Paul Felthouse offered to buy a particular horse from his nephew and stated (in a written offer) that ‘if I hear no more about him, I consider the horse mine at £30 15s’. His nephew did not reply but instructed the auctioneer, Bindley, not to sell the horse.
Bindley mistakenly sold the horse. Felthouse sued the auctioneer for conversion.
To succeed in an action for conversion Felthouse needed to demonstrate that he owned the horse at the time of the sale; to do this he needed to prove that there was a contract between himself and his nephew for the sale of the horse.
Felthouse could not impose a sale of the horse on his nephew by requiring him to notify Felthouse if he did not wish to sell on those terms. There was no communication of acceptance before the sale; consequently the nephew was not bound to sell Felthouse the horse on the day of the auction.
The defendant (Bindley) was an auctioneer. The plaintiff's nephew, John Felthouse, spoke with his uncle about the purchase of a horse and subsequently wrote to him regarding the price for the horse. The plaintiff (Paul Felthouse) replied that he would not pay the 30 guineas sought by his nephew for the horse, but would pay 30l 15s and stated that
'If I hear no more about him, I consider the horse mine at 30l. 15s.'
John Felthouse did not reply and the horse was later sold with other stock, fetching more than the uncle had offered. The auctioneer subsequently became aware of his mistake in selling the horse and wrote the the plaintiff apologising for the error and stating, in part, that:
'Instructions were given me to reserve the horse ...'
John Felthouse also wrote to his uncle, stating that he was annoyed by the sale, as he had advised Bindley that the horse had already been sold, and that he would try to recover the horse from the purchaser.
The plaintiff succeeded.
Held on appeal
There was no complete bargain at the time of the conversation between uncle and nephew. NOr was there a complete bargain when the uncle wrote to the nephew stating, in part, 'If I hear no more about him, I consider the horse mine at 30l. 15s.'
The uncle had 'no right to impose upon the nephew a sale of his horse for 30l. 15s. unless he chose to comply with the condition of writing to repudiate the offer.'
The offer remained open at the date of the sale. On that date the auctioneer was told by the nephew that the horse had already been sold and it was therefore clear that 'the nephew in his own mind intended his uncle to have the horse at the price which he (the uncle) had named'. But this intention had not been communicated to his uncle and he had done nothing to bind himself. As a result, at this time nothing had been done to 'vest the property in the horse in the plaintiff' at the time the horse was sold.
The subsequent correspondence has no legal effect.
Agreed with Justice Willes
Agreed with Justice Willes. His Honour noted that:
'as between the uncle and the auctioneer, the only question we have to consider is whether the horse was the property of the plaintiff at the time of the sale on the 25th of February. It seems to me that nothing had been done at that time to pass the property out of the nephew and vest it in the plaintiff. A proposal had been made, but there had before that day been no acceptance binding the nephew.'