Madrigal & Co vs. W.

S Stevenson & Co
Facts:
- Plaintiff company is a retail coal dealer; defendant company is a wholesale merchant
- Plaintiff sought to recover damages, alleged to have sustained it by failure of the defendant to fulfil
an alleged contract to deliver to the plaintiff 2000 tons of Duckenfield coal.
- Plaintiff alleged that on April 7, 1908, it entered into a verbal contract (which was later reduced in
writing) with a broker named Armstrong. Said broker was alleged to be representing the defendant
for the said transaction to buy 2000 tons of coal from the defendant. Said coal was supposed to be
delivered on the month July 1908 at the rate of P8.50 per ton.
- However, the defendant denied that it entered into a contract or that the broker Armstrong had
authority to enter into any such contract on behalf of the defendant. The defendant further alleged
that the only authority that was given to Armstrong was to represent the defendant to buy 2000
tons of Duckenfield coal and not an authority to sell.
- Mr. Corbet, the person in charge in the coal department of the defendant and was the one who
informed Armstrong that Steven & company was to purchase coal.
- However, there was a misunderstanding. Armstrong thought that the defendant was a seller in this
transaction instead of being a buyer.
- As a result, Armstrong submitted documents to the defendant stating that the defendant
- Mr. Stevenson, manager of the defendant company, believed that the said document was a contract
that the plaintiff is to sell and the defendant is to buy.
- As a result, the defendant affixed its signature on the blank intended for buyer as an acceptance of
the contract. Said document was immediately forwarded to the plaintiff.
- However, 2days after the plaintiff responded and delivered the said document to Armstrong in the
said document the plaintiff also affixed its signature on the blank intended for buyer. Then it was
delivered to Corbet.
- . Corbet, upon seeing the signature, returned immediately the said memorandum to the broker and
requested to correct the error.
- After that, no further action has been taken by both parties.
Issue: whether there has been an acceptance of the offer from both parties
Held:
-It has been proven that both parties were dealing in good faith and the confusion arose due to the mistake
of the broker. It has been proven as well thru the evidence presented, that the cable of instruction from the
office of the defendant in London that they were in the market as purchaser and not a seller.
-Moreover, neither of the parties authorized the broker Armstrong to make the sale on its behalf.
-And thus the broker memorandum signed by the defendant neither in intent or by its terms constituted a
promise or agreement to sell and deliver the 2000 tons of duckenfield coal.
- SC, adopted the decision of the trial court which states that “ the minds of the parties never met upon a
contract of sales by defendant to plaintiff.’’ Or in other words, there was no mutual consent by the parties to
the alleged contract and therefore was no contract.
-Decsion of trial court was affirmed. No damages for an alleged breach.