Scottish Court of Session Decisions

The pursuers in this action sought declarator that a contract of sale was entered into and finally concluded between them and the deceased John Hay, whereby the pursuers agreed to sell, and Hay agreed to purchase, certain heritable subjects, the property of the pursuers, at the price of £5000, payable at Whitsunday 1868.

It appeared that on the 15th June 1867 the treasurer of the incorporation wrote to Mr Hay as follows:—

Dear Sir,'—I am authorised by the Bakers' Incorporation to sell to you, or to the party whom you represent, the mills and whole other property belonging to them at the Water of Leith, for the price of £5000. The whole conditions of the sale must be arranged to the satisfaction of our agent, Mr Ranken.

“This offer is only to be binding for one week from this date.—I am,” &c.

Mr Hay replied on 22d June in these terms:—

Dear Sir,—I am favoured with yours of the 15th instant, stating that you were authorised by the incorporation to sell to me the mills and whole other property belonging to them at the Water of Leith for £5000, and the whole other conditions of sale to be arranged to the satisfaction of your agent, Mr Ranken.

“ I hereby accept your offer, upon the understanding that the incorporation shall give me a good title; and farther, that I am to stand in their shoes, and to become possessed of all their rights, as at the present date. I shall be ready to pay the price so soon as the titles can be completed.—1 am,” &c.

A correspondence, the material portions of which are given in the subjoined opinions of the Judges, ensued between the agents of the parties, and continued down to January 1868, on the 28th day of which month Mr Hay died. The question then arose whether there was a concluded contract of sale, binding on Hay's representatives.

The pursuer pleaded, inter alia—(1) by the writings above condescended on and referred to, or some of them, a final and concluded agreement and contract of purchase and sale of the subjects in question was entered into between the said deceased Mr Hay and the pursuers; (2) even assuming the said agreement to be incomplete in itself it was validated by the actings which followed upon it as aforesaid.

Judgment was asked on the first plea.

The Lord Ordinary (Kinloch) pronounced this interlocutor:—Finds that no concluded contract of sale of the subjects libelled passed between the pursuers and the deceased Mr Hay: Repels the first plea in law stated by the pursuers on the closed record; and appoints the cause to be enrolled, in order to be disposed of in accordance with this finding.

Note.—By a letter from their treasurer, dated 15th June 1867, the pursuers, the Bakers' Incorporation, offered to the deceased Mr Hay ‘ the mills and whole other property belonging to them at the Water of Leith,’ at the price of £5000. It was added, ‘ the whole of the conditions of sale must be arranged to the satisfaction of our agent, Mr Ranken.’ By his answer of 22d June 1867, Mr Hay accepted the offer, repeating that the price was to be £5000, ‘ the whole other conditions of sale to be arranged to the satisfaction of your agent, Mr Ranken.’

It is clear, and was not disputed, that this did not involve any reference to Mr Ranken as arbiter or umpire between the parties. He was the pursuers' law agent, and to act in that capacity; not otherwise. The matters requiring to be adjusted were, doubtless, mostly such as fell within a law agent's province. But whatever they were, it was agreed that they were such as to require adjustment; and the parties are found to start with the mutual consciousness that until an adjustment took place, the contract was not finally arranged.

Mr Ranken, the pursuers' agent, very clearly expressed his conviction to this effect in his letter to Mr Hay of date 24th June 1867. He reminded Mr Hay that the offer by the pursuers ‘ was intended merely to indicate the price at which Mr Ramage was authorised to say the Water of Leith property would be sold. The conditions of sale will fall to be arranged with your agent or yourself and me: the nature of the title; the conditions under which the property is held; the term of entry, when you are to have right to the succeeding rents,’ &c. Mr Ranken added, that so soon as they came to an understanding on these points, it would be proper to have a meeting of the pursuers' incorporation, ‘ for instructions to close with you.’ Mr Ranken might be wrong in thinking that such a meeting was necessary, but his mode of expressing himself clearly shows how much he considered the conclusion of the contract to bang on the result of the communications. Mr Hay, on his side, intimated no dissent from Mr Ranken's view.

A correspondence ensued between Mr Ranken and Messrs Adam & Sang, the agents of Mr Hay, in the course of which it was agreed on both sides that it would be proper to have a formal minute of sale, embracing all the conditions of the bargain, as these should be finally arranged, and on 15th October 1867 Messrs Adam & Sang sent Mr Ranken ‘ draft proposed minute of agreement between the Bankers' Incorporation and Mr Hay.’ The fact of a minute of sale being thus contemplated on both sides is very important in the present discussion. It may be that a formal instrument of this sort was not absolutely indispensable to the completion of the bargain; and that if it was clearly established by the writings passing between the parties that the terms of the bargain had been finally settled, this might itself be enough, without a formal document being superadded. But it is

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still of consequence that both parties looked forward to the execution of a minute of sale, because the circumstance tends all the more to throw a conscious character of incompleteness over the intervening communications.

After some alterations on both sides, the draft minute was, on 8th November 1867, sent by Mr Eanken to Messrs Adam & Sang, marked ‘ Revised. —T. R.’ on the back; and if nothing more had happened, this might have closed the transaction. But Messrs Adam & Sang, on the 13th November, returned the draft with some fresh alterations; and after waiting till the 30th November, gave Mr Ranken's memory a jog, by saying, ‘ We now think it would be desirable to get this transaction put into a more formal shape; and therefore we would be glad to hear at your earliest convenience in answer to our last letter and memorandum.’

The terms of Mr Ranken's next letter, of 2d December, show that in the interval a meeting had taken place between the agents, leading to still another transition of the document betwixt them. On 2d December Mr Ranken writes to Messrs Adam & Sang, ‘ Referring to my interview with your Mr Adam to-day, I now return herewith, to be readjusted, the draft minute of sale, paper apart, page 1, inventory of titles, translation of charter in favour of the Bakers, 1735, and memorandum. Please return all these and the plan when you get it, and fix a time for our meeting to revise the minute.’

The particulars of the interview here referred to do not anywhere appear. But it is beyond a doubt that the interview was such as led to what Mr Ranken calls a ‘ readjustment’ of the draft minute. Mr Ranken's letter expressly so says. The draft and its accompanying, documents were sent to Messrs Adam & Sang, and sent in the expectation that something would emerge requiring Mr Ranken's consideration, for he bids them please ‘ return them.’ He adds ‘ and the plan when you get it,’ showing that the plan proposed to be referred to in the disposition, and in which would mainly be comprised a description of the subjects conveyed had not been fully framed. Mr Ranken closes with these words: ‘ and fix a time for our meeting to revise the minute,’ clearly importing that the draft was still to be the subject of joint revisal.

On 21st January 1868, Mr Ranken again writes to Messrs Adam & Sang, saying, the minute of sale should now be immediately adjusted and executed.

On the 28th of the same month Mr Hay died; and the question now is stirred whether, anterior to his death, there was a concluded contract of sale, now binding on his representatives?

“The Lord Ordinary is of opinion in the negative. He is not prepared, however, to rest his judgment on the ground urged to him, amongst others, that a formal minute of sale was so made a condition of the completed contract that, until that minute was executed, no bargain had taken place, however much the terms were agreed on. The ground of the Lord Ordinary's decision is, that the parties had not fully settled and arranged the terms of the contract. It may be that the points remaining unadjusted were of secondary and subordinate importance. It is not the less true that something of sufficient consequence to prevent the parties being entirely at one still remained to be settled. It would be dangerous for a Court to rest its judgment as to the finality of a contract on the estimate it may itself form of the importance of the points of difference, as to which there may be as many opinions as there are men. In the present case, there was something sufficiently serious to require the separate consideration of the agents, and an after meeting to adjust it. Pending this proposed adjustment, the Lord Ordinary thinks that neither party could hold the other bound. Mr Ranken could not be held bound in the face of his demand for farther adjustment, and his request that the draft might be sent back for his consideration, and that there should be a meeting for revisal. Messrs Adam & Sang (or their clients) could as little be held bound when having the minute sent to them for readjustment, and told, as they were in substance told, that they should have still another meeting to think further on the subject. But this consideration seems to the Lord Ordinary conclusive. In a question of completed contract, the maxim prevails universally that both parties must be bound or neither.”

The pursuers reclaimed.

Balfour for reclaimers.

Pattison for respondents.

At advising—