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J.i.J. Hyam Vs. M.E. Gubbay - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in32Ind.Cas.53
AppellantJ.i.J. Hyam
RespondentM.E. Gubbay
Cases ReferredSeaton v. Mapp
Excerpt:
vendor and purchaser - specific performance of contract--terms uncertain--contract, if concluded before stipulated writing--earnest money, payment of, whether conclusive evidence of completion of contract--purchaser right of, to vacant possession. - lawrence jenkins, c.j.1. this appeal arises out of a suit for specific performance brought by the plaintiff, who claims to have entered into a concluded contract for the sale to the defendant of immoveable property in calcutta. negotiation is not denied, nor is there any dispute as to the identity of the property or as to the price, but it is contended by the defendant that there is no concluded contract and certainly not one that should be specifically enforced. the offence failed before mr. justice chitty, and he passed the decree for specific performance from which this appeal is preferred.2. the property in dispute belongs to the plaintiff, mr. gubbay, who lives in london. mr. r.c. cohen, acting on his behalf, instructed mr. owen, a house-broker, to find a purchaser. the price.....
Judgment:

Lawrence Jenkins, C.J.

1. This appeal arises out of a suit for specific performance brought by the plaintiff, who claims to have entered into a concluded contract for the sale to the defendant of immoveable property in Calcutta. Negotiation is not denied, nor is there any dispute as to the identity of the property or as to the price, but it is contended by the defendant that there is no concluded contract and certainly not one that should be specifically enforced. The offence failed before Mr. Justice Chitty, and he passed the decree for specific performance from which this appeal is preferred.

2. The property in dispute belongs to the plaintiff, Mr. Gubbay, who lives in London. Mr. R.C. Cohen, acting on his behalf, instructed Mr. Owen, a house-broker, to find a purchaser. The price ultimately asked was Rs. 1,33,000. Mr. Owen found a person ready to purchase at that price in the defendant, Mr. Hyam, who is in the habit of buying property with a view to subsequent building operations. Mr. Hyam was told by Mr. Owen that there were certain conditions on which Mr. Cohen insisted. As the precise limit of those conditions is a matter in dispute between the parties, I will describe them generally as designed (1) to prevent the building of a temple or mosque on the land, and (2) to secure to the Jewish School, which occupied a part of the premises, a continuance of their possession for a year. To these terms Mr. Hyam expressed his assent in the sense in which he understood them. On the 13th November Mr. Owen wrote to Mr. Gregory, the plaintiff's attorney, as follows:

Calcutta, 13th November 1912.

7/1 and 8, Pollock Street and

1, Mansook Lane.

Gal. Gregory, Esq.

Dear Sir,

With reference to our conversation of date in regard to the above premises, my principal accepts your client's offer made by you to me for rupees one lac and thirty-three thousand only. My principal agrees to have no temple or mosque built on these premises or to cause any nuisance to the Jewish Synagogue. He further agrees that he will not ask the Jewish school to vacate for 12 months from the date of execution of the conveyance. The time to execute and complete the conveyance shall be for six weeks from the date of the contract, subject to approval of titles by my principal's solicitor. Please ask your client to confirm this to-day, if possible.

Yours faithfully.

Owen Owen.

3. On the 14th Mr. Cohen confirmed the arrangement orally to his attorney, Mr. Gregory, subject to the purchaser paying Rs. 5,000 as deposit money. Up to this time Mr. Hyam had not orally discussed matters with Mr. Cohen or Mr. Gregory, nor was he known by them to be the intending purchaser.

4. On the 15th, however, there were several interviews at which Mr. Cohen, Mr. Gregory, Mr. Hyam and Mr. Owen or some of them were present.

5. According to the plaintiff there were four such interviews, first, one at Mr. Gregory's office at which Mr. Gregory Mr. Owen and Mr. Hyam were present, then one at Mr. Cohen's office where Mr. Cohen, Mr. Hyam, Mr. Owen and Mr. Gareh met, a third at Mr. Gregory's office attended by Mr. Gregory, Mr. Hyam, Mr. Owen and Mr. Gareh, and fourth and last, an interview at Mr. Gregory's office between Mr. Gregory and Mr. Gareh.

6. Mr. Hyam and Mr. Owen have no recollection of the first of these interviews, but there purports to be a record of it in Mr. Gregory's day-book, which was written up by a clerk at the close of the day. But whether Mr. Hyam was present or not, nothing of importance happened at this interview, and neither Mr. Hyam nor Mr. Owen can have had any reason for falsely denying Mr. Hyam's presence.

7. The second interview is one of importance, for, according to the plaintiff's case as developed at the hearing, it was then that the defendant accepted the plaintiff's view of the scope of the conditions.

8. The third admittedly took place and to a considerable extent the defendant admits that its purport is correctly recorded in the day-book.

9. The defendant knows nothing of the fourth, and it is not suggested he was present.

10. Mr. Gregory prepared a draft agreement on the 15th and sent it for approval to Mr. Cohen, who returned it approved on the 20th. On this last date it was forwarded for Mr. Hyam's approval.

11. On the 28th December, a power-of-attorney was received from the plaintiff, and Mr. Hyam was informed of this and asked to return the draft agreement approved. On the 15th January, Mr. Gregory wrote to Mr. Hyam offering to send the title-deeds for approval. On the same date the defendant wrote to Mr. Gregory as follows:

4, Middleton Row.

Calcutta; the 15th January 1913.

G. Gregory, Esq.,

Solicitor.

Re Pollock Street,

Premises No. 7/1 and 8.

Dear Sir,

I am returning the draft agreement re above. Will you be so good as to re-draft the same in regard to the following particulars, viz.:

1. As to the covenant not to build a mosque or temple, I agree to make this a personal covenant, but not to make it a covenant that will run with the land. But I do not bind myself as to the use of the premises for any other purpose.

2. As to the school remaining for a year, I agree to this, but the purchase is not to be completed before a year also.

3. As to the payment of interest on the purchase-money, the interest shall be at the normal rate of 6 per cent, and not 9 per cent.

I did not write to you earlier because I was willing to let the Jewish School purchase the property, but as I now understand Mr. Gubbay is not willing to sell to the school on the terms offered by them, I am returning the draft agreement as stated above.

Yours faithfully,

J.I.J. HYAM.

12. It seems probable that these two letters of the 15th crossed.

13. On the 17th Mr. Gregory replied to Mr. Hyam in the following terms:

J.I.J. Hyam, Esq.

17th January 1913,

Re 7/1 and 8, Pollock Street.

Dear Sir,

I have communicated with my client's agent with reference to your letter of the 15th instant. They are not a little surprised at the objection you now raise, which they certainly decline to entertain.

The draft agreement submitted to you far approval is merely formal agreement, setting out the terms of the concluded contract entered into by you with my client through Mr. Owen Owen, the broker, and there can be no doubt that the objections you now put forward are an afterthought on your part simply with a view of delaying the completion of your purchase.

As regards your first objection, my clients cannot understand your stating that you agree to make the covenant restricting the erection of the mosque or temple a personal covenant. This point was discussed and you made no qualification restricting the covenant. The covenant must, therefore, be a covenant running with the land and be binding on you and your assigns, otherwise there would be no necessity for making it one of the conditions of the sale. There is nothing in the draft agreement restricting the use of the premises except what was agreed, namely, that you are to cause no nuisance to the Jewish, Synagogue,

Your second objection is most inconsistent with your agreement to allow the Jewish School to remain in occupation of the premises for 12 months from the date of the execution of the conveyance, which was fixed for the 6th January instant. If, as you say, the purchase is not to he completed before a year, there would have been no occasion to make such a stipulation. This objection also my client most emphatically declines to entertain.

As regards the third objection, I admit there was no rate of interest fixed at the time, and under my advice my client will have no objection to reduce the rate of interest from 9 per cent, to 6 percent., provided you complete your purchase without any further delay.

The proposal on behalf of the Jewish School to purchase the property has nothing whatever to do with your contract to purchase, and you were fully aware at the time that the terms offered on behalf of the Jewish School had been rejected by my client long before your contract, otherwise he would not have entered into the contract with you and received the earnest money from you.

I again send you the draft agreement for your approval, and unless you return the same approved within 24 hours from this date or agree to complete your purchase on or before the first proximo (in which case the execution of the formal agreement may be dispensed with), my instructions are most peremptory to file a suit against you for the specific performance of your contract.

Yours faithfully, G. GREGORY.

14. On the 22nd, Mr. Hyam wrote to Mr. Gregory as follows:

4 Middleton, Row,

Calcutta, the 22nd January 1913.

G. Gregory, Esq.,

Re 7/1 and 8, Pollock St. and

1, Mansook's Lane.

Dear Sir,

Yours of the 17th instant on the subject of the above matters to hand.

I must repudiate your suggestion that my objections to certain terms in the draft agreement you sent me are an afterthought, or that they were put forward simply with the view of delaying the completion of the purchase of the premises in question.

With regard to the question of the covenant not to erect a mosque or temple being made a personal one in the conveyance, or one running with the land, with reference to which you say that the point was discussed and that I made no qualification restricting the covenant, I entirely did not discuss the point with your client or any one on his behalf, nor did I authorize any one to do so on mine. When Mr. Owen Owen reported to me that Mr. Cohen wanted to be assured that I would not pull down the existing building and erect in its place a mosque or temple, I told Mr. Owen that I certainly would not build either a mosque or a temple and told him to assure Mr. Cohen of that. Beyond this there never was any other discussion on the point, nor did any occasion arise for me to make any such qualification as you advert to in your letter regarding the covenant before you sent me the draft agreement, when for the first time I saw that the covenant was sought to be made to run with the land, and I at once objected to the same, and 1 deny your allegation that there was any agreement to cause no nuisance to the Synagogue which you have introduced in your draft agreement, and to which you refer at the end of the 3rd paragraph of your letter under reply.

With regard to the question of the occupation by the Jewish School of the premises for another year, the suggestion made to me was that although the school had no lease of the premises, nevertheless, in order not to work hardship on an institution which was charitable and Jewish, I was agreed to let the school remain on for a year to enable it in the meantime to find another habitation, and I agreed to this suggestion which I considered reasonable and agreed to defer the completion of the purchase for one year, until your client could give me vacant possession of the premises. The school was to remain on for a year, not from the date of the conveyance but from the date of the agreement for sale and purchase which was to be executed in writing, and this was so because 1 wanted and did insist on vacant possession, for I would have none of the trouble, worry and expense, not to mention the odium, of having to turn out a charitable and communal institution from the premises which, I am informed, it has made its home for the last 40 years. Mr. Cohen, as one of the elders of the community and at one time the Honorary Secretary of the very school in question, I believe, would be in a position better than any one else to get the school vacated without unpleasantness, and I consented to the reasonable request of Mr. Cohen to let the school remain on for a year, provided the conveyance was similarly delayed and vacant possession given to me as above stated.

I deny that the 6th January instant or any particular date was fixed for the execution of the conveyance as you allege, or that I was aware at all that the school offered to purchase the premises, or that the said offer was rejected by your client.

In the circumstances it is open to your client, as he pleases, either to accede to my terms which were agreed upon but which your client now wishes to vary, or to file his action which under instructions you threaten me with, but on my part, I shall insist on your client performing his part of the contract upon the terms agreed as hereinbefore stated.

Yours faithfully,

J.I.J. HYAM.

15. On the 22nd, Mr. Gregory wrote to Mr. Hyam demanding a return of the draft agreement, and on the 23rd, he wrote to him as follows:

23rd January 1913.

J.I.J. Hyam, Esq.

Re Pollock St. and

1, Mansook's Lane.

Dear Sir,

In continuation of my letter to you of yesterday's date, I am instructed to state that as you have declined to complete your purchase upon the terms agreed upon there is no necessity to prolong this matter by further correspondence. My client denies that there has been any variation on his part or that he is attempting to vary the terms of the contract, and as you decline to compete your purchase in terms thereof, my client has no other alternative left but to institute proceedings against you for the specific performance of your contract, etc., and which I am instructed to do without any further reference to you.

I have again to request you to return the fair draft agreement which was submitted to you for approval.

16. Mr. Hyam has explained that his delay was due to the pendency of negotiations for the purchase of the property on behalf of the Jewish School.

17. On the 8th February 1913 the plaint in the present suit was filed, and, among other matters, it is thereby alleged as follows:

3. On or about the 13th November 1912 an agreement was made in Calcutta between the plaintiff through his representative and the defendant through his broker, whereby the defendant agreed to purchase from the plaintiff the said several premises free from incumbrances subject to approval of title at the price of Rs. 1,33,000 on special conditions following, namely: (1) that the said premises and the site thereof should not be used for the purposes of a mosque or a temple, or for carrying on any noisy or offensive trade or business, or for any purpose which might cause nuisance or annoyance to the Jewish Synagogue in Pollock Street, Calcutta, situate opposite the said premises; (2) that the said Calcutta Jewish School should be allowed to continue in occupation of the said premises No. 8, Pollock Street for one year, from the date of execution of the conveyance of the said property, on the same terms and conditions under which they were then occupying the same; (3) that the defendant shall accept a conveyance of the said several premises executed under a special power-of-attorney on behalf of the plaintiff.

4.On or about the 15th November 1912 the defendant personally called and saw the plaintiff's solicitors and confirmed the said agreement and paid Rs. 1 001 as earnest money therefor, and it 'was agreed that the plaintiff's said solicitors should prepare a formal agreement in writing embodying the usual terms and conditions of sale and purchase, including the special conditions agreed upon as afore-said and submit the same to the defendant for approval, it being further agreed that the said sale should be completed within six weeks from the date on which the title-deeds of the said premises should be delivered to the defendant or his solicitors, and that in the event of the title not being approved, the plaintiff would pay no costs.

5. A draft agreement, embodying the said terms and conditions, was duly prepared by the plaintiff's solicitors and sent to the defendant for approval on the 20th November 1912, with a letter requesting the defendant to name his solicitors to whom the title-deeds of the said premises should be sent for approval on his behalf, but the defendant never replied to the said letter, The said draft agreement is now in the possession of the defendant and copy thereof is hereto annexed and marked A' to which the plaintiff refers as part of this his plaint.

18. Counsel for the plaintiff, experienced great difficulty in stating when the contract on which his client sues was made. Nor is this to be wondered at for the evidence discloses no clean-cut agreement. It has to be spelt out, if at all, from the conflicting versions given in the witness-box of what passed at several interviews; and the confusion is increased by the fact that the several interviews were not all between the same persons.

19. At one time the case made was that the letter of the 13th November was preceded by an oral agreement of which it was but an imperfect record, and that the imperfection was cured by what passed between the parties at the interviews of the 15th.

20. Ultimately the case selected by the plaintiff for our acceptance was that the parties came to a concluded agreement on the 13th of November; but Mr. Zorab at the same time expressed his wish not to abandon such advantage as he might be able to derive from the interviews of the 15th November, and in particular the interview between Mr. Cohen and Mr. Hyam on that day. The case made in the plaint appears from the paragraphs I have already read. They allege an agreement between the plaintiff through his representative and the defendant through his broker on or about the 13th November and a confirmation by the defendant to the plaintiff's attorney on the 15th.

21. It is noticeable that the agreement of the 13th as alleged in the plaint does not correspond with the letter of that date, but this Mr. Zorub explains by the suggestion that the letter was an imperfect record of the contract, and that the fuller exposition of the plaint is merely a statement of that which was inherent in the letter and might properly be read into it, if regard were had to all the circumstances. Has then the plaintiff made out that there was a concluded agreement on the 13th November

22. The ultimate conclusion of Mr. Justice Chitty is expressed in these words: I hold that there was a definite, complete and binding agreement arrived at between the parties on 15th November 1912, by which the defendant agreed to buy the property in question for Rs. 1,33,000 subject to the three conditions set out in paragraph 3 of the plaint.'

23. This certainly does not affirm a concluded contract on the 13th November and if it was the intention of the learned Judge to negative a concluded contract on the 13th, I agree with him.

24. This appears to me to be the meaning of the entry in Mr. Gregory's day-book of the 15th November, which contemplates that even on that date it still remained for terms to be settled. This too is borne oat by the evidence both of Mr. Gregory and Mr. Cohen, from which it is clear that matters had not taken definite and final shape on the 13th; in fact so far were terms from being fixed that Mr. Cohen on the 15th informed the defendant that he might 'leave or take' his conditions. In support of this view that there was no concluded agreement, the defendant points to such matters as the dispute regarding the scope of the special restrictive conditions, the amount of the earnest money and the date for completion, the uncertainty involved in the stipulation that the written agreement should contain the 'usual terms and conditions of sale and purchase,' the agreement that there should be an agreement in writing, and the conflict of view as to whether the contract was for a sale with vacant possession or not.

25. All this and also the subsequent negotiations and conduct of the parties, in my opinion, afford clear indication that there was no concluded contract on the 13th.

26. The next question is whether there was a concluded contract on the 15th. This is regarded by Mr. Justice Chitty as the important date in the case,' and he seems to have thought that a final agreement was concluded between Mr. Cohen and the defendant on that day. This is not the case made in the plaint. It is, however, alleged in paragraph 4 that on the 15th 'It was agreed that the plaintiff's said solicitors should prepare a formal agreement in writing embodying the usual terms and conditions of sale and purchase including the special conditions agreed upon as aforesaid and submit the same to the defendant for approval.'

27. If then, as I hold, there was no concluded contract before the 15th, it is manifest on the face of the plaint that the preparation of a formal agreement in writing embodying the usual terms and conditions of purchase was an integral part of the negotiations of that day and was actually a matter of agreement between the parties. That it was an essential term of the bargain between the parties that there should be a written contract is, I think, clear even apart from the definite allegation in the plaint. Thus Mr. Owen's letter refers to the time for completion as a matter to be determined by the date of the contract,' and on his evidence he explains that the time for completion was fixed at six weeks after the execution of the agreement.' The day-book, too, shows that a written agreement was to be prepared, and the evidence on the point is to the same effect. And in fact a draft agreement in writing was actually prepared and submitted by the plaintiff's attorney.

28. Can it then be said that in the absence of such formal contract in writing--for none has been executed--there is a concluded contract between the parties?.

29. In Von Hatzfeldt Wildenlmrg v. Alexander (1912) 1 Ch. 284 at pp. 286, 289 : 81 L.J. Ch. 184 : 105 L.T. 434, it was said by Lord Parker as he now is, 'it appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored.'

30. Here it is expressly pleaded in the plaint that it was a matter of actual agreement, not merely the expression of a desire, that the terms should be embodied in a written agreement. And there is the further fact that this written agreement was to take the place not of a previous writing, but of previous conversations of the uncertain character disclosed by the evidence.

31. I am aware of no case where a provision for a written agreement in place of oral conversations has been treated as negligible: none has been cited to us. Though there may be no presumption of law negativing legal obligation in the absence of writing where there is a stipulation for a written agreement, still, from the nature of things, the inclination of decision must be stronger in' that direction where the supersession is of an oral by a written agreement, and not merely of one writing by another.

32. In Ridgway v. Wharton (1854) 6 H.L.C. 238 at p. 305 : 27 L.J. Ch 46 : 4 Jur. (N.S.) 173 : 5 W.R. 804 : 10 E.R. 1287 at p. 1313 : 29 L.T. (O.S.) 390 : 108 R.R. 88, Lord Cranworth expressed the view that the circumstance that the parties do intend a subsequent agreement to be made is strong evidence to show that they did not intend the previous negotiations to amount to an agreement, and he there was dealing with the supersession of written negotiation by formal writing. While Lord Wensleydale in the same case said: 'These cases often occur in Courts of Law, and the question then always is, whether the parties mean to embody the contract, made by parol, in writing? If they do, nothing binds them till it is written. If they enter into a contract with a view to a written agreement, nothing will bind them but that written agreement.' In the absence of a written agreement, therefore, I hold there was no enforceable contract, and in the view I take, this is sufficient to dispose of the appeal.

33. But, in my opinion, apart from this, there are fatal objections to the success of this suit, for I think it is not established that the parties were at one. Thus the scope of what have been termed the special conditions was not definitely settled, nor were the parties agreed as to whether vacant possession was to be given on completion. I would here digress for a moment to point out that the parties might well not be in exact accord as to the precise mode in which effect should be given to the special conditions, though they were agreed as to their general character. Thus Mr. Hyam might be wanting to postpone completion for a year so as to accommodate the Jewish School and yet be unwilling to pay the purchase-price, borrowed for the purpose at interest, until he get possession, for to him the transaction was a matter of business.

34. Similarly the defendant may have been willing to bind himself personally as to the building on the land and have been unwilling to impose a restriction that might be a blot on the title. And as he intended himself forthwith to build, he might have supposed that would be accepted as sufficient. But to return to the difficulties in the plaintiff's way, I would next point to the allegation in the plaint, that it was agreed that the plaintiff's solicitors should prepare a formal agreement in writing embodying the usual terms and conditions of sale and purchase (paragraph 4).

35. A draft agreement has been submitted after approval by Mr. Cohen, and its terms presumably represent what was regarded as usual. *

36. A perusal of the document demonstrates the uncertainty of the expression 'usual terms,' and by way of illustration I may point to the provision in the draft that the sale is subject to tenancies, that interest at 9 per cent, is charged on the balance of the purchase-money, that a right to rescind is reserved to the vendor he is advised not to remove or comply with any objection or requisition, that the property is sold subject to all outgoings and easements though none are particularized, and that time is to be deemed in all respects to be of the essence of the contract.

37. If this draft represents the plaintiff's idea of what are usual terms' that can be introduced into an agreement for sale without discussion, it cannot be a matter of surprise if the defendant is not at one with him as to that.

38. Indeed the circumstances of this case illustrate forcibly the mischief against which the decision in Rummens v. Robins (1865) 3 De G.J. and S. 88 : 11 Jur. (N.S.) 631 : 14 L.T. 717 : 13 W.R. 979 : 46 H.R. 571 : 142 R.R. 32 was directed. There in reference to a similar provision Lord Justice Knight Bruce asked what are the usual clauses in a contract for the sale of land? They differ almost incessantly; they differ according to the state of the title, the conveniences, the fancies, and the wishes of mankind, and the particular situation, convenience and inconvenience belonging to the estate.' And in view of the uncertainty of the provision it was held that there was not a contract capable of being specifically enforced.

39. The plaintiff asserts, as is obligatory, that he was ready and willing to perform and carry out the agreement. Presumably the draft agreement embodied his conception of his obligation and indicates what he was ready and willing to perform. Bat if that be so, his readiness and willingness did not correspond with his obligations under the alleged agreement, either of the 13th or 15th November. Nor does it mend matters that the plaintiff may have been willing at the trial to waive any of the stipulations of the draft.

40. No doubt as to the main features of the transaction, i.e., the sale, the identity of the property, the price, and even the imposition of restrictions in some form or another, the parties were substantially agreed, and to that extent the defendant may well have considered that as between man and man there was a contract, and have used language appropriate to that position. But that is not enough to create a concluded contract between the parties.

41. Nor is the defendant precluded from pleading that there was no concluded contract merely because he paid earnest money, more especially as the mode in which the plaintiff's agent dealt with the money shows that even he did not treat the matter as governed by a concluded agreement at the time of payment.

42. The conclusion then to which I come is that the learned Judge should not have decreed specific performance.

43. I would, therefore, allow the appeal, reverse the judgment of the first Court and dismiss the suit with costs throughout, including the costs of the appeal.

Woodroffe, J.

44. This appeal, in my opinion, raises a question of fact, the principles of law applicable to such facts admitting of no doubt. The Court will doubtless not enforce specific performance of a contract, the terms of which are uncertain. If the Court does not clearly know what the contract is which the parties entered into, it cannot obviously enforce it. But the question whether a contract is in this sense uncertain, is a question of fact which arises upon the documents and oral evidence tendered in support of it. In the present case the alleged contract was for the sale of the premises mentioned in the first and second paragraphs of the plaint free from encumbrances, subject to approval of title at the price of Rs. 1,33,000 on the special conditions mentioned in the third paragraph of the plaint. Those terms appear to me to be free from uncertainty in themselves, and the defendant's agreement to them has been established by evidence which the learned Judge has accepted and which, for reasons which I later give, I also accept. This evidence is partly documentary and partly oral. There is no law in this country which in this case requires an exclusively written record, and if we were to insist upon it as a condition for the grant of specific performance, we should be requiring from the parties more than the law demands. Moreover, there is in this case a document, viz., the broker's acceptance of the contract. The broker was admittedly agent for both parties. Necessarily in this case as in other cases the oral evidence for the plaintiff and the defendant is in conflict. But we have to sift that evidence and to see which is to be believed. If upon such examination the nature of the agreement is left in doubt, the plaintiff must fail, but if the evidence is believed to be true, we must, I think, give effect to it. If the evidence given for the plaintiff is accepted, it, in my opinion, leaves no' doubt as to what the facts are. Moreover this is an appeal and we are asked to reverse the judgment of the learned Judge on a question of fact. The defendant in his evidence insinuates that the letter of the broker, Mr. Owen, was due to something more than misunderstanding. He contests both the truth and accuracy of the evidence of the latter and other witnesses, charges that the evidence of Mr. Cohen is absolutely false' and says that he returned the draft agreement which had been sent to him by Mr. Gregory, the plaintiff's solicitor, as he 'suspected that the latter had drawn up an agreement, the terms of which were not the same as the broker's letter, which he knew was the basis of it. His grievance on the facts is that the learned Judge has not accepted these charges or the evidence on which they are made. I have never held that the Appeal Court is bound to accept the first Court's appreciation of the facts. In my opinion both the law and fasts are open to us. Still this being an appeal on the facts, the appellant has to satisfy us that the judgment appealed against is erroneous, and this he has failed to do. On the contrary, for reasons I later state, it seems to me that the learned Judge has arrived at a correct finding on the evidence before him. He points out that the defendant's evidence stands alone, and as against it there is the evidence of the four witnesses Owen, Cohen, Gareh and Gregory, the letter of the 13th November 1912 and other documentary evidence. It would, in my opinion, require a strong case which would justify us in accepting the defendant's evidence alone as against all the other evidence which has been accepted by the Judge of first instance.

45. It is then alleged in the plaint as it stands that on the confirmation of the agreement and payment of the earnest money, it was agreed that the plaintiff's solicitors should prepare a formal agreement in writing embodying the usual terms and conditions of sale and purchase including the special conditions above mentioned, and should submit the same to the defendant for approval. On the strength of this allegation and certain answers given by the plaintiff's witnesses, it is contended that there has been no completed contract between the parties and that the suit is premature. Here again the law applicable seems to me to admit of no doubt. It is well established that the mere reference to a future formal contract will not prevent a binding bargain. The fact that the parties refer to the preparation of an agreement by which the terms agreed upon are to be put into a more formal shape, does not prevent the existence of a binding contract. There are, however, cases where the reference to a future contract is made in such terms as to show that the parties did not intend to be bound until a formal contract is signed, 'if', said Lord Cairns in Rossiter v. Miller (1878) 3 A.C. 1124 at p. 1139 : 48 L.J. Ch. 10 : 39 L.T. 173 : 26 W.R. 865, 'you find not an unqualified acceptance...subject to the condition that an agreement is to be prepared and agreed upon between the parties, and until that condition is fulfilled no contract is to arise, then...you cannot.. find a concluded contract.' In other words, the signing of a further formal agreement is made a condition or term of the bargain, and if the formal agreement is not approved and signed there is no concluded contract. The question in this suit is whether the case falls within one or other of these alternatives. As James, L.J., said in Bonnewell v. Jenkins (1878) 8 Ch. D. 70 : 47 L.J. Ch. 768 : 38 L.T. 81 26 W.R. 294, each case depends on its own special circumstances.

46. What then are the circumstances here? I will deal with this point at once, as it is one which, if disposed of in favour of the appellant, establishes his case. This contention of the appellant appears to me to be an afterthought. It first appears in the written statement filed in March 1913, the contract for sale having been, it is said, entered into in November 1912. It has been argued that the defendant is a layman and could not appreciate the advantages which, it is contended, the law gives him. We are not asked to say that the defendant is incapable of understanding or looking after his own interests, and the point here is a simple one for the party himself, whatever may be the difficulties which the Court has in some cases in ascertaining what was passing in the minds of others. The defendant has, however, only to ask himself whether it was agreed that he was in no wise to be bound until he had approved and signed a contract. If this had been the fact, it seems to me incredible that it should not at once have occurred to the defendant, and when he was pressed by the plaintiff we should have expected the reply: 'There is no contract. I have not signed and refused to sign any agreement.'

47. What then are the facts? On the 15th November 1912 the defendant admittedly paid earnest money of Rs. 1,001. This payment was in itself evidence of a concluded contract. It is suggested that it is not but that payment of earnest money is merely a sort of guarantee that the buyer will seriously negotiate. This, I think, is not the case. If this earnest money was not concluding a contract, why do we find no provision for its disposal and refund? Reliance is placed on the fact that it was not cashed directly by Mr. Cohen, but made over to his solicitor and cashed later. This, however, may well be due to the fact that Mr. E.M.D. Cohen intervened, when he found that the property on which the Jewish School was placed was going to be sold away. From the letter of the 5th December 1912 it appears that Messrs. Sassoon & Co. informed Mr. Gubbay that Mr. E.M.D. Cohen was writing to him about it. Mr. Gregory's day-book shows that Mr. Cohen accepted the Rs. 1,001 as earnest money, the amount of which was admittedly the previous subject of discussion, and that it was after that arranged that an agreement should be prepared and submitted to Mr. Hyam for his approval, the purchase to be completed within six weeks. That Mr. Hyam considered the acceptance of the earnest money closed the transactions, appears on his evidence. That Mr. Cohen and Mr. Gregory considered the matter concluded is shown by their action in at once taking steps to get a power-of-attorney executed. On the 20th November 1912 a draft was sent to the defendant for approval. After this the parties appear to have been waiting for the receipt of instructions from Mr. Gubbay as to whether he was prepared to cancel the sale, seeing that Mr. E.M.D. Cohen of the Jewish School, which was thereby likely to be displaced, was objecting to it. Mr. Gubbay, however, refused to cancel, and on the 28th December Mr. Gregory informed Mr. Hyam of the fact 'that he will not cancel the contract for sale' and asked for the return of the draft approved, without delay. The defendant was also informed of the arrival of the power-of-attorney authorising Mr. Cohen to act for Mr. Gubbay, To this the defendant gave no reply. According to his case all that he had to do was to write back and say, there is no sale to cancel until I have approved the draft contract.' He did nothing and was again written to on the 2nd January asking for return of the draft.. Ho did nothing, and having given no reply he was again written to the same effect on the 7th. He did nothing, and on the 13th January, Mr. Gregory wrote insisting on the sale and asking for return of the draft. This letter was not more successful than the rest and on the 15th January Mr. Gregory wrote again referring expressly to the agreement and saying that Mr. Gubbay will not cancel the contract as you requested him to do.' Legal proceedings were then threatened. With reference to this letter I may observe that Mr. Hyam spoke to him about cancelling the contract. The defendant who appreciates the inference which may be drawn from the use of the word cancel', denies that he ever used that term to Mr. Gregory. It is noteworthy, however, that if this be so he did not deny what Mr. Gregory stated in the reply which he at length sent on the 15th January 1913. I will refer to this letter later. Its only importance here is the explanation which it gives of the delay to which I have referred. According to Mr. Hyam he did not read the draft until about this date. He then states 'I did not write to you earlier because I was willing to let the Jewish School purchase the property, but, as I now understand, Mr. Gubbay is not, on terms offered by them willing to sell, I am returning the draft.' As the learned Judge has pointed out, Mr. Hyam has not called Mr. E.M.D. Cohen to support his story and I am unable to understand how he could have thought that there was a possibility of sale to the Jewish School, seeing that he had been definitely informed on the 28th December that Mr. Gubbay refused to cancel the sale. This is followed by an important letter of the 17th January, in which Mr. Gregory alleges that the draft sent was merely the formal expression of a concluded contract' and asking for its approval. To this the defendant replied on the 22nd January in which letter he also assents to the position that there was a concluded contract though he disputed its terms; for he says In the circumstances it is open to your client, as he pleases, either to accede to my terms which were agreed upon but which your client now wishes to vary or to file his action, but on my part I shall insist on your client performing his part of the contract upon the terms agreed.' In the face of these express words it does not seem to me to be possible to say that there was then no contract between the parties. In fact, as the learned Judge points out it is the case of both parties that a definite agreement to sell was arrived at, the difference between them being as to its terms. Mr. Cohen also evidently thought that the contract was concluded for, as above stated, he at once set about to get the power-of-attorney under which the conveyance was to be executed. It was, however, both his wish and that of the defendant that what is called in the evidence 'the usual earnest agreement' should be drawn up, and on Mr. Cohen's answers on this point reliance is placed. Mr. Cohen says that this agreement was to embody the special conditions as contained in Mr. Cohen's letter and stated by the defendant himself on the 15th and the usual terms as written by solicitors, He says that the sale was concluded with Mr. Hyam personally on the 15th and that all that was to be done was to insert the usual conditions. Mr. Hyam says in answer to the question you contemplated a written contract'?--'Yes.' It may be admitted that this was the intention of both parties. The question is, whether there was to be no concluded contract until the formal agreement was signed. That the parties did not then, whatever the defendant may now do, trouble about the other conditions is shown by Mr. Hyam's letter of the 15th January in which no attention is paid to these matters, and the statement in his evidence that these were no part of his business but of his attorney. Mr. Gregory says that the defendant told him on the 15th November that terms had been finally arranged with Mr. Cohen who had accepted the earnest money and that the remaining clauses were the usual clauses in an earnest agreement. He denies the suggestion that he understood that this matter was subject to the preparation and approval of a formal contract', and says that the formal contract was only to include and did in fact include the ordinary conditions of sale and purchase. If this be not the fact, the defendant could have called evidence to show that the terms proposed to be inserted were not, as he for the first time in the written statement alleges, usual conditions of sale in Calcutta. The written statement (section 2) admits that the defendant agreed to purchase 'upon the usual terms of such purchases and sales.' Here I may observe, upon the defendant's allegation that the draft contains terms which are not usual, that if it were necessary to decide this question it would be sufficient to point out that the evidence is all one way, there being nothing to controvert Mr. Gregory's statement on this point. It does not, however, seem necessary to decide this point, for the plaintiff does not insist upon specific performance of the draft, conceding that if it be the fact, which is not admitted, that there are any terms therein which are not usual, the same could not be enforced against the defendant. It is obvious that specific performance could not be enforced except as to terms agreed upon, namely, those in the third paragraph of the plaint. The draft was not signed and accepted. It is noteworthy in this connection that though the defendant does now object to some of such terms, he did not do so in his letter of the 15th January. Like the objection that the execution of a formal agreement was a condition of the contract, this objection appears for the first time in the written statement. I should here mention that Counsel for the respondent stated that the terms of paragraph 4 of the plaint should run as follows: Should prepare a formal agreement in writing embodying the said terms and conditions and submit the same to the defendant for approval,' instead of 'should prepare a formal agreement in writing embodying the usual terms and conditions of sale and purchase including the special conditions agreed upon as aforesaid and submit the same to the defendant for approval', and he asked that three documents should be admitted in evidence, viz., the instructions for the plaint, original draft plaint in Counsel's handwriting and a fair copy plaint. I thought that this application which was made after the close of the reply, came too late and moreover that the point was immaterial to the decision. The agreement of which specific performance is sought is that stated in paragraph 3 of the plaint and stated to have been confirmed in the first three lines of paragraph 4. The plaintiff, as stated, does not seek specific performance of the draft agreement with all its terms and the subsequent allegations as to the preparation of a formal agreement in whatever terms they are stated, have only a bearing on the question which I have already discussed, namely, whether there was a contract at all until the formal agreement was drawn up. In a still more belated fashion, though the written statement does not allege uncertainty, but on the contrary willingness to complete upon the terms the defendant had agreed to,' it was urged in argument that the contract is uncertain because the phrase usual terms and conditions' is uncertain [Rummens v. Robins (1865) 3 De G.J. & S. 88 : 11 Jur. (N.S.) 631 : 14 L.T. 717 : 13 W.R. 979 : 46 H.R. 571 : 142 R.R.32]. It would be sufficient to reply to this that there is unrebutted evidence what such conditions are, and, therefore, no uncertainty if we accept Mr. Gregory's evidence. But apart from this, what the plaintiff alleges is that the agreement sought to be enforced is that stated in paragraph 3 of the plaint, and the arrangement arrived at subsequent to and after the concluded contract there mentioned did not form part of it. This is a sufficient answer to the reply that the vendor cannot waive such stipulation, for which the case of Lloyd v. Nowell (1895) 2 Ch. 744 : 61 L.J. Ch. 744 : 13 R. 712 : 3 L.T. 154 : 44 W.R. 43 is cited. That case, moreover, is distinguishable, for there the contract was to sell subject to the preparation by the vendor's solicitors and completion of a formal contract.' This was, therefore, a term of the contract itself in that case where it was held not to be for the benefit of the vendor only and, therefore, could not be waived by him alone.

48. A new point has been raised on appeal, that the sale was free from encumbrances whereas there were some leases on the property. It appears from Mr. Cohen's evidence that the property sold was subject to lease. The Jewish School were monthly tenants and the other leases expired in October 1913, that is, before the expiration of the year when the defendant was to get possession from the Jewish School and before the hearing of the suit. The first answer to this which is given by the respondent appears to me conclusive, viz., the point was not raised in the pleadings, nor was an issue directed to the point, nor does Mr. Hyam anywhere say that he did not know of the existence of the leases and if he had known he would not have purchased. The Court is not called upon to raise an objection of this kind which the party himself has not raised. But it was submitted that Mr. Hyam could not raise the point as he was, it is suggested, unaware of the leases. I do not believe that he was unaware, nor has he sworn that he was ignorant of them. Counsel for the appellant stated that Mr. Owen was the common agent for both parties. Mr. Cohen swears that the possession was subject to the lease and that he told the broker, the common agent, of the tenancies affecting the properties. His evidence on this point is supported by Mr. Owen, who swears that he told Mr. Hyam exactly the terms which Mr. Cohen had proposed and he accepted them.' Mr. Cohen says that the term that property should be taken subject to lease was one of his expressed' conditions. Mr. Hyam says that nothing was said about encumbrances without, however, mentioning the leases. That Mr. Cohen's terms were as he states, is borne out by the draft agreement which he handed to Mr. Gregory on the 20th November. The draft was sent on to Mr. Hyam on the same date. Paragraph 1 of the draft expressly mentions that the property was sold free from the encumbrances but subject also to the existing tenancies affecting the same.' Incidentally I may remark that Mr. Gregory was here distinguishing between encumbrances and leases, the two terms not being always synonymous. This agreement must have put Mr. Hyam on notice even if he had not had actual information before. That Mr. Hyam read this agreement before suit I believe, for when he returned it on the 15th January 1913 he took specific exception to two terms of the draft, namely, the second touching interest and the last making the covenant not to build a mosque or temple to run with the land. It is noted further that the property which is the subject-matter of the suit adjoins a property of Mr. Hyam who was, therefore, likely to know what was the state of it. Nor is it in the least degree likely that Mr. Hyam, who is represented to be a person who speculates in land, did not make full enquiries as to the state of the property which he proposed to purchase. Again Mr. Hyam must have known from the draft agreement that the sale was subject to existing tenancies. If this had been for him the vital defect in title' now alleged, one would have expected him to have said at once: There are leases on the property. I was not told of them. The negotiations are off,' and this he would, one should have thought, have done the more readily seeing that on other grounds he had sought to get the sale cancelled. That he did not, points to the inference that he was aware of the leases from the beginning. Notwithstanding all this no objection on this point was taken in the written statement nor issue raised thereon. Even if we were to make the improbable assumption that Mr. Hyam was unaware of the leases until the point was mentioned in the evidence, Mr. Hyam gave his deposition after the witnesses of the plaintiff and he does not even then say that he was unaware of the leases and that if he had known of them, he would not have purchased. It is true that a somewhat similar statement was made by his Counsel here but what Counsel says is not evidence, and is not accepted as such. Nor was the point sought to be made by amended defence, nor was it according to the respondent's Counsel argued in the lower Court. That this statement is likely to be correct is shown by the fact that there is no mention of a point which has been made so much of in appeal in the judgment of the learned Judge, nor is the point specifically taken in the grounds of appeal. The point first arose in the last hearing before two Judges as a result of certain observations made by the Court, which were subsequently adopted as his argument by Counsel for the appellant. The point, therefore, in my opinion, cannot be taken now. Had it been taken in the first Court it might have been possible to lead evidence to show that it had no substance, as the facts to which I have referred themselves suggest. But even if the point were open there does not appear to me to be any substance in it. If there had been it would have been taken. In answer to the Chief Justice, Counsel for the respondent whilst submitting that the question did not arise said that if required to answer the question, he would say that the property was sold free from encumbrances but subject to the existing tenancies as the draft says, but submitted, that there was no contradiction having regard to the nature of the tenancies, the return on the money which they give, viz., 5 1/2 per cent, and the fact that the tenancies had expired before the hearing of the suit. Further, that even if the leases were encumbrances, that was no defence if the plaintiff discharged them and offered them free of encumbrances. As stated, these tenancies have long ceased to exist and cannot be any real defence. The real objection, as I point out later, is that Mr. Hyam is unwilling to incur the odium of turning out the Jewish Poor School now in possession of portion of the premises. Doubtless the point might have had a legal bearing on the question, what was the contract between the parties, if it had been raised, But it was not and as I have said there is no evidence by Mr. Hyam that when he entered into negotiations he believed he was negotiating for purchase of a property free of existing leases. Had this been the case and there was, any substance in the objection, it would have undoubtedly been properly raised., The defendant can have possession now, but he will not, take it because he does not wish to incur the displeasure of his community by turning the Poor School out as he would be entitled to do if he accepted the property. As regards the evidence that the parties, were not ad idem, it is sufficient generally to say that this must depend on the view the Court takes of the facts. If the evidence; given for the plaintiff is accepted the parties, were ad idem, for that evidence shows that the defendant understood what the terms were and gave his assent to them.

49. In my opinion these various objections fail and were an afterthought put forward to relieve the defendant of the obligation into which he had entered, should he fail oh the substantial part of his case, to which I now turn. That question, is, assuming as 1 hold that there was a concluded contract, what were its terms

50. But before doing so, I will deal with a point advanced in the argument, namely, when and where the offer was accepted and whether Mr. Owen had authority to accept on the defendant's behalf.

51. Mr. Owen's acceptance is contained in the letter of the 13th November 1912. Mr. Hyam swears that he never gave him authority to write any such letter and that the first time he saw it was on the 24th January 1913; but that he never wrote repudiating his authority as he did not think it necessary.' He denied Mr. Gregory's explicit statement that he showed him Mr. Owen's letter at the interview of the 15th. No doubt Mr. Gregory's veracity was impugned in cross-examination, it being suggested and denied that his day-books (in which this particular incident was not described had been characterised as false entries in another case. It is also a circumstance in Mr. Hyam's favour that Mr. Owen does not recollect this incident. But it is easier in the case of an incident of this kind to forget it than to honestly suppose thai) it took place when it did not. It is hard to imagine any alternative to the acceptance of Mr. Gregory's positive statement than that he was telling an untruth. I am unable to hold this, nor has 'the learned Judge done so. The incident seems to be quite a probable one. Is it likely that a conversation should be had between Mr. Cohen, Mr. Gregory and the defendant without any reference to the broker's letter which was the basis of the contract? I think not. It appears also to be the fact that Mr. Hyam's ignorance of the contents of the letter till the 25th January was not put in cross-examination to any of the plaintiff's witnesses. Mr. Owen admits that after writing the letter he did not show it to the defendant before sending it to Mr. Gregory, but he swears that he wrote it on Mr. Hyam's authority, who suggested to him its terms in the form and to the effect in which it now stands. It is said that Mr. Hyam did not previously take exception to Mr. Owen's authority. But 1 think there is nothing in this. For I think a fair reading of Mr. Hyam's evidence is that Mr. Owen had authority to negotiate and settle but only on the terms which Mr. Hyam alleges. With this I deal later. For reasons which 1 give later also I hold that Mr. Owen had authority to bind the defendant as he purported to do by his letter: and that (on Mr. Gregory's evidence) Mr. Hyam must be taken to have been aware of its terms. The question whether Mr. Owen was authorised to write the letter of acceptance is of secondary importance in this case, for if the evidence of the plaintiff be accepted the defendant personally later on gave his assent to the conditions sought to be enforced against him.

52. This being so, the facts stand as follows:

53. Mr. Owen was informed by Mr. Gregory of the plaintiff's terms on the 13th November. Mr. Cohen was then informed by Mr. Gregory of the result of this interview. Mr. Owen accepted by his letter of the 13th November of which Mr. Cohen was informed. The latter confirmed the arrangement to Mr. Gregory on the 14th November. Mr. Owen called at Mr. Gregory's office on the 15th with Mr. Hyam, when they said that they would call on Mr. Cohen to settle the terms with him and would see him again later. They are then alleged to have seen Mr. Cohen in the presence of Mr. Gareh and the contract was confirmed. After this both Mr. Cohen and Mr. Hyam called at Mr. Gregory's Office when Mr. Hyam told Mr. Gregory that he was agreeable to Mr. Cohen's terms. On the same day it is said that the 6th January was fixed for completion. On the 2nd Mr. Cohen handed the draft agreement approved to Mr. Gregory who, as stated, forwarded it to the defendant on the 20th November. Now, if this evidence' be true the result is that Mr. Owen on the 13th January accepted the plaintiff's offer explicitly as regards all terms but two, and as to these implicitly. As regards these latter there was, it is said, an acceptance though an imperfectly expressed acceptance. These two terms were, firstly, (the defendant having agreed that he would' not ask the Jewish School to vacate for 12 months from the date of execution of the conveyance) that the school was to remain on the same terms as heretofore. This was not expressly stated but implicitly accepted because without it the condition would be nugatory since it would be open to the defendant to nullify the condition by changing and enhancing the rent to a point at which the school could not pay and remain This tern was in any case, according to the evidence, later expressly accepted. Nor does the defendant deny that the school were to have possession on the same terms; what he says is that he had no objection to that provided that the contract was not to be completed until after the expiration of 12 months. The second term imperfectly recorded was that there was to be a special power-of-attorney under which the conveyance was to be executed. This is indicated though not expressed by the reference to six weeks.' This arose out of the conversation with Mr. Gregory, in which it was explained that as Mr. Gubbay was in England the contract could not, as he proposed, be executed in a month.

54. The matter is one of no importance and it is not contended that it is of any concern to Mr. Hyam whether there was such a special power or not. The same remarks apply to the fixing of a definite date, the 6th of January, which was done on the 15th. These terms were further, it is alleged, confirmed by the defendant personally on the 15th--with the evidence I deal later. It comes then to this, either there was an acceptance of the contract by Mr. Owen's letter expressly and implicitly as to the terms mentioned (other than the actual date for execution) and an acceptance of this last term by the defendant personally on the 15th January and an express confirmation by him of the other terms on the same date; or if, as the defendant alleges, Mr. Owen had no authority or his letter does not mean what the plaintiff says he does, or if he says there was no implicit acceptance of the terms imperfectly recorded, then there was an acceptance by the defendant personally on the 15th in terms which have no ambiguity about them. I think the plaintiff is entitled to rely, as he does, not only on Mr. Owen's letter which is regarded as the acceptance but on the subsequent oral conversations which, if true, more fully and clearly state and confirm that to which the letter refers. As first put before us there was some inaccuracy in the statement of the case by Counsel for the respondent which he subsequently corrected. As it now stands it is, in my opinion, in conformity with that pleaded. The appellant has submitted that there is a variance between pleading and proof in two particulars. The plaint alleges an agreement on the 13th. November 1912 between Mr. Cohen and Mr. Owen and a confirmation to the plaintiff's solicitors on the 15th. It is suggested that the case now made is an agreement with Mr. Cohen on the 15th. This argument is, in my opinion, without foundation. The plaintiff relies on the agreement of the 13th, namely, the broker's letter. What he says is that two minor terms which were implied but not expressly stated in this letter, were clearly stated and confirmed on the 15th. Confirmation was given to the plaintiff's solicitors on the return of the defendant and the broker from Mr. Cohen. The plaint omits, it is true, to state any reference to the interview with Mr. Cohen but this is an omission to plead evidence only. The confirmation to the solicitor alleged in the plaint is proved. Some reliance was placed on the fact that the learned Judge finds that an agreement was arrived at between the parties on the loth. But this does not seem open to objection, for the learned Judge had previously also held that the conditions had been previously agreed to when Mr. Owen wrote and gave Mr. Gregory the letter of acceptance on the 18th and when, as the learned Judge holds, both the solicitor and Mr. Cohen regarded the matter as concluded. The agreement evidenced by this letter was as to the terms expressed in the letter and with the two particulars so implicitly therein contained became, as the learned Judge holds, a definite, complete and binding agreement on the 15th November.

55. We are here led to a consideration of the question, what, if any, were the terms agreed upon by the parties? 1 will take them in the order in which they are stated in the broker's letter. The acceptance of the general offer for the sale of the premises in suit for Rs. 1,93,000 is not disputed. The first of the disputed special conditions is stated in the letter as follows: My principal agrees to have no temple or mosque built on these premises.' As these words are not in any way qualified they mean, in my opinion, what they in effect say and that is that a temple or mosque is not to be built by any one, whether the purchaser or others taking, through him. This construction is strengthened by the wording of the next sentence he will not ask the Jewish School to vacate, etc.,' where the purely personal obligation is expressed as such. It is also supported, by a consideration of the following facts. It cannot be matter of doubt upon the oral evidence and the day-book of Mr. Gregory that the vendor who is a Jew was insisting that the premises should not be used as a mosque or temple and that no noisy or offensive business should be carried on there, because the premises were near to the Jewish; Synagogue. This is a permanent institution and it is, therefore, reasonable to suppose that the vendor at least intended that it should be permanently protected. If he had it in his mind to bind the immediate purchaser only, the latter could have made the protection nugatory by selling the property the following day to some one else who might have built a mosque or temple or created a nuisance on the property. 1 think also that Mr. Hyam must have understood this. Whether he accepted the condition in this sense is another question to which I next refer. He must ha taken to have done so for the following reasons. In the first place that is the construction which I put on the letter of Mr. Owen who, in my opinion, had authority from his principal. That the words of the letter as they stand mean this, is to some extent indicated by Mr. Hyam's evidence. For he takes exception to the statement in the letter, which would be unnecessary if it merely meant what he says he agreed to. But the matter does not rest there for the oral evidence for the plaintiff, if true, shows both the meaning of the words in Mr. Owen's letter and that Mr. Hyam expressly agreed to the plaintiff's conditions. Mr. Cohen expressly swears that the defendant in his presence agreed to a clause being inserted in the conveyance binding the land, that is, the purchaser's assigns. This and other evidence of Mr. Cohen is charged by the defendant as being false and unless it is displaced is conclusive of the matter. Before us it has been argued that as the plaint pleads a confirmation between Mr. Gregory and the defendant, the confirmation spoken of in the evidence between Mr. Cohen and the defendant must be an invention. According to the plaintiff's evidence it is a fact that the defendant did confirm to Mr. Gregory the plaintiff's special conditions. I may here refer to Mr. Gregory's evidence and his day-book. So far then the plaint is not at variance with the evidence. We are, however, asked to say that because the plaint did not plead confirmation to Mr. Cohen, therefore, such a confirmation did not take place. In the first place, it is in a high degree unlikely that no confirmation was given to Mr. Cohen. This latter was not some stranger but the person acting for the vendor in England who knew the vendor's mind and intentions and had full authority to give effect to them. Mr. Gregory on the other hand was merely the solicitor of the vendor who in all matters would have to refer to the latter's agent, Mr. Cohen. It is, therefore, in a high degree probable that the defendant saw and spoke to Mr. Cohen and if he did it does not seem to me to be likely that at such interview, the latter would omit to discuss the special terms on which alone the sale was to take place. Mr. Cohen's evidence is further supported by that of Mr. Gregory and his day-book. The latter states that on the 15th November Mr. Owen and Mr. Hyam called on him and they said they would call on Mr. Cohen, settle the terms with him and see Mr. Gregory again. It is true that Mr. Owen does not seem to recollect having seen Mr. Gregory twice with the defendant. But as against what is possibly a lapse of memory on his part we have a reliable contemporaneous record in the day-book. That they did see Mr. Cohen is sought to be proved by the latter evidence and that of Mr. Gareh. As regards the latter's evidence it might have been a question had we been sitting as a Court of first instance, whether it is sufficiently proved that Mr. Gareh was there. Mr. Gareh is a young assistant who would not ordinarily be present unless sent for. He himself says that he cannot remember whether he was present when the defendant arrived or went in afterwards or whether he was sent for. Mr. Owen says Mr. Gareh was not there that is, during the interview) and that he was sent for at the conclusion to accompany them to Mr. Gregory. That he did this there is no doubt. Mr. Cohen on the other hand supports Mr. Gregory when he says Mr. Gareh was present. The learned Judge has accepted both Mr. Cohen and Mr. Gareh's evidence and I see no sufficient reason for differing from him, the more particularly that I disbelieve the defendant's case as put in the cross-examination of Mr. Gareh that no terms whatsoever (other than the amount of earnest money) were discussed between Mr. Hyam and Mr. Cohen.' Mr. Gregory also says, though this evidence is not of much account, that Mr. Gareh told him that the matter had been discussed before Mr. Cohen. Mr. Owen also says the terms were verbally agreed to between the defendant and Mr. Cohen. Mr. Gregory next deposes that the defendant came to him saying that they had arranged the terms finally with Mr. Cohen and that they were agreeable to his special conditions, which to the best of his belief were mentioned in detail. Mr. Gregory says that on that day he had shown the defendant Mr. Owen's letter and that the defendant did not repudiate Mr. Owen's authority, but said he would have no objection to give a personal covenant. He then naturally said that the defendant must speak to Mr. Cohen direct on the subject as his own instructions on the point were peremptory. He says, however, that when they came back (and in this he agrees with Mr. Cohen) the defendant agreed that the covenant should run with the land. As against this evidence there are two circumstances which are relied upon for the defendant. Mr. Gregory's day-book runs: 'and that he would not convert the promises into a mosque or temple' and next in his letter of the 17th January 1913 he writes: 'This point (personal covenant) was discussed and you made no, qualification restricting the covenant', no mention being made of the express agreement referred to in the evidence. Mr. Gregory's explanation is that in the day-book matters are not completely stated and that there was an omission in the letter. So far as they go it must be conceded that these two points favour the defendant. The question is, however, whether in this appeal they are sufficient to displace the other facts to which I have in part referred, including the positive direct testimony for the plaintiff which is such that it must be either true or false. I cannot believe that all of it which the defendant traverses was due to mis-recollection or mistake. Further, Mr. Hyam says that he agreed to and understood there was to be a personal covenant and according to his evidence he expressed himself in these terms. It was then that Mr. Gregory said no, no I must put it in the agreement.' This appears to me to indicate what Mr. Gregory says about the question of the personal covenant. It was to go in the agreement because as Mr. Cohen says 'it was to go with the title-deeds binding him for ever.' That it was at least so understood, is shown by the fact that the draft was drawn up in this way on the 15th and was not repudiated by the defendant to whom it was sent on the 20th November until the 15th January following. According to Mr. Hyam's evidence on the other hand when asked, do you say Mr. Cohen, when asked, did not say a single word as regards the conditions?' he answers 'absolutely nothing--not one word.' As I have said, that and the story that Mr. Gregory only said what about the mosque and temple' does not seem to me a likely tale. I may here point out that whilst the defendant asserts that what Mr. Cohen has said on this point is 'absolutely false', such a case was not put in cross-examination to the latter. On the contrary Mr. Sircar's question at page 37, line 4, assumes that there was in fact a conversation between Mr. Hyam and Mr. Cohen on the subject of the mosque and temple though the parties were at variance as to the terms of it. If, as Mr. Hyam says, the question of building a mosque or temple was dropped directly it was ascertained that be, a Jew, was the purchaser, how is it that according to his evidence Mr. Gregory insisted upon the condition appearing in the draft and its appearance there? Mr. Hyam's suggestion that there were to be two agreements, seems a new case.

56. Some of the considerations above mentioned apply also to the second and other terms of Mr. Owen's letter. The second runs or to cause any nuisance to the Jewish Synagogue.' If these words stood alone they would, in my opinion, cover the condition as stated in the plaint. But they do not stand alone. Mr. Hyam's case is that the question of nuisance was never discussed, never put to me.' As against this we have the following facts. Mr. Gregory's day-hook of the 13th November shows that Mr. Cohen was insisting that the purchaser would not carry on any noisy or offensive business.' This is, however, not repeated in the note made as regards the broker's visit which followed. Mr. Cohen spoke on the subject to Mr. Owen. The latter embodied it in his letter of the 13th November. He swears also that he told Mr. Hyam that the premises should not be made a source of nuisance to the Synagogue; that he told the latter all the terms Mr. Cohen proposed and that the defendant accepted them. Mr. Cohen says the defendant agreed to these conditions. Mr. Gregory enters in his day-book of the 15th November that the defendant agreed not to do any act which would be a nuisance to the Jewish Synagogue,' and deposes to the same effect saying that the defendant told him that he would not cause any tin shop or anything of that kind or other things to make a noise there which would be a nuisance.' He embodies a provision in the draft regarding a subject which Mr. Hyam says was never discussed and subsequently asserts the agreement in his letter of the 17th January. It seems to be impossible on these facts to hold that all this evidence is either untrue or mistaken and that, as Mr. Hyam says, the subject was never discussed at all. The letter of Mr. Owen affords strong corroborative evidence that it was discussed and that the letter in this and other respects states the plaintiff's case, is shown by the defendant's exception to it as disagreeing not only in form but in substance from what he gave Mr. Owen authority to accept.

57. The next terra was that he will not ask the. Jewish School to vacate for 12 months from the date of execution of the conveyance.' Learned Counsel for the respondent does not having regard to the circumstances and time which, has elapsed, insist upon this, term but says it was agreed upon. The letter is imperfect in that it does not expressly state 'on the same terms and conditions under which they (the school) were then occupying the same.' I should myself, as I have said, have thought this was implied. For the obvious desire was to benefit and give time to the school and unless it was allowed to remain on the same terms, the provision might have been rendered nugatory by asking a rent or imposing other conditions which would oblige the school to vacate. That, however, the defendant agreed to this is shown by the evidence of Mr. Gregory and his day-book and of Mr. Cohen. Mr. Owen says he has no recollection whether the terms were discussed. He, however, speaks to the term 'from the date of execution of the conveyance' and Mr. Gregory's evidence is that Mr. Owen's letter was shown to the defendant and that the only term which the latter attempted to get conceded was the question of personal covenant not to build, with which I have already dealt. The plaintiff's case is also stated in Mr. Gregory's letter of the 17th January. The defendant's contention is set out in his reply of the 22nd January where he says he agreed to defer completion of purchase for a year. But if so, what had the defendant to do with the school? He could not interfere with the tenants until his purchase was completed and he became owner of the property. And if so, any stipulation on the point was, unnecessary. Mr. Hyam's statement that 'not a word' was said at the interview with Mr. Gregory about the school is contradicted by Mr. Gregory's evidence, his day-book and the letter he wrote on the 17th January. The last term was as to the date for completion of conveyance which was fixed in the broker's letter as six weeks from the date of execution and was subsequently fixed on the loth November for the 6th January-following. This the defendant denies but the plaintiff's case is made out as to the letter by Mr. Owen, and as to the 6th January by Mr. Gregory, his day-book, Mr. Gareh and Mr. Owen. According to the, latter his letter was written under the defendant's instructions. Six weeks from the date of the contract would expire by the beginning of January and so, Mr. Gregory says, the 6th January was fixed as the exact date. The last point which was somewhat faintly referred to is the term under which a conveyance was to be accepted under a special power-of-attorney, the vendor being in England. This is referred to in Mr. Gregory's day-book and his evidence.

58. In short the question presents itself to me as a question of fact and the credibility of the plaintiff's witnesses. Mr. Owen, the broker, swears that he wrote the letter of acceptance under instructions from Mr. Hyam who suggested to me the terms to write to Mr. Gregory.' The first question is, therefore, whether Mr. Owen is to be believed on this and other points of the case. Nextly Mr. Cohen, who so far as I can see has no personal interest in the matter, swears that the defendant personally agreed to the terms and Mr. Gregory, the solicitor, swears that Mr. Hyam confirmed the acceptance of these terms to him and that he (Mr. Gregory) further showed the defendant the broker's letter. Again, the question is whether these witnesses are speaking the truth or not. It is quite impossible that all these witnesses should be mistaken as to all the matters on which reliance is laid on behalf of the plaintiff. Nor does Mr. Hyam suggest that, for he expressly in his evidence charges Mr. Cohen's evidence to be 'absolutely false' and seems to make the same suggestion against the latter's solicitor and his day-books, which in cross-examination were alleged to have been characterised as false in another case. We are asked to disbelieve all this evidence on the strength of Mr. Hyam's denial. The learned Judge who heard the evidence has not done so, nor am I able to hold that he is in so holding wrong. The reasons which have led to that denial have, in my opinion, been correctly surmised by Mr. Justice Chitty.

59. Mr. Hyam, though himself a Hebrew, does not at first appear to have thought of or troubled himself about the consequences of his purchase of the Jewish Poor School and as regards the covenant against building a mosque and temple he speaks of it as 'personal to him,' and Mr. Cohen who was 'prejudiced.' Later on, as is stated in Exhibit E., Mr. B.M.D. Cohen, the manager of the Poor School, learning of the proposed sale, went to Mr. Hyam and had a big row with him' and so much so that the latter wished to cancel the contract. As appears from Mr. Gregory's day-book of the 29th November, Mr. Hyam called on the former and said that Mr. E.M.D. Cohen had raised obstacles in the way of his purchasing the property, that he was quite disgusted with the whole affair', and that he would be prepared to cancel the contract. This is admitted. Correspondence then took place with Mr. Gubbay, the plaintiff, who, however, refused to cancel. On the 8th January 1913 the Solicitor's day-book shows that Mr. Hyam again called and stated that he would rather not complete his purchase as the whole of the Jewish community were against his doing so.' Mr. Hyam in his evidence refers to Mr. E.M.D. Cohen speaking of the curses of the Jews being heaped on his head.' Then on the 22nd January Mr. Hyam wrote to Mr. Gregory that he insisted on vacant possession for I would have none of the trouble, worry and expense, not to mention the odium, for having to turn out a charitable and communal institution from premises in which it had made its home for 40 years.' It appears to be this, and not the numerous objections taken later, why the defendant attempted 'to back out of his contract. It is true that he had previously taken an objection to the covenant running with the land but according to the evidence this objection was not persisted in. If it was, why did the negotiations hang on from November 13th, 1912, till towards the close of January 1913? It is quite clear that the plaintiff's agent was insisting on the covenant and if, as is suggested now, the point was vital to the defendant and not given up by him, the negotiations would have come to a close. That they did not, supports the plaintiff's case that the objection though taken was given up, Nor is there any evidence in support of he suggestion now made, that Mr. Hyam would not have agreed to conclude the contract before he got possession of the school premises as his money would be lying idle. Mr. Hyam in his evidence does not take this objection. The real objection which he had was that stated to Mr. Gregory and the rest is an afterthought, with a view to avoid an agreement which I hold is binding on him.

60. In my opinion, the appellant has established no sufficient ground for reversing the decision of Mr. Justice Chitty that the plaintiff had proved and was entitled to have specific performance of the contract pleaded.

61. The appellant has not, in my opinion, established grounds for the reversal of the judgment and decree against him and I would, therefore, dismiss this appeal with costs.

Mookerjee, J.

61. This appeal is directed against a decree made by Mr. Justice Chitty for specific performance of a contract for sale of land in Calcutta. The substantial question in controversy between the litigants is, whether there was a concluded contract in respect whereof specific performance may be directed by the Court. The trial Court has pronounced in favour of the plaintiff. That decision has been assailed by the defendant, and we have been invited to hold that there was no completed contract between the parties, as they contemplated a formal agreement which was never executed, and as they were not oven of one mind with regard to material terms of the proposed agreement while the negotiations were in progress.

62. It is well settled that the fact that the parties intended to embody the terms of their contract in a formal written agreement, is strong evidence that the negotiations prior to the drawing up of such writing are merely preliminary and not understood or intended to be binding. If it is definitely expressed and understood that there is to be no contract until the formal writing is executed, there is plainly no binding agreement formed until this provision is complied with. It is also true that if all the terms of the agreement have not been settled and it is understood that these unsettled terms are to be determined by the formal contract, there is no binding obligation until the writing is executed. But if the oral agreement or written memorandum is complete in itself and embodies all the terms to be inserted in the intended formal writing, a binding obligation is fixed on the parties, unless it is understood and intended that such contract shall not become operative until reduced to writing. These principles, which in their application give rise to questions of considerable nicety, are illustrated by decisions of the highest authority, to some of which reference may usefully be made here. In Chinnock v. Marchioness of Ely (1865) 4 De. G.T. & S. 638 : 11 Jur. (N.S.) 329 : 12 L.T. (N.S.) 251 : 13 W.R. 597 : 146 R.R. 495 : 46 E.R. 1066 : 2 H. & M. 220 : 34 L J. Ch. 399, the defendant's solicitors wrote to the plaintiff, naming the price for an estate about which they had been negotiating, the plaintiff wrote a letter in which he agreed to give the price named, and then added, I shall be obliged if you will forward me the usual contract.' In reply, the defendant's solicitors wrote, we have been instructed by the Marchioness of Ely to proceed with the sale to you of these premises. The draft contract is being prepared and will be forwarded to you for approval in a few days.' Lord Wastbury, L.C. held that so far the parties were in treaty merely, and that without the execution of the draft mentioned, there was no contract concluded. In Bonnewell v. Jenkins (1878) 8 Ch. D. 70 : 47 L.J. Ch. 768 : 38 L.T. 81 26 W.R. 294, the defendant's agents offered certain premises for sale. The plaintiff wrote to the agents, making an offer of 800 for the estate. The agents wrote in reply as follows: We are instructed to accept your offer of 800 for these premises and have asked Mr. Jenkins' solicitor to prepare contract.' The Lord Justices of Appeal held that there was a concluded contract. Thesiger, L.J., said: The mere reference to the preparation of an agreement by which the terms agreed upon would be put into a more formal shape, does not prevent the existence of a binding contract.' In Rossiter v. Miller (1877) 5 Ch. D. 648 : 46 L.J. Ch. 737, there was much correspondence about a sale of certain lots of land, and the question arose whether the correspondence showed a completed contract without the formal draft which had been referred to in some of the letters. James, L.J., said: The reasonable view of the case is that the parties intended the signing of the formal contract to be a condition precedent.' Coleridge, C.J., said: If a set of terms are agreed upon in writing, they constitute a contract, although it may be the intention of the parties that they should be put into a more formal shape;but here, a set of terms never was finally agreed to.' Baggallay, L.J., said: 'The letters left the defendant a right to believe that the signing of a formal contract was necessary to create a binding agreement.' When the case of Rossiter v. Miller (1878) 3 A.C. 1124 at p. 1139 : 48 L.J. Ch. 10 : 39 L.T. 173 : 26 W.R. 865 was taken on appeal to the House of Lords, Lord Hatherley said: 'Although the correspondence may not set forth, in a form which a solicitor would adopt if he were instructed to draw an agreement...between the parties, yet, if the parties to the agreement, the thing to be sold, the price to be paid, and all those matters, be clearly and distinctly stated, although only by letter, an acceptance clearly by letter will not the less constitute an agreement in the full sense between the parties, merely because that letter may say, we will have this agreement put into due form by a solicitor.' Lord O'Hagan said: The correspondence gives no colour to the suggestion that the contract was not final, and was not considered to be final by all the parties to it, because the formal agreement embodying its already settled terms had not been furnished.' Lord Blackburn said: The mere fact that the parties have expressly stipulated that there shall be afterwards a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. It is a matter to be taken into account in construing the evidence and determining whether the parties have really come to a final agreement or not. But as soon as the fact is established of the final mutual assent of the parties so that those who draw up the formal agreement have not the power to vary the terms already settled, I think the contract is completed.' In the course of the same speech, Lord Blackburn further said: 'Parties often do enter into negotiation, meaning that, when they have (or think they have) come to one mind, the result shall be put into formal shape, and then (if, on seeing the result in that shape, they find they are agreed) signed and made binding; but that each party is to reserve to himself the right to retire, if, on looking at the formal contract, he finds that though it may represent what he said, it does not represent what he meant to say. Whenever, on the true construction of the evidence, this appears to be the intention, I think the parties ought not to be held bound, till they have executed the formal agreement.' In Ridgway v. Wharton (1854) 6 H.L.C. 238 at p. 305 : 27 L.J. Ch 46 : 4 Jur. (N.S.) 173 : 5 W.R. 804 : 10 E.R. 1287 at p. 1313 : 29 L.T. (O.S.) 390 : 108 R.R. 88, Lord Cranworth, L.C., said: If parties have entered into an agreement, they are not the less bound by that agreement because they say, we sent it to a solicitor to have it reduced into form; but when the parties negotiate and do not say so, the mere fact that they do send it to a solicitor to have the matter reduced into form, affords to my mind generally cogent evidence that they do not intend to bind themselves till it is reduced into form. The circumstance that the parties do intend a subsequent agreement to be made, is strong evidence to show that they did not intend the previous negotiations to amount to an agreement.' Lord Wensleydale said in the same case: These cases often occur in Courts of Law, and the question then always is, whether the parties mean to embody the contract, made by parol, in writing? If they do, nothing binds them till it is written. If they enter into a contract with a view to a written agreement, nothing will bind them but that written agreement, and that quite independently of the Statute of Frauds applying to all agreements If the parties agree finally to be bound by any terms and then, for the sake of preserving a memorial, having agreed to be bound by the original terms, they get a document drawn up, there is no doubt that they are bound by the original terms. An agreement to be finally settled must comprise all the terms which the parties intend to introduce into the agreement. An agreement to enter into an agreement upon terms to be afterwards settled between the parties is a contradiction in terms. It is absurd to say that a man enters into an agreement till the terms of that agreement are settled, until those terms are settled, he is perfectly at liberty to retire from the bargain.' In Rummens v. Robins (1865) 3 De G.J. & S. 88 : 11 Jur. (N.S.) 631 : 14 L.T. 717 : 13 W.R. 979 : 46 H.R. 571 : 142 R.R. 32, where an offer to sell a piece of land at a certain price was accepted, it was ruled that there was no completed contract as the letter by which the offer was made stated that there would be the usual clauses in a contract and some limitations as to the length of the title and other minor details. Knight Bruce, L.J., said: 'What are the usual clauses in a contract for the sale of land? They differ almost incessantly; they differ according to the state of the title, the conveniences, the fancies and the wishes of mankind, and the particular situation, convenience and inconvenience belonging to the estate.' To the same effect are the decisions in Von Hatzfeldt Weldenburg v. Alexander (1912) 1 Ch. 284 at pp. 286, 289 : 81 L.J. Ch. 184 : 105 L.T. 434, Lloyd v. Nowell (1895) 2 Ch. 744 : 61 L.J. Ch. 744 : 13 R. 712 : 3 L.T. 154 : 44 W.R. 43 Jones v. Daniel (1894) 2 Ch. 332 : 63 L.J. Ch. 562: 8 R. 579:70 L.T. 588 : 41W.R. 687, Winn v. Bull (1877) 7 Ch. D. 20 : 47 L.J. Ch. 139 : 26 W.R. 230, Oxford v. Provand. (1868) 2 P.C. 135 : 5 Moore P.C. (N.S.) 150 : 16 E.R. 472, Brien v. Sivainson 1 L.R. Ir. 135, Page v. Norfolk (1894) 70 L.T. 23, Watson v. McAllum (1902) 87 L.T. 547 and Clark v. Robinson (1903)51 W.R. 443. It is needless to multiply authorities, but reference may be made to the following observation of Lord Selborne in Hussey v. Home-Payne (1879) 4 A.C. 311 : 48 L.J. Ch. 846 : 41 L.T. 1;27.W.R.. 585: A contract established by letters may sometimes bind parties who, when they wrote those letters, did not imagine that they were finally settling the terms of the agreement by which they were to be bound; and it appears to me that no such contract ought to be held established, even by letters which would otherwise be sufficient for the purpose, if it is clear, upon the facts, that there were other conditions of the intended contract, beyond and besides those expressed in the letters, which were still in a state of negotiation only, and without the settlement of which the parties had no idea of concluding any agreement.' Lord Cairns, L.C. in the same case affirmed the important principle that where a Court has to find a contract in a correspondence, the whole of that which has passed between, the parties must be taken into consideration; a line cannot be drawn at one point of the negotiations, conducted partly by correspondence and partly at meetings between the parties, without regard to the sequel of the negotiations which may plainly show that terms of the intended agreement, of great practical importance and regarded on both sides as such, then remained unsettled and were still the subject of negotiation between them.

63. From these expressions of judicial opinion, it is clear that, after all, the question is mainly one of intention. If the party sought to be charged intended to close a contract prior to the formal signing of a written draft, or if he signified such an intention to the other party, he will be bound by the contract actually made, though the signing of the written draft be omitted. If, on the other hand, such party neither had nor signified such an intention to close the contract until it was fully expressed in a written instrument and attested by signature, then he will not be bound until the signatures are affixed. As was said in Lyman v. Robinson 14 Alien 242, the question in such cases always is, did the parties mean to contract by their correspondence or were they only settling the terms of an agreement into which they proposed to enter after all its particulars were adjusted, which was then to be formally drawn up and by which alone they designed to be bound? The expression of this idea may be attempted in other words: if the written draft is viewed by the parties merely as a convenient memorial or record of their previous contract, its absence does not affect the binding force of the contract; if however it is viewed as the consummation of the negotiations, there is no contract until the written draft is finally signed. To determine which view is entertained in any particular case, several circumstances may be helpful, as for example, whether the contract is of that class which are usually found to be in writing, whether it is of such a nature as to need a formal writing for its full expression, whether it has few or many details, whether the amount involved is large or small, whether it is a common or unusual contract, whether the negotiations themselves indicate that a written draft is contemplated as a final conclusion of the negotiations. If a written draft is proposed, suggested or referred to during the negotiations, it is some evidence that the parties intended it to be final closing of then tracet Still, with the and of all rules and expositions of principles, the solution of the question in concrete cases is often difficult, doubtful and sometimes unsatisfactory. A good illustration of the uncertainty inherent in the subject is afforded by the case of Rossiter v. Miller (1878) 3 A.C. 1124 at p. 1139 : 48 L.J. Ch. 10 : 39 L.T. 173 : 26 W.R. 865, where Coleridge, C.J., James, L.J., and Baggallay, L.J., were clear that there was no contract for want of a formal draft, while Cairns, L.C., Lord Hatherly, Lord Blackburn and Lord Gordon, no less able and eminent jurists, were confident in the contrary opinion. We come now to the consideration of the circumstances and correspondence in this case in the light of the principles explained.

64. The plaintiff Gubbay is the owner of premises, 8 and 7/1 Pollock Street and 1 Mansook Lane in Calcutta. The first of these is in the occupation of the Calcutta Jewish School as tenants at a monthly rent of Rs. 300; the others consist of a godown and a lower-roomed house. The plaintiff resides in London, and employed R.M. Cohen to sell these premises for Rs. 1,33,000. Cohen instructed a house-broker Owen to find a purchaser. Owen negotiated with the defendant Hyam, who was speculating in the purchase of landed property in Calcutta for the purpose of building operations. Owen appears to have intimated to Hyam that the sale would be subject to two conditions, first, that no temple or mosque would be built on the site and secondly, that the possession of the Jewish School would not be disturbed for a year. Hyam agreed to these conditions as he interpreted them. On the 13th November 1912, Owen wrote to Gregory, the solicitor of the plaintiff, and intimated to him that he had found a purchaser of the property who was willing to pay the price demanded and had agreed not to have a temple or mosque on the site, nor to cause any nuisance to the Jewish (sic) Bathel and also not to ask the Jevish School to vacate for 12 months from the date of execution of the conveyance. The broker added that the time to execute and complete the conveyance would be six weeks from the date of the contract, subject to approval of titles, and requested that confirmation by the vendor might be obtained in the course of the day, if possible. It is not quite clear on the evidence whether, before the institution of this suit, defendant was aware that a letter in the terms mentioned had been written by the broker to the solicitor. Gregory asserts that he read it out to Hyam in the presence of Owen, but the latter has no recollection of the incident; Owen, at any rate, did not show the letter to Hyam, who denies all knowledge of it before suit. Gregory wrote for instructions to Cohen, who, on the day following, verbally confirmed the arrangement, subject to the payment of Rs. 5,000 by the purchaser as deposit money. This appears from the entries in the day-book of the solicitor under dates 13th and 14th November; entries in this day-book, it may be added, were made by a clerk in the office of the solicitor at the end of each day. Up to this stage, Owen does not appear to have disclosed the name of the intending purchaser, and Hyam had not met either Cohen or Gregory. On the 15th November, there were, according to the plaintiff, four interviews between various persons in connection with the proposed transaction: three of these are said to have taken place in the office of the solicitor and one in the office of Cohen. The first interview in point of time took place in the office of Gregory, where Owen, Hyam and Gregory are alleged to have been present, but Hyam cannot recollect that this interview did in fact take place. At the second interview, which took place in the office of Cohen, there are said to have been present Owen, Hyam, Cohen and Gareh, an assistant of Cohen employed to look after the properties of Gubbay. Owen and Hyam both deny that Gareh was present when the conversation took place; according to them, Gareh was sent for by Cohen, and merely asked to accompany Owen and Hyam to the office of Gregory; this version seems probable. The third interview was in the office of Gregory, when Owen, Hyam, Gregory and Gareh were present. The fourth interview was in the office of Gregory, between the defendant, Gregory and Gareh, and the defendant, as may be expected, denies all knowledge thereof. What is alleged by the different witnesses to have taken place at these interviews appears from their depositions and the version of Gregory may also be gathered from the entry in his day-book. There is a wide divergence between the witnesses in the accounts they profess to give of what was said by the different persons at these interviews; this is not surprising, as the witnesses were endeavouring to narrate conversations which had taken place nearly fifteen months before they deposed in Court. But this much is clear that Hyam paid a cheque for Rs. 1,001 as earnest money, which Cohen and Gareh had agreed to accept, and it was arranged that Gregory should prepare an agreement to be submitted to Hyam for approval. Gregory appears to have prepared the draft agreement on that very day and sent it to Cohen for approval. Cohen returned the draft approved on the 20th November and Gregory sent it on to Hyam at once for his approval. The evidence does not show that there was any communication between the parties between that date and the 28th December when the power-of-attorney of Gubbay was received from England. Gregory informed Hyam of the receipt of the power-of-attorney and requested the return of the draft agreement with his approval. Hyam does not appear to have replied to this letter till the 15th January 1913, and in explanation of his silence, he now states that he was waiting to see whether the Jewish School would acquire the property, as the elders of the Jewish community had heard with evident concern that the property was about to change hands. On the 15th January 1913, Hyam wrote to Gregory and stated his willingness to complete the purchase subject to three conditions, first, that the covenant not to build a temple or mosque would be personal to him and not a covenant running with the land; secondly, that the purchase would not be completed for the year during which the Jewish School were to be left in possession; and thirdly, that interest on the balance of purchase-money would be charged at six instead of nine per cent, as stated in the draft agreement. On the same day, before this letter was received by Gregory, he wrote to Hyam offering to send title-deeds for inspection and approval. On the 17th January, Gregory replied to the letter of Hyam dated, the 15th January, accepted the proposal about the interest on the balance of purchase-money, but repudiated the suggestions about the personal covenant and the time for completion of purchase. On the 22nd January, Hyam wrote to Gregory, explained that he had understood the proposed covenant not to build and not to disturb the Jewish School in the sense indicated in his letter dated the 15th January, and stated that he must insist on vacant possession. On the same day, Gregory demanded return of the draft agreement. On the next day, Gregory wrote to Hyam again, and stated that as Hyam had declined to complete the purchase on the terms which, he alleged, had been agreed upon between the parties, there was no necessity to prolong the matter by further correspondence. The present suit for specific performance was thereafter instituted on the 8th February 1913. In these circumstance?, the question arises whether there was a completed agreement between the parties as alleged by the plaintiff.

65. In the third paragraph of the plaint, it is stated that the agreement was made on or about the 13th November 1912 between the plaintiff through his representative and the defendant through his broker for the sale of the premises, subject to approval of title and on three special conditions. In the fourth paragraph, it is stated that on or about the 15th November, the defendant personally called, saw the solicitor for the plaintiff, confirmed the sale agreement, paid Rs. 1,001 as earnest money, and agreed that the solicitor should prepare a formal agreement in writing embodying the usual terms and conditions for sale and purchase, including the special conditions aforesaid. The case for the plaintiff, therefore, plainly is that there was a concluded agreement on the 13th November, which was confirmed two days later. A bold endeavour was made in this Court, after the conclusion of the arguments on both sides in this appeal, to obtain practically an amendment of the plaint, when the Counsel for plaintiff sought to introduce additional evidence to explain how the plaint had been originally drafted and how it had been transformed before it was filed in Court. The course attempted by the Counsel for plaintiff was so contrary to well-recognised rules of procedure that his endeavour was wholly unsuccessful and the merits of the controversy must be adjudged on the plaint as it stands, which has been accepted -throughout as the basis of the investigation by the trial Court and the discussions before the Court of Appeal. When, then, was the, agreement between the parties made? The, Counsel for the plaintiff found this a very embarrassing question to answer. Four alternative hypotheses are possible; first, that the complete contract is embodied in the letter of the 13th November from Owen to Gregory;, secondly, that the contract was verbally made on that date and that the letter embodies an imperfect narration thereof; thirdly, that the contract was made verbally in the course of the interviews on the 15th November; and fourthly, that there was never, in any stage, a completed agreement, as the parties intended that the agreement should, be embodied in a written instrument which was drafted by the solicitor for the plaintiff, but disapproved by the purchaser. The Counsel for the plaintiff found it difficult to make his choice among the first three alternatives,-although the plaint is founded upon the first hypothesis or possibly a combination of the first and second. The Counsel for the defendant has pressed the Court to accept: the fourth alternative. Mr. Justice Chitty, if I appreciate his judgment correctly, has held that there was no concluded agreement on the 13th November. In that view, I concur without hesitation. The day-book of the solicitor, his evidence in Court, as also the deposition of Cohen, make it perfectly plain that there was no concluded agreement on the 13th November. Nothing had been settled at the time as to the amount of the earnest money and the date for completion; even the scope of the restrictive covenants had not been settled, nor had the question of interest on the balance of purchase-money been even mooted. In these circumstances, one can well understand why, even on the 15th November, Gregory should state in his day-book that Owen and Hyam had called to confer with him and had, stated that they would call on Cohen to settle -the terms with him.' This is consistent with the statement of Cohen that when on the 15th November Hyam offered to give a personal covenant not to build a mosque or temple on the site, he told him, 'these are my conditions, leave or take.' There is, in my opinion, no escape from the position that no agreement was concluded between the parties on the 13th November and that they were on that date still in the stage of negotiation. The specific case made in the plaint, consequently, fails; indeed, the case as sought to be developed by the plaintiff in the course of the evidence is that the concluded agreement was made on the 15th November. It may be observed, in passing, that there is thus some force in the contention of the Counsel for defendant that the plaintiff should not be allowed to succeed on a case different from that set out in the plaint, and that the Court should refuse specific performance 'when there is substantial variance between pleading and proof: Hawkins v. Maltby (1867) 3 Ch. App. 188 at p. 194 : 37 L.J. Ch. 68 : 17 L.T. 397 : 16 W.R. 209, Lindsay v. Lynch (1804) 2 Sch. & Lef. 1 : 9 R.R. 54 and Mortimer v. Orchard 11793) 2 Ves. 243 : 30 E.R. 615. (21) (1831) Younge 346 : 34 R.R. 284. But, assuming that the plaintiff is entitled to a decree for specific performance in the suit as framed, if he proves that the agreement was concluded on the 15th November, the question arises whether the plaintiff has established the third hypothesis previously mentioned? The answer depends principally upon an examination of the oral testimony as to what passed at the four interviews said to have taken place on that date. Nothing material happened at the first interview, of which the plaintiff has no recollection. As regards the other interviews, the witnesses are hopelessly in conflict with each other, specially as to what was said about the covenant not to build a temple or mosque on the site, and there is that absence of certainty which is fatal to a claim for specific performance: Reynolds v. Waring (21). Upon this point, the evidence of Gareh is not reliable, and it seems improbable that he should have been present throughout the interview between Cohen and Hyam: if he had been he could not have failed to notice that Hyam at the time wrote out and tendered a cheque for the earnest money. There is then a conflict between Cohen and Hyam. Cohen seeks to make out that Hyam at first pressed to make the covenant personal, but yielded ultimately, and agreed to make the covenant run with the land. Hyam denies this, and his version appears to me more probable in all the circumstances of the case. In any event, the parties agreed that Gregory would draw up a draft agreement for their approval. Hyam and Cohen both allege that each of them wanted this draft agreement to be drawn up. What then was their intention? Did they intend that the written instrument should be merely a memorial of an agreement already completed, or was it their intention that the draft should bring out clearly the points which still required consideration and must be settled before the agreement could be deemed completed? To determine the true view of the situation, we must bear in mind that important points had not been settled up to that stage. For instance it had not been determined whether the purchaser should have vacant possession. There were leases yet to run in respect of the premises not occupied by the Jewish School. There is nothing to show that Hyam was aware of the fact of these leases, their terms and conditions, though it has been asserted that he must have made enquiries into the matter and made up his mind to accept the property subject to the leases. It is well settled that the purchaser is not bound to take subject to leases and is entitled to actual possession, unless there is an agreement to the contrary: Cottier v. Jenkins (1831) Younge 295 : 34 R.R. 268 and Lineham v. Cotter (1844) 7 Ir. Eq. Rep, 176. Hyam would, therefore, be prima facie entitled to vacant possession, and this would also be essential for the building operations he had in view. The question of vacant possession, then, was obviously one of the points which would require to be settled by the written agreement. There was also the question of completion of the transaction. According to the letter of Owen to Gregory, dated the 13th November, the time to execute and complete the conveyance was six weeks from the date of the contract; this would make the written agreement essential for the conclusion of the bargain. But it is now sought to be proved by oral evidence that in the course of the interviews on the 15th November, the date for completion was fixed at the 6th January 1913. The reason for this alleged variance is not satisfactorily made out, and the story is not convincing. There were evidently also other terms which might lead to differences between the parties, though they were compendiously described under the somewhat misleading category of usual terms and conditions of sale and purchase.' What the conception of Cohen and his solicitor was about usual terms and conditions is amply made out by the draft agreement prepared later. These terms included provisions to the effect that the purchaser would take the property subject to existing tenancies, that the balance of purchase-money would be paid and the sale completed on a date different from that contained in the letter of Owen, that interest on the balance of the purchase-money would run at 9 per cent, per annum, that the sale would be effected on the authority of a special power-of-attorney from the vendor, that the costs incidental to the completion would be paid by the purchaser, that the properties would be sold subject to unspecified outgoings and easements, that there would be a right of rescission in the vendor, that there would be a covenant running with the land not to use the site for the purposes of a mosque or a temple and not to carry on any noisome or obnoxious trade or business calculated to cause nuisance or annoyance to the Jewish Synagogue, and finally, that time would be deemed of the essence of the contract. It is obvious that many, if not all, of these conditions could in no sense be regarded as usual terms and conditions for the sale of lands. In the words of Knight Bruce, L.J., they were dependent on the state of the title, the conveniences, the fancies and the wishes of the agent of the vendor. The inference seems to me to be legitimate that the parties intended the written draft to be the consummation of their negotiations which were to be treated as concluded only upon the final execution of the written instrument. It is immaterial that the purchaser was prepared to modify the condition as to payment of interest before the negotiations were broken off or that he was prepared to waive one or other of the conditions named in the draft, during the trial of the suit. The vital point is that the fact that so many terms still remained undetermined, is a sure index that the contract had not yet been concluded. This view fits in with the mode in which Cohen dealt, with the earnest deposit Cohen admits that he did not cash the cheque but returned it to Gregory to keep it with him until he heard further from Gubbay; this is consistent only with the hypothesis that Cohen at that stage believed that there was no completed agreement and that it was still open to Gubbay to transfer the property to the Jewish School if he so desired The inference that there was no concluded agreement is strengthened when we remember that the parties were really not of one mind with reference to material elements of the transaction. Cohen bought that the property would be transferred subject to existing leases; Hyam was under the impression that he would have vacant possession. Cohen thought that there should be a covenant binding the land for all time to come to the effect that no temple or mosque would be built on the site nor any business carried on there which might prove a nuisance on there Jewish Synagogue. Hyam was under the impression that as he would build on the site at once a personal covenant from him was all that was required. There was ample room for misunderstanding, as is clear from the looseness of the language used by the parties, and if there was ambiguity in any of the conditions of sale in restriction of the rights of the purchaser the condition would be construed most strongly against the vendor: Seaton v. Mapp (1846) 2 Collyor 556, 70 R.R. 884, 63 E.R. 859. Thus, even in the daybook of the solicitor, in the entry of the 13th November, we find the proposed covenant described in one place as 'that the purchaser would not use the premises as a temple or mosque' (language appropriate to a personal covenant by the purchaser) and in another place as 'that the premises must not be used as a mosque or temple' (words appropriate to indicate a covenant running with the land). After anxious consideration of all the circumstances of the case I do not see any escape from the conclusion that there was no concluded contract either on the 13th or the 15th November, and that as the parties intended the execution of the draft to be the final step in their negotiations, there was no concluded agreement capable of specific performance. In my opinion, this appeal should be allowed, the decree for specific performance discharged and the suit dismissed with costs throughout.


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