Scottish Court of Session Decisions

In an action raised by the trustee on the sequestrated estates of A and B against E, to compel him to fulfil the obligations contained in the two feu-contracts and in the contract of ground-annual to erect and maintain certain buildings— held (1) that the pursuer had no title to enforce the obligations contained in the two feu-contracts, as he was not a party to them; and (2) that there was no personal obligation upon E, a singular successor in the lands, to fulfil the obligation to build contained in the contract of ground-annual.

Right in Security—Absolute Disposition—Back Bond—Re-eonveyance.

An action having been raised against a creditor infeft in certain lands on an ex facie absolute disposition qualified by a back bond, to compel him to fulfil certain obligations alleged to be incumbent on him under his title, he recorded the back bond, re-conveyed the lands, and obtained a decree in absence ordaining his debtor to accept and record it.

Opinion reserved as to the effect of such re-conveyance subsequent to the raising of an action.

This action was raised on the 29th of April 1887 by John Gourlay, chartered accountant, trustee on the sequestrated estates of James Marshall, miller in Glasgow, and Thomas Alexander Marshall, engineer in Glasgow, against Duncan MacNeill, & Company, merchants in London, and the individual partners of that firm. The pursuer sought in the first conclusion to compel the defenders to fulfil the obligations undertaken by the respective second parties in (1) a feu-contract entered into between John Strapp and others, trustees of the deceased John Hinshelwood of the first part, and William Simm of the second part, dated 28th September and 6th October, and recorded 8th December 1876; (2) a feu-contract entered into

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between William M'Whirter Wilson, clerk to the Commissioners of Police of the burgh of Govan, of the first part, and the said James Marshall and Thomas Alexander Marshall, of the second part, dated 13th May and 18th June, and recorded 21st June 1879; and (3) a contract of ground-annual between the said James Marshall and Thomas Alexander Marshall, of the first part, and John Inglis Bruce and James Walker Bruce, of the second part, dated 5th and 13th May, and recorded 21st June 1879, in so far as relating to the obligations remaining still to be executed upon the. second parties under the said two feucontracts and contract of ground-annual to erect, maintain, and uphold buildings on the two portions of ground after described. There was also an alternative conclusion for payment of £3000 in the event of the defenders failing to commence, and duly carry on and complete the erection of the buildings within such time as the Court might fix.

By the contract of ground-annual mentioned above entered into between James Marshall and Thomas Alexander Marshall, of the first part, and John Inglis Bruce and James Walker Bruce, of the second part, the first parties, in consideration of the yearly ground-rent or ground-annual and other prestations thereinafter written, thereby sold and disponed to and in favour of the said John Inglis Bruce and James Walker Bruce, and survivors and survivor of them, and the heir of the survivor, as trustees and trustee for behoof of the said firm of Bruce Brothers & Company, and partners thereof, present or future, according to their respective rights and interests, and to the assignees and disponees of the said trustee and trustees, heritably and irredeemably, in the first place, certain subjects being part and portion of the lands disponed by the feu-contract entered into between John Strapp and others, trustees of the deceased John Hinshelwood and William Simm, and disponed by William Simm to the first parties on 3d May 1878; and, in the second place, certain subjects disponed by the feucontract entered into between William M Whirter Wilson and the first parties. But the subjects first thereby disponed were so disponed always with and under, in so far as applicable and still subsisting, the real liens and burdens, servitudes, reservations, conditions, restrictions, prohibitions, declarations, obligations, and others specified and contained in the feu-contract first above-mentioned; and it was, inter alia, declared by said contract of ground-annual,. that the proportion of the original feu-duty of £305, 18s. 3d. effeiring to the subjects first thereby disponed was £147, 5s. 10d., which, with the sum of £14, 14s. 7d. of augmentation, in terms of the said feu-contract, amounting together to the sum of £162, Os. 5d. was the amount of the original feu-duty allocated by the contract of ground-annual on the subjects first thereby disponed; which proportion of feu-duty and augmentation the second party and their foresaids were taken bound, as they thereby bound themselves and their foresaids, to pay, and so free and relieve the first parties and the remaining subjects belonging to them in all time coming from and after the term of entry therein mentioned. And the subjects second thereby disponed were so disponed always with and under the burden of the feu-duty of £26, 12s. 2d yearly, and whole other burdens, conditions, provisions, declarations, and others specified and contained in the feu-contract second above-mentioned. It was further, inter alia, declared by said contract of ground-annual that the subjects disponed were so disponed always with and under the further real liens and burdens, conditions, provisions and others thereinafter specified, viz., inter alia (First) with and under the real lien and burden of the payment by the second party and their successors to the said James Marshall and Thomas Alexander Marshall, and their heirs and assignees whomsoever, of a yearly ground-rent or ground — annual of £106, 5s. 6d.; and then followed the clause containing the obligation to build which it was specially sought to enforce in this (action—( Second) “Over and above the obligations already existing as to the erection of buildings on said ground hereby disponed, the second party and their foresaids shall be bound and obliged, as they hereby bind and oblige themselves and them, within one year from and after the term of entry after-mentioned, to erect and build on the said ground hereby disponed, buildings which shall be of a substantial description, and built of stone, or brick and lime, and covered with slates, sufficient to yield a yearly rent equal to at least double the amount of the said ground-annual hereby created, and the foresaid proportions of feu-duty, augmentations, and others, and to maintain and uphold the said buildings in such good order and repair as will make them yield the said rent in all time thereafter.” The term of entry was Whitsunday 1879.

It was further, inter alia, provided that the yearly ground rent and duplication thereof, and whole conditions, declarations, and obligations contained in the contract of ground-annual were real liens and burdens in favour of the first parties, and that they should be recorded in the Register of Sasines as part of the contract of ground-annual, and be inserted or validly referred to in all future conveyances of the same subjects; otherwise such conveyances should be, in the option of the first parties and their heirs and assignees, null and void, and the subjects should revert to the first parties and their foresaids. Further, John Inglis Bruce and James Walker Bruce bound themselves, “their heirs, executors, and representatives whomsoever, and their assignees, all jointly and severally” to fulfil and perform the obligations incumbent upon them under the contract of ground-annual.

By disposition dated 30th and 31st August, and recorded 23d September 1882, John Inglis Bruce and James Walker Bruce disponed to and in favour of John Inglis Brnce the subjects conveyed by the contract of ground-annual, under the burdens, conditions, and obligations contained in that contract and in the two feu-contracts before mentioned. And by disposition dated 8th and recorded 11th September 1882 John Inglis Bruce conveyed the same subjects to Duncan Macneill & Company, the defenders, heritably and irredeemably, with a clause providing that the subjects “are disponed always with and under the real liens and burdens, conditions, provisions, and others specified and contained in said contract of ground-annual, dated and recorded as aforesaid.”

This disposition though ex facie absolute was merely in security being qualified by a back-letter granted by the defenders in favour of Mr John Inglis Bruce, dated 4th September 1882.

On June 1st 1887, after the action was raised, the defenders recorded this back-letter. On the 27th of July they executed a disposition and conveyance in favour of John Inglis Bruce, and on the 29th of July they raised an action against him concluding to have him ordained to register the said reconveyance, and failing such registration for authority to execute a warrant of registration in his name, and to have the property adjudged to belong to him.

The pursuer pleaded—“(1) The defenders being bound conjunctly arid severally to implement and fulfil, in so far as has not already been done, the obligations to erect and maintain buildings imposed upon the second party and their assignees and disponees under said contract of ground-annual, and upon the respective second parties and their assignees and disponees to said two feu-contracts, in so far as relating to the subjects conveyed by said contract of ground-annual, and the said obligations being conditions of their right to the ground, and being binding on the defenders, decree should be pronounced in terms of the first conclusion of the summons, with expenses. (2) Failing the defenders implementing and fulfilling the foresaid obligations, in so far as not already performed, the pursuer will thereby, through the fault of the defenders, suffer loss, injury, and damage to the amount condescended on, and decree should be pronounced in terms of the second conclusion of the summons, with expenses.”

The defenders pleaded—“(2) No title to sue, in respect that the pursuer has no title to enforce the conditions contained in the feu-eontracts. (3) The defenders are hot personally bound by any of the stipulations in the contract of ground-annual.”

The Lord Ordinary ( kinnear) on 29th October 1887 assoilzied the defenders from the conclusions of the summons.

“ Opinion.—The pursuer avers that as trustee on the sequestrated estate of Messrs James and Thomas Marshall he is in right of a ground-annual payable out of the lands described in the summons, and of certain obligations to build imposed by the contract of ground-annual upon the owners of the ground; and in the exercise of these rights he brings this action against the defenders, as the present owners of the ground, to have them compelled to perform the various obligations to build contained in the contract of ground — annual, and in certain feu-contracts under which the defenders are said to hold.

The pursuer is no party to the feu-contracts, and has plainly no title to sue upon them, either as trustee in the sequestration or in any other character, and the only question therefore is whether he is entitled to enforce the obligations of the contract of ground-annual against the defenders.

But the defenders are not parties to that contract. They are the disponees of one of the parties who was proprietor of the ground when the contract was executed, and it is well-settled law, since the judgment of the House of Lords in Gardyne v. The Royal Bank, that the personal obligations contained in a contract of ground-annual do not transmit against singular successors in the land. It is said that although they do not necessarily transmit with the land, they are yet transmissible, like other obligations, by express stipulation; and that the defenders, must be held to have undertaken the obligations in question, because they have accepted a conveyance ‘with and under the real liens and burdens, conditions, provisions, and others contained in the said contract of ground-annual. But these words do not import a personal obligation in favour of the creditor in the ground-annual; and it is admitted that there is nothing else in the deed that can be construed into such an obligation. It is unnecessary to inquire whether the condition as to building could be made effectual as a real burden, because a real burden does not carry with it any personal obligations. Again, it is said that the obligation to build is a condition of the tenure. But if it be, the pursuer, who is not the superior, and has no title of any kind to the land, has no concern with the conditions of the tenure.

“The principles on which the question must be determined are very clearly explained in the judgments of the Lord President and Lord Deas in the Marquis of Tweeddale v. Lord Haddington, 7 R. 625; and their application to the present case does not appear to me to be doubtful.

Assuming, therefore, that the defenders were to be treated as proprietors for the purposes of the present case, they could not, in my opinion, be compelled to perform the obligation to build undertaken by their author. But the other ground on which they claim to be assoilzied appears to me to be equally well founded. Although their title is ex facie absolute, they are in reality mere heritable creditors, the disposition in their favour being

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qualified by a back-letter which they have recorded in the Register of Sasines. It may be that the registration of the back-letter does not operate a complete divestiture of the feudal title But it is at least a publication of the true nature of their right; and since the record was closed they have executed a re-conveyance, and obtained a decree in absence against their debtor ordaining him to accept and record it. They have thus taken the step which the majority of the Judges in Gardyne v. The Royal Bank thought would be necessary and sufficient to extinguish the title, the registration of the back bond being sufficient in the opinion of the minority.

The pursuer reclaimed, and argued—The Lord Ordinary's interlocutor should be recalled. It was not maintained that the pursuer had a title to enforce the conditions in the feu-contracts, but he was entitled to decree against the defenders in respect of the obligation to build contained in the contract of ground-annual. That obligation transmitted against the defenders, and they were personally bound to implement it— Tailors of Aberdeen v. Coutts, December 20, 1834,: 13 Sb. 226—H. of L., August 3, 1840, 1 Rob. App. 296; Clark v. City of Glasgow Assurance Company, June 20, 1850, 12 D. 1047—H. of L. August 3, 1 1854, 1 Macq. 668. Here the obligations had that element of continuity founded upon by; Lords Deas and Shand in their opinions in Marquis of Tweeddale's Trustees v. L. Haddington, February 25,1880, 7 R. 625; cf. Magistrates of Edinburgh v. Begg, December 20, 1883, 11 R. 352.

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The case was quite distinct from Gardyne v. Royal Bank, March 8, 1851, 13 D. 912— H. of L., May 13, 1855, 1 Macq. 358. In that case the obligation sought to be enforced Was a money payment; here it was an obligation ad factum, præstandum, as in the cases of Coutts and Clark. In Coutts' case the judgment amounted to this—that the obligations there in question affected the lands, and were also enforceable by personal action against the defender, who was a singular successor in the lands. Clark's case was an authority for the pursuer. It was not a case of superior and vassal quoad the obligation in question, which was one of contract, and had nothing to do with tenure. The defenders were bound as assignees of the second parties to the contract of ground-annual. Further, the obligation in question was validly imposed on them in the disposition by which they acquired the subjects. The back-letter, especially as it was not recorded till after the action was raised, could not relieve the defenders of liability— Gardyne v. Royal Bank, supra; Clark v. City of Glasgow Assurance Company, supra; Scottish Heritable Security v. Allan, January 14, 1876, 3 R. 333. The obligation must be determined as at the date of bringing the action, and not as at the date of decree, and therefore could not be affected by a re-convenance of the lands subsequent to the raising of the action.

The defenders argued—The Lord Ordinary's interlocutor was right, (1) The obligation in question was not one of those obligations ad factum præstandum of a recurring nature which might almost amount to conditions of the tenure. It was an obligation to erect buildings which should have been performed two years before the defenders acquired the lands. Gardyne's case established that an obligation of the kind in question, though real, was not a condition of the tenure. The cases of Coutts and Marquis of Tweeddale were not opposed to the case of Gardyne In Coutts' case the question of personal obligation did not arise, as there was no insolvency on the part of the estate, and the obligations were pecuniary. If it was there decided that such an obligation could be enforced against singular successors by a personal action, Gardyne's case overruled that decision. In Marquis of Tweeddale's case the obligations said to have the character of personal obligations were obligations of a recurring character. Even if the contract of ground-annual provided that singular successors should be in all times bound, that would not bind such singular successors as there were here, according to the judgment of the House of Lords in Gardyne. Such obligations could only arise where there was privity of contract as between superior and vassal. As to the contract of ground-annual, “assignees” did not include singular successors — Magistrates of Edinburgh v. Begg, supra; nor did “representatives — Gardyne v. Royal Bank, supra. The defenders, as security-holders, were not liable for such an obligation as the one in question, which should have been implemented two years before they acquired possession of the lands. At all events they were not liable since they had re-conveyed the lands, and so were free of all obligations running with the lands—Gardyne's case; Liquidators of City of Glasgow Bank v. Nicholson's Trustees, March 3, 1882, 9 R. 689: Stewart v. Brown, November 22, 1882, 10 R. 192. No demand made could alter the character of the obligation, and as it ran with the lands, re-conveyance of the lands before final decree would transfer it.

At advising—