Scottish Court of Session Decisions

[See Hamilton v. Watson's Trustees, reported ante, vol. xxxi. 374, 21 R. 451, and in the House of Lords, ante, vol. xxxi. 934, 21 R. (H. of L.) 35.]

This was an action at the instance of David Simpson Carson, C.A., trustee under a trust-deed granted by Francis Robertson Reid of Gallowflat, for declarator that the said F. R. Reid was no longer bound by a contract of lease of a mineral coal-field entered into in 1884 between him and John Andrew Hamilton, writer, Glasgow, and for reduction of the lease and of an assignation granted by the lessor in favour of the trustees of the late James Francis Watson.

The circumstances of the case were as follows:—The proprietor of the estate of Bankhead, the late Walter Whyte, died in 1880, leaving a trust-disposition and settlement in which the following clause occurs:—“I also leave to my nephew James Francis Watson my estate of Bankhead, but I wish it expressly understood that in the event of my said nephew Janies Francis Watson dying without leaving any lawful male heir of his body, then and in that event my said lands of Bankhead are to revert back to my nephew John Hamilton.”

J. F. Watson never made up any title under this disposition, and died in April 1883 without any lawful male heir of his body, leaving a trust-disposition and settlement by which he conveyed his whole estate to David Ritchie and W. L. Brown as trustees.

In 1882 J. A. Hamilton expede a notarial instrument upon (1) the mfeftment of Thomas Whyte, and (2) the trust-disposition by him which is narrated above. This instrument was recorded in the Register of Sasines for the burgh of Rutherglen with a warrant of registration in the following terms:—Register on behalf of Mrs Margaret Pollok or Whyte in liferent, and J. A. Hamilton, nephew of deceased Walter Whyte, in eventual fee as within mentioned.”

In 1884 J. A. Hamilton granted the lease which is the subject of the present action, by which he let the minerals of the estate of Bankhead to Francis R. Reid for a period of twelve years from Whitsunday 1884. Under this lease F. Reid entered into possession and worked the minerals until 1888, when he discontinued working, but paid the rent to Hamilton until Martinmas 1892.

In 1893 the trustees of James Francis Watson brought an action against Hamilton concluding for declarator that the estate of Bankhead had vested in Watson at the death of the testator Whyte, and had passed to them by Watson's trustdisposition and settlement. The summons also contained conclusions for reduction of the title made up by Hamilton to the estate of Bankhead.

In this action decree in terms of the conclusions of the summons was obtained from the Lord Ordinary (Low) on 1st July 1893, and this judgment was affirmed by the Second Division of the Court of Session on 31st January 1894, and by the House of Lords on 4th June 1894. On 21st June 1894 decree of reduction of the title of J. A. Hamilton to the lands of Bankhead was pronounced—See Hamilton v. Watson's Trustees, cited supra.

Ritchie and Brown, as trustees of the late J. F. Watson, made up an independent title to the lands of Bankhead, and obtained an assignation dated 24th October 1894 from J. A. Hamilton, which, after narrating the leases granted by him, and the reduction of his title above narrated, proceeded as follows:—“Therefore I do hereby, at the request of the said David Ritchie and William Lochore Brown, as trustees foresaid, but without any price being paid to me, assign, convey, and make over to the said David Ritchie and William Lochore Brown, and survivor of them, as trustees foresaid, and their successors and assignees, all my right and interest in and to the foresaid leases, agreement, and letter of lease during the whole years and terms thereof yet to run, and in and to all the clauses and obligements therein contained, and rents, lordships, and profits which may arise therefrom, and in and to all action and execution competent to me thereupon, surrogating and substituting the said David Ritchie and William Lochore Brown, as trustees foresaid, and their foresaids, in my full right and place of the premises for ever, with full power to them to do everything requisite and necessary concerning the premises which I could have done myself before granting hereof.”

On 18th November 1890, Reid, the tenant in the lease of minerals granted by Hamilton, granted a trust-deed for behoof of his creditors in favour of Laurence H. Watson, C.A., Glasgow. On the death of Watson, David Simpson Carson was appointed by the Court of Session on 2nd June 1893 as trustee in his place.

Watson's trustees intimated to Reid's trustee that they were in right of Hamilton's part of the lease, in virtue of the assignation above mentioned, and demanded that the rent should be paid to them. This Carson, as Reid's trustee, declined to do, and instituted the present action, calling Watson's trustees and Hamilton as defender. The conclusions of the action sufficiently appear from the Lord Ordinary's interlocutor and opinion.

Hamilton did not defend the action.

The pursuer pleaded—“(1) The defender John Andrew Hamilton never having had any right to the said lands of Bankhead or the minerals therein, the alleged agreement between him and the said Francis Robertson Reid for a lease of the coal and other minerals mentioned therein was on his part ultra vires and wholly ineffectual. (3) The defender, the said'John Andrew Hamilton, had no power to assign to the defenders, the trustees of the said James Francis Watson, the said agreement or any right

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or title to demand from the pursuers implement of the obligations undertaken by the said Francis Robertson Reid under the said agreement, and the said last—mentioned defenders are accordingly not entitled to enforce implement thereof. (6) The agreement of lease is not enforceable against the pursuers, in respect that the said John Andrew Hamilton had no right to the subjects let, and that his pretended title to the same ex facie of the Register of Sasines, being without warrant and inherently null, did not enable him to bind the defenders, the true owners, to implement its provisions.”

Watson's trustees pleaded—“(2) It being jus tertii to the pursuers to found any plea upon the said decree of declarator and reduction and the said assignation, or upon the settlement of Mr Whyte, and title made up by John Andrew Hamilton thereon, and the defenders, the trustees of the late James Francis Watson, being able and willing to implement the conditions of the said agreement of lease, the defenders are entitled to be assoilzied from the conclusions of the summons.”

On 7th November 1895 the Lord Ordinary ( Kyllachy) pronounced the following interlocutor:—“Finds, decerns, and declares in terms of the declaratory conclusion of the summons, declaring the term of Martinmas 1892 to be the date at which the pursuers were, and are now, and in all time coming freed and relieved of and from all the obligations purporting to be imposed on the pursuer Francis Robertson Reid by the agreement mentioned in the second conclusion, and reduces, decerns, and declares in terms of the reductive conclusions of the summons,” &c.

Opinion.—“This is an action of declarator and reduction brought by the tenants under a mineral lease; and it is directed against the lessor and certain other parties who are (as it now appears) the true proprietors of the mineral field, and are also assignees to the lease under an assignation of the lessor's part of the lease granted by the lessor. The object of the action is to have it declared as against both defenders that the lease is no longer binding; and it seeks, as against both defenders, to reduce both the lease and the assignation. I do not know that I need refer to the exact terms of the summons. The proposition which it involves shortly is, that neither together nor separately can the defenders to any effect enforce the obligations of the lease as against the pursuers.

[ His Lordship here stated the fasts.]

“The pursuers maintain that John Andrew Hamilton's title having been reduced, the lease in question entered into between them and him is at an end; and in reply to the argument that the personal contract under the lease still subsists, and that the lessor, through his assignees, is still able and willing to perform the lessor's part of the contract, they contend (1) that they cannot be called upon to perform at the instance of John Andrew Hamilton, because, being, no longer proprietor of the subject, he can no longer maintain them in possession; (2) that the other defenders, although proprietors of the subject, have no title to enforce a lease to which they were not parties; and (3) that they (the other defenders) acquired no such title by the assignation under reduction, because ( a) the contract of lease had, as they say, fallen before the assignation was granted, and ( b) because the lessor's interest in a lease is not, as they say, assignable except as incident to a conveyance of the subjects let.

Considered in point of principle, the questions thus raised appear to me to be difficult. I am not, I confess, prepared to accept the proposition that the reduction of a lessor's title perse puts an end to the contract of lease; so that although the lessor were still able by arrangement with the new owner to secure the tenant in continued possession, the tenant would nevertheless be at liberty to refuse implement of his part of the contract. On the contrary, I should think prima facie that both parties would in that case still be bound—bound, that is to say, by their personal contract. If either was liberated, it could only be by the other party being disabled from performance. And, at least in other contracts than that of lease of land, such disablement would not necessarily follow from loss or absence of title. There may, I apprehend, be a quite valid sale or hire of what is or turns out to be a res aliena; nor is there, so far as I know, any legal impossibility in the seller or hirer duly performing such a contract. He may be able to do so, and may do so quite duly, by arrangement with the true owner. The peculiarity, however, of the contract of lease of land is this—that it is part of the lessor's obligation to give the lessee a title which shall be good against singular successors. And if, under a lease, the rent is or becomes payable to a person other than the proprietor of the lands, the please cannot, I apprehend, be good against singular successors. That is to say, it cannot comply with the conditions of the Act 1449, c. 18. To secure, therefore, the lessee, and so perform his (the lessor's) part of the contract, it is necessary for a lessor whose title has been set aside, either to reacquire the subjects under a valid title, or effectually to transfer his contract rights to the true proprietor. And that being so, the question in the present case seems really to come to this—whether the pursuers are right in their contention that the assignation which the lessor has here made in favour of the other defenders is incompetent and inept. If such an assignation is incompetent—that is to say, legally impossible—there is of course an end of the matter. If, again, it is competent and effectual, there seems no reason why the lessee should be liberated.

Now, can it be affirmed that the assignation by Hamilton to the other defenders of his contract rights under the various leases which he had granted during his possession was incompetent and inept? Ex hypothesi at the date of the assignation the contracts of lease as personal contracts held good. There had, as yet, been no

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default—no failure on the lessor's part to perform his obligations. Why, the defenders ask, should there in these circumstances be any legal impediment to an assignationby the lessor to an assignee who is willing and able to give performance? There is of course no delectus personce with respect to the lessor under a lease; and as regards the suggestion that the lessor's interest cannot be assigned except as incident to a disposition of the subjects—that, the defenders urge, is a proposition unsupported by principle, unless in the sense (which is conceded) that such an assignation can only be effectual if made to the proprietor of the subjects—so as to vest in the same person the right both to the rents and the property of the subject.

The defenders also urge, and I think with force, that the object of the defenders could have been obtained circuitously by a conveyance of the estate to Hamilton by the other defenders (which would have validated the lease by accretion), and a reconveyance by Hamilton to them which would have carried the lease as an accessory of the estate. That, they say, would have been clearly competent; and being so, they deny the right of the pursuers to compel such circuity of procedure. They also point out (although this is perhaps a different matter) that upon the theory of the pursuers, Hamilton remains liable to them, the pursuers, in damages for breach of contract, and is yet disabled from relieving himself by securing them in all their rights.

I am bound to say that I feel the force of these considerations, and if the point at issue had been still open, I should have had great difficulty. But the pursuers found on a judgment of the Court in the case of Weir v. Dunlop & Company, 23 D. 1293, which they say is conclusive, to the effect that such an assignation as was here granted is incompetent. And the defenders do not profess, or at least have not been able to my satisfaction to distinguish that case from the present. That being so, I consider that I am bound by that decision, and do not feel at liberty to canvas its grounds. The only distinction which I can find—apart from the very unfavourable circumstances in which the question was there raised—is this, that in that case there was perhaps ground for holding that before the assignation there in question was made, the lessor had failed to keep the lessees in possession—they having before the date of the assignation been, as I gather, practically evicted by the true owner. I do not, however, find sufficient evidence that the judgment proceeded on that ground; and on the whole, I think my proper course is to follow the decision, which I need hardly say, looking to the Judges who took part in it, is one of high authority.

I propose, therefore, following that judgment, to give the pursuers decree in terms of the conclusions of the summons.”

The defenders reclaimed.

Argued for the reclaimers—The Lord Ordinary rested his judgment on Weir v. Dunlop, July 17, 1861, 23 D. 1293. But that was a case of a very special character, and might be distinguished from the present case by the fact that the original lessor there was never infeft, and had no higher right to the lands than missives of sale. The present case was one of a right granted by a party infeft in lands on an ex facie regular title, which was subsequently reduced. Hamilton was infeft on a notarial instrument, which was registered on behalf of the widow, Mrs Whyte, in liferent, and on his own behalf in eventual fee. That was at the date of the granting of the lease an ex facie valid and regular title, i.e., it was valid on the assumption that the destination to James Francis Watson as institute was evacuated by his dying without leaving a lawful male heir of his body. Beal rights granted by a party infeft in lands on an ex facie valid title were good even if the title of the granter were afterwards reduced— Heron v. Stewart, May 30, 1749, Hume 440, 3 Boss, L.C. 243; Colder v. Stewart, November 18, 1806, 3 Boss, L.C. 248. Here, even admitting that a purchaser from Hamilton would not have obtained a good title, because he would have discovered, on examination of the record, the defect in Hamilton's title, the case of a lease was much stronger than that of a purchaser, because a lessee was entitled to rely on apparent ownership, and was not bound or entitled to submit the title of the lessor to an exact scrutiny. The law laid down in Bankine on Leases, p. 48, to the effect that if the lessor's title was reduced, or never existed, the lessee's title fell, was not supported by the case there quoted— Macniven v. Murray, May 25, 1847, 9 D. 1138. The ground of that judgment was that there was a reservation in the lease that if the title of the lessor should fall, the lessee's right should cease. Apart from these cases, the lease was good as the bona fide act of a possessor in the administration of property belonging to another— Mackenzie v. York Buildings Company, May 16, 1769, 3 Pat. Ap. 378. There was no delectus personce on the part of the lessee in the contract of lease. (2) Even supposing that the lease was not binding as between the respondents and the reclaimers without an assignation, yet the reclaimers had obtained an assignation of Hamilton's right in the contract. A lease was a contract sui generis and assignable, provided that the assignee was in a position to implement the conditions of the lease. Again, a lease by a party who had no title to the lands would be good if he afterwards acquired a title. If, therefore, when the title of Hamilton had been reduced, the reclaimers had conveyed the estate to Hamilton, and accepted a re-conveyance from him, they could, as singular successors, have enforced the lease. The same effect should be given to the assignation, because the law will not require circuity when a direct proceeding will suffice.

Argued for the repondents—(1) The case is ruled by Weir v. Dunlop, cited supra, which is practically indistinguishable. (2) The reclaimers are wrong in their assumption that the title of Hamilton, the original lessor, was ex facie valid. It was on the face of it a nullity, because the notarial

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instrument on which he was infeft, while describing him as eventual flar, showed that the actual fee was in James Francis Watson. A lease was not good against singular successors under the Act 1449, cap. 17, and consequently was not binding on the tenant in a question with singular successors, unless the granter was infeft, and had an ex facie regular title—Bell's Principles, section 1181. Here the title of the granter was not ex facie regular, and therefore neither the tenant nor the true owner could enforce it. Nor could the reclaimers maintain that the lease was good as an ordinary act of administration— Mackenzie v. York Buildings Company, cited supra, was explained by Lord Young in Liquidator of West Lothian Oil Company v. Mair, November 18, 1892, 20 R. 64, at p. 70. It was not an authority to the effect that if a person who has no right to an estate chooses to assume the administration of it, the true owner is bound by his acts. That could not be the law. (3) The assignation by Hamilton gave the reclaimers no right to enforce the lease, because a personal contract of this kind cannot be assigned. The right of a landlord is not assignable except by and along with a conveyance of the lands. In the present case Hamilton could not have enforced the lease after his title to the lands was reduced, because he could not implement its conditions by giving possession; he could not therefore by an assignation convey to the reclaimers any higher right than he himself had. But for the Act 1449, cap. 17, a lease would be merely a personal contract. By that Act the tenant is given a real right in a question with singular successors. Conceding that this infers that a singular successor has the right to enforce the lease against the tenant, still the defenders were not singular successors of Hamilton, and did not represent him in any way. Their position was therefore solely that of assignees of a personal contract which is not assignable, and which, even if it were assignable, was not valid or binding on the respondents at the date of the assignation.

At advising—