Scottish Court of Session Decisions

In this action Matthew Dick Cleland, heir of entail in possession of the entailed estate of Springfield, near Glasgow, sought to reduce and set aside a feu-contract entered into in October 1876 between Mrs Marion Cleland, then heir in possession of the estate, and Archibald M'Lean Morrison, writer in Glasgow, the defender, by which she feued upwards of 11 acres imperial of the entailed estate, with a perpetual right of quarrying stones free of charge from the Blackmount Quarry on the estate for building on the ground feued. The grounds of reduction were three—(1) That the feu-contract was ultra vires of the granter as heir of entail, or at least in so far as it conferred a right to quarry stones in Blackmount Quarry; (2) that assuming the granter was entitled to grant the feu, the feu-duty stipulated for was too small, being less than was authorised in the deed of entail; and (3) that the defender and his partner were at the time when the contract was executed law-agents of the granter, and acted for both

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parties; that no independent advice was obtained on behalf of the granter, and that the consideration was inadequate, and the provisions of the deed prejudicial to the entailed estate.

The entail, which was made in 1818 by the deceased Matthew Cleland of Springfield, contained the usual prohibitions and fetters, and in particular a prohibition duly fenced against selling, alienating, or feuing, but with an exception as to certain parts of the estate in the following terms, viz.:—“Yet it shall be lawful to feu for building upon the said lands of Schoolfield, Moss-end, and Muirparks only at a rate not less than 3s. sterling of yearly feu-duty per fall, and to grant feu-rights thereof only, and of what I have feued or might feu.” The ground feued to the defenders was entirely situated within these excepted lands, but the quarry of Blackmount above referred to was in that part of the entailed estate in which feuing was strictly prohibited.

On the death of Matthew Cleland, the entailer, the estate had devolved upon his grand-daughter Barbara Cleland, who died on 1st April 1876. While so in possession of the estate, she, with the consent of the three persons who were then the next heirs of entail (one of whom was the present pursuer), had applied to the Court of Session in 1857, and again in 1868, for authority to feu certain portions of it, including the part called Schoolfield, the object being to enable her to grant feu-rights, not only of Schoolfield, but of other parts of it, at such a rate of feu-duty as could be procured, even although less than 3s. per fall. Under these petitions about a dozen feus were given out with the authority of the Court. In no case did the feu-duty exceed 3s. per fall, although the last feu was granted so late as 1871. In each feu-contract the feuar was authorised to quarry stones from Blackmount Quarry for building on his feu free of charge for five years.

Barbara Cleland was succeeded in the entailed estate by her sister Mrs Marion Cleland, who was the wife of her cousin James Cleland. In July or August 1876 Mrs Marion Cleland and her husband agreed to feu to the defender a considerable part of the lands of Schoolfield extending to 11 acres 1 rood and 6 2–10th poles imperial measure, “with liberty and privilege to the said Archibald M'Lean Morrison and his foresaids, in common with the feuars and vassals of the said first party, of quarrying and taking away stones from the Blackmount Quarry for the purpose of building on said plot of ground and free of charge therefor;” and the feu-contract was executed by them on 4th October 1876, and ratified by Mrs Cleland on 12th October thereafter. The feu-duty stipulated was £223, 15s., being at the rate of 3s. 1 1 2d. per fall, payable half-yearly at Whitsunday and Martinmas by equal portions, but no feu-duty was to be payable till Whitsunday 1879, the payment then to become payable being for the half-year from Martinmas 1878. All the mines, minerals, and metals other than the stone in Blackmount Quarry were reserved to the superiors, and the defender and his successors in the feu were taken bound within two years after the term of entry (Martinmas 1876) to erect upon the ground dwelling-houses and shops having a rental of at least triple the feu-duty. But although the feu-duty did not begin to run till Martinmas 1878, and although the rents of the lands feued were assigned to the defender as from the term of entry, it was arranged by a separate agreement between the defender and Mrs Cleland, of the same date as the feu-contract, that the latter was to receive the agricultural rent, £37 per annum, for the said period of two years, and was besides to receive the value of the materials of the houses then on the property when these should be pulled down by the defender in the prosecution of his building operations. Mrs Marion Cleland died in October 1877, about six weeks after the death of her husband James Cleland, and she was succeeded in the entailed estate by the pursuer of the present action.

For many years the agent of the Cleland family had been Mr James Service senior, writer in Glasgow. He had acted for Mrs Barbara Cleland in her application to the Court for power to feu, and in the making up of her title. The defender was for a number of years in Mr Service's office. In August 1876 the defender and Mr James Service junior, son of Mr Service senior, entered into partnership as writers in Glasgow, occupying the same office, and with the same staff of clerks. Previous to that Mr Service junior had been in his father's office. Mr Service senior was then also in business as a writer, but he occupied a separate office, and had a staff of clerks of his own. Mrs Marion Cleland made up her title by special service, which was carried through by Messrs Morrison & Service or by Mr Service junior, and they also acted as her agents in other matters connected with her estate,—in particular, in letting the farm of Springfield, the lease of which bore to be written by “Robert Thomas Macmaster, clerk to A. M. Morrison & James Service junior, writers in Glasgow.”

The ninth article of pursuer's condescendence was as follows—“(Cond. 9) Within a few months after Mrs Marion Cleland's succession to the entailed estate the defender conceived the design of obtaining from his said client, who was an old lady, a feu of a large and valuable part of the entailed lands, extending to 11 acres 1 rood and 6 2–10 poles imperial measure, equal to 8 acres, 3 roods and 32 1–10 falls Scotch, which are described in the summons, on grossly inadequate terms, without judicial authority being obtained, and without any independent inquiry in the interests of the heirs of entail It is believed and averred that in pursuance of this scheme, taking advantage of his position as agent, the defender, or at least his partner James Service junior, with the defender's knowledge and approval, proposed to take a feu of the said plot professedly at a feu-duty of 3s. or thereby per fall, but really on terms not equivalent to that rate, and on conditions prejudicial to the entailed estate, which proposal nevertheless they or one or other of them falsely represented to be an advantageous offer, and full value for the land. The explanations and counter-statements in the answer are denied.”

The defender's answer to this article was, inter alia, as follows:—“Explained that the defender proposed to Mr Cleland to take a feu of a portion of his lands at Cumbernauld, and that Mr Cleland declined this, and offered him a feu of a portion of the lands of Schoolfield. Prior to this neither Mr Service junior nor the defender had ever acted for Mrs Marion Cleland or her husband Mr James Cleland, and the defender (who neither

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before or since acted for Mrs Marion Cleland or her husband at all) had not even seen Mrs Cleland for twenty years. There was little demand for feus in the neighbourhood of Schoolfield, and 3s. per fall was an ample rate of feu-duty for the ground feued.”

In September 1876 the pursuer had heard of the proposed feu, and had intimated twice to the defender's firm that he objected to the transaction. He also through his agents intimated his objection to Mrs Marion Cleland herself in writing, which letter was shown by her husband to the defender. The defender in his tenth answer admitted that this letter was shown him, but averred that Mrs Cleland and her husband were satisfied with the bargain, and that it was in point of fact advantageous. The pursuer further averred that he believed his remonstrances had taken effect, and that he was unaware of the carrying through of the transaction until after Mrs Marion Cleland's death.

It was matter of admission between the parties that soon after the execution of the feu-contract the defender conveyed and assigned to his partner the said James Service junior one-half pro indiviso of the subjects in question.

The pursuer's nineteenth article was—“Moreover, at the date of the said feu-contract the relation of agent and client existed between the defender and Mrs Marion Cleland, and the defender was therefore personally disqualified from obtaining the said feu-contract unless he dealt at arm's length with his client, and took care that she obtained independent advice. Instead of his doing so, however, the transaction was carried through by his own firm, or at least by his partner, there being no separate agent to represent Mrs Cleland and protect her interests or those of the heirs of entail. Further, taking advantage of his position, and in violation of his duty as agent, the defender obtained the said feu on grossly inadequate terms as above specified. Moreover, he abused his position as agent on the estate in question, and as such possessed of full knowledge of the position of the ground and the feuing rights previously granted, to obtain the said feu-contract under conditions seriously prejudicial to the heirs of entail without the usual clauses relative to the formation of streets and the class of buildings to be erected.” This the defender denied.

“The pursuer's pleas-in-law were—“1. The said feu-contract is null and void, or at least reducible as being in violation of the deed of entail and ultra vires of Mrs Marion Cleland; at least it was ultra vires of Mrs Marion Cleland to grant the defender and his successors the right of quarrying in Blackmount quarry. 2. Esto, that Mrs Marion Cleland was entitled to grant a feu of the said lands at a rate of not less than 3s. per fall as a present payment, the said feu-contract was nevertheless in; violation of the deed of entail and prejudicial to the interests of the heirs of entail, in respect that (1) payment of feu-duty by the defender was post-poned till Whitsunday 1879, while the defender's entry was at Martinmas 1876, with right to draw the rents of the said lands from that term, (2), a right of quarrying on other parts of the entailed lands was given to the defender, and (3) by the said feu, parts of the entailed estate, and in particular the mineral field let to Messrs Dixon & Co., were cut off from the old Glasgow and Stirling road.3. The defender was personally disqualified from obtaining a feu of the said lands from Mrs Marion Cleland, or at least he is not entitled to enforce it, in respect that (1) the relation of agent and client existed between the defender and Mrs Marion Cleland and her husband at the date of the said feu-contract and the defender's firm, or at least his partner or colleague James Service junior acted for both parties in the said feu-contract; (2) there was no independent advice obtained or inquiry made in the interests of Mrs Cleland or the heirs of entail as to the advisability and terms of the proposed feu; (3) the consideration given by the defender was to his knowledge grossly inadequate, but was represented to his said clients by him or the said James Service junior with his knowledge and approval to be a full return for the lands; and (4) the conditions of the feu-contract were to the defender's knowledge to the serious prejudice of the entailed estate.” The defender's pleas, inter alia, were—“(4) The feu-contract not having been ultra vires of the granters thereof the defender should be assoilzied. (5) The plea founded on agency is not competent to anyone but the client who alleges that his agent has wronged him, and the present pursuer has therefore no right to maintain the said plea. (6) The defender not having been Mrs Cleland's agent, the action so far as rested on that ground is untenable. Separatim, the contract was a fair one, in which full value was given by the defender, and regarding which Mrs Cleland had independent professional advice.”

The Lord Ordinary ( Curriehill,) allowed a proof before answer, and the facts then brought out in regard to the execution of the feu-contract were as follows:—At the time of Mrs Barbara Cleland's death James Service senior was the agent of the family, and at first he continued nominally to be agent for Mrs Marion Cleland. But he was getting old, and very slow and dilatory in carrying through business, so Mrs M. Cleland's title, as above stated, was made up by his son, who also did other business in connection with the estate.

It appeared that the defender at that time wished some ground to feu, and Mr Cleland's name was mentioned to him by Service junior. They accordingly went to see Mr Cleland, when the three went to the ground, and it was agreed then that the defender should get the feu in question. No valuation of the ground was taken previous to this by any of the parties. A draft minute of agreement between them was prepared by Service junior, which was sent to Mr Cleland. A draft feu-contract (mostly a printed form, viz., that approved by the Court in previous applications for authority to feu) was then prepared by Mr Service senior on behalf of the Clelands, and was brought by Mr Cleland to the defender and Service junior. Instead of this being returned to Mr Service senior for revisal, a new draft was prepared by Service junior, which in several points differed from the original one, and which was not sent to Service senior, but was sent to Mr Cleland, who brought it back some days afterwards, when it was extended by Service junior's clerk Macmaster, who was there designed as “clerk to James Service junior.” The drawing of the feu-contract was entered in James Service junior's books as a charge against

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the Clelands, and was paid by their representatives during the currency of this action. The contract was taken out by the defender and Service junior to Bishopbriggs, where the Clelands lived, and was signed by them there, Service junior stating that it was read over to Mrs Cleland before signing. The warrant of registration on behalf of both parties was signed by Service junior. The feu-contract was ratified by Mrs Cleland on 12th October.

The feu-contract bore to be in favour of the defender only, but on 7th October, three days after the date of the contract, the defender reconveyed to Mr Service junior the half of the ground feued, it having been arranged from the beginning that they were to go halves in the transaction.

The following evidence, inter alia, was given by Mr Alexander, agent for the pursuer—“In consequence of instructions I received from pursuer I called on Mr Service senior and saw him. I told him that pursuer objected to a feu of a large lot of 11 acres or thereby at the minimum feu of 3s. per fall. I said that on behalf of the pursuer I was quite ready to meet with him and concur in a feuing scheme of small lots as had been done formerly at a valuation to be got at the time, and that I wished him to apply to the Court as formerly for authority. Mr Service said that he objected to the scheme, and had told James Cleland so, and that he also objected to Mr Morrison. He did not say he had told Morrison that he had objected to the scheme; but he said he had told Mr Cleland that he was averse to feuing large lots, and also to Mr Morrison. He said he intended to apply to the Court as formerly for authority to feu, and that he would desire Mr Cleland to call on him in order that they might have a consultation as to the procedure to be adopted. I had no intimation from Mr Service for some time as to this proposed meeting, and I wrote him on 19th September. A copy of the letter is produced. I got no answer. I called on Mr Service on 2d October, and he told me he had not seen Mr Cleland, but he thought I should write to Mr Cleland to come in. I accordingly wrote to Mr Cleland on the same day, but he neither called nor sent an answer. On 6th October my partner Mr John D. Taylor told me that Messrs Archibald Maclean Morrison and James Service junior had to do with the estate, that they had been advertising the ground, and that he had called upon them, when it was stated that they had the feuing of the estate. I immediately called upon Morrison and Service junior and saw them. I had a conversation with Mr Service junior in Mr Morrison's presence. Mr Morrison heard what passed, but said nothing. I told Mr Service junior just what I had said to his father, that my client objected to feuing in such a large lot as 11 acres, and that at 3s. per fall, and without going to the Court. I told him I was willing to concur in getting a valuation, and having a proper feuing of the estate in small lots as formerly. I told him also that his father at my interview with him had concurred in this. Mr Service junior replied that he was now Mrs Marion Cleland's agent, and that he would not go to the Court for leave to feu or get a valuation. (Q) Did he inform you on that occasion that a contract had been executed?—(A) He did not. All he said was, as I understood him, that he would go on.”

The following evidence was given by Mr Service junior—“In the summer of 1876 Mr Morrison asked me if I knew of anyone who could feu him ground. I replied that I knew Mr James Cleland, who had ground at Blairlinn and Cumbernauld. I saw Mr Cleland in my office in July, and spoke to him on the subject. He said he would prefer to feu Springfield rather than Blairlinn. He asked me to bring out the person who wanted the feu. Defender and I went out to Springfield about the middle of July. Defender wanted ground in order to feu it to builders and others. He has been engaged in buying land and subfeuing it to a large extent. I had a share in a number of these speculations. Our practice was to take the title in name of one of us only. In the present case I had a share in the feu in question, and the title was taken in defender's name in accordance with our usual practice. That was done to simplify the matter, and I had a particular reason also, because as the deed was going to my father I did not wish him to know what speculations I was going into. When defender and I went out to Springfield we called at the house and saw Mr and Mrs Cleland. Mr Cleland, defender, and I went round the ground. Mr Cleland pointed it out to us, and stated that the price was £25 per Scotch acre. After some conversation to the effect that he would like it cheaper, defender said he would accept it at that price, and it was stated that I was to have an equal share in it. Defender stated that he wanted the ground for the purpose of subfeuing for building. I said that my chief interest was in having the preparation of the deeds in subfeuing… . It was arranged between Mr Cleland, defender, and me that a clean draft should be written out giving effect to the alterations, and that it should be done in my office in order that it might be done quicker. I accordingly prepared a new draft, and sent it to Mr Cleland on 22d September by previous arrangement for his approval, and to take it to my father. He called on me perhaps three days afterwards, and gave instructions that my clerk should extend it. I accordingly got it extended. The entry in my account—‘to drawing feu-contract’—refers to the copying out of that draft as I have explained. By the Court.—I never meant that to be charged; it was merely an entry which the clerk put into the book. When I revise a draft I don't enter it in my books as drawing it, but this draft is completely rewritten. The bulk of it is in print, and all the difference was that I struck out some of the clauses which had been in my father's draft… . Mr Cleland was made aware in July that I was to have an interest in the transaction.”

Mr Service senior was unable to give evidence from his mental and bodily condition.

John Fraser, spirit merchant in Glasgow, stated that during a conversation he had with James Cleland some days after the feu in question was granted the latter had said that he had feued the ground to Mr Service and his partner. The purport of the other evidence, so far as necessary, sufficiently appears from the opinions infra.

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

Edinburgh, 28 th June 1878.—The Lord Ordinary having considered the cause, Finds that the feucontract libelled, in so far as it confers on the defender the right, liberty, and privilege of quarrying

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and taking away stones in Blackmount Quarry mentioned in the summons was ultra vires of the granter, and is reducible: Therefore reduces, decerns, and declares in terms of the alternative reductive conclusion of the summons, and grants warrant to the Keeper of the General Register of Sasines to mark upon said register that decree of reduction of the deeds libelled has been pronounced to the extent aforesaid, and decerns: Quoad ultra assoilzies the defender from the conclusions of the action, and decerns,” &c.

His Lordship added a note, which contained, inter alia, the following—(1) As to the feu-contract being ultra vires of the deed of entail:—“The first question to be considered is, Whether the feu-right thus granted to the defender by Mrs Marion Cleland was ultra vires of her as heir of entail in possession of the estate of Springfield? I need hardly say that an heir of entail is fiar of the entailed estate and has all the powers of a fee-simple proprietor except in so far as fettered or limited by the deed of entail. In the present case, although the heirs of entail were prohibited from granting fens of the estate generally, the prohibition was relaxed as regards Schoolfield, Moss End, and Muir Parks, which they were expressly authorised to feu subject to the conditions, first, that the feus should be for building purposes, and second, that the rate of feu-duty should not be less than 3s. per fall. Mrs Marion Cleland therefore was as fully entitled to feu these lands for building purposes as she would have been had she been fee-simple proprietrix, provided only the feu-duty was not less than the rate specified in the deed of entail; and in granting such feu-rights of those parts of the estate she was not bound to stipulate for any higher rate of feu-duty, or to consult the interest of the next heirs of entail. Such being her powers under the entail, the first question under this branch of the case is whether in the feu-contract into which she entered with the defender, she exceeded these powers? As regards the privilege of taking an unlimited quantity of stones for an unlimited period from Black Mount quarry free of charge, for the purpose of erecting buildings on the eleven acres feued to the defender I am very clearly of opinion that the contract was ultra vires of Mrs Marion Cleland as heir of entail. The grant of the quarry was a gratuitous alienation of a part of the entailed estate which she had no authority to make under the deed of entail, and for which she had not obtained the authority of the Court of Session. The privilege of quarrying is a valuable one to the feuar, as it is proved that in the event of his proceeding regularly with building upon the eleven acres for a continuous period of years, the saving in cartage and tolls would be at the least £135 per annum. That sum would probably greatly exceed any lordship or rent which even a feuar would pay for liberty to quarry stones; but still there cannot be a doubt that the privilege would have been of some annual value to the estate, whereas it is here given free of charge. I am therefore of opinion that, in so far as the right of quarrying in Black Mount is concerned, the feu-contract is bad and reducible.

The next question that arises on this branch of the case is, whether the part of the contract relating to the quarry being bad, the contract is separable, and may be reduced in part, or whether the invalidity of this one branch of the contract vitiates the whole? Several cases have occurred in which where a contract has been made by an heir of entail to the prejudice of succeeding heirs, either by stipulating for too low a rent or for too long a duration of the lease, the Court has refused to interpose to reform the contract, and has set it aside altogether, as was done in the Durris cases— Gordon v. Innes, 2 Sh. p. 28; Mordaunt v. Innes, 9th March 1819, F.C. But in the present case the circumstances are entirely different. The heir of entail has granted a feu-right of part of the entailed estate which she had full power to feu,—and she has also in the same deed gratuitously alienated a different part of the estate which she had no power to give away. These two parts of the grant appear to me to be distinct and separable. The pursuer, indeed, has an alternative conclusion, to the effect that the contract should be set aside in so far as the quarry is concerned, and the defender, so far as I understand, does not maintain that if he is deprived of the quarry he is entitled to throw up the whole contract or to have the feu-duty modified. I therefore think that the pursuer is entitled to the decree of partial reduction which he seeks.”

His Lordship then went on to state his reasons for holding that the feu-duty could not be held to be less than 3s. a fall, which it was maintained it was, because it was not to be paid for two years. The reasons were—(1) the whole ground was feued, the feu-duty being payable for every inch of the ground without deduction for roads, &c.; (2) it was within the power of the granter in the fair administration of the estate to give two years' immunity from feu-duty at the commencement of a contract which contemplated the erection of a large quantity of building; (3) the granter and her successors were to receive the agricultural rents till the feu-duty was paid.

His Lordship further proceeded to state that if the feu-duty required by the deed of entail had been procured, the feu-contract could not be challenged by the pursuer or any subsequent heir of entail merely on the ground that a higher rate could have been obtained.

On the second ground of reduction, his Lordship found that there was no reason to suppose that the feu-contract drawn by Service junior was not submitted to Service senior, and revised by him, but that after that the carrying through of the contract was entrusted to Service junior; that Service junior had disclosed to the Clelands previously to the transaction that he and the defender were jointly interested, and that therefore the law of M'Pherson'sTrustees v. Watt—December 3, 1877, 5 R. 9—did not apply. Finally, that the transaction was a fair one, and that Mr and Mrs Cleland were proved to have been satisfied with it.

The pursuer reclaimed.

Argued for him—Service junior acted as agent for both parties, and no independent advice was had by the granter; no information was given her, and no separate valuation obtained. The grant was in favour to the extent of one-half of Service junior, and this was not disclosed to the granter, and therefore the law of M'Pherson's Trustees v. Watt, March 2, 1877, 4 R. 601, and December 3, 1877, H. of L., 5 R. 9, applied; cf. also Anderson v. Elsworth, June and July 1861, 3 Giffard's Reps. 154.

Argued for the respondent—Service senior had acted as agent for the Clelands, and had looked after their interest, and been consulted by them all through this transaction, although Service junior had carried it through on account of his father's age and dilatoriness. The transaction was a perfectly fair one, and the feu-duty was as much as could be got from anyone. The Clelands themselves were perfectly satisfied with their bargain. It was clearly proved that it was disclosed to the Clelands that the grant was in favour of Service junior as well as Morrison; at all events, it was not alleged on record that no disclosure was made, and it was too late now to make any amendment. The case of M'Pherson's Trustees v. Watt had suggested this ground of action to the pursuer. In regard to the law of Watt, a distinction must be drawn between a case where the person who transacted said “I didn't know you were the purchaser,” and in consequence the deed fell; and where it was the heir of the person transacting who challenged. In the latter case prejudice must be proved. The granter of this deed homologated it, and this would have been a good defence to any action at her instance, and surely her successor in the estate could have no ground of action which she had not— Earl of Elgin v. Wellwood, June 13, 1821, 1 Shaw's App. 44; Robertson v. Fleming, March and May 1861, 4 Macq. 167.

The question arose at the discussion, whether it was relevantly averred on record that Service junior, being the agent of the Clelands at the time of the transaction, took a conveyance in his own favour without disclosing to the Clelands that he was the beneficiary. A proposal to amend the record to this effect, and to lead proof as to the fact of disclosure, was made, but this was not thought necessary.

At advising—