Scottish Court of Session Decisions

This was an appeal from the Sheriff-court of Lanarkshire at Airdrie. The pursuers are iron merchants in Glasgow, and the defenders, iron manufacturers at Coatbridge.

The summons concluded for payment of £25, ‘“being loss and damage sustained and incurred by

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the pursuers, or which they may yet sustain and incur, by and in consequence of defenders' refusal and failure to implement contract entered into verbally between the pursuers and defenders at Glasgow, on the forenoon of the seventh day of July Eighteen hundred and seventy-one, and also set forth in and confirmed by writing, as per letter subsequently addressed by defenders to pursuers, of the following date and tenor, and herewith produced, viz:—’ Coatbridge, 7 th July 1871.— Messrs Robertson, Ferguson, & Company,—Dear Sirs—We have this day sold you fifty tons com. bars at £7, 15s. per ton, F. O. B., Glasgow, less five per cent. discount—usual extras and terms. Please acknowledge receipt of this, and oblige, yours truly, Hugh Martin & Sons, per Henry Hind by which contract the defenders sold to the pursuers fifty tons common bars, or common bar iron, at the price of seven pounds fifteen shillings sterling per ton, F. O. B. at Glasgow, less five per cent. discount for cash—usual extras and terms; with interest on said sum of twenty-five pounds sterling, at the rate of five per cent. per annum from date of citation to this action till payment, with expenses.”

The minute of defence was as follows:—“The defenders' procurator stated that the defence was a denial of the libel, with the explanation that there was no concluded sale between the parties; that the defenders by their letter dated 7th July 1871, narrated in the summons, proposed to conclude a sale, and requested the pursuers to agree thereto by confirming the letter, but the pursuers refused, at least failed, to conclude the proposed transaction, and led the defenders to believe that no transaction had been entered into, or was intended to be so by the pursuers; that the defenders heard nothing of the matter till the 19th August, six weeks after the date of the said letter, by which time the iron had advanced in price ten shillings per ton, on which latter date the pursuers sent to the defenders a specification of certain iron wanted by the pursuers. The 19th August occurred on a Saturday, on which day the defenders' works were closed. On the following Monday the pursuers sent a clerk to the defenders on the subject of the specification. He was informed by the defender that there was no contract between the parties, and that the defenders declined to furnish the iron.”

The Sheriff-Substitute ( Logie) allowed a proof before answer.

“Hugh Martin, junior, defender, sworn, examined for pursuers. I met Mr Robertson in Glasgow on 7th July last. I had a conversation with him about the sale and purchase of iron. Mr Robertson asked our price for iron, and I told him £7, 15s. The usual discount is always understood, but I do not recollect that being mentioned. He just wanted it at £7, 10s. and £7, 12s. 6d., but I said no, that £7, 15s. was our price. He then asked me to enter him for 100 tons at that price. I said I would not give him 100 tons, but I would give him 50. He said very well I'll just take it. We then separated. On going home I instructed my clerk to write the letter, No. 4/1 of process, quoted in the summons.”

Mr Robertson, one of the pursuers, gave evidence to the same effect.

The Sheriff-Substitute pronounced the following interlocutor:—

“Airdrie, 24th November 1871…. Finds that at a meeting in Glasgow, on 7th July last, between John Robertson, one of the pursuers, and Hugh Martin, junior, one of the defenders, after some communings, the defenders agreed to sell, and the pursuers to purchase, 50 tons common bar iron at £7, 15s. per ton: Finds that Mr Martin, on his return to Coatbridge that day, instructed a clerk to write the letter or sale note of that date, quoted in the summons, and concluding as follows; ‘Please acknowledge receipt of this’: Finds that in a sale of this kind the seller requires to be furnished by the purchaser with a specification or specifications of the different sizes of iron wanted, so that the sellers are unable to complete the contract, or to manufacture the iron wanted, until the specification has been furnished to them: Finds that the pursuers did not acknowledge receipt of the sale note as requested, and did not forward any specification of the kind of iron wanted, until six weeks thereafter, by which time iron had risen in price 10s. per ton: Finds, in law, that in contracts of this kind time is of the very essence of the bargain, and that the pursuers, by their failure to answer defenders' letter, and to forward specifications of the kind of iron wanted, enabled the defenders to cancel the contract in question if they saw fit: Finds that the defenders having cancelled the bargain, were justified in doing so, and in refusing to manufacture the iron referred to in the specification of 19th August. Therefore sustains the defences, assoilzies the defenders from the conclusions of the action: Finds the pursuers liable in expenses.” &c.

The pursuers appealed.

The Sheriff ( Glassford Bell) pronounced the following interlocutor:—

“ Glasgow, 13th February 1872… Sustains the appeal, and recalls the interlocutor appealed against: Finds it distinctly proved and admitted, both by the pursuers and defenders, that on 7th July 1871 a contract of sale was verbally concluded between them in Glasgow of 50 tons common bar iron, at the price of £7, 15s. per ton,—the defenders being the sellers, and the pursuers the buyers: Finds it proved that the pursuers, of the same date, entered the transaction in their scrip ledger book, in terms of the excerpt No. 6: Finds that, also of said date, the defenders wrote to the pursuers the letter, No. 4/1, in which they say, ‘We have this day sold you 50 tons com. bars, at £7,15s. per ton, F. O. B. Glasgow, less five per cent. discount, usual extras and terms. Please acknowledge receipt of this, and oblige,’ &c.: Finds that the pursuers received said letter, but did not consider it necessary to acknowledge receipt of it, the contract having been already concluded, independent of any writing: Finds it mutually admitted that when such contracts are made for the purchase of bar iron, a specification or specifications fall to be afterwards sent by the purchaser to the seller, of the sizes in which the former wishes the iron made and delivered, and the latter is bound to make and deliver it accordingly: Finds that after the sale in question no further communication took place between the parties till 19th August 1871, when the pursuers sent to the defenders the letter, No. 5/1, with a specification annexed of the sizes to which they wished a portion of the 50 tons made: Finds that after receipt of said letter the defenders intimated to the pursuers, first verbally, and then by the letter of which No. 5/3 is a copy, that they would not deliver the iron, and this on the ground expressed in the said letter, as follows—‘We have no contract with you. When we

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wrote you on the 7th July, we asked you to confirm the proposed purchase; but you did not do this, you did not communicate with us till 19th current, six weeks after our letter, by which time iron had advanced 10s. per ton;’ Finds that the same ground is taken up by the defenders in their minute of defence, viz., that ‘there was no concluded sale between the parties: that the defenders, by their letter dated 7th July 1871, proposed to conclude a sale, but the pursuers refused, at least failed, to conclude the proposed transaction, and led the defenders to believe that no transaction had been entered into, or was intended to be so by the pursuers;’ and the defenders go on to explain that they heard nothing farther of the transaction till the 19th August, by which time the aforesaid advance in price had taken place: Finds that the defence is thus based, not on the delay in sending a specification, but on the assertion that there was no concluded contract in respect of the pursuers' failure to confirm the defenders' letter, No. 4/1; Finds that the minute of defence states erroneously that the pursuers were asked to ‘confirm’ said letter, they being merely asked, as the letter itself instructs, to acknowledge receipt thereof: Finds that the contract having been completed verbally, was valid and binding without any writing being added, and it was a work of supererogation on the part of the pursuers to send the said letter, and it would have been equally so for the defenders to answer it, the more especially as they had shown their bona fides by already entering the transaction in their books, which would have afforded written evidence against themselves had they attempted subsequently to repudiate it: Finds that the question is not raised in the process, whether there was such undue delay on the part of the pursuers in sending a specification as to entitle the defenders to cancel the contract; and it is not proved that there was any such undue delay: Finds that no intimation having been made of any intention to cancel, and no sufficient reason having been established for cancelling, the contract was a subsisting contract at the time it was repudiated by the defenders: Finds that the loss sustained by said pursuers through the non-fulfilment of the contract was the difference between the price at which they had purchased and the higher price, viz., 10s. per ton, at the date of the repudiation, which upon 50 tons amounts to the sum sued for, of £25 sterling, in which sum finds the defenders liable: Finds them also liable in expenses.”

The defenders appealed to the Court of Session.

Rhind, for them, was proceeding to open the case, when the Lord President suggested a doubt as to the competency of the appeal, the 22d sect. of the Sheriff-courts Act, 1853, declaring that it shall not be competent to bring under review of the Court of Session any cause not exceeding the value of £25 sterling.

Rhind argued that the conclusion for interest from the date of citation made the appeal competent. A decree in absence, which is the proper test of the value of the cause, would necessarily have carried more than £25— Mitchell v. Murray, March 10, 1855, 17 D. 682; Tennent, March 3, 1864, 2 Macph. H. of L. 22; Wilson, March 6, 1858, 20 D. 764.

At advising—