the plain-
tigg to relief?  In my judgment they do not.  I think the
defendants were not bound to accept the cheque of Mr. John-
ston, who was, and was known by them to be, a pauper.  I do
not think any custom has been proved to oblige vendors to
receive the cheque even of a person in good credit, though it is,
doubtless, usual to do so.  And certainly no such custom could
bind vendors to accept a cheque from a pauper.  In my view
it makes no difference that they were told that Mr. Johnston
was buying for his wife.  They were not bound to wait for
cash until the next day.  The second condition provided that
the purchaser should "immediately after the sale" pay a
deposit of 10 per cent.  This means a payment in cash.  No
such payment was made, and the defendants were under no
obligation to sign the contract unless and until this condition
precedent had been fulfilled.  The result is that I think the
plaintiff's action fails, and the action must be dismissed with
costs in the usual form, having regard to the fact that the
plaintiff is a married woman.
  Solicitor for plaintiff: Theodore Allingham.
  Solicitor for defendants: Sismey & Sismey.
    In re LONDON AND NORTHERN BANK.
           En parte JONES.
 Contract--Withdrawal of Offer before Acceptance--Acceptance by Post--
   Company--Shares--Companies Act 1862 (25 & 26 Vict c. 89)
   ss. 35, 39, 62.
  J. applied for shares in a company but before the letter of allotment
was posted--except by being delivered to a postman in a London street to
be posted by him--a letter withdrawing his application was delivered at
the company's registered office and opened by the secretary.  By the
rules of the Post Office town postmen are forbidden to take charge of
letters for the post :--
  Held, that the withdrawal was received by the company before the
allotment letter was posted, and that there was no contract by J. to take
the shares.
  THE facts of this case, more fully set out in the judgment
reported below, were, shortly stated, as follows :---
  Dr. Jones, who lived in Sheffield, applied for shares in the
London and Northern Bank, Limited.  On October 26, 1898, he
wrote from Sheffield a letter withdrawing his application, and
this letter was received by the bank on October 27 at 8.30 A.M.
On the afternoon of October 26 the directors of the bank
resolved to allot the shares to Jones.  The allotment notices
to Jones and other applicants were prepared during the night
of October 26-27, and about 7 A.M. on October 27 were taken
to the outer precincts of the London General Post Office at
St. Martin's-le-Grand.  Here a postman came by and offered
to take the letters. He was paid a small fee for his trouble,
and according to the evidence on behalf of the bank he went
into St. Martin's-le-Grand, came back, and said it was all right.
The allotment letter to Jones was not delivered till 7.30 P.M.
on October 27.  From marks on the envelope it was indicated
that the letter had not been postsd at the General Post Office
but at a district office, and there was evidence that, had it
been posted at the General Post Office at 7.30 A.M., it would
have gone to Sheffield by the 10 A.M. train; whereas it in
fact went by the 12 o'clock train.  There was also evidence
that town postmen were not allowed to take charge of letters
for the post, and that any postman disobeying this regulation
would be reported to the proper authority.
  Jones moved, under s. 35 of the Companies Act, 1862, for
rectification of the register of members of the bank by removing
his name therefrom in respect of the shares, and for a return
of the application moneys paid by him in respect of them.
  The motion was set down in the list of causes for trial with
witnesses, and was heard by Cozens-Hardy J. on November 15
and 16, 1899.
  Eve, Q.C., and George Henderson, for the applicant.  The
letter of withdrawal was delivered to the bank before the letter
of allotment was posted ; and there was, therefore, no accept-
ance of an existing offer, and the applicant is entitled to the
relief he claims.
  [They were stopped by the Court.]
  Astbury, Q.C., and Stewart-Smith, for the bank.  Before
the bank received the letter of withdrawal the allotment
letter, which was the acceptance of the applicant's offer to
take the shares, was posted by being delivered to the servant
and agent of the Post Office.  That delivery was postage of the
acceptance, and on the postage taking place the contract was
complete :  Dunlop v. Higgins (1) ;  Henthorn v. Fraser. (2)
After the letter of allotment had been carried into the Post
Office the bank could not have got it back again.
  The secretary could not accept the vithdrawal letter ; it did
not reach the company when it was opened by the secretary.
In Truman's Case (3) the question was whether a verbal with-
drawal of an application for shares was sufficient, and it was
held that it was ; but the allotment in that case was made
after the withdrawal.
  Eve, Q.C., in reply. The postman was not the agent of the
Post Office, for the Postal Guide, at p. 47, states that town
postmen are not allowed to take charge of letters for the post.
All communications may be addressed to a company's registered
      (1) (1818) I H. L. C. 381.       (2) [1892] 2 Ch. 27.
                           (3) [1891] 3 Ch. 272.
office: Companies Act, 1862, s. 39; and any document may be
served on the company by sending it to them by post: Ibid.
                                  Cur. adv. vult.
  Nov. 17. COZENS-HARDY J. On October 15, 1898, Dr.
Jones who resides at Sheffield, applied for 1000 ordinary
shares of 10l. each in the company, upon which he paid a
deposit of 500l., being 10s. per share.  His letter of application,
with cheque enclosed, was received in due course by the com-
pany.  On October 26 Dr. Jones wrote from Sheffield a letter
withdrawing his application and asking for a return of his 500l.
This letter of withdrawal was sent as a registered letter.  It
was delivered at the office of the company at about 8.30 on the
morning of October 27 before the arrival of the secretary.  On
the afternoon of October 26 a board meeting of the company
was held, at which it was resolved to allot 1000 shares to
Dr. Jones.  An allotment letter addressed to Dr. Jones, dated
October 26, was delivered in  Sheffield at about 7.30 in the
evening of October 27.  Dr. Jones now applies to have his
name removed from the register in respect of the 1000 shares,
and for a return of his deposit, on the ground that his application
was withdrawn before notice of acceptance.
  The company alleges that, although the notice of allotment
did not reach Dr. Jones until the evening of the 27th, it was
posted at or about 7.30 on the morning of the 26th, and there-
fore before the letter of withdrawal arrived.  It is settled law
that an offer is to be deemed accepted when the letter of accept-
ance is posted, the reason being that the Post Office is con-
sidered the common agent of both parties: Harris's Case. (1)
Hence, no delay on the part of the Post Office in delivering the
letter will be material.  The withdrawal, in order to be effectual,
must be before the offer is clinched by the posting of the letter
of acceptance.  The question I have to decide is this---was the
letter of allotment posted before the letter withdrawing the
offer was received by the company?  Now, the envelope con-
taining the letter of allotment is produced.  It bears a stamp
              (1) (1872) L.R. 7 Ch. 587.
impressed with the words "11 A.M., 27 Oct., 98" with the
figures "44" below.  It has been proved that this stamp indi-
cates that the letter was not posted at the General Post Office
at all, but was deposited at one of the district post-offices in
London, from which letters are collected and taken to the
General Post Office.  The letters thus collected are placed
upon a separate bench or table, and this particular stamp is
impressed on them.  No work is done at this table until after
9.15.  Letters posted at the General Post Office are dealt with
at a different table and are impressed with a different stamp.
If the letter had been posted at 7.30 at the General Post Office,
it would have been forwarded by the 10 o'clock train to Sheffield
and have been delivered before 7.30.  It was in fact sent down
in the ordinary course by a train at or about 12 o'clock, and
was delivered in due course at 7.30.
  This evidence raises a strong presumption in favour of the
applicant.  The company seeks to rebut this presumption, and
the result of the evidence on its behalf is as follows: Mr. Claxton,
who was employed by the promoters with a staff of about ten
clerks, was engaged from shortly after the end of the board
meeting on the afternoon of the 26th throughout the whole
night in preparing from the allotment sheets the letters of
  allotment.  Their task ended at about 7 in the morning, when
  Mr. Claxton and one of his clerks took the letters, which were
  fastened in bundles of fifty, in a cab to St. Martin's-le-Grand.
They got out of the cab, and, seeing a porter in livery outside
the building, had some conversation with him, in the course of
which a postman came by and offered to take the letters.  They
gave him sixpence or a shilling for his trouble.  He went into
St. Martin's-le-Grand, came back, and said it was "all right."
Mr. Claxton was not, in some respects, a satisfactory witness,
but for the purpose of my judgment I assume that the letter of
allotment to Dr. Jones was among those taken to St. Martin's-
le-Grand and thus dealt with.
  It was contended that this was a posting of the letter at
St. Martin's-le-Grand.  It seems to me, however, that the post-
man was not an agent of the Post Office to receive the letters.
The Postal Guide, at p. 47 expressly states that town postmen
are not allowed to take charge of letters for the post. Mr.
Anderson, the witness from the post Office, stated that any
man would be reported if discovered to have done any such
thing.  I cannot therefore regard the postman as anything
better than a boy mesanger employed by Claxton to post the
letters, and the mere fact of handing the letter to the postman
outside St. Martin's-le-Grand was not a posting of the letter.
  It is further urged that directly the postman entered St.
Martin's-le-Grand the letter thereupon came into the lawful
custody of the Post Office, and was posted, without reference
to what the postman did with it.  I am, however, unable to
follow this view.  It is not possible for me to ascertain
precisely what was done with the letters by the unknown
postman. He may have left them at a table or in a bag until
some later hour. He may have taken them to a branch office.
All I know is that it was not until a much later hour that they
were found on the table appropriated to branch office letters.
However that may be, I think that the company has failed to
prove that the letter, which did not leave the Post Office until
about 11 o'clock, was posted before 8.30, or before 9.30,  at
which hour the secretary arrived and opened the letter of
withdrawal.
  As to the point that the notice of withdrawal did not reach
the company when it was opened by the secretary, I think
there is no foundation for the suggestion.  The secretary is
the man whose duty it was to receive and open letters of that
nature.  The result is that I think the withdrawal was in
time, and I must therefore make an order removing the name
of Dr. Jones from the register in respect of the 1000 shares;
and I must order the return of the deposit, with interest at
4 per cent.  The company must pay the costs of the motion.

  Solicitors for applicant: Indermaur & Brown, for Webster
  & Styring, Sheffield
  Solicitors for bank: Walker & Rowe.
                                                  F. E.
               VAN PRAAGH v. EVERIDGE
                   [1901 V. 863]
Vendor and Purchaser--Specific Performance--Mistake--Sale by Auction--
                      Purchase of wrong Lot.
  At a sale by auction of landed property the defendant purchased one
  lot by mistake for another.  The price was not extravagant, and the
  mistake was solely due to the defendant's own carelessness :--
   Held, no defence to an action for specific performance.
   Semble, Malins v. Freeman, (1836) 2 Keen, 25; 41 R. R. 178, is
  inconsistent with the principle of Tamplin v. James, (1880) 15 Ch. D. 215.
  THE plaitiff, Mrs. Edith Sarah Van Praagh, widow, was
the owner of a freehold house situate at Frognal, Hampstead,
and known as Saradith.  In September, 1901, this property
was put up for sale by auction, but it was bought in at 4500l.
On November 18, 1901, this property was again put up for
sale by auction by Messrs. Farebrother, Ellis & Co.  They also
offered for sale at the same time two other properties, namely,
an estate known as Parson's Mead, Ashtead, and No. 24, Cullum
Street, in the City of London.  The defendant, who was a
builder of Surbiton, frequently purchased properties by auction
with a view to develop them.  His attention had been called
to the particulars of Parson's Mead, Ashtead, and, after going
to Ashtead to inspect the property, he resolved to bid for it.
On November 18 he came up to London for this purpose
and attended the auction.  He was present in the auction-
room at the commencement of the sale, and took a seat in
the second or third row from the front.  He was some-
what deaf.  Affixed to the auctioneer's rostrum was a late
notice stating the order of sale to be as follows: " 1. Saradith,
Hampstead; 2. Parson's Mead, Ashtead; 3. 24, Cullum Street."
There were also distributed about the sale-room a number of
smaller printed notices to the same effect.  The auctioneer,
Mr. Breach, on entering the rostrum began by stating the
order in which he would offer the properties, and he then
proceeded to offer the Hampstead property, which he fully
described.  The defendant bid three or four times for this
property, and it was ultimately knocked down to him at 4500l.
Mr. Breach then sent his clerk to the defendant to obtain his
name and address for the purpose of filling up the necessary con-
tract ; but the defendant objected that he had not purchased the
Hampstead property, but had purchased the Ashtead property.
The clerk then informed Mr. Breach that the defendant denied
having bought the Hampstead property ;  but Mr. Breach, who
had proceeded some way with the description of the Ashtead
property, declined to interrupt the ssle of that property, which
was ultimately bought in at 16,000l.  Before lot 3 was offered
the defendant had an interview with Mr. Breach, and told him
that he had made a mistake and believed that he was bidding
for the Ashtead property.  Mr. Breach replied that he must
hold him to his bargain, and requested him to sign the contract.
This the defendant refused to do.  Accordingly Mr. Breach,
before leaving the rostrum, signed the contract as agent for the
defendant.
  The contract so signed contained two small mistakes.  In
the first place, it was dated October 17, 1901, instead of
November 18, 1901.  This mistake was due to the circum-
stance that the particulars and conditions of sale had been
printed with a view to a sale on October 17, 1901, which was
eventually postponed till November 18, and, although the date
was altered in the particulars, the original date had by inadver-
tence been allowed to remain in the conditions and in the
printed form of contract annexed thereto.  Secondly, the
Christian names of the vendor were filled in by the auctioneer
in the wrong order.
  The defendant having repudiated the contract, the plaintiff
commenced this action for specific performance and damages.
  The defendant by his defence resisted the action on the
ground of mistake, and alleged that he never agreed to purchase
the Hampstead property; he also pleaded that there was no
memorandum of the alleged contract sufficient to satisfy the
Statute of Frauds.
  Renshaw, K.C., and Frederick Thompson, for the plaintiff.
(1.) An auctioneer at the time of the sale has authority to sign
that he had any actual authority, and we submit that it was
revoked by the defendant in the auction room.
  In Malins v. Freeman (1) it was not necessary to decide
that there was no contract  but Lord Langdale's observations
are in favour of that view.  There, as here, the defendant was
bidding for a different property.  Tamplin v. James (2) is dis-
tinguishable, because in that case the defendant was bidding
for the same property, but the mistake was as to the area of
the property, and there was also gross negligence on the part
of the defendant.  This Court will not assist the plaintiff to
take advantage of the defendant's mistake where he points out
the mistake to the plaintiff as soon as he discovers it : Manser
v. Back (3) ; Webster v. Cecil. (4)  There is, therefore, no ground
for specific performance.

  KEKEWICH J., after discussing the evidence and saying that
he had no reason to doubt the honesty and verscity of the
defendant, and after referring to the precautions taken by the
auctioneer to prevent any mistake as to the order of sale,
continued as follows:--The defendant made an extraordinary
blunder, which can only be explained upon the theory that the
idea of Ashtead was so fixed in his mind that he could not think
of anything else; but he did in fact bid for the Hampstesd
property, and it was eventually knocked down to him.  From
that moment there was a contract.  I cannot understand the
argument that there was no contract.  The case of Raffiles v.
Wichelhaus (5) was relied on as establishing that there might
be a case of no contract for want of consensus ad idem.  The
ground of the decision in that case, as explained by Sir F.
Pollock in his book on Contracts, was that the contract which
was made was not the contract which was sued on, and there-
fore was not a contract which the defendant could be called
upon to perform.  There was neverthleess a contrsct.
  There being then a contract here, can there be any doubt
upon the authorities that the auctioneer was authorized to sign
  (1) 2 Keen, 25 i 44 R. R. 178.  (3) (1848) 6 Hare, 443, 448.
  (2) 15 Ch. D. 215.              (4) (1861) 30 Beav. 62.
                      (5) 2 H. & C. 906.
the nosesessary memorandum on bshalf of the purchaser?  It
would be a w~e of time to go into the casss.  TQe only sug-
gestion is that the authority having been given, and referring
necessarily to the time when the highest bid was given, that
could be revoked at any time afterwards.  But it is from that
moment that the authority comes into operation, and it would
be opening a wide door to fraud if the purchaser could be
allowed to say to the auctioneer half an hour or an hour after
the sale, " I revoke my authority ; you must not sign the con-
tract."  That is emtirely contrary to principle.  Then it is said
that there is no sufficient memorandum within the Statute of
Frauds.  The particulars and conditions were prepared for a
sale to take place in October, and the sale was deferred, and by
a slip the wrong date was left in the contract. That is not a
substantial error, and cannot prevent this from being a good
memorandum.  Then by another slip the Christian names of
the vendor were transposed.  That cannot be regarded as
having any importance.
  The only substantial question is whether this defendant is to
be let off on payment of damages, or whether a decree of specific
performance ought to be made against him.  That to my mind
is a very difficult question.  According to the view expressed
by Lord Langdale in Malins v. Freeman (1), it seems to me
that the defendant would clearly be entitled to escape specific
performance.  The language applied by the learned judge to
the defendant in that case fits this defendant admirably.  He
says: " I am of opinion that the defendant never did intend to
bid for the estate.  He was hurried and inconsiderate, and
when his error was pointed out to him, he was not so prompt
as he ought to have been in declaring it."  That, of course
cannot be said here, because the defendant pointed out the
mistake immediately; but the words "hurried and incon-
siderate" seem to cover this case exactly.  There are, however,
a great many subsequent cases in which a somewhat different
view of the law has been expressed, and there are one or two
to which I think it necessary to refer.  The first is the case
Tamplin v James (2), which came before several judges whose
  (1) 2 Keen, 25, 35 ; 44 R. R. 178.   2) 15 Ch. D. 215, 217, 221, 222.
views are entitled to very great respect.  It came in the first
instance before Baggallay L.J., sitting for Malins V.-C., and it
went from him to the Court of Appeal, consisting of James L.J.,
Brett L.J.  and Cotton L.J.  In that case there was clearly a
property contracted to be sold, and the question was whether
there should be specific performance or damages.  How the
Lords Justices applied the law to the facts of  that particular case
is immaterial, but I cite it for the general observstions which
were made.  Baggallay L.J. says : " It is doubtless well estab-
lished that a Court of Equity will refuse specific performance of
an agreement when the defendant has entered into it under a
mistake, and where injustice would be done to him were per-
formance to be enforced."  With great respect to the learned
judge, those words appear to me to raise almost more questions
than they solve, because it is extremely hard to know what
would be doing injustice to the defendant.  Cotton L.J. says:
" I will not attempt to define the cases in which the Court will
refuse specific performance on the ground of mistake.  The
circumstances of each case have to be considered " ;  and
James L.J. says :  " Perhaps some of the cases on this subject
go too far," i.e., too far in the defendant's favour, " but for the
most part the cases where a defendant has escaped on the
ground of a mistake not contributed to by the plaintiff, have
been cases where a hardship amounting to injustice would have
been infiicted upon him by holding him to his bargain, and it
was unreasonable to hold him to it."  There we get a little
comment on what  Baggallay L.J. meant by injustice being done
to the defendant.  Suppose this gentleman had been saddled
with a residential estate requiring considerable expenditure, and
one incapable of being used for the purpose for which he
and might find it difficult to let it  That might be a case of
hardship.  It is very difficult to say whether it would be
so or not.
  The next case to which I desire to refer is the case of Goddard
v. Jeffreys (1), which was vefore Kay J.  There the learned
                   (1) 30 W. R. 269, 270.
judge lays down the law as follows :  " Speaking generally, I
understand the rule to be this, that the purchaser may escape
from his bargain on the ground of mistake, if it was a mistake
to which the vendors contributed; that is, in other words, if
he was misled by any act of the vendors; but if he was not
misled by any act of the vendors, if the mistake was entirely
his own, then the Court ought not to let him off his bargain on
the ground of mistake made by himself solely, unless the case
is one of considerable harshness and hardship."  That is
putting in different language what was said by James L.J. in
Tamplin v. James. (1)  I now turn to the last edition of Fry
on Specific Performance.  The leerned author refers to many
of the cases on this subject, and qnotes at considerable length
the judgments in Tamplin v. James (1), and then adds this
(pl. 765) : " Indeed, it seems on general principles clear that one
party to a contract can never defend himself against it by setting
up a misunderstanding on his part as to the real meaning
and effect of the contract, or any of the terms in which it is
expressed.  To permit such a defence would be to open the
door to perjury and  to destroy the security of  oontracts."
Now, in this case the evidence shews that the blunder was
entirely the defendant's own; there was nothing whather on
the part of the vendor to induce the blunder. Therefore we
get rid of that objection to specific performance.  There was
no contributory negligence by the vendor.  Then is there any
hardship amounting to injustice in keeping ths defendant to
his contract?  I do not think there is.  I have evidence that
this property may be used in the way in which the defendant
intended to use the Ashtead property.  It is his business to
buy and develop estates and there is no reason why having
bought this he should not develop it.  He has bought it at a
price which it is true had not been reached before, and perhaps
would not have been reached on this occasion but for the
amount which he himself bid for it.  Still it wsas not an extra-
vagant price.  I do not see any hardship.  I do not doubt the
honesty of this gentleman in saying that he made a blunder,
yet, on the general principle referred to by Sir Edward Fry, to
                          (1) 15 Ch. D. 215.
permit such a defence would be to open the door to perjury
and destroy the security of contracts.  If the Court relieves
this gentleman who honestly confesses his blunder from per-
forming his contract, that would be inviting some one else to
come here dishonestly to get off his bargain.  It seems to me
that the defendant has entered into a contract from which he
is not entitled to be relieved, and that there must be judgment
for specific performance.
  But if specific performance were refused, the defendant
would be liable in damages.  While, therefore, I have the
materials before me and the evidence is fresh in my mind, I
think it best, in case the defendant should be sdvised to take
the opinion of another Court, that I should say what I think
about the damages.  One thing the defendant must certainly
pay, and that is the expeneses of another auction.  Besides
that, there is the depreciation of the property.  That is
extremely difficult to calculate, because the defendant was
the only bidder at this sale who went up to near the price at
which the property was knecked down.  There had been a
failure before, and, although the price ran up to 4500l., I
think I must take it that that price would not have been
reached in any other way.  Having regard to the previous
failure to sell this property, I must take it that the property
was not worth that sum.  The difficulty is to estimate by how
much the value of the property is decreased by the defendant's
repudiation.  The only real way to ascertain that is by putting
up the property for sale by auction again.  I can only arrive at
the amount in the roughest possible way.  I think that if I say
that the defendant's repudiation had prejudiced the vendor to
the extent of 250l., I shall be giving her quite as much as she
is entitled to on that head.  Upon the evidence before me, I
assess the costs of a fresh auction at 150l.  Therefore, if I were
to refuse specific performance I should give the plaintiff 400l.
damages.  In either case the plaintiff will have the costs of
the action.
  Solicitors: Law & Worssam; Edward Chester.
   PEARCE, APPELLANT; MERRIMAN, RESPONDENT.

 Parliament--Franchise--Qualification--Occupier--Husband and Wife living
  together--Wife, Owner--Husband, Tenant--Representation of the People
  Act, 1867 (30 & 31 Vict. c. 102), s. 3.

  A husband living with his wife in a house of which the wife is the
owner and of which the husband is tenant under an agreement of tenanoy
with the wife is entitled to be registered as a voter under s. 3 of the
Representation of the People Act, 1867.
  CASE stated by the revising barrister for the Westbury
Division of the county of Wilts, before whom objection was
duly made to the name of William Pearce being retained on
Division I. of the occupiers' list of Trowbridge, South, in
respect of a dwelling-house, No. 25, West Street.  The facts
were as follows: Elizabeth Richman was tenant for life
under the will of her husband of several houses, in one of
which she resided, another being that in respect of which
William Pearce, the appellant, claimed to have his name on
the occupier's list.  The appellant married a daughter of
Elizabeth Richman, and he rented No. 25, West Street of his
mother-in-law, and he and his wife resided there.  The rent
was 15s. 10d., payable every four weeks, and for many years
up to the death of Elizabeth Richman this rent was paid to
her by the appellant, who also paid the rates, and was inserted
by the overseers on Division I. of the occupiers' list and was
entitled to vote and voted at elections.  Upon the death of
Elizabeth Richman in November, 19O1, the house became the
freehold property of the appellant's wife under the terms of
her father's will.  The appellant attended the revision court
and stated that upon the death of his mother-in-law he con-
sidered the question of his right to vote, and to seeure that
right he agreed with his wife to pay to her the same amout
of rent that he had previously paid for the house.  He pro-
duced a rentbook shewing the first payment of 15s. 10d., due
December 28, 1901, and a receipt for the same signed by his
wife.  The book shewed similar payments every four weeks
up to September, 1903.  Between these dates the appellant
and his wife resided in the house as they had formerly done,
he continued to pay the rates, and his name was placed by the
overseers on Division I. of the list of occupiers.  The notice of
objection given to the appellant stated the grounds to be--
(1.) " that you have not occupied the qualifying premices as
owner or tenant for twelve months immediately preceding
July 15 in this year" ; (2.) "that your wife being owner of
qualifying premises disqualifies you."  In support of this
objection it was urged that the appellant was not the occupier
of the house either as owner or tenant, and the case of Hall v.
Michelmore (1) was cited in support of this view.  On the
appellant's behalf it was urged that that case did not govern
the present one, as in the former there was no evidence of
tenancy, whereas in the present case there was evidence of a
bona fide tenancy, and that the mere transfer of his tenancy
from his mother-in-law to his wife did not affect his right to
be retained on Division I.  It was also argued that under the
Married Womens' Property Act ,1882, a married woman, in
respect of property acquired after January 1, 1883, is entitled
to all the rights of and is in the same position as a feme sole,
and is therefore in a position to give her husband notice to
quit a tenancy of her property or to obtain possession of her
property by means of an ejectment order against her husband
or an action.  The revising barrister was of opinion that the
fact that the appellant was the occupier of the premises when
his wife became the owner of them was immaterial.  The
same question would have arisen if on the house becoming
the property of his wife he had moved into it from another
house and had claimed as occupier in succession from one to
the other.  He was further of opinion that, though a wife
might let to her husband any of her property of which she
gave up the occupation to him, the joint occupation by
husband and wife of a house belonging to her was inconsistent
with the relation of landlord and tenant.  The  right of a
landlord to give notice to quit to, or to eject, a tenant could
not, in his opinion, exist in opposition to the marital right
            (1) (1901) 86 L.T. 17.
of the husband to continue to reside with his wife.  He there-
fore came to the conclusion that the agreement that the
husband should be tenant of the house to his wife was, under
the circumstances, inoperative to constitute him an occupier as
tenant.  The revising barrister, therefore, held that the objection
was valid, and struck out the appellant's name from the list:
  Lewis Thomas, for the appellant.  The appellant was entitled
to be registered as a voter in respect of this dwelling-house
which he cccupied as tenant to his wife.  The fact that there
was evidence of a bona fide agreement of tenancy between
husband and wife distinguishes this case from Hall v. Michel-
more (1), which was relied on by the respondent before the
revising barrister.  In that case it was found as a fact that no
agreement of tenancy had benn entered into, and it was argued
that, because the husband and wife lived tegether in the wife's
house, the husband paying the rates there was an implied
tenancy sufficient to give a qualification; but the Court held
that in the absence of an agrseement of tenancy the husband
was not qualified.  Since the passing of the Married Women's
Property Act, 1882, there is nothing to prevent a wife from
being her husband's landlord, and in that capacity she would
possess all the same powers as any other landlord.  This is not
a case hoint occupation, because joint occupation involves a
joint tenancy.
  The respondent did not appear.
  LORD ALVERSTON C.J.  This appeal seems to me to afford
a practical instancce of the hypothetical case which was refered
to in Hall v. Michelmore (1)  It was contended there that the
mere fact that the house, in which the husband and wife lived,
was owned by the wife gave the husband the right to vote as
an occupier.  The revising barrister held that that was not
sufficient, and The Divisional Court came to the conclusion that,
as there was no evidence of any agreement of tenancy under
which the husband occupied the premises as tenant of his wife,
the decision appealed from was right.  But in the present case
                    (1) 86 L. T. 17.
the facts are entirely different.  It appears that the question of
the appelant's right to a vote had been considered by him,
and in order to secure that right he agreed to become the
tenant of his wife, and the rent-book shewed periodical pay-
ments of rent by him to her.  It must, therefore, be taken that
there was a bona fide agreement for a tenancy which, if it had
been an agreement by the husband with any one but his wife,
would clearly have entitled him to be on the register.  The
revising barrister, however, was of opinion that the fact that
the agreement was between husband and wife prevented him
from giving effect to it.  I do not agree with that view.
Assuming a bona fide agreement under which a husband is
tenant to his wife, I do not think that there is anything in the
relation of husband and wife to prevent it from being operative
so as to entitle the husband to a vote.  This appeal must,
therefore, be allowed.
  KENNEDY J.  I agree.  I think that the question is one of
fact, namely, whether there was a real agreemant of tenancy.
If there were a real tenancy, the husband is entitled to vote
irrespective of the fact that his own wife is his landlord.
Since the Married Women's Property Act, I882) there is
nothing to prevent a wife from standing in the position of
landlord to her husband.
  DARLING J.  I am of the same opinion.  We are not
deciding anything inconsistent with what was said in Hall v.
Michelmore. (1) In that case there was n o evidence that the
husband was tenant to his wife, and all that was decided was
that where a husband and wife are living together there is
no presumption that one is the tenant of the other.  In the
present case, on the other hand, there was evidence of a
tenancy which the revising barrister accepted; but where I
think he fell into an error was in thinking that there was a
joint occupation by the husband and wife which was incon-
sistent with the relationship of landlord and tenant. I do not
think this was a case of joint occupation, for that would only
                   (1) 86 L.T. 17.
arise when both parties were tenants.  Here the wife was the
landlord and the husband the tenant.  The hushand had the
right to occupy the premises in his capacity of tenant; the
wife had the right to live there also, not under the tenancy
agreement, but under a different contract altogether, namely
that of marriage.
                                         Apeal Allowed.
  Solicitors for appellant: Milner & Bickford, for Willis &
White, Trowbridge.
       SCRIVEN BROTHERS & CO. v. HINDLEY & CO.
                 [1912 S. 3280]
Sale of Goods--Auction--Misleading Catalogue--Lot put up for sale--Mistake
  by Bidder as to Subject-matter--Action for Price--Parties not ad idem.
   The plaintiffs instructed an auctioneer to sell by auction a number of
bales of hemp and of tow.  The goods were discribed in the auctioneer's
catalogue as so many bales in different lots with the same shipping
marks and without disclosing the differenoe in the commodities.
Before the sale samples of the hemp and tow were on view in a show-
room on the floor of which the catalogue numbers of the lots of hemp and
tow were marked in chalk opposite the respective samples, and the
defendants' manager examined the hemp but not the tow, as he was
not intending to bid for tow.  When the lots representing the tow were
put up for sale in the auction room the defendants' buyer made a bid
which was an extravagant price for tow, and the lots were at once
knocked down to him.
  In an action against the defendants for the price of the tow the jury
found that the actioneer intended to sell tow; that the defendants'
buyer intended to bid for hamp ;  that the auction believed that the
bid was made under a mistake, but that he had reasonble grounds for
beleiving that the mistake was merely as to value;  that the form of the
catalogue and the negligence of the defendants' manager in not more
closely examining the samles at the show-room and identifying them
with the lots in the catalogue contributed to cause the mistake:--
  Held, on these finding, that the parties were never ad idem sa to the
subject-matter of the proposed sale, and that there was, therefore, no
contract of sale.
  Held, also, that the finding of the jury as to the neglifence of the
plaintiffs to examine the samples of tow.

  FURTHER CONSIDERATION Of an action tried by A. T. Lawrence J.
with a jury.
  The action was brought to recover 476l. 12s. 7d,, the price of
some Russian tow alleged to have been sold at auction on behalf
of the plaintiffs to the defendants.  The defendants denied that
they had agreed to buy the tow, and alleged that they had bid at
the auction for Russian hemp, and that the tow had been knocked
down to them under a mistake of fact.  The facts as stated by
the learned judge in his written judgment were as follows :---
  Mr. Northcott, an auctioneer and broker doing business at the
Commercial Sale Rooms, London, was employed by the plaintiffs
to sell, inter alia, a large quantity of Russian hemp and tow.
The goods were lying in the docks, and samples were on view at
Cutler Street show-rooms.  The catalogue prepared by Northcott
contained the shipping mark "S.L.,--and the numbers of the
bales in two lots, namely, 63 to 67, 47 bales, and 68 to 79,
176 bales.  The former were hemp, and the latter were tow;
the catalogue did not disclose the difference in the nature of the
commodity.  At the show-room bales from each of these two lots
were on view, and on the floor of the room in front of the bales
was written in chalk "S.L. 63 to 67" opposite the samples of
hemp, and "S.L. 68 to 79" opposite the samples of tow.
These marks were placed on the floor of the gangway along
which persons inspecting samples walked.  Macgragor, the
defendants' buyer, bid for the 47 bales, and these were ultimately
knocked down to him at 24l. 0s. 6d. per ton. The 176 bales
were then put up, the defendants' buyer bid 17l. per ton (an
extravagant price for this tow), and they were at once knocked
down to him. The auctioneer said that he announced this lot as
"mixed tow," but this was denied. It was ultimately admitted
at the trial that the defendants' buyer bid under the belief that
the goods were hemp, whereas in fact the lot consisted of very
inferior tow, "mere rubbish," as several witnesses said.  It was
stated by witnesses on both sides that in their experience Russian
hemp and Russian tow were never landed from the same ship
under the same shipping marks.  The defendants' manager,
Mr. Gill, who had inspected the samples of "S.L." hemp at
Cutler Street, had been shewn two bales of hemp as "samples of
the 'S.L.' goods" by Calman, the foreman in charge of the show-
rooms. He did not wish to buy tow, and consequently had not
inspected the sample of tow, or had his attention in any way
called to the fact that the tow was also marked "S. L."  He
instructed Macgregor to bid for the 47 bales up to a limit
of 25l., and for the 176 bales to a limit of 23l., in the belief that
both lots were hemp.  He had given no instructions for the
purchase of tow and had no intention of buying tow.  His
reduction in price was due, he said, to his requirments and the
size of the second lot.
  The plaintiffs contended that the mistake was only a mistake
as to value and was not one as to the subject-matter of the
apparent contract.
  The jury in answer to questions found: (l.) That hemp and
tow are different commodities in commerce.  (2.) That the
auctioneer intended to sell 176 bales of tow.  (3.) That Macgregor
intended to bid for 176 bales of hemp.  (4.) That the auctioneer
believed that the bid was made under a mistake when he knocked
down the lot  (5.) That the auctioneer had reasonable ground for
believing that the mistake was merely one as to value.  (6.)  That
the form of the catalogue and the conduct of Calman, or
one of them, contributed to cause the mistake that occured.
(7.)  That Mr. Gill's "negligence" in not taking his catalogue to
Cutler Street and more closely examining and identifying the
bales with the lots contributed to cause Macgregor's mistake.

  Hume Williams, K.C., and Cassels, for the plaintiffs.  On the
findings of the jury the plaintiffs are entitled to judgment.
Alhough the defendants' buyer believed mistakenly that he was
bidding for hemp, the auctioneer was no party to that mistake
for the jury have found that the auctioneer had reasonable
ground for believing that the buyer's mistake was as to value
only.  A vendor is under no obligation to inform a purchaser
that he is acting under a mistake, if the mistake is not induced
by any act of the vendor: Smith v. Hughes (1). A reasonable
opportunity was given to the defendants' buyer to ascertain what
it was that was going to be sold, and, he having made a mistake,
it is not open to the defendants now to say that they are not liable
for the price of the goods because the parties were not ad idem:
                (1) (1871) L.R. 6 Q.B. 597.
Hallows v. Fernie (1); Tamplin v. James.(2)  But there is in
this case an additional reason why the defendants' case fails.
The jury have found that it was by reason of their own negligence
that the mistake was made.  They are, therefore, estopped from
saying that there was such a mistake as to prevent there being
a contract of sale.  [Duke of Beaufort v. Neeld (8), Little v. Spread-
bury,(4) In re Arnold (5), and Kennedy v. Panama Mail Co. (6)
were also referred to.]
  E. M. Pollock, K.C., and R.A. Wright, for the defendants.
The first, second, and third findings of the jury establish that
there was a mistake by both parties as to the subject-matter of
the sale, and the parties were therefore never ad idem, and there
was no binding contract : Raffles v. Wichelhaus (7); Thornton v.
Kempster.(8)  Smith v. Hughes (9) is not in point, for in that
case there was clearly a consensus ad idem as to the subject-
matter of the contract, namely, oats, and the question was
whether there was a collateral contract of warranty, or a repre-
sentation by the vendor estopping him from denying the warranty,
that the oats were old oats.  The fifth finding of the jury does
not assist the plaintiffs, for it shews that the parties were not sd
idem as to price.  The seventh finding of the jury should be
disregarded. The matters alleged by the jury to constitute
negligence on the part of the defendants' manager do not
in law amount to negligence, for he owed no duty to the plaintiff
to make an examination of goods which he did not intend to buy.
In the absence of duty there could be no negligence:  Carlisle and
Cumberland Banking Co. v. Bragg. (10)  But in any case the
plaintiffs cannot succeed on the ground of the defendants' se-
called negligence  because the jury have found that the defendants'
mistake was caused,  or contributed to, by the form of the catalogue
or the conduct of Calman: Jones v. Rimmer (11) ; Torrance v.
Bolton (12) ; Denny v. Hancock. (13)
                                            Cur adv. vult.
(1) (1863) L.R. 3 Ch. 467.               (7) (1864) 2 H.& C. 906.
(2) (1880) 15 Ch. D. 215.                (8) (1814) 5 Taut. 786.
(3) (1845) 12 Cl.& F. 248, at            (9) L. R. 6Q. B. 597.
p. 285.                                 (10) [1911] I K. B. 489.
(4) [1910] 2 K. B. 658.                 (11) (1880) 14 Ch. D. 588.
(5) (1880) 14 Ch. D. 270.               (12) (1872) L. R. 8 Ch. 118.
(6) (1867) L. R. 2 Q B. 580.            (13) (1870) L. R. 6 Ch. 1.
  July 7. A. T. LAWRENCE J. read the following judgment:---
In this case the plaintiffs brought an action for 476l. 12s.7d., the
price of 560 cwt. 2 qrs. 27 lbs. of Russian tow, as being due for
goods bargained and sold.  The defendants by their defence
denied that they agreed to buy this Russian tow, and alleged
that they bid for Russian hemp and that the tow was knocked
down to them under a mistake of fact as to the subject-matter of
the supposed contract.  The circumstances were these.  [The
learned judge stated the facts and the findings of the jury as set
out above, and continued :]  Upon these findings both plain-
tiffs and defendants claimed to be entitled to judgment.  A
number of cases were cited upon either side.  I do not propose to
examine them in detail because I think that the findings of the
jury determine what my judgment should be in this case.
  The jury have found that hemp and tow are different com-
modities in commerce.  I should suppose that no one can doubt
the correctness of this finding.  The second and third findings of
the jury shew that the parties were never ad idem as to the sub-
ject-matter of the proposed sale; there was therefore in fact no
contract of bargain and sale.  The plaintiffs can recover from
the defendants only if they can shew that the defendants
are estopped from relying upon what is now admittedly the
truth. Mr. Hume Williams for the plaintiffs argued very
ingeniously that the defendants were estopped ; for this he
relied upon findings 5 and 7, and upon the fact that the defen-
dants had failed to prove the allegation in paragraph 4 of the
defence to the effect that Northcott knew at the time he knocked
down the lot that Macgregor was bidding for hemp and not for tow.
  I must, of course, accept for the purposes of this judgment the
findings of the jury, but I do not think they create any estoppel.
Question No. 7 was put to the jury as a supplementary question,
after they had returned into Court with their answers to the
other questions, upon the urgent insistence of the learned junior
counsel for the plaintiffs.  It begs an essential question by using
the word " negligence " and assuming that the purchaser has a
duty towards the seller to examine goods that he dcas not wish
to buy, and to correct any latent defect there may be in the
sellers' catalogue.
  Once it was admitted that Russian hemp was never before
known to be consigned or sold with the same shipping marks as
Russian tow from the same cargo, it was natural for the person
inspecting the "S. L." goods and being shewn hemp to suppose
that the " S. L." bales represented the commodity hemp.  Inas-
much as it is admitted that some one had perpetrated a swindle
upon the bank which made advancas in respect of this shipment
of goods it was peculiarly the duty of the auctioneer to make it
clear to the bidder either upon the face of his catalogue or in
some other way which lots were hemp and which lots were tow.
  To rely upon a purchaser's discovering chalk marks upon the
floor of the show-room seems to me unreasonable as demanding an
amount of care upon the part of the buyer which the vendor had no
right to exact.  A buyer when he examines a sample does so
for his own benefit and not in the discharge of any duty to the
seller;  the use of the word " negligence " in such a connection is
entirely misplaced, it should be reserved for cases of want of due
care where some duty is owed by one person to another.  No
evidence was tendered of the existence of any such duty upon
the part of buyers of hemp.  In so far as there was any evidence
upon the point it was given by a buyer called as a witness for the
plaintiffs who said he had marked the word  "tow" (in his
catalogue when at the show-rooms " for his own protection."
I ought probably to have refused to leave the seventh question to
the jury; but neither my complaisance nor their answer can
create a duty.  In my view it is clear that the finding of the jury
upon the sixth question prevents the plaintiffs from being able
to insist upon a contract by estoppel.  Such a contract cannot
arise when the person seeking to enforce it has by his own
negligence or by that of those for whom he is responsible caused,
or contributed to cause the mistake.
  I am therefore of opinion that judgment should be entered for
the defendants.
                                    Judgement for defemdants.
  Solicitors for plaintiffs : Norton, Rose, Barrington & Co.
  Solicitors for defendants : Rehder & Higgs.
  F. O. R
          PHILLIPS v. BROOKS, LIMITED.
Sale of Goods--Passing of Property--Purchaser fraudulently personating
                 another Person.
  If A., fraudulently assuming the name of a person of credit and stability,
  buys, in person, and obtains delivery of, goods from B., the proporty in
  the goods passes to A., and he can therefore give a gcod title thereto to
  a third party who, acting bona fide and without notice, has given value
  therefor, unless in the meantime B. has taken steps to disaffirm the
  contract with A.
  Edmunds v. Merchants' Despatsh Transportation Co. (1883) 135 Mass.
  283 followed.
 ACTION tried by Horridge J.
 The plaintiff, who was a jeweller, sued the defendants,
who were pawnbrokers for the return of a ring or alter-
natively, its value and damages for its detention.
  On April 15  1918, a man entered the plaintiff's shop and
asked to see some pearls and some rings.  He selected pearls
at the price of 2550l. and a ring at the price of 450l.  He
produced a cheque book and wrote out a cheque for 3000l.
In signing it he said :  " You see who I am, I am Sir George
Bullough " and he gave an address in St. Jame's Square.  The
plaintiff knew that there was such a person as Sir George
Bullough and finding on reference to a directory that Sir
George lived at the address mentioned, he said  " Would
you like to take the articles with you ? " to which the man
replied :  "You had better have the cheque cleared first,
but I should like to take the ring as it is my wife's birthday
to-morrow," whereupon the plaintiff let him have the ring.
The cheque was dishonoured, the person who gave it being
in fact a fraudulent person named North who was subse-
quently convicted of obtaining the ring by false pretences.
In the meantime  namely on April 16 1918, North, in the
name of Firth had pledged the ring with the defendants
who, bona fide and without notice advanced 360l. upon it.
  In his evidence the plaintiff said that when he handed over
the ring he thought he was contracting with Sir George
Bullough, and that if he had known who the man really was
he would not have let him have it.  In re-examination he
said that he had no intention of making a contract with any
other person than Sir George Bullough.
  Hogg K.C. and Roome for the plaintiff. The property
in the ring never passed out of the plaintiff.  There was no
contract between the plaintiff and North.  Where the owner
of goods voluntarily parts- with the possession of them but
does not intend to pass the property in them to the particular
person with whom he is dealing, being deceived by him as
regards his identity, larceny by a trick is committed by the
fraudulent person and there is no contract.  See per Buckley L.J.
in Whitehorn v. Davison. (1)  That was the case in Cundy
v. Lindsay (2), where a person obtained goods by writing a
letter fraudulently inducing the belief in the minds of the
owners of the goods that he was a reputable firm bearing a
very similar name to his own. So, too, in Hardman v.
Booth (3),  where  a person obtained goods by a false representation
that he was a member of a particular firm.  See also In re
International Society of Auctioneers and Valuers; Baillie's
Case. (4)  In this case the plaintiff intended to contract with
Sir George Bullough and with no one else, and he purported
to make a contract with Sir George Bullough.  The whole
transaction was a nullity and North who could have been
convicted of larceny by a trick  could pass no title to the
defendants, who are therefore liable to the plaintiff.  [They
referred to ss. 1, 32 and 45 of the Larceny Act, 1916.]
J.B. Matthews K.C. and Valetta for the defendants.  The
property in the ring passed from the plaintiff to North :
Edmunds v. Merchants' Despatch Transportation Co. (5), which
decided that if A., in person  obtains goods by pretending to
be B., then, as A. is identified by sight and hearing, the property
passes. The print case is quite different from Hardman
v. Booth (3), where the owner of the goods was induced by
  (1) [1911] 1 K. B. 463,479.         (3) (1863) 1 H.& C. 803.
  (2) (1878) 3 App. Cas. 459.         (4) [1898] 1 Ch. 110.
                    (5) (1883) 135 Mass. 283.
the fraudulent person to believe that he was contracting with
a certain firm, and not with the swindler personally.  There
the swindler purported to act as the agent of the firm.  So,
too, in Cundy v. Lindsay (1), where there was a written order,
fraudulently concocted, which induced in the minds of the
goods owner the belief that it came from a reputable firm,
whereas in truth it emanated from an impostor bearing a
somewhat similar name.  In this case the contract was made
between the plaintiff and the man North, who was present
before the plaintiff in flesh and blood.  North could not have
been convicted of larceny by a trick.  The distinction is clear
between that offence and the offence of obtaining goods by
false pretences.  In the former the owner of goods has no
intention to part with the property, whereas in the latter
he has the intention to part with it.  See Rex v. Jackson (2) ;
Reg. v. Adams (3) ; Reg. v. Hazelton (4) ; Reg. v. Martin. (5)
Hogg K.C. in reply.
  [HORRIDGE J. Edmund v. Merchants' Despatch Transpor-
tation Co. (6) appears to be against you.]
  That case is cited by Sir Frederick Pollock in his book on
Contracts, 8th ed., p. 497n., but after it he adds " Sed qu.
and cf. Pothier, Obl. SS 19."  I adopt the query, and rely
on Pothier's opinion, which is set out in the judgment of
Fry J. in Smith v. Wheatcroft. (7)  Pothier says :  " Whenever
the consideration of the person with whom I am willing to
contract enters as an element into the contract which I am
my consent and conscquently annuls the contract." In
this case it was a material element of the contract into which
the plaintiff was willing to enter that the purchaser of the
ring was to be Sir George Bullough.
  [Reg. v. Middlton (8)  Reg. v. Buckmaster (9), Factors Act,
1889, s. 9 and Sale of Goods Act  1893, s. 24, sub-s. 2, were
also referred to.]                          Cur. adu. vult.
 (1) 3 App. Cas. 459.           (5) (1878) 5 Q. B. D. 34.
 (2) (1813) 3 Camp. 379.        (6) 135 Mass. 283.
 (3) (1844) 1 Den. C. C. 38.    (7) (1878) 9 Ch. D. 223, 230.
 (4) (1871) L. R. 2 C. C. 134.  (8) (1878) L. R. 2 C. C. 38.
                   (9) (1887) 20 Q. B. D. 182.
and for damages for detaining the same.  The value of the
ring was agreed as being 450l., and no evidence was given before
me of any damage, apart from the value of the ring which
was taken.  I have carefully considered the evidence of the
plaintiff, and have come to the conclusion that, although he
believed the person to whom he was handing the ring was
Sir George Bullough, he in fact contracted to sell and deliver
it to the person who came into his shop, and who was not Sir
George Bullough, but a man of the name of North, who obtained
the sale and delivery by means of the false pretence that he
was Sir George Bullough.  It is quite true the plaintiff in
re-examination said he had no intention of making any contract
with any other person than Sir George Bullough;  but I think
I have myself to decide what is the proper inference to draw
where a verbal contract is made and an article delivered to
an individual describing himself as somebody else.
  After obtaining the ring the man North pledged it in the
name of Firth with the defendants, who bona fide and without
notice advanced 350l. upon it.  The question, therefore, in
this case is whether or not the property had so passed to the
swindler as to entitle him to give a good title to any person
who gave value and acted bona fide without notice.  This
question seems to have been decided in an American case of
Edmunds v. Merchants' Despatch Transportation Co. (1)  The
headnote in that case contains two propositions  which I think
adequately express my view of the law.  They are as follows:
(1.) "If A., fraudulently assuming the name of a reputable
merchant in a certain town buys in person goods of another
the property in the goods passes to A."  (2.) "If A., repre-
senting himself to be a brother of a reputable merchant in
a certain town, buying for him buys in person, goods of
another, the property in the goods does not pass to A."
  The following expressions used in the judgment of
  Morton C.J. seem to me to fit the facts in this case: " The
                 (1) 135 Mass. 283,284.
minds of the parties met and agreed upon all the terms of
the sale, the thing sold, the price and time of payment, the
person selling and the person buying.  The fact that the seller
voidable, but not void.  He could not have supposed that
he was selling to any other person ;  his intention was to sell
to the person present, and identified by sight and hearing ;
it does not defeat the sale because the buyer assumed a false
name or practised any other deceit to induce the vendor to
sell."  Further on, Morton C.J. says :  " In the cases before
us, there was a de facto contract, purporting, and by which
the plaintiffs intended, to pass the property and possession
of the goods to the person buying them ;  and we are of opinion
that the property did pass to the swindler who bought the
goods."
  The rule laid down by Lord Cairns L.C. in Cundy v.
Lindsay (1) is as follows :  " If it turns out that the chattel
has been stolen by the person who has professed to sell it,
the purchaser will not obtain a title.  If it turns out that
the chattel has come into the hands of the person who
professed to sell it, by a de facto contract, that is to say,
a contract which has purported to pass the property to him
from the owner of the property, there the purchaser will obtain
a good title, even although afterwards it should appear that
there were circumstances connected with that contract which
would enable the original owner of the goods to reduce it, and
to set it aside, because these circumstances so enabling the
original owner of the goods, or of the chattel to reduce the
contract and to set it aside, will not be allowed to interfere
with a title for valuable consideration obtained by some
third party during the interval while the contract remained
unreduced."
  The question whether or not the property would pass if a
fraudulent person had gone himself to the firm from whom
he wished to obtain the goods and had represented that he
was someone else was raised in the argument in Cundy v.
Lindsay. (2)  In the speech of Lord Penzance, he says (3) :
   (1) 3 App. Cas. 459, 464.  (2) 3 App. Cas. 459, 462.
                      (3) ibid 471.
 "Hypothetical cases were put to your Lordships in argument
in which a vendor was supposed to deal personally with a
swindler, believing him to be someone else of credit and
stability, and under this belief to have actually delivered
goods into his hands.  My Lords, I do not think it necessary
to express an opinion upon the possible effect of some cases
which I can imagine to happen of this character, because none
  of such cases can I think be parallel with that which your
Lordships have now to decide."
  Lord Hatherley, in his speech, seems to me to have rather
put the case of a man's obtaining goods by representing that
he was a member of one of the largest firms in London, which
would be a case of representation as to authority to contract,
as he says (1): "Now I am very far, at all events on the print
occasion, from seeing my way to this, that the goods being
sold to him as representing that firm, he could be treated
in any other way than as an agent of that firm."
  The illustration given by Lord Hatherley and the facts
in the case of Hardman v. Booth (2) seem to me to be cases
which fall within the second proposition in the headnote in
Edmunds v. Merchants' Despatch Transportation Co. (3),
namely, representation by a person present that he was an
agent for somebody else so as to induce the seller to make a
contract vith a third person whom the person present had no
authority to bind.
  It was argued before me that the principle quoted from
Pothier (Traite/ des Obligations, * 19), in Smith v. Wheatcroft (4)
namely, " Whenever the consideration of the person with
whom I am willing to contract enters as an element into the
contract which I am willing to make, error with regard to the
person destroys my consent and consequently annuls the
contract "applies. I do not think, however, that that
passage governing this case, because I think the seller intended
to contract vith the person print, and there was no error
as to the person with whom he contracted, although the
plaintiff would not have made the contract if there had not
  (1) 3 App. Cas. 469         (3) 135 Mass. 283.
  (2) 1 H.& C. 803.           (4) 9 Ch. D. 223, 230.

been a fraudulent misrepresentation.  Moreover, the case of
Smith v. Wheatcroft (1) was an action for specific performance,
and was between the parties to the contract, and had no
relation to rights acquired by third parties innocently under
the contract, and misrepresentation would have been an
answer to the enforcement of the contract.  In this case, I
think, there was a passing of the property and the purchaser
had a good title, and there must be judgment for the defendants
with costs.
                       Judgmnt for defendants.
  Solicitors for plaintiff: Isadore Goldman & Son.
  Solicitors for defendants : Attenboroughs.
                                                  J. S. H.

                 BALFOUR v. BALFOUR
 Husband and Wife--Contract--Temporary Separation--allowance for
 Maintenance of Wife--Domestic Arrangement--No Resulting Contract.
    The plaintiff sued the defendant (her husband) for money due under
  an alleged verbal agreement, whereby he undertook to allow her 30l.
  a month in consideration of her agreeing to support herself without
  calling upon her father for any further maintainance. The parties were
  married in 1900. The husband was residednt in Ceylon, where he held a
  Government appointment. The plaintiff accompanied him to Ceylon, but
  in 1915 they returned to England, he being on leave.  In 1916 he
  went back to Ceylon, leaving her in England, where she had to remain
  temporarily under medical advice. The plaintiff alleged that the
  defendant before returning to Ceylon entered into the above agreement.
  The parties remaining apart, the plaintiff subsequently obtained a
  decree nisi for restitution of conjugal rights, and an order for alimony:--
  Held, that the alleged agreement did not constitute a legal contract,
  but was only an ordinary domestic arrangement which could not be
  sued upon.  Mutual promises made in the ordinary domestic relatinship
  of husband and wife do not of necessity give e cause for action on a contract.
   Decision of Sargant J. reversed.

 APPEAL from a decision of Sargant J., sitting as an additional
judge of the King's Bench Division.
  The plaintiff sued the defendant (her husband) for money
which she claimed to be due in respect of an agreed allowance
of 30l. a month.  The alleged agreement was entered into
under the following circumstances.  The parties were married
in August, 1900.  The husband, a civil engineer, had a post
under the Government of Ceylon as Director of Irrigation,
and after the marriage he and his wife went to Ceylon, and
lived there together until the year 1915, except that in 1906
they paid a short visit to this country, and in l908 the wife
came to England in order to undergo an operation, after
which she returned to Ceylon. In November, 1915, she
came to this country with her husband, who was on leave.
They remained in England until August, 1916, when the
husband's leave was up and he had to return. The wife
however on the doctor's advice remained in England.  On
been a fraudulent misrepresentation.  Moreover, the case of
Smith v. Wheatcroft (1) was an action for specific performance,
and was between the parties to the contract, and had no
relation to rights acquired by third parties innocently under
the contract, and misrepresentation would have been an
answer to the enforcement of the contract.  In this case, I
think, there was a passing of the property and the purchaser
had a good title, and there must be judgment for the defendants
with costs.
  Judgment for defendants.
  Solicitors for plaintiffs : Isadore Goldman & Son.
  Solicitors for defendants : Attenboroughs.
  J. S. H.
  REX v. PITFIELD.                                  1918.

  June 24, 25.
Husband and Wife--Contract--Temporary Separation--Allowance for
Maintenance of Wife--Domestic Arrangement--No resulting Contract.

  The plaintiff sued the defendant (her husband) for money due under
  an alleged verbal agreement, whereby he undertook to allow her 301.
  a month in consideration of her agreeing to support herself without
  oalling upon him for any further maintenance.  The parties were married
  in 1900.  The husband was resident in Ceylon, where he held a Govern-
  ment appointment.  The plaintiff acoompanied him to Ceylon, but
  in 1915 they returned to England, he being on leave.  In 1915 he
  in 1915 they returned to England, he being on leave.  In 1916 he
  went hack to Ceylon, leaving her in England, where she had to remain
  temporarily under medioal advice.  The plaintiff alleged that the
  defendant before returning to Ceylon entered into the above agreement.
  The parties remaining apart, the plaintiff subsequently obtained a
  decree nisi for restitution of conjugal rights, and an order for alimony:--
  Held, that the alleged agreement did not constitute a legal contract,
  but was only an ordinary domestic arrangement which could not be
  sued upon.  Mutual promises made in the ordinary domestic relationship
  of husband and wife do not of necessity give cause for action on a contract.
  Decision of Sargant J. reversed.
  August 8, 1916, the husband being about to sail, the alleged
  parol agreement sued upon was made. The plaintiff, as
  appeared from the judge's note, gave the following evidence
  of what took place :  " In August, 1916, defendant's leave
  was up. I was suffering from rheumatic arthritis. The
  doctor advised my staying in England for some months, not
  to go out till November 4.  On August 8 may husband sailed.
  He gave me a cheque from 8th to 31st for 24l., and promised
  to give me 301. per month till I returned."  Later on she
  said :  " My husband and I wrote the figures together on
  August 8 ; 34l. shown. Afterwards he said 30l."  In
  cross-examination she said that they had not agreed to live
  apart until subsequent differences arose between them, and
  that the agreement of August,  1916,  was one which might
  be made by a couple in amity.  Her husband in consultation
  with her assessed her needs, and said he would send 30l.
  per month for her maintenance.  She further said that she
  then understood that the defendant would he returning to
  England in a few months, but that he afterwards wrote to
  her suggesting that they had better remain apart. In March,
  1918, she commenced proceeding for restitution of conjugal
  rights, and on July 30 she obtaiaed a decree nisi.  On
  December 16, 1918, she obtained an order for alimony.
    Sargant J. held that the husband was under au obligation
  to support his wife, and the parties had contracted that the
  extent of that obligation should be defined in terms of so
  much a month.  The consent of the wife to that arrangement
  was a sufficient consideration to constitute a contract which
  He accordingly gave judgment for the plaintiff.
  The husband appealed.

  Barrington-Ward K.C. and Du Parq for the appellant.
  Where husband and wife are only temporarily living apart
  an agreement like that in the present case confers no contractual
  rights. There was no agreement for a separation. The
  agreement here was a purely domestic arrangement intended
  to take effect until the wife should rejoin her husband.  It
cannot be regarded as a binding contract.  The wife gave no
consideration for the promise.
  On the evidence it is submitted that this was a temporary
domestic arrangement caused by the absence of the husband
abroad, and was not intended to have a contractual operation.
  Hawke K.C. and Tebbs for the respondent.
  Where a husband and wife are living together the wife is
as capable of contracting vith her husband that he shall
give her a particular sum as she is of contracting with any
other person.
  Where husband and wife separate by mutual consent,
the wife making her own terms as to her income and that
income proves insufficient for her support, the wife has no
authority to pledge her husband's credit :  Eastland v.
Burchell.  (1)
  [DUKE L.J. That may be because they must be taken
to have agreed not to live as husband and wife.]
  Living apart is a question of fact.  If the parties live apart
by mutual consent the right of  the wife to pledge her husband's
credit arises. If, however, instead of doing so she agrees
to give up that right and to accept an allowance instead,
she is entitled to sue for it.
  The agency of the wife arises either where the husband
leaves her wrongfully, or where the parties are by mutual
consent living apart.
  In Lush on Husband and Wife, 3rd ed., p. 404, it is stated
that :  " If the wife is living apart from her husband either
(a) on account of the husband's misconduct, the wife being
left without adequate means ;  (b) or by mutual consent ;
and the husband has agreed to make her an allowance, and
neglects to pay it, the law gives her an absolute authority
to pledge his credit for suitable necassaries.
  [DUKE L.J. Are not those cases where the parties are
matrimonially separated ?]
  [WARRINGTON L.J. referred to Lush on Husband and
Wife, 3rd ed., p. 386.]
  The agency arises where there is a separation in fact.  The
C. A.  consideration for the promise by the husband to pay the
allowance was that she gave up her right to pledge his credit
L.J. The husband has a right to withdraw the
authority to pledge his cnodit.  The wife's consent, therefore,
cannot be treated as consideration to support such a contract
as this.]
  Where a husband leaves his wife in England and goes
  abroad it is no longer at his will that she shall have authority
  to pledge his credit.  If there be a separation in fact (except
  for the wife's guilt) the agency of necessity arises.  The parties
  here intended to enter into a binding contract:
  WARINGTON L.J. (after stating the facts).  Those being
  the facts we have to say whether there is a legal contract
  between the parties, in other words, whether what took
place between them was in the domain of a contract or whether
it was merely a domestic arrangement such as may be made
eveiy day between a husband and wife who are living together
in friendly intercourse.  It may be, and I do not for a moment
say that it is not, possible for such a contract as is alleged
in the present case to be made between husband and wife.
The question is whether such a contract was made.  That
can only be determined either by proving that it was made
in exprees terms, or that there is a necessary implication
from the circumstances of the parties, and the transaction
generally, that such a contract was made.  It is quite plain
that no such contract was made in express terms, and there
was no bargain on the part of the wife at all.  All that took
place was this :  The husband and wife met in a friendly way
and discussed what would be necassary for her support while
she was detained in England, the husband being in Ceylon
and they came to the conclusion that 30l. a month would
be about right, but there is no evidence of any express
bargain by the wife that she would in all the circumstances
treat that as in satisfaction of the obligation of the husand
to maintain her. Canwe find a contract from the position
of the parties ?  It seems to me it is quite impossible.  If
we were to imply such a contract in this case we should be
implying on the part of the wife that whataver happened
and whatever might be the change of circumstances while
the husband was away she should be content with this 30l.
a month, and bind herself by an obligation in law not to reqire
him to pay anything more; and on the other hand we should
be implying on the part of the husband a bargain to pay
30l. a month for some indefinite period whatever might be
his circumstances.  Then again it seems to me that it would
be impossible to make any such implication.  The matter
really reduces itself to an absurdity when one considers it,
because if we were to hold that there was a contract in this
case we should have to hold that vith regard to all the more
or less trivial concerns of life where a wife, at the request
of her husband, makes a promise to him, that is a promise
which can be enforced in law.  All I can say is that there
is no such contract here.  These two people never intended
to make a bargain which could be enforced in law.  The
husband expressed his intention to make this payment, and
he promised to make it, and was bound in honour to continue
it so long as he was in a position to do so.  The wife on the
other hand, so far as I can see, made no bargain at all.  That
is in my opinion sufiicient to dispose of the case.
  It is unneceesary to consider whether if the husband failed
to make the payments the wife could  pledge his credit or
whether if he failed to make the payments she could have
made some other arrangements. The only question we
have to consider is whether the wife has made out a oontract
which she has set out to do.  In my opinion she has not.
  I think the judgment of Sargant J. cannot stand, the
appeal ought to be allowed and judgment ought to be entered
for the defendant.
  DUKE L.J. I agree. This is in some respects an important
case, and as we differ from the judgment of the Court below
I propose to state concisely my views and the grounds which
have led me to the conclusion at which I have arrived.
Substantially the question is whether the promise of the
husband to the wife that while she is living absent from
him he will makeher a periodical allowance involves in
law a consideration on the part of the wife sufficient to
convert that promise into a binding agreement. In my
opinion it does not.  I do not dissent, as at present advised,
from the proposition that the spouses in this case might
have made an agreement which would have given the plaintiff
a cause of action, and I am inclined to think that the promise
of the wife in respect of her separate estate could have founded
an action in contract within the principles of the Married
Women's Property Act, 1882.  But we have to see whether
there is evidence of any such exchange of promises as would
make the promise of the husband the basis of an agreement.
It was strongly urged by Mr. Hawke that the promise being
absolute in form ought to be construed as one of the mutual
promises which make an agreement.  It was said that a
promise and an implied undertaking between strangers,
such as the promise and implied undertaking alleged in this
case would have founded an action on contract.  That may
be so, but it is impossible to disregard in this case what was
the basis of the whole communications between the parties
under which the alleged contract is said to have been formed.
The basis of their communications was their relationship
of husband and wife, a relationship which creates certain
obligations, but not that which is here put in suit.  There was
a discussion between the parties while they were absent from
one another, whether they should agree upon a separation.
In the Court below the plaintiff conceded that down to the time
of her suing in the Divorce Division there was no separation,
and that the  period of absence was a period of absence as
between husband and wife living in amity. An agreement
for separation when it is established does involve mutual
considerations.
  That was why in Eastland v. Burchell (1) the agreement
for separation was found by the learned judge to have been of
decisive coneequence.  But in this case there was no separation
agreement at all.  The parties were husband and wife, and
subject to all the conditions, in point of law, involved in that
                (1) 3 Q.B.D. 432.
relationship.  It is impossible to say that where the relationship
of husband and wife exists, and promises are exchanged
they must he deemed to be promises of a contractual nature.
In order to establish a contract there ought to be some-
thing more than mere mutual promises having regard to
the domestic relations of the parties.  It is required that
the obligations arising out of that relationship shall be
displaced before either of the parties can found a contract
upon such promises.  The formula which was stated in
this case to support the claim of the lady was this : In
consideration that you will agree to give me 30l. a month
I will agree to forego my right to pledge your credit.  In the
judgment of the majority of the Court of Common Pleas
in Jolly v. Rees (1), which was affirmed in the decision of
Debenham v. Mellon. (2)  Erle C.J. states this proposition (3) :
" But taking the law to be, that the power of the wife to charge
her husband is in the capacity of his agent, it is a solecism
in reasoning to say that she derives her authority from his will,
and at the same time to say that the relation of wife creates
the authority against his will, by a presumptio juris et de
jure from marriage."  What is said on the part of the wife
in this case is that her arrangement with her husband that she
should assent to that which was in his discretion to do or not to
do it as the consideration moving from her to her husband.
The giving up of that which was not a right was not a con-
sideration.  The proposition that the mutual promises made
in the ordinary domestic relationship of husband and wife of
necessity give cause for action on a contract seems to me to
go to the very root of the relationship, and to be a possible
fruitful source of dissension and quarrelling.  I cannot see that
any benefit would result from it to either of the parties, but on
the other hand it would lead to unlimited litigation in a relation-
ship which should be obviously as far as possible protected from
possibilities of that kind.  I think, therefore, that in point
of principle there is no foundation for the claim which is made  =
here, and I am satisfied that there was no consideration
   (1) (1864) 15 C. B. (N. S.) 628      (2) (1880) 6 App. Cas. 24.
                      (3) 15 C. B. (N. S.) 641.
moving from the wife to the husband or promise by the husband
to the wife which was sufficient to sustain this action founded
contract. I think, therefore, that the appeal must be
allowed.

  ATKIN L.J.  The defence to this action on the alleged
contract is that the defendant, the husband, entered into
no contract with his wife, and for the determination of that
it is necessary to remember that there are agreements between
parties which do not result in contracts within the meaning
of that term in our law.  The ordinary exmple is where
two parties agree to take a walk together, or where there is
an offer and an acceptance of hospitality.  Nobody would
suggest in ordinary circumstances that those agreements
result in what we know as a contract, and one of the most
usual forms of ageement which does not constitute a contract
appears to me to be the arrangements which are made between
husband and wife.  It is quite common, and it is the natural
and inevitable result of the relationship of husband and wife,
that the two spouses should make arrangemente between
themselves--agreements such as are in dispute in this action-=
agreements for allowances, by which the husband agrees that
he will pay to his wife a certain sum of money, per week,
or per month, or per year, to cover either her own expenses
or the necessary expenses of the household and of the children
of the marriage, and in which the wife promises either expreesly
or impliedly to apply the allowance for the purpose for which
it is given.  To my mind those agreements, or many of them,
do not result in contracts at all, and they do not result in
contracts  even though there may be what as between other
parties would constitute consideration for the agreement.
The consideration, as we know, may consist either in some
right, interest, profit or benefit accruing to one party, or
some forbearance, detriment, loss or responsibility given,
suffered or undertaken by the other.  That is a well-known
definition and it constantly happens, I think, that such
arrangements made between husband and wife are arrange-
ments in which there are mutual promises, or in which there
is consideration in form within the definition that I have
mentioned. Nevertheless they are not contracts, and they
are not contracts because the parties did not intend that
they should be attended by legal consequences. To my
mind it would be of the worst possible example to hold that
agreements such as this resulted in legal obligations which
could be enforced in the Courts.  It would mean this, that
when the husband makes his vife a promise to give her an
allowance of 30s. or 2l. a week, whatever he can afford to give
her, for the maintenance of the household and children,
and she promises so to apply it, not only could she sue him
for his failure in any week to supply the allowance, but he
could sue her for non-performance of the obligation, express
or implied, which she had undertaken upon her part.  All
I can say is that the small Courts of this country would have
to be multiplied one hundredfold if these arrangements
were held to result in legal obligations.  They are not sued
upon, not because the parties are reluctant to enforce their
legal rights when the agreement is broken, but because the
parties, in the inception of the arrangement, never intended
that they should be sued upon.  Agreements such as these
are outside the rcalm of contracts altogether.  The common
law does not regulate the form of agreements between spouses.
Their promises are not sealed with seals and sealing wax.
The consideration that really obtains for them is that natural
love and affection which counts for so little in these cold
Courts. The terms may be repudiated, varied or renewed as
performance procceds or as disagreements develop, and
the principles of the common law as to exoneration and
discharge and accord and satisfaction are such as find no
place in the domestic code.  The parties themselves are
advocates, judges, Courts, sheriff's officer and reporter.
In respect of these promises each house is a domain into
which the King's writ does not seek to run, and to which
his officers do not seeck to be admitted.  The only question
in this case is whether or not this promise was of such a class
or not. For the reasons given by my brethren it appears
to me to be plainly established that the promise here was
not intended by either party to be attended by legal con-
sequences. I think the onus was upon the plaintiff, and
the plaintiff has not established  any contract.  The
parties were living together, the wife intending to return.
The suggestion is that the husband bound himself to pay
30l. a month under all circumstances, and she bound herself
to be satisfied with that sum under all circumstancas, and,
although she was in ill-health and alone in this country,
that out of that sum she undertook to defray the whole of
the medical expenses that might fall upon her, whatever
might be the development of her illness, and in whatever
expenses it might involve her.  To my mind neither party
contemplated such a result.  I thiak that the parol evidence
upon which the case turns does not establish a contract.
I think that the letters do not evidence such a contract. or
amplify the oral evidence which was given by the wife, which
is not in dispute.  For these masons I think the judgment of
the Court below was wrong and that this appeal should be
allowed.
                                        Appela  allowed.
  Solicitors for appellant : Lewis & Lewis.
  Solicitors for respondent : Sawyer & Withall, for John C.
Buckwell,  Brighton.
  G. A. S.
SAID v. BUffi.
(l9l9. S. 32l9.]
               SAID v. BUTT

Contract--Formation--Identity of contracting Party--Material Element--
  Sale of Theatre Ticket--Procuring Breach of Contract--Servant of
  contracting Party--Liability.
    The plaintiff desired to be present at the first performance of a play
  at a theatre.  He knew that, in consequence of his having made certain
  serious and unfounded charges against some members of the theatre
  staff, an application for a ticket in his own name would be refused.
  He therefore obtained a ticket through the agency of a friend who bought
  the ticket at the theatre without disclosing that it was for the plaintiff.
ACTION tried by McCardie J. without a jury.
The facts, material to this report, were as follows : The
plaintiff was a Russian gentleman of independent means.
The defendant was the chairman and managing director
of the Palace Theatre, Ld. (hereinafter referred to as the
company), the proprietors of the Palace Theatre London.
  In July  1919, a light opera was produced at the Palace
Theatre by the company under an agreement with the
plaintiff. During the run of the opera differences arose
between the plaintiff and the defendant, and the plaintiff
made serious charges against the defendant and other
officials of the theatre with regard to the sale of tickets for
the performances of the opera.  These charges were in fact
without foundation, though the plaintiff believed them to
be true and they were deeply resented by the defendant
and other officials of the theatre.  The opera was withdrawn
on October 18, and December 23 was fixed as the date of
the first performance of a new play at the Palace Theatre.
The plaintiff desired to be present at the performance on
December 23.  He twice applied to the company in his own
name for a ticket, but his application was refused.  The
plaintiff, therefore, knowing that any application in his own
name would be rejected asked a friend of his, a Mr. Pollock,
to buy a ticket for him.  Mr. Pollock accordingly bought, in
his own name, a ticket from the company for a seat at the
performance on December 23 without disclosing, and the com-
pany and its staff did not know, that the ticket was bought
for the plaintiff.  If they had known they would have refused
to supply the ticket.  The plaintiff paid Mr. Pollock for the
ticket, and on the evening of December 23 the plaintiff went
to the theatre in order to occupy during the performance
of the new play the seat for which the ticket had been bought
by Mr. Pollock.  The defendant happened to see the plaintiff
in the vestibule of the theatre, and he thereupon gave orders
to the attendants that if the plaintiff had a ticket he was
not to be allowed to occupy his seat and his money was to
be returned to him.  In consequence of these orders the
plaintiff was refused admission to the performance, and he
left the theatre.  The money paid for the ticket was offered
to him but he declined to take it.
  The plaintiff claimed in this action damages against the
defendant on the ground that he wrongfully and maliciously
procured the company to break a contract made by the
company with the plaintiff by selling to the plaintiff a ticket
for a seat entitling him to witness the performance at the
theatre on December 23.
  Disturnal K.C. and St. John Field for the plaintiff.
  Patrick Hasting K.C. and Beyfus for the defendant.
  Cur.  adv. vut.
  June 25. McCARDIE J. delivered a written judgment
  which after stating the facts continued as follows : Upon
the above facts the plaintiff claims damages against the
defendant upon the ground that he wrongfully and maliciously
procured the Palace Theatre, Ld., to break the contract
made by selling to the plaintiff a ticket entitling him to witness
the first performance of "The Whirligig" on December 23,
1919.  The circumstances (so far as I have as yet narrated
them) appear to be simple, but the questions of law raised by
the able arguments of counsel are in many ways novel, and
one at least is of great general importance.  It is well to
state at once one or two points with regard to theatres which
seem to be well established.  In the first place it is settled
by Hurst v. Picture Theatres (1): (a) that the purchaser of
a ticket for a seat at a theatre has a right to enter and stay
and witness the whole performance provided that he behaves
properly and complies with the rules of the management;
and (b) that the licence granted by the sale of the ticket
includes a contract not to revoke the licence arbitrarily.
This was the view of Buckley and Kennedy L.JJ., and is now
the law, although I confess that I recognize the weighty
nature of the dissenting judgment of Phillimore L.J. based
on Wood v. Leadbitter. (2)  If therefore the purchaser of a
ticket is physically removed without adequate reason from
his seat, and turned out of the theatre, he may bring an action
for assault.  This is a cogent decision, and it certainly affords
a large measure of protection to the purchasers of tickets
(whether for reserved or unreserved seats) at theatres or the
like places of entertainment.  The plaintiff in Hurst's Case (1)
had paid sixpence  and had received a metal check which
entitled him to an unreserved seat.  So, too, the purchaser
of a ticket is protected if lie fails to find an unoccupied seat.
In that case he may leave the theatre and demand the return
of his money: see Lewis v. Arnold. (3)  On the other hand
the theatrical proprietor is safeguarded by the rule of law
(inter alia) that every contract for admission is subject to
the implied condition that the person admitted shall behave
properly.  This rule I do not dwell upon.  I need only say,
  (1) [1915] 1 K.B. 1.            (2) (1645) 13 M.& W. 836.
                     (3) (1830) 4 C.& P. 354.
  however, that a member of the audience is entitled to express
  either his approval or his disapproval of the performance,
  provided he acts reasonably and with due regard also to the
  rights of the other members of the audience.  If he abuses
  his privilege, then the management, upon his refusal to leave
  after being requested to do so, are justified in removing him
  from the theatre, and in using a reasonable amount of force
  for the purpose :  see per Scrutton J. in Jay v. New Bedford
  Palace of Varieties. (1)  The limits to the rights of approval
  or disapproval are incidentally referred to in Clifford v.
  Brandon (2) and Gregory v. Duke of Brungwick. (3)
  Now in the present case there is no claim for assault,
  inasmuch as no assault was actually committed ;  nor is it
  suggested that there was any false imprisonment.  The case
  against the defendant rests solely on the ground that he
  procured the Palace Theatre, Ld., to break its contract with
  the plaintiff.  Before the plaintiff can succeed he must establish  ;
  that there was a binding and subsisting contract between
  the Palace Theatre and himself on December 23 :  see
  Long v. Smithgon (4), per Avory and Shearman JJ.  In other
  words, the plaintiff must bring himself within the words of
  Lord Macnaghten in Quinn v. Leathem (5), who there said :
  " A violation of legal right committed knowingly is a cause
  of action, and that it is a violation of legal right to interfere
  with contractual relations recognised by law if there be no
  sufficient justification for the interference."
  Mr. Hastings submitted that no valid contract existed on
  December 23 between the Palace Theatre, Ld., and the
  plaintiff.  Broadly put, he contended that the Palace Theatre
  had never knowingly contracted with the plaintiff for the
  sale of a ticket for his owm use, and that upon discovering
  that the plaintiff was in fact the purchaser of a ticket for
  the stalls they would be entitled to put an end to any apparent
  contract upon the ground that where personal corsiderations
  enter into a contraot error as to the person with whom the
  (1) Times Newsp., June 30, 1910.  (3) (1843) 1 C. & K. 24.
  (2) (1809) 2. Camp. 358.          (4) (1918) 118 L.T. 678.
  (5) [1901] A. C. 495, 510.
  or who have attacked the character of the theatre officials.
  [The learned judge stated in detail the facts vith regard to
  the ticket obtained by the plaintiff through Mr. Pollock and
  continued :] The Palace Theatre officials had no idea that
  they were selling a ticket to an agent of the plaintiff.  If
  they had known it, they would at once have refused to supply
  a ticket.  I find as a fact that the plaintiff used the name
  of Mr. Pollock in order to disguise that he himself was the
  purchaser ;  and I also find that the plaintiff well knew that
  the Palace Theatre would not have sold him personally a
  ticket for December 23, 1919. I am satisfied that Mr. Pollock
  himself was aware of the above-mentioned circumstances.
  I may point out that a theatre stands on a wholly different
  footing from a public inn, or a public service such as a
  railway.  A public inn, for example, is under a common law
  duty to supply to all who come provided that accommodation
  exists ;  and provided also that the guest is of proper character
  and behaviour.  But a theatre stands upon a wholly different
  footing.  It may sell or refuse to sell tickets at its own option.
  The public cannot compel a theatre to grant admission.
  Under these circumstances, the question is whether the
  plaintiff, as an undisclosed principal of Mr. Pollock, can
  claim that a binding contract existed between the Palace
  Theatre, Ld., and himself. Now, the principle stated in
  Pothier on Obligations (already cited) is a broad one.  It
  should not, of course, be unduly applied ;  but it is one of
  practical utility.  The matter is thus put in Fry on Specific
  Performance  s. 229 :  " The law seems now to be that where
  one-person is deceived as to the real person with whom he is
  contracting, and that deception either induces the contract
  or renders its terms more beneficial to the deceiving party,
  or more onerous to the deceived, or where it occasions any
  other loss or inconvenience to the deceived party, there the
  contract cannot be enforced against him ;  but that where
  none of these circumstances can be shown to follow from
  the deception, the contract may be enforced."  This passage
  seems to accord with Fellowes v. Lord Gwydyr. (1)  The principle
  (I)  (1826) 1 Sim. 63.
was recognized by Knight Bruce V.-C. in Nelthorpe v. Holgate (1);
and the observations of that distinguished judge are most
instructive. It is the basis of the decision in Boulton v.
Jones. (2) It was actually applied by North J. in Archer v.
Stone. (3) It is cogently illustrated by the decision of the
Court of Appeal in the well-known case of Gordon v. Street (4)
(already cited), the facts of which I need not state.  It
is not impaired but merely distinguished by the decision of
Horridge J. in Phillips v. Brooks. (5) It may be usefully
considered in the light of such cases as Hill v. Gray (6) and
Whurr v. Devenish. (7)
  In my opinion the defendant can rightly say, upon the
special circumstances of this case, that no contract existed
on December 23, 1919, upon which the plaintiff could have
sued the Palace Theatre.  The personal element was here
strikingly present. The plaintiff knew that the Palace
Theatre would not contract with him for the sale of a seat
for December 23.  They had expressly refused to do so.
He was well aware of their reasons.  I hold that by the mere
device of utilizing the name and services of Mr. Pollock,
the plaintiff could not constitute himself a contractor with
the Palace Theatre against their knowledge, and contrary
to their express refusal.  He is disabled from asserting that
he was the undisclosed principal of Mr. Pollock.
  It follows, therefore, that the plaintiff has failed to prove
that the defendant caused any breach of a contract between
the palace Theatre, Ld., and himself.
  I realize, however, that the question is one of difficulty ;
and I therefore, deem it right to mention the other legal
points which arose in the case.  One of those points is of such
importance that I feel it my duty to deal with it.  Let me,
therefore, assume that the plaintiff had established a velid
contract between the Palace Theatre, Ld., and himself, upon
which he could have sued as a principal.  The defendant's
 (1) (1844) 1 Coll. 203,214,218.      (4) [1899] 2 Q.B. 641.
 (2) (1857) 2 H.& N. 564.             (5) [1818] 2 K.B. 243,249.
 (3) (1898) 78 L.T. 34.               (6) (1816) 1 Stark. 434.
               (7) (1904) 20 Times L.R. 385.
  counsel submitted that even upon such assumption the present
  action must fail, because the defendant in procuring the
  breach of contract was acting only as the managing director
  of the Palace Theatre, Ld. This submission was ably and
  fully argued by counsel on both sides. It is well to point
  out that Sir Alfred Butt possessed the widest powers as the
  chairman and sole managing director of the Palace Theatre, Ld.
  He clearly acted within those powers when he directed that
  the plaintiff should be refused admission on December 23.
  I am satisfied, also, that he meant to act and did act bona fide
  for the protection of the interests of his company.  If, therefore,
  the plaintiff, assuming that a contract existed between the
  company and himself, can sue the defendant for wrongfully
  procuring a breach of that contract, the gravest and widest
  consequences must ensue.  This is the more apparent when it
  is remembered that it is not necessary to prove actual malice
  against a defendant in order to establish a cause of action
  against him for knowingly procuring the breach of a third
  person's contract with the plaintiff, whereby the plaintiff
  suffers pecuniary damage :  see Pratt v. British Medical
  Association  (1), citing South Wales Miners' Federation v.
  Glamorgan Coal Co. (2)
  If the plaintiff is right in his contention, it seems to follow that
  whenever either a managing director or a board of directors,
  or a manager or other official of a company, causes or procures
  a breach by that company of its contract with a third person
  each director or official will be liable to an action for damages,
  upon the principle of Lumley v. Gye (3), as for a tortious act.
  So, too, with the manager or other agent of a private firm
  who does the like thing. This far-maching result of the
  principle here suggested by the plaintiff is emphasized, when
  it is remembered that in an ordinary action for breach of
  contract the plaintiff recovers his pecuniary loss only ;  whereas
  in an action for wrongfully procuring a breach of contract
  the damages against the wrongdoer are at large, and may
  vastly exceed the sum recoverable in a mere claim for breach
  (1) (1919] 1 K. B. 244, 254, 625.  (2) [1905] A. C. 239.
  (3) (1853) 2 E. & B. 216.
of contract against the contractor: see Pratt v. British
Medical Association (1) and Exchange Telegraph Co. v.
Gregory. (2).
  Mr. Disturnal for the plaintiff argued with great vigour
that though the results may be remarkable, yet the principle
asserted by the plaintiff is sound.  He points out the breadth
of the language employed in the well-known cases on the subject
from Lumley v. Gye (3) to the present time.  I agree that
the language is wide in its scope.  The proposition is stated
with unrestricted diction: that a person who without just
cause knowingly procures a man to commit a breach of his
contract with another, whereby the latter suffers pecuniary
damage, is liable to an action for tort.  But I conceive that
none of the judges was thinking of such a case as the present.
I have searched in vain for any decision which indicates
that a servant is liable in tort for procuring a breach of his
master's contract with another.  If such a cause of action
existed, I imagine that it would have been successfully
asserted ere this.  The explanation of the breadth of the
language used in the decisions probably lies in the fact that
in every one of the sets of circumstances before the Court
the person who procured the breach of contract was in fact
a stranger, that is a third person, who stood wholly outside
the area of the bargain made between the two contracting
parties.  If he is in the position of a stranger, he will be prima
facie liable, even though he may ect honestly, or without
malice, or in the best interests of himself ;  or even if he acts
as an altruist, seeking only the good of another: see the
decisions cited in Pratt's Case (4) and the Glamorgan Coal
Case. (5)
  But the servant who causes a breach of his master's contract
with a third person seems to stand in a wholly different
position.  He is not a stranger.  He is the alter ego of his
master.  His acts are in law the acts of his employer.  In
such a case it is the master himself, by his agent, breaking
  (1) [1919] 1 K.B. 281.              (3) 2 E.& B. 216.
  (2) [1896] Q. B. 147, 153.          (4) [1919] 1 K.B. 265, 266.
                    (5) [1905] A. C. 239.
  the contract he has made, and in my view an action against the
  agent under the Lumley v. Gye (1) principle must therefore
  fail, just as it would fail if brought against the master himself
  for wrongfully procuring a breach of his own contract.  This,
  I think, is the true answer to the ingenious arguments of
  Mr. Disturnal on behalf of the plaintiff upon this point.  To
  hold otherwise might create at least three actions whenever
  a managing director or other authorized agent knowingly
  procured a breach of the employer's contract.  First, an
  action based on contract against the employer for the
  pecuniary loss caused by the breach of contract ;  secondly,
  an action for tort against the agent who had procured the
  breach of contract, wherein the damages would be at large
  and might include every element of annoyance, incon-
  venience, or indignity ;  and thirdly, an action against the
  employer himself for the tortious wrong committed by his
  authorized agent in procuring the employer to break his
  contract with the plaintiff.  This extraordinary result shows,
  I think, that the contention of the plaintiff in this case cannot
  be sound. If the plaintiff here be right in his submission,
  then the flood-gates of litigation would indeed be widely
  opened.
    I hold that if a servant acting bona fide within the scope
  of his authority procures or causes the breach of a contract
  between his employer and a third person, he does not thereby
  become liable to an action of tort at the suit of the person
  whose contract has thereby been broken.  I abstain from
  expressing any opinion as to the law which may apply if
  a servant, acting as an entire stranger or wholly outside the
range of his powers, procures his master to wrongfully
break a contract with a third person.  Nothing that I have
said to-day is, I hope inconsistent with the rule that a
director or a servant who actually takes part in or actually
authorizes such torts as assault, trespass to property,
nuisance, or the like may be liable in damages as a joint
participant in one of such recognized heads of tortious
wrong.  This point was incidentally dealt with by the Court
               (1) 2E.& B. 216
of Appeal in the recent ca3e of Belvedere Fish Guano Co. v.
Rainham Chemical Works. (1)
  If I had been in favour of the plaintiff on the preceding
points the question as to whether he had what is technically
known as "just cause" for procuring a breach of contract would
have arisen for decision.  I ventured to refer to that most
difficult question in Pratt's Cage. (2)  It was touched upon
by Astbury J. in his luminous judgment in  Valentine v.
Hyde (3),  and by P. O. Lawrence J. in his cogent observations
in Davies v. Thomas (4), just affirmed by the Court of Appeal. (5)
It is not necessary to deal with the point in this litigation ;
I need only say that it may well be that " just cause " existe
in the present case.  If the plaintiff had here established a
cause of action I ahould have been called on to assess damages.
Upon the whole circumstances of the matter, and in the view
I form that the defendant did not act with any actual malice
to the plaintiff on the night of December 23, I should have
assessed those damages at the nominal sum of 40s. only.
But for the reasons I have given, this action fails, and it
must be dismissed with costs.
                                judgment for defendant.
  Solicitors for plaintiff : kenneth Brown, Baker, Baker & Co.
  Solicitors for defendant :  Beyfus & Beyfus.
(1) [1920] 2 K. B. 487.  (3) [1919] 2 Ch. 129, 144.
(2) [1919] 1 K. B. 265, 266.  (4) [1920] I Ch. 217, 231.
                   (5) [1920] 2 Ch. 189.
  F. O. R.
       REDERIAKTIEBOLAGET AMPHITRITE v. THE KING
  Petition of Right--Contract by Crown fettering its executive Power--Obligatory
                 Force of.
    During the war neutral shipowners, being aware of the liability of
  neutral ships to be detained in British ports, obtained an undertaking
  from the British Government that if they sent a particular ship to thia
  country with a particular class of cargo she should not be detained.
  On the faith of that undertaking the owners sent the ship to a British
  port with a cargo of the stipulated kind.  The British Government
  subsequently withdrew their undertaking and refused her clearance.
  On a petition of right for damages for breach of contract:--
    Held, that the Government's undertaking was not enforceable in a
  Court of law, it not being within the competence of the Crown to make
  a contract which would have the effect of limiting its power of executive
  ation in the ffu~ue.
  TRIAL of a petition of right before Rowlatt J.
  The suppliants, who were a Swedish steamship company
owning a ship called the Amphitrite, were in the year 1918
minded to trade with her to the United Kingdom.  In con-
sequence of the intensified blockade of British ports by the
Germans an arrangement had been made between the British
Government and the Governments of neutral countries that
neutral ships in British ports should be allowed to leave only
if they were replaced by other ships of the same tonnage,
which arrangement was known as the " ship for ship " policy.
The suppliants, having had two of their own ships detained
in British ports under that ship for ship policy, were anxious
to avoid such detention in the future, and accordingly they
wrote on March 8, 1918, to the British Legation at Stockholm
with reference to the Amphitrite: "We should be disposed
to put her in trade between Sweden and England in case
you could give us a guarantee that the boat should be allowed
free passage without being detained in Great Britain." The
Legation communicated with the proper authority in this
country, and on March 18 replied: "I am instructed to say
that the S.S. Amphitrite will earn her own release and be
given a coal cargo if she proceed to the United Kingdom
with a full cargo consisting of at least 60% approved
goods." The suppliants then sent the Amphitrite with a
cargo of approved goods to Hull, where 3he discharged during
the month of May, and having loaded a cargo of coal she
obtained her release and returned to Sweden. Before she
so returned her owners were in some doubt whether the
undertaking of March 18 applied only to the particular voyage
then contemplated and required to be renewed for any
subsequent voyage. They accordingly asked the British
Legation for information on that point, and received a reply
dated May 9, 1918, that " the S.S. Amphitrite will be allowed
to release herself in her next voyage to the United Kingdom."
On the faith of the undertaking contained in that letter the
suppliants again loaded the Amphitrits with an approved
cargo and sent her to Hull.  Having discharged her cargo
she went to the Forth in July to load coal for the return
voyage.  While she was there her owners received notice
from the Government that loading facilities were withdrawn
and that clearance would not be granted, unless the applica-
tion therefor was made through a certain body called the
Swedish Shipping Committee.  Owing to an agreement that
had been made between the suppliants and the German
Government the former had disqualified themselves from
making application for clearance through the Swedish
Shipping Committee, with the result that the Amphitrite
was detained in this country, and eventually her owners,
to avoid further loss, sold her.  In these circumstances the
suppliants presented this petition of right, claiming damages
for the breach of the Government's undertaking contained
in the letters of March 18 and May 9.  The Crown in its
answer and plea denied that the said letters amounted to
an enforceable contract.
R. A. Wright K.C. and Ballock for the suppliants.  The
two letters of March 18 and May 9 contain all the elements
of a contract.  There is a definite promise and abundant
consideration. The British Government wanted a cargo of
approved goods to be brought here, and having had the
benefit of the performance of the contrast they ought not
to be allowed to repudiate it. It is not disputed that the
undertaking, such as it is, was made with the full authority
of the Crown.
  Given (Sir Gordon Hewart A.-G. with him) for the Crown.
The granting of clearance to a ship cannot be made the
subject of a contract. The question whether such clearance
can be granted must depend on the military exigencies at
the time that it is applied for.  That being so the letters in
question must be read as nothing more than an expression
of intention to allow clearance if the existing conditions
continued. They cannot be regarded as fettering the
Government's action however much the military conditions
may have altered in the interval.
  Balloch in reply.

  ROWLATT J.  In this case the suppliants are a Swedish
shipowning company who sue the Crown by petition of right
for damages for breach of contract, the breach being that
the ship Amphitrite was refused a clearance to enable her
to leave this country, when she had entered a British port
under an arrangement whereby she was promised that she
should be given that clearance. Now undoubtedly the
suppliants desired to get the clearest and most binding
assurance that was possible.  Their vessel was free;  they
might have employed her elsewhere; and they had experi-
ence of the difficulties encountered by foreign ships in getting
away from this country when once they had come here.
Accordingly they wrote on March 8, 1918 to the British
Legation at Stockholm and asked whether, in the event of
the vessel being put in trade between Sweden and England,
the Legation could give them a guarantee that she would be
allowed free passage without being detained in Great Britain.
The Legation replied that they were "instructed to say that
the S.S. Amphitrite will earn her own release and be given a
coal cargo if she proceed to the United Kingdom with a full
cargo consisting of at least 60% approved goods."  That
reply was given by the British Legation after consulting the
proper authorities, and I must take it that it was given with
the highest authority with which it could be given on behalf
of His Majesty's Government.  And the British Government
thereby undertook that if the ship traded to this country
she should not be subjected to the delays which were some-
times imposed.  The letters in which that undertaking was
contained were written with reference to an earlier voyage
which was allowed to go through, the undertaking being on
that occasion observed.  But the undertaking was renewed
with respect to the voyage in connection with which the
present complaint arises by a letter from the British Legation,
in which it was stated that " the S.S. Amphitrite will be
allowed to release herself in her next voyage to the United
Kingdom "--that is to say, upon the same terms as before.
Now under those circumstances what I have to consider is
whether this was a contract at all.  I have not to consider
whether there was anything of which complaint might be
made outside a Court, whether that  is  to  say what  the
Government did was morally wrong or arbitrary ;  that
would be altogether outside my province.  All I have got to
say is whether there was an enforccable contract, and I am
of opinion that there was not.  No doubt the Government
can bind itself through its officers by a commercial contract,
and if it does so it must perform it like anybody else or pay
damages for the brcach.  But this was not a commercial
contract ;  it was an arrangement whereby the Government
purported to give an assurance as to what its executive action
would be im the future in relation to a particular ship in the
event of her coming to this country with a particular kind
of cargo.  And that is, to my mind, not a contract for the
breach of which damages can be sued for in a Court of law.
It was merely an expressing of intention to act in a particular
way in a certain event.  My main reason for so thinking is
that it is not competent for the Government to fetter its
future executive action, which must necessarily be determined
by the needs of the community when the question arises.
It cannot by contract hamper its freedom of action in matters
which concern the welfare of the State.  Thus in the case
of the employment of public servants, which is a less strong
case than the present, it has been laid down that, except
under an Act of Parliament, no one acting on behalf of the
Crown has authority to employ any person except upon the
terms that he is dismissible at the Crown's pleasure; the
reason being that it is in the interests of the community that
the ministers for the time being advising the Crown should
be able to dispense with the services of its employees if they
think it desirable.  Again suppose that a man accepts an
office which he is perfectly at liberty to refuse, and does so
on the express terms that he is to have certain leave of absence,
and that when the time arrives the leave is refused in circum-
stances of the greatest hardship to his family or business, as
the case may be.  Can it be conceived that a petition of right
would lie for damages?  I should think not.  I am of opinion
that this petition must fail and there must be judgment for
the Crown.
                           Judgment for the Crown.
  Solicitors for the suppliants:  Botterell & Roche.
  Solicitor for the Crown:  Treasury Solicitor.
                                                     J. F. C.
  [IN THE KING'S BENCH DIVISION AND IN THE
               COURT OF APPEAL.]
ROSE AND FRANK: COMPANY v. J. R. CROMPTON
     AND BROTHERS, LIMITED, AND OTHERS.
Contract--Animus Contrahendi--Agreement binding in Honour--Ousting the
                       Jurisdiction--Repugnancy.
  An English firm who manufactured and dealt in paper tissues of various
  kinds had for several years done business with an American firm.  All
  kinds had for several years done business with an American firm.  All
  goods of one kind sold in the United States, ail goods of another kind
  sold in the United States or Canada, and all goods of a third kind wherever
  sold, were sold to the Amerioan firm, and that firm placed all orders for
  goods of the third kind with the English firm.  These relation were at
  first made to continue for one year, but were renewed from time to time.
    A great part of the tissues so sold were in faet manufactured by another
  English firm.  In the course of time the American firm proposed a new
  arrangemeat, and a document was drawn up and signed by the three
firms whereby the two English firms expressed their willingness that the
present arrangements with American firm, which were then for one
year only, should be continued on the same lines for three years, and so
on for another period of three years, subject to six months' notice by
any of the parties.  The document, after purporting to set out the
understanding between the parties including several modifications of
their previous arrangement, proceeded in these words: "This arrange-
ment is not entered into, nor is this memorandum written as a formal
or legal argument and shall not be subject to legal jurisdiction in the
law courts either in the United States or England, but it is only a definite
expression and record of the purpose and intention of the three parties
concerned to which they each honourably pledge themselves with the
fullest confidence, based on past business with eaeh other, that it will
be carried through by each of the three parties with mutual loyalty and
friendly co-operation."  Then followed a clause relating to prices.
  The English firms having definitely determined these relations without
notice, the American firm brought an actio for breach of the contract
alleged to be expressed in the document:--
  Held, Bankes, Scrutton and Atkin L.JJ., that the document did
not constitute a binding contract and that the action would not lie.
  The question whether, assuming the former relations were contractual,
they were abrogated by the document, was left undecided.
  Before relations between the parties had been broken off the plaintiffs
had given and the defendants had accepted orders for goods.  Some of
these orders were executed; others were not.
  Held, by Bankes and Scrutton L.JJ. (Atkins L.J. dissenting), that the
orders and the acceptance thereof were alike referable to the document,
and that the non-fulfilment of them did not constitute a breach of
contract.
  Judgment of Bailhache J. reversed.
  APPEAL from the judgment of Bailhache J. in an action
tried before the learned judge without a jury.
  The action was for breach of an alleged contract in writing
signed by the defendants respectively on July 11 and July 8,
1913 a counterpart of which was signed by the plaintiffs on
August 12, 1913.
  The plaintiffs were an American company carrying on
business in New York. The defendants J. R. Crompton &
Brothers, Ld., and Brittains, Ld., carried on business st
bury in Lancashire and at Cheddleton in Staffordshire
respectively.
  The facts were as follows:  J. R. Crompton & Brothers,
Ld., were manufacturers of carbonizing tissue paper.  Messrs.
Rose & Frank, who were later incorporated as the Rose &
Frank Company, were merchants who dealt in this paper.
Business relations between these two firms began in 1905.
J. R. Crompton & Brothers, Ld., sent the paper to Rose &
Frank, who added some work by way of finishing it and
sold it in America.  The first arrangement between these
parties was contained in a letter of March 7 1905, written
by J. R. Crompton & Brothers Ld.  to Rose & Frank in these
terms : " As arranged with your Mr. Frank we now beg to
confirm the arrangement made with him in regard to the 7 lbs.
substance - R & F carbonizing paper,' namely that in the event
of your finding this paper suitable for your purpose we will
confine the sale of it to you for the United States and Canada
for the 12 months ending March 31, 1906."  In December,
1908, a further arrangement was made  between J. R.
Crompton & Brothers, Ld., and Rose & Frank concerning
another description of paper ;  and on December 24,  1908,
J. R. Crompton & Brothers, Ld., wrote, " We discussed at
some length with Mr. Campbell "---who represented Rose &
Frank---" matters relating to carbon tissues, and have since
then given some further thought to the matter, and agree
now to your suggestion to confine for the time being our
carbon tissues in America to you.  By this we mean so long
as this arrangement lasts we will open no new accounts in
America for carbon tissues, in addition to which we will, in
giving any quotation for such paper here, do our best to
ascertain if the paper is or is not required for America, and
where we find it is will bear your interest in mind and, so far
as we can do so, decline to quote."
  After these arrangements had been continuing for some
years Rose & Frank found that there was a demand for
carbonizing tissues of a blue colour, upon which on November 9,
1911, a further arrangement was made by a letter from
J. R. Crompton & Brothers, Ld., to Rose & Frank containing
these words :  " Please take the paragraph in our letter ' this
particular kind of blue paper in question ' to mean all blue
carbonizing tissue which we now agree to make only for your
firm, upon the understanding that all your orders for such
paper are given to us, subject to 12 months' notice on either
side to terminate the agreement."  The learned judge at the
trial held that these arrangements were binding contracts, the
effect of which was that Rose & Frank had the sole agency,
not confined to the United States and Canada, of the blue
carboning paper, subject to a twelve months' notice on
United States and Canada, subject to a similar notice, and
the sole agency of all other carbonizing tissues in the United
States only (with an exception in favour of one customer in
Boston).
  During the continuance of these relations, which were
renewed from time to time and resulted in a profitable business
to both parties, J. R. Crompton & Brothers, Ld., were in
close commercial relations with Brittains, Ld., who produced
paper tissues differing in quality from those of J. R. Crompton &
Brothers, Ld., and a considerable quantity of the tissues
supplied by J. R. Crompton & Brothers Ld., to Rose &
Frank, and to the Rose & Frank Company after its incorpora-
tion in March, 1911, were in fact manufactured by
Brittains, Ld.; but there were so far no dirct dealings between
Brittains, Ld., and Rose & Frank or the Rose & Frank
Company.
  These relations continued until the end of 1912.  Then the
Rose & Prank Company, in order to give more permanence
and stability to their business proposed that an agreement
should be drawn up between themselves, J. R. Crompton &
Brothers Ld., and Brittains Ld., whereby the last named
company should come into direct contractual relations with
the Rose & Frank Company for a period of three years and
thereafter for a further period of three years unless notice to
the contrary were given by any of the parties to the others.
An agreement to this effect dated January 1, 1913, was
actually drafted but was never exeeuted. (1)
  Instead of that agreement the following document was
drawn up. It was signed by Brittains, Ld., on July 8, and by
J. R. Crompton & Brothers Ld., on July 11, and a counter-
part thereof was signed by the Rose & Frank Company on
August 12, 1913.  It was in the terms :---
   (1) For a copy of this draft see note on p. 299, post.
  " As the business in carbonizing tissues which is now being
done between Messrs. Rose & Frank Co. of New York as
purchasers and Messrs. J. R. Crompton & Brothers Ld. of
Bury, Lancashire and Messrs. Brittains Ld. Cheddleton,
Staffordshire, as manufacturers, has attained to a considerable
volume, and Messrs. Rose & Frank Co. are of opinion that
in the interests of the traders they reprint assured arrange-
ments for the supply of these papers should be made for
some considerable period ahead, Messrs. J. R. Crompton &
Brothers Ld. and Messrs. Brittains Ld. hereby express their
willingness that the present arrangements with Messr. Rose &
Frank Co. for the sale of these papers, which are now for one
year only, shall be continued on the same lines as at print
for a period of three years, say until March 31, 1916, with
the understanding that if it is desired by any of the three
parties to alter or abrogate this arrangement at the expiration
of that period six months' notice shall be given before that
date. If no notice be given by either party the arrange-
ment shall be regarded as continuing for a second period of
three years subject to the same six months' notice for
alteration or abrogation as in the first period of three years.
  " The agreement between the three parties with respect
to the business in carbonizing tissues is as follows, and any
alteration or extension shall be subject to the mutual
agreement of the three parties :---
  " Messrs. J. R. Crompton & Brothers, Ld. with the consent
and concurrence of Messrs. Brittains Ld. agree to confine
the sale of all tissues for carbonizing exclusively to Messrs.
Rose & Frank Co. as at present for the United States of
America with the exception of:
"(1.) The F. S. Webster Co. of Boston, Mass. (whose
  businees shall be left undisturbed as at present)
  but should the F. S. Webster Co. during the currency
  of this agreement offer for sale the paper they
  buy from Messrs. J. R. Crompton & Brothers Ld.
  in its unprepared state objection shall be raised
  to it by Messrs. J. R. Crompton & Brothers Ld.,
  their assumption being that all the paper purchased
        from them by the F.S. Webster Co. is used by
        them in making carbon papers by their own plant;
        and
  "(2.) The Dominion of Canada, where both Messrs.
        Rose & Frank Co. and Messrs. J.R. Cromptom &
        Brothers Ld. shall be equally free to sell upon the
        arrangements at present existing between them,
upon the understanding that the Rose & Frank Co. will,
as far as possible confine their purchases of all grades of
carbonizing tissues so reserved to them by Messrs. J. R.
Crompton & Brothers Ld. and Messrs. Brittains Ld. exclusively
to Messrs. Crompton and Messrs. Brittains and, whilst doing
their best to increase the business still further, undertake
that the volume of business in the present grades shall not
fall in any year below that of the average of the last three
years, viz. 1910, 1911, and 1912, without such explanations
as shall be considered satisfactory by Messrs. J. R. Crompton &
Brothers Ld. and Messrs. Brittains Ld. Messrs. J. R.
Crompton & Brothers Ld. and Messrs. Brittains Ld., whose
position is in their opinion soundly secured, will subject to
unforseen circumstances and contingencies do their best,
as in the past, to respond efficiently and satisfactorily to the
calls of Messrs. Rose & Frank Co. for deliveries both in
quantity and quality, and it is further understood and agreed
that any other special and distinctive grades of paper for
carbonizing which shall be made at the suggestion of or intro-
duced by the Rose & Frank Co. shall during the currency
of this agreement be confined exclusively to them for the
United States of America and Canada without any exception
otherwise than by common agreement between the three
parties.  It is understood and agreed that the cheaper car-
bonizing papers which have already been the subject of dis-
cussion shall be oovered by the special and exclusive
arrangement of this clause, but that the value of these or
any fresh grades that may be introduced shall not be in-
cluded in the average of the three years which applies only
  to the grades of paper supplied during the three years 1910,
  1911, and 19l2.  The special R.& F. papers as hitherto
manufactured and supplied by Messrs. J. R. Crompton &
Brothers Ld. are also included in this special exclusive
arrangement as heretofore the volume of business in these years
papers being  governed  by the clause for the three years
average as in the case of the other grades.
  " It is further clearly understood that the blue carbonizing
tissues are absolutely and entirely reserved to Messrs. Rose
& Frank Co. without any exceptions during the currency
of this agreement.
  " With the single exception of these blue carbonizing
tissues this agreement applies only to the United States
of America and Canada, and does not admit of these carboniz-
ing papers being offered or sold by Messrs. the Rose &
Frank Co. in their unprepared state outside the United
States of America and Canada.
  " This arrangement is not entered into, nor is this
memorandum written, as a formal or legal agreement,
and shall not be subject to legal jurisdiction in the Law
Courts either of the United States or England, but it is only
a definite expression and record of the purpose and intention
of the three parties concerned to which they each honour-
ably pledge themselves with the fullest confidence, based
on past business with each other, that it will be carried
through by each of the three parties with mutual loyalty
and friendly co-operation.
  " Prices.---Prices, (which on the present occasion are being
advanced 10% after April 30, 1913, for the rest of the current
year by mutual consent on account of the increased cost
of production) shall in future be quoted for periods of six
months' duration only. Any alterations in price which
the manufacturers require on account of increase or
decreases in cost of production shall take effect at the end
of March and at the end of September in any year, notice
of any alteration to be given by the end of the previous
February or August respectively."
  The arrangement contained in this document was extended
to March 30, 1920.  In Map, 1919, the defendants J. R.
Crompton & Brothers, Ld., and Brittains, Ld., became
discontented with the way in which the plaintiffs, the Rose
& Frank Company, were conducting their business in America.
In the defendants' view the plaintiffs were demanding prices
for their goods which encouraged competition and was
injuring the business of the defendants. They sent a
telegram inviting a representative of the plaintiffs to come
over to England, but the invitation was not accepted.  On
May 7, 1919, the defendants definitely deterred the
arrangement between the parties.
  The plaintiffs then brought this action. The writ was
issued on November 19, 1919.
  The statement of claim contained twenty-one paragraphs:
Of these paras. 1 to 9 related to the arrangements between
Messrs. Rose & Frank, the plaintiffs, and the defendants
J. R. Crompton & Brothers, Ld., before July, 1913; the
document of July, 1913, and the agreement to continue
relations under that document till March 30, 1920.  It also
alleged (para. 12) that in the autumn of 1918 and during
1919 the defendants in breach of the alleged agreement
of July, 1913, supplied persons other than the plaintiffs in
America with carbonizing tissues and in Canada with
special and distinctive grades of paper for carbonizing
suggested or introduced by the plaintiffs and with blue
carbonizing tissues and supplied the tissues at prices
lower than those at which they had been or were supply-
ing the plaintiffs: (para. 13) that by cables on May 5 and 9,
and by letter of May 10, 1919, the defendants refused to
make any further deliveries to the plaintiffs and wrongfully
repudiated the alleged agreement of July, 1913; (para. 14)
that between March 31, 1919, and March 30, 1920 the
plaintiffs would have required 200 cases of paper from the
defendants J. R. Crompton & Brothers  Ld.  and 800 cases
from the defendants Brittains Ld., and that their estimated
loss on the non-delivery of these goods was 10,146l. on the
200 cases and 112,977l. on the 800 cases. They also
claimed (para. 16) 2867l. for depreciation of unsold stock
owing to the defendants having supplied other firms at
prices lower than those charged to the plaintiffs.
  By para. 16 the plaintiffs pleaded that if  the alleged
agreement of July, 1913, was not valid, the earlier agreements
not having been terminated by twelve months' notice were FRANK Co-
Brothers, Ld., had broken and repudiated those agreements
and that in addition to depreciation of unsold stock the
plaintiffs would suffer damage through being unable to
deliver tissues sold by them to customers ;  that their
estimated requirements for twelve months from May, 1919
were 700 cases, and their estimated loss theron 86,186l.
  Para. 17 contained a claim for 244l. 3s. 2d. for goods
delivered in 1918 not in accordance with warranty.  The
defendants did not contest this claim.
Para. IS stated that by thirty-two orders in writing, the
numbers of which were specified, the plaintiffs ordered from
the defendants a number of cases of tissues for delivery at
various dates set out in the orders at prices which the
defendants were then charging the plaintiffs for the said tissues
or at fair and reasonable prices;  that the said orders were
contained in letters from the plaintiffs dated January 23 and
21, February 7, and March 11, 1919, and were accepted by
the defendants by letters datcd February 21 and 25, and
March 29, 1919.
  Para. 19 stated that the defendants made part deliveries in
respect of four of the thirty-two orders, but in breach of the
terms of the said sales failed to deliver the balance of those  .
four orders and in respect of the remaining orders made no
deliveries at all.
  The defence contained the following paragraphs :--
  "18. The whole of the arrangements made by the letters
and documents referred to in paragraphs 3, 4, 6, 7, 8, 9 and 18
of the statement of claim were arrangements made without
consideration and were expressly or impliedly intended to be
of no legally binding effect save in so far as the actual delivery
of tissues by the defendants would raise a legal obligation on
the plaintiffs to pay a reasonable price therefor and were
expressly or impliedly made by the plaintiffs in the interest
of the traders in America and Canada whom they represented
and there were express or implied terms thereof that the
plaintiffs would act in the interests of the defendants as much
as in their own interests and would charge reasonable prices
to such traders and would do nothing calculated to jeopardize
otherwise to encourage the competition of rival manufacturers
or dealers but would honourably and loyally co-operate with
the defendants in developing the market for such tissues
which terms the plaintiffs failed to observe as is hereinafter
set  out.  .  .  .  .
   " 19. Alternatively if the defendants J. R. Crompton &
Brothers Ld. made any of the agreements alleged in
paragraphs 3, 4, 6 and 7 of the statement of claim all such
agreements were determined by mutual corsent by virtue of
or at the date of the signing of the document referred to in
paragraph 8 of the statement of claim "--i.e. the document
of July, 1913.
  " 20. If the defendants or either of them made any of the
agreements alleged in paragraphs 3, 4, 6, 7, 8, 9 and 18 of
the statement of claim there were in the said agreements the
express or implied terms set out in paragraph 18 hereof and
the plaintiffs were by the said agreements constituted the
agents of the defendants and the plaintiffs in breach of the
said agreements and of their duty as the defendants' agents
acted contrary to the interests of the defendants in that
they charged exoseive pricas to the traders in America and
Canada who were their customers and thereby seriously
prejudiced the sale of the defendante' tissues and involved
the defendants in the danger of losing the whole or a part of
their market in America and Canada and the defendants were
justified in determining the agreement or agreements."
  The defendants also counterclaimed 214l. 18s. 8d. the
reasonable price of tissues actually delivered on March 24
and April 3 and 17, 1919.
  On February 8, 1922, an order was made in chambers
that the action should be transferred to the Commercial
List and that the Court should try all questions of liability,
except the issue whether in fact the plaintiffs did any of
the acts alleged in para. 20 of the defence, and construe all
agreements ;  and that all questions of damages and of the
matters alleged in para. 20 of the defence (if they should
become material) should be referred to an Official Referee.
  The case was heard on November 9 and 10 1922
  R. A. Wright K.C. and Conway for the plaintiffs.
  Disturnal K.C., Eastham K.C. and James Wylie for the
defendants.
  Nov. 10. BAILHACHE J. [after stating the facte]. The
question has been argued before me on the construction of
the document of 1913 alone.  Another question has been
raised on the pleadings---namely, that if as a matter of
construction the defendants were not at liberty to determine
the arrangement as suddenly as they did, they were justified
in so doing by the action of the plaintiffs.  No evidence
was called in support of this position ;  it is reserved for
the defendants to make it good, if they can, by calling the
necessary evidence. All I have now to deal with is the
document of July,  1913.
  The contest turns upon the clause which immediately
precedes the statement of prices ;  it is in these words, " This
arrangement is not entered into, nor is this memorandum
written as a formal or legal agreement and shall not be
subject to legal jurisdiction in the Law Courts either of the
United States or England but it is only a definite expxession
and record of the purpose and intention of the three parties
concerned to which they each honourably pledge themselves
with the fullest confidence, based on past business with
each other, that it will be carried through by each of the
three parties with mutual loyalty and friendly co-operation."
  The point taken by the defendants is that the arrange-
ment was not intended to be and was not a contract ;  that
if I look at the whole of it and treat it as a whole I shall
see plainly that the parties intended nothing in tbe nature
of a binding contract, nothing more than a mutual under-
standing ; that therefore it was quite open to them to
provide that there should be no legal obligation on either
party and consequently no recourses to the Courts of Law.
On the other hand the plaintiffs also contend that if I take
the document as a whole I must come to the conclusion
that it was intended to be and is a binding contract which,
apart from the clause I have read, would give either party
a right of recourse to the Courts of Law if that contract
was broken. Pursuing their argument they say where a
contract binding in law is to be found in an instrument,
if the parties in the same instrument violate that contract
by a clause which stipulates that there shall be no lead
liability on either side, that clause is void because it is
repugnant to the terms of the instrument, and the contract
remains.  They say if that clause means that there is to be
no legal liability on either side, the clause is repugnant,
because it goes further than merely qualifying, it actually
defeats the main purpose of the contract. They further
say that if the clause means that there shall be no recourse
to the Courts it is still void, because it is contrary to public
policy to give effect to that intention.
  I approach the construction of this document remembering
that the business which these three parties carried on was
a large, profitable and important business to them all, probably
more important to the plaintiffs than to the defendants;
that the relations between the plaintiffs and the defendants
J. R. Crompton & Brothers, Ld :--Brittains, had not yet
come into direct relation with the plaintiffs--were terminable,
with one exception, upon a reasonable notice, and were not
for any definite length of time; and that it was the wish of
the parties and particularly of the plaintiffs, to place the
business upon a surer foundation.
  Approaching the document with these facts in mind I
find that it says:  " As the business in carbonizing tissues
which is now being done"--[The learned judge read the
document to the words "as in the first period of three years,"
and proceeded:] As I have said that arrangement was
definitely continued till March 31, 1920.
Pausing there a moment, I take it to be quite clear that
what they have agreed to is this first part of the memorandum
is that the three contracts, which were only for one year and
which were terminable on reasonable notice, were to be put
on a different footing to this extent, that instead of being
subject to reasonable notice, they were to continue for a
period of three years, subject to six months' notice being
given before that date, and for a further period of three years
if no notice were given.  It is quite clear that the parties
intended not to weaken the existing contracts but to strengthen
them ;  not to alter them except in this respect that they
should continue for a definite time and for a further period
unless six months' notice were given to determine them.  If
the memorandum ended there I should not have the slightest
doubt in saying this was as clear a contract as there could
well be that the three contracts which were running should
continue to run for a period of time.
  The memorandum goes on :  " The agreement between the
three parties with respect to the business in carbonizing
tissuee is as follows, and any alteration or extention shilall
be subject to the mutual agreement of the three parties:---"
In what follows the parties, as I gather their intention, am
beginning to sweep into one document the provisionens of the
three letters which formed the three then existing contrnact
and to exprees in that one document what the course of
bu~i is to be.  The most of the document reads exactly
as I have suggested, except as regards some small matters,
relating to such special and distinctive grades of paper as may
be indicatsd by the plaintiffs which were not comprised in
the three letters.  There is nothing in this portion of the
memorandum to show that the contracts then existing
should cease to be contracts and should become simply
arrangements having no legal force or effect, an alteration
which would be directly contrary to the plaintiffs' objecct
not to weaken but to stengthen the ties which bound the
defendants to them.
  Then comes the clause which raises the question.  If the
first part of the documents expresses an arrangement which is
only to be binding in honour and; not in law, a hope or
expectation and nothing more, the clause undoubtedly
excludes the jurisdiction of the Courts. But I have come to
the conclusion that is not the proper way to read the document.
I cannot think that there business firms have taken the trouble
to write out a memorandum which is not to be worth the
paper it is written on ;  that notwithstanding the fact that the
three agreements were to be extended for three years certain,
any of the parties might the day after signing this document
have altered their minds and would yet have committed no
breach of contract against the other or others. That seems
to me an impossible position.  It is difficult to understand
how the plaintiffs allowed this clause to be inserted;  but having
come to the conclusion that the memorandum recites contracts
which were then binding and bimds the defendants to continue
those contracts for three years, and then possibly for another
three years, I have also come to the conclusion that, if this
clause means that notwithstanding this the parties are to be
under no legal obligtion, then it is repugnant to the main
intention of the memorandum and I must reject it.  I must
equally reject it if it merely purports to oust the jurisdiction
of the Courts.  My own view is that it has the larger meaning,
that the parties shall be under no legal obligation to each
other. That being so, and the earlier part of the document
being contractual and not merely expressive of a hope or
expectation, the clause, strange as it is and I think plain as
it is, is repugnant to the main object and scope of the contract
and must be rejected.
  That disposes of the case so far as I am concerned; but
I am wrong, the plaintiffs have another and a smaller claim.
At the end of January, 1919, before the defendants' sudden
change of attitude, the plaintiffs had, as was their custom,
sent orders for specific kinds and quantities of tissue paper
based on their proximate requirements for the next three
months or more:  They claim that, whatever the document
of July, 1913, may mean; those orders, which were accepted
before the defendants put an end to that document, consti-
tute contracts and must be fulfilled by the defendants. The
defendants point out that there must be some memorandum
in writing containing all the terms of these so-called con-
tracts before they can be enforceable ;  that the acceptance
is a simple acceptance of the orders as sent, and that the
orders do not sufficiently give the terms to satisfy s. 4 of the
Sale of Goods Act.  The orders are all substantially in the
and ship as soon as possible Toronto, Canada " ;  then follows
the description of the goods ;  then " Send all documents to
our New York office. Price     ."  It is said that the
conract between the parties contained terms which ought to
be, and are not, inserted in the memorandum:  First, that
the mode of delivery is not stated ;  but the words are " Enter
our order and ship."  I understand that to mean "Deliver
f.o.b." Next, that the prices are not specified ; but no
prices were definitely agreed ;  they were left to the defendants,
which means that they were to be fair and reasonable in the
circumstances.  That is what the law implies when a contract
is silent as to the price.  Obviously such a contract may be
made, and there can be no memorandum of that upon which
the contract is silent.  Therefore the fact that the price is not
defintely mentioned does not matter. Thirdly, it is said
that no time is named for payment;  but the next words are
" Send all documents to our New York office."  If the goods
were to be shipped f.o.b. I should take this to mean that
payment would be made after the documents reach the New
York office.  That is precisely the course of business that was
followed in this case.  Therefore I have come to the con-
clusion that, if I am wrung upon the first point, there were
sufficient memoranda in writing of the orders it in January
1919, to constitute those orders, when accepted contracts for
non-fulfilment of which the defendants must pay damages
  The formal judgment of the learned judge was drawn up
as follows :--
  (a) It was adjudged and declared that the agreement
          of July, 1913, mentioned in para. 8 of the statement
          of claim was a legally binding agreement against both
          defendants and that the orders mentioned the para. 18
          of the statement of claim constituteed legally binding
contracts against the defendants J. R. Crompton &
Brothers, Ld.;
(b) It was adjudged that judgment should be for the
    plaintiffs and that they should recover against the
    defendants the sum of 244l. 3s. 2d. mentioned in
    para. 17 of the statement of claim with costs of
    that issue up to the date of admission;
(c) It was ordered and dirsoted that all other issues
    remaining to be tried and the issues as to damages
    should stand over for trial by Bailhache J. or, if he
    could not take it, by another judge taking the
    Commercial List ;. and that the plaintiffs should have
    the casts of the hearing in any event;
(d) It was adjudged that there should be judgment
    for the defendants J. R. Crompton & Brothers, Ld.,
    on the counterclaim and that they should recover
    against the plaintiffs the sum of 2124l. 18s. 8d. with
    costs up to the date of admission ;
(e) It was ordered and directed that the taxation of
    costs should stand over snd that execution on the
    counterclaim should be stayed until the final judgment
    or further order;
(f) And it was further ordered that commission should
    proceed to Amerrica to take evidence upon the issue
    raised in paras. 18 and 20 of the defence.
    The defendants appealed against this judgment except
paras. (b) and (d) thereof.
  Sir John Simon K.C., Eastham K.C. and James Wylie
for the appellants.  The learned judge was wrong in holding
that the document of July,  1913, constituted a binding
contract.  Not every agreement is a contract.  A contract
results from a combination of agreement and obligation.
It is that form of agreement which directly contemplates
and creates an obligation. The oontractual obligation is that
form of obligation which springs from agreement: Anson
on Contract. (1)  " The agreement must be, in our old English
phrase, an act in the law :  that is, it must on the face of the
matter be capable of having legal effects.  It must be con-
cerned with duties and rights which can be dealt with by
a Court of justice.  And it must be the intention of the
parties that the matter in hand shall, if necessary, be so dealt
with, or at least they must not have the contrary intention.
An appointment between two friends to go out for a walk
or to read a book together is not an agreement in the legal
sense :  for it is not meant to produce, nor does it produce,
any new legal duty or right, or any change in existing ones " :
Pollock,  Principles of  Contract. (1)  " The agreement must
purport to produce a legally binding result " :  Holland,
Jurisprudence. (2)  Thus if the scope or area of agreement
does not include or contain submission to Courts of law and
reference to legal standards and sanctions, and a fortiori if it
excludes these, there is no contract.  Balfour v. Balfour (3)
is an example.  There the wife of a man resident in Ceylon
had to return to England for health;  the husband agreed
to allow her a certain sum per month during separation, and
it was held that she could not sue him om this agreement
for it was merely a domestic arrangement not intended to be
legally binding.  Taking the document of July, 1913, as a
whole the parties have very clearly expressed their intantion
not to be bound legally by its terms.
  The learned judge has held this expression of intention
to be repugnant to the main scope and purpose of the
document. No doubt a clause may be repugnant to the
rest of a contract, and if it is, it has no effect, and the contract
is still binding.  For example im Furnivall v. Coombes (4)
churchwardens covenanted to pay for repairs to the parish
church with a proviso that they were not to be personally
liable, but only as churchwardens, and it was held that the
covenant to pay being a personal convenant the proviso was
repugnant and void.  Again in Watling v. Lewis (5) on the
division of a partnership estate the trustees of one partner
  (1) 9t ed. (1921),pp.3,4,; and      (3) [1919] 2 K. B. 571.
see note (d) on p. 4.                 (4) (1843) 5 Man. & G. 736.
  (2) 12th ed. (1916), p. 278.        (5) [1911] 1 Ch. 414.

took as his share certain land subject to a mortgage, and
covenanted " as such trustees, but not so as to create any
personal liability on the part of them or either of them "
with the trustee of the other partner to pay the mortgage
debt and interest and to keep him indemnified from claims
and demands on account thereof, and the covenantee having
been called upon to make good a deficiency on the mortgage
debt sued the surviving covenantor ;  and it was held that
the defendant was personally liable. But where both
parties express their intentIon to be bound not in law but
in honour that intention is part of their agreement and cannot
be said to be repugnant to it.  The mistake the lied
judge has made is in considering the document piece-meal.
He has taken the first paragraph of the document and
discovered in that an intention to strengthen the previous
relations, which he holds to have been contractual relations,
between the parties. But in the first place there never
were any previous contractual relations between the respond-
ents and Brittains, Ld.  They were entitled to enter into
such relations as suited them.  In the second place there
is considerable doubt whether the relation between the
respondents and J. R. Crompton & Brothers, Ld., was
contractual. Thirdly it is not to be inferred from the
fact that the period of relations is extended that the
arrangement is necessarily a binding agreement; and
fourthly it is not a proper canon of construction to con-
sider part of a document and, having inferred an intention
from that part, discard as repugnant every indication to
the contrary in the rest of the document:  Hussey v.
Horne-Payne. (1)
  The invalidity of the documemt of July, 1913, as a legal
contract does not involve the legal validity of the previous
engagements. It is not admitted that they constituted
binding contracts; that question has yet to be decided;
but if they did the contracts were superseded by the docu-
ment of 1913; for an agreement, though not a binding
contract, may yet operate to rescind an existing contract:
(1)(1879) 4 App. Cas. 311, 316.
arrangement is not entered into " is repugnant to that
intention and shondd be rejected ut res magis valeat quam
pereat: 1Furnivall v. Coombes (1) ;  Williams v. Hathaway (2) ;
Watling v. Lewis (3) ;  Forbes v. Git (4) ;  Scott v. Avery. (5)
  In executing the document of July, 1913, the parties never
intended that the former contracts should be abrogated.
Their intention was that those contracts should continue
and be made more permanent and secure.  The last thing
they intended was that if the document failed as a contract
its invalidity should infect the contracts it was designed to
confirm and strengthen.
  [BANKES L.J.  The learned judge's view of that document
made it unnecessary for him to decide whether the earlier
arrangements, assuming them to have been contracts, were
superseded.  The question depends on the intention of the
parties, a question of fact :  Noble v.  Ward (B) ;  which we
cannot decide without hearing evidence.]
  Sir John Simon K.C. in reply.  The question whether the
arrangements before July, 1813, assuming they were con-
tractual, were superseded by the document of that date is no
doubt a question of fact;  but the evidence on the question
consists of correspondence between the parties and the effect
of the document--matter which can very conveniently be
considered in this Court.  The changes introduced by that
document lead to the inference that the former relations were
abrogated. The introduction of Brittains, Ld., the contin-
uance of relations for this years, the objection to be raised
by J. R. Crompton 6 Brothers, Ld., if the Webster Co. of
Boston should offer for purchase in its unprepared sate paper
which they have bought from J. R. Crompton & Brothers Ld.,
the understanding that the respondents will confine their
purchases to the appellants the undertaking by the appellants
as to the body of business to be done between the parties,
the provision relating to the cheaper carbonizing papers, and
the alteration in prices and in the period for which prices are
  (1) 5 Man. & G. 736.     (4) [1922] 1 A. C. 256.
  (2) (1877) 6 Ch. D. 544  (5) (1856) 5 H. L. C. 811.
  (3) [1911] 1 Ch. 414.    (6) (1867) L. R. 2 Ex. 135.
to be quoted: these numerous provisions lead to one
conclusion, that the former relations were terminated and
that a new course of business was to take their place.
                                          Cur. adv. vult.
  March 23. The following written judgment were
delivered :---
  BANKES L.J.  This is a curious case.  The plaintiffs carry
on business in New York as dealers in carbonizing papers, and
the defendants are manufacturers of this class of papers in
this country.  For a number of years before July, 1913, the
plaintiffs and the defendants, Cromptons, had done business
together in the export of these papers to the United States:
The terms upon which the business was carried on are referred
to in correspondence which parassed between the two firms.  It
is a matter in dispute whether this correspond const-
tuted a contract, or a series of contracts, between these
parties---this is a matter which has yet to be tried---but for
the purpose of my judgment, and in order to test the main
question from the point of view most favourable to the
respondents,  I will assume (without deciding) that these
business relations at that time between tbese parties were
contractual relations, using that exprssion in its strict legal
sense as involving a legal liability upon the parties to perform
their agreements.  A quantity of the paper supplied by the
defendants Cromptons to the plaintiffs was manufactured by
the defendants Britains.  In the early part of 1913 the
plaintiffs were apparently anxious to get into direct business
relations with the defendants Brittains, and to secure some
assurance of a longer continuance of business relations than
they at that time had with the defendants Cromptons.  A
draft of an agreement was prepared, apparently by the
plaintiffs, or on their behalf, which bears date January 1,
1913. (1)  The parties appear to have worked on this
draft, and  by the end of June, or the beginning of July,
the three parties had agreed upon the terms of the
                  (1) See note on p. 299. post.
document upon which the main question in the action turns.
The plaintiffs allege that the document is a contract in the
strict sense of the word, involving each of the parties to it
in a legal obligation to perform it.  The defendants, on the
other hand, say that the document is nothing of the kind,
because it expressly provides that it shall not involve any of
the parties in any legal obligation to perform any of its terms.
There is, I think, no doubt that it is essential to the creation
of a contract, using that word in its legal sense, that the
parties to an agreement shall not only be ad idem as to the
terms of their agreement, but that they shall have intended
that it shall have legal consequences and be legal enforce-
able.  In the case of agreements regulating business relations
it follows almost as a matter of course that the parties intend
legal consequences to follow.  In the case of agreements
regulating social engagements it equally follows almost as
a matter of course that the parties do not intend legal conse-
quences to follow.  In some cases, such as Balfour v.
Balfour (1), the law will, from the circumstances of the case
imply that the parties did not intend that their agreement
should be attended by legal consequences. It no doubt
sounds in the highest degree improbable that two firms in
this country, arranging with a firm in the United States the
terms upon which a very considerable business should be
carried on between them over a term of years, should not have
intended that their agreement as to those terms should be
attended by legal consequences.  It cannot however be denied
that there is no reason in law why they should not so provide,
if they desire to do so.  The question therefore in the present
case resolves it into a question of construction. I see
nothing in the surrounding circumstances which could justify
an interpretation of the language used by the parties in
the document of July, 1913, in any other than its ordinary
meaning.  The document itself is a curious one from a drafting
point of view.  A skilled draftsman could easily
rendered the discussion which has taken place in the Court
below and in this Court impossible. As it is, the draftsman
appears at times to have remembered, and at times to have
lost sight of, the object he is alleged to have had in view.
For instance, the document opens with a clause apparently
studiously worded to avoid the usual appearance of a
contract. The draftsman then adopts language which at
times is strongly suggestive of a contract, and at times
indicates something other than a contract. Then follows
concludes with language suggestive of a contract.  What I
have called the governing clause is not couched in legal phrase-
ology.  A great deal more is said than need have been said
in order to record the intention of the parties.  I read it as
a genuine attempt by some one not a skilled draftsman to
go much further than merely providing a means for ousting
the jurisdiction of the Courts of law.  There is no ground for
suggesting that the language used in the clause is not a bona
fide expression of the intention of the parties.  If so, it appears
to me to admit of but one construction, which applies to and
dominates the entire agreement.  The intention clearly
expressed is that the arrangement set out in the document
is only an honourable pledge, an that all legal consequences
and remedies are excluded from it.  If this is the true con-
struction of the clause, it must govern the entire arrangement,
and there is consequently no room for the principle upon
which the learned judge decided this part of the case.
would no doubt have simplified matters if the clause in question
had been inserted at the head of the document, or even at
the end, rather than in the position it occupies.  I attribute
its position to the want of that skill in drafting of which
the document affords plenty of evidence rather than to any
want of bona fides in the language used.  Once it is estab-
lished that the language of the clause is the bona fide
expression of the intention of the parties, the matter is in
my opinion concluded, and it becomes manifest that no
action can be maintained upon the agreement contained in
the document of 1913.
  The next point which arises for decision is whether the
pre-1913 arrangements are still in existance, and if in
existence, whether they are enforcable. The point was
partly argued before us, and reference was made to Noble v.
Ward (1) and to whit Willes J. there said in reference to
rescission of one agreement by the substitution of another.
His view of the law that the question would be one for a jury
was cited with approval in Morris v. Baron & Co. (2)  When
this point was urged before us, we did, I think, intimate to
counsel that this point must be tried, and that we did not
propose to decide it. Whether this was a wise decision
on our part I am not prepared to say, but after consideration
I am satisfied that it is better to leave the matter as it stands
than to direct any further argument upon it.
  The last point involved in the appeal is as to the so-called
orders referred to in para. 1-8 of the statement of claim.
Bailhsche J. has decided that these orders were accepted
by the defendants Cromptons, and when accepted because
contract legally binding upon these defendants, though
not upon the defendants Brittains.  The bulk of these orders
were given in January, one in February; and the rest in
March, 1920.  It appears from the correspondence that in
December of 1918 the defendants Cromptons were applying
to the plaintiffs as to their probable requirements for the
coming year, because when they were ascertained Messrs.
Brittains " would do their best to make the most helpful
arrangements possible." (See Cromptons' letter, Decem-
ber 3.)  On January 23, 1919, the plaintiffs write to Messrs.
Brittains saying that they had not made up their seasons
orders, as they were awaiting Messrs. Brittains' view of
the situation and the probabilities of the quantities that
they could furnish for the coming year. On the next day,
the 24th, the plaintiffs send to the defendants Cromptons
twenty-four orders for papers of Brittains' make, and eight
orders for papers of Cromptons' make, and on the same day
they send to the defendants Brittains copies of the orders
for their make of paper sent to the defendants Cromptons,
and they end their letter as follows: "We have made no
mention of price, as we take it for granted that you will adjust
these in accordance with conditions which we hope are such
that there will be no further advance, but probably gradual
reduction." On February 7 the plaintiffs write to the
defendants Cromptons inclosing one order for their make
of paper, and telling them that they were awaiting advice
from Messrs. Brittains " as to the possibility of production
during the coming year."  On February 12 the defendants
Cromptons acknowledge the receipt of the plaintiffs' letter
of January 24 containing the thirty-two orders.  The letter
is in these terms :  " Dear Sirs, we beg to acknowledge receipt
of your favour of the 24th ulto., contents of which are duly
noted.  We also thank you for the 24 orders for 286 cases of
Messrs. Brittains' papers, and 8 orders for 64 cases of our
paper, to all of which we will give our beet attention, and
Messrs. Brittains write us with regard to the orders for their
papers that they are endeavouring to let you have deliveries
this year up to at least the full 100% for the standard year
ending February 28, 1918, but that at the moment conditions
are particularly uncertain. Nevertheless, they would like
us to assure you that they would give their most careful
attention to your requirements, and endeavour to let you
have the fullest output they possibly can, and they add
that time will make the position clearer."  During all this
time the parties were discussing the period for which the
1913 arrangement was to continue, and on March 11 the
plaintiffs in their letter of that date, which enclosed the last
six orders relied on, say this :  " We agree with the suggestion
of Messrs. Brittains acquiessed in by you, that the agreement
between us be extended to March 30, 1920, and that notice
to amend or terminate the agreement must be definitely
given by any of us before September 30, 1919"
  Under these circumstances it appears to me manifest that
these so-called orders were really requisitions under the
existing 1913 agreement, intended to be orders to be executed
by both the defendants under that agreement, the acknow-
ledgment of the receipt of which by the defendants ~Crompton
did not give them the contractual force against one of the two
defendants only which, but for the existence of the agreement,
  Now it is quite possible for parties to come to an agreement
by accepting a proposal with the result that the agreement
concluded does not give rise to legal relations. The reason of
this is that the parties do not intend that their agreement
shall give rise to legal relations.  This intention may be
implied from the subject matter of the agreement, but it may
also be expressed by the parties.  In social and family
relations such an intention is readily implied, while in business
matters the opposite result would ordinarily follow.  But I
can see no reason why, even in business matters the parties
should not intend to rely on each other's good faith and honour,
and to exclude all idea of settling disputes by any outside
intervention, with the accompanying necessity of expressing
themselves so precisely that outsiders may have no difficulty
in understanding what they mean.  If they clearly express
such an intention I can see no reason in public policy why
effect should not be given to their intention.
  Both legal decisions and the opinions of standard text
writers support this view.  In Balfour v. Balfour (1) the Court
declined to recognize relations of contract as flowing from an
agreement between husband and wife that he should send her
30l. a month for her maintenance. Atkin L.J., speaking of
agreements or arrangements between husband and wife
involving mutual promises and consideration in form, said
" They are not contracts because the parties did not intend
that they should be attended by legal consequences." In the
early years of the war, when a member of a club brought an
action against the committee to enforce his supposed rights
in a club golf competition. I non-suited him; for the same
reason, that from the nature of the domestic and social
relations. I drew the inference that the parties did not intend
legal consequences to follow from them: Lens v. Devonshire
Club. (2)  Mr. Leake says (3) that "an agreement as the
source of a legal contract imports that the one party shall
be bound to some performance, which the latter (sic) shall
have a legal right to enforce." In Sir Frederick Pollock's
language (1) an agreement to become enforceable at law must
" be concerned with duties and rights which can be dealt
with by a court of justice.  And it must be the intension of
the psrties that the matter in hand shall, if necessary, be so
dealt with, or at least they must not have the contrary
intention."  Sir William Anson requires in contract " a
commnon intention to affect" the legal relations of the parties.
  Judged by this test, I come to the same conclusion as the
learned judge, that the particular clause in question shows
a clear intention by the parties that the rest of their arrange-
ment or agreement shall~ not affect their legal relations, or be
enforceable in a Court of law, but in the  words of the clause,
shall be "only a definite expression and record of the pur-
pose and intention of the three parties concerned to which
they each honourably pledge themdelves," " and shall not be
subject to legal jurisdiction."  If the clause stood first in the
document, the intention of the parties would be exceedingly
plain.
  The cases cited to us to the contrary were cases in which
the form cf the other part of the document, as a covenant
in a deed, or a grant of a right in property in legal terms,
clearly showed an intention to create a legal right, and where
subsequent words, purporting not to define but to  negative
the creation of such a right, were rejected as repugnant.  In
Ellison v. Bignold (2), where the parties under seal "resolved
and agreed and did by way of declaration and not of covenant
spontaneously and fully consent and agree," Lord Eldon laid
aside "the nonsense about agreeing and declaring without
convenanting."  An agreement under seal is quite inconsistent
with no legal relations arising therefrom.  And in the present
case I think the parties, in expressing their vague and
loosely worded agreement or arrangement, have expressly
stated their intention that it shall not give rise to legal re-
lations, but shall depend only on mutual honourable trust.
This destroys the decision of Bailhache J. so far as it is based
on the view that the document of 1913 gives rise to legal
rights which can be enforced.
    (1) 9th ed. (1921), p. 3.      (2) (1821) 2 Jac. & W. 503, 510.
  It was unnecessary for the judge below to decide the next
point, whether, if the 1913 document gave rise to no legal
rights, the earlier agreements which contained no similar
clause could be enforced.  This turned on whether the parties
in coming to the agreement of 1913 intended to rescind the
earlier agreements except in so far as they were incorporated
in the new agreement, and even then only to continue them
as honourable obligations.  It follows from Morris v. Baron
& Co. (1) that a valid contract may be rescinded by an agree-
ment unenforsable in law, the test being whether the parties
intend to rescind the old agreement, replacing it by a new
agreement which may incorporate many of the old terms,
or merely to vary the old agreement which remains effective
except in so far as it is varied :  see per Lord Sumner, British
and Beningtons v. North Western Cachar Tea Co. (2)  Morris v.
Baron & Co. (1) also says that the intention of the parties would
be a question of fact, though the House of Lords themselves
decided the question of fact: see per Lord Haldane.  I have
carefully considered the documents and the forcible argumetn
of Sir John Simon on this point, and have come to the con-
clusion that the parties who transformed a contract between
two parties into an honourable arrangement between three
parties incorporating some parts of the old arrangement,
varying others, and adding fresh terms, clearly intended to
abandon or rescind the old arrangement and leave their
relations depending on the new honourable understanding
of 1913. Any alternative claim on the documents before
1913 therefore fails.
  I should have been prepared, if the other members of
the Court had thought it right, to hear counsel for the
respondents further on this point. We intimated during their
argument that we were with them on this point, but this,
of course, could not be final as we had not then heard Sir
John Simon in reply.  On hearing him I was much impressed
by his argument, though I needed to look at the documents
carefully to form a final opinion.  I made a mistake in not
asking Mr. Wright to complete his argument, and should
(1) [1918] A. C. 1, 21.  (2) [1923] A. C. 67.
have been ready to rectify it by hearing any further arguments
he wished to add; but as my Lord thinks it better to have a
new trial on this point, I can only say that my own opinion
is as above stated.  Though rescission is a question of intention
and therefore of fact, the House of Lords decided it in
Morris v. Baron & Co. (1) without sending the matter for a new
trial. What the document containing the engagement of
honour means is not a question on which evidence is admis-
sible ; nor is the question what the earlier letters mean;
and what the two together mean can, I think, be decided
without further evidence.  Nor am I impressed by the argu-
ment that Bailhache J. reserved further questions to himself.
He did not intend to decide this question at any time, for
his original decision had rendered it unnecessary.  If it rested
with me, I should decide the question in favour of the
appellants.
  The remaining question is the claim in para. 18 of the
statement of claim, for damage for the non-delivery of the
whole of the undelivered part of the goods said to be legally
due under some thirty-two specified orders.  As to these,
a question was raised by the defendants at the trial under
the Sale of Goods Act, 1893, which was abandoned before
us. The judge below, deciding that the agreement of 1913
was legallu enforceable, held that any facts giving a legal
answer under the agreement would also give a legal answer
to the claim under the separate orders. But he said that had
he held the arrangement of 1913 not enforceable in law he
would have held that legal claim arose under the specific
orders. For if they were given under an unenforceable
able in law, I have now to consider the position of the separate
orders.  For if they were given under an unenforceable
arrangement, they may so far as not executed partake of the
character of the overriding agreement under which they
came into existence.
 The clause in the agreement of 1913 relating to the supply
of goods to Messrs. Rose & Frank for which they have the
sole agency in the United States appears to run as follows:
  (1)  [1918] A. C. 1, 21.
Rose & Frank agree that the volume of business in any year
shall not fall in any year below the average of three years,
1910 to 1912, " without such explanations as shall be con-
sidered satisfactory" by Cromptons and Brittains.  The later
two firms on their part agree that they will " subject to unfore-
seen circumstances and contingencies do their best . . . .
to respond efficiently and satisfactorily to the calls of Messrs.
Rose & Frank Co. for deliveries both in quantity and quality."
Accordingly in December, 1918, the English manufacturers
are asking for Rose & Franks " prospective requirements,"
and on January 24, 1919, Messrs. Rose & Frank send some
thirty-two orders for deliveries, for various dates some as
far ahead as October 1, 1918.  They say they have not yet
determined the full quentity of paper they will require in the
year, but send orders which will cover part of their wants.
Messrs. Crompton, on February 12, 1919, write a letter which
appears to me fully to carry out the vague arrangements in
honour which I have held to be constituted by the arrange-
ment of 1813, but, as made under that arrangement in honour,
to give rise to no legal obligation.  It runs as follows :  "We
beg to acknowledge receipt of your favour of the 24th ulto.
contents of whioch are duly noted.  We also thank you for
the 24 orders for 286 cases of Messrs. Brittains papers, and
8 orders for 64 cases of our paper, to all of which will give
our best attention, and Messrs. Brittains write us with regard
to the orders for their papers that they are endeavouring to
let you have deliveries this year up to at least the ~full 100
per cent. for the standard year ending February 28, 1918, but
that at the moment conditions are particularly uncertain.
Nevertheless they would like us to assure you that they would
give their most careful attention to your requirements, and
endeavour to let you have the fullest output they possibly
can, and they add that time will make the position clearer."
This I cannot construe as a binding acceptance of a legal
proposal.  It is, in my opinion, an assurance that the suppliers
will do their best to comly with the probable requirements
of the agents, but do not bind themselves as conditions are
particularly uncertain.  So far as delivery was made and

accepted, legal consequences as to payment of price would
follow, but I think there is no legal remedy for non-delivery.
  In my view, therefore, the judgment of Bailhache J.
ordering that the issue of libility for damage under the
" legally binding agreement " of 1813 and the special orders
shall be tried by himself, should be reversed.
  The judgment for 224l. 3s. 3d. for the plaintiffs, and
2124l. for the defendants with costs stand. The defendants
should have the costs of the hearing to date here and below.
  ATKIN L.J. The first question in this case is whether
the document signed by the defendants on July 11, 1913,
with a counterpart signed by the plaintiffs on August 12,
1913, constituted a contract between the parties.  To create
a contract there must be a common intention of the parties
to enter into legal obligations, mutually communicated
expressly or impliedly.  Such an intention ordinarily will
be inferred when parties enter into an agreement which in
other respects conforms to the rules of law as to the formation
of contracts.  It may be negatived impliedly by the nature
of the agreed promise or promises, as in the case of offer and
acceptance of hospitality, or of some agreements made in
the course of family life between members of a family as
in Balfour v. Balfour. (1)  If the intention may be negatived
impliedly it may be negatived expressly. In this document,
construed as a whole, I find myself driven to the conclusion
that the clause in question expresses in clear terms the
mutual intention of the parties not to enter into legal obli-
gations in respect to the matters upon which they are
recording their agreement. I have never seen such a clause
before, but I see nothing necessarily absurd in business men
seeking to regulate their business relations by mutual
promises which fall short of legal obligations, and rest on
obligations of either honour or self-interest, or perhaps
both. In this agreement I consider the clause a dominant
clause, and not to be rejected, as the learned judge thought,
on the ground of repugnancy.
     (1) [1919] 2 K. B. 571.
I might add that a common instance of effect being given
in law to the express intention of the parties not to be bound
law is to be found in cases where parties agree to all the
necessary terms of an agreement for purchase and sale, but
subject to a contract being drawn up.  The words of the
preliminary agreement in other respects may be apt and
sufficient to oonstitute an open contract, but if the parties
in so agreeing make it plain that they do not intend to be
bound except by some subsequent document, they remain
unbound though no further negotiation be contemplated.
Either side is free to abandon the agreement and to refuse
to assent to any legal obligation ;  when the parties are bound
they are bound by virtue only of the subsequent document.
On this, the main question, I agree with the judgments of
the other members of the Court.
  The plaintiffs have an alternative claim against the
defendants, J R. Crompton & Bros., Ld. They say that
before 1913 they had been for years doing business with
these defendants on the terms of binding agreements ter-
minable on notice, and that if the arrangements made in
August, 1913, did not result in contractual relations, the
contracts in existence at that date have never been termin-
ated, and they sue for their breach. The defendants,
Cromptons, by their defence, para. 12, content themselves
with a denial that the agreement in question were in force
in 1919, the date of the alleged breach.  They do not allege
notice to $terminate; nor do they allege rescission, as I
think technically they should;  but their case in substance
is that the former agreements were rescinded by mutual
consent when the arrangment of August, 1913, I made.
If the document of August, 1913, were a contract, there
would, I think, be no doubt that the true inference in law
would be that by entering into fresh contractual obligations
coveing the whole field of the former contract, the parties
must be taken to have agreed to rescind the former contracts.
But we have now to assume that there were no contractual
obligations undertaken in 1913, and the question is, What was
the effect of the new arrangement upon existing contracts ?
This seems to me to be the right point reserved by Lord
Atkinson in Morris v. Barron & C. (1), where he is considering
the effect upon a written contract for the sale of goods of a
subsequent parol contract inconsistent with the terms of
the first.  " If the parol agreement were absolutely void
it might possibly be otherwise;  but owing to the terms of
s. 4 of the Sale of Goods Act, 1893, this latter question does
not arise in this case, and it is not, in my view, necessary
to decide it."  There seems to be no difference in principle
between a void contract and an agreement which is not a
contract;  the essence of the matter is that in neither case
do the purported stipulations result in legal obligations
  The question raised appears to me difficult.  I think it
quite conceivable that a man whose express object was that
" assured arrangements should be made for the supply of
paper for some considereble period ahead night assent to
an honourable understanding extending the period of agency,
but might be unwilling to relinquish the only substantial
rights he had in his existing agreements; and I think the
repeated reference in the record of the honourable under-
standing to the continued existence of present arrangements
would encourage this view.  On the other hand, I also think
it conceivable, though I personally should think it improbable,
that a man having the avowed object referred to would
abandon his legal rights for the benefits he hoped to get under
the new arrangement.  But whatever the true view is, I am
of opinion that this Court is not in a positionn to decide the
question for three reasons.
  It is plain from the decision in Morris v. Brown & Co. (2)
adopting the judgment of Willes J. in the Exechequer
Chamber in Noble v. Ward (3), that the question of rescission
is a question of fact; in Noble v. Ward (3) a question for the
jury :  see per Lord Finlay (4) and Lord Haldine. (5)  On
this question of fact I do not think we are sufficiently
informed of the relevant circumstances to pronounce.  It
  (1) [1918] A. C. 1, 30           (3) L. R. 2 Ex. 135.
  (2) [1918] A. C. 1.              (4) [1918] A. C. 10.
                    (5) [1918] A. C. 18.
would be necessary to consider what the actual existing
contracts were, as constituted by letters and modified, if at all,
by subsequent correspondence and course of business.  It
would be further necessary to consider the circumstances
under which the arrangement of July, 1913, was made, and
the conduct of the parties under it.  The question, though
raised in the pleadings and mentioned to the learned judge,
was not considered by him, as his construction of the contract
made it unnecessary.  Some, but very few, of the relevant
letters were read before us, the discussion being limited on
behalf of the plaintiff for the reason hereinafter given.  Under
the circumstances, I should come to the conclusion that this
matter should be ordered to be retried, even if the two
following considerations were not, as I think they are,
conclusive
  The judgment in this case provides for a declaration that
the agreement of July, 1913, is a legally binding agreement,
and that the orders mentioned in para. 18 of the statement
of claim constitute legally binding contracts against the
defendants, Crompton & Bros., Ld., and then provides that
all other issues remaining to be tried should stand over for
trial by Bailhache J, or other Judge taking the Commercial
List.  This latter provision gave effect on the agreement of the
parties expressed at the trial after the judgment was given. If
the learned judge's judgment is reversed as to the declaration
of the validity of the agreement of July, 1913, the point as to
rescission is an issue remaining to be tried:  It never has been
tried by the learned judge and, in my opinion, should be tried
by him, or some other judge taking the Commercial List,
according to the terms of the judgment, and should not be
tried by the Court of Appeal.
  On the hearing of the appeal we stopped Mr. Wright,
counsel for the plaintiff on this point, and intimated that we
should send the action back to the learned judge for hearing
on the question of rescission.  Sir John Simon, in reply,
adduced reasons why we should decide this point in his
clients' favour, but he did not, as far as I am aware, alter our
decision, and Mr. Wright was given no opportunity to discuss
man receiving the letter of February 12 would understand
that the writers were making their acceptance conditional
on Brittains choosing to supply the goods. If Messrs.
Cromptons meant to convey that after using the previous
formula, they should have used much more definite language.
The remaining orders are order 4661, an order for goods
" as soon as possible," sent on February 7 and accepted
on February 25 :  " We thank yon for your order . . . .
and we will endeavour to get this through during the next
three or four weeks," and six further orders for Brittains'
paper sent on March 11, three " at once,"  and three for
July 1 accepted on March 29, 1919:  " We thank you for
the six orders for Messrs. Brittains' paper which we have
passed on to them, and the same will have their best
attention."  It may be noticed that some of the orders so
sent, and, as I think, so accepted, were in fact executed
The dispute is as to the large balance that remained un-
executed.  In my view this is a very plain case of acceptance
of a written order, and I entirely agree with the judgment
of Bailhache J. on this part of the claim.  I should vary
the order of Bailhache J. by declaring that the agreement
of July, 1913, is not a legally binding agreement, but
otherwise I should leave the order as it is, allowing the
question of rescission to be tried under the order as one of
the "other issues remaining to be tried," and I think that
there should be no costs of the appeal, but as the other
members of the Court have come to a different conclusion,
the order will be as proposed by them.
                                        Appeal allowed.
  Solicitors for appellnts :  Rawle, Johnstone & Co., for
Addleshaw, Sons & Latham, Manchester.
  Solicitors for respondents:  Collins & Crosse.
ROSE AND FRANK COMPANY  .  .  APPELLANTS;
                  AND
J. R. CROMPTON AND BROTHERS,
                                RESPONDANTS
   LIMITED, AND OTHERS .  .  .
                 ET E CONTRA.
Contract--Animus contrhendi--Agreement binding in Honour--Ousting
  the Jurisdiction--Repugnancy.
  By successive arrangements made before 1913 between an American
agents for the sale in the United States and Canada of tissues for car-
bonising paper supplied by the English company. The greater part of
these tissues was manufactured for this English company by another
English company.  By an arrangement made between the American
firm and both English companies in 1913 the English company expressed
their willingness that the existing arrangemants with the American firm,
which were then for one year only, should be continued oa the same
lines for three years and so on for further periods of three years, subject
to six months' notice.  This document  after setting out the understanding
between tha parties, including several modifications of the previous
arrangements, proceeded as follows :  " This arrangement is not entered
into, nor is this memorandum writtan, as a formal or legal agreement,
and shall not be subject to legal jurisdiction in the Law Courts either

of the United States or England, but it is only a definito expression
and record of the purpose and intention of the three parties concerned,
to which they eaoh honourably pledge themselves, with the fullest
confidence--based on past business with each other---that it will be
carried through by each of the three parties with mutual loyalty and
friendly co-operation.  This is hereinafter referrod to as the ' honour
pledge ' clause."
  Disputes having arisen between the parties, the English companies
determined this arrangement without notice.  Before the relations
between the parties were broken off the American firm had given and
the first mentioned English company had accctod obtain orders for
goods.  In an action by the American firm for breach of contract and
for non-delivery of goods:--
  bed (1.) That the arrangement of 1913 was not a legally binding
contract.  (2.) That  at  the date  of  the  arrangemcnt  of  1918  all
previous agreements were determined by mutual consent, but (3.) That
the orders given and accepted constituted enforceable contracts of
sale.
  Order of the Court of Appeal [1923] 2 K. B. 261 reversed.
  APPEAL from an order of the Court of Appeal (1) reversing
an order of Bailhache J.
an order of Bailhache J.
  The appellants carried on business in New York as dealers
in tissues for carbonising papers.
  The respondents, J. R. Crompton and Brothers, Ld. (herein-
after called " Cromptons"), and the respondents, Brittains  Ld.,
were English manufacturers of tissues for carbonising papers,
but the last named respondents manufactured exclusively
for Cromptons.
  The facts arc fully stated in the report of thc case before
the Court of Appeal and sufficiently appear from the opinion
of Lord Phillimore.
  The appellants sued both the respondents for damages
for breach of contract and for damages for non-delivery of
goods. By their statement of claim they alleged a series
of agreements made between 1907 and 1911 between them
and the respondents, Cromptons, whereby the appellants
were to have the sole sale in certain areas of certain kinds
of tissues manufactured or sold by the respondents.  They
also alleged am agreement of July, 1913, between the appellants
and both the respondents under which both the respondents
agreed to confine the sale of their tissues in certain areas
  (1) [1923] 2 K. B.261.
exclusively to the appellants.  This agreement contained the
honourable pledge clause set out in the headnote. They
also alleged breaches of this agreement in 1918 and 1919, and
that in May, 1919, the respondents had wrongfully repudiated
this agreement.  Alternatively, they alleged that, if the 1913
agreement was not valid, the earlier agreements with the
respondente Cromptons were still in force in 1919, and that
the breaches alleged were breaches by these respondents of
thoee agreements. They also alleged that in January,
February and March, 1919, they had given and the respondents
Cromptons had eccepted a series of orders for tissues, and
that these respondents had failed to deliver part of the
goods so ordered.
  The respondents by their defence denied that the 1913
arrangement was a legally binding contract or that the
previous agreements continued in force after the 1913
arrangement, or that the alleged orders and acceptances
constituted legally binding contracts, and pleaded that by
virtue of, or, alternatively, at the date of, the 1913 agreement
all the previous agreements were determined by mutual
consent, and that the appellants were estopped from relying
upon them.
  Bailhache J. held that the 1913 arrangement was a legally
binding contract, and he further expressed the view that the
orders and acceptances also constituted legally binding
contracts, and so declared in his judgment.
  The Court of Appeal (Bankes, Scrutton and Atkin L.J.)
were unanimous in holding that the 1913 arrangement was
not legally binding, and they also held by a majority
(Atkin L.J. dissenting) that the orders and acceptances did
not constitute legally binding contracts.  The Court declined
to decide whether the pre-existing agreements continued in
force after the 1913 arrangement,  and thought that this matter
should ba left to be determined by the Court of first instance.
There was a cross appeal on this point by the respondents
Cromptons, who asked that it might be declared that the
pre-existing agreements had ceased to be binding on the
parties after the arrangement of 1913.
  1924.  June 23, 24, 25.  R. A. Wright K.C. and C. J. Conway
for the appellants. The agreement of 1913 was introduced
after several temporary contracts to stabilize the position of
the appellants and, apart from the final clause, it is a legally
binding contract.  The honour clause, if construed as depriving
the document of any legal force, is inconsistent with the
repugnancy: Sheppard's Touchstone, 8th ed., vol. ii  c. 21
s.4 p. 373; Forbes v. Git t33; Furnival v. Coombes (2);
Williams v.Hathaway. (3)  Balfour v. Balfour (4) is distin-
guishable, because that was a case of a family arrangement
and the parties were not at arm's length.  When once there
is found to be a bargain between the parties, that cannot
be nullified by words such as those used in the concluding
clause of this agreement. Further, that clause is an attempt
to oust the jurisdiction of the Court, and is therefore void:
Scott v. Avery (5); Atlantic Shipping and Trading Co. v.
Louis Dreyfus & Co. (6); Czarnikow v. Roth, Schmidt & Co. (7)
On the question whether, on the assumption that the main
contract is bad, the pre-existing contracts were determined
the Court of Appeal took the view that this was a separate
issue and declined to express anyopinion upon it because it
had not been discussed in the Court of first instance and the
appellants accept that view.  The point not having been
dealt with in either of the Courts below, this House will not
treat it as open.  As to the orders, they are not the less
enforceable contracts of sale because the exclusive agency
agreement is not legally enforceable.
  Sir John Simon K.C.  and Clauson K.C.  (with them
Eastham K.C. and James Wyllie for the respondants and the
appellants on the cross appeal.
  [EARL OF BIRKENHEAD. Their Lordships do not desire to
hear you on the main point.]
  Assuming that the respondants are right on the main point,
the question arises whether the earlier arrangements survive.
  (1) [1922] 1 A. C. 256,259.        (4) [1919] 2 K.B. 571.
  (2) (1843) 5 Man.& G. 736.         (5) (1856) 5 H.L.C. 811.
  (3) (1877) 6 Ch. D. 544.           (6) [1922] 2 A.C. 250.
                  (7)  [1922] 2 K.B. 478,485.
If the arrangement of 1913 is meant by all the parties thereto
to be binding in honour only it is inconceivable that the old
arrangemente should be held to survive.  The arrangement
of 1913 being by its express terms unenforceable, it would
be absurd to go back to the old arrangements:  The inevitable
inference from the document of 1913 is that when the parties
put their business arrangements on a basis of honour they
contemplated putting an end to the old agreements.  This
was a new arrangement with new parties and new terms,
and it has been acted on for several years.  [They cited
British and Beningtons v. North Western Cachar Tea Co. (1) ;
Morris v. Baron & Co. (2);  Pearl Mill Co. v. Ivy Tannery
Co. (3)]  This point could only be decided in one way,
and the Court of Appeal ought to have decided it.  There
was no occasion for any further trial.  As to the orders, no
legal obligation arose at any times before the goods were
shipped. There was no intention on the part of Cromptons
to accept a legal obligation in regard to delivery.  Assume
that the honour agreement had been a legally binding agree-
ment, its terms could have been embodied in the contract
resulting from the giving and acceptance of an order. So,
this being an honour agreement, its terms are still incorporated,
but they have no binding effect.
  C. J. Conway in reply on the main appeal and for the
respondents on the cross appeal.  The question whether the
agreement of 1913 abrogated the earlier agreements was not
open to the Court of Appeal, as the point had not been taken
in the Court below.  Assuming that the point is now open,
an honourable understanding cannot have effect as an
agreement that the old agreements should not survive.
Morris v. Barron & Co. (2) is distinguishable, because there there
was a contract, although it could not be enforced, because it
was not in writing as required by the the Statutes of Frauds.
This document is simply a scrap of paper.
  The House took time for consideration.
  (1) [1923] A. C. 48, 67.    (2) [1918] A. C. 1, 13.
                   (3)  [1919] 1 K. B. 78.
  1924. Dec. 5. LORD BUCKMASTER> My Lords, I had
prepared an independent opinion in this case, but I have had
an opportunity of reading the judgment which will shortly
be read by my noble and learned friend, Lord Phillimore,
with which I agree, and I think there is no need for any
further independent judgment on my part ; and my noble
and learned friends, Lord Birkenhead and Lord Sumner, also
desire that I should express their agreement in the judgment
about to be read.
  LORD ATKINSON. My Lords, I also have had an oppor-
tunity of reading the judgment prepared by my noble and
learned friend, and I concur with it.
  LORD PHILLIMORE. My Lords, at the conclusion of the
arguments in this case none of your Lordships had, I think,
any doubt what our judgment ought to be, but as there were
several points to be dealt with, your Lordships took time to
consider how best to express your decision upon them.  We
are all still, I believe, of the same mind, and there is no reason
for further delay.
  The appellants, Rose and Frank Company, carry on business
in the United States as dealers in carbonising tissue paper
which they have been in the habit of buying from England
then treating in some manner and selling in the perfected
state.
  Their relations with the respondents, James R. Crompton
and Brothers Ld., began as early as 1905;  and there were
three arrangements, which for the purposes of this appeal we
may assume to have been binding contracts, under which
Rose and Frank Company were to be entitled to have the
exclusive or nearly exclusive right of selling Crompton and
Brothers' carbonising tissues in America, subject to twelve
months' notice--notice which was never given.
  In 1913 circumstances led to the relations between the
parties being reconsidered ;  and it was then for the first
time brought to the notice of Rose and Prank Company that
the respondents, Brittains, Ld., had been interested with
Cromptons in supplying the carbonising tissue ;  and there-
upon the three parties entered into the arrangement which
has given rise to the present litigation.  It is dated July 8,
1913, and in the earlier part of it appears to be a binding
agreement, under which the English companies agree to confine
the sale of all their carbonising tissue in the U.S. and Canada  Lo.
--subject to certain defined exceptions--and Rose and Frank
Company agree to confine their purchases of the same stuff
exclusively to the two English companies and to do their
best to increase their trade.  The arrangement was to last
for three years subject to six months' notice.  The other
supplementary provisions need not be stated ;  but towards
the end of the document appears this remarkable clauee :
" This arrangement is not entered into, nor is this memo-
randum written, as a formal or legal agreement, and shall not
be subject to legal jurisdiction in the Law Courts either of
the United States or England, but it is only a definite expression
and record of the purpose and intention of the three parties
concerned, to which they each honourably pledge themselves
with the fullest confidence--bid on past business with each
other--that it will be carried through by each of the three
parties with mutual loyalty and friendly co-operation."
  There is no explanation upon the record, and no suggestion
was made by counsel at the Bar of any reason for the intro-
duction of this remarkable clause.  During the progress of
the hearing it occurred to some of your Lordships that it
might have been inserted in order to avoid the operation of
some American law discouraging monopolies,  But this was
a mere surmise.  For whatever reason it was introduced the
clause is there, and it remains for the Courts to give the
proper effect to it.
  The terms of this arrangement, whatever may be its force
or effect, were continued by correspondence for a second
three-yearly  period  and  by  arrangement in August,  1918,
till March 31, 1920.
  During the early part of 1919 differences arose between the
parties. The respondents thought that the appellants were
not conducting the business as they should, and that their
(the respondents') interests were suffering.  Accordingly on
May 5 they demanded by telegram compliance with certain
requirements, threatening, if the requirements were not met,
to communicate direct with the consumers.
  On the same day the appellants telegraphed back that they
refused to consent to terminate the agreement and would
hold the respondents accountable for any violation of contract,
and they demanded immediate shipment of the parcels they
had ordered; but on May 9 and 10, by cable and letter, the
respondents definitely refused to allow further deliveries to
be made.
  During the existence of the arrangement the appellants
had been giving to the respondents, Cromptons, from time to
time, orders for certain numbers of cases of tissues to be
delivered at various dates.  The documents took this form:
an order from the appellants to Cromptons: "Please enter
our order for the following goods and ship."  Then followed
either a specific date--usually the first of the month--or, if
no specific date, then "as soon as possible," and the port to
which they were to be shipped, either New York or sometimes
Toronto, and the nature of the articles required.  In com-
pliance with these orders the respondents used to ship the
goods.  A few of the orders sent in this way in the early part
of 1919 were complied with, but the others had not actually
been complied with by the time of the quarrel and were not
fulfilled afterwards.
  On November 19, 1919, the appellants brought their action,
treating the arrangement as a binding contract and claiming
damages for their breach, alternatively averring that the
three earlier agreemente were still in force and claiming
damages for their breach, and as a third alternative relying on
the several specific orders for parcels of goods in the early part of
1919 as having been accepted by the respondents, Cromptons,
and constituting specific contracts and claiming damages for
the non-delivery of these goods.  As to this part of their
claim, they made no case against the respondents, Brittains, Ld.
  The respondents joined in their defence, and contended that
the arrangement was not a binding contract, that the earlier
agreements were not binding contracts or had expired by loss
of time.  They also offered an alternative plea that if the
respondents, Cromptons, ever made any of the earlier agree-
ments, then " all of such agreements were determined by
mutual consent by virtue of or alternatively at the date of
the signing of the document referred to in paragraph 8 of the
statement of claim and/or alternatively  the plaintiffs by
signing the said document and acting thereon are estopped
from relying on any of the said alleged agreements."
  As to the appellants' claim in respect of the specific orders,
they denied that these orders gave rise to any contracts,
said that the requirements of s. 4 of the Sale of Goods Act
had not been complied with, and further that these orders
and acceptances, if any, were given as part of a specification
under the arrangement of 1913, and that if that arrangement
did not constitute any legal contract, neither did these orders
with provisional acceptances constitute contracts.
  They further pleaded misconduct on the part of the
appellants justifying them in determining the agreement.
  By an order made by McCardie J. the action was transferred
to the commercial list, and it was ordered that the Court
should try all questions of liability " except the issue as to
whether the appellants committed certain acts which were
alleged by the respondents to have justified the respondents
in determining the agreements (if any) between the parties " ;
and all questions as to damages.  The order provided that
the Court should construe all the agreements.
  These issues were then tried by Bailhache J.  He decided
that the arrangement of 1913 was a binding contract, and
further that if the appellants were ultimately held to fail on
this ground, they had a good case as to the orders and
acceptances. He then dealt with two comparatively small
money questions, directing judgment for the plaintiffs for
244l. odd with costs up to the date of the admission of this
claim, and for the respondents, Cromptons, for 2124l. odd with
costs up to the date of admission ;  and he gave the appellants
the costs of the hearing before him in any event.
  The present respondents appealed from this order, and the
Court of Appeal came unanimously to a different conclusion
to that of Bailhache J. vith respect to the arrangement of
1913, and by a majority (Bankes and Scrutton L.JJ. ; Atkin L.J.
dissenting) thought that Bailhache J. was also wrong on the
question of orders and acceptancas.  They declined, however,
to determine whether the pre-1913 arrangements were still
in existence, and whether if in existence they were enforceable,
and said that this matter remained to be tried.  They gave
the respondents costs of the issues on which they were
successful and the costs of the appeal.  Appeal and cross
appeal have been preferred from this order and are now
before your Lordships for decision.
  With regard to the first and most important point, that of
the legal force or want of force of the arrangement of 1913,
your Lordships are, I conceive, of one mind with the Court
of Appeal.  I do not propose to repeat their reasoning, with
which I venture to concur, but I wish to add one observation.
I was for a time impressed by the suggestion that as complete
legal rights had been created by the earlier part of the
document in question, any subsequent clause nullifying
those rights ought to be regarded as repugnant and ought
to be rejected.  This i3 what happens for instance in cases
where an instrument inter vivos purports to pass the whole
property in something either real or personal, and there
follows a provision purporting to forbid the new owner from
exercising the ordinary rights of ownership.  In such cases
this restriction is disregarded.  But I think the right answer
was made by Scrutton L.J.  It is true that when the tribunal
has before it for construction an instrument which unquestion-
ably creates a legal interest, and the dispute i3 only as to the
quality and extent of that interest, then later repugnant
clauses in the instrument cutting down that interest which the
earlier part of it has given are to be rejected, but this doctrine
does not apply when the question is whether it is intended
to create any legal interest at all.  Here, I think, the over-
riding clause in the document is that which provides that it
is to be a contract of honour only and unenforceable at law.
With regard to the next point--namely, the right of the
plaintiffs to recover damages for the non-delivery of the goods
specified in the particular orders for the year 1919--it should
be statcd that the defence under the Sale of goods Act was
abandoned at the trial.  On this point I agree with your
Lordships in preferring the judgments of Bailhache J. and
Atkin L.J. to that of the majority of the Court of Appeal.
  According to the course of business between the parties
which is narrated in the unenforceable agreement, goods were
ordered from time to time, shipped, received, and paid for,
under an established system;  but the agreement being
unenforceable, there was no obligation on the American
company to order goods or upon the English companies to
accept an order.  Any actual transaction between the parties,
however, gave rise to the ordinary legal rights; for the fact
that it was not of obligation to do the transaction did not
divest the transaction when done of its ordinary legal
significance. This, my Lords, will, I think, be plain if we
begin at the latter end of each transaction.
  Goods were ordered, shipped, and received.  Was there no
legal liability to pay for them?  One stage further back.
Goods were ordered, shipped, and invoiced.  Was there no
legal liability to take delivery?  I apprehend that in each
of these cases the American company would be bound.  If
the goods were short-shipped or inferior in quality, or if the
nature of them was such as to be deleterious to other cargo
on board or illegal for the American company to bring into
their country, the American company would have its usual
legal remedies against the English companies or one of them.
Business usually begins in some mutual understanding without
a previous bargain.
  However, as to this claim for damages for the unfulfilled
orders, the respondents have, under the terms of the order
of McCardie J. the defence open to them that the conduct
of the appellants was such as to justify them in determining
the agreements to deliver.
  There remains the matter of the cross appeal.  This, I
think, succceds.
  The unenforceable agreement cannot (it is true) be relied
upon as cancelling the previous agreements, because it was
to have no legal weight.  But the parties who entered into
the relations  implied by the unenforccable  agreement
must have previously cancelled, as they could do by mutual
consent all the earlier agreements.
    Upon the documents which were before the Court--which
were indeed the only materials before the Court--the proper
inference to be drawn was that the arrangement of 1913
was, though unenforceable, intended to supersede all pre-
vious arrangements or agreements, whether enforceable or
unenforceable.
  The principle laid down in  Morris  v.  Baron & Co. (1),
followed in British and Beningtons v. North Western Cachar
Tea Co. (2), is the one which governs the present case.
  It was a pity, I think, that the Court of Appeal determined,
apparently against the view of Scrutton L.J., to remit this
issue for trial instead of deciding it themselves.  I think
they should have decided it, and decided it in favour of the
respondents and cross appellants.
  Upon the whole, I would advise your Lordships to restore
the judgment of Bailhache J., except that part of it which
declares  " that  the  agreement  of  July,  1913, mentioned  in
paragraph 8 of the statement of claim is a legally binding
agreement against both defendants," and which directs that
the plaintiffs should have the coats of the hearing before
him as against the defendants Brittains, Ld., and I would
advise that the plaintiffs (the present appellants) should
have the costs of the appeal to the Court of Appeal as against
the respondents and defendants, Cromptons.  I presume that
the respondents and defendants, Brittains, Ld., had no
separate costs on that appeal.  With regard to the costs of
the appeal to your Lordships' House, the appellants have
succeeded in what may prove a very substantial part of their
case, but on the other hand the result of the issue still to be
tried may wipe out their claim.  The respondents, Brittains,
Ld., have been successful, but I imagine that before your
Lordships' House, as in the Court of Appeal, they had no
  (1) [1918] A. C. I.  (2) [1923] A. C. 48.
separate costs.  I think that the right order would be that
neither side should have any costs of the appeal,  but that
the cross appellants should have the costs of their cross appeal.
Any costs of the action not disposed of by these orders should
be disposed of by the judge who tries the remaining issue.
  The case should be remitted to the High Court of Justice
with a declaration that it be disposed of accordingly.
 Order of the Court of Appeal reversed, and
   judgment of Bailhache J. restored, except so
   far as it declares that the agreement of July,
   1913, is a legally binding agreement, and
   except so far as it directs that the plaintiffs
   should have the costs of the hearing as against
   the defendants, Brittains, Ld.  The respond-
   ents in the original appeal, J. R. Crompton
   Brothers, Ld., to pay the costs in the Court
   of Appeal. Each party to bear their own
   costs respectively in respect of the original
   appeal to the House.  Cross appeal allowed.
   The respondents in the cross appeal to pay
   the costs of the said cross appeal. Cause
   remitted back to the King's Bench Division
   to do therein as shall be just and consistent
   with this judgment.
                 Lords' Journals,  Dec.  5, 1924.
Solicitors for the appellants (respondents on the cross
appeal) :  Wild, Collins & Crosse.
  Solicitors for the respondents and the appellants on the
cross appeal :  Rawle, Johnstone & Co., for Addleshaw, Sons
& Latham, Manchester.
      LAKE .  .  .  .  .  .  .  .  APPELANT;
                  AND
      SIMMONS .  .  .  .  .  .  .  RESPONDANT.
Insurance--Lloyd's Goldsmiths' Association Policy--Exceptions--"Theft by
  customer"--"Goods entrusted to customer"--Larceny by a Trick--
  Absence of Owner's Consent to Possession.
  The plaitiff, a jeweller, was insured under a Lloyd's policy against
loss or damage to jewels by (inter alia) theft. The policy comtained
a clause exempting the insurers from liability in the case of "loss by
theft or dishonesty committed by . . . . any customer or broker or
broker's customer in respect of goods entrusted to them by the assured."
A woman E.E., who had previously bought some articles at the plaintiff's
  shop, induced the plaimtiff to let hsr have possession of two pearl necklets
  hy fraudulently representing that she was the wife of a certains person
  and that she wanted them for the purpose of showing them to her
  husband and to a purely fictitious person for their approval with a
  * Present: VISCOUNT HALDANE, VISCOUNT SUMNER, LORD ATKINSON,
 LORD WRENBURY, and LORD BLANESBURGH.
view to purchase by them. E. E. disposed of the necklets for her
own benefit. In an action on the policy to recover the value of
the necklets. The insurers pleaded the exemption clause. The trial
that she was guilty of lacceany by a taick, and the Court of Appeal
and the Housa of Lords accepted these conclusions :--
  Held, first, that the plaintiff had not entrusted the necklets to E. E.,
  because there was no real consent by him to her obtaining possession
  of them, and, secondly, that quoad the particular goods, E. E. was
  not a customer within the meaning of the clause.
  APPEAL from an order of the Court of Appeal (1) reversing
by a majority (Bankes and Warrington L.JJ. ;  Atkin L.J.
dissenting) a judgment of McCardie J. (2) in favour of the
the recovery of the value of two pearl necklets lost during
the currency of the policy.
  The facts are stated in the report of the case before the
Court of Appeal and in the opinion of Viscount Haldane.
  1927. Feb. 1, 3, 4, 10, 11. Jowitt K.C. and J. B. Melville
for the appellant.  The question is whether the loss of these
necklets by the theft of Esme Ellison was a loss by theft
or dishonesty committed by a customer in respect of goods
  "  entmsted to that customer by the assured within the meaning
of the first exception in the policy.  This really involves
two questions : (1.) Was Esme Ellison a customer? and
(2.) Were the goods entrusted to her ?
  As to 1 :  " Customer " in this collocation means a customer
in respect of the goods entrusted; otherwise no meaning is
given to the words " in respect of, etc."  The exception
does not apply unless the goods are entrusted to a customer
qua customer. This at any rate is a possible and reasonable
construction, and the fact that the exception is capable of a
wider construction will not avail the underwriters, for they
cannot rely upon an ambiguous exception : Elderslie Steam-
ship Co. v. Borthwick. (3)  A customer may be roughly
  (1) [1926] 2 K. B. 5].   (2) [1926] 1 K. B. 366.
                    (3) [1905] A. C. 93.
defined as a person who becomes under some liability to pay
--either a buyer or a prospective buyer; but Esme/ Ellison
was under no liability whatever in respect of the prices of
the necklets.  Therefore, quoad the transactions in question
she was not a customer.
  As to 2:  Entrusting involves consent to the recipient
acquiring possession of the goods.  If the nominal consent
is obtained by means of a trick it is in the eye of the law
no consent at all and the acquisition of the possession is
a theft.  The trick destroys the reality of the consent, and
if there is no consent there is no entrusting: Pollock and
Wright on Possession in the Common Law, p. 218; Cundy v.
Lindsay (1); Cole v. North Western Bank (2); Kingsford v.
Merry (3); Hardman v. Booth (4); Phillips v. Huth (5);
Cahn and Mayer v. Pockett's Bristol Channel Steam Packet
Co. (6); Oppenheimer v. Frazer and Wyatt (7); Mehta v.
Sutton. (8)  All the judges in the Courts below are agreed
that the offence of Esme/ Ellison was larceny by a trick.  She
represented that she was the wife of Van der Borgh,
which was a lie, and as regards the second necklet she
represented that Commander Digby was a wealthy man,
whereas there was no such person, and if the appellant had
known the truth he would not have handed over the necklets
to her. The distinction between larceny by a trick and
obtaining money by false pretences depends on the question
whether, when the physical possession was handed over,
there was or was not an intention to pass the property.  Here
this woman was a mere messenger; she had no right of
property in the necklets and no authority to case any
property in them or to conclude any bargain at all.  If this
were a case of false pretencas or of theft by a bailee then,
no doubt, there might have been an entrusting, but it was
neither.  There can be no bailment when the person handing
over possession does not know what he is doing. In
  (1) (I6?6) 3 App. Css. 159.  (5) (1~) 6 a. Q ~. 572.
(2) (1875) L.R. 10 C. P. 354, 373.      (6) [1899] 1 Q. B. 643.
(3) (1856) 1 H.& N. 503.                (7) [1907] 2 K. B. 50.
(4) (1863) 1 H.& C. 593.                (8) (1913) 29 Times L. R. 185.
Whitehorn Brothers v. Davison (1) The Couft, upon a some-
what narrow view of the facts, took the view that the case
was not one of larceny by a trick, but Lord Wrenbury there
there defines larceny by a trick in a way which absolutely covers
this case.  He says, "There is larceny by a trick where the
owner of goods, being induced thereto by a trick, voluntarily
parts with the possession of the goods, but does not intend
to pass the property in them, and the recipient has the animus
furandi; and the same is true where the owner of the goods
does not intend to pass the property in them to the particular
person with whom he is dealing, and has been deceived by
hat person as regards the identity of the person with whom
he is dealing." He then discusses the offence of obtaining
goods by false pretences and comes to the conclusion that
where the owner either intends to pass the property or intends
to confer a power to pass the property, that is a case of
obtaining goods by false pretences.  This qualification does not
affect the appellant's case, for Esme/ Ellison had no disposing
power at all.  In Folkes v. King (2) the Court of Appeal
held on the facts that the offence in that case was not larceny
by a trick, but two of the Lords Justices went on to say that,
even in a case of larceny by a trick, there might be a consent
to the possession, though they admit that there can be no
consent if there is a mistake as to identity.  These opinions
appear to be inconsistent with Oppenheimer v. Frazer and
Wyatt (3), as Atkin L.J. points out in his dissentient judgment,
but they do not hurt the appellant, because there was here
a mistake as to identity.  Folkes v. King (2) was distin-
guished in Heap v. Motorists' Advisory Agency (4), where
it was held that, the case being one of larceny by a trick,
there was no consent to the possession. In Lowther v.
Harris (5) the decision was  that the goods were obtained
by false pretences, but Wright J. expresses a doubt what,
if it had been a case of larceny by a trick, the result would
have been, having regard to the conflicting decisions in
  (1) [1911] 1 K.B. 463,479.           (3) [1907] 2 K.B. 50.
  (2) [1923] 1 K.B. 282.               (4) [1923] 1 K.B. 577.
                (5) [1927] 1 K.B. 393.
Oppenheimer v. Frazer and Wyatt (1) and Folkes v. King. (2)
Upon the question of entrusting the appellant relies upon the
reasoning of Atkin L.J.
  [The following cases were also referred to:  Rex v.
Devonport (3); Moore v. Evans. (4)]
  Sir John Simon K.C. and Van den Berg for the respondent.
This is a commercial contract between the underwriters
and the assured, and to ascertain its meaing the first thing
to do is to examine the nature of the document without
regard to the niceties of the criminal law.  It is an insurance
of jewellers' goods against loss from various cause, including
theft, and it is a policy in which there is a division of
responsibility for loss.  In the main body of the contract
the underwriters undertake responsibility for the loss of the
goods while they are in the custody of the assured or in
the custody of any person to whom he may have entrusted the
same" on the conditions of sale or return, for valuation,
or inspection, or for any other purpose whatever."  But the
policy contains certain exceptions. The underwriters decline
to undertake responsibility for any loss by theft or dishonesty
committed  (1.) by any whole time servant or traveller
of the assured;  (2.) "by any customer or broker or broker's
customer in respect of goods entrusted to them by the
assured." The first limb of the exception is co-extensive
with the area of the policy.  The assured is to remain liable
for the theft or dishonesty of his servants or travellers, how-
ever occurring, and whether the goods are entrusted to them
or not;  the second limb covers less ground and is limited
to the theft or dishonesty of a customer or broker or broker's
customer when the goods are entrusted to him.  Two question
arise on this policy:  (1.) Was this a loss by the dishonesty
of any customer? and (2.) Was it in respect of goods entrusted
to him?  Looking at the whole scheme of the policy, first,
the word "entrusted" in the body of the policy, having
regard to the words which follow it, must have the widest
  (1) [1907] 2 K.B. 50.            (3) (1826) M.S. Archbold's Peel's
  (2) [1923] 1 K.B. 282.           Acts, 2nd ed., p. 5.
                  (4) [1918] A.C. 185.
possible meaning and must include any voluntary handing
over for a purpose, and, according to a well recognized rule
of construction, that word should have the same meaning
in the exception. Secondly, the words in the exception
"in respect of goods entrusted, etc." do not qualify
"customer" but qualify "loss by theft or dishonesty."
  1. A customer is a person who frequents the shop for the
purpose of doing business.  The word " customer " is not
a term of art and is not narnowed by the test of whom you
would sue for the price if you issued a writ.  If the jeweller
was asked for a list of his customers he would include this
woman.  She would be treated as a customer without regard
to the question whether in the particular transaction she was
a principal or not.  The point is that the jeweller thinks
she is a person whom he may safely trust and is prepared
to take the risk of his confidence being mistaken. In the
respondent's submission this woman was a customer not only
in past transactions but in the transactions in question.
This was the unanimous view of the Court of Appeal.
  2. As to entrusting, whatever may be the accurate state-
ment of the law in regard to convictions of crime, it is a
strained and artificial reading of this commercial document
to treat the language there used as having any reference
to distinctions of that kind and to say that the liability of
the underwriters depends on the question at what moment
of time the customer was tempted to be dishonest.  In a
prosecution for theft it is essential to prove that possession
was acquired invito domino, and the in for the rule with
regard to larceny by a trick is to furnish an answer to the
defence that the dominus was not invitus, because he gave the
thing to the defendant. That is a perfectly intelligible and
logical view of the particular proceeding between the prosecutor
  I  an- d the defendant, luse it is r~y apply~ thB prinoip#
that no one can take advantage of his own fraud, but that has
nothing to do with the question whether there has been
an entrusting or not.  The policy deals with the case where
goods which are in the custody of the jeweller pass into the
custody of somebody else, and it is only because the goods
have passed from the jeweller's custody into the custody
of somebody else that the entrusting arises.
  The goods insured are defined as being goods which are
either in the custody of the jeweller or are entrusted to
somebody else, and, if they are not in the custody of the
jeweller and are not entrusted to somebody else, they are
not covered by the policy.  Voluntary delivery of possession
by the owner is necessarily an entrusting and gives to the
recipient rights that follow from possesion, e.g., the right
to recover the full value in trover.  Whether the crime of
Esme Ellison was larceny by a trick or obtaining money
by false pretences it is not true to say that there was not,
within the meaning of this policy, a voluntary passing over
of the custody of these goods.  But, first, the crime was
not larceny by a trick.  In Whitehorn Brothers v. Davison (1)
Buckley C.J. was of opinion that if the owner intended
either to pass the property or to confer a power to pass
the property the crime was not larceny by a trick, but
false pretences, and Vaughan Williams L.J. was of the
same opinion. It is not suggested here that the woman
herself had the property, but it is submitted that she
had authority to pass the property in certain events to a
customer.
  But, secondly, assume that the offence was larceny by
a trick, it does not necessarily follow that in oommercial
transactions the consent of the owner is annulled by the
fraud.  It is the nature of the trick and not the fact that it
doas or does not amount to larceny which governs the question.
Larceny by a trick may be committed in two ways.  There
may be a misrepresentation as to the identity of the person
or of the goods.  In these cases the owner does not intend
to part with possession to the thief.  But, secondly, there
may be larceny by a trick where the owner intentionally
parts with possession of the goods to the thief, being induced
to do so by a fraudulent misrepresentation not affecting
the identity of the thief or of the goods, and in this class
of case the owner in fact consents to the possession of the
goods by the thief and that consent is not annulled by the
fact that it was obtained by fraud. That is the effect of
Folkes v. King (1), upon which the majority of the Court
of Appeal based their judgment in the pint case, and
in a sense this case may be regarded as an appeal from that
decision.  Applying that decision to the facts of the present
case, this is that kind of larceny by a trick which does not
depend on the absence of consent as regards either the person
or the goods, and, there being an agreement between the
parties on those points, that is all that is required for the
purpose of entrusting.  In determining whether the jeweller
entrusted these goods to this woman it is the mind of the
jeweller which has to be ascertained, and it is immaterial
to inquire what was the wicked motive of the recipient.
Here the jeweller did voluntarily pass possession of the
goods to this woman.  No mistake as to identity arises from
the mere fact that the woman wrongly described herself
as the wife of Van der Borgh: Phillips v. Brooks. (2)  A
  mistake as to capacity or status is not a mistake as to
  identity. Although the jeweller would not have allowed
the goods to be taken out of the shop if he had known the
truth about this woman, that does not alter the fact that
he did agree with the woman in the shop that the woman
in the shop should have the custody of the goods.  The
result is that there was here an entrusting of the goods to
a customer within the meaning of this policy.
  Jowitt K.C. in reply referred to Holmes on the Common
Law, p. 308, and Pollock on Contracts, 9th ed., p. 509.

  The House took time for consideration.

  1927.  April 4.  VISCOUNT HALDANE.  My Lords, in this
case there is no dispute as to the facts.  What has happened
is that two of the learned judges of the Court of Appeal have
taken a different view of the interpretation to be put on them
from that taken by Atkin L.J., who dissented, and that
taken by McCardie J., who tried the case.
  (1) [1923] 1 K. B. 282.        (2) [1919] 2 K.B. 243.
  The narrative of events is briefly this.  The appellant,
who claims as plaintiff on a policy of insurance, is a jeweller
at Exeter who became insured im 1922 by a Lloyd's policy
underwritten, among others, by the respondent, to cover
rises up to a total of 16,000l. for twelve noonths.  The property
so insured consisted of the appellant's stock-in-trade, and
it included precious stones, pearls, and all other articles
usually kept in stock by jewellers.  What was insured
extended not only to the property of the appellant, who
was described in the policy by the name of his firm, but to
what he held in trust or oommission, or was held by him
as responsible while in his own custody,  " or in the custody
of any person to whom" he might " have entrusted the same
in the conditions of sale or return, for valuation, or inspection,
or for any other purpose whatsoever." The perils insured
against were less or damage or misfortune to any of the
property arising from any cause, with the exception, set out
specially in the policy, of such as are (inter alia) not mentioned.
These exceptions extend to "loss by theft or dishonesty
committed by any servant or traveller or messenger in the
exclusive employment of the assured (except when conveying
goods to the Post), or by any customer or broker of broker's
customer in respect of goods entrusted to them by the assured,
his servants or agents," unless such loss "arise, when the
goods are deposited for safe custody by the assured, his
servants or agents, with such broker or customer or broker's
customer."
  The claim of the appellant under this policy was for the
value of two pearl necklets (valued at 640l. and 700l.
respectively) lost during the currency of the policy. The
circumstances in which the claim arose are as follows: The
claim was made by the appellant against the respondent,
representing a number of insurers, by reason of the fraudulent
conduct of a woman named Esme/ Ellison, who was convicted,
on October 2, 1923, at the quarter sessions of the city of
Exeter, of theft of the necklets, the subject of the claim in
this action, and was sentenced to hard labour for sixteen
months. She was a practised criminal, who had been
previosly convicted of larceny and false pretences, and
had spent substantial periods in prison.
 In the early part of 1923 Esme/ Ellison was living with a
Mr. Van der Borgh, who probably knew nothing of her past,
as his wife, which she was not, at Stonelands, a well known
residence near Dawlish, not very far from Exeter. On
March 2, 1923, she called at the appellant's shop in Exeter
and saw his manager.  She said that she was living with
her husband at Stonelands, and mentioned that her sister
had just become engaged to a Commander Digby. She
bought a ring for 30l.  This sum was debited to her personally,
as Mrs. Van der Borgh, and she paid it on March 6 by cheque
on a local bank with which she had opened an account.  On
the same date she bought from the appellant a pair of old
Sheffield dishes for 16l. 16s., which were duly debited to her
personally as before, and she paid the price on March 16
by a cheque on the same account.  On March 6 she also
bought a diamond ring for 28l. 10s., which was again debited
to her personally as Mrs. Van der Borgh, and for which she
paid by cheque on April 4.  In some of these transactions
the appellant personally dealt with Esme/ Ellison.
  When she made her visit to the appellant's shop on March 6,
she saw the appellant and told him that her husband intended
to give her as a birthday present a pearl necklet of the value
of 1000l., and she asked the appellant to produce some
necklets for her inspection.  After he had sent for and got
them she saw them at the shop.  She told him that
a relative, who she said was staying at Stonelands
wished to give a wedding present to one of her sisters who
had become engaged.  On March 16, at an interview with
the appellant, she looked at two necklets which he showed
her, and led him to permit her to take them to Stonelands
in order that her husband, who was temporarily absent,
might look at them.  This the appellant let her do. He
made an entry in his book which is: "P.F. Van der Borgh,
Stonelands, Dawlish.  (1.) A fine pearl necklet of 121 pearls,
  1100l.; (2.) A fine pearl necklet of 139 pearls, 1000l.  On
  appro."  The learned judge who  tried the case and the Court
of Appeal agreed in thinking that Esme/ Ellison was under
these circumstancas a " customer " within the meaning of
the policy.  No doubt on the earlier occassions she was so,
but that does not conclude the question as to the relationship
in the transactions to which I now come.
  What was the precise nature of the transaction between
the appellant and Esme/ Ellison in regard to the two pearl
necklets ?  As already stated it took place on March 16,
1923.  The appellant made an entry in his books, not in
her favour but in that of P. Van der Borgh, her supposed
husband, as the purchaser, on approbation. He let her
take both necklets away to show to him.  On March 21
she paid a further visit to the shop.  She bought one of the
necklets, saying that her husband was pleased with the other
and had selected it, but that Commander Digby, who, she
had said, was engaged to her sister, admired the one she
brought back, but would not be able to pay the whole price
at once.  On March 28 she made yet another mint to the
shop and stated that Commander Digby continued to admire
the necklace she had brought back, and that she wished
to take it back to show to him again.  On April 4 she called
again and the appellant let her take it away for this purpose.
He entered in his books, " Lt.-Commander Digby, Cadistock,
Dorset, a fine pearl necklet (129 pearls), 1000l. on appro."
There was no such person as Commander Digby, nor had
Esme/ Ellison a sister.  Van der Borgh knew nothing of the
transactions about the necklets. She herself made away
with both of them.  She disposed of them and neither has
been recovered.
  The learned judge who tried the case found the facts as
I have stated them, and he alo found that Esme Ellison's
conduct was fraudulent throughout; that the small pre-
liminary purchases in her own name were part of a design
to gain the confidence of the appellant; that at the time
she gained possession of each necklet she intended to steal
it;  that the only purpose for which the appellant gave her
possession was, that she might hand the one to Van der Borgh
for his inspection and the other to the fictitious Commander
Digby for a similar purpose; that she received the necklets
for limited and specific purposes only; that the appellant
intended that his purchaser and debtor should be Van
der Borgh in the one case and Digby in the other, and not
Esme/ Ellison.  In these findings of fact the Court of Appeal
concurred.  Both Courts held that as the result she was guilty
of larceny by a trick.
  My Lords, so far I have no doubt that this was a true
conclusion. If that were all the case would come within
the initial and operative words of the policy, which insures
against the risk of theft.  It would also come within the
words which follow descriptive of the property insured, for
these expressly mention property for which the insured is
responsible if it is in the custody of any person to whom
the insured has entrusted it on the condition of sale or
return, for valuation or inspection, or for any other pur-
pose whatsoever.  But there is in this policy the exception
to which I have already referred in quoting the language
of the policy.  It is exception 1, which excepts from the
insurance loss by theft or dishonesty committed by (inter
alios) " any customer or broker or broker's customer in
respect of goods entrusted to them "  by the insured,
unless the loss arises when the goods are deposited for safe
custody.
  It is contended for the respondant that what has been
established in point of fact amounts to an entrusting obtained
by false pretences of the property, as distinguished from
an obtaining by larceny by a trick or theft.  What we have
to determine is thus s question on the construction of the
exception.  Was the case simply one where there was no real
consent to any property or such possession being taken over
by the woman, and in that sense theft in contemplation of
  law? Or was it a merely voidable as ditinguished from
  a void transaction, in which a delivery, which was intended
  to pass the possession and a limited proprietary title in the
  nature of a bailment, was brought about by a false repre-
  sentation, so that it would stand if the seller did not disaffirm
  it? That this question is a difficult one is obvious, for the
judges in the Courts below have been evenly divided about
it.  We have had it fully argued at the Bar.
  My Lords, in the speeches of counsel on the appeal a mass
of authorities was cited and relied on.  I have thought it
my duty to read them through.  I cannot say that I have
derived much new light from the study.  Some of the cases
cited lay down principles of law which are general and clear.
About these principles there is, however, no real controversy.
Others relate to the application of principles to circumstances
which are not the same as those in the case before us.  They
help, in truth, but little.  What is important for our purpose
is to get before our minds the particular concrete questions
before considering the law to be applied.
  Now the first of the questions is partly, at least, one of
mixed fact and law, the interpretation to be placed on the
application of  the word " entrusted " in the exceptions.
" Entrusted " is not necessarily a term of law.  It may have
different implications in different contexts. In its most
general significance all it imports is a handing over the
possession of some purpose which may not imply the conferring
of any proprietary right at all.  I hand my umbrella to a
servant to enable me to be free of it while I am taking off
my coat.  In a very general sense I entrust him with the
umbrella. But there is no easily definable bailment in such
an instance.  What I have really done is to divest myself
of the embarrasing circumstance of holding it. Entrusting
may, of course, introduce a bailment, conferring some definite
but restricted proprietary right.  It is a question, then, of the
contract entered into.  And whether there is such a contract
depends on more than a bare parting with possession. To
entrust to a customer or broker or " broker's customer,"
as specified in the exception, means a definite contract. The
reference to " safe custody " as a purpose outside the
exception points to this. So does the reference to a broker
or a broker's customer.  But in the general clause at the
beginning of the policy, where the entrusting may be for
any purpose whatsoever, the word is surely used in a more
general sense, to cover all cases in which the article
has been deliberately put into the possession of some other
person.
 Now it may well be that in this more general sense the
appellant entrusted Esme/ Ellison with the possession of the
necklets. She may well have been his customer on other
occasions.  But on this particular occasion it is plain from
his evidence and from his books that he did not look on her,
but only on Mr. Van der Borgh and the supposed Commander
Digby, as the possible purchasing customers.
Esme/ Ellison was a mere intermediary, little more than
a porter, so far as any contract was concerned, a person
entrusted with the possession for purposes which seem to fall
short of all of those specified in the exception.  She certainly
got no property.  Having regard to the circumstances that
in contemplation of law she stole the necklets from the
appellant, it is only in a qualified sense that she got even
the possession. No doubt she got possession physically,
but there was no mutual assent to any contract which would
give her even the qualified proprietary right to hold it as a
bailee proper.  The appellant thought that he was dealing
with a different person, the wife of Van der Borgh, and it
was on that footing alone that he parted with the goods.
He never intended to contract with the woman in question.
It was by a deliberate fraud and trick that she got possession.
There was not the agreement of her mind with that of the
seller that was required in order to establish any contractual
right at all.  The latter was entirely deceived as to the
identity of the person with whom he was transacting.  It
was only on the footing and in the belief that she was
Mrs. Van der Borgh that he was willing to deal with her at
all.  In circumstances such as these, I think that there was
no such consensus ad idem as, for example, Lord Cairns, in
his judgment in Cundy v. Lindsay (1), declared to be requisite
for the constitution of a contract.  No doubt physically
the woman entered the shop and pretended to bargain in
a particular capacity, but only on the footing of being a
different person from what she really was.  There was never
any contract which could afterwards become voidable by
reason of a false representation made in obtaining it, because
there was no contract at all, nothing excepting the result
of a trick practised on the jeweller.
  Jurists have laid down, as I think rightly, the test to be
applied as to whether there is such a mistake as to the party as
is fatal to there being any contract at all, or as to whether there
is an intention to contract with a de facto physical individual,
which constitutes a contract that may be induced by misrepre-
sentation so as to be voidable but not void.  It depends on a
distinction to be looked for in what has really happened.  Pothier
(Traite des Obligations, section 19) lays down the principle
thus, in a page adopted by Fry J. in Smith v. Wheatcroft (1):
" Does error in regard to the person with whom I contract
destroy the consent and annul the agreement ?  I think
that this question ought to be decided by a distinction.
Whenever the consideration of the person with whom I am
willing to contract enters as an element into the contract
which I am willing to make, error with regard to the person
destroys my consent and oonsequently annuls the contract.
. . . .  On the contrary, when the consideration of the person
with whom I thought I was contracting does not enter at all
into the contract, and I should have been equally willing
to make the contract with any person whatever as with him
with whom I thought I was contracting, the contract ought
to stand." In the careful judgment delivered by him in
Phillips v. Brooks (2) Horridge J. decided that the alternative
view secondly stated by Pothier applied to the case he was
dealing with.  A fraudulent person had entered a jeweller's
shop and looked at and selected certain jewels which the
jewellerr was prepared to sell to him individually as a casual
customer who had entered the shop. All that remained
to be subsequently arranged was payment of the price.  The
unknown customer, who drew a cheque pretending to be
seme one else, and signing it in a well known name, was
allowed in exchange for the cheque to take away one of the
jewels, of which he disposed subsequently. Horridge J.
found, as a fact, that though the jeweller believed the person
to whom he handed the jewel was the person he pretended
to be, yet he intended to sell to the person, whoever he was,
who came into the shop and paid the price, and that the
misrepresentation was only as to payment. There was
therefore consensus with the person identified by sight
and hearing, although the title to delivery was voidable as
having been induced by misrepresentation.  In the other
type of case referred to by Pothier, where the belief of the
contracting seller depends wholly on identity of character
or capacity, there is, as Mr. Justicce Holmes says at
the beginning of the Ninth lecture in his book on The
Common Law, no contract, because there is really only
one party.
  This being so I think that on the facts found there ought
to be judgment for the appellant.  No doubt if there was
a bailment such as alleged by the respondent, and it is merely
voidable, as where the handing over merely follows on a further
false representation which leaves an initial contract intact,
a determinable right of property of some kind may pass
sufficient to enable a title to be made by the bailee to some
one who takes under proper circumstansces without notice.
But it is otherwise when the bailment is void ab initio, as
in case of mere theft.  I am unable to see how the relation
of entrusting to a customer within the meaning of the
exceptions can arise here.  Bankes and Warrington L.JJ.
came to the conclusion that there was in this case an entrusting
to a customer with the words of the exception. I find
myself more in agreement with the other view taken
by Atkin L.J. and by McCardie J. at the trial. I go rather
further than the learned Lords Justices went in their inter-
pretation of the facts.  For to me it appears that on the
occasion we are dealing with the jeweller was not dealing
with this woman as a customer. We have to remember
that what he did was to let her have possession in her alleged
capacity as the wife of a husband who was to inspect and
possibly approve.  Nothing short of a belief in her identity
as a wife who was transacting for her husband as the real
customer would have induced the appelant to act as
he did.
  My Lords, I do not rely on any doctrine belonging to
criminal as distinguished from civil law.  The only relevance
of the criminal law is, I think, the analysis of the elements
required to establish a consenting mind in a general sense.
On the broader ground stated I am of opinion that on the
facts before us the judgments of McCardie J. and Atkin L.J.
were right, and those of the majority of the Court of Appeal
wrong. If so the appeal must be allowed with costs here
and also in the Courts below.
  VISCOUNT SUMNER.  My Lords, the facts which are material
here fall under two heads.  The first is accurately described
by saying that the woman Ellison might have been convicted
of larceny by a trick; the second by saying that no actual
contract, either of sale or of agency or otherwise, purported
to have been made between her and Messrs. Lake & Co.
"Larceny by a trick" is a short way of saying  that the
actual delivery of the necklace to her by Mr. Lake de manu
in manum, though it wore the outward appearance of consent
on his part, was in that respect illusory, because, owing to
the deception which Ellison practised on him, his mind did
not go consensually with his physical action.  It might have
saved some discussion, if the finding of fact had simply been
so described, without resorting to the more formal title of
the crime which she committed; but in my opinion the result
is the same.  Whichever description is preferable, I adopt
the conclusion of both Courts below.  I should have been
slow to differ from the learned judge, for, in any case, his
finding involved consideration of Mr. Lake's state of mind,
and he alone heard his evidence.  The conclusion that his
state of mind was an appearance of consent produced by the
trick and not a real consent induced by fraud is a judicial
conclusion from the circumstances proved, from the evidence
of the victim as to what was said and done, what he believed,
and what he would or would not have done in the absence
of that belief, and finally, from the judge's own view of the
ability of the witness himself to analyse and explain his
own mental processes with tolerable exactness.  A conclusion
from these materials is greatly assisted by seeing him and
judging what manner of man he is.  It would therefore be
rash to set up any opinion of my own against the trial judge's
conclusion and I am content to accept it, but I wish to add
that, on the evidence, it was doubtless right.
  As to what purported to be done the case is clear.  The
necklaces had been placed in Mr. Lake's hands on approbation
under such circumstances that, for the purposes of this case,
he was in the same position as if he had actually been the owner.
Ellison proposed Van der Borgh and the fictitious Digby as
purchasers. She never proposed to be the buyer herself.
  She never acquired nor was meant to acquire any property
from Mr. Lake.  He let her take the goods in order that
these persons might see them on approval.  He gave her
no authority to negotiate or to conclude a bargain or to pass
property from him to them.  If the pearls were approved,
if they were kept beyond a reasonable time, if the persons,
who were to have the opportunity of approving or of
disapproving the pearls offered, dealt with them in
a manner inconsistent with such offer, a direct sale by
Messrs. Lake & Co. to them would result with an immediate
passing of the property from the vendors to them.
  My Lords, however otiose it may be to do so in your
Lordships' House, I would venture further to say something
as to the definite consequences of this finding, since any
obscurity on the question is certain to raise doubts on a
branch of the law, which is settled beyond dispute and ought
not to be directed.  First, when Ellison took the necklaces
from the hand of Mr. Lake; she took them as a thief and with
no more consent on his part than if she had picked his pocket.
The facts are not that she received them from Mr. Lake
honestly and without any trick and afterwards formed a
felonious intention to deprive him of them, which intention
she proceeded to carry out. If that had been so, her offence
would have been that of larceny as a bailee.  Such a state
of facts would further have been inconsistent with obtaining
the pearls by false pretences, for a felonious mind, only arising
after she received the goods from the jeweller, would not
constitute criminality at the time of the actual obtaining.
The whole argument as to the meaning and effect of the
word " entrusted " in the exceptions clause in the policy
is at once vitally affected if the expression " larcency by a
trick " is used in anything but its strict, that is its legal  sense.
  Again, if Mr. Lake consented to nothing, analogies from the
distinction between void and voidable contracts are beside
the mark, and equally so are arguments which turn on con-
sensus ad idem as an ingredient in the conclusion of a contract:
A voidable contract importe a consent with a right to avoid
it.  The jeweller must then make an election in order to free
himself from the obligation.  As it is, there wes no contract
and nothing to avoid.  Enlightenment as to the facts was
all that Mr. Lake needed, and, on becoming aware of Ellison's
dishonesty, he could forthwith have taken back his pearls
provided that he avoided any trespass or use of unjustifiable
force in doing so.  Again, we need not ask how far Ellison
would have enjoyed rights under an assumed or implied
bailment, if some stranger had converted the pearls against
her.  What is clear is that she herself had no property or
not altogether felicitous, attributes to a pawnee what is called
a " special property "  as against the pawnor's " general
property " in a chattel, but as there was no question of
pledging these pearls to Ellison or of giving her a lien or
security over them, she had no special or any other property
in them and her possession was merely that of a thief.  We
come back again to the larceny by a trick.
  Such being the relevancy of this finding, the next step
is to consider whether anything can be imputed to Mr. Lake
which would be equivalent to his consent however it may
have been obtained.
  Your Lordships heard an argument to the effect that
Mr. Lake was not deceived as to the identity of Ellison. She
was the aame person, it is said, whom he had seen before,
and, if he continued to deal with her, it must have been
because he gave credit to her statements, which in itself
made his act an " entrusting." I think this immaterial.
Such facts may raise difficulties in deciding, whether his
frame of mind involved misplaced consent or was cosistent
with absence of any consent at all, but the conclusion that it
was such as would negative the appearance of consent and so
remove the difficulty in the way of proving an asportavit,
concludes the whole issue.  It matters not whether the trick
takes the form of claiming falsely to be a particular person,
or of claiming falsely to be a different kind of personage
than the thief is, or in manipulating the objects which are
to be acquired. The trickster is equally a trickster in all.
If A. B. passes himself off as C. D. it is an instance of the
first class.  The confidence trick man, posing as a benevolent
millionaire from the United States, is of the second.  The
man who rings the changes and confuses the barmaid, whom
he has asked for change, is of the third.  The result in all
is absence of consent on the part of the person tricked.  Of
course animus furandi may be a separate matter and it remains
to be proved.  If the jury were persuaded that the trick
was all a joke they would have to acquit, but that would not
set up a true consent on the part of the party hoaxed nor
would it establish a bailment.  The jokers possession would
still be bad for want of any consent.
  Let us now examine the structure of this accustomed form
of policy.  Even in reported cases it figures as in use in
1914  (Moore v.  Evans (1)),  and I have no doubt is much
older.  I offer no observations on its drafting. If it suits
the parties, as it obviously does, there are no doubt sound
reasons for the shape in which it comes before us. It begins
with (a) a recital, that a premium has been paid to insure
Messrs. Lake against the risks of loss and/or damage by
fire, burglary, robbery, theft, accident;  from whatever
cause or misadventure to/of the property herein specified.
This is (b) certain chattels, including pearls, the property
of Messrs. Lake, in trust or on commission or for which the
assured is/are held to be responsible, (c) while in their own
custody or in the custody of any person, to whom they may
have entrusted the same on sale or return for valuation or
inspection or for any other purpose whatever.  (d) The loss
must have occurred from Messrs. Lake's premises, 43 High
Street, Exeter, or while in transit in the United Kingdom.
Then follows (e) the duration of the policy.  Having thus
recited the name and premises of the assured, the kind of
chattels covered and their relation to the assured, and the
place in which they are to be when covered and the period
of the insurance, the policy declares as follows, "touching
the adventures and perils to the property hereby insured,
which we the assurers. . . . do take upon us, they are the loss
of and/or damage or misfortune to the before-mentioned
property or any part thereof, arising from any cause what-
soever, except as hereinafter mentioned," and then follows
the material exception clause No. 1.
  Leaving out words not material for present purposes, I
think that as a matter of construction the exception clause
takes out of the stipulated cover against "thefts" generally,
certain thefts conditioned in accordance with its terms, and
these fall into two classes--namely, those committed by
employees of the assured under all circumstances, and those
committed by customers, brokers, or brokers' customers,
when, but only when, the words "in respect of goods entrusted
to them by the assured" are satisfied.
  Now that must mean the same theft or thefts as in the
recitals which define the extent of the insurance, and, though
not so peculiarly a term of art as larceny, theft in each case
must mean anything that the law would regard and punish
as theft in the fullest sense of the word.  Next, the part
of the clause, under which a quality of the excluded theft
is indicated by the words "by any customer . . . . in respect
of goods entrusted," must cut out something already included
by the general recitals and provisions. When the goods have
passed out of the assured's own custody, they are not covered
unless they have been "entrusted" to others on sale of return
for valuation or inspection, or for any other like purpose
under the ejusdem generis rule of construction.  "Entrusted"
has therefore the same sense in the exception es in the general
words, and the only material " entrusting " is an entrusting
(a) by the assured, (b) for one of the specified purposes.  I
think it follows that " entrusting " in the exception cannot
mean a bare handing over or physical delivery. It doas
not extend beyond such a delivery as satisfies the two
qualifications stated. The goods must have been handed
over in a way that can be described as "entrusting" and for
one of the named purposes, which in this case can be no
other than " on the conditions of sale or return."  Here
it is quite plain that the pearls were never entrusted to
Ellison on conditions of sale or return.  She was not the
person who was to approve or to buy or return them---that
was Mr. Van der Borgh or Commander Digby.  If this was
entrusting, it was to one of them.  One of these persons
was imaginary.  The other was not a customer and he was
not, in fact, aware of what was being done or concerned
in it in any way.  In fact, nobody was entrusted.
  In the next place, Mr. Lakr, who trusted Ellison in the
sense of believing what she said, who entrusted the pearls
to her, if at all, only that she might take them to Van der Borgh
or Digby for purchase or return by them, and who did what
was done under a complete delusion, can only be said to have
" entrusted " the pearls to her, if he consented to her having
them. If there was a trick, which prevented any true
consent arising, there could be no entrusting.  The terms
are mutually exclusive.  In my opinion, the natural meaning
of " entrusted " involves that the assured should by some
real and conscious volition have imposed on the person,
to whom he delivers the goods, some species of fiduciary
duty.  There is no room here for my colloquial sense. A
large and important part is played in a jeweller's business
by the various kinds of genuine "entrusting," which the
earlier part of the policy describes. The exclusion from the
risk covered of any delivery of possession, however devoid
of mental assent on the part of the person who gives it, would
be quite arbitrary and hard to reconcile with the general
insuring words. The language is the insurers' own, and in
an exception it must be read contra preferentes.  If they
intended no more than " handed over," they should have
said so, and the more plainly the better.
  Against this conclusion reliance has been placed on two
arguments, (a) that in a commercial document no legal
technicality of the criminal law should be taken into account
and (b) that the element of consent should be taken in
the sense in which, in the Factors Act, 1889, s. 2, the Court
of Appeal was disposed to read it in Folkes v. King. (1)
  Every one must agree that commercial contracts are to
be interpreted with regard to the circumstances of commerce
with which they deal, the language used by those who are
parties to them, and the objects which they are intended
to secure.  This, however, is not a case in which the appellants
propose to read the policy as if they were arguing an old-
fashioned indictment, nor do I think it fair to discuss their
contention as if it involved "technicalities of the criminal
law."  Even if it were the case that the aim, on which
the doctrine of larceny by a trick at common law was first
developed, was one, in which a thief would otherwise have
escaped conviction, where he had called in fraud to the
assistance of his nimble fingers, the doctrine is now statutory
under the Larceny Act, but I do not think the doctrine ever
was one, which oould be described as being an artificial view
of the facts as opposed to the actual facts of the case.  It
was not merely "invented by judges" to prevent a thief
from taking advantage of his own wrong and relying upon
a possession which he obtained unlawfully.  Before this
"invention" an accused person, who contended that there
was no sufficient evidence of a taking, was not relying on a
possession unlawfully obtained; he was relying on the law and
was taking proper advantage--if that is the word--of being
in the right at any rate as to the law of evidence. I dissent
from the view that criminals law should be treated as irrelevant
merely because a documemt is commercial.  After all, criminal
law is still law and so are its definitions and rules.  Besides, the
distinction between a real consent, obtained by deceit, and
                   (1)  [1923] 1 K.B. 282.
first of the false representation the woman made to the
for value and in good faith on their part.  The action which
prejudices them is action which only becomes possible
because an unauthorized person has got the documents under
circumstances that lead others to act in the belief that the
true owner has given his corsent.  An argument may well
arise in such circumstancas that, as against the third party
who has changed his position, the original owner cannot
deny a consent which is not only apparent but is invested
with this appearance by what he has done. What they
have to be protected against is not confined to the results
of his intelligent and consensual action but against the results
of any action on his part at all.  Be this as it may, it seems
to me not to be decisive in the present case and I say no
more upon it.
  I agree that Ellison was not a customer for the purpose
of the exceptions clause.  There is no point in introducing
a person, who is by trade a broker and still less his customers
too, who may be unknown to the assured, unless that capacity
is directly connected with the goods with which the exception
deals. Aecordingly, my Lords, I think that the apeal
succeeds.
  LORD ATKINSON. My Lords, the argument in this case
has ranged over a very wide field.  My noble friends who
have preceed me have dealt with the various points which
have been argued by counsel on both sides.  I do not propose
to deal with those points again.  I think the appeal succeeds.
I think Miss Esme/ Ellison obtained the possession of the
jewellery handed to her by the appellant by an operation
which is appropriately described as larceny by a trick.  That,
when she got possession of it, she feloniously appropriated
it, is not disputed.  But the operation of entrusting the
possession of the jewellery but not the property in it to her,
which, prima facie, would mean handing it over to her to
be devoted by her to some legitimate purpose, was treated
rather as if it were something separable from, and uncon-
nected with, the theft committed.  It really was nothing
of the kind.  The theft was a composite thing.  It consisted
appellant, which he apparently believed, secondly, the
action he took, acting on that belief, and third, the felonious
appropriation of the goods when obtained by her to her own
use.  The so-called entrusting of the jewels to her, furnished
to her---as she intended it should---the opportunity for and
means of committing the theft.
  It does not appear to me to be possible to separate the
handing over of the possession of the jewels from the false-
hood which preceded it, and the felonious action which
followed it.  The entrusting of goods to a customer mentioned
in the exception cannot mean the delivery in all good faith
by a dealer of goods to a customer which that customer has
planned to steal, and by that very delivery enabling the
customer to effect her felonious purpose.  The true character
of the operation was larceny of the appellant's goods by
means of a trick--the trick being the false and fraudulent
representation which this woman made to the appellant,
by which the delivery to her of the possession of the jewels
was obtained.
  The appellant had no suspicion, apparently, that he was
about to be robbed through the medium of this trick. He
acted perfectly honestly in going over the possession of the
jewellery. So does every one, presumably, who suffers
from larceny by a trick.  It is the honest belief of the person
robbed in the false statements made which enables the
intending thief to defraud him.  That;  however, does not
alter the real character of the entire transaction.
  Again, the inclination of my opinion is that Miss Esme
Ellison was not a customer of the appellant quoad the goods,
the possession of which was handed over to her, within the
meaning of the exception, though she may have stood to
the appellant in relation of customer in other transactions.
No doubt the appellant regarded the handling over of the
jewels to her as amcillary to a possible sale of them to her
pretended husband, but the idea of having any dealing of
that kind with the appellant in reference to this jewellery
never entered her head. From the first she apparently
designed and intended a theft.  That was the nature of the
only dealing she had in mind.  As I have said, I think the
appeal succeeds.

  LORD WRENBURY.  My Lords, I concur.

  LORD BLANESBURGH. My Lords, I think also that this
appeal succeeds, and while I entirely agree with the judgment
of my noble and learned friend Lord Sumner, which I have
had the advantage of reading, I propose specifically to base
my conclusion on the simple ground that Ellison was not
in either transaction a customer of the appellant within the
meaning of the exception clause of the policy.
  I do not doubt that by the month of March, 1923, she
had resorted to the appellant's shop for the purpose of
purchasing goods from him with sufficient frequency to justify
her inclusion in the class of persons aptly enough described
as the customers of the appellant in connection with his
business of a jeweller.  I am free also to agree that if the only
customers or persons referred to in the exception clause had
been customers of the assured, it might on construction
have been difficult to avoid the conclusion that nothing
more was required to bring Ellison in this respect within the
exception.  With reference to a  clause so framed it could with
force have been urged that his customers were so excepted
because the assured had no need to be protected against the
unlikely dishonesty of people he knew and trusted in business.
  But, my Lords, the exception is not confined to customers
of the  assured.  It extends to a "broker or broker's
customer" as well, and, as will be seen in a moment, no
corresponding explanation of their appearanee in the exception
can be put forward.
  If the whole expression is to be construed in absolute or
detached terms, as I have so far construed the word
"customer," who, it may be asked, is a "broker"?  May
he be any kind of broker?  What is the qualification for his
inclusion if he may not?  What possible connection, still
construing the word at large, is there between the assured
and the "customer" of such a broker?  Who is such a
"customer"? Who is not? How would that position,
one way or the other, be known to the assured? It is, my
Lords, I think, quite impossible to say. In my judgment,
therefore, it is necessary to reconsider the effect of the whole
phrase "customer, broker or broker's customer in respect
of goods entrusted to them," from this standpoint and with
a view of seeing whether there is any relation in which they
all stand to the assured which makes it possible at once to
fix their identity and to justify the exception in regard to each
that the customer of the assured, the  broker or the broker's
customer must, each and all of them, be such with reference to
the particular goods so entrusted to them. And Ellison
was not, and never pretended to be and was not treated
by the appellant as being, a customer in that sense in relation
to either of the necklaces now in question.
  My Lords, I am in entire agreement with McCardie J.
on this point.  I cannot think that it would have been dealt
with in the Court of Appeal so lightly as it was, if the Lords
Justices had noticed that rcasons which may be apt enough to
justify the inclusion of customers of the assured as such
in the exception have no application either to brokers or
their customers, and that in construing the clause no wider
meaning can properly be attached to the word "customer"
  in the one case where it is used than in the other.
  Order of the Court of Appeal reversed, and
  judgment of McCardie J. restored. The
  respondent to pay the costs in the trial of the
  action before McCardie J. and also the costs
  in the Court of Appeal and in respect of the
  appeal to this House. Cause remitted back
  to the King's Bench Division to do therein as
  shall be just and consistent with this judgment.
              Lords' Journals, April 4, 1927.
  Solicitors for the appellant : Kenneth Brown, Baker, Baker.
  Solicitors for the respondent :  Windybank, Samuell &
  Lawrence.
              KENNEDY v. THOMASSEN.
                 [1928. K. 175.]
Contract--Offer and Acceptance--Offer to redeem Annuity for lump Sum--
Release of Annuity executed by Annuitant--Death of Annuitant before
Acceptance communicated to Purchasers--Money paid in ignorance of
Annuitant's Death--Failure of consideration--No concluded Contract.
Under the will of her then husband made in 1902 and a separation
deed and settlement made in 1903 V. was entitled to two annuities
of 200l each. The testator, who was also the settler, died in 1913, and
V. afterwards married a Dutch subject, and for the remainder of her
life resided in Holland. In 1927 the trustees of the will offered to
redeem both annuities, and after some negotiations were informed by V.'s
solicitors that they would advice her to accept 600l. for redemption, the
annuities to be paid a full up to date of redemption. The trustees
sent the solicitors a draft release for their approval.  V. having informed
er esWliciors $ thatsa the offser0ofa60000l.~theyseAntbhe
the release engrossed for her execution, and she executed it on
January 12, 1928.  On January 17 she died, but no notification of
her death was received by her solicitors in London until January 31.
In the meantime the trustees having been informed by V.'s solicitors
on January 24 that she had accepted the 6000l., on January 30 paid
the money to them, being then in ignorance of V's death:--
  Held, that there was no concluded contract for the sale and purchase
of the annuities, as the purchasers could not have intended their offer
to be accepted by the vendor merely executing a document.
    But even assuming there was a concluded contract, there was a total
  failure of consideration, owing to the death of the annuitant before
  completion, and the trustees were entitled to recover back the 6000l.
    Stickland v. Turner (1852) 7 Ex. 208 applied.

  INTERPLEADER ISSUE.
  By a separation deed and settlement dated December 23
1903, and made between James Webster of the first part,
Elizabeth Wilhemina Gerhardina Webster his wife of the
second part, and persons therein named as trustees of the
settlement of the third part, it was provided that the trustees
should hold a sum of 8000l. stock, which had been transferred
by the said James Webster into their names upon trust during
the life of the said E.W.G. Webster, if she should at all
times observe and perform all the covenants and stipulations
therein contained to pay her out of the income thereof the
clear annual sum of 200l. by half yearly payments on January 6
and July 6 and subject thereto the settlement trustees were
to hold the said fund and the income thereof in trust for the
said James Webster absolutely.
  By his will dated September 30,  1902, the said James
Webster, having appointed the plaintiffs trustees thereof,
devised his real and all the residue of his personal estate
unto them upon the trusts therein declared, subject never-
theless to the payment of certain annuities, including an
annuity of 200l. to his said wife, E.W.G. Webster, during
her life.  The testator died on April 18, 1913, and his will
was duly proved.  After his death Mrs. Webster was married
to Pieter Leonhard Elija Vyzelaar, a Dutch subject resident
in Holland, who died in or about the year 1920, leaving
his widow surviving him.
  The plaintiffs, desiring to distribute the residuary estate
of the testator, proposed to the surviving annuitants under
his will, including Mrs. Vyzelaar, to commute their annuities
by payment to them of a capital sum. Accordingly the
plaintiff's solicitors by letter dated November l7, 1927,
addressed to Messrs. Long & Gardiner, as solicitors for
Mrs. Vyzelaar, offered to pay her the sum of 5378l. 16s. 8d.
in satisfaction of the two annuities of 200l., each payable
to her under the separation deed and will aforesaid.  This
offer was not accepted, and after considerable negotiations
by letter Messrs. Long & Gardiner informed the plaintiff's
solicitors that if they would make her an offer of 6000l. they
would advise Mrs. Vyzelaar to accept it.
    On January 5, 1928, the half yearly instalment of the 200l.
annuity payable to Mrs. Vyzelaar under the separation deed
was sent by the plaintiff's solicitors to Messrs. Long &
Gardiner, and on January 9, 1928, a draft dced of release
was sent to them for their approval in the event of
Mrs. Vyzelaar's acceptance of the offer of 6000l. Messrs.
Long & Gardiner caused the draft to be engrossed, and sent
it to Mrs. Vyzelaar for her execution.  She executed it on
January 12, 1928, in-the presence of the British Consul and
a Dutch notsry, and it was returned to Mr. Henry Smith, a
member of the firm of Long & Gardiner, with a covering
letter written at Mrs. Vyzelaar's request, saying that she was
ill, but had executed the document.  The letter proceeded,
" I also hope you will not part with the document before
they have paid."  Mr. Smith had previously written to her
saying that he would not part with the release except upon
payment of the annuity up to date and 6000l. in cash.  On
January 24 Messrs. Long & Gardiner wrote to the plaintiff's
solicitors as follows :  " We have now obtained Mrs. Vyzlaar's
receipt and release for 6000l. duly authenticated by the
British Consul at the Hague. . . . . We shall be glad to know
when the matter is ready for completion." In reply the
plaintiff's solicitors acknowledged receipt of this letter, and
said that the trustees' cheque for 6000l. would be handed
over to Messrs. Long & Gardiner " in exchange for the receipt
and release, on hearing from you that such cheque can be
made payable to Mrs. Vyzelaar or to such lady per yourselves."
The letter added that the trustees would also pay to
Mrs. VyzeLaar the proportion of her 200l. annuity under the
will to date of payment of the 6000l., which they suggested
should be paid " on Monday next, the 30th instant, if you
agree the terms hereof." Messrs. Long & Gardiner replied
that they saw no objection to the cheque being made payable
to Mrs. Vyzelaar per themselves.
  Mrs. Vyzelaar died on January 17, but no notification of
her death was received by her solicitors or any person in
England until january 31, when they received a letter dated
January 30 from the defendant, who claimed to be sole executor.
On January 30, 1928, the plaintiffs being then still unaware
of Mrs. Vyzelaar's death, paid Messrs. Long & Gardiner a
sum of 6000l. by cheque, and received in return the release
executed by her.  The release until then had been undated.
but the date January 30, 1928, was inserted on delivery of the
cheque.
  The plaintiffs having been informed of the death of
Mrs. Vyzelaar by Messrs. Long & Gardiner, claimed from them
the repayment of the 6000l., but Messrs. Long & Gardiner
refused to repay such sum on the ground that it was claimed
by the defendant as executor of Mrs. Vyzelaar.
  The plaintiffs thereupon brought this action, the writ
naming Messrs. Long & Gardiner as defendants.
  By order made on April 25, 1928, upon an interpleader
summons taken out by Messrs. Long & Gardiner, the 6000l.
was paid by them into Court, the claimant Thomassen was
substituted for them as defendant to the action, and the
trial of the following issue was ordered---namely, whether the
said sum of 6000l. with interest belonged to the plaintiffs or
the defendant.
  Gover K.C. and Humphrey H. King for the plaintiffs.  On
the facts there was no concluded contract between the parties.
But if there was any concluded contract at all it could not
have come into existence before January 24, 1928, the date
on which the fact of Mrs. Vyzelaar's acceptance of the
trustees' offer was first communicated to the trustees.
  If that be so then two results follow :  (1.) the offer lapsed
by the death of Mrs. Vyzelaar before that date, and (2.) her
death revoked the authority of her solicitors to notify her
acceptance to the plaintiffs.
  Thirdly, even assuming that there was on January 24 a
concluded contract between the parties, it was void or
voidable as against the plaintiffs, by reason of the fact that
the annuities had ceased to exist at the death of the annuitant.
The subject-matter of the contract was gone, and there was
a total failure of consideration.
   On the first point it is clearly established that acceptance
must be communicated to the other party ; a mere mental
acceptance is insufficient :  In re Consort Deep Level Gold
Mines (1) ;  Byrne & Co. v. Van Tienhoven. (2)  The law is fully
stated by Lord Blackburn in Brogden v. Metropolitan Ry.
Co. (3), where he quoted from memory, with approval, a
passage from a judgment of Brian C.J. in one of the Year
Books (4), laying down the rule.  The only exception to the
general rule that notice of acceptance is required is in those
cases where the offeror promises to pay a sum of money for
the performance of a certain act, or, for example, a reward
for finding something or giving certain information.  These
cases are fully discussed im Carlill v. Carbolic Smoke Ball
Co. (5), but they have no application to the print action.
  The plaintiffs only supplied the solicitors of the annuitant
with a draft release to approve on her behalf.  Instead of
approving and returning it for engrossment they had it
engrossed themselves and sent it to her to execute.  The
plaintiffs had no knowledge either of the approval or the
execution until January 24, a week after Mrs. Vyzelaars
death.  In Reynolds v. Atherton (6) Warrington L.J. held
that an offer lapsed by the death of the person to whom
it was made.
   On the second point, the death of the annuitant revoked
the authority of her solicitors to communicate her acceptance
to the trustees. The only exception to this rule is in the
case of agents appointed by power of atterney.  On the last
point, that of failure of consideration, even if the contract
had involved the execution of a conveyance, the Court would
set it aside : Fry on Specific Performance, s. 905, p. 426.
 (1) [1897] 1 Ch. 571, 591.          The passage is also quoted in Anson
 (2) (1880) 5 C. P. D. 344.          on Contract (16th ed. at p. 28).
 (3) (1877) 2 App. Cas. 666,           (5) [1893] 1 Q. B. 256.
691.                                   (6) (1921) 125 L. t. 690; affirmed in
 (4) 17 Edw. 4, Term, Pasch case 2.  H. L. 127 L. T. 189.
In Strickland v. Turner (1) a contract for the sale of an annuity
as held to fail owing to the death of the arnnitant.  That
decision was approved in Turner v. Greene (2) and in
Huddersfield Banking Co. v. Lister. (3)
  Topham K.C. and Cleveland-Stevens for the defendant.
There is no total failure of consideration; the contract was
made when Mrs. Vyzelaar executed the release on January 12,
1928.  There was what is called in Anson on Contract, 16th ed.,
p. 19, "an offer of a promise for an act."  The offer was to
pay the sum of 6000l. on the execution of a release by the
annuitant.
  The completion account, paying the annuity down to
January 30, was wrong, and the annuity should only have
been paid down to January 12.
  The deed was delivered as an escrow, and when the money
was paid the performance of the condition dated the contract
back to the date of execution:  Carlill v. Carbolic Smoke
Ball Co. (4);  Foundling Hospital v. Crane. (5)
  [EVE J. But the agency of Mrs. Vyzelaar's solicitors
would determine on her death.]
  Yes, but Mr. Smith was more than her agent merely; he
was the recognized channel of communication, with authority
to deliver the message and continue.  The principle is stated
in Henthorn v. Fraser (6), referring to Dunlop v. Higgins. (7)
  The offer was made to Mrs. Vyzelaar and was accepted,
  becoming a complete contract by the execution of the release.
  No reply was called for.
  EVE J.  This case in my opinion can be disposed of upon
  the short point that th~ never was a oonolu~~ contffla
for the sale and purchase of these annuities.  Negotiations
commenced in October, 1927, and by the middle of November
the intending purchasers communicated to Messrs. Long &
Gardiner, the recognized agents of the vendor, certain
  (1) (1852) 7 Ex. 208.           (4) [1893] 1 Q.B. 256,270.
  (2) [1895] 2 Ch. 205,210.       (5) [1911] 2 K.B. 367,382.
  (3) [1895] 2 Ch. 273,281.       (6) [1892] 2 Ch. 27.
               (7) (1848) 1 H.L.C. 381.
alternative proposals for the purchase.  Each of these proposals
involved the payment of a sum of money and the payment
of the annuities down to the date of completion.  The letter
of November 17, which I need not read again, clearly shows
that. The alternatives there presented did not commend
themselves to the vendor, and the matter went on; further
correspondence followed, and on December 21 Mr. Smith,
the member of the firm of Messrs. Long & Gardiner, who
was attending to the matter, wrote to the purchasers'
solicitors, Mrs. Rutter & Marchant :  " I have been in
communication with my client, but have not I able to
make her alter her decision.  I think, however, I should
point out that you did not give me much ground for argument,
as your last offer was still below the price of a Government
annuity of 400l.  If you can make a firm offer of 6000l. cash
I am prepared once again to approach my client and will
advise her to accept that sum.  If the above suggestion is
carried through the existing annuities must of course, in
accordance vith your letters, be paid to the date of payment
of the capital sum and the trustees' costs discharged."
Messrs. Rutter & Marhant thereupon took further instruction
from the purchasers, and on December 23 they informed
Mr. Smith by telephone of the willingness of the purchasers
to give the 6000l., end to accept the conditions laid down
in his letter of December 21. This information,
communicated to his client in a letter of the same date.  The
vendor was not at first disposed to accept this offer, but after
some further correspondence between her and Mr. Smith,
in which she asked for and was given fuller information,
she on January 9 wrote to Mr. Smith thanking him for his
letters, and saying, "I will accept on your advice the offer
of 6000l." That was communicated to Mr. Smith, not as
the agent of the purchasers, but in order that he, as the agent
of the vendor, should communicate to the purchasers her
acceptance of their offer.  It is not a case where the mere
posting of the acceptance concluded the contract. The
acceptance of the offer was not in fact communicated to the
purchasers' solicitors until January 24, and between January 9
and 24 the vendor had died.  The effect of her death was
to determine Mr. Smith's agency.  In my opinion after her
death he had no authority from her or anybody representing
her to community the acceptance to the purchasers, and
in the absence of such communication no contract was ever
concluded. It has however been argued that a contract
was concluded apart from any communication of any
acceptance of the offer to the offerers. The offer, it is
contended, of December 23 only required one thing to be
done by the vendor, and that was to execute a release of the
annuities, and when in fact, as it now turns out, she did on
January 12 execute a release, she had by so doing done
everything to complete the contract, and was relieved from
any obligation to do anything more.  Mr. Smith's statement
of the offer, which had been made to him through the
telephone, in his letter of December 23 to the vendor, is
as follows: "I have just had a telephone message from
Messrs. Rutter & Marchant that their clients have authorized
them to make you an offer of 6000l. cash for a release of your
annuities." What does that mean ?  Does it mean that
the moment you sign the release a contract is concluded and
it will not be obligatory either upon you or me to make any
further communication to the purchasers?  It only means
this, that for the purchser of these annuities the purchasers
are prepared to pay you 6000l., and you will have to execute
a release or some other appropriate document to carry out
the matter.  It is impossible to say that this was an offer
which anybody contemplated could be accepted by the mere
execution by the vendor of the document of January 12.
It would be stretching the result of the case referred to by
Bowen L.J. in Carlill v. Carbolic Smoke Ball Co. (1) far beyond
what was contemplated, to hold that they applied to such a
case as this.  In my opinion it is a case in which the communi-
cation to the purchasers of the acceptance was necessary,
and this never having been made during the time when the
person authorized to make it had authority so to make it,
no contract was ever concluded.
              (1) [1893] 1 Q.B. 256.
  I might add that assuming there were a contract it was
in my opinion one for the purchase of the annuities at a
future date.  It was not intended that the purchase should
be completed as on the day of the letters or on January 12,
the day when the release was executed. It was intended
that the purchase price should be ascertained when the parties
were ready for completion, and the purchase price was not
merely the 6000l., but it was that sum plus the apportioned
part of the two annuities to be calculated down to the day
of completion. The case therefore would fall within the
authority of Strickland v. Turner (1), and had I held that there
  was a concluded agreement, I should have been bound to
  hold further that the death of the annuitant between contract
  and completion rendered the contract incapable of performance
  in that there was no considertion which the purchaser would
  receive for his money.  The fund in Court belongs to the
  plaintiffs, and must be paid out to them.  If there is no
  arrangement about the costs the defendant must pay them.

    Solicitors : Rutter & Marchant;; A.F. & R.W. Tweedie.
                    (1) 7 Ex. 208.
                                        H.L.L.
       THOMPSON v. LONDON, MIDLAND AND SCOTTISH
                 RAILWAY  COMPANY.
Railway--Negligence--Accident to Railway Passenger--Negligence of Railway
  Company--Damages--Excursion Ticket--Special Contract--Condition
  negativing Company's Liability--Passenger unable to read--Reasonable
  Notice of Condition.
    The plaintiff, who could not read, had an excursion ticket takes for
  her by her niece on the face of which were printed the words: "Excur-
  sion.  For conditions see back"; and on the back was a notice that
  the ticket was issued subject to the conditions in the defendant company's
  time tables and excursion bills.  On the excursion bills excursion tickets
  were stated to be issued subject to the conditions shown in the company's
  current time table.  The time table, which could be obtained for
  sixpence each, stated:  " Excursion tickets . . . . are issued subject
  to the general regulations and to the condition that the holders . . . .
  shall have no rights of action against the company . . . . in respect of
  . . . . injury (fatal or otherwise) . . . . however caused."  A special
  jury found that an accident to the plaintiff on the journey covered by
  the excursion ticket was due to negligence on the part of the defendant
  company.  To prevent the case going back for a new trial, the jury were
  asked whether the defendant company took reasonable steps to bring the
  conditions to the notice of the plaintiff and answered "No," and awarded
  damages.  Argument was then allowed whether the jury could so find,
and it was held that as a matter of law when the ticket was accepted
the contract was complete, and therefore there was no evidence on which
the jury could find as they did:--
  Held, that the fact that the plaintiff could not read did not alter
the legal position; that she was bound by the special contract made on
the excursion ticket on the acceptance of the ticket; and that the
indication of the special conditions by reference to the time tables was
sufficient notice of their existence and contents.
  Stewart v. London and North Western Ry. Co. (1864) 33 L. J. (Ex.) 199
applied.
  Parker v. South Eastern Ry. Co. (1877) 2 C. P. D. 416 distinguished.
  Numan v. Southern Ry. Co. [1923] 2 K. B. 703 approved.
  Held, also, that the question put to the jury for the sake of convenience
  as to reasonable notice must he determined upon the law applicable
  to the conditions upon which the ticket was issued, and that those
  conditions negatived the right of the plaintiff to recover damages.
  Watkins v. Rymill (1883) 10 Q. B. D. 178 followed.
  APPEAL from Mr. Commissioner Sir W. F. Kyffin Taylor
sitting at Manchester with a special jury.
  The action was brought by Mrs. Mary Elizabeth Thompson
against the defendant company for damages in respect of
injuries sustained by her through alleged negligence of the
defendant company's servants.
  The following statement of facts is taken from the judgment
of the Master of the Rolls :---
  "Mrs. Thompson went with two other persons, the two other
persons being her daughter and her niece, a Miss Aldcroft, on
January 23, 1928, to the railway station, and she was a pas-
senger on a train from Manchester to Darwen, the train reaching
Darwen at about 10 P.M. at night.  When the train arrived at
Darwen station it apparently was too long to be accomodated
at the platform, with the result that it had to pull up a second
time.  The plaintiff was told not to get out at the first stopping
of the train.  Then the train drew up a second time, and when
it reached the platform it reached that part of it right at the
end of the platform where the ramp begins, and in stepping
out on to the platform she slipped and suffered the injuries
which are set out in the statement of claim.  The action is
brought and is based on the negligence of the defendants
in the course of carrying the plaintiff to her destination---
Darwen from Manchester.  The defendants rely upon the
conditions of the contract under which they undertook to
convey the plaintiff from Manchester to Darwen, and the
particulars say this :  The ticket issued to the plaintiff by
the defendants for the said journey was an excursion ticket
and on the face of the said ticket were printed (inter alia)
the words ' Excursion, For conditions see back,' and on the
back of the said ticket were printsd (inter alia) the words
' Issued subject to the conditions and regulations in the
company's time tables and notices and excursion and other
bills.' On the excursion bill of the ssid company were
printed (inter alia), the words ' Excursion tickets are issued
subject to the notices and conditions shown in the company's
current time tables.' In the company's time table were
printed (inter alia). the words ' Excursion tickets and tickets
issued at fares less than the ordinary fares are issued subject
to the general regulations and conditions and also the
condition that neither the holders nor any other person shall
have any right of action against the company . . . . in respect
of . . . . injury (fatal or otherwise) loss, damage or delay
however caused.'
" There is no dispute that this lady was travelling by an
excursion train. It is an excursion train which apparently
the defendant company run so many times a week during
particular periods of the year between Darwen and Manchester
on terms of a muoh lower charge being made to passengers
than is charged for the ordinary transit. The excursion
trains are not part of their ordinary service of trains--they are
trains on special days and special occasions and on special
terms as to price.  There is some evidence as to how the lady
came to travel.  She says in her evidence she cannot read ;
she paid a Miss Aldcroft, who was one of the ladies of the
party, the sum which was required, and Miss Aldcroft says
this (this is the learned Commissioner's note) :  ' I took tickets
--three hall-day excursions to Manchester 2s. 7d. each'--
that is from Darwen to Manchester and Manchester back to
Darwen.  Now the price 2s. 7d. each is just one-hall of what
would be charged as the ordinary fare for that amount of
railway travelling between Darwen and Manchester and back
again from Manchester to Darwen. She says at that time
nothing was said about handbills and nothing about conditions
and she saw no handbill, but on cross-examination she says
her father had been to see if there were excursion trains,
and there is in the evidence (according to the note which
has been very sensibly and very fairly agreed between junior
counsel in the case) this statement, which does not find its
way into the condensed note which is before me, that he had
looked and found that there were excursion trains as indicated
by some of the bills which were hanging up in the booking hall
of the railway company.
  " The lady's action was tried before Mr. Commissioner Sir
William Francis Kyffin Taylor sitting at Manchester with the
assistance of a special jury of Manchester men, and he left
certain questions to the jury.  The first question that had to be
decided was, Whether or not there was any negligence on the
part of the defendants ? and the second was, What were the
damages if they held that the defendants were liable ?  Then
came the question of a special defence which had been argued
on the particulars that I have already read.  On that issue the
learned Commissioner took a course which has been taken
before and taken prudently in order to prevent the case going
back for a new trial.  He says in his summing up to the jury :
' I want to leave a question to you about this condition.  .  .  .  .
Did the defendants, the railway company, take reasonable
steps to bring the conditions to the notice of the plaintiff ?
It may be that that question is not necessary, but I think
it wiser, in order to save expense and trouble, to get an answer
from you at any rate if you would be good enough to bring
your minds to bear upon it.'  It is I think quite plain from
that introductory sentence that the learned Commissioner
left that question not because he was satisfied in his mind
that there was evidence which required or justified the
question being put, but ex majore cautela so that it might
be considered and the answer of the jury considered if it
became necessary to do so.  The jury in answer to that
question replied as follows:  they answered No, they had not
taken steps, and then they found on the other two questions
for the plaintiff, that is, they found negligence and they found
damages to the amount of 167l. 10s.  The learned Commis-
sioner at a later date rightly had the legal question arising
upon the issue of that condition argued before him and
ultimately came to the conclusion that the condition did
afford a shield of defence to the railway company, and upon
that he entered judgment for the defendants.  It is from
that judgment for the defendant railway company that
the plaintiff appeals."
  The appeal was heard on May 14, 1929.

  N.B. Goldie K.C. and B. R. Rice-Jones for the appellant.
  Jackson K.C. and W. Gorman for the respondent company.
  The arguments sufficiently appear from the judgments.
  [The following cases were referred to: Skrine v. Gould (1) ;
Williamson v. North of Scotland and Orkney and Shetland
Steam Navigation Co. (2); Richardson, Spence & Co. v.
Rowntree (3) ;  Hood v. Anchor Line (Henderson Brothers) (4) ;
Nunan v. 'Southern Ry. Co. (5); Watkins v. Rymill (6);
Marriott v. Yeoward Brothers (7); Hearn v. Southern Ry.
Co. (8); Stewart v. London and North Western Ry. Co. (9) ;
Harris v. Great Western Ry. Co. (10); Grand Trunk Ry. Co
of Canada v. Robinson (11); Parker v. South Eastern
Ry. Co. (12)]

 LORD HANWORTH M.R. This case has raised a very inter-
esting point, not the less interesting because it is not new,
but we have had the advantage of an able argument on both
sides, from Mr. Goldie and Mr. Jackson, and we feel no
difficulty in coming to a conclusion.
  [His Lordship stated the facts as above set out and
continued:]  The learned Commissioner has come to his
conclusion upon a ground which we are of opinion was right.
  (1) (1912) 29 Times L.R. 19.          (8) (1925) 41 Times L.R. 305.
  (2) 1916 S.C. 554.                    (9) 33 L.J. (Ex.) 199.
  (3) [1894] A.C. 217.                  (10) (1876) 1 Q.B.D. 515.
  (4) [1918] A.C. 837.                  (11) [1915] A.C. 740.
  (5) [1923] 2 K.B. 703.                (12) 2 C.P.D. 416; (1876) 1 C.P.D.
  (6) 10 Q.B.D. 178.                         618.
  (7) [1909] 2 K.B. 987.
  Dealing with the condition, I must just say a word or two
more as to its nature.  The ticket issued to the plaintiff had in
plain and unmistakable terms in type as large as the other
words upon the face of the ticket: " Excursion, For conditions
see back."  There is no difficulty in reading those words any
more than there is a difficulty in reading the words "Third
Class" or "Manchester" down below.  Then on the back of
the ticket is printed also in type, which if small is easily legible :
" Issued subject to the conditions and regulations of the
company's time tables and notices and excursion and other
bills. Return as per bill." In the time table at p. 552
there is this condition, which is relied upon and which I have
read. The condition on the back makes the first reference
to the company's time tables, but it also refers to noticas and
excursion and other bills.  In the excursion bills, which con-
tain some notes as to the tickets to be issued and the charges
to be made and the dates on which pasengers can travel
at a single fare for a double journey, there is a reference to
the conditions and the inquire is directed to the time table.
Ultimately therefore the time table is the place where this
particular condition is found.  Any person who took the
trouble to follow out the plain and legible words on the
ticket,  " See Conditions," would he directed without diffi-
culty to the some of the conditions and would be able to find
it. Obviously persons who are minded to go for a day
journey of this sort do not take the trouble to make an
examination of all the conditions, but two thing are plain,
first, that any person who takes this ticket is conscious that
there are some conditions om which it is issued and also
secondly, that it is priced at a figure far below the ordinary
price charged by the railway company, and from that it is
a mere sequence of thought that one does not get from the
railway company the ticket which they do provide at the
higher figure of 5s. 4d.
  The plaintiff in this case cannot read;  but, having regard
to the authorities, and the condition of education in this
country, I do not think that avails her in any degree.  The
ticket was taken for her by her agent.  The time of the train
If that be so, the conditions render it impossible for the
plaintiff to succasd in her action. It is, however, argued
that it is a question of fact for the jury, whether or not
sufficient notice was given of these conditions, and whether
or not, therefore, the plaintiff ought to be held bound by the
conditions ;  for it is said that the conditions are, I will not
say past finding out, but difficult to ascertain.  The learned
Commissioner who tried the cause appriciated that the verdict
of the jury was based probably on the fact that you have to
make a considerable search before you find out the conditions.
I think he is right in saying that in the line of cases, and
there are many, under which this case falls, it has not ever
been held that the mere circuity which has to be followcd to
find the actual condition prevents the passenger having notice
that there was a condition.
  Starting  as early as 1864, there is a case of Stewart v.
London and North Western Ry. Co. (1), a decision of the Court
in banc, in which it was held that the holder of a railway
excursion ticket--expressed to be " issued subject to the
conditions contained in the company's time and excursion
hills," one of which conditions was that " luggage under
40 lb." should be carried " free, at passenger's own risk "--
was bound by the terms of this special contract, which was
not void under the Traffic Act ;  and he had consequently
no claim against the company for the lcas of his luggage,
although it was proved that he did not know the condition
on which it was being carried.  The learned Chief Baron,
Pollock C.B., in  that case, says (2) :  " There is  a rule in
the English law that every man must be taken to know that
which he has the means of knowing, whether he has availed
himself of those means or not.  Now, as to this ticket, the
plaintiff must be supposed to have read it.  If he did not
choose to consult the handbill, that is his fault, not the fault
of the company.  The bill points out the terms upon which
these particular and special trains are to run."  And then
he refers to the condition, and says (3) :  " The  plaintiff's
  (1) 33 L. J. (Ex.) 199.     (2) 33 L. J. (Ex.) 200.
                       (3) 33 L. J. (Ex.) 201.
ignorance, then, was of his own creation, and the luggage
was lost in a place where he has agreed to take the risk
himself. Under the circumstances, the railway company
are not liable, and on that ground there should be no rule."
And then the other judges concurred.  I have referred to
that case not only because it is the earliest one to which
our attention has been called in matter of date, but also
because it refers to an excursion train.  It appears to me
important to bear in mind that we are dealing with a special
contract made for a special transit by an excursion train.
We are not dealing with the ordinary schedule of trains avail-
able to every one at the usual rate.  We are dealing with a
particular transit, in respect of which the father of Miss
Aldcroft went down to the station to know if and when such
transit was available, and ascertained both the time and
the price; and he could have learned all the conditions if
he had been so minded.
  That consideration, that it was an excursion train and a
special contract, must be borne in mind; for there are a
number of cases which, if you do not bear that in mind, might
be taken as applying and applying in a contrary sense to the
present case.  For instance, I think that in dealing with
Parker v. South Eastern. Ry. Co. (1) it must be remembered as
regards the condition which was there relied upon as to limita-
tion of liability in respect of goods deposited in a cloak room,
that the limit there arose upon a ticket which had been
handed to the depositor; but it was unnecessary for the
purpose of the deposit and the safe custody that there should
be any terms or conditions at all, or indeed, that there should
be a written contract at all.  Therefore, the contract was
one which could be made, and might very ordinarily be made,
without any written conditions of any sort or kind; and
that feature is dwelt upon as significant in the judgment of
Lord Coleridge C.J. in the Court below, where he says (2):
"Regard being had to the common and ordinary course of
business, it seems to me to be reasonable that a man receiving
such a ticket as this should look upon it as a mere voucher
  (1) 1 C.P.D. 618;  2 C.P.D. 416.     (2) 1 C.P.D. 618,626.
for the receipt of the package deposited, and a means of
identifying him as the owner when he sought to reclaim it,"
and in that sense not containing any special eondition to
which his attention was to be drawn.  And in the Court of
Appeal observations are made which must be taken with
that qualifying factor arising upon the issue of the ticket.
Bramwell L.J. (as he then was)  there says (1) : " Would
the depositor be bound ?  I might content myself by asking :
Would he be, if he were told ' our conditions are on this
ticket,' and he did not read them.  In my judgment, he
would not be bound in either case.  I think there is an
implied understanding that there is no condition unreason-
able to the knowledge of the party tendering the document
and not insisting on its being read--no condition not relevant
to the matter in hand.  I am of opinion, therefore, that the
plaintiffs, having notice of the printing, were in the same
situation as though the porter had said:  ' Read that, it con-
cerns the matter in hand ' ;  that if the plaintiffs did not
read it, they were as much bound as if they had read it and
had not objected."
Now there is the present case.  It was quite clear, and
everybody understood and knew that there would have to
be a ticket issued.  Without such ticket, which is the voucher
showing the money has been paid, it would not be possible
for the lady to go on the platform to take her train, or on
reaching the end of her transit to leave the platform without
giving up a ticket.  It is quite clear, therefore, that it was
intended there should be a ticket issued ;  and on that ticket
plainly on its face is a reference made to the conditions under
which it is issued.
  The question then remains, the judge having left this
question to the jury, and the jury having found it in favour
of the plaintiff, ought that verdict upon that question to
be set aside ?  Mr. Goldie has said that there was some
evidence on which the question was properly left to the jury---
namely, the fact that the oondition was somewhat far to seek,
and could not have been immediately diseovered by the
  (1)  2 C. P. D. 416, 428.
person taking the ticket. I agree with the observations of
the learned Commissioner, Sir William Francis Kyffin Taylor,
upon that point. I cannot find that the question of difficulty
or delay in ascertaining the condition has been relied on in
any of the cases as making any difference.
 The observations rightly dwelt upon by Mr. Goldie, made by
Lord Haldane in Hood v. Anchor Line (Henderson Brothers) (1),
were in a case where there was a question of fact open and
to be determined by the tribunal.  But if the question is
whether there is any evidence to support the findings of fact
question to them was otiose.
    Now it appcars to me that this point is exactly dealt
with in Watkins v. Rymill (2) in the judgment delivered by
Stephen J., in which he said (3) :  " The only question which can
be called a question of fact is, whether giving a man a printed
paper plainly expressing the conditions on which a keeper of
mission is or is not equivalent to asking the owner of the
carriage to read that paper, vith intent that he should read
it when he has a fair opportunity of doing so.  This, we
think, is a question of law, to be answered in the affirmative."
So here the giving of the ticket in plain terms indicated
that there are conditions, and that one of the conditions
is that the person shall find them at a certain place and accept
them, and that is I think quite a plain indication that the
carrier has made that offer upon those terms and conditions
only, and that any answer that he had not brought the con-
ditions sufficiently to the notice of the person accepting the
offer must be set aside as perverse.
  Following, therefore, the judgment in Watkins v. Rymill (2)
it appears to me that the learned Commissioner who dealt
with this question here was quite right in saying that he
could not give effect to the answer of the jury upon the
  (1) [1918] A. C. 837.  (2) 10 Q. B. D. 178.
                     (3) 10. B. D. 179 190.
question that he put for reasons of convenience ; and that
this must be determined upon the law applicable to the
conditions upon which the ticket was issued ;  and that those
conditions negative the right of the plaintiff to recover.
For these rcasons the appeal must be dismissed with costs.
  LAWRENCE L.J. Notwithstanding the able argument of
Mr. Goldie, I am of opinion that this appeal fails. The
question to be decided is whether there was any evidence
upon which the jury could find that the railway company
did not take reasonable steps to bring to the notice of the
appellant the conditions on which she would be carried.
Now the appellant was, I think, entitled to insist that all
that was reasonably necessary as a matter of ordinary practice
should have been done to bring to her notice the fact that
the contract tendered to her when she paid her fare excluded
her right of action in respect of injury, fatal or otherwise,
however caused.  Whether all that was reasonably necessary
to bring that condition to her notice was done is a question
of fact :  see per Lord Haldane in Hood v. Anchor Line
(Henderson Brothers). (1)  In  the present case the learned
Commissioner has held that there was no evidence to the
contrary.
  The facts of the case are simple.  On the ticket issued to
the plaintiff's agent there was a statement in plain terms
that it was issued subject to conditions which would be
found on the back, and on the back there is a plain statement
indicating where the conditions subject to which the ticket
was issued were to be found.  In these circumstances (the
notice on the ticket not being tricky or illusory) it seems
to me that there is no room for any evidence that the company
had not done all that was reasonably necassary as a matter
of ordinary practice to oall attention to the conditions upon
which the ticket was issued.  Mr. Goldie strenuously contended
that as the condition upon which the company now relies
was of an unusual character in that it exempted the company
from its ordinary liability, special attention ought to have
  (1)  [1918] A. C. 837,  844.
been drawn to that condition. In my judgment, that
argument is not sound; if it were, the company would have
to draw attention not only to the condition upon which it
now relies, but to all the conditions which might become
material according to the events which might afterwards
happen, and that could not as a matter of ordinary practice
be done upon a ticket such as this or verbally at the ticket
office.
  It seems to me that the right view is the one which was
expressed by Bramwell L.J. in Parker v. South Eastern Ry.
Co. (1) in the passage to which the Master of the Rolls has
referred. If there were a condition which was unreasonable
to the knowledge of the company tendering the ticket I do
not think the passenger would be bound. Here it cannot
be said that the condition in question in this case is an
unreasonable one, either from the point of view of the
company or from that of the passenger.  It is a oondition,
as appears from Stewart v. London and North Western Ry.
Co. (2), which has existed in respect of excursion trains for
upwards of half a century, and is, to my mind, a reasonable
condition, which need not have special attention directed to
it. I therefore agree with the learned Commissioner that
there was no evidence upon which a jury could properly
have found that the company had not taken reasonable steps
to bring to the attention of the appellant notice of the
condition upon which it was going to carry her between
Manchester and Darwen on the occasion in question.
  I agree with the Master of the Rolls that this appeal ought
to be dismissed.
  SANKEY L.J.  I agree, if I may be permitted to say so,
with what Lord Dunedin says in Hood v. Anchor Line
(Henderson Brothers) (3): "This is a class of case in whioh
of citing of authorities there is no end, and yet it is, I think,
quite possible to say 'Hear the conclusion of the whole
matter,'" and I think Mr. Goldie was quite right in saying
  (1) 2 C.P.D. 416,428.           (2) 33 L.J. (Ex.) 199.
                 (3) [1918] A.C. 837,846.
that Parker v. South Eastern Ry. Co. (1), which has been
approved in every case since its date, really stereotyped the
question which a tribunal always must put to itself when
the question arises. The learned Commissioner did put a
third question here: "Did the defendant railway company
take reasonable steps to bring the condition to the notice of
the plaintiff?"
  Now those who practise in this class of case know
perfectly well the sort of considerations which are placed
before juries when they are asked to give a verdict and an
answer to that question.  In some of the cases the ticket
has been handed to the plaintiff folded up, and it has been
suggested to the jury that that fact shows that the defendants
did not take reasonable steps to bring the conditions to the
notice of the plaintiff.  In the earlier cases you will find
examples of an argument which has long since been abandoned,
where it was sought to be said that where the conditions
were printed at the back of the ticket instsad of upon the
front of the ticket, the jury ought to say that there the
defendants had not taken reasonable steps to bring the
conditions to the notice of the plaintiff.  There is still a third
class of cases.  If you look at the authorities you will find
that the attention of the jury has been called to the smallness
of the print, and it is said: "Oh yes, the print was so small
that no reasonable person could read it," and the jury have
been asked to say on that consideration that reasonable
steps have not been taken by the defendants to bring the
conditions home to the notice of the plaintiff, especially, as
it is put in some of the cases, if when you take the ticket
for an excursion train, somebody behind you is of the opinion
that you are taking too long to get the ticket and hustles
you out of the ticket office before you have time to see.  No
doubt all those are matters for the consideration of the jury.
  But in this present case I think rather a different state of affairs
  is involved.  There can be no question here about the size of
  the print, at least I do not understand that Mr. Goldie (who,
  if he will permit me to say so, argued the case very well)
            (1) 2 C.P.D. 416.
takes any point with regard to the size of the print; I do
not think so.  If he had, I should have disagreed with him
for the rcasons pointed out by my Lord the Master of the
Rolls; it is in quite big print and quite legible print, "For
conditions see back."  Now when you look at the back it is
not possible I think to say merely because the condition was
not printed upon the front that it did not give reasonable
notice. There again the print, although smaller, is legible,
and refers to the notices, excursion and other bills and to the
time tables.
  As I understand it the real point made by Mr. Goldie, and
I rather expect the point upon which the jury really gave
their verdict, was this:  "Well, what we have to consider
is this, that the conditions do not in fact appear upon the
ticket at all either on the front or the back but they do
appear in a document---namely, the time tables, which it is
extremely difficult to get: "  There was evidence that there was
only (I think) one copy in the booking office, and that you
had to pay 6d. to get a copy if you wanted to see for your-
self, and it is suggested: "Ah, well now, that is not giving
reasonable notice of the conditions."  I do not quite agree
with that.  I rather think that this is a class of case where
conditions and incorporates conditions which are contained
in another document, and if you do make a contract like
that I do not think it is open to you to say either: (1.) that
you did not in fact look at the document which contained
the incorporated terms; or (2.) that the document which
contained the incorporated terms was one which you might
have had some difficulty in finding.  The fact remains that you
had made a contract which clearly says that the conditions
are contained in a particular document. Now I cannot help
thinking that the jury thought it was because of the difficulty
in getting the time table or the bills that the company had not
taken reasonable steps to bring the condition to the notice of
the plaintiff. That I understand is where the learned Com-
missioner disagrees with the verdict of the jury.  He says,
and I should like to read the passage again: "I do not think
myself that in the line of cases under which I hold th1s
case falls, that does make any difference" ---that is to say
the considertation whether you have to make a considerable
search before you find the conditions.  "It does not prevent
the passenger having notice that there are conditions in
writing, and that they are the conditions on which the com-
pany makes the offer, and if there is a written offer which
refers to conditions which are to be found in a document,
which if you like you can search, it seems to me that the
person accepting the offer is bound by the conditions and
that in such a case there is no evidence such as would come
within those authorities upon which a jury could say that
reasonable steps had not been taken by the company to bring
the conditions to the notice of the person purchasing the
ticket." I would like to guard myself in the way that
Bramwell L.J. and my brother Lawrence L.J. have guarded
themselves with regard to the question whether if the docu-
ment to which you are referring imposed such unreasonable
conditions that nobody could contemplate that they exist,
you could be bound by them.  The example given was
supposing you left in a cloak room goods bound by conditions
in a time table, and there were oonditions in the time table
that if you did not remove your goods within twenty-four
hours they should be forfeit to the railway company or that
you should pay 100l., or some ridiculous condition like that,
in my view the conditions would not be binding.  Supposing
again the conditions in the time table were printsd in Chinese,
so that you could not understand them, there again it probably
could not be said you would be bound by the condition,
but the present condition is by no means an unreasonable
condition; everybody familiar with the practice of the railway
world knows the sort of conditions that are imposed upon
people who take cheap tickets--sometimes they are drovers'
tickets, sometimes they are tickets to enable workmen to go
backwards and forwards, sometimes they are excursion tickets,
and in respect of the latter tickets, in Stewart v. London and
North Western Ry. Co. (1), to which we have been referred,
          (1) 33 L.J. (Ex.) 199.
in addition to the passage read from the judgment of
the Chief Baron, Pigott B. said (1)  (it was an excursion
train) he looked upon it as a special contract; that it
was competent for the parties to make it, and the railway
company did not incur the responsibility of common carriers
in running these excursion trains.  In those circumstancas
I do not think that it was open to the jury to find that the
company had not taken all reasonable steps to give the
plaintiff notice of the conditions.  The case proceeds on a
different line altogether, and I am of opinion that the
learned Commissioner was right in entering judgment for
the defendants non obstante veredicto.
  I agree that the appeal should be dismissed.

                             Appeal dismissed.
  Solicitor for appellant: John Carnegie, for C. St. J.
Broadbent, Darwen.
  Solicitor for respondents: Alexander Eddy.
          (1) 33 L.J. (Ex.) 201.