Scottish Court of Session Decisions

[Sequel to Brown v. Robertson, May 21, 1896, 33 S.L.R. 570].

Page: 571↓

The facts in this case appears sufficiently from the preceding report and from the opinion of the Lord Ordinary.

On 24th July 1896 the Lord Ordinary ( Kyllachy) pronounced the following interlocutor:—“Having considered the cause, finds that the value of the goodwill of the public-house business mentioned on record in bonis of the deceased at the date of his death did not exceed the sum of £50, and with this finding continues the cause: Grants leave to reclaim.”

Opinion.—“I have considered the proof in this case, and have come to the conclusion that the pursuer has failed to prove that the goodwill of the deceased's business had—so far as it was a subject in bonis of the deceased, and capable of transmission to his executors—a higher value than the £50 entered in the inventory, and tendered by the defender.

The goodwill of a public-house to a large extent attaches to the premises, and belongs to the landlord. The tenant's goodwill, at least if (as in the present case) the tenant has no lease, consists mainly in the value to his successor of the introduction which it is in his power to give to the landlord and to the licensing authority. Still, that introduction may often have a substantial value; and accordingly I think it quite possible that if the deceased had, during his life, sold his tenant's goodwill, he might—backgoing as the business was—have realised for it from £200 to £300.

It is however common ground that this or any similar price could only have been obtained subject to the conditions (1) that the licence should be transferred by the Magistrates; and (2) that the purchaser should be accepted by the landlord. Assuming an absolute sale—that is to say, a sale on the footing that the purchaser took his chance of those conditions—the evidence seems to show that it would have been difficult, even during the deceased's lifetime, to have obtained any price for the tenant's goodwill.

To justify therefore the demand which the pursuer now makes, it would require to be shown that the deceased's executrix had, as such, the means of securing to a purchaser, first, the landlord's acceptance of him as tenant; and second, the transfer to him of the deceased's licence.

Now, I confess I do not see how either of these points can be affirmed. Upon the evidence I should think that the probabilities were the other way. The test is to suppose that the deceased had left, say, an executrix-nominate, representing interests different from those of his widow and children, or that his estate had been at once sequestrated, or that this particular asset had been confirmed by an executor-creditor. What in any of those cases would have been the likelihood of the legal representative being able to secure for his nominee acceptance by the landlord and the magistrates? The evidence makes it plain that it would have been at least likely that the claims of the widow, or of her nominee, would have been preferred. The landlord was examined, and in fact says so. No doubt the defender possessing the double character of widow and (prospective) executrix, got accepted without difficulty. And possibly if she had sold the combined goodwill which she possessed in both characters she might have got for it perhaps as much as the deceased would have got. But she would, I think it is clear, have done so mainly, if not entirely, in respect of the transference of her individual claims as widow. And that being so, she cannot, in my opinion, be bound to account to the creditors for what would really have been the price of her personal recommendation. What she has to account for is what was in bonis of the deceased—that is to say, what the deceased could transmit to his legal representatives. And in my opinion the value of the goodwill which was thus transmissible is not proved to have exceeded the sum of £50. I shall therefore make a finding to that effect, and continue the cause. There are some minor matters of figures apparently at issue between the parties, but I am informed that these have been or are in the course of adjustment.”