Die Veneris, 5°
Decembris, 1924.
sess. 1924.—[h.l.]
ROSE AND FRANK COMPANY
v.
JAS. R. CROMPTON AND BROTHERS, LIMITED,
AND
BRITTAINS, LIMITED, ET E CONTRA.
Earl of Birkenhead.
Lord
Atkinson.
Lord Sumner.
Lord Buckmaster.
Lord Phillimore.
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, Limited, 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
12 months' notice—a notice which was never given.
In 1913, circumstances led to
the relations between the parties
bring reconsidered; and it was
then for the first time brought to the
notice of Rose and Frank
Company that the respondents Brittains,
Limited, had been
interested with Cromptons in supplying the
carbonising tissue; and
thereupon the three parties entered into
the arrangement which had
given rise to the present litigation. It
is dated the 8th July
1913, and in the earlier part of it appears to
l)o a binding
agreement under which the English companies agree
to confine the
sale of call their carbonising tissue in the U.S. and
Canada—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 clause:
' 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
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."
There is. no explanation upon
the record, and no suggestion was
made by Counsel at the Bar of
any reason for the introduction 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 the 31st March 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 the 5th May
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 the 9th and 10th May, 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 Crompton's : "
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
compliance 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 hot
actually been complied with
by the time of the quarrel and were
not fulfilled afterwards.
On the 19th November 1919, the
appellants brought their
action, treating the arrangement as a
binding contract and claiming
damages for the breach,
alternatively averring that the three earlier
agreements 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 Ltd.
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 agreements, 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
"
stopped 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 section 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
2,124l. 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.,
with respect to the arrangement of 1913, and by a
majority,
Bankes, L.J., Scrutton, L.J., and Atkin, L.J., dissenting,
thought
that Bailhache, J. was also wrong on the question of orders
and
acceptances. 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 is 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 dis-
regarded.
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 unquestionably creates a legal interest, and
the
dispute is 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, this doctrine
does not apply when the question is
whether it is intended to create
any legal interest at all. Here,
I think, the overriding 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
non-delivery of the goods specified in the
particular orders for
the year 1919, it should be stated that the
defence under the Sale
of Goods Act was abandoned at the trial. On
this point 1 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,
succeeds.
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
unenforceable 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 previous arrangements or
agreements whether enforceable or unenforceable.
The principle laid down in
Morris v. Barron (1918 A.C., page 1)
followed in
British and Benningtons v. N. W. Cachas Tea Co.
(1923
A.C.,-page 48) 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
costs of the
hearing before him as against the defendants Brittains,
Ltd., 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, Ltd. 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, Ltd. have been successful, but I
imagine that
before your Lordships' House, as in the Court of
Appeal, they
had no 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.
sess. 1924.—[h.l.]
ROSE AND FRANK COMPANY
v.
J. R. CROMPTON AND BROTHERS, LIMITED, AND
OTHERS,
ET E CONTRA.
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 opportunity
of reading the judgment
prepared by my noble and learned friend
and I concur with it.
In
the House of Lords.
ON APPEAL
FROM HIS MAJESTY'S COURT OF
APPEAL (ENGLAND).
between
ROSE AND FRAKK COMPANY - -
Appellants
AND
J.
R. CROMPTOST & BROTHERS LIMITED
and BRITTAIN'S LIMITED - - Respondents
and between
J. R. CROMPTON & BROTHERS LIMITED Appellants on
the Cross-Appeal
AND
ROSE AND FRANK COMPANY - - Respondents
on the
Cross-Appeal.
Case
FOR THE RESPONDENTS ON THE
ORIGINAL APPEAL
AND APPELLANTS ON THE CROSS-APPEAL.
1. This
is an appeal by the Appellants who were Plaintiffs
in the action,
from an order of His Majesty's Court of Appeal
in England (Lords
Justices Bankes, Scrutton, and Atkin) dated
the 23rd of
March 1923 which reversed in part the judgment of
The Honourable
Mr. Justice Bailhache dated the 10th of November
1922 on the trial
of certain preliminary issues which had been
given in favour of
the Appellants; certain further issues (which
did not affect the
Respondents Brittain's Limited) were thereby
left for further
trial and the Respondents J. R. Crompton and
Brothers Limited by
their Cross Appeal claim that those further
issues could and
should have been decided by the Court of Appeal
in their favour.
2. The main question in this
appeal is whether a document
signed by the parties in July and
August 3913, which set out
certain arrangements between them as to
the supply of paper by
the Respondents to the Appellants
and the agency of the
Appellants for the sale of such
paper did or did not constitute
a legally binding agreement; and
the decision of this question
turns upon the meaning and legal
effect of a clause in the said
document which is in the following
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 expression and record of the- purpose
and
intention of the three parties concerned, to which they
each
honourably pledge themselves, with the fullest con-
fidence—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 herein-
after referred to as the '
honourable pledge ' clause."
3. The second question in the
appeal is whether certain
documents which subsequently passed
between the Appellants
and the Respondents Cromptons, and were in
some respects in
the form of orders for and acceptances of orders
for such paper,
constituted binding contracts upon the said
Respondents for the
supply of such paper or were merely requests
for goods under, and
the method by which the parties carried out,
the honourable pledge
set out in the document of August 1913 and
were of no higher
legal validity than the arrangement set out in
that document.
The third question in the
appeal (and in respect of this
the Respondents Cromptons bring
their cross appeal) is whether
certain correspondence carried on
between the Appellants and the
Respondents Cromptons prior to the
document of August 1913
constituted legally binding contracts
between those two parties,
and whether, if such contracts were so
constituted, those contracts
continued to be binding upon those
parties after the arrangements
made in August 1913 were entered
into. The Court of Appeal
have declined to decide these points
and have left them for trial
before a Court of First Instance.
The course of the
proceedings in the action was as
follows:—
(a) The Appellants by their
Writ of Summons dated
the 1.9th of November 1919 sued
both of the Respondents
for (1) damages for breach of contract
and (2) damages for
non-delivery of goods. By their Statement of
Claim they
alleged in the first place (paragraphs 3 to 7) a series
of
agreements made in and between 1907 and 1911 between
the
Appellants and the Respondents Cromptons alone,
by which those
Respondents agreed that the Appellants
should have the sole sale
(with specified exceptions) in
certain areas of certain kinds of
papers manufactured
and/or sold by the Respondents Cromptons.
(b) In the second place they
alleged (paragraphs 8 and
9 of the Statement of Claim) an
agreement in August 1913
between the Appellants and both the
Respondents under
which both the Respondents agreed to confine the
supply
for sale and the sale of their papers in certain
areas
exclusively to the Appellants (with, certain
specified
exceptions). This alleged agreement was set out in
the
document which contained the "honourable pledge"
clause
set out in paragraph 2 of this Case.
(C) In the third place they
alleged (paragraphs 12,
13, 14 and 15 of the Statement of Claim)
breaches in the
autumn of 1918 and in 1919 of the agreement of
August
1913, and that they had suffered damage; and
alterna-
tively (paragraph 16 of the Statement of Claim) that
if
the 1913 agreement was not valid the earlier agreements
with
the Respondents Cromptons were still in force in
1919 and that the
breaches alleged were breaches by the
Respondents Cromptons of
those agreements.
(d) In the fourth place they
alleged (paragraphs 18,
19 and 20 of the Statement of Claim) that
in January,
February and March 1919 they had given, and the
Respon-
dents Cromptons had accepted, a series of orders for
paper;
and that the Respondents Cromptons had, in breach of
their
agreements so constituted, failed to deliver part of
the goods so
ordered, whereby the Appellants had suffered
damage.
(e) There were also two small
claims by the Appellants
(paragraphs 17 and 21 of the Statement of
Claim) and a
Counter-claim by the Respondents in respect of which
no
question now arises.
(F) By their Defence the
Respondents Cromptons
(in substance and so far as is at present
material) denied
that they had made the alleged pre-1933
agreements and
both Respondents denied that the August 1913
arrangement
was a legally binding Contract, denied that the
pre-1913
agreements (if they were legally binding contracts)
con-
tinued in force after the August 1913 arrangement,
denied
that the alleged orders and acceptances constituted
legally
binding contracts, and pleaded (in paragraph 18 of
the
Defence) that both the pre-1913 arrangements and the
August
1913 arrangement were arrangements made without
consideration and
intended to be of no legally binding
effect. It was also pleaded
(paragraph 19 of the Defence)
that by virtue of or alternatively
at the date, of the signing
of, the August 1913 document, the
pre-1913 agreements
were determined by mutual consent and that
the Appellants
were stopped from relying upon them.
(g) It was further pleaded by
the Respondents (para-
graph 20 of the Defence) that the
Appellants had by their
conduct justified the Respondents in
summarily determining
the agreements (if any) between the parties.
(h) Further the Respondents
Cromptons as to the
alleged pre-1913 agreements relied upon the
Statute of
Frauds.
(I) By an Order The Honourable
Mr. Justice McCardie
dated the 8th of February 1922 it was
ordered that the
action be transferred to the Commercial List and
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; that
the Court should construe all
the agreements; and that all
questions as to damages and
as to the matters alleged in paragraph
20 of the Defence
(which set out certain alleged terms of the
agreements and
certain alleged breaches of such terms by the
Appellants)
should, if they became material, be referred to an
Official
Referee.
(J) At the trial of the issues
so directed The Honourable
Mr. Justice Bailhache held that the
August 1913 arrange-
ment was a binding contract and it was
accordingly
unnecessary for him to give any decision as to any
further
issues. He expressed the view, however, that the
orders
and acceptances also constituted legally binding
contracts
and so declared in his judgment. The Court of
Appeal
held on the contrary that neither the August 1913
arrange-
ment nor the orders and acceptances constituted
legally
binding contracts and left for consideration on a
further
hearing by the Judge the questions whether the alleged
pre-1913 agreements were contracts legally binding upon
the
Respondents Cromptons and whether if they were they
continued to
be binding upon those Respondents after
the August 1913
arrangement had been entered into.
The Appellants are an American
Company carrying on
business in New York as dealers in tissue
papers which are bought
by manufacturers Who by coating them with
carbon make carbon
papers for typewriters and other purposes.
The Respondents carry
on business in England as manufacturers of
such tissue papers and
there is and has at all material times
been an arrangement between
the two Respondents under which the
Respondents Cromptons
deal with and sell the whole of the output
of such papers of the
Respondents Brittains.
In 1904 the Appellants were
requesting the Respondents
Cromptons to give to them the
exclusive agency in America for
the sale of the papers
manufactured or sold by those Respondents ;
and they continued to
press for this though those Respondents
were reluctant to grant
it, and the result was a series of vague
and informal
arrangements contained in letters passing between
these two
parties.
The first of these arrangements
was made with respect
to a type of paper known as " 7 lbs.
' R and F ' Carbonizing
Paper " which was manufactured by
the Respondents Cromptons
only and not by the Respondents
Brittains. It was at the outset
a promise by Cromptons "
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 twelve months ending
March 31st 1906.
We will do our best also to see that none of
this paper goes to
the United States or Canada except through
you during the term of
the present contract." This was contained
in a letter of
the 7th of March 1905 which purported to confirm
an oral
arrangement and the period was for more than a year.
There was no
consideration for Cromptons' undertaking or, if
there was
consideration, it was not expressed and there was no
memorandum
sufficient to satisfy the Statute of Frauds.
There were, as appears
from the correspondence,
difficulties about getting the paper
made to the satisfaction of
the Appellants' customer or
customers (see for instance letters of
the 4th of December 1905,
26th of January 1906, 27th of July
1906,10th and 21st of August
1906,19th and 31st of October 1906)
and for a time the making of
the paper was experimental.
Finally in a letter of the 21st
of October 1907 the
Appellants wrote " We think we will be
able to work up quite a
trade on this R and F substance and of
course it is understood,
in accordance with the original
agreement, that we are to have
the sole sale of this paper in
this country and Canada " : in a
letter of the 2nd of
December 1907 they wrote " In our letter of
October 21st we
wrote you that we took it for granted that the
arrangements
between us in regard to this grade of paper should
continue and
that we were to have the sole selling agency for this
paper in
this country and Canada. You seem to have overlooked
this in
your reply to our letter and we take it for granted that
the
arrangements on this grade of paper heretofore existing
between us
still exist and will continue to exist until a
sufficient notice is given
by either one of us to the other of
determination of the same " ; and
to this Cromptons
replied on the 13th of December 1907 " We
are sorry we
omitted to reply to the remark in your letter of
October 21st in
regard to continuing the sole sale of this paper
to you for the
United States and Canada and this of course we
agree to until
reasonable notice is given by either side to terminate
the
arrangement." There was no consideration for
Cromptons'
undertaking, or if there was consideration it was not
expressed.
The Appellants claimed (paragraph 4 of the Statement
of Claim)
that the reasonable notice referred to was twelve
months, and,
if that was so, there was no sufficient memorandum
to satisfy
the Statute of Frauds.
In December 1908, Mr. Campbell,
a representative of
the Appellants, was in England, and, as
appears from the corres-
pondence, interviewed the Respondents
Cromptons and succeeded
in persuading them to make an arrangement
covering all carbon
papers. The arrangement appears in letters of
the 24th of
December 1908, the 4th, 18th and 29th of January 1909,
and the
13th of February 1909.
It was to the effect that
Cromptons would " confine for
the time being their carbon
tissue in America to the Appellants;
would " so long as this
arrangement lasts " open no new accounts
in America for
carbon tissues; would in giving quotations for
such papers in
England do their best to ascertain if the paper was
or was not
required for America and would if they found it was
" bear
your interest in mind and so far as we can do so decline
to
quote." It was understood that Cromptons were still to
be at
liberty to supply direct to two Companies in America, the
F. S.
Webster Company and the Columbia and Ribbon & Carbon
Company
for their own use only (i.e., not for re-sale to other
manufacturers)
but certain points raised by the Appellants as
to the limiting of
the supplies to the Columbia Company and as
to the price to be
charged to that Company and to the Webster
Company were left
unsettled. Beyond a vague assurance (in a letter
of 4th January
1909) by the Appellants that they would do their
utmost to push
Cromptons' goods and discourage those of other
manufacturers,
there was no consideration for Cromptons'
undertaking, and
Cromptons wrote (on the 24th December 1908)
" We hope the
arrangement with you as named herein will enable
you to give us
increased business and providing we are satisfied
with that
increase see no reason now why the present arrangement
should not
continue as between you and ourselves indefinitely,"
and the
Appellants wrote (on the 29th January 1909) " We have
every
confidence in your good faith in protecting our interests
and
appreciate the same and assure you that we will reciprocate
so far
as your interests are concerned." There was no provision
as
to the length of time for which the arrangement was to last.
The
Appellants claimed that it was terminable on one year's
notice,
and if that was so there was no memorandum sufficient to
satisfy
the Statute of Frauds.
The Appellants clearly
regarded the arrangement so
made as being made on mutual
confidence only to be ended at
once if that confidence ceased for
on the 28th May 1909 they wrote
claiming to be informed exactly
what shipments were made by
Cromptons to the Webster Company and
the Columbia Company
and saying " if our present arrangement
is to continue you must
have absolute confidence in us and in our
ability to handle the
situation. If this is lacking kindly let
us known at once so that we
can make such arrangements as to us
will seem fit and we must
have the absolute control of your
papers in this Country." And
on the 24th June 1909 they
wrote " It is absolutely necessary
that you leave matters
entirely in our hand and let us work
according to our last
judgment and discretion and you will
not be a loser by it in any
way. If there is any lack of confidence
either in our
integrity or our ability to handle the situation we
should be
very much pleased if you would let us know."
The Appellants also regarded
themselves as free to
insist upon alterations in the
arrangement at their own will for
on the 15th November 1910 they
wrote to Cromptons sending a
draft letter which they required
them to sign in which there was
eliminated the right of Cromptons
to sell to the Webster Company,
and saying " we must
therefore withdraw from the attitude
that we maintained with you
on November 3rd (when Mr. Frank
on their behalf had interviewed
Cromptons) and must absolutely
insist upon one of the conditions
of our agreement that you do not
deliver paper directly to
Webster," and the draft which accom-
panied this letter
provided for a grant to the Appellants of the
sole right of
selling the Respondents Cromptons' papers in the
United States
till the 31st December 1913 without any exceptions
with an
obligation upon the Appellants to use not less than £6,000
worth
of paper per annum.
On the 3rd December 1910
Cromptons declined to cease to
sell to Webster, but subject to
this expressed willingness to make
a three years' contract if the
Appellants would bind themselves
to buy not less than £6,000
worth of paper per annum. This
suggestion was not accepted by the
Appellants (letter of the
30th of December 1910).
In December 1910 the
Respondents Cromptons cease
to supply paper direct to the
Columbia Company. There was no
agreement on the matter between
Cromptons and the Appellants
but merely a letter from Cromptons
to the Columbia Company
(letter of the 7th December 1910) asking
that Company to pass
its order in future through the Appellants
and a letter of the same
date from Cromptons to the Appellants
enclosing a copy of the
above letter and saying " as we are
not anxious to continue direct
business with this firm and
understanding you would like to do the
business yourselves we
have written them as per enclosed copy."
Between December 1910 and May
1911 there was a
discussion between the Appellants and
Cromptons which further
indicated how informal and dependent
upon the goodwill of
both was the existing arrangement between
them. It may be
summarised as follows : The Appellants
acquiesced for the present
in Cromptons' claim to sell direct to
Webster and to decline to
bind themselves to take any specific
quantity of paper but wanted
the period of the arrangement to be
fixed for two or three years
(letter of the 30th December 1910)
and they said they would do
their best as hitherto to sell
Cromptons' goods and extend the
business (ibid); for which
assurance Cromptons thanked them
(letter of the 25th of January
1911). They pressed for a letter
specifying that the
arrangement was to continue till the 31st of
December 1913
unless terminated sooner by mutual consent
(letters of. the
7th and 10th February 1911) but Cromptons
demurred to this
unless there was a guarantee to take £6,000
worth of paper
per annum (letters of February the 18th and March
3rd, 15th and
24th 1911) and the Appellants (letter of the 28th
March 1911)
urged that the matter should be left to their good
faith saying,
inter alia " We realise that it is to our interest to use
as
large a quantity of your merchandise as we can and to do
whatever
is in our power to discourage the competition on the
part of
others and we have acted in accordance with this policy
for the
last five years and intend to continue same so long as our
relations
remain as pleasing as they are . . . We beg to repeat
however
that we are looking out for your interest and will sell
as many
of your goods as we possibly can giving them the.
preference over
all others and we will not engage ourselves
to take any similar
line to yours." They accordingly pressed
again for a letter
" consenting to our present understanding
continuing to
December 31st 1913." But Cromptons while assuring
them that
they did not doubt their good faith continued
to press for a
guarantee of the quantity to be taken (letter of the
10th April
1911) saying " We believe that you will put all your
energy
into the sale of our papers and we believe it is to our
mutual
benefit that you should do this, but on the other hand, of
course,
there may be buyers who would strongly object to pur-
chasing our
papers through you and if we have an agreement with
you we should
of course be debarred from quoting these people
direct, and the
business in our papers would be practically speaking
solely in
your hands. We feel, therefore, considering that this
would be
the case, we should have some sort of a guarantee of a
given
turnover in return for the sole control of our papers."
Finally
it was agreed (letters of the 25th April and 4th May 1911)
that
the matter should be left" as it is under our old arrangement
"
till further discussion.
On the 20th of June 1911 a
question arose between the
Appellants and Cromptons whether
Cromptons were committing
a breach of the understanding between
them by selling a
certain blue paper direct to the Webster
Company. The matter
was discussed in letters of the 28th June,
8th of July, 1st and 10th
of August, 12th and 19th of September
and 3rd of October 1911.
and in October 1911 the Appellants
through their representative,
Mr. Campbell, came for the first
time into communication with the
Respondents Brittains as appears
from letters of the 24th and
26th October 1911.
This discussion led up to the
third and last of the alleged
agreements made between the
Appellants and Cromptons before
1913. It concerned blue paper
already referred to which was a
very small part of the
business done between the parties.
Cromptons at first
consented to give the Appellants control of
this paper in the
United States, i.e., without exception of the
Webster Company
(letter of the 24-th October 1911) with the
proviso that if the
business increased so as to interfere materially
with the sale of
white paper the arrangements would require
re-consideration, but
the Appellants did not accept that and
insisted that they were
to have the sole control throughout the
world of any blue paper
made by Cromptons, terminable only on
twelve months' notice
(letter of the 26th of October 1911). After
further discussion
(letters of the 27th and 30th of October and
1st and 2nd of
November 1911) Cromptons wrote (letter of the
3rd of November
1911) " We will agree under the peculiar and
special
circumstances to give you the sole control of this particular
kind
of blue paper in question," the Appellants replied (letter
of
the 7th of November 1911) accepting that as satisfactory save
that
with reference to the expression " this particular kind
of blue
paper in question " it was to be understood that
Cromptons
were not to make blue carbonising tissue of any quality
for anyone
but the appellants and " as the usual agreements
are not for less
than one year I think it would be best to have
it for this period.
We of course agree to send you all our
business in the grades
which you supply so long as the agreement
is in force," and
Cromptons agreed to that (letter of 9th
November 1911).
In January 1912 the Appellants
again took up an attitude
which showed that they regarded
themselves as under no con-
tractural obligation towards
Cromptons and as being free to insist
upon alterations in the
arrangement at their own will. They
wrote on the 9th of
January 1912 enclosing 36 orders to be accepted
only on the
conditions that the discount allowed to them should
be increased
from 10 per cent, to 25 per cent, and that they should
be
accorded the sole right to sell all carbonising papers for the
United States and Canada dealt in by Cromptons without any
exception or reservation whatsoever. They said " our
business
relations for the most part have been very friendly and
it is our
desire to continue to do business with and through
you,"
and after referring to changed conditions and the
necessity for
cheaper papers they said '' we must also repeat and
dwell upon the
absolute necessity of your confining the sale of
carbonising papers
in the United States and Canada exclusively to
us." On the same
day the Appellants wrote to the Respondents
Brittains enclosing
a copy of the above letter and saying "
We have decided to close
this business (i.e. the business with
Cromptons) in 1912 ; since
I have seen you however we have
decided not to do this hoping
that we could arrange matters
satisfactorily with your assistance.
Since my return I have gone
over the matters discussed by us with
Mr. Frank and have decided
on the plan as per our letter to
Jas. R. Crompton and Bros, of
which I enclose a copy. As our
stock is very low on your papers
we hope that should any difficulties
arise with J.R.C. that you
will see to it that we suffer no loss of
business through
controversy." The position taken up by the
Appellants thus
was that they were entitled to demand
peremptorily that the
arrangement should be extended to Canada
and that the exception
of Webster Company should be eliminated,
that on failure by
Cromptons to comply at once they need order
no more goods ; and
that they could go behind Cromptons and
obtain supplies direct
from Brittains. Brittains protested (cable
and letter of the 20th
January 1912) and the Appellants consented
to leave the matter in
Brittains' hands for further negotiation (cable
of the 22nd
January 1912).
The matter was further
discussed throughout the year
1912, and the first quarter of
1913. The Appellants used language
indicating that the
continuance of relations with Cromptons was
in their (the
Appellants) discretion (letter of the 31st of January
1912)
Brittains intimated that while the business would continue
to be
done through Cromptons, Brittains would now be directly
associated
with them so far as the Appellants were concerned
(letter of the
3rd February 1912) saying " We think this will be
a
satisfaction and an assurance to you," and the Appellants
were
prepared to continue their relations with Cromptons
pending
settlement of the questions at issue " at least for
the present
especially as we see that you will be directly
associated with them
in their business relations with us "
(letters of the 13th of February
1912).
An offer made by Cromptons on
the 5th of February
1912 in which they insisted on maintaining
their right to supply
the Webster Company and their own
arrangements in Canada
was partially but not unequivocally agreed
to by the Appellants
on the 19th February 1912. and the matter
was further discussed
in letters of the 4th, 12th and 26th of
March 2nd April, 13th and
26th of November, and 5th and 11th of
December 1912, and the
10th, 24th and 28th January, 3rd, 8th and
11th of February 1913
without any agreement being arrived
at. It was arranged,
however, that the Appellants should
submit for consideration a
memorandum of a proposed agreement.
In March 1913, Mr.
Campbell, representing the
Appellants, came to England
bringing a memorandum as appears
from letters of the 4th and 12th
of March 1913. This memo-
randum being the document set out on
page 363 of the Appendix
and dated the 1st of January 1913. It
was however not accepted
by the Respondents and in its place a
draft memorandum was
sent by Cromptons to the Appellants on the
16th of April 1913.
This memorandum was discussed
in letters of the 2nd of
May, 6th of June and 24th of June 1913,
and it was signed as finally
agreed by Brittains on or about the
10th of July 1913 by Cromptons
on or about the 11th of July 1913
(see letter of that date) and by
the Appellants on or about the
13th of August 1913 (see letter of
that date). It is set out on
pages 366 to 369 of the Appendix.
The arrangement contained in
addition to the " honour-
able pledge" clause already
set out the following provisions to
which the Respondents
desired to draw attention as being expressed
in language
indicative of an intention not to create contractual
relations:—
" Messrs. J. R.
Crompton & Brothers Limited
and Messrs. Brittains
Limited hereby expressed their .
willingness that the
present arrangements with Messrs.
Rose and Frank for the sale of
these papers which are now
for one year only shall be continued
on the same lines as
at present for a period of three years say
until the 31st of
March 1916."
" The Rose and Frank
Company will as far as
possible confirm their purchases of all
grades of carbonising
tissues so reserved to them by Messrs. J.
R. Crompton and
Brothers Limited and Messrs Brittains Limited
exclusively
to Messrs. Crompton and Messrs. Brittains, and
whilst
doing their best to increase the business still
further,
undertake that the volumes 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 & Bros. Limited and Messrs.
Brittains
Limited."
(C) "
Messrs. J. R. Crompton & Bros. Limited
and
Messrs. Brittains Limited, whose position is, in their
opinion,
soundly assured, will, subject to unforeseen
circumstances
and contingencies, do their best as in the past to
respond
efficiently and satisfactorily to the calls of Messrs.
Rose and
Frank Co. for deliveries both in quantity and quality."
The arrangement set out in this
memorandum differed
from the arrangements set out in the letters
written before 1913
in the following, among other respects:—
(i) The Respondents Brittains
were now made a
party to the arrangement.
(ii) The period of the
arrangement was now to be
for three years and, in the absence of
notice, for further
periods of three years.
(iii) If the Webster Company
offered for sale the paper
they bought from Cromptons objection
was to be raised
by Cromptons.
(iv) There was an understanding
that the Appellants
would so far as possible confine their
purchases of all grades
of paper reserved to them by the
Respondents exclusively
to the Respondents.
(v) The Appellants undertook
that the volume of
business in the present grades of paper should
not fall in
any year below that of the average of the years 1910,
1911
and 1912 without such explanations as should be
considered
satisfactory by the Respondents.
(vi) The Respondents undertook
that they would,
subject to unforeseen circumstances and
contingencies, do
their best as in the past to respond efficiently
and satis-
factorily to the calls of the Appellants for deliveries
both
in quantity and quality.
(vii) Any other special and
distinctive grades of paper
made at the suggestion of and
introduced by the Appellants
were to be confined exclusively to
the Appellants for the
United States and Canada.
(viii) The cheaper papers
already the subject of
discussion were to be covered by the
special and exclusive
arrangement referred to in (vii) above.
(ix) Prices were to be quoted
in future for six months
only.
Thereafter at the beginning of
each year the Appellants
were in the habit of sending to
Cromptons a large number of
" orders" which were "
calls for deliveries" under the August
1913 arrangement and
were stated to be estimates of their require-
ments for the year
and were sent in order to give "some idea as
to the tonnage
we will require " ; and Cromptons replied thanking
them for
the orders and the Appellants were on and after the 11th
of
January 1916 warned that orders were entered without
guarantee as
to price or delivery. Instances of this procedure
occur in
letters of the 30th of December 1913, 20th of January
1914, 9th
of February 1914, 2nd, 3rd, 18th and 30th of December
1914, 8th
of January 1915, 2nd of March 1915, 23rd and 30th of
December
1915, 11th of January 1916,1st, 10th and 30th of March
3rd of
January 1917, 20th of March 1917, 13th of April
2nd of July 1917,
16th of October 1917, 10th of December
1917, 21st of March 1918.
The arrangement of August 1913
was automatically
renewed until the 31st of March 1919 and
thereafter by agreement
between the parties until the 30th of
March 1920, notice of termina-
tion to be given before the 30th
of September 1919 ; as appears
from letters of the 25th, 26th
and 29th of October 1915, and the
12th of November 1915, 27th,
28th and 29th of August 1918,
20th and 27th of September 1918,
21st, 22nd and 28th of October
1918, 8th and 22nd of November
1918, 13th of December 1918,
6th, 29th and 31st of January 1919,
and 11th of March 1919.
With regard to the "
Orders " in respect of which the
Appellants claim in this
action, on the 2nd of December 1918,
Brittains, in a letter,
copy of which was forwarded to the
Appellants, asked
Cromptons to ask the Appellants " as they have
opportunity,
to review their own position so as to be able, say
early in the
New Year—to give us some indication for our guidance
as to
their own position and prospective requirements, so that we
may
be able to make the most helpful arrangements possible."
Cromptons
conveyed this request to the Appellants on the 3rd
December 1918
and on the 9th of December the Appellants Wrote
saying "
Owing to the press of year and affairs and the uncertainty
connected
with the present conditions we have not yet firmly
concluded as
to what quantities on each grade of paper we will
be able to
place orders for the coming year." On the 6th of
January
1919 they wrote saying " We cannot, of course, state
definitely
what our needs for the coming year will be. For the
moment we
estimate that we will need from 800 to 1,000 cases
of Brittains'
papers during the year 1919." On the 11th of January
1919
they sent four orders which were duly executed ; and on the
23rd
of January they wrote to Brittains saying " We have not
yet
made up our seasons orders, awaiting advice from you, as
per your
letter through Cromptons, in which you state that about
the
middle of January you would be able to inform us as to your
view
of the situation and the probability of the quantities that
you
could furnish for the coming year." On the 24th of
January 1919
they wrote to both the Respondents sending a number
of orders.
To Brittains they wrote: " 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
reductions," and to
Cromptons they wrote " We have not
yet determined the full
quantity of paper that we will require
from you and Brittains,
but realising that you have no special
orders from us we are
sending you orders enclosed which will
cover part of our wants
for the year 1919." On the 7th of
February 1919 they sent a
further order ; and on the 12th of
February 1919 Cromptons
replied as follows : " 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 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 28th of
February 1918, but
that at the moment conditions are particularly
uncertain.
Nevertheless they would like us to assure 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." On the
25th of
February 1919 Cromptons acknowledged the order sent
the 7th of
February. On the 11th of March 1919 the Appellants
sent a further
6 " orders" and on the 29th of March 1919
Cromptons
replied saying " We also thank you for the six orders
for Messrs. Brittains' blue paper which we have passed on to
them
and same will have their best attention."
It was in respect of
non-delivery of a large part of the paper
specified in the above
" orders" that the Appellants claimed
damages. Copies of
the said " orders" are set out on pages 374
to 389 of
the Appendix.
On the 9th of April 1919 the
Respondents cabled to the
Appellants to come to England as soon
as possible, a question
having arisen whether the Appellants had
or had not by their
conduct in respect of the prices they had
charged in America given
justification for the summary
determination of the arrangement
of August 1913. After further
communications the Respondents
in May 1919 treated the
arrangement as at an end by reason of
the Appellants' conduct.
On the 17th of September 1919
the Respondents gave
notice if such was necessary, to terminate
the arrangement of
August 1933 on the 31st of March 1920.
The case was heard on
documentary evidence alone by
The Honourable Mr. Justice
Bailhache on the 9th and 10th of
November 1922. The learned
Counsel for the Appellants argued
that the August 1913 document
constituted a legally binding
contract; and that alternatively
the 1919 orders and acceptances
constituted legally binding
contracts against the Respondents
Cromptons alone ; and
having stated that these (with the minor
points which do not now
arise) were all the points in the case,
added later, that there
was on the pleadings an alternative claim
based on the
pre-existing arrangements having continued as if
they were not
superseded by the August 1913 agreement. This
last point,
however, was never argued and no further allusion was
made to it
in the course of the case. The learned Judge in his
judgment,
which was delivered on the 10th of November 1922,
referred to
three of the earlier letters written to the Appellants
by the
Respondents Cromptons and treated them as without
question
constituting binding contracts (a point which was never
admitted
on behalf of the Respondents). He then in dealing
with the August
1913 document assumed a line to be drawn at
the end of the first
paragraph of that document and examining
that paragraph by itself
said that it was quite clear that the parties
therein agreed that
the three pre-existing contracts were to be
extended and
strengthened. What followed was, in his view,
a setting out of
the intended course of business and a bringing into
one document
of the provisions of the three earlier letters referred
to, with
slight alterations, but with nothing to show that the
pre-existing
contracts should cease to be contracts for "if that
were so,
that would be directly contrary to the very object Messrs.
Rose &
Frank had in view, which was not to weaken the ties
which bound
the Defendants to them but to strengthen them."
The learned
Judge then, coming to the "honourable pledge"
clause,
stated that it was incomprehensible why the Appellants,
having
such intention and desire, should have consented to that
clause
being inserted and how three business firms should have
taken the
trouble to write out a memorandum of this kind, which
was not to
be worth the paper it was written on, and led to an
impossible
position; and having come to the conclusion that the
memorandum,
without the clause in question, recited contracts
which were then
binding and did in fact bind the Respondents to
continue those
contracts for periods of three years, held that that
clause, if
it meant that the parties were not to be legally bound,
was
repugnant to the main spirit of the memorandum and must be
rejected
; and that it must equally be rejected if it merely excluded
the
jurisdiction of the Court, though he expressed the view that
it
had the wider meaning. With regard to the 1919 "
Orders,'
though it was in the circumstances unnecessary to decide
the point,
the learned Judge expressed the opinion that whatever
view be
taken of the 1913 document, these orders constituted
binding
contracts between the Appellants and the Respondents
Cromptons
and that there were sufficient memoranda of such
contracts to
satisfy the Sale of Goods Act. The plea of the Sale
of Goods
Act was abandoned by the Respondents in the Court of
Appeal,
and they do not now rely upon it.
It was accordingly adjudged
and declared that the
agreement of July 1913 was a legally
binding agreement against
both Respondents; that the orders
mentioned in paragraph 18
of the Statement of Claim constituted
legally binding contracts
against the Respondents Cromptons and
that all other issues
remaining to be tried and the issues as to
damages should stand
over for trial by The Honourable Mr. Justice
Bailhacheor other judge
taking the Commercial List (such order to
supersede the previous
order directing reference to an Official
Referee) that the Appellants
should have the costs of the hearing
in any event, that taxation
of costs should stand over, and that
a commission should proceed to
America to take evidence as to the
issues raised in paragraphs 18
and 20 of the Defence.
On the 23rd of November 1922
the Respondents gave
notice of appeal to the Court of Appeal
against the said judgment
and order (save in certain respects not
now material).
The appeal was heard before
Lords Justices Bankes,
Scrutton and Atkin and the Court held
unanimously that the
said agreement of 1913 was not a legally
binding agreement
upon either of the Respondents and (Lord
Justice Atkin dissenting)
that the said orders did not constitute
legally binding contracts
against the Respondents Cromptons.
Lord Justice Bankes on the
assumption (but without
deciding the point) that the
pre-existing agreements between the
Appellants and the
Respondents Cromptons were legally binding
contracts laid down
the principle that it is essential to the creation
of a legally
binding contract that the parties should intend that
it shall
have legal consequences and be legally enforceable and
held that
the " honourable pledge" clause, was not a provision
of
means for ousting the jurisdiction of the Court, but an
expression
of an intention that the arrangement should be merely
an honour-
able pledge and that all legal consequences and
remedies should
be excluded and applied to and dominated the
,whole agreement;
and that the 1919 orders and acceptances were
only requisitions
made under the 1913 agreement, having no more
contractual
force than that agreement.
Lord Justice Scrutton
expressed the opinion that the
pre-existing agreements gave rise
to legal relations, though " owing
to the vagueness of the
language used there might be considerable
difficulty in
ascertaining with exactitude what those legal relations
were"
agreed that the " honourable pledge" clause meant
that
the parties should not be under any legal obligation to each
other
at all; and held that such intention being clearly expressed
there
was no reason why effect should not be given to it and that
there
was no ground for the application of the principle of the
rejection
of repugnant clauses. As to the 1919 orders, the learned
Lord
Justice held that on the documents there was "no
binding
acceptance of a legal proposal."
Lord Justice Atkin agreed that
the 1913 arrangement
was not a legally binding agreement; but
was of the opinion that
the 1919 orders were not affected by the
arrangement of 1913 and
constituted contracts binding upon the
Defendants Cromptons.
On the question whether the
pre-existing agreements
remained in existence and enforceable,
in spite of the 191.3 arrange-
ment, the Court was unanimously of
opinion that the matter should
be left to the Court of First
Instance as one of the issues remaining
to be tried; though Lord
Justice Scrutton expressed the view
that the question could have
been decided on the correspondence
and documents without further
evidence and said that if it had
rested with him he would have
decided it in favour of the present
Respondents.
The Respondents humbly submit
that the judgment of the
Court of Appeal, save on the question of
the pre-191.3 agreements,
was right and ought to be affirmed for
the following amongst other
REASONS.
(1) BECAUSE on the true
construction of the
August 1913 document as a whole and of the
" honourable pledge "
clause it was the intention
of the parties that the said
documents should,
have no binding legal effect upon their
relations.
(2) BECAUSE there is no reason
in law why such
an intention should not be treated as having
been
effectively carried out.
(3) BECAUSE the expressed
intention of the parties
was not merely to exclude the
jurisdiction of the
courts, and the rule that an agreement
with
that object is against pub lie policy is inapplicable.
(4) BECAUSE even apart from
the " honourable
pledge'' clause, the language used in the
document is indicative of an intention of the
parties that the
document should have no
binding legal effect upon their relations
and
there is no repugnancy between that clause and
the rest
of the document.
(5) BECAUSE even if the
language of the document,
apart from that clause, is language
creating a
contractual relation, it cannot be taken
independently
of that clause; and the doctrine
as to the rejection of repugnant
clauses is
inapplicable.
(6) BECAUSE the " orders "
and acceptances were
on their true construction not intended by
the
parties to create binding legal contracts, but
were merely
indications by the Appellants,
acknowledged by the Respondents
Cromptons, of
the Appellants' probable requirements for the
year
under the August 1913 arrangement and
were " calls for
deliveries " under that arrange-
ment and were of no higher
contractual force
than that arrangement, but were merely part
of
the method of carrying it out.
(7) BECAUSE to attribute a
contractual validity
to the orders would be to treat the parties
as
contractually bound for a year to the extent
of the orders,
and so to nullify to that extent
the intention of the parties
expressed in the
August 3 93 3 document.
(8) BECAUSE the order of the
Court of Appeal on
these issues was right.
The Respondents Cromptons as
Appellants by cross-appeal,
humbly submit that the judgment of
the Court of Appeal was
wrong in that it was not further declared
and adjudged that the
arrangements made before 1913 by these
Respondents with the
Appellants were not legally binding contracts
or alternatively,
if they were legally binding contracts that they
had ceased to be
binding upon the parties after the arrangement of
August 1913
was entered into and/or had so ceased in the year 1919
; and will
humbly pray that it may be declared and adjudged
accordingly,
or that such other order may be made as to this most
Honourable
House may seem meet for the following amongst other
REASONS,
(1)
BECAUSE the Appellants before the Court of
First Instance (as is
stated in paragraph 30 of
this case) did not contend that the
arrangements
made before 1913 continued in force.
(2) BECAUSE the whole of the
evidence necessary
and admissible for the decision of the
question is
contained in the correspondence and documents.
(3) BECAUSE the said
arrangements were on their
true construction not intended by the
parties
to be of legally binding effect; and the parties
and in
particular the Appellants showed by their
conduct that they were
not intended to be of
legally binding effect.
(4) BECAUSE there was no
consideration for the
undertakings given by the
Respondents
Cromptons.
(5) BECAUSE there were no
sufficient memoranda
of the said alleged agreements to satisfy
the
Statute of Frauds.
(6) BECAUSE the said alleged
agreements were
so vague as to be unenforceable.
(7) BECAUSE, even if the said
alleged agreements
were legally binding contracts, they were
by
mutual consent rescinded and abandoned when
the parties
entered into the arrangement of
August 1913.
(8) BECAUSE they were abandoned
and became
obsolete by reason of the conduct of the parties
in
carrying on business and acting from 1913
onwards under the
arrangement of August
1913.
(9) BECAUSE the judgment of the
Court of Appeal
was wrong in so far as the Court refused to
deal
with these issues and to decide them in favour
of these
Respondents.
JOHN SIMON.
T.
EASTHAM.
JAMES WYLIE.
In
the House of Lords
ON APPEAL
From His Majesty's Court of
Appeal
(England).
between
ROSE AND FRANK COMPANY - Appellants
and
J. R. CROMPTON & BROTHERS LIMITED
and
BRITAINS LIMITED - Respondents
AND BETWEEN
J. R CROMPTON & BROTHERS LIMITED
Appellants on the
Cross-Appeal
and
ROSE AND FRANK COMPANY
Respondents on the
Cross-Appeal
Case
for the respondents on the
original
appeal and appellants on the cross-
appeal.
RAWLE, JOHNSTONE & CO.,
1 Bedford Bow,
London, W.C. l,
Agents
for
ADDLESHAW, SONS & LATHAM,
Manchester,
Solicitors
for the Respondents and for
. the Appellants on the
Cross-Appeal.
In the House of Lords
ON APPEAL
FROM HIS MAJESTY'S COURT OF APPEAL (ENGLAND).
between—ROSE
& FRANK COMPANY ... appellants
AND
J. R. CROMPTON &
BROTHERS
LIMITED and BRITTAINS LIMITED
respondents.
CASE
FOR THE RESPONDENTS ON THE CROSS APPEAL
(The
Appellants on the Original Appeal).
1.—The Appellants on the
Cross Appeal raise in their Case two
points :—
That the Agreements made
before the 1913 Agreement
(hereinafter called the pre-1913
Agreements) were not valid
and legal contracts ; alternatively
that if they were legal
contracts they were not enforceable by
reason of there being
no memorandum sufficient to satisfy the
Statute of Frauds.
That the Court of Appeal was
wrong in treating the issue
as to whether the pre-1913 contracts
were superseded or
cancelled by the 1913 Agreement as being an
issue of fact
which should not be tried on the Appeal before them
but
dealt with by a Judge of First Instance and as an issue
which
fell under the Consent Order dated the 10th November
1922 and
should be tried by the Honourable Mr. Justice
Bailhache or if he
could not take it by another Judge taking
the Commercial List.
2.—With
regard to the first question raised on the Cross Appeal,
viz.:
whether the pre-1913 Agreements were valid and legal contracts,
it was never disputed by Mr. Disturnal, who appeared on behalf of
the
Appellants on the Cross Appeal before the trial Judge, that
such
Agreements were valid and legal contracts.
The Honourable Mr. Justice
Bailhache in his Judgment found
that the pre-1913 Agreements were
legal binding contracts, the
Judgment of the trial Judge as drawn
up by Agreement between
the parties, did not recite that part of
the learned Judge's Judgment,
because it was immaterial in view of
the learned Judge's finding as to
the 1913 Agreement.
3.—In the Court of
Appeal, Sir John Simon, who appeared for
the Appellants on the
Cross Appeal, in opening, said that he did not
admit that the
pre-1913 Agreements constituted binding contracts,
but said that
this question had yet to be decided ; in his reply,
however, he
assumed that they were enforceable contracts.
4.—Neither before the
trial Judge nor before the Court of Appeal
was it contended that
the pre-1913 Agreements were not enforceable
by reason of there
being no memorandum sufficient to satisfy the
Statute of Frauds.
5.—The position,
therefore, would appear to be that the House
of Lords is asked to
decide a point which was not in issue before the
trial Judge, and
which was not the subject of appeal to the Court of
Appeal, and
which, in the Court of Appeal, was first stated to be a
question
yet to be decided, and was subsequently treated as being not
in
issue.
6.—With regard to the
second question raised on the Cross-
Appeal, viz.: that the Court
of Appeal was wrong in treating the
issue as to whether the
pre-1913 contracts were superseded or
cancelled by the 1913
Agreement as being an issue of fact which
should not be tried on
the appeal before them, but dealt with by a
Judge of first
instance and as an issue which fell under the Consent
Order,
dated the 10th November 1922, and should be tried by the
Honourable Mr. Justice Bailhache, or if he could not take it
by
another Judge taking the Commercial List. This point was
never
taken before the trial Judge, but was taken by Sir John
Simon in
opening on behalf of the Appellants on the Gross Appeal
in the Court
of Appeal; when Mr. Wright, Counsel for the
Respondents on the
Cross Appeal, started arguing this point in the
Court of Appeal he
was stopped by the Court on the ground that it
involved a question
of fact, and that the material was not
available for the Court of
Appeal to arrive at a conclusion on the
question of fact.
7.—In their Judgment,
Lord Justice Bankes and Lord Justice
Atkin decided that the
question as to whether the pre-1913
Agreements cancelled or
superseded the previous agreements was
one of fact and should be
tried by the trial Judge. Lord Justice
Scrutton, on the other
hand, was prepared to give Judgment on this
question in favour of
the Appellants on the Cross Appeal.
8.—It is submitted that
the view that the majority of the Court
of Appeal on this point
was correct. The effect of the Cross Appeal
on this point is to
ask the House of Lords to decide an issue of
fact, the materials
for which decision were. not before the trial
Judge, or the Court
of Appeal of the House of Lords. The House of
Lords would further,
if it acceded to the Cross Appeal, be deciding
the point which has
never been the subject of complete arguments
in the Courts below.
In order to enable a decision to be arrived at,
it would be
probably necessary to hear oral evidence, and in any case
to
examine and peruse a great number of letters which were never
put
in evidence or considered before the trial Judge or in the Court
of
Appeal.
9.—It is humbly submitted
that the Judgments of Lord Justice
Bankes and Lord Justice Atkin
were right and ought to be affirmed
for the Reasons stated above.
R. A. WRIGHT.
C. J. CONWAY.
In the House of Lords
on appeal
FROM HIS MAJESTY'S COURT OF APPEAL
(ENGLAND).
between
ROSE
& FRANK COMPANY Appellant
—AND—
J. R. CROMPTON & BROTHERS
LIMITED and BRITTAINS
LIMITED ... ... Respondent
CASE
FOR THE RESPONDENTS ON THE
CROSS APPEAL
(The Appellants on the Original
Appeal)
WILD, COLLINS & CROSSE,
Kennan's House,
Crown Court,
Cheapside, EC
In the House of Lords
ON APPEAL
FROM HIS MAJESTY'S COURT OF
APPEAL (ENGLAND).
BETWEEN
ROSE & PRANK COMPANY -
- - - - Appellants
AND,
J. R. GROMPTON &
BROS. LIMITED and
BRITTAINS LIMITED - -
- - - - Respondents
and between
J.
R. CBOMPTON & BROS. LIMITED - - - Appellants
(On the Cress Appeal)
and
ROSE & FRANK COMPANY -
- - - - Respondents
(On the Cross Appeal).
Respondents' Additional
Documents
EAWLE, JOHNSTONE & CO.,
1 Bedford Row, W.C.I.
Agents
for
ADDLESHAW, SONS & LATHAM,
Manchester,
Solicitors for
the Respondents and for the
Appellants in the Cross
Appeal.
| No |
document |
Page |
| |
correspondence.
|
|
| 29 |
Letter Appellants to J. R. Crompton & Bros. Ltd., dated
24th June 1909 |
416 |
| |
Letter J. R. Crompton & Bros. Ltd. to C. Campbell, dated
12th March 1913 |
418 |
| |
Letter J. R. Crompton & Bros. Ltd. to C. Campbell, dated
26th March 1913 |
419 |
| |
Letter J. R. Crompton & Bros. Ltd. to Appellants, dated
16th April 1913 |
420 |
| |
Letter Appellants to J. R. Crompton & Bros. Ltd., dated
2nd May 1913 |
420 |
| |
Letter J. R. Crompton & Bros. Ltd. to Appellants, dated
6th June 1913 |
423 |
| |
Letter Appellants to J. R. Crompton & Bros. Ltd., dated
24th June 1913 |
424 |
| |
Letter Appellants to J. R. Crompton & Bros. Ltd., dated
22nd July 1913 |
426 |
| |
Letter J. R. Crompton & Bros. Ltd. to Appellants, dated
15th March 1916 |
427 |
| |
Letter J. R. Crompton & Bros. Ltd. to Appellants, dated
23rd March 1916 |
428 |
| |
Letter Appellants to Brittains Limited, dated -24th March
1916 |
428 |
| |
Letter Appellants to Brittains Limited, dated 24th March
1916 |
429 |
INDEX
In the House of Lords.
ON APPEAL
FROM HIS MAJESTY'S COURT OF
APPEAL (ENGLAND).
BETWEEN
ROSE & FRANK COMPANY - - - -
Appellants
and
J. R. CROMPTON & BROS. LIMITED and
BRITTAINS LIMITED - - - -
Respondents
and between
J. R. CROMPTON & BROS. LIMITED - -
Appellants
(On the Cross Appeal)
and
ROSE & FRANK COMPANY ... - Respondents
(On the Cross Appeal)
Respondents' Additional
Documents.
No. 29.
CORRESPONDENCE.
S. J. rose & frank.
Paper.
201
& 203, Wooster St.,
New York.
Messrs. Jas. R. Crompton &
Bros. June 24th 1909.
Bury, England.
Gentlemen,
We beg to acknowledge the
receipt of your letter of June 9th
contents of which has been
duly noted.
We are rather surprised at the
tone of your letter, as well as
your reply to Ailing & Cory,
of which you send us a copy. It sounds
as if you lack confidence
in our ability to carry on your business.
If you do not think that
we have your interest in mind as well as our
own, and recognize
that they are mutual, you are entirely mistaken.
You need have no
fear that Ailing & Cory will introduce any paper
to substitute
yours as they have been trying that for the last two
years, and
have not succeeded.
There is but one house in this
country that can introduce a new
paper to the trade, and that is
ourselves.
You evidently do not realise the
position that we hold with the
carbon trade, and the importance of
the position that we occupy,
as we have a full line to supply
these people with, which no other
house in this country has.
It is absolutely necessary that
you leave matters entirely in
our hands and let us work according
to our best judgment and
discretion and you will not be a loser by
it in any way. If there
is any lack of confidence either in our
integrity or our ability to
handle the situation we should be very
much pleased if you would
let us know. We have been shaping things
for the last six months,
and it now looks to us that with a little
patience, you will not
be the loser.
In our last letter we explained
to you that it is not to our
advantage nor to yours to encourage a
competition with ourselves,
which to say the least is not
satisfactory in its dealings.
We beg herewith to enclose
draft for L.579.3.7 in payment of
bills as per pay statement
attached.
We also enclose four orders for
which we bespeak your
attention, calling your special attention
to order 776. You know
what trouble we have had in the past by
reason of the uneven
weights, and we trust that you will succeed
in avoiding a
re-occurrence.
We
think we can do a much larger business in this R. &
F.
substance if you would see your way clear to reduce the
price. Also
if you could make it so that it would take the Blue
and Purple ink,
which it does not take now, as there must be some
chemical in your
mixture which causes these colors to fade.
We have no trouble in this
respect with your extra heavy.
51/2 lb. paper and we cannot
understand why you cannot get the
same thing in R. & F. 7 lb.
Please hurry forward order 781
with the first Shipment that
you make to us.
With regards, we are,
S. J. Rose & Frank.
ALFRED FRANK.
james R. crompton & brothers
limited.
Elton Paper Mills,
Near Bury,
Ref.
A.N. " 1178." Lane.
12th March 1913.
Charles
Campbell Esq.,
(of New York)
Hotel
Meurice,
Rue de Rivoli,
Paris.
Dear Sir,
We are in receipt of your favor
of the 10th inst. and have also
received a letter from your New
York House intimating that you are
on this side, and that you
would call and see us. We understand
you have the memorandum of
the proposed Agreement for three
years. We will arrange for a
meeting with Messrs. Brittains if you
will let us know definitely
what time you can be in Manchester on
Tuesday next.
We enclose private letter we
have received for you, and with
kind regards, we remain,
Yours truly,
For Jas. R. Crompton &
Bros. Ltd.
ALF. NUTTALL,
Director.
P.S.—We hope you will be
able to get here not later than
Tuesday next, as we shall be
closing for holidays latter end of
the week, and the writer will
be away from home.
james R.
crompton &
brothers limited.
Elton Paper Mills,
Near
Bury,
Lane.
Ref. A.N. "
1178." 26th March 1913.
Charles Campbell Esq.,
Midland Hotel,
Manchester.
Dear Sir,
We confirm telephone
conversation with you this morning, &
shall be pleased to see
you here tomorrow morning. We have
arranged with Mr. Haigh to meet
us at the Midland Hotel at
3 o'clock tomorrow afternoon.
Yours truly,
For Jas. R. Crompton &
Bros. Ltd.
ALF. NUTTALL,
Director.
Ref. J.R.C. " 1178."
The Rose & Frank Co.
New York. 16th April 1913.
Gentn.
re Carbonizing Tissue
business in the United States and Canada.
We now beg to submit to you for
your acceptance, the enclosed
revised draft of the proposed three
years Agreement & upon
hearing from you that you approve the
same, we will have prepared
two clear copies, one for your
signature, & one for ours, unless in
order to save time, you
like to send one to us signed by yourselves,
& one for us to
sign which latter we will return to you immediately
after we
receive it. This we think is all that should be necessary
to put
the matter upon a satisfactory footing. & we shall be glad
when
it is finally settled.
If you like to include Messrs.
Brittains cheap grade tissue in
the Agreement, under the same
conditions which apply to the best
papers, we shall be glad for
you to do so. If you cannot see your
way to this, we suggest this
grade should be left out of the present
Agreement, leaving it to
apply only to Messrs. Brittains best papers.
The writer is sorry, that
through illness, he was unable to see
Mr. Campbell when over
here, but sends his kind regards, & hoping
soon to hear from
you in reply to this letter, we are,
Yours truly,
For James R. Crompton &
Bros. Ltd.
JAMES R. CROMPTON,
Director.
New York.
May 2 1913.
Messrs. J. R. Crompton &
Bros. Ltd.
Bury.
Dear Sirs,
We have your letter of the 16th
ulto. in the matter of the
3 years agreement between Messrs.
Brittains Ltd., yourselves and
ourselves, and have carefully read
over the Memorandum.
We
would suggest the following changes.
The first sentence on the first
page, first paragraph to be
amended to read as follows: If no
notice be given by either
party the arrangements shall be regarded
as continuing for
a further period of three years.
This is the form of agreement
that we have with all our manu-
facturers and seems to be the
fairest all around, as we do not think
that any contract in which
there is so much involved to all of us
should continue at the risk
of being terminated by six months notice
at any time. No doubt if
you will think this matter over you will
agree with us. The same
reasons that moved us all to make a three
year contract now remain
at the end of the first three years for any
new contract.
We would suggest an addition to
the first paragraph on page 2
regarding the F. S. Webster Co.
That the paper sold to the
F. S. Webster Co. shall only be in such
quantities as they require
for manufacturing carbonizing paper in
their own plant. And
that they are not to be allowed to offer any
of the paper for sale
uncarbonized.
On page 2, paragraph 2 11th
line, we would suggest that the
average of the last three years,
1910, 1911 and 1912 be inserted.
We think that in order to avoid
any possible misunderstanding,
something should be said in your
letter carrying out the idea of
paragraph 4 of the agreement
submitted by us. This does not bind
you in any way to accept the
making of new papers for us unless
you desire to do so under an
understanding as outlined in the
paragraph referred to.
We are of the opinion that the
first paragraph of your letter
on page 3 is unnecessary and
better omitted. If, however, you desire
to insert this we have no
objection, as we feel perfectly safe in the
light of our past
experience, and we think you should reciprocate
the same feeling
toward us which seems to us to make this paragraph
unnecessary and
might be construed as a reflection on either one of
us. As stated,
however you can leave it in or just as you desire.
If you will have clear copies
prepared and sent to us, adopting
the suggestions that we made,
we shall be pleased to sign and
return them.
You will see that we have
elected not to include Messrs. Brittains
cheap grade of tissue in
this agreement, as we cannot recede from
tine position that we
have taken regarding the confining of the sale
of this paper
exclusively to us for the United States and Canada
without any
exception whatever.
We also beg to acknowledge the
receipt of your letter of
April 17th and beg to state that we
have not yet had a chance to
try out the R & F Paper which you
mention. Replying to your
enquiries regarding an agreement with
you in regard to R & F
paper, we of course take it for granted
that we have the selling
right for this and similar grades in this
country and Canada, and
are perfectly willing to enter into a
three year agreement with you
under the same conditions that we
have had the paper heretofore
which you can incorporate in the
letter to be signed by yourselves,
Brittains and ourselves noting
the different conditions under which
the sale of this paper is
given to us, to wit, that it is strictly
confined to us without
any exception whatsoever, both for these
grades and anything
similar.
We have received your invoices
for shipments of some of our
orders and note that you shipped
these via Hull, which is rather
embarrassing to us, as in cabling
our order No. 2721 we stated to
ship by quickest route which we
thought you would understand as
meaning via Liverpool. In order to
avoid any future misunder-
standings of this kind please note that
when we cable for goods,
unless we state otherwise, we would like
our orders cabled shipped
via Liverpool, quickest steamer.
We enclose herewith draft for
£1235/8/5 in payment of bills
as per pay statement
attached.
With kindest regards, we are,
Very truly yours,
Rose & Frank Co.
(Sgd) ALFRED
FRANK.
Copy of this letter sent to Brittains.
We would suggest the following
changes.
The first sentence on the first
page, first paragraph to be
amended to read as follows: If no
notice be given by either
party the arrangements shall be regarded
as continuing for
a further period of three years.
This is the form of agreement
that we have with all our manu-
facturers and seems to be the
fairest all around, as we do not think
that any contract in which
there is so much involved to all of us
should continue at the risk
of being terminated by six months notice
at any time. No doubt if
you will think this matter over you will
agree with us. The same
reasons that moved us all to make a three
year contract now remain
at the end of the first three years for any
new contract.
We would suggest an addition to
the first paragraph on page 2
regarding the F. S. Webster Co.
That the paper sold to the
F. S. Webster Co. shall only be in such
quantities as they require
for manufacturing carbonizing paper in
their own plant. And
that they are not to be allowed to offer any
of the paper for sale
uncarbonized.
On page 2, paragraph 2 11th
line, we would suggest that the
average of the last three years,
1910, 1911 and 1912 be inserted.
We think that in order to avoid
any possible misunderstanding,
something should be said in your
letter carrying out the idea of
paragraph 4 of the agreement
submitted by us. This does not bind
you in any way to accept the
making of new papers for us unless
you desire to do so under an
understanding as outlined in the
paragraph referred to.
We are of the opinion that the
first paragraph of your letter
on page 3 is unnecessary and
better omitted. If, however, you desire
to insert this we have no
objection, as we feel perfectly safe in the
light of our past
experience, and we think you should reciprocate
the same feeling
toward us which seems to us to make this paragraph
unnecessary and
might be construed as a reflection on either one of
us. As stated,
however you can leave it in or just as you desire.
If you will have clear copies
prepared and sent to us, adopting
the suggestions that we made,
we shall be pleased to sign and
return them.
You will see that we have
elected not to include Messrs. Brittains
cheap grade of tissue in
this agreement, as we cannot recede from
tine position that we
have taken regarding the confining of the sale
of this paper
exclusively to us for the United States and Canada
without any
exception whatever.
We also beg to acknowledge the
receipt of your letter of
April 17th and beg to state that we
have not yet had a chance to
try out the R & F Paper which you
mention. Replying to your
enquiries regarding an agreement with
you in regard to R & F
paper, we of course take it for granted
that we have the selling
right for this and similar grades in this
country and Canada, and
are perfectly willing to enter into a
three year agreement with you
under the same conditions that we
have had the paper heretofore
which you can incorporate in the
letter to be signed by yourselves,
Brittains and ourselves noting
the different conditions under which
the sale of this paper is
given to us, to wit, that it is strictly
confined to us without
any exception whatsoever, both for these
grades and anything
similar.
We have received your invoices
for shipments of some of our
orders and note that you shipped
these via Hull, which is rather
embarrassing to us, as in cabling
our order No. 2721 we stated to
ship by quickest route which we
thought you would understand as
meaning via Liverpool. In order to
avoid any future misunder-
standings of this kind please note that
when we cable for goods,
unless we state otherwise, we would like
our orders cabled shipped
via Liverpool, quickest steamer.
We enclose herewith draft for
£1235/8/5 in payment of bills
as per pay statement
attached.
With kindest regards, we are,
Very truly yours,
Rose & Frank Co.
(Sgd) ALFRED FRANK.
Copy of
this letter sent to Brittains.
james
R. crompton & brothers limited.
Elton Paper Mills
Near Bury,
Lane.
Ref.
B.C. Jr. " 1178 " 6th June 1913.
The Rose & Frank Co.
New York.
Gentn,
We duly received your favor of
the 2nd ulto. with reference
to the three years agreement, copy of
which was sent on to Messrs.
Brittains Limited. We have fully
conferred with them & now
enclose draft of what we propose
this should be, & hope you will
agree with it.
You will notice that we have
acceded to your wish that if no
notice be given by either party
the arrangement shall be regarded
as continuing for- a further
period of three years.
With reference to the F. S.
Webster Co. & your request that
we should embody a paragraph
to the effect that these customers
should be supplied with paper
only on the understanding that it is
for their own use, & not
for sale in the unprepared state, we have
no reason for supposing
that they do sell the paper except after
they have coated it, &
having no special reason for writing them
now limiting them to the
coating of all the paper themselves, we
think that the point
raised by you will be quite covered by the
clause we have inserted
in the agreement, to the effect that should
they, during the
currency of the Agreement, offer for sale in its
unprepared state
the paper they buy from us, objection shall then
be raised by us
to their doing so, as the assumption at present is that
the I'. S.
Webster Co. coat all the paper we supply to them.
With regard to the average of
the last three years, we have
also acceded to your desire that the
minimum volume of business
should be based on the average of the
last three years instead of
the last two years. In doing this we
bear in mind that the whole
basis of this agreement rests upon the
honourable & loyal way in
which the Agreement is carried
through by each of the three
parties. The natural expectation of
course would be that1 the
business should show an
increase from year to year, instead of
falling to the average of
a past series of years. For the same reason
we should not like to
delete the paragraph in this connection which
makes it clear that
this is not an ordinary legal Agreement subject
to the
interpretation of the Law Courts, but something that we
ourselves
& Brittains Limited regard as more binding still, the
honourable
pledge of each of the three parties.
With reference to the substance
of paragraph 4 in your draft
Agreement submitted to us, you will
see that we have incorporated
the essence of this paragraph in the
revised draft agreement, as
now sent forward, & after full
discussion with Messrs. Brittains
Limited, we have agreed, as
stated in the draft, that the cheaper
carbonizing papers which
have already been the subject of dis-
cussion, shall be included
in this special & exclusive arrangement
in which the " R
& F " Papers are also included.
The draft Agreement as it now
stands covers the whole ground
of this carbonizing tissue
business, & if you unreservedly agree,
we will have it copied
in triplicate, each copy to be signed by the
three parties, &
one copy retained by each of them.
After the full consideration
that has now been given to this
matter, we trust the business
will go forward on sound foundations
to the satisfaction of all
the parties concerned.
Yours faithfully
For Jas.
R. Crompton & Bros. Ltd.
RALPH CROMPTON jr.
Director.
rose & frank Co.
New York,
June 24th 13.
Messrs. Jas. R. Crompton &
Bros. Ltd.
Bury, Lancashire, England.
Dear Sirs : —
We beg to acknowledge the
receipt of your letters of the 3rd,
6th, 9th and 11th inst.
The Matter of Blue Carbonizing
Tissue, we note that you are
doing your utmost to hurry forward
part of our order and we trust
that you have been successful and
that a partial shipment is now
on the way.
In reference to the draft
agreement sent us in your letter of
the 6th inst., we beg to state
that the same is satisfactory to us,
and if you will have the
agreement or memorandum drawn up in
triplicate we shall be pleased
to sign two copies returning them
to you, asking you to send us
one copy signed by you and Messrs.
Brittains Ltd.
We desire to call your
attention to the fact that we have been
penalized on the Canadian
business which we do not think is just
fair. We are willing to
enter the market on an even basis with
you so far as the selling
price is concerned but at the same time
we do not think it right
that we should be handicapped by having
to pay more for goods
going into Canada than we would if the same
goods were sent to the
United States.
We think that Messrs. Brittains
Ltd, will agree with us that
this should not be done, and we look
forward to a discontinuance
of the practice of this on your part
in the future.
We are very glad that the
matter of our future dealings is now
on a basis which is fully
understood, by all of us, and we look
forward to a continuance of
the agreeable relations that we have
had with you in the past for
a long time in the future.
As soon as we can get at it,
which we hope will be in the
Course of the next few weeks, we
will try to send you an Order for
the 7 lb. Substance to be
manufactured by the Brittains Co.
We enclose herewith one order
for which we bespeak your
careful attention, as well as draft for
£429. 10. 6 in payment
of bill as per pay statement
attached. Another draft will be sent
to you in the course of a few
days.
With kindest regards, and again
wishing to express our
satisfaction that our little differences
are now smoothed out, we are
Very truly yours,
ROSE & FRANK CO.
rose & frank Co.
New York
Messrs. Jas R. Crompton &
Bros Ltd., July 22/13
Bury, Lancashire,
England.
Dear Sirs,
We beg to acknowledge the
receipt of your letters of July 7th,
10th and 11th. We also
acknowledge receipt of the Memorandum
of Agreement in triplicate.
Our Mr. Frank is at present on his
vacation and this matter will
have our attention as soon as he
returns.
We note what you say regarding
the #14 A. Gauze as against
# 4 A Gauze. We shall call our
customers attention to the superior
quality and hope that this
grade will prove superior as you state.
As you state nothing in
your letter about the price, we presume
that you expect to sell
this at the same price as the 4—A Gauze.
Regarding the # 14 — D
Extra Thin quality, we wish to
state that at the present time we
could not pay 1d. per lb extra
for light weight tissue. We shall
be glad to bear this in mind,
however, and see if we cannot open
up a new trade for this grade.
Before offering this, however, we
would like to be sure that Brittains
can keep it absolutely
uniform and that it will show superior
quality. In order to give
it a fair test for a higher priced paper,
it might be well if
Brittains would make a few cases of this in
18 inch, rolls and
ship the same when convenient.
We think it will be difficult
to introduce such a high priced
paper, as competition on the
finished product is very keen and
the prices on the light weight
papers are very high as it is now.
We shall do all we can to try
and get a market if it is possible to
do so. When the first sample
run is finished, will you kindly ask
Brittains to give you a
report as to whether they will be able to
maintain the uniformity
and superior quality of the paper so that
we can promise this to
our customers accordingly.
We enclose herewith draft in
payment of invoice as per pay
statement attached.
With regards, we are Very truly
yours
ROSE & FRANK CO.
' '
james R. crompton & brothers
limited.
Elton Paper Mills,
Ref.
A.N. Near Bury, Lane.
Messrs. Rose & Frank
Co. March 15th 1916.
New York.
Dear Sirs,
REVISION OF PRICES.
You will have received copy of
Messrs. Brittains' letter of the
26th ulto. informing us that they
find it necessary to ask for an all
round advance in price of 12½
% to apply to all deliveries after
March 31st and you will note
what they say about not being able
to give any guarantee, but that
they hope to allow the new prices
to remain in operation for the
next six months.
We have been reviewing our own
position and we too find we
must ask the same advance from the
same time.
It is impossible for us to tell
you the difficulties with which
we now have to contend and the
difficulty we have in getting raw
materials not to mention the
greatly increased cost of that which
we can obtain. We are also,
as you can understand troubled as
regards labour, coal, chemicals
and practically everything we
require.
We send you under separate
cover invoice for a quantity of
20 L sent on your account to
Canada and we very much regret that
we have had to keep you so
short of supplies of this paper but
we have really been doing the
best we could under the awkward
circumstances.
Messrs. Brittains write us
saying they will be sending forward
this week a good supply of
Blue Gauze 18" also some 26½" rolls No. 7
and
before the end of the month a further delivery of Blue Gauze
60
rolls 18" No. 6A and some 18" and 261" No. 7.
We hope we shall be able to get
these shipped without any
undue trouble and delay and hope they
will reach you safely and
help you out of your difficulties.
Yours faithfully,
ALF. NUTTALL
Director.
james
R. crompton & brothers.
Elton Paper Mills,
Messrs. Rose & Frank
Co. Nr. Bury, Lane.
Ref. A.N. March 23rd 1916.
136/140, West 21st Street
New York.
Dear Sirs,
We beg to acknowledge receipt
of your favour of the 1st instant
and thank you for your esteemed
remittance £7.34. 3. 7d.
Messrs. Brittains write to say
that the balance of the Blue
carbonizing Paper together with some
of the other grades, will
be coming round quickly and we shall
probably be able to ship
same next week. They also add that this
will make the total
quantities delivered this quarter equal to the
quantity delivered
in the corresponding quarter last year and they
are glad they have
been able to keep up the deliveries to this
standard.
No effort will be spared to
deal with other deliveries.
As regards the E. C. C. Paper we will
try and let you have a
delivery very soon, but are sorry we cannot
at present do very
much with this.
With kind regards, we remain,
Yours faithfully,
For James R. Crompton &
Brothers Ltd.
ALF. NUTTALL
Director.
rose & frank Co.
136-140 West 21st Street,
New York,
Mar. 24th
1916.
Private & Confidential.
Messrs. Brittains Ltd.,
Nr. Leek, Staffs. England.
Dear Sirs,
Your private letter of the 26th
of February has been duly
received and we enclose copy of our
cable sent to you on March 17.
reading:
" Cover six months supply "
by this you will understand
that we accept the conditions outlined
in your letter as to
taking at the advanced price, a six months
supply of paper,
conditional upon your being able to gather a
supply of stock
sufficient to make the same and to take this paper
from you at the
price last quoted independent of the market
conditions as to price
should there be a downward tendency.
We fully appreciate the
position in which you are in and can
only repeat what we have so
often stated, that we regard our
interests as mutual and our
relations such as to warrant the helping
out of each other in
difficulties which may arise from circumstances
entirely beyond
the control of either. We have every confidence in
you and
appreciate the services which you have rendered to us.
We hope
that you will find no further obstacles in supplying us
with the
paper that we have ordered and that you will be in a
position to
make us shipments in the future as you have heretofore.
With kindest regards, we are,
Very truly yours,
Rose & Frank Co.
ALFRED
FRANK.
136-140 West 21st Street
New York
March 24th
1916.
Messrs. Brittains Ltd.
Nr. Leek,
Staffordshire,
England.
Dear Sirs,
We beg to acknowledge receipt
of the copy of your letter
addressed to Messrs. James R. Crompton
& Bros. Ltd. in reference
to price and note that after the
31st of this month you will be
compelled to make an all round
increase of 12 ½ %
We accept all the conditions as
outlined in your letter, to wit:
That this price is to remain for
six months viz : to the end of
September.
We beg to confirm all our
recent orders sent to you under the
new conditions, as we do not
wish to withdraw any of them, but
desire them all filled as given.
430
A copy of this letter sent to
Messrs. James R. Crompton &
Bros. Ltd. to day.
With kindest regards, we are, .
Very truly yours,
ROSE & FRANK CO
AF/HG
P.S.—Enclosed please find
copy of letter sent today to Messrs.
In the House of Lords.
ON APPEAL
FROM HIS MAJESTY'S COURT OF
APPEAL (ENGLAND).
between
ROSE & FRANK
COMPANY ...Appellants
—AND-
JAS.
R. CROMPTON & BROS. LIMITED
and BRITTAINS LIMITED
... Respondents.
APPENDIX.
WILD, COLLINS & CROSSE,
Kennan's House, Crown Court,
Cheapside, London, E.C.2,
Appellants' Solicitors.
RAWLE, JOHNSTONE & CO.,
1 Bedford Row, London, W.O.I.
Agents for ADDLESHAW, SONS &
LATHAM,
Manchester,
Respondents' Solicitors.
Doct.
No. |
Description of Document. |
Date. |
Page. |
| 1 |
Writ, issued |
19 Nov. 1919 |
1 |
| 2 |
Statement of Claim, delivered |
15 Dec. 1920 |
3 |
| 3 |
Particulars, delivered |
25 Feb. 1921 |
14 |
| 4 |
Defence and Counterclaim, delivered |
29 July 1921 |
15 |
| 5 |
Particulars of Bequest referred to in paragraph 20 of the Defence, delivered |
29 July 1921 |
21 |
| 6 |
Particulars of Counterclaim under paragraph 22 of the Defence, delivered |
29 July 1921 |
26 |
| 7 |
Reply to Defence and Counterclaim, delivered |
2 Nov. 1921 |
31 |
| 8 |
Order of Mr. Justice McCardie transferring .Action to the Commercial
List, dated |
8 Feb. 1922 |
32 |
| 9 |
Precis of Letters between Solicitors for the parties relative to arrange-
ments made between them as to the Trial, dated |
8 Mar. 1922
8 Mar. 1922
27 Mar. 1922
31 Mar. 1922 |
33
33
34
35 |
| 10 |
Transcript of Shorthand Writer's Notes of the Judgment of Mr. Justice
Bailhache, delivered |
10 Nov. 1922 |
36 |
| 10a |
Judgment of the Court, dated |
10 Nov. 1922 |
56 |
| 11 |
Notice of Appeal, dated |
23 Nov. 1922 |
58 |
| 12 |
Transcript of Shorthand Writer's Notes of the Judgment of the Court
of Appeal, dated
Lord Justice Bankes
Lord Justice Scrutton
Lord Justice Atkin |
23 Mar. 1923
… …
… …
… … |
59
59
64
70 |
| 13 |
Order of the Court of Appeal, dated |
23 Mar. 1923 |
80 |
| 14 |
Further Order of the Court of Appeal, dated |
23 Mar. 1923 |
82 |
| |
DOCUMENTS PUT IN AT THE TRIAL. |
|
|
| 15 |
Correspondence—
Letter, Jas. R. Crompton & Bros, Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Brittains Ltd
" Brittains Ltd. to Jas. R. Crompton & Bros. Ltd
" Appellants
" Jas. R. Crompton & Bros. Ltd. to Appellants |
7 April 1904
11 May 1904
13 Sept. 1904
22 Sept. 1904
23 Sept. 1904
3 Oct. 1904
12 Oct. 1904 |
84
85
85
86
87
88
89 |
| |
Correspondence (continued)—
Letter, Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Alfred Frank to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Alfred Frank
" Alfred Frank to .Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" " "
" " "
" Alfred Nuttall to Alfred Frank
" Appellants to Jas. R. Crompton & Bros. Ltd
" Brittains Ltd.
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R Crompton & Bros. Ltd
" Jas. R Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R Crompton & Bros. Ltd. to Appellants
" Alfred Frank to Alfred Nuttall
" Alfred Nuttall to Alfred Frank
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" " "
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Ap pellants to Jas. R. Crompton & Bros. Ltd
" " "
" " "
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Chas. Campbell to Jas. R. Crompton & Bros. Ltd
" Jas. R Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" " "
" Chas. Campbell "
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R, Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" " " |
21 Oct. 1904
9 Nov. 1904
23 Nov. 1901
14 Feb. 1905
23 Feb. 1905
25 Feb. 1905
27 Feb. 1905
7 Mar. 1905
5 April 1905
22 June 1905
28 Aug. 1905
22 Nov. 1905
1 Dec. 1905
4 Dec. 1905
17 Jan. 1906
26 Jan. 1906
10 Feb. 1906
30 Mar. 1906
9 April 1906
13 July 1906
27 July 1906
10 Aug. 1906
21 Aug. 1906
10 Sept. 1906
28 Sept. 1906
9 Oct. 1906
19 Oct. 1906
31 Oct. 1906
20 Feb. 1907
20 Mar. 1907
5 April 1907
21 Oct. 1907
2 Dec. 1907
13 Dec. 1907
20 Feb. 1908
4 Mar. 1908
13 Mar. 1908
23 Mar. 1908
28 Aug. 1908
8 Sept. 1908
6 Dec. 1908
24 Dec. 1908
30 Dec. 1908
4 Jan. 1909
11 Jan. 1909
18 Jan. 1909
29 Jan. 1909
6 Feb. 1909
13 Feb. 1909 |
90
90
91
92
93
94
84
95
96
97
98
98
99
100
101
101
102
103
104
105
106
107
108
109
109
110
111
111
112
114
115
116
117
118
119
120
121
121
122
123
125
125
127
127
129
130
131
133
136 |
| 15 |
Correspondence (continued)—
Letter, Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton &.Bros. Ltd.
" Brittains Ltd. to Appellants
" Jas. R. Crompton & Bros. Ltd. to Appellants
" " "
" " "
" " "
" Appellants to Brittains Ltd
" " Jas. R. Crompton & Bros. Ltd.
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" " "
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" " "
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" " Brittains Ltd
" " Jas. R. Crompton & Bros. Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Brittains Ltd
" " Jas. R. Crompton & Bros. Ltd
" Brittains Ltd. "
" Jas. R. Crompton & Bros. Ltd. to Brittains Ltd
" " Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" " Brittains Ltd
" Jas. R. Crompton & Bros. Ltd. to Appellants
" " "
" Brittains Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" " Brittains
" Brittains to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" " "
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Jas. R. Crompton & Bros. Ltd
" " "
" " Brittains Ltd
" " "
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Brittains Ltd
" " Jas. R. Crompton & Bros. Ltd
" " "
" " Brittains
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Brittains Ltd. to Chas. Campbell
" Jas. R. Crompton & Bros. Ltd. to Appellants
" Appellants to Brittains Ltd |
21 Aug. 1914
1 Sept. 1914
14 Sept. 1914
17 Sept. 1914
23 Oct. 1914
2 Dec. 1914
3 Dec. 1914
18 Dec. 1914
18 Dec. 1914
30 Dec. 1914
8 Jan. 1915
19 Jan. 1915
2 Feb. 1915
2 Mar. 1915
17 Mar. 1915
20 Mar. 1915
2 April 1915
2 April 1915
9 April 1915
15 July 1915
6 Aug. 1915
6 Aug. 1915
25 Oct. 1915
26 Oct. 1915
29 Oct. 1915
12 Nov. 1915
12 Nov. 1915
27 Nov. 1915
10 Dec. 1915
11 Dec. 1915
23 Dec. 1915
30 Dec. 1915
11 Jan. 1916
1 Mar. 1916
10 Mar. 1916
30 Mar. 1916
26 May 1916
23 June 1916
23 June 1916
15 Dec. 1916
J Jan. 1917
19 Jan. 1917
19 Jan. 1917
20 Mar. 1917
11 April 1917
13 April 1917
5 May 1917
2 July 1917
16 Oct. 1917 |
246
248
249
250
251
252
253
254
254
255
256
257
258
259
261
262
264
266
266
268
270
270
272
274
275
276
277
278
278
280
281
282
284
284
285
286
287
288
288
289
290
290
291
292
294
297
299
300
301 |
No. 1.
Writ, issued 19th November
1919.
1919.—R.—No. 1401.
IN THE HIGH COURT OF JUSTICE.
King's Bench Division.
Between—Rose & Frank
Company ... Plaintiffs
and
J. R. Crompton & Bros.
Limited and Brittains
Limited Defendants.
GEORGE THE FIFTH, by the Grace
of God, of the United
Kingdom of Great Britain and Ireland, and
of the British Dominions
beyond the Seas, King, Defender of the
Faith To J. R. Crompton &
Bros. Limited of Bury in the County
of Lanes and Brittains Limited
near Leek in the County of Staffs
We command you, that within
eight days after the service of this
Writ on you, inclusive of the day
of such service, you do cause an
appearance to be entered for you in
an action at the suit of Rose
& Frank Company And take notice that
in default of your so
doing, the Plaintiff may proceed therein and
judgment may be given
in your absence.
Witness, Frederick Viscount
Birkenhead, Lord High Chancellor
of Great Britain, the Nineteenth
day of November in the year of Our
Lord One thousand nine hundred
and nineteen.
N.B.—This Writ is to be
served within twelve calendar months
from the date thereof, or,
if renewed, within six calendar months from
the date of the last
renewal, including the day of such date, and not
afterwards.
The Defendant may appear hereto
by entering appearance either
personally or by Solicitor, at the
Central Office, Royal Courts of
Justice, London.
The Plaintiffs claim:—
Damages
for breach of contract.
Damages for non-delivery of
goods.
This Writ was issued by Wild,
Collins & Crosse of and whose
address for service is Kennan's
House, Crown Court, Cheapside, in the
City of London, Solicitors
for the said Plaintiffs, who carry on business
as Importers and
Exporters at 152 West 22nd Street New York in the
United States of
America, and are a body incorporated under the laws
of the United
States.
This Writ was served by me
at
on the Defendant
on , the day of , 192 .
Indorsed the day of ,192 .
(Signed) ,
(Address)
No. 2.
Statement of Claim, delivered
15th December 1920.
1919.—R.—No.
1401.
IN THE HIGH COURT OF JUSTICE.
King's Bench Division.
Writ issued the 19th day of
November 1919.
Between—Rose & Frank
Company Plaintiffs
and
J. R. Crompton & Bros.
Limited and Brittains
Limited Defendants.
STATEMENT OF CLAIM.
1.—The Plaintiffs carry on
business in New York as dealers
in tissues for carbonising papers
and prior to 1907 dealt chiefly in
tissues for carbonising papers
manufactured in countries other than
England. The Defendants
Brittains Limited are English manufacturers
of high-class tissues
for carbonising papers and the Defendants
Crompton & Bros.
Ltd. are English manufacturers of less expensive
tissues for
carbonising papers. At all material times the Defendants
Crompton
Bros. Ltd. had the exclusive right to the output and the
sale of
the products of the Defendants Brittains Limited.
2.—All the tissues
hereinafter referred to bought by the Plaintiffs
from the
Defendants or either of them were to the knowledge of the
Defendants
and or each of them bought for the purpose of resale to
the
Plaintiffs' customers. In respect of all the tissues
hereinafter referred
to the practice of the Plaintiffs as the
Defendants well knew was to
buy such papers from the Defendants in
an unfinished state and to sell
such, papers to manufacturers who
coated the unfinished tissues and so converted them into carbonising
papers.
3.—By an Agreement made in
or about December 1907 between
