Harvey v. Facey

Three telegrams passed between the buyers and the owner of a property called Bumper Hall Pen in Jamaica. The Privy Council decided whether the owner's reply quoting a price was an offer to sell.

Quick Revision

Parties

• Harvey and Another — plaintiffs and appellants. Solicitors in partnership at Kingston who sued for specific performance (an order to carry out a contract) of an alleged sale.
• Facey and Others — defendants and respondents. They include Larchin M. Facey, the alleged seller, and his wife Adelaide Facey.
• Mayor and Council of Kingston — the body against which the appellants also sought an injunction (a court order) to stop it taking a conveyance of the property from L. M. Facey.

Procedural History

1. The appellants sued for specific performance of an alleged agreement by L. M. Facey to sell Bumper Hall Pen. They also sought an injunction against the Mayor and Council of Kingston.
2. The respondents denied the contract and pleaded section 4 of the Statute of Frauds (a law requiring certain contracts to be in writing).
3. Curran, J. decided the case on 8 February 1892. He dismissed the suit with costs. He held that the alleged agreement did not disclose a concluded contract for sale and purchase.
4. The Supreme Court of Jamaica reversed that decree on 18 June 1892. It declared that a binding agreement had been proved against L. M. Facey.
5. The Supreme Court held that the appellants had not shown that L. M. Facey could sell without his wife's consent. It also held that she had not authorised the agreement. So the agreement could not be specifically performed.
6. The Supreme Court awarded the appellants forty shillings as damages against L. M. Facey for breach of the agreement. It also awarded costs in both courts against him.
7. On 5 July 1892 the Supreme Court gave leave to appeal to Her Majesty. The leave covered only the part of the decree based on L. M. Facey's want of authority to sell.
8. On 15 March 1893 Her Majesty in Council gave special leave to appeal on the damages awarded. The respondents were given liberty to contest the contract at the hearing without special leave.
9. The appeal was argued before six members of the Privy Council. Lord Morris delivered the judgment on 29 July 1893.

Facts

1. In early October 1891, L. M. Facey negotiated with the Mayor and Council of Kingston for the sale of a property called Bumper Hall Pen.
2. Facey had offered to sell it to the council for £900.
3. The council discussed that offer at its meeting on 6 October 1891 and put off deciding whether to accept it.
4. On 7 October 1891 Facey was travelling by train from Kingston to Porus.
5. The appellants had a telegram sent after him, addressed to him on the train for Porus. It asked whether he would sell Bumper Hall Pen and asked him to telegraph his lowest cash price. The reply was to be paid for.
6. The same day Facey replied by telegram: "Lowest price for Bumper Hall Pen £900".
7. The same day the appellants telegraphed Facey on the train at Porus. The words included: "We agree to buy Bumper Hall Pen for the sum of nine hundred pounds asked by you".
8. The last telegram also asked Facey to send his title deed so that the appellants could get early possession.
9. The appellants and Facey duly received all the telegrams.
10. The appellants are solicitors carrying on business in partnership at Kingston.
11. The appellants said Facey had power to bind his wife, Adelaide Facey, when selling the property.

Issues Raised

1. Did the three telegrams make a binding contract of sale between the appellants and L. M. Facey?
2. Was Facey's telegram giving his lowest price an offer to sell that the appellants could accept?
3. Could the appellants' last telegram be an acceptance, or was it only an offer needing Facey's acceptance?
4. Did the appellants' first telegram, asking whether he would sell, get an answer in Facey's reply?
5. Did L. M. Facey have power to sell the property without his wife, Adelaide Facey?
6. Were damages properly awarded, and were the appellants entitled to specific performance?

Arguments Contended

For the appellants (Sir Horace Davey, Q.C., and F. Safford)

• The telegrams were themselves a memorandum of contract sufficient to satisfy the Statute of Frauds.
• Facey's telegraphic form carried his signature, and he had authority to make it.
• The telegram the appellants received carried the sender's and receiver's names, written by the clerk in the ordinary course of business. That was a sufficient signature under the statute.
• If the telegrams satisfied the statute, the Court of Appeal was right that they proved a binding agreement.
• On power to sell, the property was bought with L. M. Facey's money. His wife was a mere trustee for him.
• He had always acted as owner. He could bind his wife's interest, if any, or at least his own.
• The part of the decree declaring a binding contract should be affirmed.
• The Mayor and Council of Kingston bought subject to that contract, in full or so far as it was enforceable.

For the respondents (Farwell, Q.C., and Stewart Smith)

• The judgment of Curran, J. should be restored and the Appeal Court's judgment discharged.
• Apart from L. M. Facey's authority to sell, the claim to specific performance and the effect of the Statute of Frauds, there was an initial difficulty.
• That difficulty was that the telegrams on their face did not disclose a completed contract.

F. Safford replied for the appellants. The report does not record the content of his reply.

Court's Reasoning

Lord Morris (for the Board)

The judgment has no numbered paragraphs. The steps below follow the order of Lord Morris's judgment.

1. Noted: the appellants sued for specific performance of an agreement for the sale of Bumper Hall Pen. The alleged agreement was said to be made by L. M. Facey, who was said to have power to bind his wife, Adelaide Facey.
2. Noted: the appellants also sought an injunction against the Mayor and Council of Kingston. It would stop them taking a conveyance of the property from L. M. Facey.
3. Noted: Curran, J. dismissed the action with costs. He held that the alleged agreement did not disclose a concluded contract.
4. Noted: the Court of Appeal reversed him and declared a binding agreement proved against L. M. Facey.
5. Noted: that court held that the appellants failed to prove L. M. Facey could sell without his wife, or that she had authorised him. So the agreement could not be specifically performed.
6. Noted: it awarded forty shillings damages against L. M. Facey for breach, with costs in both courts.
7. Noted: the Order in Council let the respondents contest the contract alleged in the pleadings without special leave.
8. Noted: the Board recounts the October 1891 negotiations, the council's meeting on 6 October 1891 and the three telegrams of 7 October 1891.
9. Held: it was unnecessary to consider several of the respondents' defences. Their Lordships concurred with Curran, J. that there was no concluded contract to be collected from the telegrams.
10. Held: the first telegram asks two questions. One is whether L. M. Facey is willing to sell. The other is the lowest price.
11. Why: the word Telegraph in the first telegram is addressed to the second question only.
12. Held: L. M. Facey replied to the second question only, and gave his lowest price.
13. Noted: the third telegram treats his answer as an unconditional offer to sell at the price named.
14. Held: the Board cannot treat Facey's telegram as binding him except by its terms, which are the lowest price. "Everything else is left open".
15. Held: the appellants' reply telegram cannot be treated as an acceptance of an offer to sell to them. It is an offer that required acceptance by L. M. Facey.
16. Held: the contract could only be completed if L. M. Facey had accepted the appellants' last telegram.
17. Noted: the appellants argued that Facey's telegram should be read as saying yes to the first question. There is nothing to support that.
18. Why: Facey's telegram gives "a precise answer to a precise question, viz., the price".
19. Held: the contract must appear from the telegrams. The appellants had to argue that Facey's answer implied a yes to the first question.
20. Held: the mere statement of the lowest price at which the seller would sell contains no implied contract to sell at that price to the persons making the inquiry.
21. Held: the Board will advise Her Majesty that the Supreme Court's judgment be reversed and Curran, J.'s judgment restored.
22. Held: the appellants must pay the respondents' costs of the appeal to the Supreme Court and of this appeal.

Authorities

The judgment cites no case law. Section 4 of the Statute of Frauds was pleaded by the respondents. The Board did not decide the Statute of Frauds point, because there was no concluded contract.

Also cited in footnotes: none.

Judgement

1. The Board will advise Her Majesty that the judgment of the Supreme Court be reversed.
2. The judgment of Curran, J., dismissing the suit, is restored.
3. The appellants must pay the respondents the costs of the appeal to the Supreme Court and of the appeal to the Privy Council.

Legal Principle / Ratio

A reply that only states the lowest price is not an offer to sell. If a buyer then says that he agrees to buy, that is a new offer, and it needs the seller's acceptance.

Key holding: the mere statement of the lowest price at which the seller would sell contains no implied contract to sell at that price to the persons making the inquiry.

Critical Analysis

Analysis based on the judgment text.

• The Board relies on the wording and layout of the first telegram. It reads the word Telegraph as attached only to the price question.
• The judgment does not say whether a reply of "yes" alone would have made the seller bound.
• The Board did not decide the Statute of Frauds point, the wife's authority or the damages. It left those defences aside because there was no contract.
• The judgment does not discuss why an inquiry about price is not treated as an offer in general. It rests on the facts of the three telegrams.

Significance

• The case shows that a statement of the lowest price contains no implied contract to sell to the person asking.
• It shows that each message in a series of negotiations must be read for what it actually says.
• The judgment is short and rests on the words of the telegrams. It states no wider rule beyond these facts.

Exam-Important Points

• Rule: a statement of the lowest price is not an offer to sell. Trap: quoting a figure does not answer a separate question whether he will sell.
• Rule: the appellants' last telegram was an offer to buy. Trap: it was not an acceptance, because there was nothing to accept.
• Rule: acceptance of an offer must be expressed. Trap: it cannot be implied. The Board said an acceptance of the first question could not be implied.
• Result: the Privy Council reversed the Supreme Court and restored Curran, J.'s dismissal. Trap: the Supreme Court had found a contract.
• Costs: the appellants paid the respondents' costs of both appeals.

Prepared from the full text of the judgment. The judgment has no numbered paragraphs. The citation is not in the judgment text.