Scottish Court of Session Decisions

By lease dated April 1869 Mr Sutherland Walker of A berarder let to the now deceased George Linton, farmer, at Farr, and John Linton, his son, the Mains Farm of Aberarder, Inverness, for nineteen years from the term of Whitsunday 1869 as to the houses, lands in grass, hill and moor ground, and the separation of the crop of that year from the ground as to the arable land under crop. The lease expired at Whitsunday and separation of crop 1888.

It was provided by the lease that the proprietor should take the sheep stock on the farm at the expiry of the lease at a valuation

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to be made by two persons to be mutually chosen, the stock to be inspected and delivery thereof taken at Whitsunday, and the price to be fixed between that term and the term of Martinmas following, it being understood and agreed that the valuators should take into consideration the price of stock at the Inverness July Wool Market and the Falkirk September and October Trysts, and the price to be payable at the term of Martinmas 1888.

About Whitsunday 1888 John Linton, who had succeeded his deceased father, formed the opinion that Mr Sutherland Walker was in pecuniary difficulties. He therefore required him to find security for payment of the value of the sheep stock on the farm before delivery of it was made. To that demand Mr Sutherland Walker made no reply.

In September 1888 Linton presented a petition to the Sheriff for warrant to sell the sheep stock. That petition was duly served upon the proprietor, who did not enter appearance, and warrant was granted to Messrs Macdonald, Fraser, & Company to sell the sheep by public auction, and they did so. Messrs Macdonald, Fraser, & Company consigned the sum realised by the sale in the hands of the Clerk of Court, and the net proceeds, amounting to £1492, 19s. 2d., were paid by order of the Sheriff to Linton on 1st November 1888.

Linton alleged that if the stock had been taken over and paid for in terms of the lease he would have received therefor the sum of £1901, 15s., and he raised this action against Sutherland Walker for £408,15s. 10d., the difference between that sum and the sum realised.

Upon 3rd August 1889 the Lord Ordinary ( M'Laren) found that the pursuer had not set forth any relevant or sufficient grounds in support of his claim to the sum of £408, 15s. 10d.

“ Opinion.—… I shall begin with the claim arising out of the sale of the sheep stock, because it is out of this matter that the difference has arisen which resulted in the present action. Under the conditions of lease the tenant was to vacate the farm at Whitsunday, and was to be paid the value of the sheep stock at the next term of Martinmas, the value to be ascertained by two persons mutually chosen, with power to name an oversman. It was conditioned that the valuators should take into consideration prices of stock at the Inverness July Wool Market and the Falkirk September and October Trysts, the price to be payable at the term of Martinmas. Valuators were named, and they agreed upon an oversman, but no award has been made. In his narrative of the proceedings subsequent to the termination of the lease the pursuer states (Cond. 8)—‘Prior to the term of Whitsunday 1888 the pursuer ascertained that the defender was in pecuniary difficulties, and subsequent to that term he ascertained that he had not paid the interest on the heritable securities over the estate of Aberarder due at that time. The pursuer therefore required the defender to find security for the due payment of the value of the sheep stock on the farm before delivery of it was made.’ This demand has, as will be seen, a very important bearing on the issues in this case, and it is desirable in the outset to consider whether the pursuer was within his rights in calling on the landlord to find security. The lease, it is admitted, gave no such right. As to any supposed right arising ex lege the conditions of the case seem to be these—On the expiration of the lease the pursuer was creditor for the price in a personal contract of sale, in which it was agreed that the purchaser of the sheep should have six months' credit, in order that time might be given for a fair determination of the price by reference to markets to be held during the period for which credit was given. I am not aware of any rule of law which entitles a seller who has agreed to give credit to call upon his debtor to find security. Indeed, I am reasonably certain there is no such law. The seller, however, is not without his remedies. If he has delivered the stock he may, on suspicion of the debtor's insolvency or inability to pay, use arrestment or inhibition in security of the price, and it will then be determined in an application for the recal of the arrestment or inhibition whether the seller's apprehensions were reasonable, and such as will entitle him to maintain his diligence. If the stock has not been delivered the seller may, on suspicion of the purchaser's inability to pay, withhold delivery, and then, in an action by the purchaser to compel delivery, it will be determined whether the seller had good grounds for the action taken. In the present case the tenant would neither give unconditional delivery nor take the responsibility of refusing delivery, but called upon his landlord to give security, and in this demand I think he was not well founded. The defender seems to have acted not unreasonably in the matter, because, as stated in his answer to article 8, he ‘was willing, and proposed that the pursuer should retain the sheep’—that is, until Martinmas—‘and for this purpose that he should have the house and the use of such parts of the steading as he might require, as well as the crop on certain parts of the farm, free till 1st October 1888.’ This was of course a mere proposal, and as it was not accepted the proposal is not an element in the decision of the main question. It is, however, to be considered that a tenant who refuses delivery of sheep stock to his landlord may be in the embarrassing position of having a stock in hand which he must remove from the farm, and for which he must find pasture elsewhere. The proposal of the defender, if accepted, would have relieved the tenant from this disadvantage, because it secured him in the possession of the sheep until the agreed-on period of delivery, at the same time providing him with necessary pasture, and a residence for the tenant himself, or whoever he might appoint as caretaker. It appears to me that up to this point the defender's action is unexceptionable. He was not bound to give personal security, and at the same time he was willing that the pursuer should have all the security which the retention of the sheep on

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the farm could afford to him… .

The next proceeding is that referred to in condescendence and answers 12 and 13. It is there explained that the pursuer first obtained authority from the Sheriff to clip the sheep and sell the wool, and thereafter to sell the sheep and consign the price in the hands of the Clerk of Court. The sale of the sheep stock by order of the Sheriff was an evident breach of the contract of sale into which the tenant had entered with his landlord. He was bound to deliver that identical stock at Martinmas, and the supposition that he could get rid of his obligation under cover of the warrant of the Sheriff is to my mind altogether inadmissible. If the defender had opposed the sale I do not doubt that his opposition would have been successful. He, however, did nothing, and it is probable that he was not anxious to take over the stock. The sheep stock when sold produced the sum of £1492, 19s. 2d. The pursuer asserts that they were of the value of £1901, 15s., and the pursuer claims the difference between these two sums under the second head of the petitory conclusions. I have endeavoured, with the assistance of counsel, to find out what is the obligation in consequence of which the defender is supposed to be liable for this sum of money, but in this endeavour I have been unsuccessful. The defender was the purchaser of the sheep on terms which bound him to pay the price at Martinmas. He never refused to pay the price, and never had the chance of doing so. The pursuer, instead of delivering the stock according to agreement, chose to sell them at a public sale, making use of the Sheriff's warrant, which, however, in my opinion does not in the least alter the complexion of the transaction. I could have understood that the defender might have a claim for breach of contract in consequence of the non-delivery of the stock had he thought fit to make it. But how the pursuer's breach of contract should give him a claim against the party to whom he has failed in his obligation is altogether beyond my comprehension. The solution of the case is briefly this—The pursuer distrusting his landlord's solvency or ability to pay, instead of carrying out his contract chose to sell the sheep to other parties. Apparently he thought that the price obtained at a judicial sale was more worth having than the prospect of payment of a larger sum by a debtor whose obligation he distrusted. This was a matter for his own judgment, so long as the other party to the contract acquiesced or did not interfere. It may be that the proceeds of the judicial sale are less than the valuation which would have been put upon the stock by a referee. If so, the substitution of the lesser price for the larger one was the act of the pursuer himself, and as such can give rise to no action against any other party.”

The pursuer reclaimed, and argued—The pursuer as creditor for the value of the sheep was warranted in his actings when his debtor was vergens ad inopiam, and the pursuer was ready to show that his landlord was in that condition at the time the sheep were sold—Bell's Prin. 46, 69; Dove v. Henderson, January 11, 1865, 3 Macph. 339; Symington v. Symington, December 3, 1875, 3 R. 205; Craer v. Morrison, June 2, 1882, 9 R. 890; Ferguson v. Fyffe, November 4, 1868, 6 S.L.R. 68; Bell on Sale, 120. If a purchaser became vergens ad imopiam before the delivery of an article sold, and so was unable to complete his part of the bargain, the seller was entitled to sue him for damage which had been inflicted by this failure on his part—Benjamin on Sale, 756; ex parte Chalmers, January 31, 1873, L.R., 8 Ch. App. 289; ex parte Stapleton, February 6, 1879, L.R., 10 C.D. 586.

The respondent argued—He was not vergens ad inopiam, but even assuming this, the pursuer could not sue him for damages. The defender was willing to take delivery of the sheep at the time appointed in the lease, viz., Whitsunday 1888, but the pursuer broke his part of the bargain, by putting it out of the power of the defender to fulfil his obligation. In the English cases quoted bankruptcy had been intimated, and it was necessary that there should be that intimation, or something equally clear before they could apply.

At advising—