Scottish Court of Session Decisions

This was an action at the instance of John Renison, golf club manufacturer in Glasgow, against Andrew Stewart Bryce jun., golf ball manufacturer there, in which the pursuer concluded for decree ordaining the defender to implement and fulfil a contract for the sale of the defender's business, or alternatively for damages.

The pursuer founded upon two letters, which were as follows:—“Bellvale Chemical Works, Glenpark Road, Glasgow, 1st Dec. 1896.—Mr John Renison, 70 Dobbie's Loan.—Dear Sir,—Referring to our conversation regarding the business of the Bellvale Chemical Coy., I beg to make you the following offer, viz.—In consideration of your paying me the sum of Five hundred pounds sterling (say £500), and allotting or having allotted to me shares in your proposed limited company to the extent of Seventeen hundred and fifty pounds in preference shares of one pound each, fully paid up, and bearing interest at the rate of seven and one-half per cent. (say 7 1 2%), I hereby offer to assign to you or your nominees, my right, title, and interest in the afore-mentioned concern, including all plant, machinery, fixtures, patent rights, and stock-in-trade, together with the goodwill, conform to inventory sent herewith. I agree to transfer the above to you on payment of the afore-mentioned sum of Five hundred pounds, and Seventeen hundred and fifty pounds in shares; and I bind myself to transfer the assets as referred to here free of all liability. I am the sole proprietor, and this offer is binding upon me until the fifteenth day of January Eighteen hundred and ninety-seven (1897). As I am meantime working up the raw material in stock, it must be distinctly understood that you pay all charges for rent, wages, etc., incurred from this date until date of transfer, you getting all goods manufactured from the said raw material.—I am yours truly, The Bellvale Chemical Coy., A. S. Bryce jr.”

“A. S. Bryce junior, Esq., Bellvale Chemical Works, Glenpark Road, Glasgow.— Registered.—145 St Vincent Street, Glasgow, 14th January 1897.—Dear Sir,—I am instructed by Mr John Renison, of No. 70 Dobbie's Loan, to accept on his behalf, as I now do, your offer to him of 1st December 1896, to sell, assign and transfer the business of the Bellvale Chemical Company, of which you are the sole proprietor, and that upon the terms and conditions therein set forth. The company which Mr Renison is forming will be registered to-morrow, and I am desired to ask you to send to me a statement with respect to the raw material which you stated in your offer you were working up, so that the charges incidental thereto may be adjusted, and the settlement with you may be carried through without delay. You might kindly send me the papers relating to the patents that I may prepare the assignations.—Yours truly, Jas. Cunningham.” Mr Cunningham was a writer in Glasgow.”

The pursuer set forth these letters, and averred as follows “(Cond. 5) The company contemplated by the parties and referred to in the missives was registered under the name of the ‘Golfers’ Supply Company, Limited,' on 20th January 1897. The pursuer thereafter called upon the defender to implement his bargain. He was ready and willing, as he informed the defender, to fulfil his counterpart. He is still willing and ready to do so. He offered the defender payment of the price stipulated, viz., £500 in cash and £1750 in preference shares of £1 each fully paid up, bearing interest at the rate of 7 1 2 per cent. in the limited liability company formed by him, which was registered on 20th January 1897, and is now carrying on business. The defender has, however, intimated to the pursuer that he does not intend to carry out his bargain. The pursuer has since frequently pressed the defender to do so, but he refuses or delays to carry it out, and the present action has therefore been rendered necessary.”

The pursuer also averred that the capital of the proposed company was from the beginning of the negotiations stated at £10,000.

The defender in his statement of facts averred, inter alia—“(Stat. 3) It was expressly agreed between the pursuer and the defender that in the event of the proposed transaction being carried out, the capital of the company proposed to be formed should not exceed £5000, that the working capital of the company should be £1500 or thereby, and that the pursuer should not receive in cash more than £100, and that to be for the formation expenses. It was also agreed between the parties that the company should be registered, and the capital provided for by the 15th January 1897, and that the defender's offer should fall in the event of the company not being registered, and the cash stipulated for by him not being paid, and the shares stipulated for him not being allotted or handed to him on or before said date. (Stat. 5) The pursuer failed to hand over to the defender the cash and shares stipulated for by said 15th January 1897. (Stat. 6) The defender believes and avers that a limited company has been formed on an entirely different basis from that agreed upon by the pursuer and defender. The memorandum and articles of association of the company which has been formed are dated 18th January 1897, and the company was registered on 20th January 1897. The capital of the company formed is £10,000, divided into 9500 preference shares and 500 ordinary shares of £1 each, and the shares in the said company referred to by the pursuer

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are consequently not the shares, nor are they of the value, stipulated for by the defender. The pursuer was not, on or before 15th January 1897, and is not yet, in a position to tender to the defender shares in the company referred to in the defender's offer of 1st December 1896, or to fulfil his part of the alleged contract.”

The defender pleaded, inter alia—“(5) No binding contract having been made between the pursuer and defender, the defender ought to be assoilzied. (6) The pursuer not being able to fulfil his part of the alleged contract, the defender ought to be assoilzied. (7) The pursuer being in breach in essentialibus of the said alleged contract, the defender is not bound thereby, and ought to be assoilzied with expenses.” On 8th December 1897 the Lord Ordinary ( Stormonth Darling), after hearing counsel in the procedure roll, issued the following interlocutor:—“Finds that the contract founded upon in the summons was concluded by the missives set out on record, and in respect thereof decerns against the defender conform to the conclusions of the summons for implement, continues the cause, and grants leave to reclaim.” Opinion.—“The pursuer here sues for implement of a contract for the transfer to him of the defender's business as a manufacturer of golf balls in Glasgow, and failing implement for damages. At first the summons and condescendence were defective in asking performance of the defender's part of the contract without tendering performance of the pursuer's part. This, however, has been rectified by amendment, and the question now is, whether the offer and acceptance set out on record disclose a completed contract, or whether there is any room for inquiry.

The missives are precise in their terms, and the acceptance exactly meets the offer without introducing any new term. The subject of the sale is defined, and the price, so far as payable in money, is fixed at £500. But in addition to that sum the defender was to receive preference shares of £1 each, fully paid up, and bearing interest at the rate of 7 1 2 per cent, in a limited company to be formed by the pursuer. The defender pleads that this was an insufficient ascertainment of the price, because the capital of the company and the proportion between ordinary and preference shares were not stated. He further says that it was agreed between him and the pursuer, although not stated in the missive, that the capital of the company should not exceed £5000, whereas the capital of the company which has actually been formed is £10,000.

The answer to that I think is, that if the defender attached importance to the capital of the company being limited to £5000, he ought to have stipulated to that effect in his offer, and that by not doing so he left a certain latitude to the pursuer in the formation of what the offer called ‘your proposed limited company.’ I do not say that if the company as formed had been widely different from that which was proposed at the time the missives were exchanged, the defender could have been held to his offer. But the defender's case is very far from alleging anything like wide divergence between the one and the other. So far as the rule of law is concerned requiring the price in a contract of sale to be ascertained or ascertainable, I think it is amply satisfied by the number of the shares, their denomination, and the rate of interest on them being specified.

The only other point which the defender attempted to make was that the company, which was registered on 20th January 1897, ought to have been registered five days sooner. But there is no stipulation to that effect in the missives; there is only the expression of a hope.

I therefore see no room for a proof, and I think the pursuer is entitled to decree of implement de piano.”

The defender reclaimed.

The argument sufficiently appears from the opinions of the Lord Ordinary and the Court.