Scottish Court of Session Decisions

On 29th March 1917 Roberts & Cooper, Limited, pursuers, brought an action against Christian Salvesen & Company and others, shipowners, defenders, concluding for decree for £3000 with interest from 27th January 1917.

The memorandum of agreement between the pursuers and defenders, dated 25th January 1917, was as follows:—“The vendors agree to sell and the purchasers agree to buy the steamship ‘Giralda,’ built by Messrs Osbourne, Graham, & Company, Sunderland, December 1887, classed 100 Al, passed Lloyd's Special No. 1 Survey 1916, and measuring 1100 tons gross and 676 tons net register, on the following conditions, viz.—The steamer is now on passage to Leith, where she is due next week to discharge, and is purchased subject to safe arrival, any damage (if any) on the passage to Leith to be made good to Lloyd's satisfaction, and the steamer to be handed over with Lloyds' 100 Al class maintained. As soon as possible after the steamer is discharged the vendors shall, provided the Admiralty will afford facilities, at their own risk and expense place her in a graving dock or on a slipway and draw the tail-end shaft for examination. If the bottom, tail shaft, or any other under-water part be found damaged or broken the vendors shall make such damage good to the satisfaction of Lloyds' surveyor, and all expenses in connection with the drydocking and drawing and replacing the tail shaft shall be borne by them, but if no damage be discovered to the bottom, tail shaft, or other under-water part the expenses in connection with the dry-docking and drawing and replacing the tail shaft shall be borne by the purchasers. Should there be no dock available at Leith the purchasers shall have the option of taking her without dry-docking or of sending the steamer at their own risk and expense to another port for dry-docking. The agreed purchase price is £30,000, say £30,000 sterling, payable as follows:—£3000 on signing this agreement, and the balance by cash in Leith within five days after the steamer is ready for delivery in accordance with this agreement. Should the steamer become a total or constructive total loss before delivery the deposit to be returned immediately to the purchasers. In exchange for the purchase money as above agreed the vendors shall hand to the purchasers a legal bill of sale, and shall deliver the steamer to the purchasers free from all debt or encumbrance, together with all her outfit on board and on shore, including all plans, classification certificates, anchor and chain certificates, chronometer and model in vendors' possession belonging to the steamer; and the steamer with all her outfit shall be taken with all faults and errors of description without any allowance or abatement. All unbroached provisions, paints, oils, and other consumable stores, and any bunker coals remaining on board shall be paid for by the purchasers at the current market prices at the port of delivery. The steamer shall be at the risk and expense of the purchasers from the date on which the balance of the purchase money becomes payable. Failing the due payment by the purchasers of the purchase money as herein provided, the vendors shall be at liberty to re-sell the steamer by either public or private sale; the deposit shall be forfeited to the sole use of the vendors, and any deficiency between the amount realised and the amount due shall be borne by the purchasers, together with interest at the rate of £5 per centum per annum and all expenses of such re-sale. Should default be made by the vendors in the execution of a legal transfer or in delivery of the steamer and her outfit as aforesaid any amount paid by the purchasers shall be repaid on demand, together with interest at the rate of £5 per centum per annum, without prejudice to the purchasers' claim for loss through non-fulfilment of this contract or to their right to enforce specific performance of same. If any dispute or difference should arise in connection with this agreement the same shall be referred to a single arbitrator in London to be appointed by the parties hereto, but if the parties cannot agree upon a single arbitrator they shall each appoint an arbitrator, and the arbitrators so appointed shall appoint an umpire, and the award of such arbitrator or umpire shall be final and binding upon the parties hereto, and may for the purpose of this agreement be made a rule of court. The commission as agreed is payable by the vendors to the Shipping Agency, Limited, on completion of this agreement.— per pro Roberts & Cooper, Ltd., Coleh M. Roberts, Managing Director. D. W. Cooper, Secretary. Jany. 26th, 1917.

“ Should no suitable dry dock be available in Leith immediately on steamer's discharge, purchasers to take delivery and pay for steamer in full. Stamp 6d.— Chr Salvesen & Co. 27/1/17.” [The clause in italics was added by the vendors (defenders) before they signed.]

The pursuers pleaded, inter alia—“1. The pursuers having paid to the defenders the said sum of £3000 as part payment of the price of said steamer, and no contract of sale having been concluded, the pursuers are entitled to repayment of said sum with interest as concluded for. 3. In any event the defenders having sustained no loss are not entitled to retain the said sum, and decree should be granted as concluded for”

The defenders pleaded, inter alia—“3. A valid contract having been concluded at 26th January 1917 the defenders should be assoilzied. 4. The pursuers having homologated the clause added to agreement are bound thereby. 5. The pursuers, in full knowledge of the added clause, having ( a) delayed to repudiate the contract, whereby the defenders were deprived of the re-sale and use of the vessel, ( b) allowed the defenders on a faith of the contract to dry-dock

Page: 723↓

the vessel and incur expense, are barred from now repudiating the contract. 6. The defenders are entitled to retain the £3000 ( a) in terms of the contract, ( b) as damages for the loss caused them by the pursuers' breach of contract.”

On 28th November 1917 the Lord Ordinary ( Hunter) assoilzied the defenders.

Opinion, from which the facts of the case appear—“In this action the pursuers sue the defenders for payment of £3000, the amount deposited by the former with the latter in connection with an alleged sale of the steamship ‘Giralda.’ The ground upon which the pursuers seek to recover the deposit is that there never was any concluded contract of sale between the parties.

“In January 1917 the pursuers, who are timber importers and coal exporters, were anxious to purchase a steamer for the purpose of trading with Sweden. On the 16th of that month the Shipping Agency, Limited, of London, approached the defenders asking if they were willing to sell the ‘Giralda,’ and at the same time inquiring if the vessel was ‘at present on requisition’ as they had ‘positive buyers for a similar steamer.’ The defenders replied on the 18th that if the Shipping Agency would let them know what they expected to get for the ‘Giralda’ they would consider whether they would sell or not, and added that the vessel was ‘entirely free of requisition.’ This statement was in strict accordance with fact, for although the vessel had been requisitioned by the Government she had been unconditionally released in the preceding September. The Shipping Agency, who are brokers, communicated with the pursuers.

Negotiations took place between the Shipping Agency and the defenders as to the price and conditions on which the latter would sell the ‘Giralda.’ In particular, the defenders made it perfectly clear that they would not consider any proposal to sell the vessel subject to a clause giving the purchasers right to reject on inspection. At the same time they were agreeable that the vessel should be dry-docked at Leith, to which port the vessel was bound, and any under-water damage made good. The pursuers desired that if a dry-dock was not available at Leith the vessel should be dry-docked elsewhere, and the Shipping Agency communicated this desire to the defenders, who finally assented thereto, although they stipulated that they would only sell upon the footing that the full price for the vessel should be paid by the purchasers before the ship left Leith.

On 25th January 1917 the Shipping Agency, who were acting as brokers for both parties, forwarded to the pursuers a draft agreement for the sale of the ship, intimating that it was also subject to the sellers' confirmation, ‘as they have not seen same yet.’ On the same date that company had forwarded a copy of the agreement to the defenders, who wrote and wired acceptance, subject to its being made quite clear to the purchasers that full payment would have to be made before the ship left Leith. The position of the defenders was made clear to the pursuers by telegram from the Shipping Agency, dated 26th January 1917. This telegram was received by the pursuers before they signed the draft agreement. No notice of it, however, was taken by them, and they signed and forwarded to the defenders the draft agreement in the form in which it had been sent to them by the Shipping Agency. On receiving the agreement the defenders signed it, but in front of their signature added the stipulation ‘Should no suitable dry-dock be available in Leith immediately on steamer's discharge purchasers to take delivery and pay for steamer in full.’ The defenders acknowledged receipt of the deposit to the pursuers direct, but sent the agreement with the signature of parties to the brokers, who had to see to the carrying out of the con tract. The suggestion made by Mr Cooper in the witness-box that there was anything irregular in the defenders' action in adding this clause has absolutely no foundation. It only made clear what they had already intimated to be a condition upon which alone they would sell the vessel—a condition notified to the pursuers. In forwarding the agreement to the Shipping Agency the defenders drew their attention to the added clause, explaining that the intention of the agreement might be to give effect to their stipulation as to payment, but that it was not at all clear to their mind. They added—‘We will on no consideration whatsoever agree to any contract by which buyers remove the ship from Leith, even at their risk and expense, before the full payment has been made.’ On 29th January the Shipping Agency forwarded the agreement for sale of the vessel, as signed by the defenders to the pursuers, calling their attention to the clause that had been added. On the same date the pursuers wrote to the defenders that they fully understood that the steamer should be delivered to them at Leith ‘on the discharge of her present cargo or after she comes out of the dry dock, provided a suitable dry dock is available at Leith. In the event of no dry dock being available, she will have to proceed to some other port where a dry dock is available, as we have bought the steamer with her Lloyds 100 A1 class maintained.’ The defenders understood this to mean that payment would be made before the vessel left Leith and they so indicated to the Shipping Agency on 30th January. On receipt of the agreement as signed by the defenders the pursuers wrote to the Shipping Agency that they were not called upon to accept the clause added by the defenders. That is the only letter indicating any repudiation of the agreement. It was not communicated to the defenders, who considered that their terms had been accepted. All parties believed that the matter had been adjusted. I cannot accept the suggestion made by Mr Cooper in the witness-box that the pursuers did not consider that there was any concluded agreement. It is quite inconsistent with the actings of the pursuers and with many passages in the correspondence. I do not think that the point now made by the pursuers ever occurred to them until a

Page: 724↓

much later date and after they had consulted their agents. The brokers had offers of a re-sale at a profit. They communicated these offers not to the defenders but to the pursuers, who however indicated that they had bought for their own business and were not going to re-sell. On 31st January the Shipping Agency wired ‘“Giralda” could probably pay 32,000 with your firm authority wire contract was submitted to you subject owners confirmation they added clause regarding payment before steamer leaves Leith and unless you agree you give them opportunity withdraw.’ The pursuers' answer was—‘The question of paying for the vessel will not give us one moment's trouble.’ I do not think it surprising that the recipients of that wire took it as an assent to the defenders' clause.

On 1st February 1917 the ‘Giralda’ arrived in Leith Roads—a fact of which the pursuers were duly informed by the defenders.

Meantime the pursuers had been making arrangements for the employment of the ‘Giralda.’ As their intention was to employ her in trade with Sweden they had to apply for a licence from the War Trade Department. That department by letter dated 1st February, which would be received by the pursuers on 2nd February, intimated that the licence could not be given for the ‘Giralda.’ On 3rd February the pursuers telegraphed to the Shipping Agency “Giralda” we bought as free boat and now find she is not free we will accept return of deposit and two thousand pounds in addition and cancel contract without prejudice. That is an extraordinary communication for the pursuers to make if all parties knew that there was no concluded contract.

Prior to the agreement being signed by the pursuers, the Shipping Agency had informed them that the ship was free, meaning that she was free from requisition by Government. I have difficulty in believing that the pursuers could have understood the word ‘free’ as being used in any other sense. The unsatisfactory nature of Mr Cooper's evidence makes me hesitate to accept their representation as to the sense in which they understood the word had been used by the brokers. They certainly desired to buy a vessel which they might employ in trade with Sweden, but they did not stipulate as a condition of sale that the vessel should get a Government licence. They thought probably that if the ship was not requisitioned the licence would be procured. It was however no part of the contract that she should receive such a licence, and the pursuers' counsel did not maintain that it was. The defenders were in no way responsible for the pursuers failing to procure the licence they desired.

The pursuers stoutly maintained in correspondence the position, although they did not disclose this, that by ‘free’ the defenders guaranteed that the pursuers should receive a licence from the Government. This was the one and only ground on which they were refusing to implement the contract. On 8th February 1917, in a communication to Mr Richardson, who was to represent them at dry-docking of the vessel at Leith, the pursuers say, ‘As things are we hardly know what is the proper course for us to adopt, we are considering the matter, but at the time of writing we have not arrived at any decision. At the same time to repudiate the contract may place us even in a worse hole than we are at present. If we could use the boat for the export of coal to Sweden everything would be in order.’

The defenders arranged with the Admiralty that the ‘Giralda’ should be dry-docked in Leith. On 9th February they informed the pursuers that the vessel would dry-dock there the next day. On the same date they wrote them as to vessel being free from requisition at the date when she was offered for sale, and so far as they knew at the date of the letter. On 10th February 1917 the pursuers wired “Giralda” unless you can prove that this steamer was free when offered to us do not dry-dock same on our account.’ In sending this wire the pursuers were using the word ‘free’ in a different sense from what they knew or ought to have known that it would be understood by the defenders, who on the same date wired—‘“Giralda” transports and Admiralty informed us by wire 31/8 following proposed release of “Giralda” is without restrictions, steamer docks this afternoon, ready inspection bottom shaft to-morrow.’ Another telegram seems to have been sent from the pursuers to the defenders in which they say we ‘remind you there is no concluded contract.’ This is the first indication that might possibly refer to the point on which they are now founding. I do not think it was so understood by the defenders. The ‘Giralda’ was duly docked, and on 12th February the defenders wired that the vessel was ready for delivery, everything being passed by Lloyds.

Some time about the 10th February 1917 the pursuers seem to have consulted their solicitors, from whom on the 13th February 1917 the defenders received intimation that they contended that there was no contract, this being explained by the Shipping Agency on the same date as meaning the ship not free, and that the clause inserted by the defenders was never agreed to by the pursuers. A meeting took place between the parties but nothing came of it, the pursuers definitely intimating that they were not bound.

On the terms of the agreement, I think it doubtful whether the clause added by the defenders added anything to the contract. The document is very badly expressed. It is difficult to reconcile the clauses as to delivery of the vessel, payment of the price, and dry-docking at a port other than Leith on condition that the purchasers were to remove her from Leith at their own risk and expense, except on the footing that the balance of the price was to be paid before the vessel was delivered by the defenders to the pursuers at Leith. The pursuers suggested that the vessel would have required to be dry-docked before the defenders could hand them the Lloyds certificate to which they were entitled before delivery. No

Page: 725↓

point upon this is made on record, and Mr Salvesen explained that after a survey shortly previous the vessel had been duly entered in Lloyds' books, and that he was in a position to procure and hand over a certificate without dry-docking. I do not require to decide this point, because by their conduct as shown in their actings and the correspondence the pursuers must in my opinion be held to have accepted the clause added by the defenders. In the well-known case of the Duke of Hamilton v. Buchanan, 1878, 5 R. (H.L.), 69, 15 S.L.R. 513, upon which the pursuers founded, Lord Blackburn, at p. 82, speaking of the necessity of consensus of both parties to the terms of a contract, said—‘It is not enough that the parties were not agreed. It may have been that one of them meant one thing and the other the other. Nevertheless, according to the law, both of England and of Scotland, if the one has so conducted himself—has so spoken and so acted—that if he had been a reasonable man he would have known that the other side believed that he did agree to certain terms, and if the other side did, in fact, in consequence of his so acting, believe it, it matters not that the man did not really mean to do it. He would be, as it is said in Scotland, personally barred from disputing that he was bound by the terms which the other side had been led to believe were the terms relied upon by him.’ These words appears to be applicable to the pursuers' conduct, on the assumption that there was not sufficient in the evidence, as referred to by me, to justify my drawing the conclusion, which I do, that the pursuers agreed to the terms of the contract with the added clause of the defenders.

The pursuers argued before me that the clause in the agreement as to forfeiture of the deposit was in the nature of a penalty and not of liquidated damages, that they were therefore entitled to have the penalty modified, and that as the defenders had in fact suffered no damage, they ought to get decree for repayment of the whole £3000. This point is not properly raised by the pursuers upon record as in my opinion it ought to have been. As, however, I heard a considerable amount of argument upon the question I think it right to express my opinion thereon.

The forfeiture clause in the contract is thus expressed—‘Failing the due payment by the purchasers of the purchase money as herein provided, the vendors shall be at liberty to re-sell the steamer by either public or private sale, the deposit shall be forfeited to the sole use of the vendors, and any deficiency between the amount realised and the amount due shall be borne by the purchasers together with interest at the rate of £5 per centum per annum and all expenses of such re-sale.’

In the recent and authoritative decision Clydebank Engineering and Shipbuilding Company, Limited, 7 F. (H.L.) 77, 42 S.L.R. 74, Lord Halsbury (Lord Chancellor), in considering the difference between penalty and pactional damages, said—‘Both in England and in Scotland it has been pointed out that the Court must proceed according to what is the real nature of the transaction, and that the mere use of the word “penalty” on the one side or “damages” on the other would not be conclusive as to the rights of the parties.’ His Lordship proceeded afterwards—‘We come, then, to the question, What is the agreement here? and whether this sum of money is one which can be recovered as an agreed sum as damages, or whether, as has been contended, it is simply a penalty to be held over the other party in terrorem—whether it is, what I think gave the jurisdiction to the Courts in both countries to interfere at all in an agreement between the parties, unconscionable and extravagant, and one which no court ought to allow to be enforced.’ In the same case, after referring to the case of Lord Elphinstone v. Monkland Iron and Coal Company, 1886, 13 R. (H. L.) 98, 23 S.L.R. 870, Lord Davey said—‘I therefore conceive that it may be taken as an established principle in the law of Scotland that if you find a sum of money made payable for the breach, not of an agreement generally, which might result in either a trifling or a serious breach, but a breach of one particular stipulation in an agreement, and when you find that the sum payable is proportioned to the amount, if I may so call it, or the rate of the non-performance of the agreement—for instance, if you find that it is so much per acre for ground which has been spoiled by mining operations, or if you find, as in the present case, that it is so much per week during the whole time for which delivery of vessels beyond the contract time is delayed—then you infer that, prima facie, the parties intended the amount to be liquidate damages and not penalty.’ Lord Robertson in the same case said—‘Now the Court can only refuse to enforce performance of this pecuniary obligation if it appears that the payments specified were—I am using the language of Lord Kyllachy—merely stipulated in terrorem and could not possibly have formed “a genuine pre-estimate of the creditor's probable or possible interest in the due performance of the principal obligation.”’ In the 8th edition of his works on Damages, at p. 178, Mr Mayne says—‘There never was any doubt that if there be only one event upon which the money is to become payable, and there is no adequate means of ascertaining the precise damage that may result to the plaintiff from the breach of the contract, it is perfectly competent to the parties to fix a given amount of compensation in order to avoid the difficulty.’ Applying the principles to which I have referred to the present agreement I see nothing unreasonable or extravagant in the contract providing for forfeiture of the deposit amount of 10 per cent of the price in the event of the purchasers failing to implement the contract by paying the balance of the price. From the evidence it is clear that it would or might be extremely difficult to estimate the precise loss which the sellers would sustain in that event. They would lose the commission payable by them to the brokers, the vessel might be kept idle for a considerable time as they would have made no arrangements

Page: 726↓

for chartering, and there was the expense of dry-docking incurred by the defenders only because the pursuers insisted therein as a condition of sale. These are elements of probable loss that might well lead parties to make forfeiture of the deposit a pre-estimate of such damage. They are independent of loss upon a re-sale for which there is separate provision. The case seems to me similar to Commercial Bank of Scotland, Limited v. Beal, 1890, 18 R. 80, 28 S.L.R. 61, where the Court held forfeiture of £5000 deposited by a purchaser of a brewery at a price of £35,000 was not in the nature of a penalty against which the purchasers who were in breach could claim relief by restriction.

The pursuers relied mainly upon two decisions in the Privy Council. In Kilmer v. British Columbia Orchard Lands, Limited, [1913] AC 319, 50 S.L.R. 673, an agreement for sale of lands at a price to be paid in instalments at specified dates contained a clause of forfeiture both of the agreement and of all payments of past instalments of purchase money in case of default of punctual payment of any one instalment; and time was declared to be of the essence of the contract. Default having been made the company sued to enforce the forfeiture. The purchaser paid into Court the instalment due and counterclaimed for specific performance. It was held that he was entitled to the relief asked as the condition of forfeiture was in the nature of a penalty. The later case of Steedman v. Drinkle, [1916] 1 AC 275, was similar, though owing to a distinction to which I need not refer specific performance was not decreed, but relief against forfeiture granted on proper terms. Between these cases and the present there appears to me to be a clear and radical distinction, which is brought out by Lord Macnaghten in his opinion in the former case, where he points out that the penalty ‘if enforced according to the letter of the agreement becomes more and more severe as the agreement approaches completion and the money liable to confiscation becomes larger.’

I propose to sustain the defences and to assoilzie the defenders.”

The pursuers reclaimed, and argued—(1) No contract had been concluded between the parties. The only defence upon record was that the contract was concluded on 26th January 1917. The added clause had never been accepted by the pursuers, and the defenders had not proceeded on the footing that the pursuers had accepted it, but they led the pursuers to believe that they had signed the contract as it had left the pursuers. The added clause was material, for the pursuers' attitude all along was that they would not accept the ship unless she was dry docked. That was shown by their immediate repudiation of the added clause when they knew of it. Their whole actings subsequent to 26th January 1917 were to be attributed to their belief that the contract had been completed without the added clause, and that they were not bound to accept it. To that state of mind their actings founded on as homologating the contract were to be attributed, and by that they were explained. Consequently they had not homologated a contract including the added clause. If so, no contract being proved, there was no answer to the claim for return of the deposit. (2) But if a contract had been made the defenders were not entitled to retain the deposit of £3000. The contract provided for the forfeiture of the deposit if the purchasers made default, but it also provided for any loss of price on re-sale, and for the expenses of the re-sale being borne by the pursuers. Those provisions excluded the idea of liquidate damages, which involved a contractual pre-estimate intended to cover the whole loss. A penalty did not exclude the recovery of a larger sum, but in that case the sum payable was limited to the actual loss sustained. The £3000 was not liquidate damages, for it was not a genuine pre-estimate of the probable or possible interest in due per formance— Public Works Commissioner v. Hills, [1906] AC 368, 43 S.L.R. 894, per Lord Dunedin. Clydebank Engineering and Shipbuilding Company, Limited v. Don Jose Ramos Tzquierdo y Castaneda, 1904, 7 F. (H.L.) 77, 42 S.L.R. 74, was distinguished. So was Commercial Bank of Scotland v. Beal, 1890, 18 R. 80, 28 S.L.R. 61, for the terms of the agreement were different, and excluded inquiry in to the loss, but if not that case contradicted Hills' case ( cit.). Everything depended on whether the clause in question really involved an intention to assess the damages in advance or not— Elphinstone v. Monkland Iron and Coal Company, Limited, 1886, 13 R. (H.L.) 98, 23 S.L.R. 870. Wallis v. Smith, [1882] 21 Ch. D. 243, was very special, and was not now good law— Willson v. Love, [1896] 1 QB 626. Soper v. Arnold, (1889) L.R., 14 A.C. 429, per Lord Herschell at p. 433, was very special. In Hinton v. Sparkes, (1868) L.R., 3 C.P. 161, the agreement showed that liquidated damages were intended. In in re Dagenham ( Thames) Dock Company, (1873) L.R., 8 Ch. App. 1022, where there was also a clause of forfeiture, the clause was regarded as a penalty clause. Clauses of forfeiture of deposits were treated in the same way as clauses of liquidate damages or penalty— Kilmer v. British Columbia Orchard Lands, Limited, [1913] AC 319, per Lord Moulton at pp. 322 and 325, approving of the Dagenham case ( cit.), 50 S.L.R. 673 and 674; Steedman v. Drinkle, [1916] 1 AC 275. Dingwall v. Burnett, 1912 SC 1097, 49 S.L.R. 882, was in favour of the reclaimers. Wallis v. Smith, (1882) L.R., 21 Ch. D. 243, per Jessel, M.R., and Forrest & Barr v. Henderson, 1869, 8 Macph. 187, per Lord President Inglis at p. 195, 7 S.L.R. 112, were referred to. Howe v. Smith, [1884] 27 Ch D 89, was distinguished. Further, it was inconsistent with Kilmer's case ( cit.).

Argued for the respondents—The Lord Ordinary was right. (1) There was a concluded contract on 26th January, for the added clause had been accepted by the pursuers before the written contract was made out. If not the pursuers had homologated the addition, for they had allowed the defenders to act as if the contract was completed; they had refused to release the ship for another buyer, and they had claimed

Page: 727↓

damages for breach of the contract. But in any event all questions raised by the added clause were solved when the vessel was dry-docked at Leith, when the pursuers should have held the contract completed and implemented it. (2) The defenders were entitled to retain the £3000. That sum was really of the nature of liquidate damages and was not subject to modification. But in any event damage to the amount had been proved. Here the pursuers were quite unwilling to implement the contract. The £3000 was really earnest money and in such circumstances it could not be recovered—Ersk. Inst. iii, 3, 5 and 6; Hinton's case ( cit.); Howe's case ( cit.), per Fry, L.J., at pp. 101, 102, and 103. Ex parte Barrell, [1875], L.R. 10 Ch. App. 512; Soper v. Arnold ( cit.); Wallis v. Smith ( cit.); Mayne on Damages, 8th ed., p. 248, were direct authorities in the respondents' favour. The Dagenham case ( cit.) and Dingwall's case ( cit.) were not in point. In Kilmer's case ( cit.) the deposit was an instalment of the price. Beal's case ( cit.) was referred to.

At advising—