R v Thompson & Son Ltd

Judgment Date25 February 1920
Date25 February 1920
CourtKing's Bench Division (Ireland)
Thompson v. The King.

K. B. Div.

Vendor and purchaser - Contract - Agreement between parties "subject

to contract."

Where an offer and acceptance are made (a) subject to a subsequent formal contract, if such contract is a condition or term which until performed keeps the agreement in suspense, the offer and acceptance have no contractual force. On the other hand, if all the terms are agreed on, and (b) a formal contract is only contemplated as putting the terms in legal shape, the agreement is effectual before and irrespective of such formal contract.

Held, reversing the judgment of Pim J., that on the facts, and in the circumstances set forth in the present case, the agreement between the parties came within (a), and therefore was not enforceable. The judgment entered for the suppliants was reversed, and the petition dismissed with costs accordingly,

Per Gibson J.: Where it is desired to have a Petition of Right tried without a jury, an order of the Court for that purpose should be obtained beforehand, so as not to allow the case to proceed to trial with a jury, which could only be discharged by consent.

Petition of Right.

The correspondence and facts are fully set out in the judgment of Pim J. The petition was originally set down for trial before him and a special jury, but with the consent of counsel on both sides the jury was discharged, as it was agreed that the question was one of the application of legal principles to the facts, which were not in dispute.

The Grown applied to the King's Bench Division (1) to have the judgment of Pim J. set aside, and the petition dismissed.

Cur. adv. vult.

Pim J.:—

This is a case of a Petition of Right, presented by Messrs. Thomas Thompson & Son Ltd., of Carlow, Engineers, in which the suppliants set out that a contract which had been entered into between His Majesty's Minister of Munitions and the suppliants,

agreeing to sell to them, in consideration of £24,200, the Munition Factory at Waterford and the stores therein, had been broken by the refusal of the Minister to carry out his contract. The suppliants claimed £4000 damages for breach of this contract.

During the course of the war, the Minister of Munitions, acting under the powers given to him. by the Defence of the Realm Act took from the Great Southern and Western Railway Co. a piece of ground in the City of Waterford, and erected thereon a National Cartridge Factory. Soon after the signing of the armistice in the month of November, 1918, the Minister signified his intention of selling the factory and the stores therein; and as early as the 30th of November in that year the suppliants wrote to Mr. Frank Lyall, the agent of the Minister of Munitions saying "I am prepared to make you a bid for it as it stands look stock, and barrel." In reply to this letter, Mr. Lyall directed the suppliants to make any bid that they wished to make to the Directors in Dublin.

On the 24th February, 1919 the suppliants wrote to the Directors of the Ministry of Munitions in Dublin that they would"take over the premises machinery, plant, tools and full equipment, as they stood on the 1st inst. and all as described by the maps, drawings, and complete inventory and schedule made shortly before that date, and to pay you the sum of £20,000 (twenty thousand pounds) in cash," but said that the offer was subject to a condition that a reasonable rent and term could be arranged with the owners of the site (that is, the Great Southern and Western Railway Co.). The suppliants added that they intended to start an industry on the site, and that it was a matter of great importance to them that they should obtain as long a lease as possible, at a reasonable rent; they further wrote that, as their offer had been based on the assumption that the term and rent forecasted by the Minister would apply, they would be prepared to reconsider their offer if they got more favourable terms.

On the 11th of March, 1919, the suppliants wrote to Mr. Lyall a letter in which they again stated that if the Minister were in a position to came forward and offer a reasonable term under a lease, or to sell the freehold with the ground they would be in a position to make a better offer; and also that if the machinery and buildings only were offered for sale and twelve months given for breaking them up, the machinery would probably bring a better price.

In reply to this letter, Mr. Lyall wrote on the 13th of March that Sir Howard Frank the then principal agent of the Minister of Munitions had not the value of the factory clear in his own mind, and that he would not be in a position to inform the suppliants what was the lowest figure which he would accept for some days.

On the 26th April, 1919 Sir Howard Frank wrote the following letter to the suppliants:—"4 Whitehall Court 26th April, 1919. National Cartridge Factory Waterford. Dear Sirs,—Three offers have been made for the above factory complete, neither of which are acceptable. It has, however, been decided, in order to afford those who have made these offers a further opportunity of considering the matter, to ask each to submit their best proposal exceeding £20,000 on or before twelve o'clock, on the 5th May next, when the highest offer above £20,000 will be accepted subject to its being in a form which is satisfactory, and to a formal contract to be approved by the Chief Crown Solicitor. No assurance whatever can be given that the land can or will be acquired, but you are aware of the terms upon which it is held. A similar letter is being sent to the other two who offered for the factory.—Yours faithfully Howard Frank.—Messrs. Thompson & Sons, Ltd. Carlow, Ireland."

The statement in the letter that no assurance could be given that the land could or would be acquired, and that the suppliants were aware of the terms under which it was held, is a clear indication to the suppliants that the Minister intended to sell what he had, and nothing more or less, and that he did not intend to encumber himself with attempting to get better terms for the suppliants from the railway company.

Another letter, which is undated, but which seems to have been written about the same time, is as follows:—"4 Whitehall Court, London, S.W., 1.—Waterford.—Dear Sirs,—I am in receipt of your letter of the 5th, but you will remember your previous offer was subject to a reasonable rent and term being arranged with the owners of the site. I cannot entertain any offer with such a condition. Will you therefore let me know if you waive it, and that you will make your own arrangements with the railway company?—Yours faithfully, Howard Frank.— Messrs. Thompson & Son, Ltd., Hanover Works, Carlow."

This letter is again an intimation to the suppliants that the Minister of Munitions would not enter into any negotiations with the railway company as to the lease or the rent to be reserved thereunder, and that all such matters must be looked to by the suppliants; and it is clear from the further correspondence that the suppliants so understood the letter.

On the 8th May, 1919, the suppliants telegraphed to Sir Howard Frank as follows:—"Just as soon as you can give me a definite yes or no I am prepared to make revised offer definite also." It is not clear, and it has never been clear to me, what this definite "yes or no" referred to but I take it to refer to the difference which had arisen between the Minister and the suppliants as to the value of the stores on the Waterford site, and as to whether they would or would not be comprised in whatever offer the suppliants made.

In reply to that telegram, a letter dated the 8th May, 1919, was sent by Sir Howard Frank to the suppliants. He repeated the telegram, and proceeded—"If you had made an offer without a condition which was obviously impossible, it would have been accepted subject to contract, but you did not do so, and in the meantime I have agreed to allow the matter to remain open until next Monday morning. If you desire to purchase, you must please put forward your proposal in a way that can be entertained."

This letter went no further than the last letter written by Sir Howard Frank; but it is a third intimation to the suppliants that the Minister would have nothing to say to any negotiations with the railway company.

On the 22nd May, 1919, the suppliants wrote again to Sir Howard Frank. They reminded him that they had already offered £21,500, and that he had been then willing to include some of the stores in the price named. They pointed out to him that the arrangement was that the Minister was to make an offer, and they continued:—"If, therefore, you will kindly let me have an offer, I will, if it is reasonably near my estimate, close the matter at once."

In reply to this last letter Sir Howard Frank sent the following telegram to the suppliants:—"Thompson, Hanover Works, Carlow.—Will accept subject contract twenty-four thousand two hundred pounds (£24,200) for Waterford Factory as we hold it, including stores, but excluding Board of Works property and certain press spares of Gramophone Company, which is not factory property, as pointed out by Major Devine, subject your acceptance and confirmation by noon Tuesday, 27th instant.— Howard Frank. 24th May, 1919."

This telegram was confirmed in a letter of the same date.

On the 27th May, 1919, the suppliants telegraphed to Sir Howard Frank as follows:—"To Sir Howard Frank, 4 Whitehall Court, London.—We accept your offer of the W.N.C.F. at £24,200 conditions as to B. O. W. and Gramophone property being as represented. Kindly forward draft contract to Carlow, with definite information as to holding agreement from railway, and ask your local representatives to give us facilities to compare stores, so that possession may be obtained this month. If wire reply necessary address c/o Certify, Dublin, to-day.— Thomas Thompson & Son Ltd., Carlow."

On the same day Sir Howard Frank...

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