Scottish Court of Session Decisions

The Edinburgh Albert Buildings Co. Ltd., pursuers, brought an action in the Sheriff Court at Edinburgh, against George Senior, Edinburgh, tenant of the Albert Hall, Edinburgh, defender, concluding as follows:—“To sequestrate and to grant warrant to officers of Court to inventory and secure the whole stock, fittings, furniture, goods and other effects, so. far as subject to the pursuers nypotnec, which are or have been on the premises occupied by the defender at the Albert Hall, No. 24 Shandwick Place, Edinburgh, since 17th August 1915, in security and for payment to the pursuers of the sum of £153 sterling, being the rent thereof, at the rate of £9 per week, due and payable for the period from said 17th August 1915 to 14th December 1915, with interest thereon at the rate of five per centum per annum from the said last-mentioned date till payment, and expenses; and thereafter to grant warrant to sell by public roup the whole or so much of the sequestrated effects as will satisfy and pay to the pursuers the said rent, interest and expenses; and to appoint payment to be made to the pursuers of the rents, interest and expenses aforesaid out of the proceeds of any sale or sales, or out of any sums consigned to have the sequestration recalled, and to decern against the defender for said rent, interest and expenses in the event of no sale taking place, or for such balance as may remain due to the pursuers after sequestration and sale and payment of expenses and all preferable claims therefrom; and to grant warrant to arrest on the dependence.” No appearance was entered for the defender, but the General Guarantee Corporation, Ltd., Glasgow., compearers, appeared by minute craving recal of the sequestration.

The lease entered into between the pursuers and defender was in the following terms:—“With reference to the note entered into between Messrs J. & J. Galletly, secretaries for and on behalf of the Edinburgh Albert Buildings Company, Ltd., and Mr George Senior, the present tenant of the Albert Hall, dated 28th March 1914, Mr Senior having represented to the directors of the company that he is unable to pay the rent of £10 weekly, stipulated by the said note, and the directors of the said company having agreed to reduce the rent of the hall as from the week commencing the 28th day of December 1914, to £9 per week, it is agreed between the parties as follows, namely:—1. The missive of let, dated 28th March 1914, is hereby cancelled. 2. The Albert Hall shall be let by the week, commencing as on Monday, 28th December 1914, by the company to the said George Senior. 3. The rent payable shall be £9 weekly, that rent to be paid in advance every Monday by 12 o'clock noon. 4. Either party may bring the let to an end on giving one week's notice. 5. The rent of £9 before referred to shall include the occupier's taxes. 6. Mr Senior accepts the hall and fittings, etc., as referred to in the note of 28th March 1914 as in perfect order, and undertakes to leave them in the same condition at the expiry of his tenancy. 7. The proprietors will keep the property wind and water tight. All other repairs, etc., shall be done by Mr Senior.”

The pursuers averred—“(Cond. 3) The defender paid the rent of said hall for the period from the date of his entry down to the week ending 17th August 1915. He has paid no rent in respect of his possession from that date to 14th December 1915, when the lease was brought to an end by him.

Page: 192↓

He is thus due to the pursuers arrears of rent amounting to £153, being seventeen weeks' rent at the rate of £9 per week.”

They pleaded—“The defender being due to the pursuers the rent sued for, the pursuers are entitled to the warrants and decrees craved, with expenses.”

The following agreement was entered into between the compearers and the defender:—“This agreement, made the 29th day of April 1914, between General Guarantee Corporation Limited, 142 Queen Street, Glasgow, hereinafter called the ‘Owners’ of the one part, and Mr George Senior, of the Albert Hall, Edinburgh, hereinafter called the ‘Hirer,’ of the other part, wit-nesseth that the owners agree, at the request of the hirer, to let on hire to the hirer a player piano, No. 5244/8021, maker ‘Farrand Cecilian.’ And in consideration thereof the hirer agrees as follows:—1. To pay to the owners on the 29th day of April 1914 the sum of seven pounds (£7) in consideration of the option to purchase contained herein, and for which credit will only be given in the event of a purchase being effected; and three pounds ten shillings (£3, 10s.) on the 29th day of each succeeding month so long as the hirer sees fit to continue the hiring. 2. To keep and preserve the said instrument from injury and take all risks (damage or loss by fire included). 3. To keep the said instrument in the hirer's own custody at the above-named address, and not remove the same (or permit or suffer the same to be removed) without the owner's previous consent in writing. 4. That if the hirer do not duly perform this agreement the owners may (without prejudice to their rights under this agreement) re-take possession of the said instrument, and for that purpose leave and licence is hereby given to the owners (or agent and servant, or any other person employed by owners) to enter any premises occupied by the hirer, or of which the hirer is tenant, to re-take possession of the said instrument, without being liable to any suit, action, or indictment, or other proceeding by the hirer, or anyone claiming under the said hirer. 5. If and when the owners are entitled to re-take the said instrument under clause 4 hereof, or should they fail from any cause, or not see fit, to re-take the same thereunder, or should the hirer fail to pay punctually the rent of the premises on which the said instrument may be, or fail to produce the receipt for the last periodical payment thereof when demanded by the owners or by their agents or servants, the owners, their agents, or servants, may at any time thereafter give notice forthwith to the hirer to terminate this agreement, such notice to be sufficient whether given verbally or otherwise. If in writing such notice to be sufficient if sent by post or otherwise, addressed to or delivered at the last known place of abode or business of the hirer whether such premises be occupied or not, or by delivering the same to any person on the premises where the said instrument may be, and this agreement shall thereupon absolutely determine and end, but the hirer shall remain liable for any past breach, and the hirer in event of such absolute determination of this agreement shall have no right of redemption or otherwise under clause ( d) hereof.… The owners agree 9.… ( b) If the hirer shall punctually pay the full amount of one hundred and thirty-six pounds, ten shillings (£136, 10s.) by £7 at the date of signing, and by such monthly payments as aforesaid, the said instrument shall become the sole and absolute property of the hirer. ( c) Unless and until the full amount of £130, 10s. be paid the said instrument shall be and continue to be the sole property of the owners…

The following averments by the compearers and answers thereto by the pursuers were made—“… (Cond. 2) The compearers on 29th April 1914 let on hire to the said George Senior, who was then tenant of the pursuers' premises, the said player piano under the conditions specified in an agreement entered into between the parties of same date.… (Cond. 3) The said George Senior made various payments under said agreement, amounting in all to £32, the last payment being made on 26th October 1915, but in respect of his failure to continue said payments the owners on 10th December 1915 terminated said agreement. During the continuance of said agreement and until the date of the sequestration aftermentioned said player piano remained in the premises of said Albert Hall. Said player piano throughout remained the property of the compearers, and at no time belonged to the defender Senior. ( Ans. 3) Admitted that until the date of the sequestration the said player piano remained in the premises of the Albert Hall. Not known and not admitted that payments were made by the defender to the minuters. Quoad ultra denied. (Cond. 4) On the 20th January 1916 the pursuers brought a sequestration for rent against the said George Senior, and pretended to sequestrate the hypothec of the said George Senior in said Albert Hall. The inventory and appraisement following thereon includes nothing but the said player piano, there being no hypothec whatever. The present application has become necessary for the compearers to obtain possession of their property. ( Ans. 4) Admitted that on the 19th day of January 1916 the pursuers brought a sequestration for rent against the defender and sequestrated said player piano, which was the only article in said Hall subject to pursuers' hypothec. Quoad ultra denied. (Cond. 5) The said Albert Hall was let by pursuers to defender by the week, the rent payable being £9 weekly in advance, with right to either party to bring the let to an end on giving one week's notice. Said hall was let furnished and the whole fittings and furnishings therein with the exception of said player piano belonged to the proprietors and were included in the let, and the rent of £9 was partly in respect of the hire of said furnishings. Pursuers were not entitled to, and in point of fact did not, require their tenant to plenish or furnish the premises let. There is therefore no applicability under such a let for the landlords' hypothec. The pursuers as landlords

Page: 193↓

in effecting said let relied entirely on the personal credit of their tenant. The lease of said premises came to an end on 4th December 1915, when the pursuers relet same to another tenant on similar terms. ( Ans. 5) … Admitted that the whole fittings and furnishings in said hall with the exception of the said player piano were the property of the pursuers. Admitted that to a small extent the rent of £9 per week, which was a single and indivisible rent, was payable in respect of the fittings in the hall. The lease came to an end on 11th December 1915, when the premises were let to another tenant on similar terms. Quoad ultra denied. (Cond. 6) Said premises were let by pursuers to defender for the purpose of a picture house. It is a well-known and recognised practice for the lessee of such premises to hire player pianos, and the pursuers were all along aware that said instrument was not the property of their tenant. They were not entitled to rely, and as a matter of fact did not rely, on said article as being liable for payment of their rent. The player piano is of the value of at least £60. ( Ans. 6) Admitted that said premises were let by pursuers to defender as a picture house. The said player piano was used by defender in connection with the cinematograph entertainments given in the hall. Quoad ultra denied.”

The compearers pleaded—“3. The pursuers having no right of hypothec whatever, and having relied entirely on the personal credit of their tenant, are not entitled to sequestrate said player piano, and the same should be released from said sequestration.” The pursuers pleaded—“2. The minuters' averments being irrelevant, the minute should be dismissed. 3. The player piano referred to being subject to pursuers' hypothec, the crave of the minuters to have the sequestration recalled should be refused with expenses.”

On 15th March 1916 the Sheriff-Substitute ( Guy) sustained the second and third pleas-in-law for the pursuers, refused the crave of the minute for the compearers, and granted warrant to sell the player piano for payment to the pursuers of the rent due.

“ Note.—The compearers claim that the player piano in question should be taken out of the sequestration (first) because they are the owners of it; (second) because it is a single article belonging to a third party in the premises occupied by the tenant; (third) because these premises are occupied as furnished premises by the tenant; and (fourth) because the tenant's rent is stipulated to be payable in advance. To deal with the last two points first. I do not know that it has ever been determined that there is no landlord's hypothec for premises let furnished or for premises where the rent is stipulated to be payable in advance. I can see no reason why it should be so decided unless such reason be an argument for the complete abolition of the law of landlord's hypothec. Some little difficulty arises from the case of Gow & Shepherd v. Anderson, February 13, 1808, Hume's decisions, 517. That was a very special case, but the important facts in it were that the article there in question, though a hired-out article, was not in the possession of the person to whom it was hired. Further, the premises in question there were a dwelling-house let furnished. To revert to the first two points. It is no doubt true that the law of hypothec proceeds upon the footing that moveables in the tenanted premises are presumably the property of the tenant. But as Lord President Inglis said in Bell v. Andrews, (1885) 12 R. 961, 22 S.L.R. 640, ‘Although the right of property of such articles may be in another there are certain cases in which these will nevertheless fall under the hypothec. One is the case of hired furniture. Mr Bell says that the principle for this is that the risk is contemplated when the furniture is delivered on hire.’ And again he says ‘No case has yet been decided to the effect that a single article belonging to a third party and not hired falls under the hypothec.’ Reference may be made to the case decided in this Court— Smith Premier Typewriter Company v. Cotton, 1906, 14 S.L.T. 764. In that case the very question I am now considering was involved. No doubt it was an action for delivery brought by the owners of a hired article, but the principles upon which it was decided are those which I am now seeking to apply in the present case. It is quite clear that in the present case the compearers had in view the possibility of their player piano falling under the hirer's landlord's right of hypothec, because they stipulate in the hire-purchase agreement that should the hirer fail to pay punctually the rent of the premises on which the said instrument may be, or fail to produce the receipt for the last periodical payment thereof when demanded by the owners or by their agents or servants, the owners, their agents or servants, may at any time thereafter give notice forthwith to the hirer to terminate this agreement.’ The contract to which I have referred is a contract of hire purchase, and it seems to me that all that has been said in previous cases with regard to hired articles falling within landlord's hypothec applies a fortiori to cases of articles given out under a hire-purchase agreement. The option to become the proprietor of the article is to my mind a very important consideration.”

The compearers appealed, and argued—The landlords' hypothec in urban tenements was based upon his right to call upon his tenant to furnish the premises let, in security of the rent—Bell's Principles, section 1276; Bell v. Andrews, 1885, 12 R. 961, per Lord President Inglis at p. 962, 22 S.L.R. 640. Accordingly there was no room for the hypothec when such premises were let furnished, for in that case the landlord was held by his own lease to have fully plenished the subjects and consequently had waived any right to call upon the tenant to plenish. Consequently where lodgings were let furnished a piano brought in did not fall under the hypothec— Gow & Shepherd v. Anderson, 1808, Hume's Dec. 517. Nelmes & Company v. Ewing, 1883, 11 R. 193, per Lord President Inglis at p 196, 21 S.L.R. 134, illustrated the converse case. But, apart

Page: 194↓

from the matter of furnishing, the extension of the landlord's hypothec to the goods of third parties did not always apply to single articles brought into the premises. Thus it did not apply to a single article belonging to a third party and not hired— Bell v. Andrews ( cit.); Pulsometer Engineering Company, Limited v. Gracie, 1887, 14 R. 316, per Sheriff Guthrie at p. 317, 24 S.L.R. 239; Bottger v. Globe Furnishing Company, 1906, 14 S.L.T. 117, at p. 118. Here the premises were let furnished, and the article in question was a single article belonging to a third party and owned by the compearers. Further, the hypothec was a security for rent not yet paid—Bell's Prins. 1234; Preston v. Gregor, 1845, 7 D. 942—and could not therefore apply when the rent was, as here, payable in advance. Further, the hypothec did not apply to arrears of rent—Gloag and Irvine, Rights in Security, p. 417; Hornx. M'Lean, 1830, 8 S. 454; Stewart v. Rose, 1816, Hume's Dec. 229.

Argued for the pursuers—The right to hypothec was based on the landlords right to have the premises furnished, and also in the case of articles hired by a third party and taken into the premises upon the presumed consent of the hirer to submit his goods to that right—Bell's Prins. ( cit.). Here the consent of the hirer must be presumed. He knew nothing of the terms of the bargain between the pursuers and defender, and he must be held to be aware that the landlord had a right of hypothec, and could not be said to have only parted with his goods knowing that no hypothec might apply to them. The hypothec covered everything brought into the premises—Stair, iv, 25, 3; Ersk. Inst, ii, 6, 64—and it was not limited to what was sufficient to cover the rent—Rankine on Leases, p. 391. The rule with reference to furnished premises was not in point, for the premises in question bore no analogy to a furnished house, and in any event they were not fully furnished, for they did not contain the article in question which was necessary for the defender's business. Nelmes' case ( cit.) applied. Bell v. Andrews ( cit.) was not in point, for the facts were different. Gow & Shepherd's case ( cit.) was not a decision to the effect that there was no hypothec when premises were let furnished, for that case was decided upon the owner's right to a rei vindicatio. Catterns v. Tennent, 1835, 1 Sh. and M'L. 694, per Lord Brougham at p. 717, showed that there might be a hypothec in the case of premises let furnished. The fact that the article in question was a single article brought into the premises made no difference— Penson v. Robertson, June 6, 1820, F.C.; M'Intosh v. Potts, 1905, 7 F. 765, 42 S.L.R. 576; Smith Premier Typewriter Company v. Cotton, 1906, 14 S.L.T. 764. Further, the fact that the rent was payable in advance was irrelevant. The compearers could not be held to have allowed the piano to be taken into the premises, because there was a bargain of a certain kind to which they were not parties. As the hypothec only became operative where there was a breach of contract, the tenant could not plead that the right of hypothec had been waived by the stipulation for rent in advance. He was in breach of his contract and could not appeal to it, consequently his authors the compearers could not do so. Further, it was settled that the terms of the contract of let did not affect the right of hypothec—Rankine on Leases, p. 385. Thus the hypothec continued though the landlord had a cautioner bound with the tenant for the rent— Stewart v. Bell, May 31, 1814, P'.O. 499. The hypothec was not excluded in the case of a forehand rent— Taylor v. Davidson, 1740, M. 6197—and the common law as therein laid down was embodied in the Hypothec Amendment (Scotland) Act 1867 (30 and 31 Yict. cap. 42), section 4. Bell's Comms. pp. 29 and 33; Hepburn v. Richardson, 1726, M. 6205, were also referred to.

At advising—