Scottish Court of Session Decisions

This was an action at the instance of Mr James Grant, wine merchant, Glasgow, against Mr Donald Mackenzie, plasterer, Glasgow, concluding for decree that the defender should be ordained “in implement of the obligations incumbent on him in favour of the pursuer under missives of sale and relative receipt by defender, all dated 12th May 1897, or otherwise in virtue of the obligations incumbent on him as the pursuer's agent in the purchase of the subjects after mentioned, to make, grant, subscribe, and deliver a valid and sufficient conveyance of the subjects following.” The subjects referred to in the summons were Nos. 377 to 389 Dumbarton Road, Glasgow, which in May 1897 were vested in Mr Andrew Crawford, ironfounder, Glasgow. On the 11th May they were purchased by the defender from Messrs J. & T. D. Colquhoun, Mr Crawford's agents, at the price of £5000. The pursuer averred that he was desirous of purchasing the subjects himself at a price not exceeding £5000, but was unable to come to terms with Mr Crawford's agents; that the defender suggested that he should try to make the purchase on the pursuer's behalf, and that he made the offer for the subjects “on behalf of and as agent for pursuer, but without disclosing to Crawford or his law-agents that he was acting for pursuer.”

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The pursuer further averred that the defender was unwilling for personal reasons to disclose to Mr Crawford's agents that the purchase had been made on the pursuer's behalf, and that he suggested that the transaction between them should take the form of a sub-sale by him to the pursuer at a nominal or fictitious profit, which he fixed at £500, and undertook to grant to the pursuer a letter or other document explaining that the addition of £500 was purely nominal.

The pursuer further averred that to carry out the transaction in this form the defender had addressed an offer to the pursuer's agents which had been accepted by them, and had granted a receipt for the £500. The missives of sale and receipt were in the following form:—

“75 Holland, Street,

Glasgow, 12th May, 97.

Messrs T. C. Young & Orr, Writers.

Dear Sirs,—I now sell to you that property Nos. 377 to 389 Dumbarton Road, Glasgow, at the price of Five thousand five hundred pounds sterling, over the ground rent of £52, 14s., entry and settlement at Whitsunday first. Donald Mackenzie.

Adopted as holograph,

Glasgow, 17th May, 1897.”

We accept the foregoing offer.

T. C. Young & Orr.”

“75 Holland Street,

Glasgow, 17th May, 97.

Received from Messrs T. C. Young & Orr the sum of Five hundred pounds stg. to account of price of Dumbarton Road property sold to them today. They are to relieve me of all expense, and pay the balance of Five thousand pounds to Messrs Colquhoun at settle.

Donald Mackenzie.”

The receipt was not holograph.

The pursuer maintained that by these documents the defender agreed to sell the property to him for £5000, being the price for which he had bought it on his behalf, or otherwise that he agreed to sell him the property for £5500, and to discharge him of the sum of £500 thereof. He offered to pay the sum of £5000 in exchange for a conveyance.

The defender admitted the missives of sale, and that he had signed the receipt, but averred he had expected to receive cash for the amount, and immediately after signing it had written to the pursuer's agents, calling upon them to pay the amount, and that he was ready and willing to implement the contract of sale.

The Lord Ordinary ( Kincairney) on 12th May 1898 allowed the parties a proof before answer.

The nature of the evidence sufficiently appears in the opinions of the Lord Ordinary and of Lord M'Laren.

The Lord Ordinary on 20th July pronounced the following interlocutor:—“Decerns and ordains the defender to make, grant, subscribe and deliver to the pursuer a valid and sufficient conveyance of all and whole the subjects and others described in the summons, which description is here held as repeated brevitatis causa, with entry at the term of Whitsunday 1897 in favour of the pursuer and his heirs and assignees whomsoever, and that by the first sederunt day of next session in terms of the draft disposition, or in such other terms as the parties may agree upon, or failing agreement, as the same may be adjusted at the sight of Hugh Moncricff, Esquire, writer, Glasgow: Grants leave to reclaim.”

Opinion.—“As I have formed a decided opinion in this case in favour of the pursuer I do not think it necessary to make avizandum before giving judgment.

The question is whether the defender is bound to convey to the pursuer certain licensed premises in Dumbarton Road, Glasgow, for the sum of £5000. The documents relating to that question are (1) missives of sale between the parties (there being no question that Messrs Young & Orr are merely the pursuer's agents), in which the price is said to be £5500, and (2) a receipt for £500 as paid to account of the price. These are the only documents by which the contractual relations between the parties have been constituted or expressed. They agree with the pursuer's case, and if the action were to be determined on these documents alone he would be entitled to the decree concluded for. If the pursuer had rested his case on the documents alone there might have been room for the argument that the case must be decided on consideration of these documents exclusively, and that parole evidence was incompetent. But that course has not been adopted. Parole evidence has been led on either side, rightly and competently as I think, considering the averments. But at all events the competency of the parole evidence has not been challenged. The question then is whether the conclusion deducible from the documents has been displaced by the parole evidence.

Now, there are three possible views which may be taken on this matter—(1) that the bargain was, as the pursuer avers, that the property was bought by the defender for the pursuer at the price of £5000; or (2) as the defender avers, that it was sold by the defender for £5500, and that no part of that price has been paid—a view which would entitle the defender to £5500 for the property, and would result in absolvitor, but which cannot receive full effect in this case; or (3) that the parties misunderstood one another, and that in consequence there was no bargain.

The defender's view is supported—so far as the parole evidence goes—by his own evidence almost alone; for I think that the evidence of his clerk, Miss Hervey, adds little, and does not call for separate examination. For the pursuer there are three witnesses—himself, Mr Orr his agent, and Mr Auld, Mr Orr's clerk.

If the case had depended on the evidence of the pursuer and defender alone it might have been hard to say how it should be decided, or whether there would be any sufficient ground for holding the one more credible than the other. Each tells a story which appears unlikely and suspicious, but these accounts are so discrepant and contradictory as, in my opinion, to exclude the

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possibility of the theory of misapprehension, which no doubt I would willingly adopt if it were at all possible. But I think it is not possible. As between the pursuer and the defender misapprehension or error is not in the case.

The pursuer says that he was desirous of purchasing the property in question from the owner Mr Crawford through his agents Messrs Colquhoun, and that the defender acted as an intermediary for him with the Messrs Colquhoun, in inquiring about the price and making the purchase. He says that the defender offered to do this in return for a service which he had tendered him in the way of business. He explains that his reason for adopting this circuitous method was because he feared (groundlessly, as appears) that Messrs Colquhoun might raise the price on account of his connection with the property, his brother being tenant and holding a licence, and he acting for his brother in his absence. I suppose that account must be accepted as true, because both parties are agreed that the defender had negotiations with the Messrs Colquhoun with a view to the purchase of the property for the pursuer. The pursuer says that he authorised the defender to go the length of £5000. The defender says that the pursuer would not go above £4800.

Parties are agreed that the defender bought the property from the Messrs Colquhoun, as agents for Mr Crawford, for £5000, and that he bought it as for himself, not disclosing the name of the pursuer. Beyond that the parties are at total variance. The pursuer's averment is that the defender said that he had bought the property for the pursuer, and was ready to convey it to him, but that he wished that a nominal addition should be made to the price, in order to conceal from the Messrs Colquhoun that he had been deceiving them and buying for the pursuer when he had represented that he was buying for himself—a lame enough and somewhat absurd story apparently. But the pursuer is corroborated in it by Mr Orr and Mr Auld.

The defender says that having failed to get the property at the pursuer's price (£4800) he bought it for himself at £5000, and that he re-sold it to the pursuer immediately for £5500, through the intervention of Mr Orr acting as the pursuer's agent. The defender does not, I think, say that the pursuer understood that he had given up his endeavours to obtain the property for him, the pursuer. But it may be that the defender was under no obligation to continue his efforts on the pursuer's behalf, and was entitled as mere matter of law, apart from considerations of fairness and good faith, to acquire the property for himself and make money by re-selling it at an enhanced price to the pursuer. With reference to the receipt for £500, he represents that he granted it at the request of Mr Orr, and on his representation that it was necessary in order to enable him to settle at the term, and that he received no money for it—an extremely unintelligible and unlikely story. Mr Orr's account is that the receipt was granted, although no money passed, simply because the £500 was a fictitious price added to conceal the real purchaser from Messrs Colquhoun, as he says the defender fully understood.

The primary question is whether the defender made this purchase for himself or as agent for the pursuer. Assuming, what I understand has not been disputed, the competency of the parole evidence, I think this case must be answered for the pursuer. The evidence of the defender may fairly be set against the evidence of the pursuer on this point. But then there remains the evidence of Mr Orr and of Mr Auld unbalanced. I do not think there is room for the view that Mr Orr was under a misapprehension. Such a view seems untenable either on his own evidence or, what is more important, on the defender's. He does not suggest any misunderstanding on the part of Mr Orr, but suggests a gross fraud without personal motive, an idea which I do not entertain for a moment. It appears to me on this point that it is necessary to take the missives and the receipt together, and that if parole evidence is admissible at all, it must be admitted in regard to the whole transaction. If it is not admitted at all, the documents prove the pursuer's case. If it is admitted, the preponderance of it supports the documents.

If it is held that the defender made the purchase as the pursuer's agent, then the conclusion that the pursuer is entitled to judgment to the effect that he is entitled to a disposition of the lands for the sum of £5000 follows immediately. For in that view there is no difficulty whatever in preferring Mr Orr's statement as to the defender's reason for signing the receipt for £500 without receiving the money to that of the defender.

I am therefore of opinion that judgment to that effect should be pronounced. The pursuer will require to consider in what manner under the conclusions of the summons it is to be made operative.”

The defender reclaimed, and argued—(1) The Lord Ordinary was wrong in allowing a proof at large. If the pursuer's claim were founded on a contract of agency the only proof admissible was the writ or oath of the defender— Dunn v. Pratt, January 25, 1898, 25 R. 461. When parties embodied their contract in a written document it was incompetent to fall back upon former actings and arrangements. The reclaimers were not barred from attacking the allowance of proof by the fact that they had had no plea to this effect. The proof had been allowed before answer, and they had done all that was necessary by protesting against it. (2) If the action depended on the missives it was clearly irrelevant, for the pursuer had made no offer to pay the £5500. The receipt was not holograph or tested or properly stamped, and was therefore not probative. The pursuer tried to found upon it, not as evidence of the contract but as evidence of one of the terms of it, and this he was not entitled to do. Accordingly, the missives of sale alone

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could be looked at, and the pursuer's case apart from parole evidence was negatived.

Argued for respondent—As the reclaimer had failed to reclaim against the decision of the Lord Ordinary allowing a proof, it was too late for him to maintain now that the evidence could not be taken into account— Kerr's Trustees v. Ker, November 16, 1883, 11 R. 108; Simpson v. Stewart, May 14, 1875, 2 R. 673. There was a relevant averment that the receipt had been granted for an ulterior purpose to that which appeared, both parties were agreed that no money had passed, and the Court would admit parole evidence upon this—Dickson on Evidence, section 1038. The reclaimer wished to decide the case on a selection of the documents, and to attack the receipt. His point as to the improbative nature of the receipt was raised for the first time now, and so far from challenging it on record he had admitted it.

At advising—