Authored By : Richard Garth, Henry Stewart Cunningham

Richard Garth, C.J.

1. This suit is brought to enforce the specific performanceof a contract for the purchase of a house.

2. The lower Court held that the alleged contract was notproved and dismissed the suit.

3. The plaintiff has appealed to this Court, and he hasrelied in support of his case upon two letters, which passed on the 3rd ofSeptember 1882, as well as upon the conduct of the parties, and a conversationwhich occurred on the afternoon of the same day after the letters wereexchanged.

4. The negotiation, it seems, was brought about by ahouse-broker named Hurro Chunder Ghose, who knew that the defendant was on thelook-out for a house in the particular locality, and proposed to him to buythis one. After looking over a portion of the house, and hearing HurroChunders description of it, the defendant, at Hurro Chunders suggestion,wrote the following letter to the plaintiffs in his wifes name:

To Sreejoot Baboo Koylash Chunder Doss, and Sreejoot BabooGirindra Nath Doss, Mohassoys.

The value of your house, No. 10, Rutton Mistrys Lane, inPatuldangah, has been fixed through Sreejoot Hurro Chunder Ghose, broker, atRs. 13,125; agreeing to that value I write this letter. Please come over to thehouse of the attorney, Baboo Mooraly Dhur Sen, Mohassoy, this day between 3 and4 oclock in the afternoon with the title-deeds of the house, and receive theearnest.

There shall be no doing otherwise . Finis. 1289, 19thBhadro.

Sree Runginee Dossee, now residing in the house No. 49,Jhamapuker.

By the pen of Sree Kisory Mohun Ghose.

5. Upon receiving this letter from Hurro Chunder, theplaintiffs through their manager wrote the following letter to the defendantswife:

To Sreemutty Runginee Dossee, Mohassoy.

You having agreed to purchase our house, No. 10, RuttonMistrys Lane, in Arcooly, for Rs. 13,125, have sent a letter this day throughSreejoot Hurro Chunder Ghose, broker, and we are agreeable to it, and between 3and 1 oclock in the afternoon this day we will be present at the house of yourattorney, Baboo Mooraly Dhur Sen, Mohassoy, and receive the earnest. Finis.1289, 19th Bhadro.

Sree Koylash Chunder Doss

and

Sree Girindro Nath Doss.

By the pen of Sree Mohindro Nath Mookerji

6. The plaintiffs contend that these letters constituted,and were intended to constitute, a pucca or binding agreement. The defendant,on the other hand, contends that they were only intended as commencing thenegotiation, which was to have been completed by the payment of theearnest-money, and the execution of a regular byna contract.

7. At the trial, however, no evidence was given on behalf ofthe defendants. The learned Judge decided against the plaintiffs on their ownshowing; and I think that he was right.

8. It seems to me that the real question is, whether the twoletters, which were exchanged on the 3rd of September, do, in fact, constitutea complete and binding agreement.

9. For the purpose of determining this question, we mustgather the intention of the parties from the letters themselves, and not fromwhat was said or intended before the letters were exchanged.

10. In consequence of some doubt being suggested during theargument, as to whether the letters had been correctly translated, we sent forone of the Court interpreters, and asked him to translate them in open Court.His translation agreed substantially with that which had been previouslyfurnished, and by the aid of it the construction which I put upon thedefendants letter is this:

As the value of your house has been fixed by Hurro Chunder,the broker, at Rs. 13,125, and as I agree to that value, I write this letter torequest that you will come to the house of my attorney, Mooraly Dhur Sen,between 3 and 4 oclock to-day, bringing with you the title-deeds of yourhouse, and receive the earnest-money. If you will not fail me in this, I willnot fail you.

11. The letter in answer appears to mean this:

As you have agreed to purchase my house for Rs. 13,125, andhave sent me your letter to that effect, we agree to your proposal, and will beat the house of your attorney to-day between 3 and 4 oclock, and receive theearnest-money.

12. Mr. Allen has contended that the first portion of thedefendants letter is an absolute proposal by him to buy the house for the sumnamed, independently of all other considerations; and that the remainder of theletter forms no part of the proposal, but merely suggests the time, place andmariner in which the proposal is to be carried out.

13. If this were really so, I should quite agree with Mr.Allen that [893] the case would come within the principle of Rossiter v. MillerL.R. 3 Ap. Cas. 1124 and the other authorities to which he has very properlycalled our attention. But I cannot take that view of the letter. It contains,as it seems to me, no absolute proposal or undertaking to purchase the house; whathad been done at that time, with the aid of the broker, was merely to ascertainthe proper price; and all that the defendant meant to say was "so far asprice is concerned, I am quite content with that which my broker has fixed-andif you are also content, I beg you will come to my attorneys office with yourtitle-deeds; when we arrange matters, you shall receive theearnest-money."

14. His intention, as it seems to me, was that the mattershould be finally settled at the attorneys office; and two very importantmatters were left for that occasion--namely, the inspection of the title-deeds,and the amount and payment of the earnest-money. It was very proper that thedefendant should not commit--himself; to any binding contract, till he knewsomething, at any rate of the nature of the plaintiffs title; and as regardsthe earnest-money, it must be observed that both parties treat that as anelement in the bargain. How then could the contract be said to be complete andbinding, until the amount of the earnest-money had been ascertained.

15. In point of fact, no meeting took place at theattorneys office, because the attorney was not there, and the defendantrefused to consult any other attorney; but suppose the meeting had taken place,and parties had been unable to agree as to the amount of the earnest-money, howcould it possibly have been said that they had arrived at any bindingagreement.

16. Mr. Allen tried hard to escape from this difficulty inone of three ways:

1st.--By the argument, which I have already mentioned, thatthe payment of the earnest-money did not affect the contract itself, but onlythe way in which it was to be carried out.

But it seems to me that both parties treated it as anelement in the contract; and if so, the contract could not be complete untilthe amount of the earnest-money was ascertained.

2ndly,--He argued that the Court could ascertain the amountof the earnest-money, as it has ascertained in several cases the price of theproperty sold.

But the amount to be paid for earnest-money must, from itsvery nature, be a matter of agreement between the parties; it cannot beascertained by the Court, for the best of reasons, because it is paid not onthe completion but on the making of the contract; or at any rate at some timebefore the completion.

3rdly.--Then lastly, Mr. Allen argued, that assuming theearnest-money to have been an element in the contract, his clients were contentto waive it. But no notice of any waiver appears to have been given; and evenif it had been, the defendant had by that time repudiated the contract. If thecontract was incomplete and not binding on the 3rd of September, nothing thatwas afterwards done by the plaintiffs could have made their position anybetter.

17. I am satisfied, on the whole, that looking to the letteritself, the defendant never made or intended to make any absolute proposal topurchase the property. I think he never intended to bind himself to anything,till his attorney knew something of the plaintiffs title, and the amount ofthe earnest-money had been ascertained.

18. As soon as these additional matters had been adjusted,the earnest-money would have been paid and a byna contract prepared. That isundoubtedly the usual course in native transactions of this kind; and it seemsto me that what was said by the plaintiffs manager in giving his evidencestrongly confirms that view.

19. Then lastly, Mr. Allen contended that what was said bythe defendant when the parties met afterwards at Baboo Mooraly Dhur Sensoffice was sufficient to constitute a binding contract; according to theplaintiffs managers evidence, the defendant said: "By the letter youhave given me, you have bound yourself to sell the property to me, and by theletter I have given you, I have bound myself to take the property."

20. Even assuming this to be true, I think it makes theplaintiffs case no better. It was no new promise, but only a reference to theletters which had passed; and I dont think it would justify us in putting adifferent construction upon the letters, than that which they bear upon theface of them. Besides which, as the amount of earnest-money was not then fixed,the words said to have been used by the defendant would not relieve theplaintiffs from that difficulty.

21. But even if I Were disposed to take a different view ofthe evidence of the plaintiffs manager, I think we should clearly be bound,before deciding in the plaintiffs favour, to give the defendant an opportunityof contradicting this statement, and going generally into his case.

22. The learned Judge, as we understand, dismissed the suitupon the plaintiffs own evidence, and without calling upon the defendant to gointo his case. As it is, I agree with the Court below and think the appealshould be dismissed with costs on scale 2.

Henry Stewart Cunningham, J.

23. I also think that the original Court was right. The mainargument in the appeal was that as the parties to the contract, thesubject-matter and the price were all ascertained, there was a binding agreementfrom which neither party was at liberty to recede. This rule, however, cannotbe applied without qualification to the present case. The cases to whichreference has been made Ridgway v. Wharton 6 H.R. 238 Rossiter v. Miller L.R. 3Ap. Cas. 1124 Bownewell v. Jenkins L.R. 8 Ch. D. 70 Crossly v. Maycock L.R. 18Eq. 180; Chinnock v. Marchioness of Ely 4 de G.J. & S. 638 in my opinion,establish the rule that, if the material ingredients of the agreement areascertained, and if there be a distinct offer on one side, and a distinctacceptance on the other, a contract arises, notwithstanding that the partiesmay have recorded their intention that it shall be put into a more formal shapeby a solicitor. But, on the other hand, if on the true construction of the correspondenceand evidence it appears to have been the intention of the parties that they arenot to be bound till the agreement has been put into a formal shape andapproved by them, then the parties ought not to be bound till that formaldocument has been executed. In the present instance I think that the properconstruction to be put on the letters is that the defendant did intimate hisintention not to be bound till the deeds had been produced at his attorneysand with his attorneys approval the byna--putro executed, and the byna orearnest-money paid.

24. I concur on the ground on which the original Court heldthis to be the right construction, and especially on the fact that neither ofthe letters was written by the contracting parties, and that the request in thedefendants letter to the plaintiffs to come over to the house of Mooraly Dhurwith the title-deeds was not agreed to in the plaintiffs letter, nor was infact complied with. I concur accordingly in thinking that the original Courtwas right in dismissing the appeal.

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Koylash Chunder Doss and Ors. vs. Tariney Churn Singhee andOrs. (22.04.1884 - CALHC)