Glasgow and Newcastle and Middlesborough Stem Shipping Company v Watson
| Jurisdiction | Scotland |
| Judgment Date | 19 November 1873 |
| Date | 19 November 1873 |
| Docket Number | No. 42. |
| Court | Court of Session (Inner House - First Division) |
Lord Shand. B., Lord President, Lord Deas, Lord Ardmillan, Lord Jerviswoode.
Contract—Offer—Acceptance—Proof.—
A coalmaster offered, on 5th August 1871, to supply a shipping company with steam-coal for one year at 7s. per ton Negotiations subsequently took place between the parties, and on 13th October 1871, after the price of steam-coal had risen 2s. per ton, an acceptance was sent to the offerer. The offerer rejected the acceptance.
In an action of damages raised by the shipping company against the coalmaster for breach of contract, held that the mere continuation of negotiations between the parties did not import a continuation of the offer so as to leave it open for acceptance on 13th October 1871, and that it was necessary for the pursuers to prove that the offerer had expressly consented to the continuation beyond a reasonable time from its date.
The Glasgow and Newcastle and Middlesboro' Steam Shipping Company, and Daniel Reid and John Reid, shipowners, Glasgow, the partners of that company raised an action against John Watson, coalmaster, Glasgow, and concluded for £654, 11s. 3d., being the difference between the sum actually paid by them for coals for their three steamers, ‘Prince,’‘Alice,’ and ‘Palermo,’ during the twelve months subsequent to 13th October 1871, and the price they would have had to pay had Watson implemented a contract which they alleged he had entered into with them to supply their steamers with coals for these twelve months. The contract, they averred, was constituted by the following three letters:—(1) ‘Memorandum, Glasgow and Newcastle and Middlesboro' Steam Shipping Company to J. Watson. Glasgow, 4th August 1871.—Would you be good enough to let us know at what rate per ton you could supply coals to our steamers at G'mouth for a twelvemonth on the usual terms. John Watson, Esq., coalmaster.’ (2) ‘Letter, J. Watson to Glasgow and Newcastle and Middlesboro' Steam Shipping Company. Glasgow, 5th Aug. 1871.—Gentlemen,—Your kind favour of 4th August to hand, and in reply, beg to offer you my Watson's Hartley steam-coal for one year at 7s. per ton, alongside at Grangemouth. Hoping the above will meet with your approval, I remain, yours faithfully, p. John Watson, J. C. M.’ (3) ‘Letter, D. Reid to John Watson. Glasgow, 13th Oct. 1871.—John Watson, Esq., 123 St Vincent Street.—Referring to your offer of 5th August to supply us with coal for one year, I hereby accept the same. Your Mr Simpson promised from time to time to arrange a different mode of delivery, otherwise I would have accepted your offer earlier.—Yours faithfully, Daniel Reid.’
In the interval which elapsed between the date of Watson's letter of 5th August and the date of the Steam Shipping Company's letter of 13th October the company averred that Mr Daniel Reid, the partner who had charge of the transaction, had had frequent interviews with a Mr Simpson, one of Watson's salesmen, as to the, manner in which the contract was to be implemented, and in particular they averred that there were certain proposals under consideration as to Watson supplying a lighter to convey the coals to the steamer. There being some delay in the settlement of these points the company stated that Mr Reid had written the formal acceptance of 13th October. It was further alleged that Watson had, in consequence of an arrangement with the company, supplied them on 25th August with forty odd tons of coals for trial, and that the trial having been satisfactory, intimation had been sent that the coal would be taken.
Watson, on the other hand, averred that his letter of 5th August founded upon was a mere quotation of prices, and denied that the company had at any time up to 13th October indicated that they considered it an offer such as admitted of acceptance, so as to form a contract. He refused to recognise the existence of any contract with the company. He also explained that the forty odd tons of coals, referred to by the company as sent for trial, were supplied in fulfilment of an order in the usual course of trade from the company, and were invoiced at 8s. per ton instead of 7s., which was the price in the alleged contract. He admitted, however, that he had subsequently, upon being pressed to do so, reduced the price to 7s. per ton. He further averred that by the usage of trade among coalmasters an offer by a coalmaster to supply coals must be accepted within eight or ten days of its date. It was stated also that he had two salesmen, viz., Connell and Simpson, and that Connell, and not Simpson, had charge of the sales of the Hartley steam-coal.
Pleaded for Watson;—3. The defender is entitled to absolvitor, in respect that, upon a sound construction of the letters libelled, the same do not constitute a binding contract between the pursuers and defender. 4. The defender is entitled to absolvitor, in respect—(1) The letter of 5th August did not specify any quantity of coal, and did not admit of acceptance so as to constitute a contract. (2) Separatim, the letter of 5th August, even if capable of being read as an offer, was not timeously accepted. (3) The letter, in so far as being capable of being read as an offer, had been withdrawn or departed from prior to its alleged...
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