Scottish Court of Session Decisions

Messrs Kimball & Morton (Limited) carried on business as manufacturers of sewing-machines in Glasgow. Having lost their premises by fire they entered into negotiations for the purchase of certain premises in Preston Street, of which Mr Henry Heys was the proprietor. The subjects consisted (1) of a large furniture factory, engine-shop, &c., behind, and a space of vacant ground in the rear in possession of the firm of G. Taggart & Co., under a lease expiring at Whitsunday 1889; (2) of a space of ground in the front, leased till Whitsunday 1889 to Messrs Arrol & Co., proprietors of adjacent engineering works.

On Tuesday 26th March Messrs Kimball & Morton wrote Mr Heys' agents in these terms—“We beg to offer Three thousand seven hundred pounds for the property and ground in Preston Street (subject to feu-duty of £43 odds). One thousand pounds to be paid at Whitsunday, and the balance to lie for seven years, at four per cent., on the security of the property, the balance to be reducible at any time on three months' notice being given. This offer is made on condition of immediate entry being given, and of acceptance within three days,” &c.

Further negotiations having been entered into between the parties with a view to the offer being increased, Messrs Kimball & Morton, on Thursday the 28th March, wrote again to Mr Heys' agents in these terms:—“Gentlemen,—We are unable to increase our offer of 26th inst., which is understood to include engine-boiler and all fittings connected thereunto belonging to proprietor now in buildings. The right to reduce bond to be reserved only by us, &c. P.S.—While possession of the buildings is to be given immediately, it is understood that these conditions will not apply to the vacant ground in front of buildings if you fail to arrange for this with the tenants.—K. & M.”

By letter of the same date the offer contained in the above two letters was accepted by Mr Heys.

On 30th March Messrs Kimball & Morton wrote Mr Heys' agents the following letter:—Referring to our letters of 26th and 28th inst., our primary object in making offer being to obtain immediate possession of property in Preston Street, and the present tenant having failed to vacate the premises, we hereby withdraw our offer, and decline to proceed with the purchase,” &c.

The present action was raised by Mr Heys for the purpose of compelling Messrs Kimball & Morton to implement their part of the above agreement, and further, in the event of their failure to do so within such time as the Court should appoint, for £1000 in name of damages.

The defender pleaded, inter alia—“(1) The pursuer having failed to implement the conidtion as to immediate occupancy of the premises in question expressed in the defenders' offer, they were entitled to resile from the offer.”

From the proof which was allowed it appeared that the defenders before making their offer had seen the premises, and were aware of the nature of Messrs Taggart & Co.'s occupation. At the date of the offer Messrs Taggart & Co. were in process of removal to new premises, and the premises at Preston Street were practically vacated as a manufactory, but a good deal of furniture had still to be removed. On Friday 29th March Mr Morton, secretary to the defenders' company, visited the premises, and was shown the copy of a letter by Messrs Taggart & Co. to the pursuer, undertaking to remove from the back premises that week, and from the front premises the next or the following week, and to give possession to the incoming tenant then. He expressed no dissatisfaction at the delay. The partners of the firm of Messrs Taggart & Co. gave evidence to the effect that if they had been pressed they could have vacated the premises by Saturday the 30th March. Mr Taggart said—“If we had been told on the Friday to make a special effort at some other person's expense to take away everything belonging to us, we could have had the whole job done before the Saturday morning. It was just a question of men and money.” Mr Packer, another partner, said—“By putting on plenty of men we could have cleared out everything, including the furniture, in two days. (Q) With an effort could it have been done by the Saturday night?—(A) I believe it could; the furniture was lying loose in the place, and we had plenty of room to put it in.”

On 26th November the Lord Ordinary ( Kyllachy) pronounced this interlocutor—“Having taken the proof, heard counsel, and considered the cause, Decerns against the defenders to implement the missives of sale libelled, conform to the conclusions of the summons to that effect, reserving to the pursuer to move for decree in terms of the further conclusions for damages in the event of the defenders failure to implement the decree now pronounced within one month from the date hereof, and reserving to the defenders their defences thereto: Finds the pursuer entitled to the expenses hitherto incurred by him,” &c.

“ Opinion.—The question in this case is whether the defenders were justified on Saturday the 30th of March in resiling from the contract with the pursuer, which had been concluded on Thursday the 28th. Their ground for resiling was, as expressed

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in their letter, that the pursuer had failed to give them ‘immediate entry,’ as stipulated in the missives, and the question of failure appears to depend on this—whether the period for immediate entry had expired by the forenoon of Saturday the 30th, when the defenders' letter was written—that is to say, within forty-eight hours of the conclusion of the contract.

In my opinion that question must be answered in the negative, with the result that the pursuer is entitled to decree. I am unable to hold that, according to the true meaning of this contract, immediate entry had ceased to be possible within so short a period.

It must be considered that the term ‘immediate entry’ is not a term as to the meaning of which it is possible to lay down any general or hard and fast rule. It perhaps means something more than entry within a reasonable time, but it does not necessarily mean instantaneous entry, or entry within an hour or a day of the conclusion of the contract. The question as to what in any given case it does mean must I think be determined by reference to the circumstances of each case, and the circumstances of this case are, I think, sufficient to show that the parties here did not contemplate entry within forty-eight hours of the completion of the contract.

In the first place, I cannot overlook that the parties were admittedly bargaining with reference to subjects which they both knew to be in the occupation of tenants, who necessarily required time to remove their plant and stock-in-trade from the premises. And that was an operation which could not reasonably be expected to be performed in an hour or a day.

No doubt before accepting the defenders' offer the pursuer may have been bound to make arrangements with his tenants for immediate removal, but it could hardly, I think, have been contemplated that the operations of removal should have been begun before the contract was completed, or, if begun, that they should also have been completed by that time. I quite appreciate the defenders' argument that the pursuer had three days to accept the defenders' offer, and that it was not impossible within that time both to have arranged with the tenants, and to have procured the removal of the tenants' belongings. But I confess I think that the defenders lay undue stress upon the circumstance that the missives contained the not unusual stipulation that their offer should be open for acceptance for three days. I greatly doubt whether that stipulation had special reference to the matter of entry. I am disposed to read it merely as fixing in ordinary course a period for the consideration of the defenders' offer. And that for that purpose it was not too long a period, is, I think, shown amongst other things by this—that the negotiations between the pursuer and defenders continued during the three days, and the final bargain was not struck until the Thursday, when the defenders wrote declining to increase their offer, and the matter was closed at a meeting between the parties or their representatives.

In the next place, there is another test of the meaning of parties, to which it is, I think, legitimate to appeal. I mean the conduct of the defender Mr Morton, who went, as we have heard, to the premises accompanied by his foreman on Friday the 29th, and spent some hours in various communings with the tenants. If, as the defenders suggest, Mr Morton was entitled to expect possession on the evening of the 28th, and to expect that the premises would be void and redd for him at that time, still more, of course, was he entitled to expect that on the following day. But although he finds the former tenants in possession on the 29th, and also finds a great part of their stock of furniture and plant and machinery still in the premises, he makes no complaint to the effect that the premises have not been cleared. He expresses no disappointment, and makes no suggestion of any failure in that respect on the part of the pursuer. On the contrary, it is not until after the close of the interview, and after he or his foreman have made a full examination of the premises, and when the tenants have handed to him a copy of their letter to the pursuer agreeing to remove, that for the first time it seems to have occurred to him that the pursuer had not put himself in a position to give immediate entry, and therefore that his company were free from the bargain. Now, whatever may have been the apprehensions on that subject which the terms of the tenants' letter may have excited, the fact that Mr Morton did not think of repudiating the contract till he learned of that letter makes it to my mind plain that he did not expect on the forenoon of the 29th (the day after the acceptance) to find the premises ready for his occupation. In other words, his conduct showed that he did not expect immediate entry in the sense of entry simultaneous with the conclusions of the contract.

“In my opinion, therefore, the contract must be held to mean no more at most than this, that the tenants in occupation should, upon the close of the bargain, remove with all due despatch. And if this be so, I do not, I confess, think it doubtful that the defenders' repudiation on the morning of Saturday the 30th was not justified by any default which had then occurred.

It remains only to consider whether the terms of the letters (including the letter referred to) which had passed between the pursuer and the tenants were such as to justify the defenders in resiling on the ground that the pursuer was disabled from giving immediate entry in the proper sense of that term. Now, how stands that matter? The pursuer had, it appears, an obligation from Messrs Taggart, the tenants, to have the premises wholly vacant within (speaking roundly) ten days from the 28th, and the evidence makes it, I think, quite plain that it was entirely within the pursuer's power, if he had been asked to do so, to have procured the defenders' entry on the morning of Monday 1st April, or even earlier. In other words, the evidence

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leaves no doubt in my mind that if Mr Morton had intimated that he declined to wait for ten days, and desired entry to the whole premises, say on Monday the 1st of April, he would have got that entry. I think it proved that the pursuer was in a position to give it. At all events, the defenders have not proved the contrary, and therefore I think that at the date of repudiation there had been no default on the pursuer's part, or anything else to justify the defender's repudiation.

I shall therefore decern against the defenders in terms of the conclusion for implement, reserving to the pursuer to move under the conclusion for damages if he fails to obtain implement of the contract.”

The defenders thereafter lodged a minute, stating that they elected not to implement the missives of sale libelled, and dispensed with the time allowed in the above-recited interlocutor to make their election.

On 8th January 1890 the Lord Ordinary pronounced this interlocutor—“The Lord Ordinary having heard counsel on the motion of the defenders that the amount of damages shall now be fixed, in respect of the defenders' election not to implement the missives of sale libelled, as said election is set forth in the minute, Refuses said motion, and on the motion of the defenders grants leave to reclaim.”

The defenders reclaimed, and argued—The terms “immediate entry” must be strictly construed. They implied that there should be no obstruction on the part of the tenants after the three days allowed in the offer had elapsed.

The pursuers were not called upon.

At advising—