CONTRACT LAW-I PROJECT

CASE COMMENTARY

ON

PAUL FELTHOUSE v BINDLEY

142 E.R. 1037

1862

BY:

SYED MOHAMMAD
KHURSHEED

13/B.B.A/054.

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 TABLE OF CONTENTS

FACTS OF THE CASE........................................................................................................................... 3

ISSUES FRAMED BY THE COURT. ................................................................................................... 5
DECISION OF THE HON’BLE COURT. ............................................................................................. 6
Willes J. .............................................................................................................................................. 6
Byle J. and Keating J. ......................................................................................................................... 7
REASON FOR THE DECISION OF THE COURT. ............................................................................. 8
PERSONAL ANALYSIS OF THE CASE. ............................................................................................ 9
CASE NOT A DEPARTURE FROM ANY PRECEDENT. ................................................................ 10

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 FACTS OF THE CASE

Paul Felthouse, the plaintiff, wanted to buy a sizing Europe horse from his nephew Mr. John
Felthouse. The letters for this contract that were exchanged between the parties carried the
following negotiations:

January 1st 1861.

“Dear Sir,— I saw my father on Saturday. He told me that you considered you had bought the
horse for 30l. If so, you are labouring under a mistake, for 30 guineas was the price I put
upon him, and you never heard me say less. When you said you would have him, I considered
you were aware of the price, as I would not take less.”

John Felthouse .

In reply to the aforementioned letter was:

January 2nd, 1861.“Dear Nephew,— Your price, I admit, was 30 guineas. I offered 30l., — 
never offered more: and you said the horse was mine. However, as there may be a mistake
about him, I will split the difference, — 30l. 15s. — I paying all expenses from Tamworth. You
can send him at your convenience, between now and the 25th of March. If I hear no more
about him, I consider the horse mine at 30l. 15s.”

Paul Felthouse.

To this letter the nephew i.e. Mr. Paul Felthouse did not sent any reply.

On the 25th of February, Mr. bindley, an auctioneer, auctioned the stocks of Mr. Paul
Felthouse. Although Mr. Paul, told bindley not to sell that specific horse but by mistake the
horse in question was sold with the rest of the stock, and fetching, which sum was handed
over to John Felthouse. On the following day, the defendant, being apprised of the mistake,
wrote to the plaintiff a letter seeking apology for his mistake and assuring that he would do
his best to get the horse back.On the 27th of February 1861, Mr. John wrote a letter to the
 plaintiff expressing his regret towards the sale of the horse by the defendant. He in his letter
also mentioned “….i said the horse is sold….” 1 Which acts as an evidence that he intended to
sell the horse to the plaintiff and was satisfied with the bargains that took place before 25th
February 1861. He also intended to compensate for the mistake of the defe ndant by
mentioning “…..i have one horse …..if you like to have it for a few months, say five or six,
 you are welcome to it, free of any charge, except the expenses of travelling: and if, at the end

1
Paul Felthouse v Bindley (1862) 142 E.R. 1037.

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of that time, you like to return him, you can; or yo u can keep him, and let me know what you
think he is worth…” 2.Mr. Paul Felthouse not satisfied with the compensation filed a case at
the court of common pleas against Mr. bindley for the conversion of the horse.

The case was heard by a three judge bench that included Willes J, Byles J and Keating J .

2
 Ibid.

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 ISSUES FRAMED BY THE COURT

The court from the aforementioned facts derived the questions that

• Whether or not the silence of Mr. John till 27th of February makes a valid contract
and thus gives the possession of the horse to Mr. Paul.?

• Whether or not the letter sent by Mr. John on 27th of February in which he showed
intention leads the formation of a contract?

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 DECISION OF THE HON’BLE COURT

The hon’ble court gave the majority judgement in the favour of the defendant and denied the
compensation for the plaintiff. The hon’ble judges gave the f ollowing judgments:

Willes J.

• Firstly, He was of the opinion there was no complete bargain on the 2nd of January
and it is also clear that the plaintiff had no right to impose upon Mr.john the sale of his horse
for 30l. 15s unless he chose to comply with the condition of writing to repudiate the offer.
Mr.john might, no doubt, have bound his uncle to the bargain by writing to him; the plaintiff
might also have retracted his offer at any time before acceptance. It stood an open offer and
so things remained until the 25th of February 3, when Mr. John was about to sell his farming
stock by auction. The horse in question being catalogued with the rest of the stock, the
defendant was told that it was already sold. It is clear, therefore, that Mr. John in his own
mind intended his uncle to have the horse at the price which plaintiff had named for 30l. 15s.
But he had not communicated such his intention to the plaintiff, or done anything to bind
himself. Nothing, therefore, had been done to vest the property in the horse in the plaintiff
down to the 25th of February, when the horse was sold by the defendant. It appears to that,
independently of the subsequent letters, there had been no bargain to pass the property in the
horse to the plaintiff, and therefore that he had no right to complain of the sale of the horse. 4

the letter of John Felthouse of the 27th of February, 1861, was not also admissible in
evidence against the defendant as after the sale of the horse by the defendant, it did not confer
title on the plaintiff; and that there was at the time of the alleged conversion no sufficient
memorandum in writing, or possession of the horse, or payment, to satisfy the statute of
frauds. The hon’ble judge cited the case Carter v. Toussaint5 and Bloxam v. Sanders 6 with
refrence to the abovementioned lines.

• Secondly, he mentioned that the letter sent by Mr. John to the plaintiff on 25th of
February may be considered as a completion of bargain under the statute of fraud but does
not constitutes the formation of a contract.

3
 Supra note 1.
4
 Ibid.
5
 Carter v Toussaint (1822) 5 B & Ald 855.
6
 Bloxam v. Sanders (1825) 4 B. & C. 941, 7 D. & R. 396.

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• Thirdly, by citing the case of Stockdale v. Dunlop 7 he mentioned that “assuming that
there had been a complete parol bargain before the 25th of February, and that the letter of
the 27th was a mere expression of the terms of that prior bargain, and not a bargain then for
the first time concluded, it would be directly contrary to the decision …”8 of the
aforementioned case in which it was held that there can be no compensation for the breach of
a contract which was made verbally and thus is incapable for being enforced 9.

At the end, on the contrary to his whole judgement he stated that by taking the case of Coats
v. Chaplin10 as an authority, there can be a remedy for the plaintiff against the defendants . In
this case “the traveller of Morrisons, tradesmen in London, verbally ordered goods for
 Morrisons of the plaintiffs, manufacturers at Paisley. No order was given as to sending the
 goods. The plaintiffs gave them to the defendants, carriers, directed to Morrisons, to be taken
to them, and also sent an invoice by post to Morrisons, who received it. The goods having
been lost by the defendants' negligence, and not delivered to Morrisons, — it was held that the
defendants were liable to the plaintiffs.” 11 In the case in hand it can be observed that the
 plaintiff sent a letter to Mr. John for the purchase of the horse. Mr. John also intended to sell
the horse to the plaintiff but due to the negligence on behalf of the third party i.e. the
defendant, the plaintiff was not able to get the horse. On this ground and citing the above
mentioned case the plaintiff may incur the compensation for the conversion of the horse.

Byle J. and Keating J.

Both the hon’ble judges were of the same opinion as of the aforementioned judge ment. In his
 judgement, Justice Keating emphasised and considered that the case can be judged by finding
that who was in possession of the horse at the time when the sale took place and only
question in case that arises is: Whether on 25th of February 1861, when the sale of the horse
took place the plaintiff had the possession of the horse or Mr. John. The hon’ble court found
that there wasn’t any contract between the parties directing the court to the conclusion that
the possession of the horse was with Mr. John and thus the plaintiff cannot claim for any
compensation on the basis of conversion of the horse by the defendant.

Final judgement

Thus, the decision to this case was delivered in the favour of the defendant and no remedy or
compensation was awarded.

7
 Stockdale v. Dunlop (1840) 6 M. & W. 224.
8
 Supra note 1..
9
 Supra 3.
10
 Coats v. Chaplin , 3 Q. B. 483, 2 Gale & D. 552.
11
 Supra note 1.

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 R EASON FOR  THE DECISION OF THE COURT

For the case in hand the argument largely centred on the question of whether sufficient
memorandum had been made to pass title to the uncle under the requirements of the Statute
of Frauds for which the plaintiff would be able to claim for conversion. To prove such
conversion the plaintiff had to prove that he possessed sufficient title of the horse in turn
which depends upon the fact that whether there was a contract or not.

The hon’ble court found that there had been no such contract was formed between the
 plaintiff and Mr. John and henceforth no memorandum that passes the title of the horse to the
 plaintiff was formed. Even if the letter of 27th of February 1861 is considered as an evidence
it was a mere expression of the bargain between the plaintiff and Mr. John and such bargain
cannot constitute the formation of a contract or give rise to any compensatory remedy to the
 plaintiff if seen in accordance with the principles formed in the case of Stockdale v Dunlop .
On the basis of this reasoning the court of common pleas held that the plaintiff cannot get any
relief in the form of compensation.

This judgement was affirmed by the exchequer court unanimously .

The principle or the ratio decidendi of the case formed is

“Mere silence to an offer, even though the party to which the offer is made intended to
accept the offer ; does not explicitly accepts or does not show acceptance by any means does
not form a contract between the parties.”

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 PERSONAL ANALYSIS OF THE CASE

The case being based upon the fact that if a party even tough intending to accept the proposal
of the other party does not shows this by his speech, cannot for m a contract. Acknowledging
the judgement given by the honourable judges it can be said that the facts of the case and in
the view of the precedent cases the judgement was very apt.

 The first contention is, The judgement unambiguously clears the fact that the contract
cannot bind either of the parties to the contract . The fact that Mr.john intended to sell
the horse to the plaintiff of the case leads to dilemma that will he surely sell the horse
or not? Such term in cloud cannot be held as a binding contract for ei ther of the
 parties.
 The second contention is, that party cannot impose the offer on the other par t. The
 phrase “If I hear no more about him, I consider the horse mine at 30l. 15s.” 12
imposed Mr. John to enter into a contract with the plaintiff. It is thus, unjustifiable to
 bind a party to a contract unilaterally.

 Nevertheless, it is submitted that judgment was sound but the argument of professor Miller
criticizing the judgment also seems relevant. He argues

“The common pleas held for the auctioneer on the grounds that the plaintiff had no title to
 sue since the date of the auction the nephew had not effectively accepted the offer. Given that
he admittedly told the auctioneer that the horse was reserved for his uncle and that the latter
had equally assumed that it was so. It is not clear that why anything further should be
regarded as essential to the formation of a contract. On balance it can be supported that the
approach of the common pleas was wrong in principle and the actual result of the case can
only be supported because there had been no delivery, part payments or memorandum in
writing to satisfy the requirements of the statute of fraud.” 13

Hence, from the aforementioned argument by professor miller the flaw in the judgment can
 be expressly showeth that when Mr. John himself mentioned that “...I said that horse is
 sold…”14 (with reference to the horse in question) to the defendant it can be inferred that he
felt the contract to be complete on his part which was the same in the mind of the plaintiff.
Therefore there was a definite meeting of minds of the party on the contract. This forms a
clear evidence that there was a contract between the parties. If the court had given the
 judgment only on the reasoning that there was no written contract or any payment made by
the party that could satisfy the statute of fraud, then, the reasoning behind the judgement
could have been considered effective.

12
 Supra note 1.
13
 Prof. C.J. Miller, The modern law review, Volume 35, 489 (1972).
14
Supra note 1.

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 CASE NOT A DEPARTURE FROM ANY PRECEDENT

The case in hand is not a departure from the any precedent case but an issue in itself without
any precedent leading to the question of law. Although in the case of Brodgen v Metropolitan
Railways15 was a bit similar to this but the objective question in the case was not that
whether silence to an offer would lead to acceptance but whether the conduct of a person lead
to the acceptance. The judgement remained within the framework of conducts and remained
silent on the fact that is dealt in the present case.

Though the judgement has been criticized on the basis that there was a clear intention of Mr.
John it has been accepted as an authority.

15
Brodgen v Metropolitan Railways (1877) 2 APP cas 666.

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