2 k. b. king's bench division. - duhaime.org and... · 2 k. b. king's bench division. at...

2 K. B. KING'S BENCH DIVISION.

at the end of the seventh year you can define a period of one year or two years from the date fixed, I cannot

261

C. A.

1923

say. TwQo years or one year before the seventh year -E=o_E_L_L_

you do not know whether the term is going to expire or D~iEu.

not, and it seems to me impossible to say that at the Atkin L.J.

timP. you give that notice or before you give that notice, there is a date fixed for the expiration of the term. However it is unnecessary to determine that matter. I agree with what has been said by my brother Warrington that the result of our decision is that in this case there is a notice to quit, and if it had been a valid ·notice to quit there would have been a claim, or there might have been a claim to com-pensation under s. 10. -That, of course, does not arise now. The appeal must be allowed, and judgment entered for the defendants with costs here and below.

Solicitors for appellants : Ellis & Fairbairn, for Charsley & Reynolds, Sluugh.

Solicitors for respondents : Edell & Co. G. A. S.

[IN THE KING'S BENCH DIVISION AND IN THE COURT OF AI'PEAL.]

ROSE AND FRANK COMPANY v. J. R. CROMPTON AND BROTHERS, LIMITED, AND OTHERS.

[1919. R. 1401.]

Contraat-Anim!Ul' Gontrahendi-Agreement binding in Honour--O~Uting the Jurisdiction-Repugnanoy.

An English finn who manufactured and dealt in paper tissues of various kinds had for several years done business with an American finn. All goods of one kind sold in the United States, all goods of another kind sold in the United States or Canada, and all goods of a third kind wherever sold, were sold to the American firm, and that finn placed all orders for goods of the third kind with the English firm. These relatioll5 were at first made to continue for one year, but were renewed from time to time.

A great part of the tissues so sold were in fact manufactured by another English finn. In the course of time the American firm proposed a new arrangement, and a document was dra.wn up and signed by the three

K.B.D. 1922

Nov. 9, 10.

C. A. 1923

Feb. 8, 9, 12 ; March 23.

Owner

Highlight

262

1922

RosE AND FRANx Co. ..

J. R. CRaMP• TON AND

BRoS., LD,

KING'S BENCH DIVISION. [1923]

firms whereby the two English firms expressed their willingness that the present arrangements with the .American firm, which weie then for one year only, should be continued on the same lines for three years, and so on for another period of three years, subject to six months' notice by any of the parties. The document, a.fter purporting to set out the understanding between the parties, including several modifications of their previous arrangement, proceeded in these words : " This arrangement is not entered into, nor is this memorandum written, as a fonna.l or legal agreement, and shall not be subject to legal jurisdiction in the law courts either in 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 ea.ch 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 mutualloya.lty and friendly co-operation." Then followed a clause relating to prices.

The English finn.B having definitely determined these relations without notice, the American firm brought an action for breach of the contract alleged to be expressed in the document :-

Helil, by Bankes, Scrotton and Atkin L.JJ., that the document did not constitute a binding contract and that the action would not lie.

The question whether, assuming the former relations were contractual, they were abrogated by the document, was left undecided.

Before relations between the parties had been broken off the plaintiffs had given and the defendants had accepted orders for goods. Some of these orders were executed ; others were not. He!~ by Bankes and Scmtton L.JJ. (Atkin L.J. dissenting), that the

orders a.nd the acceptance thereof were alike referable to the document, and that the non-fulfilment of them did l!Ot constitute a breach of contract.

Judgment of Bailhache J. reversed.

APPEAL from the judgment of Bailhache J. in an action tried before the learned judge without a jury.

The action wa.s for breach of an alleged contract in writing signed by the defendants respectively on July 11 and July 8, 1913, a counterpart of which was signed by the plaintiffs on August 12, 1913.

The plaintiffs were an American company carrying on business in New York. The defendants J. R. Crompwn & Brothers, Ld., and Brittains, Ld., carried on business at Bury in Lancashire and at Cheddlewn in Staffordshire respectively.

The facts were as follows : J. R. Crompwn & Brothers, Ld., were manufacturers of carbonizing tissue paper. Messrs. Rose & Frank, who were later incorporated as the Rose & Frank Company, were merchants who dealt in this paper.

2 K. B. KING'S BENCH DIVISION. 263

Business relations between these two firms began in 1905. 1922 J. R. Crompton & Brothers, Ld., sent the paper ro Rose & RosE AND

Frank, who added some work by way of finishing it and ~ Co.

sold it in America. The first arrangement between these J. R. CB.oKP· TON AND

parties was contained in a letter of March 7, 1905, written BROs., LD. by J. R. Crompwn & Brothers, Ld., to Rose & Frank in these terms : " As arranged with your Mr. Frank we now beg to confirm the arrangement made with him in regard w the 7 lbs. substance ' R & F carbonizing paper,' namely 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 12 monthB ending March 31, 1906." In December, 1908, a further arrangement was made between J. R. Crompton & Brothers, Ld., and Rose & Frank concerning another description of paper; and on December 24, 1908, J. R. Crompton & Brothers, Ld., wrote, "We discussed at some length with Mr. Campbell "-who represented Rose & Frank-" matters relating to carbon tissues, and have since then given some further thought to the matter, and agree now to your suggestion to confine for the time being our carbon tissues in America to you. By this we mean so long as this arrangement lasts we will open no new accounts in America for carbon tissues, in addition to .vhich we will, in giving any quotation for such paper here, do our best to ascertain if the paper is or is not required for America, and where we find it is will bear your interest in mind and, so far as we can do so, decline to quote."

After these arrangements had been continuing for some years Rose & Frank found that there was a demand for carbonizing tissues of a blue colour, upon which on November 9, 1911, a further arrangement was made by a letter from J. R. Crompton & Brothers, Ld., to Rose & Frank containing these words : " Please take the paragraph in our letter ' this particular kind of blue paper in question ' to mean all blue carbonizing tissue which we now agree to make only for your firm, upon the understanding that all your orders for such paper are given to us, subject to 12 months' notice on either side to terminate the agreement.". The learned judge a.t the

264 KING'S BENCH DIVISION. [1923]

1922 trial held that these arrangements were binding contracts, the RosE AN» effect of which was that Rose & Frank had the sole agency,

FRANK Co. nfin d h U d v. not co e to t e nite States and Canada, of the blue J. R. CnoMF- carbonizing paper, subject to a twelve months' notice on

TON AND

:Bnos., Ln. either side, the sole agency of the 7 lbs. substance in the United States and Canada, subject to a similar notice, and the sole agency of all other carbonizing tissues in the United States only (with an exception in favour of one customer in Boston).

During the continuance of these relations, which were renewed from time to time and resulted in a profitable business to both parties, J. R. Crompton & Brothers, Ld.,_ were in close commercial relations with Brittains, Ld., who produced paper tissues differing in quality from those of J. R. Crompton &

Brothers, Ld., and a considerable quantity of the tissues supplied by J. R. Crompton & Brothers, Ld., to Rose & Frank, and to the Rose & Frank Company after its incorporation in March, 1911, were in fact manufactured by Brittains, Ld.; but there were so far no direct dealings between Brittains, Ld., and Rose & Frank or the Rose & Frank Company.

These relations continued until the end of 1912. Then the Rose & Frank Company, in order to give more permanence and stability to their business, proposed that an agreement should be drawn up between theiDBelves, J. R. Crompton & Brothers, Ld., and Brittains, Ld., whereby the last named company should come into direct contractual relations with the Rose & Frank Company for a period of three years and thereafter for a further period of three years unless notice to the contrary were given by any of the parties to the others. An agreement to this effect dated January 1, 1913, was actually drafted but was never executed. (1)

Instead of that agreement the following document was drawn up. It was signed by Brittains, Ld., on July 8, and by J. R. Crompton & Brothers, Ld., on July 11, and a counterpart thereof was signed by the Rose & Frank Company on August 12, 1913. It was in these terms:-

(1) For a copy of this draft see note on p. 299, post.

I I I .


"As the business in carbonizing tissues which is now being 1922

done between Messrs. Rose & Frank Co. of New York as RosE AND

R f FaA.NX: Co. purchasers and Messrs. J. . Crompton & Brothers Ld. o v.

B"~ Lancashire and Messrs. Brittains Ld. Cheddleton J. R. Cao>U'· ~.J, ' ' TON AND

Sta.ffords~e, as manufa.oturers, ha.s attained to a considerable Baos., Ln.

volume, and Messrs. Rose & Frank Co. are of opinion that in the interests of the traders they represent assured arrange~ menta for the supply of these papers ahould be made for some considerable period ahead, Messrs. J. R. Crompton & Brothers Ld. and Messrs. Britta.ins Ld. hereby express their willingness that the present arrangements with Messrs. Rose & Frank Co. for the sale of these papers, which are now for one year only, shall be continued on the same lines a.s at present for a period of three years, say until March 31, 1916, with the understanding that if it is desired by any of the three parties to alter or abrogate this arrangement at the expiration of that period six months' notice shall be giv~n before that date. If no notice be given by either party the arrange~ ment shall be regarded as continuing for a second period of three years subject to the same six months' notice for alteration or abrogation as in the first period of three years.

" The agreement between the three parties with respect to the business in carbonizing tissues is as follows, and any alteration or extension shall be subject to the mutua.l agreement of the three parties :-

"Messrs. J. R. Crompton & Brothers, Ld. with the consent and concurrence of Messrs. Brittains Ld. agree to confine the sa.le of all tissues for carbonizing exclusively to Messrs. Rose & Frank Co. as at present for the United States of America with the exception of :

"(l.) The F. S. Webster Co. of Boston, Mass. (whose business shall be left undisturbed as at present) but shonid the F. S. Webster Co. during the currency of this agreement offer for sale the paper they buy from l'r!essrs. J. R. Crompton & Brothers Ld. in its unprepared state objection shall be raised to it by Messrs. J. R. Crompton & Brothers Ld., their assumption being that all the paper purchased

266

1922

RosE AND FRANK Co. ..


·from them by the F. S. Webster Co. is used by them in making carbon papers by their own plant ; and

J. R. 0nOMP• "(2.) The Dominion of Canada, where both 1\Iessrs. TON AND

Baas., Ln. Rose & Frank Co. and 1\Iessrs. J. R. Crompton & Brothers Ld. shall be equally free to sell upon the arrangements at present existing between them,

upon the understanding that the Rose & Frank Co. will, as far as possible confine their purchases of all grades of carbonizing tissues so reserved to them by Messrs. J. R. Crompton & Brothers Ld. and Messrs. Brittains Ld. exclusively to Messrs. Crompton and Messrs. Brittains and, whilst doing their best to increase the business still further, undertake that the volume 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 1\Iessrs. J. R. Crompton & Brothers Ld. and 1\Iessrs. Brittains Ld. 1\Iessrs. J. R. Crompton & Brothers Ld. and Messrs. Brittains Ld., 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 & Frank Co. for deliveries both in quantity and quality, and it is further understood and agreed that any other special and distinctive grades of paper for carbonizing which shall be made at the suggestion of or introduced by the Rose & Frank Co. shall during the currency of this agreement be confined exclusively to them for the United States of America and Canada without any exceptions otherwise than by common agreement between the three parties. It is understood and agreed that the cheap~r carbonizing papers which have already been the subject of dis· cussion sha.ll be covered by the special and exclusive arrangement of this clause, but that the value of these or any fresh grades that may be introduced shall not be in· eluded in the average of the three years which applies only to the grades of paper supplied during the three years 1910, 19ll, and 1912. The special R. & F. papers as hitherto

2 K. B. KING'S BENOH DIVISION. 267

manufactured and supplied by Messrs. J. R. Crompton & 1922

Brothers Ld. are also included in this special exclusive RosE AND

arrangement as heretofore, the volume of business in these ~ Co. paperS being governed by the Cl8.USe for the three years J. T~;.. CR:· average as in the case of the other grades. Bnos., Ln.

" It is further clearly understood that the blue carbonizing tissues are absolutely and entirely reserved to Messrs. Rose & Frank Co. without any exceptions during the currency of this agreement.

" With the single exception of these blue carbonizing tissues this agreement applies only to the United States of America and Canada, and does not admit of these carbonizing papers being offered or sold by Messrs. the Rose & Frank Co. in their unprep:red state outside the United States of America and Canada.

" 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.

"Prices.-Prices, (which on the present occasion are being advanced 10% after April 30, 1913, for the rest of the current year by mutual consent on account of the increased cost of production) shall in future be quoted for periods of six months' duration only. Any alterations in price which the manufacturers require on . account of increases or decreases in cost of_ production shall take .effect at the end of March and at the end of September in any year, notice of any alteration to be given by the end of the previous February or August respectively."

The arrangement contained in this document was extended to March 30, 1920. In May, 1919, the defendants J. R. Crompton & Brothers, Ld., and Brittains, Ld., became


1922 discontented with the way in which the plaintiffs, the Rose Ros:E AND & Frank Company, were conducting their business in America. FRA~ Co. In the defendants' view the plaintiffs were demanding prices

J. R. Cnolll'· for their goods which encouraged competition.- and was TON AND • • , •

Bnos., Ln. IDJunng the busmess of the defendants. They sent a

telegram inviting a representative of the plaintiffs to come over to England, but the invitation was not accepted. On May 7, 1919, the defendants definitely determined the arrangement between the parties.

The plaintiffs then brought this action. The writ was issued on November 19, 1919.

The statement of claim contained twenty-one paragraphs-. Of these paras. 1 to 9 related to the arrangements between

• Messrs. Rose & Frank, the plaintiffs, and the defendants J. R. Crompton & Brothers, Ld., before July, 1913; the document of July, 1913, and the agreement to continue relations under that document till March 30, 1920. It also . alleged (para. 12) that in the autumn of 1918 and during 1919 the defendants in breach of the alleged agreement of July, 1913, supplied persons other than the plaintiffs in America with carbonizing tissues and in Canada with special and distinctive grades of paper for carbonizing suggested or introduced by the plaintiffs and with blue carbonizing tissues and supplied the tissues at prices lower than those at which they had been or were supplying the plaintiffs : (para. 13) that by cables on May 5 and 9, and by letter of May 10, 1919, the defendants refused to make any further deliveries to the plaintiffs and wrongfully repudiated the alleged agreement of July, 1913; (para. 14) that between March 31, 1919, and March 30, 1920, the plaintiffs would have required 200 cases of paper from the defendants J. R. Crompton & Brothers, Ld., and 800 cases from the defendants Brittains, Ld., and that their estinlated loss on the non-delivery of ~hese goods was 10, 146l. on the 200 cases and 112,977!. on the 800 cases. They also claimed (para. 15) 2867!. for depreciation of unsold stock owing to the defendants having supplied other firms at prices lower than those charged to the plaintiffs.

2 K. B. KING'S BENCH DIVISION 269

By para. 16 the plaintiffs pleaded that if the alleged 1922

agreement of July, 1913, was not valid, the earlier agreements RosE AND

not having been terminated by twelve months' notice were F~ eo. still in force, and that the defendants J. R. Crompton & J. R. eno ....

TON AND

Brothers, Ld., had broken and repudiated those agreements BROS,, LD. and that in addition to depreciation of unsold stock the plaintiffs would suffer damage through being unable to deliver tissues sold by them to customers ; that their estimated requirements for twelve months from May, 1919, were 700 cases, and their estimated loss thereon 86,186l.

Para. 17 contained a claim for 244!. 3s. 2d. for goods delivered in 1918 not in accordance with warranty. The defendants did not contest this claim .

Para. 18 stated that by thirty-two orders in writing, the numbers of which were specified, the plaintiffs ordered from the defendants a number of cases of tissues for delivery at various dates set out in the orders at prices which the defendants were then charging the plaintiffs for the said tissues or at fair and reasonable prices ; that the said orders were contained in letters from the plaintiffs dated January 23 and 24, February 7, and March 11, 1919, and were accepted by the defendants by letters dated February 21 and 25, and March 29, 1919.

Para. 19 stated that the defendants made part deliveries in respect of four of the thirty-two orders, but in breach of the terms of the said sales failed to deliver the balance of those four orders and in respect of the remaining orders made no deliveries at all.

The defence contained the following paragraphs :-" 18. The whole of the arrangements made by the letters

and documents referred to in paragraphs 3, 4, 6, 7, 8, 9 and 18 of the statement of claim were arrangements made without consideration and were expressly or impliedly intended to be of no legally binding effect save in so far as the ~ctual delivery of tissues by the defendants would rajse a legal obligation on the plaintiffs to pay a reasonable price therefor and were expressly or impliedly made by the plaintiffs in the interest of the traders in America and Canada whom they represented


1922 and there were express or implied terms thereof that the RosB AND plaintiffs would act in the interests of the defendants as much ~ Co. as in their own interests and would charge reasonable prices

J. R. Cno:r.!F- to such traders and would do nothing calculated to jeopardize TON AND !

·BBOS., Ln. the sale of such tissues or by charging unduly high prices or otherwise to encourage the competition of rival manufacturers or dealers but would honourably and loyally co-operate with the defendants in developing the market for such tissues which terms the plaintiffs failed to observe as is hereinafter set out . ....

" 19. Alternatively if the defendants J. R. Crompton & Brothers Ld. made any of the agreements alleged in paragraphe 3, 4, 6 and 7 of the statement of claim all such agreements were determined by mutual consent by virtue of or at the date of the signiog of the document referred to in paragraph 8 of the statement of claim "-i.e. the document of July, 1913.

" 20. If the defendants or either of them made any of the agreements ·alleged in paragraphs 3, 4, 6, 7, 8, 9 and 18 of the statement of claim there were in the said agreements the express or implied terms set out in paragraph 18 hereof and the plaintiffs were by the said agreements constituted the agents of the defendants and the plaintiffs in breach of the said agreements and of their duty as the defendants' agents acted contrary to the interests of the defendants in that they charged excessive prices to the traders in America and Canada who were their customers and thereby seriously prejudiced the sale of the defendants' tissues and involved the defendants in the danger of losiog the whole or a part of their market in America and Canada and the defendants were justified in determining the agreement or agreements. 11

The defendants also counterclaimed 2124!. 18s. Sd. the reasonable price of tissues actually delivered on March 24 and April 3 and 17, 1919.

On February 8, 1922, an order was made in chambers that the action should be transferred to the Commercial List and that the Court should try all questions of lisbility, except the issue whether in fact the plaintiffs did any of


the acts alleged in para. 20 of the defence, and construe all 1922

agreements ; and that all questions. of damages and of the Ros:s AND

matters alleged in para. 20 of the defence (if they should ~ Co.

become material) should be referred to an Official Referee. J. R Onon. O:ON AND

The case was heard on November 9 and 10, 1922. B&os., LD.

R. A. Wright K.O. and Oonway for the plaintiffs. Distw-nal K.O., Eastham K.C. and James Wylie for the

defendants.

Nov. 10. BAILHACHE J. [after stating the facts]. The question has been argued before me on the construction of the document of 1913 alone. Another question has been raised on the pleadings-namely, that if as a matter of construction the defendants were not at liberty to determine the arrangement as suddeuly as they did, they were justified in so doing by the action of the plaintiffs. No evidence was called in support of this position ; it is reserved for the defendants to make it good, if they can, by calling the necessary evidence. All I have now to deal with is the document of July, 1913.

The contest turns upon the clause which innnediately precedes the statement of prices ; it is in these words, u 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 ouly 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."

The point taken by the defendants is that the arrangement was not intended to be a.nd was not a contract; that if I look at the whole of it and treat it as a whole I shall see plainly that the parties intended nothing in the nature of a. binding contract, nothing more than a. mutual under~ standing ; that therefore it was qnite open to them to

272 KING'S BENOH DIVISION. [1923]

1922 provide that there should be no legal obligation on either RosE AND party and consequently no recourse to the Courts of Law. ~ Co. On the other hand the plaintiffs also contend that if I take

J. R. CRoKP- the document as a whole I must come to the conclusion TON Am>

BBOs .• LD. that it was intended to be and is a binding contract which, Ba.ilhaehe J. apart from the clause I have read, would give either party

a right of recourse to the Courts of Law if that contract was broken. Pursuing their argument they say where a contract binding in law is to be found in an instrument, if the parties in the same instrument violate that contrac.,t by a clause which stipulates that there shall he no legal liability on either side, that clause is void because it is repugnant to the terms of the instrument, and the contract remains. They say if that clause means that there is to be no legal liability on either side, the clause is repugnant, because it goes further than merely qualifying, it actually defeats the main purpose of the contract. They further say that if the clause means that there shall be no recourse to the Courts it is still void, because it is contrary to public policy to give effect to that intention.

I approach the construction of this document remembering that the busin6ss which these three parties carried on was a large, profitable and important business to them all, probably more important to the plaintiffs than to the defendants ; that the relations between the plaintiffs and the defendants J. R. Crompton & Brothers, Ld.-Brittains, Ld., had not yet come into direct relation with the plaintiffs-were terminable, with one exception, upon a reasonable notice, and were not for any definite length of time ; and that it was the wish of the parties, and particularly of the plaintiffs, to place the business upon a surer foundation.

Approaching the document with these facts in mmd I find that it says : " As the business in carbonizing tissues which is now being done "-[The learned judge read the document to the words " as in the first period of tlrree years," and proceeded:] As I have said that arrangement was definitely continued till March 31, 1920.

Pausing there a moment, I take it to be quite clear that


what they have agreed to in this first part of the memorandum 1922

is that the three contracts, which were only for one year and RoBE AND

which were terminable on reasonable notice, were to be put ~ Oo.

on a different footing to this extent, that instead of being J. R. CBolU· TON AND

subject to reasonable notice, they were to continue for a BILOs., Ln.

period of three years, subject to six months' notice being Bailbacho 1.

given before that date, and for a further period of three years if no notice were given. It is quite clear that the parties intended not to weaken the existing contracts but to strengthen them ; not to alter them except in this respect, that they should continue for a definite time and for a further period unless six months' notice were given to determine them. If the memorandum ended there I should not have the slightest doubt in saying this was as clear a contract as there could well be that the three contracts which were running should continue to rwt for a period of time.

The memorandum goes on : " The agreement between the tlrree parties with respect to the business in carbonizing tissues is as follows, and any alteration or extension shall be subject to the mutual agreement of the three parties :-" In what follows the parties, as I gather their intention, are beginning to sweep into one document the provisions of the three letters which formed the three then existing contracts, and to express in that one document what the course of business is to be. The rest of t~e document reads exactly as I have suggested, except as regards some small matters, relating to such special and distinctive grades of paper as may he indicated by the plaintiffs, whioh were not comprised in the three letters. There is nothing in this portion of the memorandum to show that the contracts then existing should cease to be contracts and should become simply arrangements having no legal force or effect, an alteration which would be directly contrary to the plaintiffs' object not to weaken but to strengthen the ties which bound the defendants to them.

Then comes the clause which raises the question. If the first part of the document expresses an arrangement which is only to be binding in honour and not in law, a hope or

K

274 KING'S BENCH DIVISION. [1923}

1922 expectation and nothing more, the clause undoubtedly RosE AND excludes the jurisdiction of the Courts. But I have come to ~ Co. the conclusion that is not the proper way to read the document.

J. R. CRaMP· I cannot think that three business firms have taken the trouble TON AND

BRos., LD. to write out a memorandum which is not to be worth the Ballhaehe J. paper it is written on ; that notwithstanding the fact that the

three agreements were to be extended for three years certain, any of the parties might the day after signing this document have altered their minds and would yet have committed no breach of contract agairult the other or others. That seems to me an impossible position. It is difficult to understand how the plaintiffs allowed this clause to be inserted ; but having come to the conclusion that the memorandum recites contracts which were then binding and binds the defendants to continue those contracts for three years, and then possibly for another three years, I have also come to the conclusion that, if this clause meallB that notwithstanding this the parties are to be under no legal obligation, then it is repugnant to the main intention of the memorandum and I must reject it. I must equally reject it if it merely purports to oust the jurisdiction of the Courts. My own view is that it has the larger meaning, that the parties shall be under no legal obligation to each other. That being so, and the earlier part of the document being contractual and not merely expressive of a hope or expectation, the clause, strange as it is and I think plain as it is, is repugnant to the main object and scope of the contract and must be rejected.

That disposes of the case so far as I am concerned ; but if I am wrong, the plaintiffs have another and a smaller claim. At the end of January, 1919, before the defendants' sudden change of attitude, the plaintiffs had, as was their custom, sent orders for specific kinds and quantities of tissue paper based on their proximate requirements for the next three months or more. They claim that, whatever the document of July, 1913, may mean, those orders, which were accepted before the defendants put an end to that document, constitute contracts and must be fulfilled by the defendants. The defendants point out that there must be some memorandum

2 K. B. KING'S BENOH DIVISION.

in writing containing all the terms of these so-called con- 1922 tracts before they can be enforceable ; that the acceptance Ros:s: AND

is a simple acceptance of the orders as sent, and that the ~ eo. orders do not sufficiently give the terms to satisfy s. 4 of the J. R. CJulKP ..

TON AND Sale of Goods Act. The orders are all substantially in the BROs., LD.

same form : " Please enter our order for the following goods :Bailba.che 1.

and ship as soon as possible Toronto, Canada " ; then follows the description of the goods ; then " Send all documents to our New York office. Price ." It is said that the contract between the parties contailled terms which ought to be, and are not, inserted in the memorandum : First, that the mode of delivery is not stated; but the words are " Enter our order and ship." I understand that to mean " Deliver f.o.b." Next, that the prices are not specified; but no prices were definitely agreed ; they were left to the defendants, which means that they were to be fair and reasonable in the circumstances. That is what the law implies when a contract is silent as to the price. Obviously such a contract may be made, and there can be no memorandum of th~t upp~ which the contract is silent. Therefore the fact that the price is not definitely mentioned does not matter. Thirdly, it is said that no time is named for payment ; but the next words are "Send all documente to our New York office." If the goods were to be shipped f.o.b. I should take this to mean that payment would be made after the documents reach the New York office. That is precisely the course of business that was

·.followed in this case. Therefore I have come to the con-clusion that, if I am wrong upon the first point, there were sufficient memoranda in writing of the orders sent in January, 1919, to constitute those orders, when accepted, contracts for non-fulfihnent of which the dsfendants must pay damages.

The formal judgment of the learned judge was drawn up as follows :-

(a) It was adjudged and declared that the agreement of July, 1913, mentioned in para. 8 of the statement of claim was a legally binding agreement agairult both defendants and that the orders mentioned in para. 18 of the statement of claim constituted legally binding

276

1922

RosE AND FB.ANK Co.

v. J. R. CROW>•

TON AND Bnos.,Ln.

Bailhacbe :r.

KL"!G'S BENOH DIVISION. [1923]

contracts against the defendants J. R. Crompton &

Brothers, Ld. ; (b) It was adjudged that judgment should be for the

plaintiffs and that they should recover against the defendants the sum of 2441. 3s. 2d. mentioned in para. 17 of the statement of claim with costs of that issue up to the date of admission ;

(c) It was ordered and directed that all other issues remaining to be tried and the issues as to damages should stand over for trial by Bailhache J. or, if he could not take it, by another judge taking the Commercial List ; and that the plaintiffs should have the costs of the hearing in any event ;

(d) It was adjudged that there should be judgment for the defendants J. R. Crompton & Brothers, Ld., on the counterclaim and that they should recover against the plaintiffs the sum of 21241. 188. Sd. with costs up to the date of admission ;

(e) It was ordered and directed that the taxation of costs should stand over and that execution on the counterclaim should be stayed until the final judgment or further order ;

(f) And it was further ordered that a commission should proceed to America to take evidence upon the issue raised in paras. 18 and 20 of the defence.

The defendants appealed against this judgment except paras. (b) and (d) thereof.

Sir John 8i11Wn K.C., Eastham K.C. and James Wylie for the appellants. The learned judge was wrong in holding that the document of July, 1913, constituted a binding contract. Not every agreement is a contract. A contract results from a combination of agreement and obligation. It is that form of agreement which directly contemplates and ~Jreates an obligation. The contractual obligation is that form of obligation which springs from agreement : Anson on Contract. (I) "The agreement must be, in our old English

(I) 14th ed, (1917), p. 2.

2 X. B. KING'S BENOH DIVISION. 277

phrase, an act in the law : that is, it must on the face of the o. A.

matter be capable of having legal effects. It must be con~ 1923

cerned with duties and rights which can be dealt with by RosE AND

a Court of justice. And it must be the intention of the ~ Co.

Parties that the matter in hand shall if necessary, be so dealt J. R. CRoll£:1>· 1 TON AND with, or at least they must not have the contrary intention. BRos., LD.

An appointment between two friends to go out for a walk or to read a book together is not an agreement in the legal sense : for it is not meant to produce, nor does it produce, any new legal duty or right, or any change in existing ones " : Pollock, Principles of Contract. (1) "The agreement must purport to produce a legally binding result " : Holland, Jurisprudence. (2) Thus if the scope or area of agreement does not include or contain submission to Courts of law and reference to legal standards and sanctions, and a fortiori if it excludes these, there is no contract. Balfour v. Balfour (3) is an example. There the wife of a man resident in Ceylon had to return to England for health; the husband agreed to allow her a certain sum per month during separation, and it was held that she could not sue him on this agreement for it was merely a domestic arrangement not intended to be legally binding. Taking the document of July, 1913, as a whole the parties have very clearly expressed their intention not to be bqund legally by its terms.

The learned. judge has held this expression of intention to be repugnant to the main scope and purpose of the document. No doubt a clause may be repugnant to the rest of a contract, and if it is, it has no effect, and the contract is still binding. For example in Furnivall v. Coombes (4) churchwardens covenanted to pay for repairs to the parish church with a proviso that they were not to ~be personally liable, but ouly as chnrchwardens, and it was held that the covenant to pay being a personal covenant the proviso was repugnant and void. Again in Wafling v. Lewi.& (5) on the division of a partnership estate the trustees of one partner

(1) 9th ed. (1921), pp. 3, 4; and see note (d) on p. 4.

(2) 12thed. (1916), p. 278.

(3) [1919]2 K. B. 571. (4) (1843) 5 Man. & G. 736. (5) [1911]1 Ch. 414.


C. A. took as his share certain land subject to a mortgage, and 1923 covenanted " as such trustees, but not so as to create any

RosE .urn personal liability on the part of them or either of them '' ~Co. with the trustee of the other partner to pay the mortgage

J. R. OBo""· debt and interest and to keep him indemnified from claims TON AND

BRos .• LD. and demands on account thereof, and the covenantee having been called upon to make good a deficiency on the mortgage debt sued the surviving covenanter ; and it was held that the defendant was personally liable. But where both parties express their intention to be bound not in law but in honour that intention is part of theix agreement and cannot be said to be repugnant to it. The mistake the learned judge has made is in considering the document piece~meal. He has taken the first paragraph of the document and discovered in that an intention to strengthen the previous relations, which he holds to have been contractual relations, between the parties. But in the first place there never were any previous contractual relations between the respondents and Brittains, Ld. They were entitled to enter into such relations as suited them. In the second place there is considerable doubt whether the relation between the respondents and J. R. Crompton & Brothers, Ld., was contractual. Thirdly it is not to be inferred from the fact that the period of relations is extended that the arrangement is necessarily a binding agreement ; and fourthly it is not a proper canon of constru~tion to consider part of a document and, having inferred an intention from that part, discard as repugnant every indication to the contrary in the rest of the document: Bussey v. Borne-Payne. (1)

The invalidity of the document of July, 1913, as a legal contract does not involve the legal validity of the previous engagements. It is not admitted that they constituted binding contracts ; that question has yet tc be decided ; but if they did the contracts were superseded by the document of 1913; for an agreement, though not a binding contract, may yet operate to rescind an existing contract :

(l) (1879) 4 App. Cas. 311, 316.

f

I 2 lt. B. KING'S BENCH DIVISION. 279

Morria v. Baron &; Go. (l); British and Be:ningtuns v. North o. A.

Western Oachar Tea Go. (2) 1923

The orders mentioned in para. 18 of the statement of claim RoSE AND

were referable to the document of July, 1913, and their noll- F~ Oo. fulfilment involves no legal consequences. J, R. CBoHF

!WN AND R. A. Wright K.O. and Conway for the respondents. Bno• .• LD.

The argument for the appellants would preclude all possibility of repugnancy. If every clause in a document to which the parties set their hande contributes its part towards the resultant agreement, no clause can be repugnant to that agreement. But the doctrine that repugnant clauses must be rejected still exists: Forbes v. Git. (3) The words of a document are not of themselves the ultimate and conclusive test of the intention of the parties. The Court in gathering that intention does not confine itself to the worde used: Ford v. Beech (4), per Parke B. ; but considers also the relation between the parties and the circumstances in which the words are used. The same form of words may have one effect when used by a husband and wife and another when used by two business men seeking profit. What intention will the Court draw from the circumstances that J. R. Crompton & Brothers, Ld., were entitled to the whole output of Brittains, Ld. ; that the respondents were the sole agents of the blue paper supplied by J. R. Crompton & Brothers and the sole agency in America and Canada. of their 7 lbs. substance subject to a twelve months' or other reasonable notice 1 Was it their intention to renounce these profitable agencies for an agreement which might be terminated by a. cable message at a moment's notice 1 Their intention was the opposite. It was, as the learned judge said, to strengthen not to weaken the ties that bound the appellants J. R. Crompton & Brothers, Ld., to them ; and to bring themselves into direct relation with Brittains, Ld., and so obtain power to enforce the obligations of Brittains, Ld., tc J. R. Crompton & Brothers. If that was the intention, then clearly the clause beginning "This

(1) [1918) A. C. 1. (2) [1923) A. C. 48.

(3) [1922)1 A. c. 256. (4) (1848) 11 Q. B. 852, 866,868.


C. A. arrangement is not entered into " is repugnant to that 1923 intention and should be rejected ut res magis valeat quam

Ros• AND pereat: Furnivall v. Goombe8 (1) ; Williams v. Hathaway (2); ~Co. Watling v. Lewis (3); Forbe8 v. Git (4); Scott v. Avery. (5) J.,!~C=- In executing the document of July, 1913, the parties never BRos., Ln. intended that the former contracts should be abrogated.

Their intention was that those contracts should continue and be made more permanent and secure. The last thing they intended was that if the document failed as a contract its invalidity should infect the contracts it was designed to confirm and strengthen.

[BANKES L.J. The learned judge's view of that document made it Ullilecessary for him to decide whether the earlier arrangements, assuming them to have been contracts, were superseded. The question depends on the intention of the parties, a question of fact: Noble v. Ward (6); which we cannot decide without hearing evidence.]

Sir John Si11UJn K.G. in reply. The question whether the arrangements before July, 1913, assuming they were con~

tractua.l, were superseded by the document of that date is no doubt a question of fact ; but the evidence on the question consists of correspondence between the parties and the effect of the document--matter which can very conveniently be considered in this Conrt. The changes introduced by that document lead to the inference that the former relations were abrogated. The introduction of Brittains, Ld., the continuance of relations for three years, the objection to be raised by J. R. Crompton & Brothers, Ld., if the Webster Go. of Boston should offer for purchase in its unprepared state paper which they have bought from J. R. Crompton & Brothers, Ld., the understanding that the respondents will confine their purchases to the appellants, the undertaking by the appellants as to the body of business to be done between the parties, the provision relating to the cheaper carbonizing papers, and the alteration in prices and in the period for which prices are

(1) 5 Man. & G. 736. (2) (1877) 6 Ch. D. 644. (3) (1911]1 Ch. 414.

(4) (1922]1 A. C. 256. (5) (1856) 5 H. L. C. 811. (6) (1867) L. R. 2 Ex. 135.

2 X. B. KING'S BENCH DIVISION. 281

to be quoted ; these numerous provisions lead to one C. A. conclusion, that the former relations were terminated and 1923

that a new course of business was to take their place. Ros:s AND F'RANx Co • ..

Cur. adv. vult. J. R. CB.oHP• TON AND

BROs., LD.

March 23. The following written judgments were delivered :-

BANKES L.J. This is a curious case. The plaintiffs carry on business in New York llil dealers in carbonizing papers, and the defendants are manufacturers of this class of papers in this country. For a number of years before July, 1913, the plaintiffs and the defendants, Cromptons, had done business together in the export of these papers to the United States. The terms upon which the business was carried on are referred to in correspondence which passed between the two firms. It is a matter in dispute whether this correspondence constituted a contract, or a series of contracts, between these parties--this is a matter which has yet to be tried-but for the purpose of my judgment, and in order to test the main question from the point of View most favourable to the respondents, I will assume (without deciding) that these business relations at that time between these parties were contractual relations, using that expression in its strict legal sense as involving a legal liability upon the parties to perform their agreements. A quantity of the paper supplied by the defendants Cromptons to the plaintiffs was manufactured by the defendants Brittains. In the early part of 1913 the plaintiffs were apparently anxious to get into direct business relations with the defendants Brittains, and to secure some assurance of a longer continuance of business relations than they at that time had with the defendants Cromptons. A draft of an agreement was prepared, apparently by the plaintiffs, or on their behalf, which bears date January 1, 1913. (1) The parties appear to have worked on this draft, and by the end of June, or the beginning of July, the three parties had agreed upon the terms of the

(1) See note on p. 299, post.

282 KING'S BENOH DIVISION. [1923)

c. A. document upon which the main question in the action turns. 1923 The plaintiffs allege that the document is a contract in the

Ros:m AND strict sense of the word, involving each of the parties to it FRANE: Co. in a legal obligation to perform it. The defendants, on the

J. R. ~MP- other hand, say that the document is nothing of the kind, B~~.~- because it expressly provides that it shall not involve any of Bankes L.J. the parties in any legal obligation to perform any of its terms.

There is, I think, no doubt that it is essential to the creati~n of a contract, using that word in its legal sense, that the parties to an agreement shall not only be ad idem as to the terms of their agreement, but that they shall have intended that it shall have legal consequences and be legally enforceable. In the case of agreements regulating business relations it follows almost as a matter of course that the parties intend legal coDBequences to follow. In the case of agreements regulating social engagements it equally follows almost as a matter of course that the parties do not intend legal consequences to follow. In some cases, such as Balfour v. Balfaur (1}, the law will, from the circumstances of the case, imply that the parties did not intend that their agreement should be attended by legal consequences. It no doubt sounds in the highest degree improbable that two firms in this country, arranging with a firm in the United States the terms upon which a very considerable business should be carried on between them over a term of years, should not have jntended that their agreement as to those terms should be attended by legal consequences. It cannot however be denied that there is no reason in law why they should not so provide, if they desire to do so. The question therefore in the present case resolves itself into a question of construction. I see nothing in the surrounding circumstances which could justify an interpretation of the language used by the parties in the document of July, 1913, in any other than its ordinary meaning. The document itself is a curious one from a drafting point of view. A skilled draftsman could easily ·have rendered the discussion which has taken place in the Court below and in this Court impossible. As it is, the draftsman

(1)[1919]2 K B. 57L

2 K- B. KING'S BENOH DIVISION. 283

appears at times to have re:r;nembered, and at times to have 0. A.

lost sight of, the objeet he is alleged to have had in view. 1923

For instance the document opens with a clause apparently Ros:s AND ' • · FRANK eo.

studiously worded to avmd the usual appearance of a v.

contract. The draftsman then adopts language which at J . .!N 0:· times is strongly suggestive of a contract, and at times BBOs., LD. indicates something other than a contract. Then follows Bankes L.J.

what is said to be the governing clause, and the document concludes with language suggestive of a contract. What I have called the governing clause is not couched in legal phrase-ology. A great deal more is said than need have been said in order to record the intention of the parties. I read it as a genuine attempt by some one not a akill~d. draftsman to go much further than merely providing a meaiiS for ousting the jurisdiction of the Courts of law. There is no ground for suggesting that the language used in the clause is not a bona fide expression of the intention of the parties. If so, it appears to me to admit of but one construction, which applies to and dominates the entire agreement. The intention clearly expressed is that the arrangement set out in the document is only an honourable pledge, and that all legal consequences and remedies are excluded from it. If this is the true con-struction of the clause, it must govern the entire arrangement, and there is consequently no room for the principle upon which the learned judge decided this part of the case. It would no doubt have simplified matters if the clause in question had been inserted at the head of the document, or even at the end, rather than in the position it occupies. I attribute its position to the want of that skill in drafting of which the document affords plenty of evidence, rather than to any want of bona tides in the language used. Once it is estab-lished that the language of the clause is the bona fide expression of the intention of the parties, the matter is in my opinion concluded, and it becomes manliest that no action can be maintained upon the agreement cont&ined in the document of 1913.

The next point which arises for decision is whether the pre-1913 arrangements are still in existence, and if in


c. A. existence, whether they are enforceable. The point was 1923 partly argued before us, and reference was made to Noble v.

RosE AND Ward (1) and to what Willes J. there said in reference to F.uNx. Co. rescission of one agreement by the substitution of another.

v. J. R. OROMI"- His view of the law that the question would be one for a jury Bor::S.:-Lo. was cited with approval in Morn:s v. Baron & Co. (2) When Bankes L.J. this _point was urged before us, -we did, I think, intimate to

counsel that this point must be tried, and that we did not propose to decide it. Whether this was a wise decision on our part I am not prepared to say, but after consideration I am satisfied that it is better to leave the matter as it stands than to direct any further argument upon it.

The last point involved in the appeal is as to the so-called orders referred to in para. rs of the statement of claim. Bailhache J. has decided that these orders were accepted by the defendants Cromptons, and when accepted became contracts legally bindiog upon these defendants, though not upon the defendants Brittains. The bulk of these orders were given in January, one in February, and the rest in March, 1920. It appears from the correspondence that in December of 1918 the defendants Cromptons were applying to the plaintiffs as to their probable requirements for the coming year, because when they were ascertained Messrs. Brittains " would do their best to make the most helpful arrangements possible.'' (See Cromptons' letter, DecemM ber 3.) On January 23, 1919, the plaintiffs write to Messrs. Brittains saying that they had not made up their season's orders, as they were awaiting Messrs. Brittains' view of the situation and the probabilities of the quantities that they could furnish for the coming year. On the ne_xt day, the 24th, the plaintiffs send to the defendants Cromptous twenty-four orders for papers of Brittains' make, and eight orders for papers of Cromptons' make, and on the same day they send to the defendants Brittains copies of the orders for their make of paper sent to the defendants Cromptons, and they end their letter as follows: "We have made no mention of price, as we take it for granted that you will adjust

(1) L. }\, ~ Ex. 136. (2) [1918] A. 0. 1.


these in accordance with conditions which we hope are such C. A.

that there will be no fnrther advance, but probably gradual 1923 reduction." On February 7 the plaintiffs write to the RosE AND

defendants Cromptons inclosing one order for their make ~ Co.

of paper, and telling them that they were awaiting advice J . .!~ ~~from Messrs. Brittains " as to the possibility of production BRos., LD. during the coming year." On February 12 th~ ~ef~ndants EaDkesL.J.

Cromptons acknowledge the receipt of the plamtiffs letter of January 24 containing the thirty·two orders. The let~r is in these terms : " Dear Sirs, we beg to acknowledge rece1pt of your favour of the 24th ulto., contents of which are duly noted. 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, a~d Messrs. Brittains write us with regard to the orders for thell' papers that they are endeavouring to let you have deliveries this year up to at least the full 100% for the standard year endiog February 28, 1918, but that at the moment conditi?ns are particularly uncertain. Nevertheless, they would like us to assure you 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." During all this time the parties were discussing the period for which the 19.13 arrangement was to continue, and on March 11 the plaintiffs in their letter of that date, which enclosed the last six orders relied on, say this: "We agree with the suggestion of Messrs. Brittains acquiesced in by you, that the agreement between us be extended to March 30, 1920, and that notice to amend or terminate the agreement must be definitely given by any of us before September 30, 1919." .

Under these circumstances it appears to me manifest that these so-called orders were really requisitions under the existing 1913 agreement, intended to be orders to be executed by both the defendants under that agreement, the acknowledgment of the receipt of which by the defendants Cromptons did not give them the contractual force against one of the two defendants only which, but for the existence of the agreement,


o. A. they might certainly have had. Had the orders been executed, !923 the price at which they would have been executed would have

RosE AND been regulated by the terms of the 1913 agreement, and this FBANx Co. is no doubt what the plaintiffs had in mind when they wrote

v. J. R. ORo""· their letter of January 24. No case is made by the plaintiffs B~:S.~. that the defendants or either of them are bound by any :Bankes L.J'. estoppel in relation to these orders, or any of them. The

case made is a simple one of offer and acceptance. For the reasons I have given, I thiulr that this case fails.

The appellants in my opinion succeed both on the point as to the legal effect of the document of July, 1913, and as to the legal effect of the orders mentioned in para. 18 of the statement of claim, and the judgment of Bailhache J. must be varied by making the declaration contained in the first paragraph of the formal judgment in the negative instead of in the affirmative on both points, and the appellants must have the costs of this appeal and in the Court below of the two issues on which they have now succeeded, and the stay upon the taxation of costs, so far as it relates to those issues, must be removed. In other respects, the judgment of the Court below is to stand.

SoRUTTON L.J. The facts giving rise to the present dispute are clearly stated by Bailhache J., and I do not repeat them. Down to 1913 there were agreements between :Messrs. Rose. & Frank Co. in the Uulted States and Messrs. Crompton in England which in my opinion 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. In 1913 the parties concurred in signing a document which gives rise to the present dispute. I agree that if the clause beginning "This arrangement, were omitted, the Courts would treat the rest of the agreement as giving rise to legal relations, though again of great vagueness. An agreement that Messrs. Brittain & Crompton " will subject to unforeseen circumstances and contingencies do their best1 as in the past, to respond efficiently and satisfactorily to the calls of Messrs. Rose & Frank Co. for


deliveries both in quantity and quality," is not very helpful C. A. or preoise. But the clause in question beginning " This 1923

arrangement " is not omitted and reads as follows : " This RosE AND

arrangement is_ not entered into1 nor is this memorandum FR~ Co.

written, as a formal or legal agreement, and shall not be J. R. C&om.>-TON AND

subject to legal jurisdiction in the Law Courts either of the B•os., LD. United States or England, but it is only a definite expression Scrutton L.J.

and record of the purpose and intention of the three parties concerned to which they each honourably pledge themselves with the fullest confidence, based upon past business with each other, that it will be carried through by each of the three parties with mutual loyalty and friendly co-operation." The judge below thinks that by itself this clause " plain as it is " means that the parties shall not be under any legal obligation to each other at all. But coming to the conclusion that without this clause the agreement would create legal obligations~ he takes the view that the clause must be rejected as repugnant to the rest of the agreement. He also holds that if the clause merely means to exclude recourse to the Law Courts as a means of settling disputes, it is contrary to public policy as ousting the jurisdiction of the King's Courts.

In my view the learned judge adopts a. wrong canon of construction. He should not seek the intention of the parties as shown by the language they use in part of that language only, but in the whole of that language. It is true that in deeds and wills where it is impossible from the whole of the contradict<>ry language used to ascertain the true intention of the framers, resort may be had, but only as a last expedient, to what Jesse! M.R. called "the rule of thumb" in In re Bywater (1) of rejecting clauses as repugnant according to their place in the document, the later clause being rejected in deeds and the earlier in wills. But before this heroic method is adopted of finding out what the parties meant by assuming that they did not mean part of what they have said, it must be clearly impossible to harmonize the whole of the language they have used.

(I) (1881) 18 Oh. D. 17, 20.


c. A. Now it is quite possible {or parties to come to an agreement 1923 by accepting a proposal with the result that the agreement

RosE AND concluded does not give rise to legal relations. The reason of ~ Co. this is that the parties do not intend that their agreement

J. R. CnoMI>- shall give rise to legal relations. This intention may be TON AND

BROs., LD. implied from the subject ma.tter of the agreement, but it may scru;; L.J. also be expressed by the parties. In social and family

relations such an intention is readily implied, while in business ma.tters the opposite result would ordinarily follow. But I can see no reason why, even in business matters, the parties should not intend to rely on each other's good faith and honour, and to exclude all idea. of settling disputes by any outside intervention, with the accompanying necessity of expressing themselves so precisely that outsiders may have no difficulty iu understanding what they mean. If they clearly express such an intention I can see no reason in public policy why effect should not be given to their iutention.

Both legal decisions and the opinions of standard text writers support this view. In Balfour v. Balfour (1) the Court declined to recognize relations of contract as flowing from an agreement between husband and wife that he should send her 30!. a. month for her maiutenance. Atkin L.J., spea.king of agreements or arrangements between husband and wife involving mutual promises and consideration in form, said " They a.re not contracts because the parties did not intend that they should be attended by legal consequences." In the early years of the wa.r, when a member of a club brought an action against the committee to enforce his supposed rights in a club goH competition, I non-suited him for the same reason, that from the nature of the domestic and social relations, I drew the inference that the parties did not intend legal consequences to follow from them: Lens v. Devonshire Olub. (2) Mr. Leake says (3) that "an agreement as the source of a !ega.! contract imports that the one party shall be bound to some performance, which the latter (sic) shall have a~ legal right to enforce." In Sir Frederick Pollock's

(I) [1919]2 K. B. 571. (2) Unreported. See The -Times

Newspaper, Dooember 4, 1914. (3) 7th ed. (1921), p. 3.

f

f I l f

I '


language (1) an agreement to become enforceable at law must C. A. "be concerned with duties and rights which can be dealt 1923

with by a court of justice. And it must be the intention of Ros~ the parties that the matter in hand shall, if necessary, be so FR~ Co. dealt with, or at least they must not have the contrary .r. R. CROMl'·

TON AND

intention." Sir William Anson requires in contract "a Bnos., Ln.

common intention to affect" the legal relations o£ the parties. scrutton L.J.

Judged by this test, I come to the same conclusion as the learned judge, that the particular clause in question shows a. clear iutention by the parties that the rest of their arrangement or agreement shall not affect their legal relations, or be enforceable in a Court of law, but in the words of the clause, shall be "only a definite expression and record of the purpose and intention of the three parties concerned to which they each honourably pledge themselves," "and shaD not be subject to legal jurisdiction," If the clause stood first in the document, the intention of the parties would be exceedingly plaiu.

The cases cited to us to the contrary were cases in which the form of the other part of the document, as a covenant in a deed, or a grant of a right in property in legal terms, clearly showed an intention to create a legal right, and where subsequent words, purporting not to define but to negative the creation of such a right, were" rejected as repugnant. In Ellistm v. Bigrwld (2), where the parties under seal "resolved and agreed and did by way of declaration and not of covenant spontaneously and fully consent and agree,'' Lord Eldon laid aside " the nonsense ab'out agreeing and declaring without covenanting." An agreement under seal is quite inconsistent with no legal relations arising therefrom. And in the present case I think the parties, in expressing their vague and loosely worded agreement or arrangement, have expressly stated their intention that it shall not give rise to legal relations, but shall depend only on mutual honourable trust. This destroys the decision of BailhucheJ. so far as it is based on the view that the document of 1913 gives rise to legal rights which can be enforced.

(I) 9th ed. (1921), p. 3. (2) (1821) 2 Jac. & W. 503, 510.

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290 KING'S BENOH DffiSION. [1923]

c. A. It was unnecessary for the judge below to decide the next 1923 point, whether, ii the 1913 ·document gave rise to no legal

RosE AND rights, the earlier agreements which contained no similar Fru.Nx Co. clause could be enforced. This turned on whether the parties

u. J. R. CRoMP· in coming to the agreement of 1913 intended to rescind the

TONAND Ji t" f h • d Bnos., LD. ear er agreements excep 1n so ar as t ey were mcorporate scrutton L.J. in the new agreement, and even then only to continue them

as honourable obligations. It follows from Morris v . . Baron & Go. (1) that a. valid contract may be rescinded by an agreement unenforceable in law, the test being whether the parties intend to rescind the old agreement, replacing it by a new agreement which may incorporate many of the old terms, or merely to vary the old agreement which remains effective except in so far as it is varied: see per Lord Sumner, British and Beningtons v. Norih Western Gachar Tea Go.(2) Morris v. Baron & Go. (1) also says that the intention of the parties would be a question of fact, though the House of Lords themselves decided the question of fact: see per Lord Haldane. I have carefully considered the documents and the forcible argument of Sir John Simon on this point, and have come to the conclusion that the parties who transformed a contract between two parties into an honourable arrangement between three parties incorporating some parts of the old arrangement, varying others, and adding fresh terms, clearly intended to abandon or rescind the old arrangement and leave their relations depending on the new honourable understanding of 1913. Any alternative claim on the documents before 1913 therefore fails.

I should have been! prepared, if the other members of the Court had thought it right, to hear counsel for the respondents further on this point. We intimated during their argument that we were with them on this point, but this, of course, could not be final as we had not then heard Sir John Simon in reply. On hearing him I was much impressed by his argument, though I needed to look at the documents carefully to form a final opinion. I made a mistake in not asking Mr. Wright to complete his argument, and should

(1) [1918] A. 0. 1, 21. (2) [1923] A. c. 67.


have been ready to rectify it by hearing any further arguments o. A.

he wished to add; but as my Lord thinks it better tc have a 1923 new trial on this point, I can only say that my own opinion Ros:a: AND

is as above stated. Though rescission is a question of intention Fru.mt Co. u.

and therefore of fact, the House of Lords decided it in J. R. CRo><P·

Morris v. Baron & Go. (1) without sending the matter for a new B;::,~.;'L;,. trial. What the document containing the engagement of sClUttion L.J.

honour means is not a question on which evidence is admis-sible ; nor is the question what the earlier letters mean ; and what the two together mean can, I think, be decided without further evidence. Nor am I impressed by the argu-ment that Bailhache J. reserved further questions to himself. He did not intend to decide this question at any time, for his original decision had rendered it unnecessary. If it rested with me, I should decide the question in favour of the appellants.

The remaining question is the claim in para. 18 of the statement of claim, for damage for the non-delivery of the whole of the undelivered part of the goods said to be legally due under some thirty-two specified orders. AB to these, a question was raised by the defendants at the tria.l under the Sale of Goods Act, 1893, which was abandoned before us. The judge below, deciding that the agreement of 1913 was legally enforceable, held that any facts giving a legal answer under the agreement would also give a legal answer to the claim under the separate orders. But he said that had he held the arrangement of 1913 not enforceable in law he would have held that a legal claim arose under the specific orders. Ail I have held the agreement of 1913 not enforceable in law, I have now to consider the position of the separate orders. For if they were given under an unenforceable arrangement, they may so far as not executed partake of the character of the overriding agreement under which they came into existence.

The clause in the agreement of 1913 relating to the supply of goods to Messrs. Rose & Frank for which they have the sole agency in the United States appears to run as follows :

(1) [1918] A. C. 1, 21.


c. A. Rose & Frank agree that the volume of business in any year 1923 shall not! fall in :any year below the average of three years,

RosE AND 1910 to 1912, "without ~such explanations as shall be conF~ Co. sidered satisfactory" by Cromptons and Brittains. The latter

.J. R. CaoiD?- two firms on} their part agree that !they will "subJ' ect to unfore-ToN AND • 1

Baas., LD. seen oll'oumstances and contingencies do their best . . . . scrutton L.J. to respond efficiently and satisfactorily to the calls of Messrs.

Rose & Frank Co. for deliveries both in quantity and quality." Accordingly in December, 1918, the English manufacturers are asking for Rose & Frank's "prospective requirements," and on January 24, 1919, Messrs. Rose & Frank send some thirty-two orders for deliveries, for various dates, some as far ahead as October 1, 1919. They say they have not yet determined the full quantity of paper they will require in the year, but send orders which will cover part of their wants. Messrs. Crompton, on February 12, 1919, write a letter which appears to me fully to carry out the vague arrangements in honour which I have held to be constituted by the arrange· ment of 1913, but, as made under that arrangement in honour, to give rise to no legal obligation. It runs as follows: "V\'e beg to acknowledge receipt of your favour of the 24th ulto. contents of which are duly noted. We also thank you for the 24 orders for 286 cases of Messrs. Brittains pa.pers, 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 February 28, 1918, but that at the moment conditions are particularly uncertain. Nevertheless they would like us to assure you 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.'' This I cannot construe as a binding acceptance of a legal proposal. It is, in my opinion, an assurance that the suppliers will do their best to comply with the probable requirements of the agents, but do not bind themselves as conditions are particularly uncertain. So far as delivery was made and f

I

2 K. B. KING'S BENOH DIVIlliON. 293

accepted, legal consequences as to payment of price would c. A.

follow, but I think there is no legal remedy for non-delivery. 1923

In my view, therefore, the judgment of Bailhache J. RosEAND

ordering that the issue of liability for damages under the ~ Co •

"legally binding agreement" of 1913 and the special orders J. R. ORoM:P· shall be tried by himself, should be reversed. B~.Tn.

The judgment for 224l. 3&. 3d. for the plaintiffs, and scrutton L.J.

2124!. for the defendants with costs stand. The defendants should have the costs of the hearing to date here and below.

ATKIN L.J. The first question in this ease is whether the document signed by the defendants on July 11, 1913, with a counterpart signed by the plaintiffs on August 12, 1913, constituted a contract between the parties. To create a contract there must be a common intention of the parties to enter into legal obligations, mutuaJ!y communicated expressly or impliedly. Such ·an intention ordinarily will be inferred when parties enter into an agreement which in other respects conforms to the rules of law as to the formation of contracts. It may be negatived impliedly by the nature of the agreed promise or promises, as in the case of offer and acceptance of hospitality, or of some agreements made in the course of family life between members of a family as in Balf<YWr v. Balfour. (1) If the intention may be negatived impliedly it may be negatived expressly. In this document, construed as a whole, I find myself driven to the conclusion that the clause in question expresses in clear terms the mutual intention of the parties not to enter into legal obligations in respect to the matters upon which they are recording their agreement. I have never seen such a clause before, but I see nothing necessarily absurd in business men seeking to regulate their business relations by mutual promises which fall short of legal obligations, and rest on obligations of either honour or self-interest, or perhaps both. In this agreement I consider the clause a dominant clause, and not to be rejected, as the learned judge thought, on the ground of repugnancy.

(I) [19I9]2 K. B. 571.


C. A. I might add that a common instance of effect being given 1923 in law to the express intention of the parties not to be bound

RosE AND in law is to be found in cases where parties agree to all the ~ Co. necessary terms of an agreement for purchase and sale, but

J. ,!~ ~- subject to a contract being drawn up. The words of the BRos., LD. preliminary agreement in other respects may be apt and

Atkin L.J. sufficient to constitute an open contract, but if the parties in so agreeing make it plain that they do not intend to be bound except by some subsequent document, they remain unbound though no fUPther negotiation be contemplated. Either side is free to abandon the agreement and to refuse to assent to any legal obligation ; when the parties are bound they are bound by virtue only of the subsequent document. On this, the main question, I agree with the judgments of the other members of the Court.

The plaintiffs have an aJternative claim against the defendants, J. R. Crompton. & Bros., Ld. They say that before 1913 they had been for years doing business with these defendants on the terms of binding agreements terminable on notice, and that if the arrangements made in August, 1913, did not result in contractual relations, the contracts in existence at that date have never been termin~ ated, and they sue for their breach. The defendants, Cromptons, by their defence, para. 12, content themselves with a denial that the agreements in question were in force in 1919, the date of the alleged breach. They do not allege notice to terminate; nor do they allege rescission, as I think technically they shonld ; but their case in substance is that the former agreements were rescinded by mutual consent when the arrangement of August, 1913, was made. H the document of August, 1913, were a contract, there wonld, I think, be no doubt that the trne inference in law wonld be that by entering into fresh contractuaJ obligations covering the whole field of the former contracts, the parties must be taken to have agreed to rescind the former contracts. But we have now to assume that there were no contractual obligations undertaken in 1913, and the question is, What was the effect of the new arrangement upon existing contracts 1


This seems to me to be the point reserved by Lord c. A.

Atkinson in Morris v. BarrM&: Go. (1), where he is considering 1923

the effect upon a written contract for the sale of goods of a RosE AND

subsequent parol contract inconsistent with the terms of ~ Co. the first. " If the parol agreement were absolutely void J. R. Cno:ra.

TON .rnD it might possibly be otherwise ; but owing to the terms of Bnos., LD.

s. 4 of the Sale of Goods Act, 1893, this latter question does Atkin L.J.

not arise in this case, and it is not, in my view, necessary to decide it., There seems to be no difference in principle between a void contract and an agreement which is not a contract ; the essence of the matter is that in neither case do the purported stipulations resnlt in legal obligations.

The question raised appears to me difficult. I think it quite conceivable that a man whose express object was that " assured arrangements should be made for the supply of paper for some considerable period ahead , might assent to an honourable understanding extending the period of agency, but might be unwilling to relinquish the only substantial rights he had in his existing agreements ; and I think the repeated reference in the record of the honourable under~ standing to the continued existence of present arrangements would encourage this view. On the other hand, I also think it conceivable, though I personally shonld think it improbable, that a man having the avowed object referred to would abandon his legaJ rights for the benefits he hoped to get under the new arrangement. But whatever the true view is, I am of opinion that this Court is not in a position to decide the question for three reasons.

It is plain from the decision in Morris v. BarM & Go. (2), adopting the judgment of Willes J. in the Exchequer Chamber in Noble v. Ward (3), that the question of rescission is a question of fact ; in Noble v. Ward (3) a question for the jury: see per Lord Finlay (4) and Lord HaJdane. (5) On this question of fact I do not think we are sufficiently informed of the relevant circumstances to pronounce. It

(1) [1918] A. C. 1, 30. (3) L. R. 2 Ex. 135. (2) [1918] A. C. 1. (4) [1918] A. C. 10.

(5) [1918] A. c. 18.


c. A. would be necessary to consider what the actual existing 1923 contracts were, as constituted by letters and modified, if at all,

RosEAND by subsequent correspondence and course of business. It ~ Co. would be further necessary to consider the circumstances J;:,~c:::nMP·under which the arrangement of July, 1913, was made, and Bnos., LD. the conduct of the parties under it. The question, though

Atkill L.J. raised in the pleadings and mentioned to the learned judge, was not considered by him, as his construction of the contract made it unnecessary. Some, but very few, of the relevant letters were read before us, the discussion being limited on behalf of the plaintiff for the reason hereinafter given. Under the circumstances, I should come to the conclusion that this matter should be ordered to be retried, even if the two following considerations were not, as I think they are, conclusive.

The judgment in this case provides for a declaration that the agreement of July, 1913, is a legally binding agreement, and that the orders mentioned in para. 18 of the statement of claim constitute legally binding contracts against the defendants, Crompton & Bros., Ld., and then provides that all other issues remaining to be tried should stand over for trial by Bailhache J. or other judge taking the Commercial List. This latter provision gave effect to the agreement of the parties expressed at the trial after the judgment was given. H the learned judge's judgment is reversed as to the declaration of the validity of the agreement of July, 1913, the point as to rescission is an issue remaining to be tried. It never has been tried by the learned judge and, in my opinion, should be tried by him, or some other judge taking the Commercial List, according to the terms of the judgment, and should not be tried by the Court of Appeal.

On the hearing of the appeal we stopped Mr. Wright, counsel for the plaintiff on this point, and intimated that we should send the action back to the learned judge for hearing on the question of rescission. Sir John Simon, in reply, adduced reasons why we should decide this point in his clients' favour, but he did not, as far as I am aware, alter our decision, and Mr. Wright was given no opportunity to discuss


the matter further. I ca.n see no justifica.tion under the C. A.

circumsta.nces for deciding the point in this Court, and I agree 1923

with the judgment of Bankes L.J. in this respect. RosE AND

The question of the orders given in 1919 requires separate ~eo. consideration. I myself am at a loss to understand how J. !,;. ~Ja· the provisions of the arrangement of 1913, whether binding BBOs., Ln.

or not, affect the matter. The· general relation of the parties Atkin L.J.

was that the plaintiffs were to be the sole vendors of the defendants' goods in the United States of America. Agree· ments constituting one party sole selling agent in a defined area of the other party's goods are, of course, common. Their special provisions vary ; often the agent enters into a correw lative obligation that he will not sell within his area any other maker's goods of similar description. Sometimes the manufacturer is under no legal obligation to sell any or any particular amount of goods to the selling agent; sometimes the agent succeeds in putting him under such an obligation. In this case the defendants by the honourable understanding entered into the vague engagement contained in the document which had as a basis the average turnover for the last three years before the agreement. But whatever the terms of the agreement or understanding, it contemplated, as nearly all such agreements do, that the actual business done under it should be done by particular contracts of purchase and sale upon the terms of the general agreement so far as applicable. The actual business was done in this case, as in countless others, by orders for specific goods given by the " agent " and accepted by the manufacturer or merchant. To see whether the orders given were accepted, the terms of the alleged acceptance have to be regarded. In this case I find that after a correspondence as to the possible requirements of the plaintiffs for the whole of the year, the plaintiffs, on January 24, 1919, write: "We have not yet determined the full quantity of paper that we will require from you and Brittains, but realizing 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.'' Enclosed were orders all addressed to Messrs. Cromptons : " Please enter our order for


o. A. the following goods and ship .... to us at .... " The blanks 1923 were all filled up by various directions, " When convenient ,

RosE AND "As soon as possible," February I, March 1, APril 1, up ~o ~ Co. December 1, 1919, and the destination was either New York

J . .!;. ~· or Toronto. The price and terms are left blank, and I agree BBos., LI>. with the learned judge that these are sufficiently defined

AtklnL.J. by the course of bus~esa between the parties. No question ariaea before ua aa to the provisions of s. 4 of the Sale of Goods Act, aa it was expressly waived by counsel for the defendants. The order proceeds : " Kindly acknowledge and state when you will ship." The last words obviously mean "Advise us when the time comes of any proposed shipment.'' The answer is on February 12, 1919: "We .... thank you for the 24 orders for 286 caaea of Messrs. Brittaiua' papers and 8 orders for 64 cases of our paper, to all of which we will give our best attention.'' Pausing there, this is the common formula of acceptance in the business world which has been treated as acceptance in countless cases since merchants first wrote to one another. It would be understood as an acceptance passing between two merchants where there was no obligation at all on the part of the vendor to accept. Why it should bear a different meaning in a case where there is an honourable understanding by the merchant to accept up to some vague limit, I am nnable to understand. The letter continues, " and Messrs . .Brittains write us with regard to the ordere for their papers that they are endeavouring to let you have deliveries this year np to at least the full 100 per cent. for the standard year ending February 28, 1918, but that at the moment conditions are particularly uncertain." This seems to me to relate to the business likely to be done over the whole year, and particularly to the plaintiffs' statement in the letter of January 24, 1919, under reply that they had not yet determined the full quantity of paper that they would require, and that they would send on further orders later. I read the whole letter as saying " We definitely accept these orders, and as to further orders for Brittains' paper we expect to be able to execute them up to the 1918 quantity, but this is not certain." I cannot think that any business


man rece1vmg the letter of February 12 would understand o. A.

that the writers were making their acceptance conditional 1923

on Brittaina choosing to supply the goods. If Messrs. RosE....,

te · th · FRANE Co. Cromptons meant to convey that af r usmg e preVIOUS v.

formula, they should have used much more definite language. J. ,!~ c::The remaining orders are order 4661, an order for goods Bno~ Lo. " as soon as possible," sent on February 7 and accepted Atkin L.J.

on February 25 : " We thank you for your order . . .. and we will endeavour to get this through during the next three or four weeks," and six further orders for Brittains' paper sent on March 11, three "at once," and three for July 1 accepted on March 29, 1919: "We th.ank you for the six orders for Messrs. Brittains' paper wh1ch we have passed on to them, and the same will have their best attention." It may be noticed that some of the orders so sent, and, as I think, so accepted, were in fact executed. The dispute is as to the large balance that remained un-executed. In my view this is a very plain case of acceptance of a written order, and I entirely agree with the judgment of Bailhache J. on this part of the claim. I should vary the order of Bailhache J. by declaring that the agreement of July, 1913, is not a legally binding agreement, but otherwise I should leave the order as it is, allowing the question of rescission to be tried un~er !~e order a~ one of the " other issues remaining to be tned, and I think that there should be no costs of the appeal, but as the other members of the Court have come to a different conclusion, the order will be as proposed by them.

Appeal allawed.

Solicitors for appellants : Rawle, Johnstone & Oo., for Addleskaw, Sons &; Latham, Manchester.

Solicitors for respondents : CoUins & Crosse.

NOTE. The draft e.greenient of January 1, 1913, mentioned above:-Agreement made and entered into this 1st day of January, 1913, by and

between Brittains Limited of Cheddleton, Staffordshire, England party of the first part James R. Crompton & Brothers Limited of Bury, Lancashire,

300

C. A.


England party of the second part and Rose & Frar.Jc Company of New York, United States of America party of the third part.

I. The parties of the first and second parts do hereby -constitute the pa.rty RosE AND of the third part their sole and exclusive agent, except as hereinafter otherwise

Fru..NK Co. provided, for the saJa in the United States of America and the Dominion of J R ~MF- Canada. of aJl papers for carbonizing purposes manufactured by the parties

• '1'0~ AND of the first and second parts or either of them during the term of this agreement B:aos., Ln. of the qualities hitherto supplied by them or either of them directly or

1923

indirectly to the party of the third part· upon the terms and conditions hereinafter specified.

2. The parties of the first and second part-s agree to deliver to the party of the third part in the City of New York or elsewhere in the United States of America or in the Dominion of Canada as may be designated by the party of the third part such quantities of paper for carbonizing purposes as may be ordered of them or either of them by the party of the third part for the use of the party of the third part or for further sale by it in the said countries upon prices to be agreed upon between the parties from time to time during the term of this contract, but not oftener than twice in each year, subject to all usual discountg ; it being the intention of the parties that the prices to be agreed upon shall be the lowest prevailing market prices and shall depend on the prices of raw material and labor (sic) for the time being and that such prices shall not be changed by the parties of the first and second parts excepting after six months' notice in writing to the party of the t·hird part of their intention to make any changes therein.

3. The parties of the first and second parts agree not to sell or deliver to any person or persons whom80ever wheresoever situate except to the party of the third part or upon the order of the party of the third part any blue carbonizing paper nor any paper known as No. 2 Carbonizing Paper of the party of the second part in any weight or quality, and to manufacture exclusively for the party of the third part papers heretofore marketed by the party of the third part by the designation ' R. & F.' and ' Sheepskin' or any other similar carbonizing paper manufactured according to the same formula as the said last specified paper under any other name whatooever,

4. The parties of the first and second parts agree that they will not manufacture sell or deliver for or to any person or persons wheresoever situate directly or indirectly excepting to the party of the third part any paper or papers not heretofore manufactured or sold by the parties of the first and second parts or either of them the manufacture of which may be suggested to them or either of them by the party of the third part.

5. Anything contained in paragraph 1 of this agreement to the contrary notwithstanding the parties of the first and second parts may continue to sell and deliver to F. S. Webster Company of Boston, Massachusetts, and to persons in the Dominion of Canada. who prior to the execution and delivery of this agreement have been customers of the parties of the first and second parts or either of them such papers as they have been supplying to the said purchasers.

6. The party of the third part agrees during the term of this agreement to purchase of the parties of the first and second parts annuaHy such quantities as will at least equal its average annual purchases of them during the calendar years 1910, 1911 and 1912; it being understood and agreed that the continu· ance of the sole agency heretofore created is conditioned upon such purchases.

2 K. B. KING'S BENCH DIVISION.

7. The parties of the first and second parte agree promptly to make all deliveries as and when required by the party of the third part, excepting and subject only to the act of God or unavoidable strikes and lock outs,

301

C. A.

192;1

8. Thia agreement shall continue in force for the period of three years RosE AND frow the date hereof and shall thereafter be deemed to be extended and FAANK Co. continued for a further period of three years unless before the expiration of the J. R. ~M.Pfirst period of three years notice shall ha.ve been given in writing by a.ny of roN AND

the parties to the others of a desire to terminate the same upon such expiration. BROs., Ln. 9. The parties of the first and second parts agree that they will promptly

turn over and refer to the party of the third part all enquiries which they or either of them may receive with reference to the use, sale and importation into the territory covered by this agreement· of the merchandise hereinbefore apecified, and that they will not during the term of thia agreement quote prices or offer the same for sale in the said territory excepting by and with the consent in writing of the party of the third part.

W.H. G.

LONDON COUNTY COUNCIL v. GAINSBOROUGH.

ShopH-Suwlo,y Trading-Shop open on Sa114ay after 8 p.m.-•; Every day other than Saturday"-" Weekdays other than Sat.urdaya "-Sunday Ob8ervance Aot, 1677 (29 Oar. 2, a. 7)-Skops Afts, 1912 to 1921-Shopa (Early Closing) Act, 1920 (10 & 11 Geo. 5, c. 58), Schroule, Part 1., Art. !Shops (Ea,.ly Closing) Aot (1920) Amendment Act, 1921 (11 &: 12 Geo. 5, o. 60), 8. 1.

By the Shops (Early Closing) Act, 1920, Schedule, Part I., Art. 1 (a): " Every shop shall be closed for the serving of customers not later than 8 o'clock in the evening of every day other than Saturday and not later than 9 o'clock in the evening on Saturday." The Shops (Early Clos.ing) Act (1920) Amendment Act, 1921, provides that the above Order shall not prevent " the es.le of fruit, table waters, sweets, chocolates, or other sugar confectionery, or ice-cream until 9.30 P.M. on weekdays other than Saturdays, and 10 P.M. on Saturdays." Upon an information against the occupier of s. confectionery shop for keeping his shop open between 8 and 9.30 l'.M. on Sunday evening:-

Held, that the words "every day other than Saturday" in Part I. of the Schedule to the Act of 1920 included Sun~ays, while the words "weekdays other than Saturdays" in the amend.iilg Act of 1921 did not include Sundays, and therefore that an offence had been committed contrary to the above prov:ision of the Act of 1920.

CASE stated by 1Ietropolitan Police Magistrate. An information laid on behalf of the appellants charged

the respondent that his shop, known as No. lOA, Marble Arch, in the County of Londo~. was not closed for the service of customers after the hour of 8 P.:\1. on Sunday,

1923 Aprill3.

2 k. b. king's bench division. - duhaime.org and... · 2 k. b. king's bench division. at...

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