Philip Bertie Petrides.

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Held, that the consideration for the bond was to stifle a
criminal prosecution and was therefore illegal, and the bond
could not be sued upon, and that where a party to an
unlawful contract has paid tin' money stipulated to be
paid thereunder he shall not have the help of the Court to
recover it.

CAPACITY OF PARTIES.



Foreign Sovereigns are not subject to Jurisdiction of English
Courts unless they waive their Privi'ege and submit to the
Jurisdiction.

MKrIIELL r. THE SULTAN OF JOHORE. [ism

(63 L. J. Q. B. 593; (1894) I Q. B. 149; 9 R. 147: 70 L. T. 64;
58 J. P. 244— C. A.

The defendant came to this country and adopted the pseudonym
of Albert Baker, and in that name won the affections of the



CAPACITY OF PARTIES. 63

plaintiff. The defendant having abandoned any idea of marry-
ing the plaintiff went abroad. He was then sued, and an order
for substituted service was obtained. On an application to set
this aside —

Held, no action lay, for an independent foreign sovereign

is entitled to immunity from civil proceedings in the Courts

of this country, unless upon being sued he elects to waive his

privilege and submit to the jurisdiction .



Onus is on Plaintiff to prove that Goods supplied to an Infant
are Necessaries, i.e., suitable to his condition in life and
actual requirements at time of sale.

NASH v. INMAN. [1908]

(77 L. J. K. B. 626 ; (1908) 2 K. B. 1 ; 98 L. T. 658 ;

24 T. L. B. 401— C. A.)

The plaintiff, a tailor, supplied goods to the value of
14-3/. 10s. 3d. to the defendant, who was the son of a prosperous
architect. The defendant was a freshman at Cambridge, and
the goods supplied were suits of clothes, great-coats, and eleven
fancy waistcoats at 2/. 2s. each. The plaintiff brought an action
against the defendant, who pleaded infancy.

Held, the plaintiff having failed to prove the articles
ivere necessaries, was not entitled to succeed, for ivhere an
action is brought for the price of goods sold and delivered,
and the defendant pleads and proves infancy, the onus is on
the plaintiff to prove that the goods ivere necessaries within
the meaning of that term, as defined in sect. 2 of the Sale
of Goods Act, 1893 — that is to say, that the goods were
suitable not only to the condition in life of the infant, but
also to his actual requirements at the time of the sale and
delivery.



64 CONTRACT.

Continuing Contracts entered into by an Infant are not void but
voidable, and if not repudiated within reasonable time after
coming- of age are binding on Infant.

EDWAEDS v. CARTER. [1893]

(63 L. J. Ch. 100 ; (1893) A. C. 360 ; 1 R. 218 ; 69 L. T. 153 ;
58 J. P. 4.)

Upon his marriage, Martin Albert Silber covenanted to settle
any property he might succeed to under his father's will. Shortly
after the marriage the son attained full age. The father died
more than three years later, leaving by will property of con-
siderable value to the son. Fourteen months afterwards the
son, who had up to that time received an annuity under the
covenant which had been settled upon him b}^ his father, who
was a party to the covenant, gave notice purporting to repudiate
the settlement.

Held, that a continuing covenant entered into by an in-
fant is not void but voidable, and mast be re/mdiatrd within
a reasonable time of coming of age, and Unit an infant is not
entitled to wait and see how, in respect of any particular
sum of money, the covenant will operate, and that the repu-
diation was too late and therefore ineffectual.



Contracts which are for the benefit of an Infant are binding
upon him.

GREEN v. THOMPSON. [1899]

(68 L. J. Q. B. 719; (1899) 2 Q. B. 1 ; 80 L. T. 691 ; 48 W. R, 31 ;
63 J P. 486— D.)

An apprenticeship deed entered into by an infant apprentice
contained a stipulation that the apprentice shall not be instructed
or paid wages on days on which the business of the master shall



CAPACITY OF PARTIES. 65

be at a standstill " through accident beyond the control of the
master."

Held, that the stipulation is not so detrimental to the
infant as to be invalid and incapable of being enforced
against him, and that such a stipulation to be invalid must
be so much to the detriment of the infant as to render it
unfair that the infant should be bound by if.



An Infant cannot ratify even a Contract of Marriage after he
comes of age, but evidence may be given of a fresh Promise
to Marry after coming of age.

DITCHAM v. WOEEALL. [1880]

(49 L. J. C. P. 688 ; 5 C. P. D. 410 ; 43 L. T. 28(5 ; 29 W. E. 59 ;

44 J. P. 799.)

While still an infant the defendant became engaged to the
plaintiff, and the parties continued on the footing of an engaged
couple after the defendant came of age. After coming of age
the plaintiff, at the request of the defendant, fixed the date of
the marriage. He ultimately repented of his choice and refused
to marry the plaintiff. Thereupon the girl brought an action
for breach of promise of marriage.

Held, that although a contract entered into by an infant
cannot be ratified by him when he comes of age, yet the
request of the defendant to the plaintiff to fix the day of
their marriage was sufficient evidence of a fresh promise by
the defendant to marry the plaintiff , by ivhich he was bound.



j.



6H CONTRACT.

An Infant cannot be made liable on a Contract, where Infancy
would be a Defence, by the action being framed in tort.

JENNINGS v. RUNDALL. [1799]
(8 Term Reports, 336 ; 4E.E. 680.)

The defendant, an infant, hired a mare from the plaintiff, and
so overrode her that she was damaged. The plaintiff brought
this action, not for negligence in the performance of the contract,
to which the defendant might have pleaded infancy, but in tort
for wrongfully and injuriously riding the mare.

Held, the defendant was not liable, for a plaintiff cannot
convert an action founded <>n a rant rod into a tort so a* to
charge an infant defendant.

But see Hurnard v. Haggis, infra, where an infant was made
liable on a tort which, though originating in contract, was wholly
independent of the contract.



A Contract by a Lunatic binds him, unless it can be shown that
his insanity was known at the time to the other contracting
party.

THE IMPERIAL LOAN CO. v. STONE. [1892]

(61 L. J. Q. B. 449; (1892) 1 Q. B. 599; 66 L. T, 556 ; 56 J. P.

436—0. A.)

In an action brought by the plaintiffs as payees of a joint and
several promissory note made by the defendant to recover a
balance due upou the note, the jury found that at the time the
defendant made the note he was insane and incapable of under-
standing the contract, but they were unable to agree as to
whether the plaintiffs at the tune knew of the defendant's
insanity.



REALITY OF CONSENT. 67

Held, by the Court of Appeal, upon these findings, there
must be a new trial.

A part// to a contract cannot avoid a contract on the
//round of his insanity at the time he entered into it, unless
his insanity was at the time known to the other contracting
party. The burden of proving both the insanity and the
knowledge of it by the other contracting party lies upon the
party seeking to avoid the contract.



REALITY OF CONSENT.



In the absence of Negligence, a Contract induced by Fraud is void
even against an innocent third party. Where the Signature
to a Negotiable Instrument is obtained by Fraud, and there
has been no Negligence, the Negotiable Instrument is void
even as against a holder in due course.

LEWIS- v. CLAY. [1898]
(67 L. J. Q. B. 224 ; 77 L. T. 653 ; 46 W. E. 319.)

The defendant, who had just come of age, joined an Ascot
House party. Lord William Neville, whom the defendant had
known intimately for some years, was also a member of the
same party. One evening Lord William Neville went to the
defendant's bedroom and asked him to witness some deed or
document. Lord William Neville produced a roll of papers
covered up by blotting or other paper in which there were four
openings. Upon the defendant asking what the documents
were about, Lord William Neville said he would show them if
the defendant insisted, but he would rather not, as it was a
private matter, that he wanted a power of attorney, and that it
had to do with his sister's marriage settlement, and certain
divorce proceedings then pending. The defendant, trusting to
Lord William Neville, whose honour he had no reason to doubt,
then signed his name four times, and Lord William Neville

f2



68 CONTRACT.

signed twice in the openings. He said he signed his name with
the sole intention of witnessing the signature of Lord William
Neville. It subsequently appeared that the documents signed
by the defendant were promissory notes. In an action upon
the promissory notes by the plaintiff, who obtained them in
good faith and for value, the jury found tbe defendant had not
been guilty of negligence.

Held, the defendant wax not liable, as it was a contract
ivhich had been induced by fraud, and as there had, been no
negligence upon his part in signing the document, he ivas
not estopped in an action brought against him upon the
note by the payee of the note from relying upon the true
facts as a defence, and -well facts afforded an answer to
the action.

Held also, the payee of a promissory note is not a " holder
in due course " within the meaning of sect. 29 of the Bills
of Exchange Act, and even if he had been he would not, upon
the facts stated above, have been entitled to recover.



Mistake as to person with whom the Contract is made known to
that person avoids the contract.

CUNDY v. LINDSAY. [1878]
(47 L.J. Q. B. 481 ; 3 App. Cas. 459 ; 38L.T. 573; 26 W. R. 406.)

Goods were supplied by Lindsay to one Blenkarn, who had
taken premises at 37, Wood Street, and in ordering the goods
had signed his name in such a way as to induce Lindsay to
believe that he was a member of a well-known firm of Blenk-
iron & Sous, in Wood Street. For tbis fraud Blenkarn was



REALITY OF CONSENT. 69

tried and convicted of obtaining goods under false pretences.
Before hiss conviction, Candy had honestly bought the goods in
question from him and had sold them again. In an action by
the plaintiffs Lindsay & Co. for conversion of the goods —

Held, that the property in the goods did not pass from
the plain tiff's, who were consequently entitled to recover their
value from the defendants.

The jurors having in substance found that Blenkarn had
led, and intended to lead, the plaintiffs to believe, and they
did believe, that the person with whom they were communi-
cating was not Blenkarn, the dishonest and irresponsible,
but was a well-known and solvent house of Blenkiron Sf Co.,
doing business in the same street, how is it possible that
in that state of things any contract could have arisen
between Lindsay and Blenkarn, the dishonest man ? Of
him they knew nothing, and of hint they never thought.
With him they never intended to deal. Their minds never
even for an instant rested upon him, and as between him
and them there was no consensus of mind which could lead
to any agreement or any contract whatever. As between
him and them there -was merely the one side to a contract,
where in order to produce a contract two sides would be
required. That being so, it is idle to talk of property
passing. The property remained as it originally had been,
the property of Lindsay, and the title which was attempted
to be given to Gundy was a title ivliich could not be given
to him.



70 CONTRACT.

Parties must be ad idem, otherwise no Binding Contract is created.
Parol Evidence may be given to explain a latent ambiguity.

EAFFLES v. WICHELHAUS and another. [18(54]
(33 L. J. Ex. 160 ; 2 H. & C. 90G.)

The defendants agreed to purchase goods " to arrive ex
Peerless from Bombay," and in doing so had in their minds
a boat of the same name, leaving Bombay in October. The
plaintiffs, however, meant the Peerless that left in December,
so the two parties were not ad idem-. Parol evidence was given
to explain this latent ambiguity.

Held, no contract, as the parties were not ad idem.



Mutual Mistake as to existence of Subject-Matter of Contract
voids Contract.

SCOTT v. COULSON. [1903]
(72 L. J. Ch. 600 ; (1903) 2 Ch. 249 ; 88 L T. 653— C. A.)

On March 19th, 1902, the plaintiff, by an agreement in writing
agreed to sell to the defendants for 460/. a policy of assurance
on the life of A. J. Death. The agreement was completed by
an assignment dated April 19, 1902. The assured had died in
December, 1899, though at the date of the contract for sale both
parties believed him to be alive. In the interval between the
date of the contract and the completion, the defendants received
information which led them to believe that the assured was dead
at the date of the contract, but they did not disclose this
information to the plaintiff.

Ilelil, such a contract may be rescinded even after it has
been com id, ted by assignment of the policy to the purchaser ',
on the ground of mutual mistake



REALITY OF CONSENT. 71

At the date of the contract for sale of this policy both the
parties to the contract supposed the assured to be alive, but
as it turned out that this was a common mistake, the
contract ivas one which could not be enforced. It is not
necessary to have recourse to equity to rescind the contract if
the basis which both parties recognised as the basis is not
true.



Where, by the Mistake of one Party, something is expressed in a
Contract which that Party never intended to express, the
Contract will be rescinded.

PAGET v. MAESHALL. [1884]

(54 L. J. Ch. 57.5 ; 28 Ch. D. 25.5 ; 51 L. T. 351 ; 33 W. E. 608 ;

49 J. P. 85.)

The plaintiff granted a lease of certain premises to the defen-
dant, and by mistake included a first floor which she intended
to reserve. The defendant was not a party to the mistake.

Held, that the lease must be rescinded, with an option to
the defendant to lake the premises excluding the first floor.
In cases of mutual mistake the Court grants relief by way
of rectification ; but in cases of unilateral mistake by way of
rescission, giving the other party the option of rectification.



Money paid under Mistake of Fact is recoverable.

In re BODEGA CO., LTD. [1904]

(73 L. J. Ch. 198; (1904 1 Ch. 276; 89 L. T. 694; 52 W. E. 249;
1 1 Manson, 95.)

A director vacated his office automatically by bargaining for
a secret commission on the sale of certain property to the com-



72 CONTRACT.

pany, and continued to act and to receive his fees as director.
He was subsequently re-elected to office in the ordinary course
on his supposed retirement by rotation. At the time of this re-
election the sale in question was completed with the exception
of the payment of the secret commission, for which the director
had a lien.

Held, the company was entitled to recover these fees.
Services rendered do not amount to a legal consideration
unless then have been rendered in response to some request
explicit or implied by law. The acceptance of services
rendered is a prima facie ground for implying at law a
request; but the Court is at liberty to resist this prima
facie inference if warranted by the peculiar circumstances
of the case.

That although the director during the period between his
vacating his office and his re-election had rendered services
to the company ivhich had been accepted by them, yet, inas-
much as it teas impossible for the Court /<> believe that the
company would ever have requested him to render these
services had they been aware of the true state of the facts,
the Court could not imply a request for these services on the
part of the company from the mere fact of their ignorant
acceptance of them, and accordingly that the serv-ices ren-
dered did not amount to a legal consideration for the fees
i mid for /hem, and that the company was therefore entitled
to recover these fees as money had and received.



REALITY OF CONSENT. ~'6

Money paid under Mistake of Law cannot be recovered unless
there is some equitable ground which makes it inequitable
that the money should be retained by the person receiving it.

ROGERS v. INGHAM. [1876J
(46 L. J. Ch. 322 ; 3 Ch. D. 351 ; 35 L. T. 677 ; 25 W. R.
338— C. A.)
John Ingham having died leaving an ambiguous will, the
executor took counsel's opinion as to the meaning of certain
bequests. The opinion of counsel being adverse to that of one
of the legatees, he also took the opinion of counsel, who advised
in exactly the same way as the other had done. Acting upon
these opinions the executor divided the moneys. Two years
Inter the dissatisfied legatee filed a bill against the executor and
the other legatees, submitting that the will had not been pro-
perly construed, and claiming repayment from the other
legatees.

Heir/, the plaintiff was not entitled to succeed, for although
the Court has power to relieve against mistakes in law as
well as against mistakes in fact, the Court will only relieve
where there is any equitable ground which makes it, under
the particular facts of the case, inequitable that tin- party
who received the money should retain it.



An Innocent Misrepresentation is a good ground for Rescission of
a Contract, but not for Damages for Deceit, for if a representa-
tion is made in the honest belief that it is true, it is a good
answer to an action for Deceit. There is no such thing as
Constructive Fraud, but fraud must be proved. Motive of
person guilty of fraud is immaterial.

DERRY v. PEEK. [1889]
^58 L. J. Ch. 864 ; 14 App. Cas. 337 ; 37 Ch. D. 541 ; 61 L. T. 265 ;

38 W. R. 33.)

The directors of a tramway company issued a prospectus stating
that the company had, by its special Act of Parliament, the



74 CONTRACT.

right to use steam power instead of horses. Authority was,
in fact, given by the special Ad to use steam power, but only
with the consent of the Hoard of Trade, which had not been
obtained when the prospectus was issued. When making the
statement the directors believed that the consent would follow
as a matter of course if the tramways were properly constructed.
The consent of the Board of Trade vvas subsequently refused.
The company having failed, an action for deceit was brought
ugainst the directors by a shareholder, who alleged that he had
taken shares on the faith of the statement in the prospectus.

Held, that the defendants were entitled to judgment, as
this wns an action for deceit, and they had made the state-
ment in the belief that it was true

In an action for rescission it is sufficient to prove a mis-
representation, and, however innocent it may have been, the
contract ivill be rescinded.

In an action of deceit, fraud mast be proved, and nothing
short of that will suffice.

fraud is proved when it is shown that a false /•(presenta-
tion has been /node ( i j knowingly, or (ii) without belief in its
truth, or (Hi) recklessly careless whether it be true or false,
and the absence of reasonable grounds for a misrepresentation
is merely evidence from which the conclusion may be drawn
that the person making the misrepresentation did so without
belief in its truth. To prevent a false statement being
fraudulent there must always be an lamest belief in its truth,
for one who knowingly alleges that which is false has obviously
no such honest belief. If fraud be proved, the motive oj the
person guilty of it is immaterial.



REALITY OF CONSENT. 75

The Statement of an Honest Opinion is not a Misrepresentation.

ANDERSON v. PACIFIC INSURANCE CO. [1872]

(26 L. T. 130 : L. R. 7 C. P. 65 : 20 \Y. R. 280 ; 1 Asp. M. C. 220.)

The plaintiffs, wishing to insure their vessel, Clarendon, from
Belize to Rendezvous Point back to Belize, thence to other
ports, and finally to London, sent their clerk to the defendants 5
offices. The clerk told the defendants' manager that the
plaintiffs knew nothing about Rendezvous Point further than
that they had that day received a letter from the captain of the
ship in which the captain said of Rendezvous Point : "It is
considered by the pilot here as good and safe anchorage and
well sheltered. I have been out and seen the place and consider
it quite safe." In point of fact the place was not a good and
safe anchorage, and the ship was lost there in consequence.
The j ury found that the captain honestly entertained the opinion
he had expressed.

Held, the expressions contained in the captain's letter did
not amount to an absolute statement of fact, but a mere
matter of opinion honestly formed, which did not amount to
a misrepresentation by the assured to vitiate the policy.



Innocent Misrepresentation of a Contract of uberrimse fidei
vitiates the Contract.

BATES v. HEWITT. [1867]
(36 L. J. Q. B. 282; L. R. 2 Q. B. 595 ; 15 W. R. 1172.)

The Georgia, a ship well known in England on account of
its exploits as a Confederate cruiser, was purchased by the
plaintiff, who got her registered as a British vessel, and sent to
an insurance broker an order to insure her, and a slip contain-
ing accurate particulars of the name of the vessel, the place
where she was built, her captain, tonnage, and charter, but



76 CONTRACT.

omitting to mention that she had been in the Confederate
service. The defendant, after seeing the ship, and without
knowing she was the former Confederate cruiser, underwrote

her. The vessel having 1 n seized by the Government of the

United States, the jury, in an action on the policy, found that
the defendant was not aware of the fact that the Georgia
was the Eormer Confederate cruiser, but that he had abundant
means of identifying the ship at the time of underwriting her
from information to be found in the slip itself.

Held, the contract being our of uberrima jidei, the non-
disclosure of a material fact afforded a good defence, for
the assured was not entitled to rely on the recollection of
the underwriter and the chance of his making further

inquiry.



Innocent Misrepresentation is no ground for Rescission of an
executed Contract for the Sale of a Chattel or Chose in Action.

SEDDON v. THE NORTH EASTERN SALT C<>., LTD. [1905]

74 L.J. Ch 199; ,1905; 1 Ch. 326; 53 W. R. 1-V- ;
91 L. T. 793; 21 T. L. R. lis.

On the faith of representations made by Hewitt, one of the
defendants, that the London Salt Company had made a net
trading loss not exceeding 250/., the plaintiff purchased all the
shares of the company at tiie price of 4,575/. Examination of
the books was made by the plaintiff Boon after the purchase of
the Rhares, and he discovered that there had actually been a lofs
of over 900/. Three months after taking over the business the
plaintiff brought this action for the rescission of the contract,
alleging misrepresentation by concealment but not alleging
fraud.

Held, the Court will not grant rescission of an executed
contract for the sale of a chattel or chose in action on the
ground of an innocent Misrepresentation.



REALITY OF CONSENT. 77

In order for the plaintiff to succeed in such a case fraud
must be proved.

.In the absence of fraud a contract of this kind is not void
hut voidable only, and it was tht duty of the plaintiffs
bearing in mind the peculiar nature of lite property, to re-
pudiate the contract at the very earliest possible moment
when he found out that any misrepresentation had been made,
if in fact any was made.



The maxim Caveat Emptor applies to Sale of Goods. Non- dis-
closure is not Fraud except in Contracts uberrimse fidei.

WARD v. HOBBS. [1878]

(48 L. J. Q. B. 281 ; 4 App: Cas. 13 ; 3 Q. B. I). 150 : 40 L. T. 73 ;

27 W. R 114.)

The defendant sent pigs which were to his knowledge infected
with a contagious disease for sale to a public market ^which is
an offence under sect. 57 of the Contagious IHseases (Animals)
Act, 1>69). The pi^s were sold subject to an expivss condition
that no warranty would be given. The plaintiff bought the
pigs, which infected other pigs in his possession, causing him
great loss and expense. In an action for breach of an implied
warranty and false representation that they were free from any
contagious di>* ase —

Held, the defendant was not liable, for, at all events,
//dan they are sold subject to an ci / ress condition that //>>
warranty ivill be given, the mere act of exposing the pigs for
sale in a public market was no evidence of an implied repre-
sentation by the defendant that they were free from infection,
or that he did not know titan to be infected.

Purchasers are not within the purview of the above Act,



78 CONTRACT.

and cannot in consequence maintain an action upon a viola-
tion oj the duty imposed by that section.



Online LibraryPhilip Bertie PetridesStudent's cases : illustrative of all branches of the law → online text (page 8 of 29)