Scottish Court of Session Decisions

In 1874 William Reid, W.S., was employed by William Hugh Logan, Edinburgh, as his law-agent, and continued his agent till 1877, when the agency ceased. In 1874 Mr Logan acquired the Theatre Royal, Edinburgh, which he sold to the Edinburgh Theatre Royal Company (Limited), under a reservation to himself of two private boxes in the theatre for his sole and exclusive use. On the 4th February 1876 he assigned to Mr Reid, and his heirs, successors and assignees, the sole and exclusive right of admission to one of these private boxes. The deed was prepared by Mr Reid, no other agent being consulted in the matter, and no value (apart from Mr Reid's past services) was given therefor. It bore to be granted “for certain good causes and considerations.” While Mr Reid was Mr Logan's agent, other agents occasionally acted for him in particular matters. Mr Reid's successor as Logan's agent was Mr Officer, S.S.C., who acted till Mr Logan's death. Mr Logan was aware that he had power to revoke the gift, and from time to time expressed to various persons, Mr Officer amongst the number, his intention to do so. He never expressed to Mr Reid any intention of revoking the gift, and Mr Reid by himself and his friends used the box till Logan's death in December 1882, and thereafter until the then existing theatre was burned in June 1884. Logan attended the theatre and took part in its business as joint-lessee with Mr J. B. Howard up to within three weeks of his death, and he saw Mr Reid using the box. The gift was never challenged till November 1884, when Logan's trustees executed a deed of revocation recalling the gift. Thereafter they brought this action to reduce the assignation.

It was admitted that the box had a substantial value, but the parties differed as to the precise or approximate amount thereof.

The pursuers explained the grounds on which Logan himself took no steps to reduce the gift, notwithstanding his intention to do so, to be, (1) financial difficulties, (2) that his health was feeble, (3) that his mind was much occupied with a litigation in which he was engaged (and in which another agent acted), and with a dissolution of partnership with a co-lessee.

They pleaded—“(1) The said gift having been made by a client to his law-agent while that relationship subsisted between them, the same is null and void, and the pursuers are entitled to decree as concluded for. (2) The said William Hugh Logan was not precluded from recalling the said gift during his lifetime, in respect (1st) that it was null and void ab initio, and could be recalled by him at any time; and (2d) that there was not, in the circumstances, any acquiescence on his part, or any confirmation by him of the rights thereby conferred on the defender. (3) The said assignation being null and void and revocable, the pursuers are entitled to decree in terms of the summons.”

The defender pleaded—“(1) The statements of the pursuer are irrelevant and insufficient in law to support the conclusions of the summons. (3) Separatim, The said assignation having been acquiesced in, and acknowledged and confirmed by Mr Logan during the period after the relation of agent had ceased between him and the defender, and remaining unrevoked at his death, the present pursuers have no right to revoke the same, and the defender should be assoilzied.”

The Lord Ordinary ( M'Laren), after the facts already stated had been established by proof and admission in a joint-minute, pronounced this interlocutor—“Finds that the assignation libelled was a gift by the deceased William Hugh Logan to his agent, the defender, during the subsistence of the relation of agent and client, and that the same was not confirmed by the granter after the termination of such relation: Therefore reduces, decerns, and declares conform to the first conclusion of the summons.

“ Note.—This action is instituted by the testamentary

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trustees of the deceased Mr Logan, sometime proprietor of the Theatre Royal, Edinburgh, against Mr Reid, Writer to the Signet, for the reduction of a gift by Mr Logan to Mr Reid of the perpetual right to the use of a private box in that theatre.

Mr Logan on 23rd November 1875 sold the theatre to a limited company, under reservation of the exclusive right to two private boxes. On 4th February 1876 Mr Reid, without any valuable consideration, acquired one of these private boxes from Mr Logan. By the first article of the minute of admissions it is ascertained that the relation of agent and client existed at the time of the gift, and I therefore find that the assignation libelled is reducible as a gift by a client to his agent during the subsistence of that relation. In a recent case I gave reasons for the opinion that all such gifts are reducible, and that the objection is not to be overcome by evidence that the gift was unsolicited. The case was taken to the Inner House, and the judgment affirmed. I therefore do not enter further on this topic.

In the present case the defender contends that the case ought to be regarded as one in which the gift was confirmed after the relation of agent and client had ceased. It appears that the defender ceased to act as the agent for Mr Logan individually in August 1877, but continued to act for the company to which Mr Logan sold the theatre, and in which he retained a small interest.

The defender in 1877 rendered some trifling services to Mr Logan as law-agent, but in this question I think these services should be left out of account. There is thus an interval of five years from the cessation of the individual agency to Mr Logan's death on 22d December 1882. This is an element so far favourable to the defender's contention. But in my opinion the mere lapse of time does not amount to confirmation so as to bar the right of challenge of the gift. I do not think that express confirmation by deed or writing is necessary to raise such a bar. There may be virtual confirmation by acts which are inconsistent with the supposition that the granter stood upon his right of challenge. In the present case, however, there are no such acts except that Mr Logan was in the habit of going to the theatre, where he saw the defender or his friends occupying the box in question. The defender thinks that Mr Logan was pleased to see him making use of the privilege, but appearances are some times deceptive, and according to the evidence of Mr Mair, Mr Logan all the time entertained the design of reducing his gift as soon as his affairs were in a prosperous condition. Ultimately his health was such as to indispose him for engaging in litigation, but he never expressed any different opinion as to the defender's right to the box from that which he had indicated to Mr Mair. In these circumstances I am of opinion that Mr Logan's representatives are entitled to exercise his right to rescind.”

[The decision referred to by his Lordship in the foregoing note was that in Anderson v. Turner, July 16, 1884 (not reported), in which his Lordship stated the law as follows—“I think there are very strong reasons for maintaining and strictly applying the rule that disables a solicitor from accepting a gift from his client while the relation of agent and client subsists. According to the settled current of authority in England such a gift is void under all circumstances, and the agent will not, as in the case of a purchase of the client's estate, be allowed to support the gift by evidence that the gift was obtained without fraud or improper solicitation. It is not very clear on the authorities whether the rule has been accepted in Scotland in so absolute a sense. The authorities are, as I apprehend, not opposed to the acceptance of the rule as established in England, and on such a subject I should certainly not be disposed to assist in introducing a new distinction between the doctrines of the English and Scottish Courts. For this reason, and because the rule appears to me to be well founded, I am prepared to hold that the assignation and back-letter in question are null on the sole ground that these writings constitute a gift to an agent while the relation of agent and client was subsisting. I think it very much better for solicitors themselves that all such gifts should be cut down by the operation of a uniform rule than that each case should be considered on its merits. In the case of a purchase by a solicitor from a client it may very well be that the transaction is advantageous to both parties—the one party wants money, the other wants an investment—and what the Court inquires into is the fairness of the transaction. But a gift can never be advanvantageous to the donor (in the legal sense), and one cannot predicate fairness or unfairness regarding it. There is therefore no true analogy between the case of a gift and that of a purchase to which the defender naturally seeks to assimilate his case.” In that action the Second Division on 16th July 1884 adhered to the interlocutor of the Lord Ordinary reducing the transaction there in question as a gift of the client to the agent while the relationship was subsisting.]

The defender reclaimed, and argued—The Lord Ordinary was wrong in holding that such a gift as the present was an absolute nullity. It was only revocable in the option of the donor. Here the donor knew that he had a power of revocation, but he never exercised it. After the relationship of agent and client had ceased he showed his “fixed, deliberate, and unbiassed determination”— Wright v. Vanderplank, March 1856, 8 De Jex, Macnaughton & Gordon's Rep. 133—that he meant to abide by the gift. He saw the donee constantly using the box, and never made the smallest intimation to the latter that he intended to revoke the gift. This lasted for five years from the cessation of the agency till the donor's death. In Mitchell and Another v. Humfray, March 22, 1881, L.R., 8 Q.B. Div. 587, it was held that though a gift to a person in a confidential relation to the donor, e.g., to a physician from his patient, may be voidable, yet if after the confidential relation has ceased to exist the donor elects to abide by the gift, and does so, it cannot be impeached after his death if it is not proved that the donor was aware that the gift was voidable at his election. In Long v. Taylor, June 8, 1821, 1 S. 57 (N.E.) 59, there was the element of fraud. That element also existed in Anstruther v. Wilkie, Jan. 31, 1856, 18 D. 405. See also York Buildings Company v. Taylor, 1 S. 57, aff. 2 Sh. Ap. 252. Here there was no fraud whatever.

The pursuers replied—It was settled in the law

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of Scotland, as in that of England, that all such gifts were absolutely null and void as being contrary to public policy—Snell's Equity, 480; Tom son v. Judge, June 1855, 3 Drewry's Rep. 306; Anstruther v. Wilkie, supra. It was true that lapse of time without challenge might be favourable to the idea of confirmation and to a plea in bar of reduction of the gift, but it might be explained— Walmersley v. Booth, June 29, 1739, 2 Aikin's Rep. 25; Morse v. Royal, March 1806, 12 Vesey's Rep. 355; Gresley v. Mousley, April 1859, 4 De Jex & Jones' Rep. 78 (L.J. Turner, 78); Champion v. Rigby, May 20, 1830, 1 Russell & Mylne, 539. Here the donor expressed his intention repeatedly to revoke the gift, and had he lived longer he would have done so.

At advising—