Beardmore & Company v Barry
| Jurisdiction | England & Wales |
| Judge | Lord Carson,Viscount Haldane,Lord Shaw of Dunfermline,Viscount Dunedin,Lord Shaw,Lord Blanesburgh,. |
| Judgment Date | 02 July 1928 |
| Judgment citation (vLex) | [1928] UKHL J0702-1 |
| Court | House of Lords |
| Date | 02 July 1928 |
| Docket Number | No. 7. |
[1928] UKHL J0702-1
House of Lords
Viscount Haldane.
Viscount Dunedin.
Lord Shaw.
Lord Carson.
Lord Blanesburgh.
After hearing Counsel, as well on Friday the 27th, as on Monday the 30th, days of April last, upon the Petition and Appeal of Mrs. Julia Park or Barry, Widow, residing at 20, Park Terrace, Glasgow, Executrix of the late Colonel James Smith Park, M.V.O., Shipowner in Glasgow, as such Executrix and as an Individual, praying, That the matter of the Interlocutors set forth in the Schedule thereto, namely, an Interlocutor of the Lord Ordinary in Scotland (Lord Morison), of the 16th of March, 1927, and also an Interlocutor of the Lords of Session there, of the Second Division of the 3d of December, 1927, so far as therein stated to be appealed against, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Interlocutors, so far as aforesaid, might be reversed, varied, or altered, or that the Petitioner might have such other relief in the premises as to His Majesty the King in His Court of Parliament, might seem meet; as also upon the printed Case of William Beardmore and Company, Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal, in the Court of Parliament of His Majesty the King assembled, That the said Interlocutors, in part complained of in the said Appeal, be, and the same are hereby Affirmed, and that the said Petition and Appeal be, and the same is hereby dismissed this House: And it is further Ordered, That the Appellant do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the parties entitled to the same within One Calendar Month from the date of the Certificate thereof, the Cause shall be, and the same is hereby, remitted back to the Court of Session in Scotland, or to the Lord Ordinary officiating on the Bills during the Vacation, to issue such Summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary.
My Lords, I have been asked to read the speech of my noble friend Lord Haldane.
My Lords,
The points in controversy in this case now reduce themselves to a single one, whether the Court of Session was right in declaring the letter of Colonel Park, dated 19th October, 1920, to bind the Applicant who is his executrix to the performance of an obligation to take shares which Colonel Park was said to have entered on in the letter in question. This point really turns on the language of the letter, and is the only question now left. For other points, such as that specific performance is not a remedy which is competent, and that the letter is not probative, and is therefore not binding, have not been pressed at your Lordships' Bar. The action has not reached the stage of proof, and the argument arose in the Procedure Roll. The Lord Ordinary repelled the defenders' pleas in law and enrolled the cause for further procedure. There was an Appeal to the Second Division which unanimously affirmed his judgment.
The action was brought by the Respondents for a declaration that the agreement contained in the letter was binding on the Applicant as executrix, and for its specific implement. The facts are simple. Colonel Park, who was a shipowner in Glasgow, was a director of the Respondent Company for some years before his death in February, 1921. On 19th October, 1920. he entered into arrangements with his co-directors which resulted in his addressing to them the letter, the terms of which are what is now important.
"Gentlemen,
In consideration of your concurring in the withdrawal of my application for 60,000 6 per cent. Cumulative Preference Shares of £1 each (free of Income Tax up to 1s. 2d. in the £1) in your Company, dated the 18th day of May, 1920, I hand you my application for 12,000 Preference Shares and request you to apply the sum of £12,000 which you have in hand in respect of my application for the 60,000 Preference Shares in payment in full for the 12,000 Preference Shares, and I agree at any time upon request by you to subscribe for or find subscribers to your satisfaction for 48,000 6 per cent. Cumulative Preference Shares of £1 each (free of Income Tax up to 1s. 2d. in the £) at par, such shares to rank pari passu with the existing Preference Shares and the dividends to run from the date of allotment; and in the event of my making default in putting in an application or finding subscribers as aforesaid, I authorise the Secretary for the time being of the Company to put in an application, in my name, and authorise you to allot the Shares to me, upon an application so signed.
Yours truly,
J. Smith Park."
(Stamp 6d.)
My Lords, no allotment of the 48,000 shares was made before Colonel Park's death. It is contended on behalf of the executrix, first, that the contract he made with the Respondent Company was a personal one performance of which could only be called for during his lifetime, and, secondly, that the request to be made by the Respondent Company and the action of the Secretary which was to follow it were such that they could give rise to an obligation on him only during his lifetime. As nothing was done during that lifetime it is said that the Applicant is not bound, because any mandate given by Colonel Park was revoked by his death.
If there was a contract which bound Colonel Park to subscribe and the obligation was transmitted to his executrix the point as to mandate becomes unimportant. For the agreement standing by itself would entitle the Respondent Company to place his name on the register of shareholders and to enforce this right so as to bind his estate. The Applicant could not be made a shareholder against her will, but she could be called on to find someone who would take up the shares.
My Lords, the question is accordingly reduced to this: did the letter of 19th October, 1920, impose on the writer an unrestricted obligation to subscribe or find subscribers for the 48,000 shares? To my mind it clearly did this. The only qualification was that his agreement was to do what he agreed to do at any time upon request by the Company. That such a request was bargained for could make no difference. So far as Colonel Park was concerned he had bound himself absolutely to do what he had contracted to do at any time if and when the Company called on him to do it. That is surely indistinguishable in its legal effect from a simple obligation to subscribe. In the usage which prevails in the business world no distinction would be drawn. It would be said that he meant to put himself under an unrestricted liability and that he had done so. As has been well pointed out by the learned Judges in the Second Division, the case is not one of an offer to take shares, an offer which might be withdrawn. It is a definite agreement to take or find subscribers for shares, and it required no acceptance, but bound Colonel Park from the moment it was entered into.
My Lords, I can come to no other conclusion than that the Appeal must be dismissed with costs.
My Lords, I read the following judgment of my noble and learned friend Lord Dunedin.
My Lords,
The Dean of Faculty having quite rightly abandoned some untenable pleas which were urged but repelled in the Court below, there remains one question and one only: Is the obligation undertaken by the late Colonel Park to subscribe for 48,000 Preference Shares in the Respondent's Company an obligation which binds his executors?
This depends upon the construction to be put upon the letter of 19th October, 1920, which has already been quoted by the noble and learned Lord on the Woolsack. The critical sentence is, "I agree at any time upon request by you to subscribe for, or find subscribers to your satisfaction for 48,000 shares." Admittedly no request was ever made by the Company during Colonel Park's lifetime. Can they now request his executors? It was urged that the contract was personal to Colonel Park. Now the word "personal" can be used in two rather different senses. As ordinarily used, when it is said that a contract is personal, it means that there is something in the nature of the contract that points to the contractor himself being alone bound; the ordinary illustration is a contract to write a book or paint a picture, and it is in that sense that I think the learned Judges of the Second Division have used it, for they have used these illustrations. Then, having decided that the contract was not personal, they fortified themselves by a dictum of my own in Gardiner's case to the effect that any man who binds himself binds his executors, unless he makes it very clear that he has not meant to do so. My Lords, I think my dictum is sound but, in the view I take of this case, it is beside the question. For the real question is not whether something that bound Park bound his executors, but whether the contract as expressed is a conditional contract, and that the condition precedent—request by the Company—not having been purified there was no obligation to transmit. In the other sense of the word that may be said to be the question, whether the contract was personal to Park. For my own part, I prefer to limit the use of the word "personal" to the first sense and to say here, was the contract conditional on a request by the Company to Park, it being obvious that no request can ever be made to a man after his death.
My Lords, I confess that for some time during the discussion I felt inclined to answer...
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