Scottish Court of Session Decisions

The pursuers of this action were proprietors of the estate of East Plean, in the county of Stirling, and in the year 1864 they granted a lease of a freestone quarry on the estate to the defender James Gowans, who bound himself to pay a fixed yearly rent of £200, or, in the option of the pursuers, a lordship of sixpence for each ton of ashler, and one penny for each ton of rubble stone. It was further provided by the lease that in order to ascertain the amount of lordships payable in respect of all stone sent off by railway, the weights for which carriage was charged should be held to be the correct weights; and, in respect of other stone, that each cartload should be held to be one ton weight.

The defender further bound himself to cause regular books to be kept, in which should be inserted in a distinct manner the whole out-put and disposals of the freestone, including any that might have been used for buildings connected with the workings, which books were to be at all times open and patent to the proprietors and their factor, or others authorised by them, and also to transmit quarterly to the proprietors, or their factor, extracts or statements from the said books of the quantities of freestone disposed of or used, which extracts it was provided should be certified by the tenant or by his manager, and verified on oath if required. The defender accordingly continued to transmit quarterly returns, but instead of taking the weights according to the railway books, he made up the returns from his own books, giving an amount greatly less than that which was really sent away. The pursuers, on the faith of these returns, settled with the defender from time to time, but at length, having reason to doubt the accuracy of the defender's statement, they examined the railway company's books, and finding from them that far more stone had been sent away than appeared from the defender's returns, they raised this action, concluding for payment of the arrears of lordship.

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

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“ Edinburgh, 4th December 1873.—The Lord Ordinary having heard parties' procurators, and having considered the closed record, proof adduced, and whole process, Finds ( first), That under the terms, and according to the sound construction of the lease entered into between the pursuers and defender, dated 10th May and 2d June 1864, the weight of stone excavated by the defender, and upon which weight lordship fell to be paid, was to be determined, so far as the said stone was sent by railway, by the weights charged by the railway company, and upon which carriage was paid to the railway company: Finds ( second), That the rents or lordships actually paid by the defender to the pursuers, for the years ending 3d February 1868, 3d February 1869, 3d February 1870, 3d February 1871, and 3d February 1872, were not calculated according to the weights of stone charged by the railway company, and on which carriage was paid to the railway company, but according to calculations and returns made by the defender himself, irrespective altogether of the actual weights on which carriage was charged and paid: Finds ( third), That the defender has not instructed any ground, either in fact or in law, sufficient to bar the pursuers from going back, and from now charging the defender for the said years with the full lordships payable by him under the exact terms of his lease: Finds ( fourth), That on a just accounting between the pursuers and the defender, taking the weights charged by the railway company and on which carriage was paid them as the basis of calculation, there is due and resting-owing by the defender to the pursuers, for the years ending Candlemas 1868 to Candlemass 1873, both inclusive, a sum of at least £450 sterling; therefore decerns and ordains the defender to make payment to the pursuers of the sum of £450 sterling, and that in full of the whole rents and lordships due by the defender up to the term of Candlemas 1873, with interest thereon at the rate of 5 per cent. per annum, from 14th June 1873 and until paid: Finds the pursuers entitled to expenses, but subject to very considerable modification, and, in the circumstances, modifies the same to one-half of the taxed amount: Remits the account of said expenses to the Auditor of Court to tax the same, and to report.

Note.—As this case stood upon record, and when the proof commenced, it raised a very serious question of a painful nature, affecting the honesty and good faith of the defender. There were serious charges, or at least imputations, amounting to fraud, directed against the defender, or against those in his employment. The defender was charged (Cond. VII.) with making false returns, ‘false to the knowledge of the defender or of those acting for him.’ This averment gave an anxious character to the case, both in the conduct of it by the parties and in the disposal of it by the Court.

At an early period of the proof, however, it became apparent that fraud was really out of the case, and the counsel for the pursuers candidly and fairly admitted that he did not lay their case upon fraud, that is upon conscious or intentional deceit practised either by the defender or by those in his employment. The Lord Ordinary accordingly has considered the case on the footing that both Mr Gowans and those in his employment acted honestly and in bona fide, without any intention of defrauding or deceiving the pursuers.

The elimination of the question of fraud, however, while it relieves the case of its painful aspect, does not relieve it of its difficulties. Nay, in one sense it increases those difficulties, for it strengthens the defender's plea, that the pursuers are barred by settled accounts from going back on the rents or lordships for the five years preceding Candlemas 1872. This is, in truth, the real difficulty in the case, and the Lord Ordinary will advert to it immediately. It will conduce to distinctness, however, to explain seriatim the steps or findings on which the Lord Ordinary's final judgment rests. He has embodied the leading or more important points in the findings in the preceding interlocutor.

(1) The Lord Ordinary is of opinion that, according to a sound construction of the lease between the parties, the rent or lordship payable to the pursuers was to be determined by the weight of stone actually sent from the quarry. The lordship was fixed at 6d. per ton for ashlar or cubic stone, and 1d. for each ton of rubble stone. The lordship was fixed not by measure but by weight, and though the defender might sell his stones by measure, or by number, or in any way he pleased, and actually did so, still, in regard to every description of stone he must pay lordship by weight alone. This is quite clear from the lease, and was hardly matter of dispute.

(2) The Lord Ordinary thinks that according to the lease the lordship was to be calculated according to the gross weight as the stone left the quarry, and not according to the weight which the stones ultimately had, after they were hewn and shaped and dressed by the builders who purchased them from the defender. The defender maintained that from the gross weight must be deducted what is called the quarry allowance, which is extra weight or extra measure given by the quarry-master to his customers, to allow for dressing or chipping, and which varies from 10 to 25 per cent. The Lord Ordinary thinks that in a question of lordship the defender is not entitled to any such allowance excepting in so far as the defender himself dresses or shapes the stones in the quarry. The criterion is,—What did the stones weigh when they were sent off from the quarry, whether by cart or by railway? What became of them afterwards is of no consequence, whether they were hewn into statues, or into highly ornamental work, or built into walls without shaping at all, does not matter. The lordship is fixed by the weight as they leave the quarry. This seems manifest.

(3) From the provision that the true and correct weight shall be held to be the weight for which carriage is charged by the railway, it is clear that the railway company have nothing to do with how the weight may be reduced by shaping or dressing, or carving. The railway makes no deduction on that account. The railway company simply charges for the weight which passes over their steelyard, or if they do make any abatement such as disregarding odd hundredweights, then of that abatement the defender will get the benefit, but of nothing else. The weight for which the railway company charge carriage is to be the weight which is to fix the lordship. It is inconceivable that the parties intended that there should be deductions or abatements from the railway weights, none of which are mentioned, or defined, or even hinted at. If any abatement was meant, it should have been stipulated for in the lease.

(4) Accordingly, the Lord Ordinary holds

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that the railway weights are made the absolute rule for determining the lordship as between landlord and tenant. Whatever the railway company charge and obtain carriage for shall be held to be the weight upon which the defender must pay lordship.

The expression of the lease is ‘weight charged for;’ but the Lord Ordinary is disposed to read this fairly as meaning weight charged for and according to which carriage was paid. If a dispute arose, and the charge was rectified, then it was the rectified charge, and not the original one, that would rule. Thus, when the defender got an abatement from the railway's charge for carriage, he would be entitled to the same abatement in a question with the landlord. But beyond this the Lord Ordinary cannot go. Whatever weight, according to which carriage was ultimately paid, must be absolutely held to be the weight on which lordship also must be held to be paid. This was the bargain, and the Court cannot alter it. It must be given effect to.

And it was a most wise provision, calculated, as the proof in this action abundantly shows, to prevent endless disputes; for if the railway weight is not to be taken, there is no end to the views which may be urged by the contending parties. It is in evidence that the stone is never weighed at all by anybody, excepting by the railway company.

Accordingly, the Lord Ordinary utterly disregards all the evidence relied on by the defender as to the railway weights and the railway system of weighing being inaccurate. In a question of the meaning of the lease this is wholly irrelevant. The railway system of weighing has always been the same, and both parties knew this perfectly and took their chance in it. It is true the weights are only roughly ascertained, and now and then perhaps only guessed at, but on the whole justice is done, the customer getting the benefit, it is proved, of odd weights. But whether just or not, the railway weights must fix the lordship, for both parties have said so, and neither party will take the trouble to weigh for themselves.

(5) What the railway weights actually were can hardly be a subject of serious dispute. There may be minute decrepancies between different books kept by the railway company, and probably some errors have been discovered, but the invoices, according to which carriage was actually paid, have been recovered, and that fixes the weight as in a question of lordship.

(6) The next point is that for the five years ending Candlemas 1872 lordship has not been paid by the defender according to the railway weights, or according to any actual weights at all, but merely according to certain returns and calculations made by the defender himself at his own hand. The Lord Ordinary assumes that the defender acted honestly and in bona fide in making these returns, but the fact is undoubted that the lordship was calculated not according to the manner prescribed in the lease, but according to mere calculations made by the defender himself, and founded not upon actual weight at all, but upon estimates or calculations taken from the measurement of the stones sold.

Now it turns out that these calculations and returns made by the defender show a much less weight than the weight charged for by the railway company—the difference being the sum sued for in the present action, and this raises what is really the only difficult question in the present case, viz., whether the pursuers are entitled to go back on the past five years, rectify the computation of lordship, and charge the same in exact accordance with the lease? Now—

(7) The Lord Ordinary is of opinion that no sufficient ground, either in fact or in law has been instructed creating any bar against the pursuers yet rectifying the account, and obtaining from the defender the just rent to which, according to the exact terms of the lease, they are unquestionably entitled.

The defender founded on various circumstances as barring the pursuers from now demanding the just lordship according to the lease, at least for the period prior to Candlemas 1872. It was hardly disputed that for the last year embraced in the present action, the year ending Candlemas 1873, and which has not been settled for at all, the lordship must be paid according to the lease. The Lord Ordinary will shortly notice the grounds relied on by the defender.

The defender maintained that the terms of the lease had been altered or departed from, and that both parties agreed that the railway weights should be laid out of view altogether, and the lordship calculated from the defender's books alone. The Lord Ordinary thinks that no such agreement has been established. It would be very difficult to establish such an agreement by anything short of a deed derogating from the lease. The defender's books don't show weight at all except of rubble. For the great bulk of his output he charges by measure, and endless controversies would arise, and have arisen, as to the principle upon which measure is to be converted into weight. It is impossible to throw everything loose in this way. The unanswered letter of 12th February 1868 cannot possibly be held as an agreement to subvert the whole lease. Besides, that letter proceeded upon a false or erroneous return, said to have been got from the railway company by the defender, but which unquestionably does not show the true amount of the railway company's weights. The defender has not explained how he got this incorrect return, or even the terms in which he asked for it. Probably it was only a partial return got from only one of the stations at which the stone was weighed. The defender has lost the principal return, and has nothing but a copy, but the fact is certain that the return is false and incorrect, and this alone would be sufficient to destroy any agreement based thereon.

Again, the defender maintained that in each year there was a settlement and final discharge, which, without fraud, cannot be reduced. But this is not so. There was nothing of the nature of compromise or transaction. There was no investigation into accounts or adjustment of balance. All that was done was, that the pursuers' agent, believing the defender's own returns to be correct, accepted the fixed rent or the lordships in terms of these returns. But if it turns out, as is now shown, that the defender's returns were grossly incorrect, even although made in bona fide, it would be very strong to hold that the pursuers are barred from having the mistate corrected.

If the mistake had been owing to the pursuers themselves,—if it had been solely the pursuers' fault that they charged and accepted a less lordship than the true lordship under the lease, there might

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have been some force in the defender's plea. But the mistake was not owing to the pursuers, but to the defender himself. It was the defender's own returns, now proved to be erroneous, that misled the pursuers, and it is hard to see how the defender can found upon his own mistake as barring the pursuers from rectifying the accounts according to the true terms of the lease. It is worthy of notice that all the returns made by the defender bore to be according to the weights ‘as entered in the railway company's books.’ This was not the case, and although possibly the pursuers might have assumed, from the letter of 12th February 1868, that the defender was taking the weights from his own books as a mere matter of convenience, it is completely proved that the pursuers never knew that the defender's books did not show weight at all, and that the returns were a mere ex parte calculation, made up by the defender himself upon principles which he never once communicated or hinted to the pursuers.

It is true there may have been looseness, and perhaps carelessness, on the part of the pursuers. They seem to have accepted the defender's returns without due inquiry, or, perhaps, without inquiry at all. They never asked to see the defender's books, and they never went themselves to see the railway books. But it is hardly for the defender to plead that the pursuers had too much confidence in him the defender himself, if he, however innocently, misled them. The true consequence of the pursuers' neglect or over confidence is to affect their claim for expenses, and not to preclude the just rectification of accounts. The Lord Ordinary, in the matter of expenses, has given, ill effect, and he thinks the utmost effect, to the somewhat loose conduct of the pursuers.

(8) Holding, then, that the accounts are to be rectified and the true lordship ascertained in terms of the lease, the only remaining questions relate to the calculations of lordship as based upon the railway weights.

Here there are some difficulties in detail, but they do not very greatly affect the amount; and the Lord Ordinary has found himself obliged, acting as a jury, to take a general or average view. The question whether scuntions and backs are ashlar or rubble may well be a matter of doubt and dispute, as most of the witnesses say they are neither the one nor the other. And so with various other disputed points. On these the Lord Ordinary has given the defender the benefit of any doubt; and instead of the amount sued for, £598, 19s. 2d., and instead of the lesser amounts brought out by the pursuers' accountants, £568, 12s. 11d. and £491, 11s. 1d., the Lord Ordinary thinks that he does substantial justice by giving the pursuers decree for a slump and estimated sum of £450. About one-half of this sum can hardly be disputed as being applicable to the year ending Candlemas 1873, which year has never been settled for in any way, and as to which the Lord Ordinary thinks there is really no defence. The deficiencies applicable to the preceding five years now decerned for are under £250.

The Lord Ordinary may remark, that the whole short-paid lordships are completely accounted for by simply adding the quarry allowance, which the defender has wrongly deducted, but on which, the Lord Ordinary thinks, lordship must be paid. The quarry allowance varies from 10 to 25 per cent. on the whole stone.

The Lord Ordinary has severely modified the pursuers' expenses, reducing them to one-half. His grounds are—(1) The defender's character was attacked, fraud was imputed—a charge now withdrawn; (2) The defender has been successful on various matters of detail; but (3, and chiefly) The pursuers are really much to blame for the looseness with which they went about the matter. If they had made reasonable inquiry at the beginning, or year by year, this heavy litigation and inquiry would have been avoided; (4) Both parties are to blame for the indefiniteness of the lease, which assumes, contrary to the fact, that rubble and ashlar embrace the whole output of the quarry.”

The defender reclaimed.

At advising—