Scottish Court of Session Decisions

This was an action at the instance of Peter Mowat, builder, Edinburgh, against the Caledonian Banking Company, concluding for implement of missives of sale of Gerston Distillery, Caithness, embodied in the two following documents:—

“Caledonian Banking Co., Limited, Inverness, 28th November /94.

Peter Mowat, Esq.

Page: 204↓

Dear Sir,— Gerston Distillery.—I am favoured with your letter of yesterday, and have to thank you for the reference which you give. I hereby make you definite offer of the above distillery at the figure you name, viz., £11,500 for two months from this date, and hope that you will let us have your acceptance as soon as you conveniently can within that time. Should you think of visiting the distillery, we shall be glad to give you every facility for inspection.—Yours, &c., E. H. Macmillan, Manager.

26 th Jan. 1895.

Dear Sir,—I hereby accept of your offer to me of 28th November of Gerston Distillery, Halkirk, Caithness.—Yours, &c., Peter Mowat.”

The letter from the bank manager was not holograph.

On 28th January the bank manager telegraphed to Mr Mowat, “Letter received, but you have not sent deposit agreed upon. Unless received by to-morrow, transaction at an end.

No deposit was sent, and on 30th January the bank manager intimated to Mr Mowat that the transaction was at an end.

Mr Mowat thereafter raised the present action.

The pursuer averred that the defenders had adopted and recognised their offer as existing by the terms of the holograph telegram quoted above, and by a letter of 27th December, “which is believed to be, at least in part, holograph of defenders' said manager.”

He further averred that, following upon the defenders' offer, he “incurred considerable expense and trouble in making investigations regarding said distillery and its capabilities and prospects. He travelled to London and also to the North of Scotland … and in connection therewith he expended considerable time, money, and trouble. This he did on the faith of the offer quoted above, and with the knowledge and encouragement of the defenders and their said manager….”

He contended accordingly that the defenders were barred from founding on any informality in their offer, (1) personali exceptione, and (2) rei interventu.

The defenders averred that between the time of their offer and the pursuer's acceptance they had arranged that the pursuer should with his acceptance deposit 5 per cent. of the purchase price, and that they had broken off negotiations in consequence of his failure to do so. They denied that they had adopted or recognised their improbative offer by any subsequent holograph writing.

The Lord Ordinary ( Kincairney) on 10th August pronounced the following interlocutor:—“Finds that the defenders' offer is not holograph or authenticated, and that it has not been adopted by any document holograph of the manager of the bank or otherwise probative: Finds that there are no relevant averments of rei interventus.” He accordingly assoilzied the defenders.

Note.—…. “I am further of opinion that there is no relevant averment of acts of rei interventus. There could not have been any such acts done in reliance on a completed agreement, for there was no completed agreement until the date of the pursuer's acceptance, and the defenders' repudiation followed immediately. I do not dispute that an offer expressed as open for a certain time may become binding rei interventu, although improbative. The pursuer referred to several cases in which informal unilateral deeds had been made binding rei interventu. Such were the cases of The Dunmore Colliery Company, February 1, 1811, F.C.; United Mutual Mining Company v. Murray, June 13, 1860, 22 D. 1185; and the Church of England Insurance Company v. Wink, July 17, 1857, 19 D. 1079. But I think the pursuer avers no acts which are of the character of acts of rei interventus. He does not say that he relinquished any engagement, or renounced any advantage, or entered into any contract on the faith of the contract. All that he did was to make inquiries about the distillery and endeavour unsuccessfully to raise money by means of a syndicate. Such acts are not within the category of acts of rei interventus.—Bell's Prin., sec. 26; Bell's Com., i. 346; Gardner v. Lucas, February 8, 1878, 5 R. 638, per Lord Shand.

“It has been remarked that the pursuer in this action seeks to enforce a purchase, but does not make any offer of the price. The openly expressed suggestion of the defenders is that he has not, and never had, the necessary funds. I do not know how that may be. Perhaps the defenders have the best of reasons for standing on a technical defence against the fulfilment of a bargain. I do not find such reasons on the record or in the correspondence. But I am of opinion that the defenders are within their legal rights, and that their defence must be sustained.”

The pursuer reclaimed, and argued—The mere fact that the acts by which rei interventus was constituted took place before the pursuer's acceptance of the offer, and that consequently the obligation to be confirmed was only unilateral, did not prevent the application of the doctrine of rei interventus. It was in consequence of the offer that the expense had been incurred— Baird's Trustees v. Murray, November 21, 1883, 11 R. 153 at 166; Church of England Insurance Company v. Wink, July 17, 1857, 19 D. 1079. The case of Allan v. Gilchrist, March 10, 1875, 2 R. 587, suggested that the averments would support a claim for damages, even if not for implement.

Counsel for respondents were not called upon.

At advising—