1. This case is practically before the Court tinder somewhat peculiar circumstances.
2. The main question is one relating to title, and I am not really in a position to say what the title is. Naturally one would suppose that the defendants would produce all the title deeds, and lay before the Court full information on the subject, but from what fell from the defendants one can see that they are not in possession of the title-deeds.
3. The case arises in this way. The plaintiff entered into a contract with the two defendants on the 2nd April 1878, for the purchase from them of certain property at ghoosery, comprised in two plots described in the contract. The material parts of the contract are these (after reading the portions set out above his Lordship continued):
4. It is not necessary to go into the details of what happened afterwards, except, on one or two points. Rupees 500 in Company's paper was paid at the time of the agreement. There is a conflict of testimony as to whether another 500 was paid to the vendors' solicitor. Rupees 5,000 was also paid, but that is recovered back. The present suit is brought to recover the two sums of 500 and costs incurred by the present plaintiff.
5. The transaction fell through by the plaintiff's advisers refusing to proceed.
6. The question is whether the plaintiff was entitled to do this. If not, he is not entitled to recover the two sums of 500, nor the costs. But if the terms of the contract are such as to entitle him to decline to carry out the purchase, he is entitled to recover, subject to proof of the payment of the second 500.
7. As to the 2nd paragraph it is contended that it made the decision of Messers. Dutt and Mitter, J. conclusive, unless there were some want of good faith or unless their objections were distinctly unreasonable. With reference to this point three cases have been cited, the first of which was Hudson v. Buck L.R. 7 Ch. D. 683. In that case the document relied on as containing the terms of the contract was this: 'Received of Mr. S. Buck (the defendant), this day, the sum of 20 in respect of Arkley Copse, near Barnet, as a deposit on the purchase of the lease, with possession upon completion, for the sum of 680, and subject to the transfer of the mortgage now upon the property, and also the approval of the title by Mr. Buck's solicitor.'
8. Now the effect of the words 'subject to the approval of the title by Mr. Buck's Solicitor' was much considered by Mr. Justice Fry, before whom the case came, and he held, that the words did not leave the parties as they would have been without them, but he says: 'It appears to me that it is not unreasonable to suppose that the purchaser should desire to preclude the possibility of such a protracted litigation, and that he should intend to stipulate that the opinion of a particular person, his own solicitor, should be conclusive as to the sufficiency of the title deduced, and that in the absence of compliance with that condition, the contract should not be capable of being enforced.' Then the learned Judge says: It is not necessary to decide that the absence of approval by the purchaser's solicitor would be conclusive, if the purchaser himself had acted unreasonably, as for instance, if he had declined to appoint any solicitor, or if the solicitor whom he appointed had insisted upon utterly unreasonable objections to the title.'
9. The actual conclusions were that the objections taken by the solicitor were not utterly unreasonable, and therefore the decision of the solicitor was conclusive.
10. The subject came before the Court of Appeal in Hussey v. Horne Payne L.R. 8 Ch. D. 670. The matter turned on the correspondence, and the question on which the Court of Appeal decided the case was, whether certain words in a letter-'subject to the title being approved by our solicitors'-introduced new terms into the proposal requiring acceptance by the other side. The Court came to the conclusion they did.
11. The Master of the Rolls and Lord Justice Cotton gave their opinions. The Master of the Rolls said, 'the only question which we are called upon to decide is, whether that additional term so expressed amounts in law to an additional term, or whether it amounts, as was very fairly admitted by the counsel for the respondents, to nothing at all, that is, whether it merely expresses what the law would otherwise have implied. The expression 'subject to the title being approved by our solicitors' appears to me to be plainly an additional term. The law does not give a right to the purchaser to say that the title shall be approved by any one, either by his solicitor or his conveyancing counsel, or any one else. All that he is entitled to require is what is called a marketable title, or as it is sometimes called, a good title. Therefore, when he put in subject to the title being approved by our solicitors,' he must be taken to mean what he says, that is, to make it a condition that solicitors of his own selection shall approve of the title.
The matter has been recently and fully discussed by Mr. Justice Fry in Hudson v. Buck L.R. 7 Ch. D. 683 and as I entirely agree with his observations on the nature of the condition, it is unnecessary for me to repeat them. The result therefore is, that there is no contract.
12. Lord Justice Cotton said: 'Now, is there not a now term introduced by the last words of the letter of the 6th of October, 'subject to the title being approved by our solicitors? 'The argument on behalf of the respondent is this, that these words are merely surplusage, and express nothing but what the law would itself have implied. In support of that view, Mr. Pope relied upon observations made by Mr. Justice Fry, that the objection taken by a solicitor to a title under a term of this sort, if it is agreed to by both parties, must be a reasonable objection, but that by no means shows, that it is not a new term. Putting this term in the way in which Mr. Pope suggested it ought to be read, 'subject to the solicitors, provided they act reasonably, being the judges whether there is a good title or not,' it is something entirely different from the rule of law, which is, that the judge, subject to the ordinary right of appeal, is the person to decide whether or no a good title can be made. That is what the law provides independently of stipulation, but this stipulation would make the solicitor, provided he acted reasonably and bona fide, the sole and absolute judge as to whether there was or was not a good title. If he acted reasonably and bona fide, the Court (assuming that the term had been assented to and made part of the contract) would not inquire whether his objections were well-founded in law; that being so, these words introduce a new term, and the letter is not an acceptance pure and simple of the offer contained in the previous letter.'
13. That case went to the House of Lords, and the decision was affirmed by the House of Lords, but on another ground: and one of the learned Lords, Lord Cairns, expresses a doubt as to the view taken by the Court. He says L.R., 4 App. Cas., at p. 321: 'I have not desired to put the opinion which I have offered to your Lordships upon that ground, and I should doubt very much myself, if it were necessary to decide it, whether the opinion of the Court of Appeal in this respect could be maintained. I feel great difficulty in thinking that any person could have intended a term of this kind to have that operation, because, as was pointed out in the course of the argument, it virtually would reduce the agreement to that which is illusory. It would make the vendor bound by the agreement, but it would leave the purchaser perfectly free. He might appoint any solicitor he pleased, he might change his solicitor from time to time. There is no discretion personarum; there is no appointment of an arbitrator in whom both sides might be supposed to have confidence. It would be simply leaving the purchaser, through the medium of his solicitors, at liberty to say from caprice at any moment, we do not like the title, we do not approve of the title, and therefore the agreement goes for nothing. I have great difficulty in thinking that any person would agree to a term which would have that operation. But it appears to me very doubtful whether the words have that meaning. I am disposed rather to look upon them as meaning nothing more than a guard against its being supposed that the title was to be accepted without investigation, as meaning in fact, the title must be investigated and approved of in the usual way which would be by the solicitor of the purchaser. Of course, that would be subject to any objection which the solicitor made, being submitted to decision by a proper Court, if the objection was not agreed to.'
14. These are the authorities in the matter, and I conceive it is the duty of the Court to follow the decision of the Court of Appeal until it is overruled. These are the views of the Lord Chancellor, and they must raise doubts in every mind, but still they are not the grounds of the decision.
15. The other Lords did not refer to the question.
16. I think, therefore, that it will be my duty to follow the decision of the Court of Appeal rather than the observations of the Lord Chancellor which were not strictly ratio decidendi.
17. After all, every document must be construed by its own terms. The document before him was an expression used in the close of a letter, and Lord Cairns construed the words as meaning a reservation of rights.
18. But the document here is a formal document containing in one instrument the whole of the terms between the parties, and the phrase 'to the satisfaction of the purchaser's solicitors' occurs frequently in separate contexts. In the second paragraph it appears first. In that paragraph the solicitors are mentioned by name as the persons to be satisfied, and it goes on 'subject to the vendors satisfying the purchaser as to the rent.' When it deals with the question as to title, the solicitors are to be satisfied, and when it deals with the facts, as to which any one can judge, the solicitors are not mentioned. On the other question as to collateral matter as to costs, the contract says: should the purchaser's solicitors not approve of the title. 'I think this means should the vendors fail to make a good title.' Again the same thing occurs in paragraph 9, where it is to be 'subject to the approval of title as aforesaid.'
19. Taking the authorities and documents together, I am disposed to say, I am bound to follow the decision of the Court of Appeal. I do not think it can be a pure question of law. On looking at the whole of the circumstances, the only construction I can put upon them is, that the parties did intend that the decision of the purchaser's solicitors was to be conclusive as to whether the title would be accepted or not, subject, however, to what Mr. Justice Fry says in his decision.
20. It is necessary, therefore, to inquire whether the objections were proper and real. It seems to me they were. It is not necessary to go into the reasons. Any attorney wishing to advise his client safely would rightly refuse this title.
21. (His Lordship then considered the facts of the case and decided that the objection to the title was valid.)