Bishop v. Eaton

Brief Fact Summary.

Defendant asked Plaintiff to loan money to Defendant's brother, and Defendant would be sure Plaintiff would be repaid. Notice of the loan and subsequent non-payment was sent by mail to Defendant but never received, so Defendant never knew that his request had been accepted. Plaintiff sued Defendant. The trial court ruled for Plaintiff. Defendant appealed.

Synopsis of Rule of Law.

Deposit of a letter of acceptance in the mail is sufficient to constitute acceptance of an offer.

Facts.

Bishop (Plaintiff) was a business associate of Frank Eaton’s (Defendant) brother, Harry. In December 1886, Defendant wrote a letter to Plaintiff that said, "If Harry needs more money, let him have it, or assist him to get it, and I will see that it is paid." In 1887 Harry Eaton signed a promissory note for two hundred dollars to Stark, payable in one year. Plaintiff signed the note as surety, relying on Defendant’s letter for reimbursement if called upon to pay the note. Plaintiff mailed Defendant a letter saying he had signed the note, but Defendant never received it. When payment was due in 1889 Plaintiff asked Defendant to pay the note and he replied, "Try to get Harry to pay it. If he don't (sic), I will. It shall not cost you anything." In 1891, Plaintiff paid the note and sued Defendant. The court ruled for Plaintiff. Defendant appealed the ruling.

Issue.

Whether an offer has been accepted if the offeree mails a letter of acceptance and the offeror does not receive it.

Discussion.

When an offer is made, notice of the act which constitutes acceptance must be given in a reasonable way, depending on the nature of the transaction, the circumstances of the parties, and the nature of any previous dealings. In this matter, the offer was made by letter and it is reasonable for Plaintiff to accept the offer in the same manner. Since Plaintiff lived in Illinois and the Eatons lived it Nova Scotia, Defendant should have expected to receive notice of acceptance in the mail, and it would be a particularly harsh rule to hold Plaintiff responsible for Defendant’s failure to receive the letter. Plaintiff did all he was required to do to accept the offer of guaranty when he seasonably placed the letter of acceptance in the mail.