This case involves a dispute over the ownership and sale of a yacht named Bronzewing. Burke originally owned the yacht but was unable to repay a loan, so he entered negotiations to sell the yacht to Elser. Elser incurred expenses to repair the yacht. The Supreme Court ruled that a letter from Elser stating he would "entertain the purchase" of the yacht for a certain price did not constitute a binding contract. The court determined Elser never intended to purchase the yacht for himself and only considered it when trying to form a yacht club. Burke was ordered to repay Elser for the repair expenses.
This case involves a dispute over the ownership and sale of a yacht named Bronzewing. Burke originally owned the yacht but was unable to repay a loan, so he entered negotiations to sell the yacht to Elser. Elser incurred expenses to repair the yacht. The Supreme Court ruled that a letter from Elser stating he would "entertain the purchase" of the yacht for a certain price did not constitute a binding contract. The court determined Elser never intended to purchase the yacht for himself and only considered it when trying to form a yacht club. Burke was ordered to repay Elser for the repair expenses.
This case involves a dispute over the ownership and sale of a yacht named Bronzewing. Burke originally owned the yacht but was unable to repay a loan, so he entered negotiations to sell the yacht to Elser. Elser incurred expenses to repair the yacht. The Supreme Court ruled that a letter from Elser stating he would "entertain the purchase" of the yacht for a certain price did not constitute a binding contract. The court determined Elser never intended to purchase the yacht for himself and only considered it when trying to form a yacht club. Burke was ordered to repay Elser for the repair expenses.
This case involves a dispute over the ownership and sale of a yacht named Bronzewing. Burke originally owned the yacht but was unable to repay a loan, so he entered negotiations to sell the yacht to Elser. Elser incurred expenses to repair the yacht. The Supreme Court ruled that a letter from Elser stating he would "entertain the purchase" of the yacht for a certain price did not constitute a binding contract. The court determined Elser never intended to purchase the yacht for himself and only considered it when trying to form a yacht club. Burke was ordered to repay Elser for the repair expenses.
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CW ROSENSTOCK (as admin of estate of HW ELSER) v
EDWIN BURKE, THE COOPER COMPANY
1924 Ponente: Avancena, J. FACTS 1. Burke owned a yacht called Bronzewing purchased in Australia for sale 2. Burke mortgaged it for a loan of 100k from Mr Avery (manager of Asia Banking Corp), which he was unable to pay 3. Elser wanted organize a yacht club and sell the yacht to members of the club for 120k 4. Elser would keep 20k as commission and 100k would go to Burke 5. Burke acquired a written option saying that Elser confirmed his verbal offer of 120k for the yacht, with the offer open for 30 days from 12 Feb 1922 6. Elser proposed conducting a pleasure cruise the south, with prominent businessmen aboard the yacht as a means to advertise the yacht 7. To fix the yacht, Elser incurred expenses of 6k because Burke had no money 8. Elser attempted to loan 20k from Mr Avery but the latter refused, in view of the subsisting debt 9. Elser notified Burke that he was now unwilling to purchase the yacht for more than 70k and that he should talk to Mr Avery 10. Elser wrote a letter (3 April 1922) stating that he would pay 80k for the yacht, with 10k downpayment and 5k monthly installments, and would use 80k worth of stocks from Pickering Inc as security, signed by Burke, Elser, Avery 11. Current action is for Elsers recovery of 6k used to fix the yacht ARGUMENTS 1. Burke a. Agreement was that Burke would pay for repairs in exchange for gratuitous use of the yacht b. Cross-complaint: comply with letter stating sale, and give downpayment of 10k TRIAL COURT 1. With respect to Burke: Pay 6k to Elser, pay 1k to Cooper Company for unpaid repairs
2. With respect to Elser: Purchase the yacht (appealed by Elser to
SC) ISSUE WON letter written on 3 April 1922 was a valid contract of sale binding on Elser RULING 1. No a. A common man would use I am willing to buy, I intend to purchase b. Elser was a prosperous merchant and so his specific words should be presumed to have been chosen for specific effect. Thus his statement that I am willing to entertain the purchase shows that he did not intend to buy the yacht, but merely ENTERTAINED the idea c. Esler never wanted to buy the yacht for himself, only sell it to members of a yacht club d. Elser only considered purchasing the yacht when he negotiated with Avery to obtain a 20k loan to replace the engine. Since he had not yet acquired the 20k to replace the engine, it can be assumed that he was not yet willing to purchase the yacht e. 3 April 1922 letter was made by stenographer who supports Elsers claim that Elser refused to remove entertained even when Burke asked to remove it *Also reversed ruling on Burke paying for repairs it was Elser who initiated and ordered repairs, and it was Elsers word against Burke in this situation, so follow logic: Whoever asked for repairs, and got something in return (use of yacht) liable to pay for repairs.