Scottish Court of Session Decisions

The Inverness and Ross-shire Railway Company, now represented by the defenders, required for the formation of their line of railway to intersect the lands of Brahan and others, part of the entailed estate of Seaforth, of which the late Honourable Mrs Mackenzie was, in 1861, heir of entail in possession, and also the lands of Kildun, a portion of which formed part of the said entailed estate, and another portion of which belonged to the pursuer, Mr Keith William Stewart Mackenzie, as fee-simple proprietor thereof.

In January 1861 the said railway company entered into a minute of agreement with Mrs Mackenzie and Mr Mansfield, C.A., her trustee, and the pursuer, whereby the parties thereto, inter alia, agreed “that all claims, except as hereinbefore reserved, of compensation to be paid by the said first party (the company) to the proprietrix of said lands, for the lands to be taken, &c., shall be fixed and determined by the said Peter Brown, Esq., as sole arbiter.”

On 22d October 1862 the said arbiter issued his decree-arbitral, in which he found that the value of the land taken belonging to the said second parties (Mrs Mackenzie and the pursuer), or in which they are respectively interested, and the damage to the remainder of their lands, was £706, 11s. 6d., for which sum he decerned against the railway company.

The pursuer sought to reduce the minute of agreement, and also the decree-arbitral. The former, he contended, was invalid, because Mrs Mackenzie, being an heiress of entail under a strict

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entail, was not entitled to dispose of any part of the estate except by a strict compliance with the Railway Acts and Lands Clauses Consolidation Act; and as these had not been complied with, the submission was null. The objections to the decree-arbitral were—(1) that when it was issued the submission had expired, by reason of the arbiter not having issued his award within three months, as required by section 35 of the Lands Clauses Consolidation Act; and (2) that the arbiter had awarded a slump sum as compensation for the lands, the value of which he was authorised to fix, and for the lands belonging to the pursuer in fee-simple, the value of which was not submitted to him.

The Lord Ordinary (Ormidale) pronounced the following interlocutor:—

Edinburgh, 28th November 1865.—The Lord Ordinary having heard counsel for the parties, and considered the argument and whole proceedings: Finds (1) That the deed of agreement containing the submission sought to be reduced in this case, was entered into and executed on the 4th and 8th of January 1861, by the defenders, on the first part, and the pursuer for himself, and for the now deceased Mrs Stewart Mackenzie, and by Mr Thomas Mansfield, on the second part; (2) That by said submission it was agreed that all claims of compensation (except as therein reserved) to be paid by the defenders to the proprietrix of the lands of Brahan and others, in the county of Ross, for the lands to be taken for the purposes of the defenders' railway and relative works, and in respect of severance and all consequential damage, should be fixed and determined by Mr Brown of Link wood as sole arbiter; (3) That the lands of Brahan and others, so far as the said Mrs Stewart Mackenzie was proprietrix thereof, were, when said submission was entered into, and have been ever since, held under the fetters of a strict entail; (4) That no claim of compensation to be paid by the defenders to the pursuer, as proprietor in fee-simple of any part of the lands of Kildun, is comprehended by said submission to Mr Brown; (5) That the decree-arbitral by Mr Brown now sought to be reduced, bearing to be the decree-arbitral under said submission, was not pronounced or issued till the 22d October 1862, nearly two years after the time when the submission itself was entered into and executed; and (6) That there having been no prorogation or renewal of said submission by the parties thereto, it had fallen, and the powers of the arbiter, Mr Brown, had come to an end before his said decree was pronounced and issued: Finds further, and separately, that by said decree-arbitral Mr Brown finds that there is due to the pursuer (although no claim for compensation as due to him was submitted), and the late Mrs Stewart Mackenzie, for their respective interests in said lands of Brahan and others, the aggregate sum of £706, 11s. 6d., without seperating and distinguishing how much thereof is due to the pursuer, and how much to Mrs Stewart Mackenzie, or how much is due in respect of lands held under the entail, in which alone Mrs Stewart Mackenzie had any interest, and that portion of said lands called Kildun, held in fee-simple, in which the pursuer alone was interested; and also finds that said decree-arbitral was never adopted, homologated, or acquiesced in either by Mrs Stewart Mackenzie, who died in about a month after its date, or by the pursuer: Finds that in these circumstances the said submission is no longer subsisting, and that the said decree-arbitral is invalid and ineffectual, and reducible as concluded for by the pursuer; Therefore to that effect and extent reduces, decerns, and declares, in terms of the conclusions of the summons, but quoad ultra (except as to expenses) assoilizies the defenders and decerns; Finds the pursuer entitled to expenses, allows him to lodge an account thereof, and remits it when lodged to the auditor to tax and to report.

R. Macfarlane.

Note—No proof was asked or adduced by either party in this case, and by the joint note, No. 142 of process, they have renounced probation, subject to an admission of the genuineness of the letters and documents in process, and that certain works were made “in consequence of the formation of the railway.” It is not said, however, and there is nothing to prove that these works were executed in consequence of, or in reliance upon, the decree-arbitral in dispute. They appear rather to relate to these matters contained in the agreement (which also contains the submission) not brought under reduction.

The specific findings set out in the interlocutor sufficiently indicate the grounds of judgment, They substantially resolve into these propositions: 1st, That the submission had fallen before the decree-arbitral in dispute was pronounced and issued; 2d, That even if it could be held that the submission had not so fallen, the arbiter having exceeded his powers, his decree is reducible; and 3d, That there are no circumstances relevant or sufficient to show that the decree-arbitral had been so adopted or homologated or acquiesced in as to bar the pursuer from now challenging it, and insisting for its reduction in the present action.

1. It cannot be doubted, and accordingly was not disputed at the debate, taht as a general rule an heir in possession of an entailed estate is not entitled to sell or dispose of any part of it, except so far as permitted by the entail itself, or authorised by Act of Parliament. Neither was it disputed, and at any rate it is proved by the title-deeds in process that the heir in possession for the time of the entailed lands of Brahan and others, being those in question, had no authority under the entail itself to sell or dispose of any portion thereof to the defenders, and that such authority was to be found only in the Railways Acts, and especially the “Lands Clauses Consolidation Act (1845).” By the 6th and 7th sections of that Act, the defenders were entitled to purchase, and the late Mrs Stewart Mackenzie was empowered to sell, such portion of her entailed estate as was necessary for the defenders' railway; but in regard to the compensation to be given therefor, it is provided by the 9th section, in the case of lands to be taken from a party like Mrs Mackenzie under disability, and not having the power to sell, except under the Railway Acts, that unless the same shall have been determined “by the Sheriff, or by the verdict of a jury, or by arbitration, or by the valuation of a valuator appointed by the Sheriff,” it shall not to be less than shall be determined by “two able practical valuators” appointed by the parties. The power of the Sheriff, or of a jury, or of a valuator or valuators, was not involved in the present instance. Nor can it be maintained, as the defenders have attempted to do, that the rights of parties have been settled under arbitration, unless the decree-arbitral under challenge can be shown to be of the statutory character and conform to the statutory provisions. What, then, are these provisions? By the 24th section of the Act, the mode of proceeding “when any question of disputed compensation by this or the Special Act, or any Act incorporated therewith,

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authorised or required to be settled by arbitration, shall have arisen,” is set out; and by the 36th section it is enacted that, if, “when the matter shall have been referred to arbitration, the arbiters, or their umpire, shall for three months have failed to make their or his award, the question of such compensation shall be settled by the verdict of a jury, as hereinafter provided.” In the present instance the fact is undoubted that the arbiter failed to make his award within three months, and therefore it is clear that his award, or decree-arbitral, which was not issued or pronounced till nearly two years after the submission to him had been entered into, is invalid, in respect that the submission had long previously fallen.

2. Even if it could be held that the submission was subsisting at the time Mr Brown pronounced and issued his decree, that decree would, in the opinion of the Lord Ordinary, be invalid, in respect of the compensation awarded by it being found to be due to the pursuer for lands belonging to and held by him individually in fee-simple, as well as to the late Mrs Stewart Mackenzie, for lands belonging to and held by her under the fetters of a strict entail. It is manifest, on the face of the submission, that the arbiter had no power to award compensation to any party except Mrs Mackenzie, as proprietrix of the entailed lands of Brahan and others; but notwithstanding, the compensation awarded by him to the pursuer, as well as Mrs Mackenzie, is stated in one sum, and had relation to the lands belonging to and held by the pursuer in fee-simple, as well as the entailed lands belonging to Mrs Mackenzie. Nor is it possible to separate and distinguish how much of the compensation awarded applies to the one and the other portions of lands, and, of course, the statutory provisions touching the manner in which the compensation obtained from a railway company, in respect of entailed lands taken and injured by them, should be disposed of, are rendered unworkable. The result is that the arbiter must, in the opinion of the Lord Ordinary, be held to have exceeded his powers, and that his decree-arbitral is for that reason invalid.

3. Nor does the Lord Ordinary think that sufficient has been established to show that the submission was prorogated or renewed, or that, by adoption or homologation, or other acts and conduct, the pursuer has barred himself from now challenging the validity of Mr Brown's award; and in arriving at this conclusion, the Lord Ordinary has not overlooked the case which was cited to him, on the part of the defenders, of the Caledonian Railway Company v. Lockhart, March 1860, 3 Macqueen's Appeals, 808, where it was held by the House of Lords that parties are not by the Railway Acts prohibited from enlarging the time for an arbiter making his award. That there was any formal prorogation or renewal of the submission is not alleged; but it was maintained by the defenders, at the debate, that it must be held in law to have been prorogated or renewed by the actings of the parties. What the defenders precisely mean by this is not very clear from their statements and pleas on record. But the Lord Ordinary cannot find in the admission of parties, or in the correspondence and other writings in process, anything sufficient to warrant him in giving effect to the defenders' contention in any reasonable view that can be taken of it. (1) The correspondence, which appears to have passed before the submission was entered into, can obviously have no bearing on the present question. (2) What is called the supplementary agreement is equally irrelevant, as the pursuer does not in this action seek to reduce either the original or supplementary agreement. He has challenged the validity of the submission in the original agreement alone. (3) In regard to the correspondence which passed subsequent to the lapse of three months after the date of the submission, or after the decree-arbitral was issued, the Lord Ordinary can see nothing to warrant him in holding either that the submission was prorogated or renewed, or that the decree-arbitral was adopted, homologated, or acquiesced in. On the contrary, he observes from the correspondence that objection was from an early period taken to the competency of the submission, the regularity of the proceedings under it, and the validity of the decree-arbitral, anything of the nature of approval being connected with proposals for a settlement which were never acceded to; and (4) The note by Mr Brown, the arbiter, No 22 of process, by which he attempts to separate and distinguish the compensation stated in aggregate in his decree-arbitral into two sums, one applicable to the entailed lands which belonged to Mrs Mackenzie, and the other to the unentailed lands belonging to the pursuer, is plainly of no effect, being dated so recently as the 8th of January 1864, after the present action had been served and called in Court, and, moreover, having been obtained by the defenders alone, without the knowledge or authority of the pursuer.

The cases of Laing v. The Caledonian Railway Company, 19th January 1850, 12 D. 481; Anderson v. The Deeside Railway Company, 3d June 1853, 15 D. 713; The Glasgow and Barrhead Railway Company v. The Nitshill Coal Company, 5th August 1850, 7 Bell's Appeals, 325; and The North British Railway Company v. Renton, 15th January 1864, 2 Macpherson, p. 442, were cited in the course of the debate. The Lord Ordinary does not find in these cases anything to controvert, but much, especially in the case of the North British Railway Company v. Renton, to confirm the views on which he has proceeded in deciding the present case.

Various points were noticed and discussed in the course of the debate, and particularly the competency of the mode in which the matter of insurance and the claims of the tenants are dealt with in the decree-arbitral; but as these matters are not distinctly raised in the record, and might require to be cleared up in proof in some respects, the Lord Ordinary has not founded his judgment upon them. And in regard to the conclusion by the pursuer for the expenses incurred by him in the submission proceedings, the Lord Ordinary has to remark that nothing was said at the debate in support of that conclusion; and at any rate the pursuer, by his own conduct in the course of the submission, has, in the opinion of the Lord Ordinary, forfeited all claim which he might otherwise have had to such expenses. R. M'F.

The defenders reclaimed.