This is a fundamental contract law case establishing the principle that silence cannot constitute acceptance. It clarifies that an offeror cannot impose a contract on an offeree by stating that their silence will be treated as consent. 

• The Parties: Paul Felthouse (the plaintiff/uncle) and his nephew, John Felthouse, were negotiating the sale of a horse.

• The Misunderstanding: The uncle believed he had bought the horse for £30, while the nephew believed he had sold it for 30 guineas.

• The Offer: To resolve the confusion, the uncle wrote to the nephew on January 2nd offering to split the difference: "If I hear no more about him, I consider the horse mine at £30 15s".

• The Silence: The nephew did not reply to this letter. However, he intended to accept the offer and instructed the defendant, Bindley (an auctioneer selling his farm stock), to reserve the horse and not sell it.

• The Mistake: By mistake, the auctioneer sold the horse at auction on February 25th.

• The Claim: The uncle sued the auctioneer for conversion (wrongfully selling another's property), arguing that the horse belonged to him at the time of the auction.

• Did the nephew's silence and internal intention to accept the uncle's offer constitute a valid acceptance?

• Did ownership of the horse pass to the uncle before the auction took place?

The Court of Common Pleas ruled in favour of the defendant (the auctioneer). The uncle had no property in the horse at the time of the sale. 

• Silence is Not Acceptance: The uncle had no right to impose a sale on his nephew by stipulating that silence would equal acceptance.

• Communication is Required: Although the nephew intended to sell the horse to his uncle (evidenced by his instruction to the auctioneer), he had not communicated this acceptance to the uncle. A mental resolve to accept an offer is insufficient to form a binding contract.

• Timing of Ownership: Since no contract was formed before February 25th, the horse still belonged to the nephew when the auctioneer sold it. Therefore, the uncle could not sue for conversion.

• No Retrospective Effect: A letter written by the nephew after the auction (February 27th) acknowledging the sale could not retroactively transfer ownership to the uncle to bind a third party (the auctioneer) for an action taken previously.