Scottish Court of Session Decisions

By missives of sale dated in January 1894, entered into between Louis Soeder, residing at 10 Dublin Street, Edinburgh, of the one part, and Messrs Duncan Smith & M'Laren, S.S.O., as authorised by Mrs Christina M'Murtrie or Smith, residing at 6 Hope Street, North Leith, and described in the missives as the proprietrix of the subjects, of the other part, the first party agreed to purchase the property Nos. 5 and 6 Hope Street, North Leith, consisting of a two-storey cottage, for the sum of £170. The purchaser's entry was to be at the term of Whitsunday following. On 2nd February Mr Soeder, who had not been professionally represented at the time the sale was concluded, sent the titles to a law-agent for examination on his behalf. It was then found that the feu-contract, which constituted the title to the subjects, contained, inter alia, the following restrictions:—“(1) That the said piece of ground above disponed is feued for the erection of a dwelling-house, and for no other purpose whatever, except with the consent in writing of the superior; (2) that the feuar shall be bound to have a passage of 3 feet 4 inches in breadth on the north-east portion of the said piece of ground hereby disponed unbuilt upon; (3) that the feuar shall not be allowed to have windows in the back wall of the upper storey of the said dwelling-house, but only be allowed to use flat lights on the roof at the back thereof.”

On 26th February the purchaser's agent wrote to Messrs Duncan Smith & M'Laren that these restrictions were not known to the purchaser or disclosed by the seller to him at the time the purchase was concluded, and that in consequence his client refused to accept the subjects.

An action of implement of the sale was thereafter raised in Mrs Smith's name against Mr Soeder. The real domini litis in this action were the Standard Property Investment Company, who held bonds over the subjects to their full value, and on whose behalf and with whose authority the sale had been effected. The nominal pursuer had no interest in the conclusions of the action, but had lent her name to the Investment Company on receiving a guarantee for any expenses which might be incurred by or awarded against her.

The pursuer averred—“The restrictions in the title objected to by the defender are restrictions of an ordinary character, and have relation to the proper and due regulation of the occupation and use of the property. These conditions and restrictions are the same mutatis mutandis as are imposed on the feus adjoining. The said two-storied cottage was built at the time of the defender's purchase conform in all respects to the said conditions, and the title offered is one which the defender is bound to accept.”

The defender in addition to maintaining that the existence of the restrictions entitled him to resile from his bargain, founded upon two receipts granted to him by the pursuer which bore that the pursuer had received from the defender the sum of £5 in full of all claims by her against him in connection with the summons.

The defender accordingly pleaded, inter alia:—“(1) In respect of the receipt and discharge above referred to, the action is barred, and the said documents are valid and must be given effect to unless reduced.”

The Lord Ordinary ( Moncreiff) on 21st December 1894, before answer, allowed parties a proof of their averments as to the circumstances in which the receipts had been granted, and in respect of the proof he repelled the defender's plea-in-law above quoted. The grounds of the Lord Ordinary's judgment (as explained in his Lordship's note), were (1) that the pursuer's obtuseness was such that she was incapable of understanding the effect of the receipts; and (2) that the defender knew that the Investment

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Company had the entire beneficial right and interest in the subjects, and that this being so, he had no right to take the receipts from her.

On the further consideration of the case the Lord Ordinary on 20th June 1895 pronounced the following interlocutor:—“Decerns and ordains the defender to implement and fulfil in all respects his part of the missives of sale libelled, in terms of the first alternative conclusion of the summons; under certification that in the event of his failing so to do within one month, decree will be pronounced under the second alternative conclusion of the summons,” &c.

Note.—“It may be assumed in favour of the defender that the purchaser of a heritable subject will be entitled to resile from his bargain if the seller seeks to impose or the titles contain conditions and restrictions of an unusual character of which the purchaser was ignorant, and which he was not bound to have contemplated. In such a case it may be that a seller is bound to draw the purchaser's attention to conditions of that kind, and if he does not do so, and the purchaser has not had an opportunity of examining the titles for himself, he may be entitled to resile. I do not know that the cases founded on by the defender exactly establish that proposition; because both in the case of Robertson v. Rutherford, 4 D. 121, and White v. Lee, 6 R. 699, the seller was unable to give a good title to the whole of the subjects sold. But undoubtedly the former judgment proceeded to a great extent upon the purchaser's ignorance of the restrictions, some of which were of a very unusual and serious character.

In the present case, however, I do not think that the restrictions to which the defender objects are so unusual in the case of an urban subject as to entitle the defender, who admittedly has had an opportunity of examining the subjects, and who must have seen from the structure of the building and the way in which the ground was laid out, evidence of the existence of some at least of the restrictions, to resile from his bargain.

What the defender purchased was a two-storied cottage as it stood. Now the three conditions to which the defender objects are these. Under the feu-contract nothing but dwelling—houses are to be erected on the ground. That is not an unusual condition; but if it is the case that it has been departed from in the case of other houses in the neighbourhood, the defender should have no difficulty in getting the superior's leave to depart from it. He next objects that the feuar is bound to leave a passage of 3 feet 4 inches to afford a means of access to reserved premises at the back. That passage, I understand, is to be seen by anyone who inspects the house. Thirdly, he objects to the condition that the feuar shall not be allowed to have windows in the hack wall of the upper storey of the dwelling-houses, but will only be allowed to use flat lights on the roof thereof. This also is not an unusual condition, and an inspection of the house should have drawn the defender's attention to its existence.

It is said that the defender is a foreigner, and that that made it the more incumbent upon the pursuer to explain the existence of the conditions. I have had an opportunity of seeing the defender in the box, and although he is a foreigner he speaks English excellently and is a man of more than average intelligence, and there is nothing in his manner, appearance, or conversation to lead anyone to suppose that he was not conversant with and able to transact an ordinary piece of business.

On the whole matter I think there is no necessity for proof, and that the pursuer is entitled to decree in terms of the first declaratory conclusion of the summons, under certification.”

The defender reclaimed, and argued—1. Apart from the question of the discharge, the defender was entitled to refuse to accept the subjects, since the restrictions, of the existence of which he was not informed, were of an unusual character in the case of property such as that in question. The photograph produced shows that buildings in the neighbourhood were twice the height allowed in the pursuers' feu-contract, and many of them were used for shops. 2. The defender was entitled to rely upon the discharges. If the pursuer could raise the action she could also discharge it, and it was no answer to this to say, as the Lord Ordinary said, that she was a woman of exceptional stupidity. The consent of the Investment Company to the discharge was not necessary. They had not taken the statutory course of selling the subjects by public roup, and they must take the consequences of having used Mrs Smith's name in the missives of sale and in this action. She was the only person who could have brought an action on the contract, and she was the only person who could discharge the claims under the action.

Argued for the pursuer—1. The feu-contract was open to the defender's inspection if he wished to examine it, but he did not do so, and the restrictions being of an ordinary kind in relation to such property—there was no obligation upon the seller to call his attention to them. 2. It was true that the sale to the defender was nominally by Mrs Smith, but he was perfectly aware that she had no interest in the subjects, and was not entitled to take a discharge behind the back of those who had the real interest. Further the Lord Ordinary, who heard the proof, had found that the pursuer had granted the discharge in ignorance of its nature and effect, and the Court would therefore not give effect to it— M'Donagh v. P. & W. MacLellan, 1886, 13 R. 1000. The same principle was recognised by the House of Lords in the case of The North British Railway Company v. Wood, 1891, 18 R. (H.L.) 27.

At advising—