Supreme Court of Canada
Morrow Screw & Nut Co. v. Hankin, (1918) 58 S.C.R.
74
Date: 1918-12-23
John Morrow Screw
and Nut Company (Defendant) Appellant;
and
Francis Hankin
(Plaintiff) Respondent.
1918: November 26; 1918: December 23.
Present: Sir Louis Davies C.J. and Idington,
Anglin, Brodeur and Mignault JJ.
ON APPEAL FROM THE SUPERIOR COURT OF THE
PROVINCE OF QUEBEC, SITTING IN REVIEW.
Contract—Memorandum in writing—Conditions
missing—Parol evidence —Relation of documents—Statute of Frauds—Usage of trade—
Option—Provincial laws in Canada—Judicial notice—Art. 1235 C.C.
The respondent agreed by contract in the form
of a letter to appellant' and "approved" by him, to purchase steel
drills, without mentioning any "prices" but merely quoting the sizes
and a rate of discount. It was stipulated that "the value of this
contract" would "be from $25,000 to $35,000," and that "our
shipping instructions, invoicing instructions, etc., given on July 10th,
1915," would "hold good." The letter of July 10th, 1915,
contained an express reference to a standard drill price list, in use by the
whole drill trade of North America.
Held, that the
respondent had the right to establish by parol evidence that the discount
mentioned in his letter meant, according to the usage of trade, discount off
the standard drill prices and so to prove that the contract in writing
contained all essential terms.
Held also,
that, according to the terms of the agreement, the respondent was bound to
purchase goods to an amount of $25,000, with the right to order an additional
amount of $10,000 which the appellant could not refuse to supply, the option
being entirely with the respondent.
Per Davies
C.J. and Anglin, Brodeur and Mignault JJ.—The written agreement between the
parties was intended not to be a mere option revocable until acted upon, but an
actual agreement entailing mutual obligations.
Per Anglin, Brodeur
and Mignault JJ.—While the proof of a contract, within Art. 1235 C.C, must as a
matter of procedure be made according to the lex fori, its validity
depends upon the lex loci contractus.
Per Anglin, Brodeur
and Mignault JJ.—The laws of the Province of Ontario and those of the Province
of Quebec as to the requirement of writing in the case of contracts such as in
this case differ in their effect.
[Page 75]
Per Anglin,
Brodeur and Mignault JJ.—The Supreme Court takes judicial notice of the
statutory or other laws prevailing in Provinces of Canada other than that in
which the action or proceeding under appeal to it has been instituted. Logan
v. Lee, (39 Can. S.C.R. 311), followed.
Judgment of the Court of Review [Q.R. 54 S.C.
208], affirmed.
APPEAL from the judgment of the Superior
Court of the Province of Quebec, sitting in review at Montreal, affirming the judgment of
the trial court and maintaining the plaintiff's action with costs.
The material facts of the case are fully
stated in the above head-note and in the judgments now reported.
W. N. Tilley K.C. for the appellant.
Eug. Lafleur K.C. and Weldon for the
respondent.
The Chief
Justice.—This action was one brought in the Superior
Court of the Province of Quebec by the plaintiff, respondent, Francis Hankin,
against the defendant, appellant, to recover damages alleged to have been
sustained by him owing to the refusal of the defendant to carry out an alleged
contract made by him with plaintiff to manufacture and deliver to plaintiff a
stipulated quantity of "twist drills of cast steel."
The Superior Court sustained the plaintiff's
action and awarded the plaintiff $10,032.31 as damages, which judgment was
confirmed "in all things" by the Court of Review and from which
latter judgment this appeal is taken.
From the evidence at the trial, it appeared that
the appellant, defendant, issued to the trade periodically a catalogue
accompanied by a standard twist drill price list which is a list in use by all
manufacturers of twist drills in the United States and Canada. On this
[Page 76]
list the gross prices remain unchanged from year
to year. As net prices are constantly fluctuating, they are quoted by way of
discounts of greater or less amount from these standard gross prices. This
manner of quoting, the plaintiff contended and the trial judge found, was well
established in the trade so that dealers, when buying or selling, quote merely
the kinds or sizes of the drills referred to and the rate or rates of discount
which is understood as referring to the standard list and thus establish the
prices agreed on.
Plaintiff, through his manager Hill, had,
several times before the contract in question here, entered into contracts with
defendant for the purchase of drills, the negotiations being made "and
concluded either with Coulter, the president, or with Horton, who styled
himself variously as "assistant to the president" or the
"manager," or as "acting for the president."
One of these earlier contracts was still in
force and partially completed in August, 1915, when the contract now in
question was made.
On August 21st, 1915, plaintiff's manager, Mr.
Hill, went to Ingersoll and entered into negotiations with Mr. Horton for the
purchase of cast steel twist drills of the net value of from $25,000 to
$35,000. The negotiations were closed at the same meeting and a written
contract was at once prepared in the form of a letter from plaintiff to
defendant signed by Mr. Hill for plaintiff, marked "accepted" at the
foot and signed by the defendant company per Mr. Horton. This contract is the
basis of plaintiff's suit and is in the following terms:—
Ingersoll,
Ontario, Aug. 21, 1915.
The John Morrow Screw & Nut Coy. Ltd.
Ingersoll, Ont.
Gentlemen:
As per my conversation with your Mr. Horton
this morning you will enter our contract as follows:
[Page 77]
Best quality Cast Steel Twist Drills,
neither Drills, Packages or Cases to bear any other mark excepting size.
The value of this contract to be from
twenty-five thousand ($25,000) to thirty-five thousand dollars ($35,000) net.
Specifications to commence about three weeks hence and shipment of the whole
lot is to be made before the end of March, 1916.
Discounts as follows:
|
Straight Shank Jobbers Drills, inch
sizes..............
|
80,
10, 3½%
|
|
Taper Shank Jobbers Drills, inch
sizes.................
|
80,
10, 3½%
|
|
Straight Shank Taper Length Drills, inch
sizes.........
|
80,
10, 3½%
|
|
Drills ½" Shanks (both right and
left hand Twist)......
|
80,
10, 3½%
|
|
Drills ⅝" Shanks (both right
and left hand Twist)......
|
80,
10, 3½%
|
|
Bit Stock
Drills....................................
|
80,
10, 3½%
|
|
Number
Sizes......................................
|
80,
10, 3½%
|
|
Letter
Sizes........................................
|
80, 10,
3½%
|
|
Taper Square Shanks (both right and left
hand Twist)..
|
76%
|
Delivery F.O.B. Montreal.
Terms of Payment—Spot cash against invoice
with original Inland Bill of Lading attached.
Our Shipping instructions, Invoicing
instructions, &c., given on July 10th, 1915, to hold good unless modified
by us later.
Yours truly,
Francis Hankin & Co.
Per A. H.
Hill.
Accepted
John Morrow Screw & Nut Co. Limited,
Horton,
For President
and Manager.
The letter of July 10th, 1915, referred to at
the close of the above letter or contract, embodied the terms of one of the
earlier contracts between the parties for the purchase and sale of drills and
contained with the shipping and invoicing instructions an express reference to
the standard twist drill price list on which all discounts are placed.
After plaintiff sent in his first order or
specifications within the stipulated three weeks, defendant began expressing
its fears that it would not be able to "live up" to the contract and
asking plaintiff to consent to cancel it, which plaintiff refused to do,
whereupon, defendant, by its letter of October 15th, formally declared it would
not carry the contract out.
Plaintiff thereupon invited tenders from other
manufacturers, for the same quantities and kinds of
[Page 78]
drills, and eventually closed a contract with
the Cleveland Twist Drill Company for the kinds and quantities the defendant
had undertaken to supply. The defendant was kept advised of the calls for
tenders and of the Cleveland company's quotations and . was formally put in
default again by the plaintiff before closing with this latter company.
The amount paid by plaintiff to the Cleveland
company for the kind and quantity of drills the plaintiff had contracted to
supply was $10,032.31 above that which the contract, if binding, with the
defendant provided for and this amount is the damages claimed by him and
adjudged by the court.
Mr. Tilley for the appellant contended first
that the alleged contract was an offer or option merely and was withdrawn, but
I really do not think that such a construction is at all reasonable if it is
once held that the contract is in other respects valid.
He further submitted that Horton had no
authority to enter into the contract, but I am also of opinion that under the
evidence there is no reasonable doubt of his authority to do so. It may be
observed that Horton himself was not called as a witness and the only evidence
given on defendant's part was that of the president himself which fell far
short in the face of the proved facts of shewing want of authority on Horton's
part. I think it clearly shewed that the company always recognized Horton, at
any rate in the president's absence, and held him out as having full authority
to transact such business as was involved in the entering into of such contracts
as the one in question.
There remained his main contention that the
contract was one required by the Statute of Frauds to be in writing and that
oral evidence of the bargain to supply what was wanting in the written
instrument could not be given.
[Page 79]
Both parties, he said, agreed that there was no
substantial difference between the law of Quebec and that of Ontario on the
subject. The "prices" to be paid under the alleged contract were not
stated in it nor was there any reference in it to the "standard list of
prices" from which the prices of each class of articles stipulated for in
the contract could be ascertained.
But I do not think such absence is necessarily
fatal provided it can be supplied either by another document to which direct
reference is made in the contract so that the two can be read together and so
constitute a complete memorandum, or in the absence of direct reference in one
to the other, if the two documents can be connected together by reasonable
inference.
In the case of Doran v. McKinnon, I had
to examine fully the authorities on the point and to express my conclusion from
them and it was as above stated.
Applying this rule to the case before us we have
the following facts proved: That in the twist drill trade there is only one
price list on the whole North American continent; when either buyers or sellers
quote discounts on drills in their orders or acceptances of orders, they have
this price list in their minds and both parties understand that, when they
refer to discounts on prices, they mean discounts on the gross prices given in
the standard drill price list—necessarily in use by all manufacturers of twist
drills and all dealers in the same. This is made abundantly clear by this
uncontradicted evidence of Mr. Hill.
The discounts quoted in the contract above set
out manifestly refer to some amounts or prices. The letter of July 10th, 1915,
referred to in the last paragraph of
[Page 80]
the contract, does mention the standard list
along with the prices on which the discounts were to be made. The result is
that the standard list of prices from which the discounts mentioned in the
contract are to be deducted should and must be connected together by reasonable
inference as having necessarily been in the mind of both parties to the
contract when entered into and could not possibly have reference to anything
else and that being so it is sufficient under the authorities to satisfy the
statute.
As to the contention with respect to the meaning
of the words "inch sizes" which I remark were not "inch
size" merely, I think in the connection in which they were used they were
trade terms known and well understood in and by the trade and that the weight
of testimony as to their meaning was strongly in favour of the contention that
"inch sizes" included drills in fractions of an inch or more than an
inch. In the respondent's factum it is stated and was not challenged on the
argument that
of the three kinds of drills described in
the contract as of "inch sizes" the first two were known as jobbers
drills.
The price list shews and Mr. Young, a witness
called by appellant, swore that jobbers drills were only listed in
"fractional" sizes and run up to only half an inch in diameter. If,
therefore, appellant's interpretation of the meaning of the term is the correct
one he was offering and agreeing to sell jobbers drills of one inch in
diameter, a thing which it did not manufacture and which did not exist in the
trade.
It must be remembered that this objection was
never raised until the trial, when the defendant applied to amend his plea so
as to cover it. I think the learned trial judge correctly found the trade usage
of the words to be that they covered fractional sizes.
[Page 81]
Mr. Tilley contended with respect to the damages
that in any event they could only be estimated on the failure of the defendant
to deliver the $25,000 value of the goods up to which the plaintiff bound
himself to order; and did not cover the other ten thousand in value which was
only an option given to the plaintiff; a minimum and a maximum figure was
stated. The plaintiff was bound to order $25,000. He had the right to order
another $10,000, but there was no right on the vendor's part to refuse to
supply the $35,000 value if ordered, the option was one entirely with the purchaser.
The defendant repudiated the contract absolutely
on the 16th October and in a letter of that date suggested that plaintiff
purchase the drills" in the United States. The plaintiff replied on the
19th saying that in order to protect his interests he would proceed to purchase
the drills elsewhere, charging the difference to defendant.
He called for tenders for from $25,000 to
$35,000 in value of drills and notified the defendant of the result of the
tenders in letter of 27th October.
Later, on 16th November, he again wrote
defendant as follows:—
In reference to our letter of 27th October,
we find that in covering for only $25,000 to $35,000 of drills with Cleveland
Twist Drill Company, on account of the increased price which we have had to pay
this will not enable us to purchase the same quantity of drills as would be the
case against your contract. We have therefore covered for an extra ten thousand
to fifteen thousand and desire you to be notified of the fact.
In other words, plaintiff substantially notified
the defendant that he had exercised his option up to the $35,000 and that as
the defendant had definitely and absolutely repudiated the contract he would go
into the market and purchase up to that figure for the best price he could and
hold the defendant responsible for any loss he would sustain.
[Page 82]
Under these circumstances I think the assessment
of the plaintiff's damages was made on a correct basis and the appeal should be
dismissed with costs.
Idington J.—When the terms used in the alleged contract have been, as they
were, duly and correctly interpreted, we ought, I submit, to find it quite
intelligible and answering all the requirements of the Statute of Frauds.
But if it is attempted to so extend that as to
incorporate something which is not obviously intended to be incorporated
therewith, a difficulty arises in the way of him making the attempt, but not in
our finding a contract.
There is a contracting letter of a date anterior
to this contract which is referred to in the last sentence thereof. So far as
same can, clearly and reasonably, be held to have been indicated thereby as the
subject of incorporation, I see no difficulty in doing so. I refer to the
"shipping instructions," "invoicing instructions," &c.
The "&c.", may, not unreasonably,
be taken to mean the like kind of terms and thereby include the sentence in the
letter referred to, and that falling therein under the heading "Re
invoicing" "Drills to be billed at 80, 10, 3½ of your standard
lists," and thus make clear that it was the appellant's standard lists of
all sorts of inch sizes whether single or multiples or fractions thereof, which
were had in view in contracting.
When that is done appellant says confusion is
produced thereby of such a nature that you cannot find a definite contract, or
at least one such as necessary to find in order to cover or lay a foundation
for assessing a great part of the damages in question.
The sizes of the drills named in the contract
falling
[Page 83]
under the phrase "inch sizes" being of
doubtful import led to the introduction of evidence of experts and I cannot say
there is error in doing so or in that accepted by the learned trial judge.
Indeed, if that evidence is admissible, which did not seem to be seriously
questioned, I should say it is quite unnecessary to raise such issues as
started upon the question of inch sizes unless to lead the court into the
wilderness of confusion and succeed thereby.
For my own part I incline to think that the
question so raised is of no consequence when we find in law that the measure of
damages is the difference between the price or prices agreed upon and the
market price at the time when the buyer was entitled to get delivery, and that
seems to have been the same proportionate rise, or so nearly the same, in all
the classes of tools in question, that the result of the breach of contract
would be the same if measured by any selection the respondent saw fit to make.
It is not his buying or bargain that is the
measure of damages, though that may be some evidence of market price and in
some circumstances he may be bound to avert or minimize loss.
His power of selection under such a contract as
this of course gives, or is liable to give, rise to confusion of thought, and
had there been in fact a substantial deviation of the percentage of rise in the
respective market values of the different classes of goods in the list from
which the respondent was entitled to select, a difficult question might have
arisen. But in regard to drills up to an inch and a half sizes at least, there
would seem to have been no difference of percentage of rise in any class and
respondent bought quite enough below that margin to fulfil his right to damages
on the $35,000 limit of his bargain, without coming into the
[Page 84]
field of variation of percentages of rise and
thus is eliminated any question turning upon the multiple of inches.
There was a contract definitely binding
respondent to buy at least up to $25,000 worth, and the appellant to sell not
only that much but also up to $35,000 worth if respondent should so select.
It seems at first blush that it is unfair to
have the seller bound to such an extent when the buyer is not.
If the market accidentally goes one way there is
a possibility of the one party to a contract suffering thereby, having to bear
a heavier load than the other party might have to bear in case of the market
going the other way.
That, however, is the result which the parties
agreed to observe and in the light of which they must be held to have
deliberately bargained to meet the consequences. The vendor in consideration of
a supposed certainty of anticipated profit, coupled with a wider profitable
possibility, saw fit to bind itself and so end all question.
There are numerous cases to be found in
Blackburn on Sales, at pages 236-244, illustrating incidentally the law on the
subject.
As to the alleged want of authority on the part
of Horton, I should have hardly thought it arguable in light of all that had
transpired between the parties thereto before and after the making of the
alleged contract so clearly recognizing his ostensible authority.
The questions of a contract, and of the measure
of damages being . determined against the appellant, there seems, therefore, no
alternative but a dismissal of the appeal with costs.
Anglin J.—The defendants appeal from a judgment of the Court of Review
affirming a judgment of the
[Page 85]
Superior Court holding them liable in damages to
the extent of $10,032.31 for breach of contract. The grounds of appeal are that
the alleged contract was not such in fact but a mere revocable option; that it
was not "good" because of the omission from the writing evidencing it
of the element of prices; that, although the plaintiff is claiming damages for
failure to supply goods of sizes of fractional parts of an inch, "inch
sizes" only are specified in the letter of August 21st, and they do not
include sizes of fractional parts of an inch, and the price list relied upon
and put in evidence contains no prices for sizes of an inch or multiple
thereof; and that the agent of the defendants, who signed the document relied
on, exceeded his authority.
Upon the whole evidence I have no doubt that the
plaintiff's letter of the 21st of August, 1915, with the defendant's acceptance
upon it, was intended by the parties not to be a mere option revocable until
acted upon, but to be an actual agreement entailing mutual obligations. Those
obligations were that the plaintiff on the one hand would order not less than
$25,000 worth of goods of the descriptions therein set forth and that the
defendants on the other would supply goods so to be ordered, up to, but not
exceeding, the value of $35,000. The plaintiff was to send in specifications of
the quantities of each of the classes of goods set forth that he might require in
sufficient time to enable the defendants
to ship the whole lot before the end of
March, 1916.
The prices, subject to the discounts specified,
were to be those stated in the "standard drill price list," which the
evidence shews is used by the whole drill trade of North America. The
consideration for the defendants assuming an obligation to furnish such drills
as might be ordered, within the limits specified,
[Page 86]
was the plaintiff's undertaking to order, within
a period capable of ascertainment, at least $25,000 worth of such drills.
I have so far dealt with the case apart from any
difficulty presented by the 17th section of the Statute of Frauds. While the
proof of a contract within Art. 1235, C.C. must as a matter of procedure be
made according to the lex fori, its validity depends upon the lex
loci contractus, which in this case is Ontario. Mr. Tilley's contention
that the laws of Ontario and Quebec in regard to the requirement of writing in
the case of contracts such as that under consideration are the same in effect
is not quite correct, although article 1235 C.C. is no doubt founded on the
Statute of Frauds. Munn v. Berger.
Under the 17th section of the Statute of Frauds, an absence of the prescribed
memorandum, if it does not affect the validity of the contract itself (Leroux
v. Brown),
presents the . same obstacle to the enforcement of it by action as arises under
the 4th section. Maddison v. Alderson.
Under article 1235 C.C., the question would appear to be purely one of
evidence and the Quebec courts, quite logically, do not require a defendant to
plead a mere absence of evidence which the law obliges the plaintiff to supply.
He may ore tenus object to the admissibility of parol evidence when
offered by the plaintiff. Article 110 of the Code of Civil Procedure is not
regarded as applicable. English and Ontario practice is to the contrary.
English Rule 211, o. 19, r. 15; Ont. Con. Rule (1915) No. 143.
Another difference is suggested by decisions of
the Quebec courts (as to the soundness of which it is of course quite
unnecessary now to express an opinion),
[Page 87]
that an admission of the contract by the
defendant either in his pleadings or in giving evidence will satisfy article
1235 C.C. Guay v. Guay.
A judicial admission is complete proof against
the party making it.
Article 1245 C.C. See too Sheppard v. Perry.
A plaintiff, in an English or Ontario court,
cannot avail himself of a like admission against a defendant who sets up the
statute as a defence. Lucas v. Dixon.
Still another difference arises from the use of the words "accepted or
received" in article 1235 C.C., in lieu of the words of section 17 of the
English statute: "Accept * * * and actually receive." Mr. Justice
Fournier discusses this important departure in Munn v. Berger.
But a defence of invalidity according to foreign
law must be pleaded under each system alike (Lafleur, Conflict of Laws, 23).
Here the only plea is that their acceptance of the plaintiff's letter of the
21st of August, directing the booking of his contract in the terms therein
stated, does not by the law of Ontario constitute a valid contract enforceable
against the defendants. Two professional gentlemen called as expert witnesses
for the defence based their opinions that the contract was invalid under Ontario
law—or rather that there was no contract—solely upon absence of mutuality of
obligation. They regarded the document sued upon as a mere option. They were
neither asked for, nor did they give, evidence as to the 17th section of the
Statute of Frauds. The professional gentleman called by the plaintiff in
rebuttal upheld the contrary view. Merely incidentally he said on
cross-examination:—
A contract for the sale of goods does not
require to be in writing. It can be oral.
[Page 88]
(No doubt he meant, in cases within the 17th
section of the statute, if it be not pleaded or if its alternative requirements
be fulfilled.) He added that the element of price missing from the letter in
question was sufficiently supplied by implied reference and by the evidence explanatory
of the meaning of the discounts stated, which was received subject only to an
objection based neither on the requirements of the Statute of Frauds nor on
those of article. 1235 C.C. There was no attempt to meet this evidence by
calling testimony in sur-rebuttal. The learned trial judge apparently did not
regard the validity of the contract under the 17th section of the Statute of
Frauds as being an issue. He treated the omission of direct reference to the
standard price list from the letter as raising an issue of contract or no
contract independently of and apart from any question as to the sufficiency of
the written evidence, and he found upon it, in my opinion quite rightly,
against the defendants. He makes no allusion to the sufficiency or insufficiency
of the letter of August 21st to satisfy the 17th section of the Statute of
Frauds; nor is that question touched upon in the judgment of the Court of
Review.
Yet in this court counsel for the appellants
chiefly relied upon the absence of a reference to the standard drill price list
in the letter of August 21st as affording his clients a defence under the 17th
section of the Statute of Frauds. Without so deciding I shall assume that that
defence was sufficiently pleaded to meet the requirements of Quebec procedure,
although, in Ontario, it would be clearly otherwise, and, since counsel for the
plaintiff did not object, I shall also assume that it is open to the appellants
to invoke this defence in this court notwithstanding the apparent failure to do
so at the trial.'
[Page 89]
Upon the evidence before it, the Superior Court,
being bound to treat the construction and effect of the 17th section of the
Statute of Frauds as a matter of fact to be established by evidence, could not
have done otherwise than hold that its requirements had been satisfied. Mr.
Hamilton Cassels so deposed and his testimony remained uncontradicted. The same
is true of the Court of Review. See cases collected in Beauchamp, Rep. de Jur.
Can., vol. 2, col; 2067, Nos. 326-7. Although we are required to render the
judgment which the court appealed from should have rendered ("Supreme
Court Act," section 51), it is the settled jurisprudence of this court
that it
is bound to follow the rule laid down by
the House of Lords in the case of Cooper v. Cooper, in
1888, and to take judicial notice of the statutory or other laws prevailing in
every province and territory in Canada, suo motu, even in cases where
such statutes or laws may not have been proved in evidence in the courts below
and although it might happen that the views as to what the law might be as
entertained by members of the court might be in absolute contradiction of any
evidence upon those points adduced in the courts below.
Logan v. Lee. This
view was tacitly acted upon in Garland v. O'Reilly. This
conception of the functions of this court as "an appellate tribunal for
the whole Dominion" is in harmony with the Imperial Act of 1859, 22 &
23 Vict. ch. 63, noted by Mr. Lafleur at page 34 of his work. See too Bremer
v. Freeman.
It was in my opinion open to the plaintiff to
establish by parol evidence, as he did, that the discounts stated in his
letters of the 21st of August (meaningless in themselves) according to the
usage of the trade meant and could only mean discounts off the standard drill
prices according to the list in common use throughout North America and that
both the parties must have
[Page 90]
so understood. The case seems to me to fall
clearly within the principle of the decision in Spicer v. Cooper, where
parol evidence was held admissible to shew that a sale of fourteen pockets of
Kent Hops at 100s. meant at 100s. per cwt. according to the usage of the hop
trade.
In Newell v. Radford, Bovill
C.J. says, at p. 54:—
It has always been held that you may prove
what the parties would have understood to be the meaning of the words used in
the memorandum and that for this purpose parol evidence of the surrounding
circumstances is admissible.
Byles J. says at p. 55:—
Evidence has been held admissible to settle
the meaning of the price or of the quantity of goods sold mentioned in the
memorandum.
In Macdonald v. Longbottom, parol
evidence was admitted to shew that "your" wool meant wool which the
plaintiff had purchased as well as wool clipped from his own sheep. In Hutchison
v. Bowker,
Parke B. says:—
If there are peculiar expressions used in a
contract which have, in particular places or trades, known meanings attached to
them, it is for the jury to say what the meaning of these expressions was.
Of course the jury must act on evidence. Alexander
v. Vanderzee,
Ashforth v. Redford.
See also cases collected in Benjamin on Sales, 5th ed., p. 236. In Blackburn on
Sales, 3rd ed., the rule is thus stated at p. 51:—
The general rule seems to be, that all the
facts are admissible which tend to shew the sense the words bear with reference
to the surrounding circumstances concerning which the words were used, but that
such facts as only tend to shew that the writer intended to use words bearing a
particular sense are to be rejected.
See too Addison on Contracts (11th ed.), pp. 69
& 70.
[Page 91]
I prefer to rest my conclusion that the letter
of August 21st sufficiently stated the terms of the contract between the
parties in regard to prices on this ground rather than on any other implied
reference in it to the standard drill price list, which I consider dubious, to
say the least.
Upon the weight of evidence I am convinced that
"inch sizes" mentioned in the contract include fractions as well as
multiples of an inch—just as "millimeter sizes" admittedly include
fractions of a millimeter.
I have no doubt that the contract in question
was within the ostensible, if not within the actual, authority of the
defendant's assistant manager, Horton.
The question of damages presents some difficulty
owing to the non-specification of definite quantities in the contract. But id
cerium est quod certum reddi potest. The plaintiff has established that,
but for the defendant's repudiation, he would in due course have specified
under his contract with them the drills which he ordered in the American
market. The orders in respect of which loss is claimed do not exceed the
$35,000 limit placed by the contract upon the defendant's obligation. The
evidence disclosed that the plaintiff took reasonable steps to minimize his
loss. I find no ground for disturbing the assessment of damages.
The appeal, in my opinion, fails and must be
dismissed with costs.
Brodeur J.—I had prepared some notes with regard to this case but I find,
after having read the opinion of my brother Anglin, that our views coincide. I
would be then of opinion that the appeal should be dismissed for the reasons
given by my brother Anglin.
[Page 92]
Mignault J.—I have read the opinion of my brother Anglin and I concur in his
reasons for the dismissal of the appeal.
The parties undoubtedly looked upon the letter
of the 21st August, 1915, written by the respondent and accepted by the
appellant, as forming a contract, and, in its letters seeking to be relieved
from the obligations it had assumed, the appellant treated it as such. The
opinion of the learned trial judge, not printed in the case, but filed at the
hearing before this court, as well as a careful examination of the record, have
convinced me that the grounds urged by Mr. Tilley in his argument before us
were not contended for in the court below. It is true that learned counsel of
the Ontario Bar were called by the appellant at the trial to support its plea
that,
by the law of Ontario, even if the said
letter had been accepted by the appellant, the same does not constitute a valid
contract enforceable against the defendant.
But the learned counsel based their opinion on
what they considered a lack of mutuality, while admitting that if, subsequently
to the letter, the respondent had specified certain goods, before there had
been any revocation, there would have been a contract "pro tanto."
I must, with deference, think that the objection of lack of mutuality was
not well taken. Assuming that the respondent had the right, and had not in any
manner lost this right, to specify the goods which the appellant had agreed to
supply on specification, I fail to see how the latter could escape from its
obligation to supply the goods by repudiating the whole contract before any
specification had been made.
I also do not think that the letter of August
21st can be regarded as imposing no obligation on the respondent to take any
goods. Properly construed, it obliged
[Page 93]
him to purchase at least $25,000 worth of cast
steel twist drills, with the right to take more up to $35,000. This, if
accepted by the seller, would be a valid contract. The question whether any
property passed is immaterial, for the contract would be valid even if the
goods did not exist but had to be manufactured at a future date.
The objections of Mr. Tilley were very ably
urged, but they appeared to me somewhat technical. Undoubtedly an order could
be made subject to a standard price list, and I think that this was done in the
present case. Of course, it is essential that a price be sufficiently agreed
upon to constitute a valid contract of sale, but if, construing the contract
according to the usages of trade, the prices were to be those determined by a
standard price list in use in this trade, and were so understood by the
parties, and if, moreover, as the evidence shews, the list of discounts
mentioned in the letter, according to the common understanding of persons
dealing in these articles, determined the price to be paid, I cannot believe
that the element of price was absent in the agreement made by the parties. The
appellant, in its letters to the respondent, never claimed that the contract
was not understandable, but merely pleaded its inability to complete deliveries
within the time fixed. The contention now made that the contract is meaningless
seems in every way an afterthought.
I am clearly of opinion that the appellant
cannot challenge the authority of Mr. Horton, who accepted the letter "for
president and manager." The contract was not an unusual one, and this
defence of lack of authority merely impresses me as shewing the anxiety of the
appellant to escape from a contract which it repented having made.
[Page 94]
The effect of article 1235 of the Quebec Civil
Code, on which Mr. Tilley relied, is well demonstrated by my brother Anglin. The
whole question under this article is one of proof and not of validity of
contract. My brother Anglin has also dealt with the effect of the Statute of
Frauds under the Ontario law and I feel I can add nothing to his discussion of
this question.
Perhaps I might add that, as the question came
before the Superior Court, art. 1235 C.C. would have stood clearly in way of
the respondent had he not produced a writing sufficient, under the terms of
that article, to prove the contract alleged by him. I do not care to lay down
any general rule on the question whether the proof of a foreign contract is, as
a matter of procedure, governed by the lex fori, or by the lex loci
contractus. But I do think that such a provision as article 1235 is one
which a Quebec court must follow when it is sought to make evidence of any of
the matters mentioned by it, quite irrespective of the locality where the
contract, warranty, promise or acknowledgment was made. In this sense, and I do
not wish to be understood as otherwise dealing with the subject of conflict of
laws, the lex fori prevails over the lex loci contractus.
Mr. Tilley also relied on the decision of the
Judicial Committee of the Privy Council in the case of Reg. v. Demers. In my
opinion, this decision is clearly distinguishable from the one appealed from.
Demers had undertaken to print certain public documents at certain specified
rates. The contract imposed no obligation on the Crown to pay Demers for work
not given him for execution, nor was there anything in the contract binding the
Government to give him all or any of the printing work referred to in the
agreement, the
[Page 95]
Government being free to give the whole work, or
such part as it might see fit, to any other printer. Their Lordships did not
hold the contract invalid, as is contended in the present case; on the
contrary, they were of the opinion that for all work given to Demers on the
footing of the contract the Government was undoubtedly bound to pay according
to the agreed tariff, but they dismissed the claim made by Demers for damages
because no printing work had been given him after a certain date.
In the present case the agreement of the parties
properly construed was for the sale of certain goods to be specified by the
respondent, the latter, in my opinion, being bound to take goods up to the
amount of at least $25,000 with the right to order an additional amount of
$10,000. The contract mentioned that the specifications were to commence about
three weeks from its date and that shipment of the whole lot was to be made
before the end of March, 1906. I cannot agree with the contention that there
was not here a valid contract binding on both parties according to its terms.
On the whole, my opinion is that the appeal
should be dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellant: Atwater,
Surveyer & Bond.
Solicitors for the respondent: Weldon & Harris.
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