Scottish Court of Session Decisions

George Wight, farmer, Longnewton, Haddington, brought an action against W. D. O. Hay Newton, of Newton, Haddington, in which he concluded for declarator that the defender had let to him the farm of Longnewton and Latch for nineteen years from Martinmas 1906, “all in terms of and under the conditions specified in the draft lease to be produced at the calling,” and it being so found and declared that the defender should be ordained to execute a lease in pursuer's favour, in terms of and under the conditions specified in said draft lease, “or in such terms as shall be fixed and determined by our said Lords.”

The pursuer pleaded — “(1) The pursuer having entered into possession of the subjects of let at Martinmas 1906, and possessed the same since that term, and having expended considerable sums on the faith of the lease condescended upon, and having

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implemented said lease in so far as incumbent upon the pursuer, an effectual contract has been concluded between the parties which both are bound to implement and give effect to, and decree of declarator should be pronounced as concluded for. (2) The draft lease condescended upon having been prepared by the defender's agents and factors, communicated to and revised by the pursuer, and the terms of the lease adjusted between the parties, both landlord and tenant are bound by this draft of the lease and their actings with reference to the subjects let, and the pursuer is entitled to have the defender ordained to enter into a formal lease to him of the subjects let, in terms of said draft, or otherwise in suoh terms as may be adjusted at the sight of the Court.”

The defender pleaded—“(3) The pursuer not having possessed the subjects let on the faith of the draft lease condescended on, and no agreement as to the conditions of the lease having been concluded between pursuer and defender, the pursuer is not entitled to decree of declarator as concluded for.”

The following narrative is taken from the opinion of Lord Salvesen — “On 21st July 1906 the pursuer, who is a farmer, made offer for Longnewton farm and policy parks as then possessed by Mr Wright at an annual rent of £550, the duration and general conditions in the lease as might be arranged. The offer was transmitted to Messrs Guild & Guild, who act as agents and factors for the defender, the owner of the farm in question, and who conducted the whole correspondence on his behalf. The offer was favourably entertained, and a draft lease containing the clauses which the landlord proposed was prepared by Messrs Guild and communicated to the pursuer on 28th August. The pursuer was at the same time informed that he might regard the transaction as substantially completed, and that he might make arrangements on the footing of obtaining entry to the farm in November. When submitting the draft lease Messrs Guild wrote requesting a meeting, at which they state “We think it can easily be finally adjusted.” The meeting took place on 31st August 1906, at which certain alterations were admittedly agreed on, and at which the pursuer called attention to a clause in the defender's lease which was in the following terms—“The proprietor hereby binds and obliges himself to put the farmhouse, steading, and outhouses into a suitable condition of repair; and, subject to such repairs, the tenant hereby accepts of the whole houses, buildings, dykes, fences, gates, hedges, drains, ditches, watercourses and others on the said farm … as in a good habitable and tenantable condition, and binds himself to maintain and uphold them, as well as any additions thereto, all the years of this lease, and to leave them so at the expiry hereof, ordinary wear and tear excepted.” The pursuer pointed out to Mr Guild that this clause was in a very unusual form, in respect that it put no obligation on the landlord to put the dykes, fences, &c., into tenantable condition at the commencement of the lease, while it imposed upon the tenant the duty of leaving them in such condition at its termination; and he proposed either that the landlord should undertake to put them into tenantable condition, or, if he did not do so, that he, the tenant, should not be bound to leave them in a tenantable condition at the expiry of the lease. Some discussion took place, to which I shall afterwards refer, and a meeting was subsequently held between the parties on 9th October at the farm. Both parties understood that they had come to an agreement; and the tenant entered upon the farm and took over the crop, stocking, &c., from the outgoing tenant at a cost of £900, the price fixed in a submission between him and Mr Wright, the outgoing tenant. The submission was prepared and carried through by Mr Guild. Since 1906 the pursuer has remained in possession of the farm, has cultivated the same in terms of the provisions in the draft lease, and has regularly paid the stipulated rent. No formal stamped deed, however, was executed; but on 30th July 1909, in response to an application by Mr Stirling, the pursuer's solicitor, to have the draft lease adjusted, it was sent to him by Messrs Guild. Its terms were brought into harmony with the alteration that the pursuer had demanded on 31st August 1906, and the draft as so revised returned to Messrs Guild. The draft lease, as revised, lay in Messrs Guild's possession from 11th August 1909 until 3rd November, without any observation being made by them as to the addition proposed by Mr Stirling or revisal. Meanwhile a dispute had arisen between the pursuer and defender as to the pursuer's right to cross a private avenue with his farm carts, in order to convey the crops from a field on the one side to the steading on the other, and an interdict had been brought by the defender against the pursuer so using the avenue. It was not until this dispute had been disposed of adversely to the defender's contention that on 3rd November 1909 Messrs Guild, without making any attempt to complete the adjustment of the lease, wrote—“In so far as regards the draft it does not seem to be possible for us to adjust a lease; and Mr Wight's occupancy of the farm must have to stand as at present under his missive offer to us of 21st July 1906. That is the document upon which he is now possessing the farm, and by which Captain Hay Newton's rights fall to be regulated.” The pursuer's agent protested against this contention, maintaining that the terms of the lease, as revised in August 1906, had been adjusted; but the defender, through his agents, adhered to the view expressed in the letter from which I have quoted. Subsequently the agents took up the position that the pursuer was possessing on a yearly tenancy, and on this footing they gave him notice to quit the farm at Martinmas 1910.”

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On 26th November 1910 the Lord Ordinary ( Cullen) after proof assoilzied the defender from the conclusion of the summons.

Opinion. — [ After setting forth the conclusions of the action]—“The draft tabled by the pursuer in order to formulate in extenso the terms of the lease which he seeks to establish is No. 6 of process. It is a draft of a formal lease, complete in all its clauses.

It will be observed that this is not the case of a tenant seeking to establish that a contract of lease has been made quoad the substantials of subject, rent and duration, and asking that his landlord should be ordained to execute a formal lease with all “the usual and necessary clauses.” The pursuer demands a lease in terms of his draft No. 6, and nothing else. This makes an important difference, because the dispute between the parties has come to be one as to a particular obligation laid on the landlord in the draft No. 6, which the pursuer deems to be essential and indispensable. The defender attaches an equal degree of importance to it, and says he never agreed to undertake the obligation.

By letter, dated 21st July 1906, quoted on record, the pursuer offered for the farm a rent of £550, ‘the duration and general conditions of lease as may be arranged.’ On 28th August 1906 the landlord's factor, Mr Guild, W.S., sent him a ‘rough draft’ lease (No. 12 of pro.), and proposed a meeting at which he said he thought it could easily be finally adjusted. In terms of this draft the landlord bound himself to put the farmhouse, steading and outhouses into a suitable condition of repair, and, subject to such repairs, the tenant was to accept the whole houses, buildings, dykes, fences, gates, hedges, drains, water-courses, and others on the farm as in good habitable and tenantable condition, and to maintain and leave them in such condition at the ish. The pursuer went over this draft and made certain notes, and on 31st August 1906 he, along with one of his sons and a friend, Mr Shiels, had a meeting with Mr Guild with a view to adjusting the draft. A variety of matters were discussed, One of these was the part of the above clause whereby the tenant was to accept the dykes, fences, gates, hedges, drains, &c., as in good and tenantable repair. Certain notes were made by Mr Guild on the draft. The pursuer did not see these notes. On the margin of the draft, opposite the clause above referred to, there was written in pencil ‘Meet at farm.’

The pursuer entered to the farm at Martinmas 1906, and incurred substantial expenditure which, it is not disputed, would amount to rei interventus sufficient to set up an informal lease duly proved scripto. Unfortunately nothing was done after the meeting of 31st August in the way of having a formal lease executed. The draft (No. 12 of process) was left in Mr Guild's hands, and apart from the meeting of 26th May 1908, after referred to, the pursuer did not again see it until July 1909. By that time a good deal of friction had arisen. The pursuer's agent Mr Stirling wrote to Mr Guild for the ‘adjusted draft lease.’ On 30th July Mr Guild sent the draft (No. 12 of process). He wrote—‘As regards the lease of Longnewton, we some time ago went over the draft with Mr Wight and adjusted it, but for some reason or other it has never been written out. We, however, send the adjusted draft herewith, in order that you may adjust it for Mr Wight, and we shall be glad to have it back at your convenience, as it is better that the lease should be signed.’

The draft so sent (No. 12 of process) contained certain alterations made by Mr Guild subsequent to the meeting of 31st August 1906. When precisely they were made is not shown. One alteration extended the duration from five to nineteen years, with breaks. No question arises on this head. There were other alterations, mainly in the direction of making express exception of certain small and special portions of the lands which had not been possessed by the previous tenant Wright. As, however, the pursuer's draft lease (No. 6), makes Wright's possession the measure of the let, these are not material. The matter of importance in the present case is that the clause as to the tenant accepting the dykes, fences, gates, hedges, drains, &c., as in tenantable repair stood just as it did in the draft when originally sent to the pursuer, and when the meeting of 31st August 1906 took place.

Mr Stirling having received the draft, made certain deletions and additions. He returned it to Mr Guild on 11th August 1909 with the explanation ‘The alterations I have made are in red ink and these have been made in order to restore the lease to the precise condition in which it was after the meeting between you, on the one hand, and Mr Wight and his son and a friend on the other hand. Since the meeting some additions and amendments have been made on the lease which were not mentioned at the meeting, and on the other hand you had omitted to add the words “dykes, fences, gates, drains, &c.” after the word “outhouses” at the foot of page 5. Mr Wight and his son are absolutely clear that you at the meeting agreed to treat the fences and ditches on the same footing as the farmhouse and steading. Surely this was only reasonable.’

About this time a serious dispute arose between the pursuer and the defender with regard to the pursuer making use of the private avenue leading to the mansion-house, and on 26th October 1909 the defender presented a note of suspension and interdict against the pursuer. The matter of the draft lease lay over until 3rd November, when the defender, having apparently made up his mind that he should get quit of the pursuer, took up the position that there was no concluded lease. This was a complete change of front, because Mr Guild's letter of 30th July 1909 clearly acknowledged the existence of a lease. There is no doubt, indeed, from the correspondence that both parties proceeded up to November 1909 on the footing that there was an ‘adjusted lease.’ The difficulty is

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as to what the terms of the lease were, and in particular whether it laid the defender under obligation to put the dykes, fences, &c., in repair, or bound the tenant to accept them as they stood. Mr Guild's ‘adjusted draft’ was the draft No. 12 as sent to Mr Stirling on 30th July 1909, which made the tenant accept the dykes, fences, &c. The pursuer's ‘adjusted draft’ was No. 12 on the assumption of its being altered to the effect of deleting his acceptance of the dykes, fences, &c., as in tenantable repair and of inserting an obligation on the defender to put them in such repair.

Towards this clause the attitude of both parties is that it is of essential importance. The pursuer demands a declarator in terms of the draft lease tabled by him (No. 6) which puts the defender under obligation to repair. He depones that he would not have taken a lease without such an obligation.

The alleged lease must be proved scripto. The pursuer adduces the draft No. 12 of process. On record he avers (Cond. 4) At this meeting (31st August 1906), and in the presence of said parties, the various clauses in the draft lease were gone over, certain alterations on and additions thereto were made, and the terms thereof were finally adjusted and agreed to.’ This seems to mean that the draft, in the terms in which it actually stood when the meeting ended, recorded the final agreement of parties. There is no doubt that a draft lease, although it begins its life by being tentative in character and a mere vehicle of negotiation, may afford good written evidence of a concluded contract of lease for a term of years if it be shown by the actings of parties to have reached the stage of being an adjusted draft, that is to say, of being a record of the parties' concluded intentions. ( Bathie v. Lord Wharncliffe, 11 Macph. 490.) It will not serve this purpose, however, if it has not got beyond the stage of passing between the parties for the adjustment of essential conditions. The pursuer accordingly tables the draft No. 12 as an adjusted draft. The difficulty, however, which confronts him is that, having tabled it as adjusted, he is under necessity at once to reject it in so far as it relates to the clause dealing with the dykes, fences, &c., because if that clause be taken as it appears in the draft—that is to say, as it stood before altered in red ink by Mr Stirling on the eve of the rupture between the parties—it negatives the pursuer's case. The pursuer must seek his evidence elsewhere if at all. Cases have often occurred where the evidence of a concluded lease has been collected from various sources. But where, as here, there is a draft lease formally complete in all its clauses, which is tabled as an adjusted draft, it is an extremely difficult course to proceed to throw it over and to contradict its terms quoad one of its important, and as the parties here agree essential provisions. It would certainly require at least some very distinct and unequivocal evidence outside the ‘adjusted draft’ to enable the pursuer to succeed on this line.

The first position which the pursuer takes up is that the adjusted draft should be held to be draft No. 12 as altered by Mr Stirling and returned to Mr Guild in August 1909. This, in my opinion, will not do, because the alterations were never accepted. I do not think that Mr Guild's delay to take the matter up until 3rd November can reasonably be held to be a tacit acceptance of them. During the interval the dispute about the avenue arose.

The pursuer's next position is that the correspondence between the parties supplies evidence which is sufficient to show that the agreement of parties as to the dykes, fences, &c., was not that appearing in the ‘adjusted’ draft (taken without Mr Stirling's alterations), but was that expressed in the pursuer's draft No. 6. He points to various letters from him and from Mr Stirling complaining of the state of fences and drains, and of the defender's failure or delay to put them in order, and to the fact that the defender made some small effort at repairs. There is, however, no letter or writing of any kind under the hand of the defender or his agent, expressing or conceding the existence of an obligation on the deferder, such as the pursuer seeks to establish. No doubt the writ of a tenant may, under certain circumstances, be available as evidence against his landlord, e.g., an offer received by the landlord and acted on. Tenants, however, sometimes make ill-founded claims through mistake as to their rights or otherwise, and the question here is whether the letters in question are to be held as displacing the clause in the ‘adjusted’ draft, and superseding it by one quite different, merely because the defender did not, in writing, repudiate them, and because he did some improvements which might be due to goodwill, as Mr Guild alleges they were. I do not think the pursuer himself interpreted the defender's position and actings as implying a recognition by him of the obligation in question, because he became uneasy on the subject and went with his wife to call on Mr Guild on 26th May 1908, on which occasion Mr Guild read to him from the draft No. 12 the clause relating to the dykes, fences, &c. Shortly thereafter (8th July) Mr Stirling, his agent, wrote Mr Guild saying—‘Mr Wight would like if his lease could now be adjusted and the improvements or repairs which the proprietor was to make be carried out. He says that certain expenditure is still necessary on the buildings, fences, and drains, and he asks me to express the hope that you will be able to carry out the wrork at an early date.” There was no written reply to this letter, and the matter was allowed to drop for a year until the draft was sent to Mr Stirling on 30th July 1909, and he made his alterations on it.

On the whole, while I do not think that the defender's attitude towards the pursuer's letter was wholly satisfactory, I do not see my way to read into the otherwise adjusted draft, a clause reversing the position of the landlord as it actually stands on the draft.

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The pursuer, however, contends that esto he has not proved the obligation by writing, he is entitled to prove it by parole evidence. He advanced the proposition that if there be writing to prove the three primary essentials of a lease—subject, rent, and duration—it is competent to prove any condition of the lease, however important, by parole. No authority was adduced, and I do not think the proposition well founded. ( Paterson v. Earl of Fife, 3 Macph. 423). It is not a question of filling in the ‘usual and necessary’ clauses, but of proving a part of the contract which the parties here unite in esteeming of first-rate importance. It is true that the pursuer's clause represents what would be the landlord's common law obligation in the absence of special compact. But then it is clear that the matter here was made the subject of special compact. The draft lease No. 12, tabled by the pursuer as an adjusted draft, contains a special compact which negatives the pursuer's case, and I do not think he can displace it by parole evidence. In a case of this kind it is difficult, as the parole evidence is being led, to draw the line between evidence bearing on the terms of the alleged agreement and evidence which is admissible to show the history and treatment of the draft lease, which is appealed to as having ultimately become a record of the parties' concluded intentions, and the whole evidence tendered was received under reservation of the defender's objections to its competency.

Had the pursuer sought to establish a lease in the terms of No. 12, it may be that he would have succeeded. As it is he will not have No. 12. The only question therefore is whether he has proved a contract of lease in terms of his draft No. 6, and as in my opinion he has failed to do so quoad one of its important conditions, it follows that the defender is entitled to absolvitor.”

The pursuer reclaimed, and argued—The four essentials of a lease, viz., the parties thereto, the subject, the duration, and the rent, had, as was undisputed, been agreed on. If the four essentials were agreed on, there was a concluded lease. It was not necessary to prove any of the conditions of the lease over and above the main four by writ. Subsidiary conditions could be proved by parole. In one case the Court had even allowed parole proof of the endurance of a lease for special reasons— M'Leod v. Urquhart, May 25, 1808, Hume's Decisions 840. Certainly parole proof was competent where there was ambiguity in any of the subsidiary conditions. The actings of the parties were referable only to an agreement, and showed clearly that the clause had been agreed to. There was proof here rebus et factis. The landlord had repaired the fences, and drains had been put right. The landlord had acted exactly as if the clause in dispute formed part of the contract. In these circumstances the clause could be proved by parole — Bathie v. Lord Wharncliffe, March 5, 1873, 11 Macph. 490 (Lord President at 496, and Lord Deas at 498), 10 S.L.R. 308; Earl of Mansfield v. Henderson, June 5, 1856, 18 D. 989 (Lord Deas at 993); Carron Company v. Henderson's Trustees, July 15, 1806, 23 R. 1042 (Lord Kyllachy at 1048), 33 S.L.R. 736. But if proof by writ were necessary the pursuer had what was equivalent to ample proof scripto. The tenant's view of the contract was put in letter after letter by him to the landlord. The landlord never on one occasion repudiated the position the tenant took up in the correspondence. It was idle for him now to say that he did not agree to the conditions. It might be that they were never expressly acceded to, but acceptance was in the circumstances to be inferred, there being no repudiation. The pursuer had acted on the footing that they were agreed to— Colquhoun v. Wilson's Trustees, March 6, 1860, 22 D. 1035; Forbes v. Wilson, February 22, 1873, 11 Macph. 454; Dowling v. Henderson & Son, June 11, 1890, 17 R. 921, 27 S.L.R. 738; Cornish v. Abington, 1859, 4 H. & N. 549 (Pollock, C.B., at 556). If, however, the Lord Ordinary was right, in his view that the pursuer was not entitled to have this clause inserted in the lease, then he was entitled to have a remit to a man of business to insert the usual and necessary clauses. The law implied provisions with regard to certain things as to which the contract was silent— Bathie v. Lord Wharncliffe ( sup. cit.), Lord Deas at 11 Macph. 497; Erskine v. Glendinning, March 7, 1871, 9 Macph. 656, 8 S.L.R. 410. Tenantable condition meant fit for the purpose for which it was let. The clause with regard to fences and drains was a usual and necessary clause — Bell's Prin., 1253–1255; Erskine, ii, 6, 39; Haining & Douglas v. Grierson, February 18, 1807, Hume's Decisions, 829. All styles going back to 1826 contained this clause—Juridical Styles, 3rd ed. 1826, i, 688. In any event it was absurd to suggest that the clause could be cut into two halves. If the landlord's obligation to put fences, &c., in repair went out, the tenant's obligation to leave in repair must also be struck out. There was either acceptance of the clause by both parties or no consensus on the matter.

Argued for defender—The pursuer had only concluded for a lease in terms of the draft which he tabled. As his action was laid, he was entitled to that or nothing. If he failed in his contention the defender was entitled to absolvitor. The clause in question was not one of the usual and necessary clauses—Juridical Styles, 6th ed., i, 419. Both parties all along regarded the fences condition as an essential one. They were accordingly never ad idem, and there being no consensus the contract of lease must fall— Buchanan v. Duke of Hamilton, March 8, 1878, 5 R. (H.L.) 69, 15 S.L.R. 513. The pursuer averred that it was agreed that the clause in question should be put in. He could only prove that averment by writ or oath of the defender— Paterson v. Earl of Fife, January 27, 1865, 3 Macph. 423; Walker v. Flint, February 20, 1863, 1 Macph. 417 (Lord Justice-Clerk at 421). Failure to repudiate timeously the pursuer's letters

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did not amount to agreement scripto to the clause. It would have taken much longer time to make the failure to repudiate develop into acquiescence. There could not be a remit to a reporter except for the purpose of adjusting a formal clause.

At advising—