Scottish Court of Session Decisions

This was an action at the instance of Sir John Trotter Bethune of Kilconquhar, against William Morgan, farmer, Coates, for payment of £935, 12s. 5d., in the following circumstances:—

The defender was executor-dative of his brother, the deceased Thomas Morgan, who was tenant of the farms of North and South Cassingray, the property of the pursuer, under a nineteen years' lease, commencing at Martinmas 1858. The destination in the said lease was to Thomas Morgan “and his heirs,” all assignees, legal and voluntary, being expressly excluded. The said Thomas Morgan, on the other hand, bound and obliged himself, “and his heirs, executors, and representatives whomsoever, to make payment to the said Sir John Trotter Bethune,” &c., “yearly, of the sum of £850 sterling,” &c. Thomas Morgan died on 9th November 1871 unmarried and intestate; and the defender, his executor-dative, entered upon the possession and management of the farms, and continued therein until Martinmas 1873, when he removed. The defender averred that he took the management of the farms only to protect his deceased brother's moveable estate, the heir-at-law, James Peattie Morgan, Captain in the Royal Artillery, having refused to take up the lease. The defender further averred that he remained in the management of the farms until Martinmas 1873 only because the pursuer would not let him out until the Court decided in an action of declarator that he was entitled to leave the farms before the end of the lease. The action of declarator here referred to was raised in the Court of Session, on 6th July 1872, against the present pursuer at the instance of Captain James Peattie Morgan and the present defender for the purpose of having it found and declared, inter alia, that (first) the said James Peattie Morgan, as heir-at-law to his late brother Thomas Morgan, was not bound to implement the contract of lease above mentioned; (second) that the said William Morgan junior, as executor of the said Thomas Morgan, or in any other character, was not bound to implement the said contract of lease, or to run out the said contract; and (third) that the said William Morgan junior, as executor foresaid, was entitled to realize the crop, stocking, and other moveable estate left by the said Thomas Morgan upon the farms of North and South Cassingray, and to sell the same by public auction at the term of Martinmas 1872, or at the first term of Martinmas thereafter that might first occur not less than twenty days from the date of final decree in the action, or to remove the same, always reserving the defender's right of hypothec; as also to vacate the said farms at the said term of Martinmas as if the said lease had come to its natural termination.

On 14th February 1875 the Lord Ordinary ( Shand) pronounced an interlocutor in the action of declarator, finding, inter alia, “that Thomas Morgan left no heritage except his right to the lease: that, on 16th November 1871, the said James Peattie Morgan, heir-at-law of the said Thomas Morgan, intimated to the landlord that he would not take up the lease, and that the said James Peattie Morgan was not bound to implement the said contract. As regards William Morgan junior (the present defender), the said interlocutor found ( first) ‘that, having completed a title as executor of his late brother, the said Thomas Morgan, and having in that character intromitted with his brother's moveable estate, he is liable, as his brother's executor, for the fulfilment of the obligations contained in said lease, or otherwise in damages for breach thereof; ( second)

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that he has become personally responsible for the rents stipulated by said lease of the crops and years 1871–2 and 1872–73, but has not by his actings made himself personally responsible, and is not personally liable for the fulfilment of the obligations of the said lease for the period thereof which has yet to run, as maintained by the defender; ( third) that the said William Morgan junior (the present defender) is entitled to realize and dispose of the whole crop and stocking on the said farms in such manner as he may think to the best advantage, subject always to the (present pursuer's) right of hypothec, and to his the said William Morgan junior's existing obligations, as executor foresaid, and personally to the (present) pursuer, in terms of the preceding findings, and decerned, &c.’”

Upon a reclaiming note the Second Division, on 15th March 1873, adhered to the Lord Ordinary's interlocutor. It appeared that the said William Morgan (the executor) did not avail himself of this reclaiming note to bring under review of the Second Division the findings in the above interlocutor which were adverse to himself.

The defender having intimated his intention of vacating the farms at Martinmas 1873, the pursuer advertised them, but being unable to let the farms together, he let the farm of South Cassingray on a fourteen years' lease from Martinmas 1873, at a rent of £390 per annum, the proprietor to expend £600 in improving the steading and repairing fences, without interest, and he let the farm of North Cassingray on a nineteen years' lease from Martinmas 1873, at a rent of £250, the proprietor to expend £500 free of interest in repairing the steading and fences, and if required £100 more, to bear interest at five per cent, the proprietor also to expend on drainage, if necessary, a sum not exceeding £400, to bear interest at five per cent.

In these circumstances the pursuer averred that he had suffered loss and damage to the extent of £935, 12s. 5d., in respect that the lease had not been implemented. He also averred that he was always willing that the defender should possess the farms under the said lease.

The defender alleged that if the pursuer had taken the lease from Captain Morgan and advertised the farms immediately after the late tenants death, he would have had no difficulty in obtaining the old rent for them.

The pursuer pleaded—“The pursuer having sustained loss and damage to the extent sued for, by reason of the said lease not having been implemented. is entitled to have decree in terms of the conclusions of the summons.”

The defender pleaded—“(1) The action as laid is irrelevant. (2) The defender having broken no contract, nor otherwise injured the pursuer, is not liable to pay damages to him. (3) An executor not being bound to fulfil all the personal engagements of the defunct, is not bound to pay damages for non-fulfilment of a contract when the contract bound the deceased to a defined course of personal conduct, and when that conduct became impossible through death or any other inevitable cause. (4) The damage of which the pursuer claims having been caused or materially contributed to by his own fault, the defender ought to be assoilzied. (5) Compensatio injuriarum.”

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

“ Edinburgh, 16 th July 1874.—The Lord Ordinary having heard parties' procurators, and having considered the closed record, lease founded on, and whole process,—Finds that, according to the true meaning and effect of the lease between the pursuer on the one part, and the late Thomas Morgan on the other part, a copy of which is No. 6 of process, the obligation to pay the rent therein stipulated is validly and effectually constituted, not only against the deceased Thomas Morgan, the original tenant, and against his heir-at-law, representing him, but also against the executor of the said deceased Thomas Morgan, and that in volorem and to the extent of the executry-estate: Finds accordingly, that the defender, as executor of the deceased Thomas Morgan, and to the extent of the executry-estate, is liable to the pursuer in the rents of the subjects let by the said lease, and that down to the expiry of the lease, subject always to deduction of all sums realised by, or available to, the pursuer, from reletting the subjects of the said lease, or otherwise, in consequence of the defender and the heir-at-law having declined to take up the said lease; and, with these findings, and before further answer, allows both parties a proof of their respective averments under the ‘Evidence (Scotland) Act 1866,’ and appoints the case to be enrolled that a diet of proof may be fixed; meantime reserves all questions of expenses, and grants leave to reclaim.

Note.—The abstract question, whether or not the defender, as executor of the late Thomas Morgan, was liable to the pursuer either for rent or for any of the prestations under the lease, was fully and anxiously argued at the debate, and both parties concurred in asking a judgment upon this question of law, as a decision thereof in favour of the defender would put an end to the litigation The Lord Ordinary thinks this request reasonable, and he has, accordingly, decided the question argued.

The defender is the executor of the late Thomas Morgan, and, admittedly, he is liable in the obligations of the said Thomas Morgan, in valorem of the executry estate. Thomas Morgan at the time of his death was tenant of the farms of North and South Cassingray under a nineteen years' lease, commencing at Martinmas 1858. The question is,—Whether the defender, as executor (the heir-at-law having declined to take up the lease, and there being no other heritable succession), is liable to the pursuer either for the rent, or for any of the other prestations in the lease?

An objection was taken in limine by the defender, that the lease founded on had not been signed by the landlord till 1872, four months after the death of the tenant. No special plea is stated in support of this objection, and as it was admitted that the tenant had signed the lease, and had been in possession of the farms in virtue thereof for nearly thirteen years, the Lord Ordinary thinks the objection groundless. The rights of parties would have been precisely the same though the landlord had not signed the lease at all, or even although it had not been signed by either party, provided it was admitted or proved that it was the contract between the parties, and that it was the ground and foundation of the tenant's possession.

Assuming the lease, however, to be the contract between the landlord and late Thomas Morgan, the defender ingeniously maintained that, as the lease was destined to heirs only, as the defender

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as the executor, could not claim as of right the succession to the lease, and as it had been expressly found that the defender is not personally bound to take up the lease, so he cannot be made liable either for the rent or for any of the other prestations in the lease, or for damages for the breach thereof.

The question was said at the bar to be a new one, and the Lord Ordinary is not aware of any decided case precisely applicable. But, upon principle, he has not found much difficulty in repelling the defender's plea, and finding him liable in valorem of the late tenant's personal estate.

(1) The terms of the lease itself are almost conclusive of the question. No doubt the destinaation in the lease is taken simply to the tenant “and his heirs,” all assignees, legal and voluntary, are expressly excluded, but then, when the tenant comes to bind himself to pay rent, he binds his executors as well as his heirs. The words are—‘And on the other part, the said Thomas Morgan binds and obliges himself, and his heirs, executors, and representatives whomsoever, to make payment to the said Sir John Trotter Bethune,’ &c., ‘yearly of the sum of £850 sterling,” &c. The meaning of this is doubtful. It is, that the tenant's whole estate, personal as well as heritable, is subjected to, and rendered liable in, payment of the rent due to the landlord. It may be that the heritable estate is primarily liable, although there is no discussion as between heir and executor. It may be that the executor, forced to pay, may have relief against the heir or the heritable succession, but surely when the tenant expressly binds his ‘executors and representatives whomsoever,’ these words can only mean that his personal estate is to be liable to the landlord. This is pars contractus. The parties have said so, and the law will enforce it. The defender's contention would lead to this, that although the tenant had left a free personal estate of thousands or millions, the landlord would have no claim thereon for the deficiency of his rent. This contention seems quite inadmissible.

It is true the executor cannot claim the lease as of right, nor probably could he be compelled to take it up and cultivate the land, at least unless there be express stipulations to this effect, but this does not affect the express liability which the deceased tenant has constituted against his executor. Probably also, if the heir renounced the lease, and the landlord insisted against the executor, equity would require him, as a condition of so insisting, to receive the executor as tenant. But no question of this kind arises here. The landlord has all along been perfectly willing to receive the defender as tenant, and in the litigation which has already taken place between the parties he tried to compel the defender and the heir-at-law, Mr James Peattie Morgan, to take up the lease. In this attempt, however, the present pursuer was unsuccessful. Both the heir-at-law and the present defender stated that they would have nothing to do with the lease, and would not become tenants therein. It by no means follows, however, that because the present defender cannot be compelled to take the lease, therefore he is not liable as the late tenant's executor for what the late tenant has expressly bound him to pay.

(2) The question now at issue seems almost to be res judicata in the previous litigation between the parties. The previous action was at the instance of the present defender as executor, and of James Peattie Morgan, who was heir-at-law of the late tenant, against the present pursuer, the landlord; and its leading conclusions were— First, That the heir-at-law was not bound to take up the lease, and second, That present defender, as executor of the late tenant, ‘or in any other character, is not bound to implement the foresaid contract of lease, or to run out said contract.’ There were ancillary conclusions as to stock and cropping. Now, the Lord Ordinary, (Lord Shand), by interlocutor dated 14th February 1873, while affirming the first conclusion of the action, and liberating the heir-at-law Mr James Peattie Morgan, who refused to take up the lease, and did not represent the deceased tenant at all, refused to affirm the second conclusion of the summons as regards the present defender. On the contrary, he found, in regard to the present defender, William Morgan junior, “that having completed a title as executor of his late brother, the said Thomas Morgan, and having in that character intromitted with his brother's moveable estate, he is liable as his brother's executor for the fulfilment of the obligations contained in said lease, or otherwise in damages for breach thereof.’ This interlocutor and the finding therein, was affirmed by the Second Division. It is difficult to resist the conclusion that this finding pronounced in foro contentioso between the same parties, and relative to the same matter, is final and binding against the present defender—At the same time the Lord Ordinary would be unwilling to rely exclusively upon res judicata, if the pursuer's case were not otherwise founded in justice and on principle.

(3) Various difficulties were ingeniously raised by the defender, none of which, however, appear sufficient to avoid the conclusion now reached. For example, the defender maintained that this is an action of damages for breach of contract; but as it has been found that the defender was not bound to take up the lease, there could be no damages for breach of a contract which was never binding on the defender. But the defender's proposition is too broad, for it often happens that damages are exigible where specific performance cannot be enforced,—for example, in all the higher contracts of service. The Court will not enforce specific implement against a clerk or partner, but he will be liable in damages if the contract is not specifically fulfilled. The true answer, however, is that the present is not an action of damages strictly or properly so called. It is an action for liquidated rent expressly covenanted to be paid, and all that the defender can claim is, that the landlord shall deduct whatever he can fairly make from the subject which has been thrown back upon his hands, instead of being enjoyed by the defender. The sound view is, that the landlord or lessor has two securities for his rent,— first, the personal obligation of the tenant and his representatives; and, second, the subject let itself and its fruits. Now, when the debtor refuses to take or enjoy the subject let, and allows the landlord to retain and make the best of it, all that he can demand is that the landlord shall deduct from the liquid rent due the utmost that he can recover from his real security.

A further difficulty raised by the defender was how far the landlord, who at best is only a creditor for sums to fall due during the next three years, can demand decree for a present sum, even offering, as he does, to discount interest. But this does not create any practical difficulty, and the defender

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himself, who says he is anxious to wind up the executry-estate, will hardly insist on keeping it up till the ish of the lease.

“As the parties are at issue as to what the landlord has realised from the lease, and whether he has duly and timeously re-let the subject, and on other points of detail, the Lord Ordinary has allowed a proof. Here again the defender demanded, as of right, a Jury Trial, insisting that this was an action of damages and an enumerated cause. As this is not the view the Lord Ordinary takes, and as the questions in dispute are more appropriate for a proof, the Lord Ordinary has ordered proof in common form. He has reserved expenses, but the whole expenses since closing the record should fall on the defender.”

The defender reclaimed, and the First Division appointed the case to be heard before seven Judges.

The pursuer obtained leave to add the following plea:—“In respect of the proceedings in the previous action of declarator referred to in the condescendence, and of the interlocutors pronounced therein dated 14th February and 15th March 1873, it is res judicata that the defender is liable as his brother's executor to the pursuer for the fulfilment of the obligations contained in the lease between the pursuer and the late Thomas Morgan, or otherwise in damages for breach on non-implement thereof.”

Argued for the Reclaimer—On the tenant's death the heir was the only person who could take up the lease, and in this case he refused to do so. In these circumstances, the landlord was entitled to go against the heritable estate, but except the lease the late tenant left no heritable estate, and so the landlord had no relief. Then this was really an action of damages for breach of contract, but as it had been found in the action of declarator that the defender was not bound to take up the lease, there could be no action for a breach of contract which was never binding upon him. This question was not res judicata. It had never been raised in the action of declarator. All that was there decided was that the defender was liable qua executor, and in so far as he had intromitted with his brother's moveable estate.

Argued for the Respondent—This matter was res judicata, for the judgment in the declarator went to this, that the heir having renounced the lease, which constituted the whole heritable succession, the executor became liable for the obligations contained in the lease, or otherwise in damages for breach thereof. Even if the matter was not res judicata, it was clear that the whole estate of the deceased tenant was liable for non-implement of the lease. The claim of the pursuer was not founded on any obligation in the lease to pay damages, but the lease having been entered into, the claim of the pursuer arose ex liege on account of the provisions of the lease not having been implemented. The obligation under the lease was, that the farm would be cultivated to the end of the lease, and the tenant bound himself that the prestations of the lease would be performed to the landlord during the whole currency of the lease. Here the heir refused to take up the lease, and thus, no one coming in place of the original tenant, there was no discharge of his estate, and the clear and only meaning of the obligation entered into in the lease by the tenant was, that his whole estate, personal as well as heritable, was subjected to and rendered liable in payment of the rent due to the landlord.

At advising—