Scottish Court of Session Decisions

This was an appeal from the Sheriff Court of Edinburgh against a judgment of the Sheriff-Substitute. The action was at the instance of John Davie, boot and shoemaker in Edinburgh, against William C. Stark, clothier and outfitter there, and concluded for the sum of £50 sterling, being half-year's rent of shop and pertinents No. 92 High Street, Edinburgh, belonging to “the pursuer, due at Martinmas 1875 for the half-year immediately preceding, and which shop and pertinents were let to the defender on lease for seven years from Whitsunday 1872 to Whitsunday 1879, at the annual rent of One hundred pounds, payable at the usual half-yearly terms.” The lease was negotiated in February 1872 by missive letters between the defender and Messrs M'Kellar & Swan, builders in Edinburgh, who were then proprietors of the subject. The offer made by the defender, dated 5th February, was as follows: —“I offer to take that new shop No., low-most shop, High Street, with cellarage below, for a period of seven years, at the yearly rental of One hundred pounds sterling, on conditions that it is fitted up with gas-fittings according to my instructions; that the two shops above, No. and High Street, are not let during the term of my lease to any person or persons in the drapery, clothing, or ready-made outfitting trade.” On 6th February Mr Spalding, W.S., agent for Messrs M'Kellar & Swan, replied:— “Sir,—Messrs M'Kellar & Swan have handed me your letter of 5th current. They instruct me to state that they are willing to give you the lease you wish of their lowest shop in High Street on condition of your giving security to their satisfaction for the rents, and that as regards the gas-rods they are willing to bear half the expense— the rods becoming theirs at the end of the lease. They are willing to consent to the restriction you propose as to the shop next to the one you offer for, but they cannot consent to any restriction as to the uppermost of two shops above, to which you refer. Of course if you were to assign or

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sublet it would need to be to tenants approved of by the landlords, and it would be necessary to provide that they should have the option of terminting the lease in the event of your becoming bankrupt or executing a trust-deed for behoof of creditors. I shall be glad to hear from you tomorrow, and if you are satisfied with the terms I shall send you the draft lease for revisal.—I am, &c.” On 7th February Mr Stark wrote:—“Sir, —In reply to yours of the 6th, I agree to find security for the rent on the conditions that all the gas-rods are fitted up wholly and entirely at the expense of the landlords according to my instructions; that the shop next to the one I offer for be subject to the restrictions referred to in my last letter, and the smaller shop above that (being the second shop above the one I offer for) be not let during the term of my lease to a clothier, or any person or persons in the men's ready-made clothing trade.—I am,” &c. And on 12th February Messrs M'Kellar & Swan replied:— “Dear Sir,—We hereby accept your offer of the 7th instant for the lowest shop in the tenements now erecting by us in High Street and Blackfriars Street, and that we give you possession by the 10th May 1872.—Yours,” &c. No formal lease of the premises was received by the defender from M'Kellar & Swan. Considerable correspondence passed between them on the subject of the lease, and M'Kellar & Swan gave as their reason for not implementing the missives that the property had been sold to the pursuer, who objected to the restrictions agreed upon. With a view to obtain implement the defender by memorandum of 8th May 1872 agreed to submit his own business to a restriction of not selling hats, satin, silk, and felt. No lease was however obtained, but the defender obtained possession of the shop on 10th May 1872, and carried on his business there from that date. The pursuer Davie purchased the whole tenements of which the defender's shop and premises formed part, with entry at Whitsunday 1872. He entered himself into the occupancy of the shop No. 94 High Street, to which the restrictions applied, and exposed for sale various articles averred by the defender to form part of the ordinary stock of a draper, clothier, or ready-made outfitter. On 27th May 1872 the defender by letter by his agent to the pursuer required him to discontinue exposing the said articles for sale, as being in violation of the condition in the missives of lease, but this the pursuer refused to do. Some correspondence followed, and on 15th June 1872 the defender formally intimated by letter by his agent to the pursuer that he held that he was selling certain articles in contravention of his lease, and that he reserved to himself the right to proceed against him for enforcement of the lease, and held him liable in damages. The pursuer replied on 17th June that he did not admit that the defender occupied the premises under a lease at all, and that he reserved right to himself to put an end to his tenancy at the end of the year or when he should think proper. Acting on this repudiation of the lease, the defender gave notice on 1st February 1875 that he would cease to be tenant of the shop at the following Whit-sunday. He received no reply to his letter making this intimation, and on 2d March he wrote to the pursuer stating that he held him to have acquiesced in it. To this letter he received the following reply from the pursuer's agent:— “Dear Sir,—Mr Davie has handed me your letters to him of the 1st ult. and 2d inst. Your first letter required no reply, as my client was at a loss to understand how you could propose to cease to be his tenant in the face of the missives of lease entered into between you and his authors Messrs M'Kellar & Swan, and your agents' subsequent letters to me insisting that you held the premises on lease, when my client proposed to question your position. You will therefore be good enough to understand that my client declines to relieve you of the lease, and any attempt on your part to get out of it can only involve you in expense. My client is selling the property under burden of the lease, and if you get the purchaser to relieve you, good and well, but with that Mr Davie has nothing to do.—Yours, &c.” On 17th March 1875 the defender's agent wrote as follows to the agents of the pursuer:—“Dear Sir,—No doubt you will remember that in the months of May and June 1872 we had a correspondence with you in reference to the occupancy of the shop 92 High Street, belonging to your client Mr Davie, and occupied by Mr W. C. Stark. In that correspondence we drew your attention to the fact that Mr Stark's occupancy of the premises was coupled with certain conditions as to the trade to be carried on in the shop No. 94, and which also belongs to your client. We pointed out certain articles which were being exposed for sale in that shop in contravention of the missives of occupancy, and reserved Mr Stark's right to enforce the conditions, and also to claim damages for these conditions being violated. We are now instructed to intimate to you on behalf of Mr Davie, that from his having gone on for the last three years contravening the terms of occupancy of the premises, Mr Stark intends to insist for payment at the rate of £30 per annum in name of damages, and we are also instructed to intimate that unless a satisfactory arrangement is come to on the subject on or before Saturday first, proceedings will at once be taken for enforcing the claim, and also for interdict of Mr Davie's proceedings.—We are,” In reply the pursuer denied having contravened the stipulation in the missive letters. On 23d April 1875 the defender's agents wrote:—“Dear Sir,—Deferring to our letter to you of the 17th, and your answer thereto of the 18th ultimo on this subject, we now beg formally to intimate to you, as acting for Mr Davie, that unless he discontinues on or before the 1st May 1875 infringing the terms of Mr Stark's lease, as already complained of, Mr Stark will hold himself entitled to renounce the lease in question, and vacate the premises, and he will do so at the term of Whitsunday first. Of course this proceeding does not in any way affect the question of damage already sustained by Mr Stark, and an action will at once be raised to enforce that claim.—We are,” &c.

The pursuer however declined to make any restriction in the conduct of his business, and after repeating the intimation made by him on 23d April, the defender vacated and displenished the shop at Whitsunday 1875, and sent the keys to the pursuer. The pursuer then returned the keys, and intimated to the defender that he held him liable for the rent during the currency of the lease. Thereafter the pursuer made application to the Sheriff for warrant to let the shop, and to

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apply the rent in payment pro tanto of the rent to become due by the defender under the lease, reserving his claim against the defender for the balance that might remain due. The warrant was obtained, but a tenant not having been found, the pursuer himself entered into possession of the shop in November 1875, and sued the defender for the rent between Whitsunday and Martinmas.

The Sheriff-Substitute ( Hallard) pronounced the following interlocutor, with note appended, dated 16th February 1876:—

The Sheriff-Substitute having considered the closed record and productions, and heard parties' procurators thereon: Finds that in April 1875 the defender was tenant under the pursuer of the shop No. 92 High Street, the lease constituted by the missives produced, and possession following thereon, having then still upwards of four years to run: Finds that on the 23d of said month the defender gave notice that he was to renounce the lease and vacate the shop at the following Whitsunday 1875, unless effect were given to his complaint of violation of a condition of the lease hereinafter referred to: Finds that the defender did accordingly vacate the premises at said term: Finds that the pursuer did not recognise said renunciation, but endeavoured in September 1875 to let said shop by judicial authority, and that the same remained unlet from Whitsunday 1875 till Martinmas following, being the six months to which is applicable the rent now sought to be recovered by the present action: Finds that the ground on which the defender gave up his occupancy and lease of the said shop 92 High Street, was an allegation that the pursuer, as occupier and owner of the adjoining shop No. 94, had violated a condition of the lease under which the defender held the shop in question, No. 92, as tenant of the common authors of both parties, Messrs Mackellar &Swan, from whom the pursuer had in 1872 purchased the whole subjects under burden of the defender's lease: Finds that said alleged violation of the lease was that the pursuer offered for sale in shop No. 94 articles of the same kind as those offered for sale by the defender in shop No. 92: Finds that the defender was not entitled, on the ground so alleged by him, to put an end to the lease, and abandon possession as at Whitsunday 1875: Therefore Finds that the defender is bound to pay the rent concluded for, from Whitsunday till Martinmas 1875; decerns in terms of the conclusions of the libel: Finds the defender liable in expenses, of which allows an account to be given in, and remits the same when lodged to Mr Robert Barclay Selby, solicitor, or to the Clerk of Court, to tax and report; and decerns.

Note.—On the assumption that the defender's complaint was well founded, it is thought that the remedy adopted by him was not a competent one. He might have sought redress for the past by damages, and protection for the future by interdict. But his right to break the lease is not clear, and required at all events to be ascertained by declarator.

At the very interesting debate with which the Sheriff-Substitute was favoured, the pursuer relied on the case of Dryburgh v. Dryburgh, 21st May 1874. The defender justly pointed out the distinction between that case and the present.

There the tenant remained in possession, and refused payment of his rent in respect of an unconstituted and illiquid claim for abatement of rent. Here the tenant ceased to possess. But it is thought that that authority applies here a fortiori. If the tenant remaining in possession is not entitled to oppose to a demand for rent an illiquid claim expressly contemplated in the lease, still less is he entitled at his own hand to break the lease, cease possession, and leave the premises without a tenant. A claim to abate rent is surely a smaller thing than a claim to void the lease. If decree of constitution be needed for the one, decree of declarator seems to be much more needed for the other.

The defender appealed to the Second Division of the Court of Session.

The Court ordered a proof, chiefly as to the extent of the contravention of the conditions contained in the missive letters; and thereafter heard counsel.

Argued for the appellant—Restriction in question was fundamental to the lease. Pursuer violated the condition seriously, persistently, and deliberately. Having violated the contract he cannot, while refusing implement on the one hand, demand implement on the other.

Argued for the respondent—Condition in question was not essential to the contract. Rescission is an ultimate remedy, and if interdict will do, it must not be resorted to.

Authorities cited—Stair i. 10, 16; Turnbull v. McLean, March 5, 1874, 1 Rettie 730; Macbride v. Hamilton, June 11, 1875, 2 Rettie 775; Addison on Contracts (last ed.) 266; Johannso v. Young, 32 L. J., Q.B. 385; Hunter on Landlord and Tenant (last ed.) 280; Duncan v. M'Dougall, Hume 792.

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