Scottish Court of Session Decisions

This case came up by reclaiming note against the interlocutors of the Lord Ordinary ( Gifford), of dates March 11 and June 6, 1873. The circumstances were briefly as follows. The defender, Mr Scott, purchased from the pursuers the estate of Auchenfranco, in the stewartry of Kirkcudbright. The offer was as follows:—

“ Dumfries, 23 d June 1871.

Gentlemen,—I offer to purchase the estate of Auchenfranco at the price of £18,750, cash down and rents and taxes to be apportioned to the day of payment, and without regard to the legal question of crops—the trustees to obtain their £200 from the Water Commissioners; the purchaser to recognise

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the recent feu-rights in Lochfoot village; the trustees not to be bound to enter with the Crown. An answer to this to be given me within ten days. Reference to Manchester and Liverpool District Bank, Manchester Spring Gardens. A good and legal title to be given to the purchaser.—Yours, &c.”

The pursuer maintained that it was, inter alia, one of the conditions of sale, and expressly stipulated for by the pursuers and agreed to by the defender, that, in respect that the defender's entry to the lands was to be from the date of the payment of the price thereof, and that the price was to be a cash down or ready money payment, the rents derived from and taxes due by said lands, on and after the term of Whitsunday 1871 (viz., the rents and taxes due at Martinmas 1871, and payable by the tenants at Candlemas 1872), should be apportioned between the pursuers and the defender to the day of the payment of the price thereof, and that without regard being had to the legal question of crops. The half-year's rents of the lands for Whitsunday 1871 were due at Whitsunday 1871 and paid to the pursuers in August following, prior to the defender's entry to the lands.

This Mr Scott denied, and explained that the clause as to apportionment of rents was inserted expressly for the benefit of the defender, who would otherwise have been entitled only to the half-year's rents conventionally payable at Martinmas 1871, and that the half-year's rents to be apportioned were those conventionally payable at Whitsunday 1871 (but not then paid), for the last half of crop and year 1871.

In fulfilment of the missives of sale, the pursuers, by disposition dated the 29th and 30th days of September, and 9th day of October 1871, in consideration of the payment of £18,750, disponed the estate to the defender Samuel Scott.

The disposition fixed the defender's term of entry as at 14th October 1871, the clause being as follows:—“And we, with consent foresaid, assign the rents from the date of delivery hereof, being the 14th day of October 1871, and without regard to the legal question of crops.” The defender retained the price of the estate in his own hands from the date of the missives of sale, in June 1871, until the date of the disposition, being nearly four months, and paid no interest thereon to the pursuers. The amount of interest on the price retained by the defender. calculated at four per cent., amounts to about £300, and the pursuer averred that the defender had not only retained this interest, but had also drawn the rents falling due during the period in which he withheld payment of the purchase-money and interest. Under the leases granted by the pursuers to the tenants, their term of entry was fixed to be at Whitsunday 1871, but the first half of that year's rent was to be payable at Martinmas 1871. The half-year's rents amounted to £376, 0s. 5d., of which it was maintained that £294, 12s. 5d. belonged to the pursuers, as sellers of the lands, and £81, 8s. to the defender as purchaser. On 28th October 1871 James M'Kie, writer, Dumfries, one of the pursuers, intimated by letter to the tenants of Auchenfranco that the pursuers, as sellers of the estate, had right to the rents thereof from Whitsunday 1871 to the 14th day of October 1871, and he informed each tenant of the apportioned sums of rents due by him to each party. The defender admitted that the tenants' term of entry to the arable farms was at Whitsunday 1871 in so far as regards the houses, grass, and pasture, and to the “arable land” at the separation of the crop of that year, but he explained that the half-year's rents due by the tenants at Martinmas 1871 were payable for the first half of crop and year 1872, and that the rents to be apportioned and referred to in the disposition were the rents for the last half of crop and year 1871, and made payable under the leases at Whitsunday 1871, although not collected till Lammas 1871. At the date of the sale of the lands to the defender these rents had not been collected.

The pursuers pleaded—“(1) In terms of the disposition and other writs condescended on, the pursuers were entitled to draw the rents of said lands from Whitsunday 1871 until 14th October 1871. (2) The defender having illegally and unwarrantably got payment from the tenants of the said sum of £224, 18s. 3d. belonging to the pursuers, is bound, under deduction of whatever sum he may instruct to be due by the pursuers to him for taxes, to pay the same to the pursuers, with interest as concluded for. (3) In any view, the defender is not entitled to retain the rents, and also the interest upon the price or purchase-money of said lands.”

The defender pleaded—“(2) According to the true construction and meaning of the disposition founded on, the defender is entitled to the whole rents payable by the tenants at Martinmas 1871, and to absolvitor from the conclusions of the present summons. (4) The rents in question being payable by the tenants for the possession of their farms subsequent to Martinmas 1871, the defender is entitled to absolvitor, with expenses.”

The Lord Ordinary's interlocutor was as follows:—

“ Edinburgh, 11 th March 1873.—The Lord Ordinary having heard parties' procurators, and having considered the closed record, writs produced, and whole process—Finds that the rents payable by the tenants of all and whole the five-pound lands of Auchenfranco, with the mill and pertinents of the same, sold by the pursuers to the defender, and which rents were payable by the said tenants at the term of Martinmas 1871, are apportionable between the pursuers and the defender so and in such manner that a proportion of the said rents effeiring to the period from Whitsunday till 14th October 1871 shall belong to the pursuers, and a proportion of the said rents effeiring to the period from said 14th October till Martinmas 1871 shall belong to the defender: Finds that the taxes and public burdens payable in respect of the said lands and others, and the ownership thereof, fall to be apportioned between the pursuers and defender in the same manner, and appoints the cause to be put to the roll that the exact amount of rent and taxes apportioned as aforesaid may be determined, and that decree may be pronounced in favour of the pursuers for the proportion or balance due to them by the defender, and decerns: Finds the pursuer entitled to expenses, and remits the account thereof, when lodged, to the auditor of Court to tax the same and to report.

Note.—This case involves a question of very general interest and importance relative to the meaning and effect of the ‘Apportionment Act, 1870,’ 33 and 34 Vict., cap. 35, entituled ‘An Act for the better Apportionment of Rents and other Periodical Payments.’ A very broad question indeed is raised upon this Act, namely, whether its

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provisions apply to all cases whatever—cases of contract, for example, and cases of sale—unless its operation is expressly excluded; or whether the statute is confined to cases of the termination of limited interests by death or otherwise, and to questions of succession, and between heir and executor, as seems to have been the case with the old Apportionment Act, 4 and 5 Will. IV., cap. 22 (1834).

The difficulties, however, are greatly enhanced in the present case by the peculiar terms in which the parties have chosen to express their contract, whether the contract be considered as contained in the original missives of sale, or as contained in the disposition which was executed and delivered by the pursuers to tho defender. The missives expressly say that rents and taxes are to be apportioned to the day of payment, without regard to the legal question of crops, while the disposition, without saying anything about apportionment, merely assigns the rents from 14th October 1871, without regard to the legal question of crops.’

A very strenuous argument was maintained before the Lord Ordinary, to the effect that it was incompetent to look to the missives of sale, or to the correspondence between the agents, to any effect whatever; but that the question must be considered upon the terms of the delivered disposition, and on the terms of that deed alone, all prior missives being held as cancelled and superseded.

The Lord Ordinary is not disposed to give effect to this plea in the broad terms contended for by the defender. There is no doubt of the general principle that when a formal deed, whether of agreement or of conveyance, is adjusted, executed, and delivered, it supersedes previous missives or communings between the parties, and cannot be controlled or overruled by the terms of previous missives. But this rule must be taken in a reasonable sense, for it often happens that in the sale and transference of an estate questions relating to searches, encumbrances, repairs, or even as to completing titles, are left to stand upon the agreement in the missives even after the formal disposition is delivered, and the mere delivery of the disposition will not in all circumstances, and per se, discharge the seller of separable and separate obligations which he had come under in the missives.

In the present case, however, this question, which may often be one of some nicety, is not very material; for the Lord Ordinary has come to think that the apportionment of rents, which by the preceding interlocutor he has found must be made, is an apportionment which results from the terms of the disposition, as well as from the terms of the missives. At the same time, the Lord Ordinary is confirmed in his view by what he thinks is the fair reading and intention of the missives, as expressing the real meaning of the parties.

Taking the terms of the disposition, and considering that deed along with the leases current at its date, and with the express provision of the Apportionment Act of 1870, the Lord Ordinary is of opinion that the rents payable under the leases at Martinmas 1871 fall to be apportioned between the pursuers and defender in the proportion of 152 to 28—the 152 being the number of days from Whitsunday 1871 to 14th October, the term of entry, and 28 being the number of days from 14th October to Martinmas 1871, when the half-year's rents were payable. He has reached this conclusion, although not without difficulty, upon the following grounds:—(1) The Apportionment Act of 1870 is expressed in the broadest and most general terms. Section 2 enacts that ‘from and after the passing of this Act all rents, annuities, dividends, and other periodical payments in the nature of income (whether reserved or made payable under an instrument in writing or otherwise), shall, like interest on money lent, be considered as accruing from day to day, and shall be apportionable in respect of time accordingly.’

There is no limitation of the cases to which this enactment shall apply. It is not confined to the determination of limited interests. It is not confined to questions of succession; it applies to every case where the right to a subject commences at a given date; the right to rents shall be apportioned to that date ‘in respect of time.’ Hence, if a man agrees to sell a house, or farm, or fishings, or anything else as at a given date, the rents of the subject are apportionable in time up to that date, just as the interest of money assigned would be, for this is the analogy to which the statute itself reduces everything. It enacts that all rents, &c. shall, ‘like interest on money lent,’ accrue from day to day. The narrative of the statute points to the same broad result: It narrates the mischiefs and inconveniences arising from rents, &c., not being apportionable at common law. That some of these mischiefs and inconveniences have been remedied by various statutes, including that of 1834, and it subsumes the expediency of remedying all such mischiefs and inconveniences.’ This plainly extends to cases of contract as well as to cases of succession. So universal is the Act, that it seems to have required two special clauses to exempt from its operation premiums on policies of assurance, and cases where the parties stipulate that there shall be no apportionment.

The result seems to be that, whenever a subject yielding rent is sold, the rent shall be apportioned to the day of sale or entry, without regard to the nature of the fruits, or to the special enjoyment for which rent is paid, and this unless the contrary is stipulated. This may lead to some anomalies in reference to grazing, shooting, fishing, or mineral rents, but it is not inequitable and seems as fair as a rule of universal application can be made to be. Parties are always at liberty to make any special bargain they please for themselves.

(2.) By the terms of the disposition there is to be ‘no regard to the legal question of crops.’ This is really very much what the statute says. The statute enacts that time is to be the measure of apportionment: De die in diem all through, without regard to what is the special term or period of productiveness. But the provision goes somewhat beyond the statute, for it seems to preclude the question for what crop and year the rent is payable. We must look to the leases to get the rent, but we are not to have any regard to the particular crop for which rent is exigible. This seems to fix that the time of the tenant's possession is the true and only criterion, for apportionment is to be made ‘ in respect of time.’

(3.) Now, the leases current at the date of the disposition are four in number, besides a missive under which a small mill is held. All of them bear that the tenant's entry is to be Whitsunday 1871 in so far as regards the houses, grass, and pasture, and at the separation of the crop of that year as to the arable land, and the yearly rent is

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declared to be payable in two equal portions at Martinmas and Whitsunday, the first half-yearly payment being at Martinmas 1871, and so forth half-yearly. The mill has a Whitsunday entry, with rent payable at Martinmas and Whitsunday thereafter. In reference to the arable parts of the estate, the old leases had all expired as at Whitsunday 1871, and the new leases had been granted under an express reservation contained in the missive of sale.

(4.) It appears plain enough that if there is to be an apportionment in respect of time, apart from crops, it must be the current rents which fall to be apportioned—that is, the rents becoming due under the current leases granted in August 1871, and not the rents which were paid and settled at Whitsunday 1871, the negotiations for sale only commencing in June thereafter. True, the outgoing tenants may not have fully reaped their waygoing crop at 14th October 1871, though it is more than probable they had done so before that date. But at all events they had ceased to be tenants, and had paid up their rents at Whitsunday 1871, long before the defender had even offered to purchase the estate. It would require a very strong case of express contract to give the defender a right to any part of the rents payable at Whitsunday 1871. There is no such contract here.

(5.) It seems quite fixed that an agricultural lease, with a term of entry like those in process, at Whitsunday as to houses and grass, and at separation of crop as to arable land, has really a Whitsunday entry and a Whitsunday ish. It is one lease, and not two, and the term of years runs in law from Whitsunday. This was expressly decided in the case of Wright v. The Earl of Hopetoun, 10th July 1863, 1 Macph. 1074; Appd. (H. L.) 27th May 1864, 4 Macqueen, 729; 2 Macph. (H. L.) 35. Here, in a highly penal question, it was held that a right to renewal was forfeited, because notice was not given due time before the Whitsunday, although it was in plenty of time if the separation of crop was the ish:

Lastly, The Lord Ordinary thinks it competent and fair to look to the missives, and to the letter which passed between the sellers and purchaser of even date with the missives, 23d June 1871. In that letter Mr M'Kie explains what he means by apportionment in Mr Scott's offer. He says that it would simplify matters if the purchaser would take the whole rents payable at Martinmas 1871, and pay interest on the price as from Whitsunday 1871, and that this would be much the same in money. This is nowhere repudiated in the correspondence, and if it expresses the intention of parties, it would really be conclusive; for the purchaser has paid no interest on the price, and he is now seeking the whole rents, which began to run long before his purchase. The rents, it seems, are just about equal to 4 per cent. on the price.

The Lord Ordinary regrets that he must order the case to the roll to fix the exact amount of rents and taxes. But there should be no difficulty in doing this, if the principle of the Lord Ordinary's judgment is either acquiesced in or affirmed. The present interlocutor virtually exhausts the questions at issue; and as the pursuers are successful, the Lord Ordinary thinks them entitled to expenses.”

At advising—