Obligation to grant a Right. - Whether such an Obligation be equivalent, as if the Right were granted.
Stephen Broomfield of Mains v. John Young of Shankfoot
Date: 11 August 1753 Case No. No 31.
A minute obliging parties to extend a tack on stamped paper, under a penalty, but not bearing “attour performance,” is binding, and cannot be resiled from on paying the penalty.
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By minute of tack, dated 9th April 1750, Stephen Broomfield set to John Young the lands of Hassendean for the space of five years, for which Young was to pay a certain yearly tack-duty; and the minute concludes with these words, “And all parties agree, that this minute be extended on stamped paper, betwixt and the first of May, under the penalty of L. 10 Sterling, to be paid by the party failer to the party observer or willing to observe.”
A few days after the date of the said minute, John Young intimated under form of instrument to Stephen Broomfield, that he resiled from the agreement of entering into a five years tack; whereupon Stephen Broomfield brought a process against him, concluding that he should be obliged to enter into a tack of the said lands, and to perform all the stipulations incumbent on him by the said minute.
Pleaded for the defender, That he can be no further liable than to pay the penalty of L. 10 Sterling, as the minute does not bear that the penalty was to be paid by and attour performance; and therefore each party was at liberty to resile from the bargain upon payment of the penalty. Penalties were first introduced by the Roman lawyers in obligations of this kind, quæ in facto consistunt; because if the fact was not performed, the creditor had an action ad damnum et interesse; but as this damage was always uncertain and illiquid, and depended upon a difficult proof; to prevent these questions, penalties were adjected to such contracts; which penalties were understood to come in place of and to liquidate the damnum et interesse, as is plain from § 7. Inst. De verb. oblig. From the example of the Roman law, penalties are with us usually adjected to contracts which consist in performing any thing; and the same construction must take place that these penalties stand for the damage in case of not performance; and therefore where performance is to be insisted for, it is provided by the contract, that the penalty shall be paid by and attour performance; and where that clause is not added, the Lords have found that the penalty only is due; Forbes, 27th July 1706, Bairdner against Drysdale, voce Penalty.
Answered for the pursuer, That the adding of a penalty does not give the parties an election of either performing the obligation or paying the penalty as they please, Stair, Inst. L. 1. T. 17. § 20. the penalty being only added as a compulsive on the debtor to fulfil, and to be a fund for paying the expenses of compelling performance; though these words ‘by and attour performance,’ be commonly added, yet that is only ob majorem cautelam; and though they be not added, yet the parties are obliged to perform their contract if it be in their power, as it is only loco facti impræstabilis, that damnum et interesse succeeds. The case cited by the defender from Forbes, was a fact of this last kind, the defender having obliged himself under a penalty to cause a third party subscribe a disposition to lands; and as the defender could not compel the third party to subscribe the disposition, he could only be liable in the penalty; but where the fact is prestable by the defender, he must perform it, if the pursuer insist for performance, as the Lords have frequently found; particularly 19th March 1630, Crichton contra Pirie, voce Penalty; and 27th December 1695, Beattle contra Lambie, Ibidem.
“The Lords repelled the defence, that the defender was only obliged to extend the minute on stamped paper, under the penalty of L. 10 Sterling, and found him liable in that penalty, the same being expended; and also found him liable in payment of the bygone rents already fallen due, and of the rents which shall become due in time coming, in terms of the minute of tack.”
Act. Geo. Pringle.Alt. And. Pringle.
Fol. Dic. v. 4. p. 24. Fac. Col. No 89. p. 134.
