Scottish Court of Session Decisions

The Act of Sederunt of 12th November 1825, reproduced in the codifying Act of Sederunt 1913, H, iii, 1, enacts—“ Valuation of Teinds—Particulars to be Condescended on.—In processes of valuation of teinds the summons shall distinctly set forth the rent of the lands according to the current leases when they are under lease; and when they are not under lease the rent shall be stated which it is averred they would bring if let on a lease for nineteen years if arable, eleven years if pasture lands, or nineteen years if partly both, with the usual and customary clauses.…”

Robert Finnie M'Ewen, Esquire of Marchmont, Berwickshire, pursuer, brought an action against the Rev. Charles James Watt, minister of the parish of Polwarth, and Sir John Hume Campbell, Bart, of Marchmont, defenders, for any interest he might have as titular or pretended titular, concluding for a valuation of the teinds, both parsonage and vicarage, of the estate of Marchmont.

No appearance was entered for the defender Sir John Hume Campbell.

The parties averred, inter alia—“(Cond. 3) The pursuer is heritable proprietor of the lands of Marchmont, together with the teinds, parsonage and vicarage, and the whole parts, pendicles, and pertinents thereof whatsoever lying within the parish of Polwarth and county of Berwick,… conform to disposition granted by the said Sir John Hume Campbell, Bart., in favour of the pursuer, dated 11th May and recorded 16th May 1914. (Cond. 5)… The grass parks extend to 424 acres. If said grass parks and the policies, which are 134 acres in extent, were let on lease for eleven years with the usual and customary clauses it is averred that a fair rent for the said subjects would not exceed the sum of £350. There are also woodlands which extend to 346 acres, which are for the most part moorland, and have an agricultural value not exceeding £60 per annum. The sums above specified are inclusive of rents derived from houses, smithies, shops, and stores, which amount to £30, 18s. or thereby, and if this sum of £30, 18s. be deducted from the estimated value above given the sum of £1516, 15s. or thereby will be left as the true annual agricultural value in stock and teind of said subjects. ( Ans. 5) … Denied that a fair rent for the pasture lands referred to in condescendence 5 would not exceed the sum of £350. Explained that the said pasture lands extend to 422 acres or thereby, and it is believed and averred that a fair average rent for these subjects is £801, 0s. 9d. instead of £350. Denied that the woodlands have only an agricultural value not exceeding £60 per annum. Explained that the woodlands in the parish extend to 369·953 acres, a fair average rental of which it is believed would be £457, 10s. There therefore falls to be added to the total estimated value of £1516, 15s. condescended on by the pursuer (first) the sum of £451, 0s. 9d., being the difference between the sum of £350 estimated by the pursuer for the pasture lands and the sum of £801, 0s. 9d. mentioned above, and (second) the sum of £397, 10s., being the difference between the above sum of £457, 10s. for woodlands and the sum of £60 per annum which pursuer avers the agricultural value does not exceed. Said two sums of £451, 0s. 9d. and £397, 10s. amount together to £848, 10s. 9d., making in all £2365, 5s. 9d. as the true annual agricultural value in stock and teind of the pursuer's lands of Marchmont and others, apart from any adjustment that may be made on a strict accounting for deduction for rents from houses, smithies, shops, and stores above referred to.”

The compearing defender pleaded, inter alia—“1. The rental of the pursuer's lands being inaccurate and incomplete the action should be dismissed. 2. The rental of the pasture lands and woodlands condescended on by the pursuer not being a fair estimate of the average rental which could be obtained therefor during the next eleven years, cannot be used as the basis of the valuation concluded for.”

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On 6th January 1921 the Lord Ordinary on Teinds ( Blackburn) after a proof pronounced this interlocutor—“Finds and declares that the teinds, both parsonage and vicarage, of the following lands belonging to the pursuer, videlicet, all and whole the following parts and portions of the lands and estate of Marchmont, videlicet, the mansion—house of Marchmont with the offices and policies thereof, the lands and farm of Cothill, the lands and farm of Polwarth Rhodes and Mount Robert, the lands and farm of Polwarth South Crofts, the lands and farm of Polwarth Mill, the houses and acre lands in and near Polwarth village, part of Polwarth Moor, adjoining Kyles Hill Quarry, and all other lands and others being the whole lands and others belonging to the pursuer, and forming part of his estate of Marchmont, lying in the parish of Polwarth and county of Berwick, are of the constant yearly value of £303, 7s. sterling, being one—fifth part of the constant rent and value of £1516, 15s. sterling, which is the constant yearly value of the said lands and pertinents both in stock and teind jointly: And finds and declares that the said sum of £303, 7s. sterling per annum is the constant and fixed yearly duty and the just, constant, and true value of the teinds, parsonage and vicarage, of the said lands and pertinents to be paid in place thereof in all time coming.”

Opinion.—“The pursuer, who is the proprietor of the estate of Marchmont, in the parish of Polwarth and county of Berwick, brings this action for the purpose of having the teinds of the said lands valued. The estimated yearly value of the subjects, so far as teindable, as set out in condescendence 5, amounts to £1516, 15s.

Defences have been lodged by the minister of the parish, and numerous objections taken to the estimated rental. In his answer to condescendence 5 the defender puts the teindable rental at £2365, but after the proof he claimed that certain facts disclosed therein required that this amount should be increased by a sum of £52, 9s. 3d., making in all £2417, 9s. 3d.

The subjects include the policies of the mansion—house, grass parks, woodlands, farms let on leases, and other lands let yearly. It is with regard to the rental of these last two mentioned subjects that the defender claimed that the addition of £52, 9s. 3d. should be made to his estimate of the teindable rental as stated on record.

The rental of the lands under lease is stated by the pursuer at £1021, 4s., and leases were produced in process verifying this figure. Objection was taken to the rental of £75 in the lease produced of the farm of Polwarth Mill as not disclosing the true value of the lands. This is a lease of the farm for nineteen years from Whitsunday 1898 in favour of John Kinghorn. On the expiry of the term the tenancy was renewed by tacit relocation. In October 1920 a new lease was adjusted as from Whitsunday 1920 at a rent of £90 in favour of James Kinghorn as tenant, and of the said John Kinghorn, his father, as cautioner for his son. The defender claimed that the rental disclosed in the new lease must be taken as the true value of the lands. The summons in this action is dated 13th April 1920, when the old lease was still current, and it is well established that where lands are let on lease the rent under the lease current at the date of raising the action is to be taken as establishing the teindable rental (Connell, vol. i, p. 188). The argument for the defender proceeded on what appears to me to be a misapprehension of the meaning of Ersk. ii, 10, 32, note 263. The case of Dalrymple ( M. 15,759) there quoted makes it clear that the note refers to a lease with a periodically increasing rent, in which case the rent payable at the date of the summons is to be taken as the teindable value, and not the-smaller rent payable at the commencement of the lease or the larger rent which might become payable during the course of the process.

Next, it appeared from some of the leases produced that the tenants are taken bound to insure the farm buildings, and that premiums amounting to £21, 6s. 9d. are at present payable by some of the tenants. This sum it was claimed should be added to the rental of the subjects let on lease because insurance was, ‘a landlord's obligation.’ No authority was quoted for this proposition, and I know of none to support it. Apart from express stipulation, neither a landlord nor a tenant is bound to insure the farm buildings any more than to restore what may be destroyed by fire (Rankine on Leases, 221), and the insurance is as much in the interest of the one as of the other. The Marchmont leases contain an express agreement that the tenant shall be liable for any damage or loss occasioned by fire to the buildings, and I cannot see that premiums payable under a stipulation of this sort have any relation whatever to the teindable rent of the farm. I accordingly find that the teindable rental of the subjects let on lease is £1021, 4s. as stated by the pursuer.

The subjects which are let yearly are stated in condescendence 5 to return a total rental of £116, 9s. They consist of some thirty-five properties let at small rents, and the total rental is verified by a statement. From this total rental there falls to be deductod a sum of £30, 18s., which it is not disputed is rent paid for non-teindable subjects, and which is verified by No. 40 of process. The net result of these two productions is embodied in No. 41 of process, which identifies the subjects by their numbers on the Ordnance Survey sheet, and gives the rental so far as teindable. The defender's only objections to this statement are that the rental of £10, 2s. 6d. paid by J. Hastie for No. 106, which extends to 6·8 acres, and the rental of £12 paid by P. Jaffrie for No. 248, which extends to 23·3 acres, do not represent the true value of the subjects let.

Hastie's field, No. 106, is valued by the pursuer's witness Forrest at from 25s. to 30s. an acre, while the defender's witnesses, Maitland Stewart and Crichton, value it at 45s. an acre. I prefer the evidence of Forrest, who is very familiar with the

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district, supported as it is by the evidence of the rent at which the field has been let for some time.

Jeffrie's field, No. 248, which is also referred to in the evidence as Crumpton's Park, was in grass before the year 1918, when it had to be broken up. It was leased to Jeffrie from the term of Martinmas 1918 for three years at a rent of £12, on condition that it should be cropped in a certain rotation, and that in the year 1921 a crop of oats or barley should be sown along with grass and clover seeds to be supplied by the pursuer. There are also conditions as to the manuring of the ground, some of the manures being supplied by the pursuer. The defender maintains that the true value of this field is the rent it might fetch if the result of this treatment is to improve the ground to the same condition as a neighbouring field, Burn Park, which is valued at £1 an acre. Forrest says that in its present condition 10s. an acre, which is the rate at which the field is now leased, is a fair rent. With regard to the rent which might be obtained if the field improves under its present treatment, he says—‘I think it would be difficult to make as big a rent as Burn Park; I think £22.’ Of the defender's witnesses who value the field in its prospective condition alone, one (Maitland Stewart), after saying in chief that he agrees with Forrest's figure of £22, says in cross that ‘the value I have put upon it is £18, 13s.,’ while the other (Crichton) puts on it the same value as on Burn Park, and reaches a rent of £23, 7s. In my opinion the teindable rent of the field must be ascertained on the basis of what it would yield if let on a lease for eleven years in its present condition, and on that basis the present rent appears to be a fair one.

The grass parks are stated in condescendence 5 to extend to about 424 acres and the policies to 134 acres, and the pursuer estimates that if let on lease for eleven years a fair rent for these subjects would not exceed £350. The defender in answer 5 contends that a fair average rent for the pasture lands, which he describes as extending to 422 acres or thereby, would be £801, 0s. 9d., but makes no mention of the policies. In the course of the proof, however, it appeared that he included the rental of the policies in the above figure.

What are described by the pursuer as the grass parks are shown by a statement to extend to 429 acres, and to yield a total rental of £613 as at present let for grazing purposes. The grazing of 113 acres of the policies is let as a separate subject for £60, the remainder of the policy acreage being occupied by the mansion-house, stables, gardens, tennis courts, &c. All these grazings were let by public roup in 1917, and were again let to the same tenants in 1918 at an increase of 30 per cent. on the rents. This increased rent they have continued to pay each year down to the raising of the present action.

The rent obtainable for policy grounds is admittedly affected by the drawbacks which necessarily attach to the use of such ground for pasturage. Not only is the feeding of beasts which might do damage to the policies prohibited, but any stock fed therein is subject to disturbance by the use made of the policies by the landlord and others. The defender maintains that to ascertain the teindable rent of the policies they should be valued as if no such drawbacks existed, and further, that the whole acreage should be valued as if it were under grass, without making any allowance for the part occupied by the avenues, or even, as I understood, by the mansion-house, gardens, &c. This somewhat startling proposition is said to be justified by the decision in the Calton case Burt v. Home, 5 R. 445. Valuing on this basis one of the defender's witnesses, Maitland Stewart, arrives at a figure of £182, 2s. 8d., and the other, Crichton, at a figure of £168, as the fair rent which the policies should produce if let on lease for eleven years. I do not think it is necessary to examine the methods by which they reach their totals, as in my judgment a valuation on this basis is entirely wrong and was expressly disapproved of in Baird v. Wemyss, 8 F. 669, where it was laid down that the teindable rental of rural subjects is the rent which can be obtained for the subjects in their actual condition. The pursuer's witnesses gave evidence that the present rent of £60 paid for the grazing of the policies is a fair rent for the subjects as they at present exist, and I do not think the defender's witnesses suggested any alternative figure as the fair rent on this basis although they criticised the figure of £60 as being too low. Counsel for the defender referred to a book which contains the particulars of the Marchmont estate when it was offered for sale in 1913, wherein it is stated (page 19) that the rental of ‘policy parks (let season 1912) apportioned’ was £119. This entry is apparently taken from the valuation roll, and it was said to apply to a smaller acreage than that now included in the policies. I do not think there is any evidence as to what is meant by ‘policy parks’ or by the word ‘apportioned’ in this entry. But even if it be assumed that the entry applied only to the actual policies as they existed in 1912, they have since that date been so altered that I do not think the rental then obtained would be of much assistance in fixing the rent which the grazings might now be expected to yield. I think the evidence of the pursuer's witnesses, corroborated as it is by the rent actually paid for several consecutive seasons, establishes that £60 is a fair rent for the season's grazing of the policies.

The rental of £613 at present paid for the seasonal grazing of the other grass parks is again supported by the pursuer's witnesses as a fair annual rent for such subjects as at present let, though they agree that the annual rental of grass parks is liable to fluctuate from year to year. They take the total rental of £673 now paid for the whole grazings, including the policies, as the starting point from which they proceed to estimate what would be a fair rental for the whole subjects under an eleven-year lease. From this figure they make certain deductions in respect of the obligations

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which under the existing method of letting the subjects have to be met by the pursuer, but which under a lease would be transferred to the tenant. This is on the intelligible principle that you will arrive at a rental which the tenant could pay without increase of expenditure and the landlord accept without loss of profit. In connection with the grass parks there are 25,000 yards (15 miles) of fencing to be maintained, excluding one-half of the march fences and fences maintained by the railway company. The burden of keeping these fences in repair at present falls on the landlord while under a lease it would be transferred to the tenants. The fences were in very bad condition when the pursuer acquired the property and have not yet been put in good order. The witness Spence estimates that the sum of £175 spent upon them last year will require to be spent for the next six years before they are in order, while after that it will cost £75 a-year to maintain them. Accordingly the first deduction which it is claimed must be made from the seasonal rents is £75 in respect of the fences. Next, the lessor of grass parks has to provide a parkkeeper or shepherd to look after the stock, and as these parks are extensive the cost of this is put by the pursuer's witnesses at £100 per annum. The labour required for the cutting of thistles, weeds, &c., is estimated at £50, and the commission of an auctioneer, which is also paid by the lessor, is put at £14. In addition to these charges, of which the pursuer would be relieved if the grazings were let on lease, he has at present to pay occupier's rates which amount to £35 and income tax under Schedule D as the occupier of the ground. The grazing subjects are entered in the valuation roll at £475, a sum which was apparently arrived at on the average of the gross rentals for the three years prior to 1914, and on this value the pursuer last year was assessed for and paid £285 income tax as occupier under Schedule B. He has appealed against this assessment, but the grounds of his appeal would not be available to tenants under leases and they would have to pay the whole of the occupiers' taxes as at present assessed. I think that in estimating that the rent which tenants could afford to pay under leases would be at least £100 less in respect of the income tax alone than the seasonable rents which they at present pay, the pursuer's witnesses take a very sanguine view of the future. The pursuer accordingly maintains that the above deductions, viz., £75 for fences, £150 for labour, shepherding, and weed cutting, £14 for auctioneer's commission, £35 rates, and £100 for income tax, would require to be made from the present rental to ascertain what a tenant could afford to pay under an eleven years' lease. This would reduce the rent to £300, but in condescendence 5 the pursuer suggests that £350 should be fixed as the fair rental. This seems to me to be the best available method of arriving at the probable rental of the subjects as they at present exist if let on lease, but the resulting figure necessarily depends upon the proper amount of the deductions. The defender's witnesses admit that applying this method of arriving at the rental under a lease deductions would fall to be made from the present rental under all the above heads. But as they themselves proceed on an entirely different method of arriving at the rental under a lease they content themselves with criticising the amount claimed for deductions as excessive without offering any alternative figures. The method they adopted is to ignore any seasonal rents which have been received for the grass parks at any time and to value each field separately as the subject of an eleven years' lease. I am not at all sure whether this was on the assumption that the fields were to remain in grass or not. My impression is that they valued each field on the footing that the whole of the grass parks might be let as one agricultural farm. I cannot find that any of the witnesses states the total amount of the rental thus arrived at, but counsel for the defender stated that it came to £658 for the grass parks, which together with the £169 for the policies made a rental of £827 for the whole pasturage subjects. This it was maintained was the rent tenants might be expected to pay under a lease, although they would have in addition to bear the burden of rates and taxes and upkeep of fences and also have to provide a shepherd to look after their stock. I was not at all impressed with this evidence, and cannot reconcile the figures the witnesses arrived at with their admission that seasonal grazings give higher rents and a better net return to the landlords than do lands let on lease. I am accordingly left with little to guide me as to the rental which the grass parks could return if let on lease except the evidence of the pursuer's witnesses. Some of their deductions appear to me to be rather on the liberal side, but that for income tax under Schedule B is probably understated, and I do not think it is doubtful that a rent of £350 under a lease would give a higher net return to the pursuer than do the present seasonal rents. As it is admitted that seasonal rents as a rule give a higher net return than rents under leases, I see no reason for interfering with the pursuer's figure of £350 as a fair rent for the grass parks on the assumption of an eleven years' lease.

The woodlands extend to 346 acres, and the pasturage of them is not and has never been let. The pursuer offers to include them in the teindable subjects at a rent of £60. The witnesses on both sides are agreed that if let in their present condition this is a fair rent. But the defender maintains—again on the authority of the Calton case—that the rental of the woods should be ascertained by estimating the value of the land as if it were free of trees. This value his witnesses arrive at by ascertaining the value of the land on each side of a wood and taking the average as the value of the woodland. This is, I believe, the practice adopted in fixing values for the valuation roll. By this process they arrive at a teindable rental of £230 for the woodlands. I think this branch of the defender's case illustrates more clearly than any other the confusion

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of thought which runs through his whole case between taxation on the value of land and a right to a portion of the fruits which the land may be expected to yield in its actual condition. I have no hesitation in fixing the teindable rental of the woodlands at £60, but in doing so I do not wish it to be understood that I commit myself to the view that woodlands are teindable subjects. The pursuer has tendered that sum on record and the question has not been argued before me. My impression is, however, that woodlands are not teindable, and if I had thought that the pursuer had to any small extent understated the teindable rental of some of the other subjects included in the valuation I should have been inclined to give him credit for allowing a teindable rent for these woodlands. On the whole matter, I see no reason to make any alteration on the figure of £1516, 15s. suggested by the pursuer as the teindable rental of the whole subjects referred to in the condescendence.”

The compearing defender (the minister) reclaimed, and argued—There were three points to be considered—(1) The rental of the grass parks; (2) the rental of the policy grounds; and (3) the question whether fire insurance premiums, payable by the tenants, should he added to the rental from the subjects let on lease. (1) The Lord Ordinary's figure of £350 as the rental of the grass parks was arrived at by taking the actual rents received and then deducting the oncost charges. In adopting this method the Lord Ordinary was in error. The correct method of ascertaining the value of the parks was to consider what rent they would bring if let on an eleven years' lease on ordinary terms, in accordance with the Act of Sederunt 1825. The figure would then be £810. The let of the grass and grazing fell to be distinguished from a let of pasture land itself. If the reclaimer's figures, calculated upon this basis, could not be accepted, then the respondent was bound to give his own figure for a lease of these parks. The evidence showed that the value of the parks if let, on an eleven years' lease would be much higher than their value when let as seasonal grazings. The respondent had arrived at his figure by taking the rent received for the letting of parks and deducting therefrom the charges actually borne by the proprietor. This method was wrong because it did not include the profit derived from the occupation of the land itself. (2) As regards the policy grounds, no doubt it was their actual condition that, on the whole, determined their value, but in calculating that value restrictions imposed by the landlord to preserve the amenity of the mansion—house and its approaches ought not to be taken into account. Nor should the hypothetical rental be reduced because these grounds were interspersed with trees, even though the trees deteriorated the grass under and around them—Act 1633, cap. 17, C.A.S., 1913, H. 3, 1; Connell on Tithes, vol. i, p. 181, vol. ii, p. 95; Lord Glenlyon v. Clark, 1842, 5 D. 69, per Lord Mackenzie at pp. 71, 72; Burt v. Home, 1878, 5 R. 445, 15 S.L.R. 472, approved in Galloway v. Earl of Minto, 1922, reported supra p. 46, per Lord Dunedin at p. 47; Baird v. Wemyss, 1906, 8 F. 669, 43 S.L.R. 614. (3) The fire insurance premiums ought to be considered part of the teindable rental, as they were an element in the consideration for the use of the lands. Tenants were not bound at common law to insure against fire, and the practice of the Valuation Court had been to treat these premiums as rent— Marquis of Breadalbane v. Robertson, 1914 8.C. 215, per Lord Skerrington at p. 222, 51 S.L.R. 156.

Argued for the respondent—The Lord Ordinary arrived at the figure £1516, 15s. as the constant rent and value of the subjects, and one fifth thereof, viz., £303, 7s., represented the yearly value of the lands. It was a principle of teind valuation that the subjects must be taken in their actual state unless the land were being put to an unnatural use to defeat the minister's right to teind. The landlord was entitled to use his land for all natural purposes whether the result was to raise or to lower the teindable value. The Act of Sederunt of 1825 provided that in the case of subjects not let under lease the “constant rent” should be fixed at such a figure as the subjects might fairly be expected to bring in if let in their actual condition. The grass parks must be taken as they stood. They ought not to be assimilated to ordinary pasture land for the purpose of calculating the rental. With regard to the policy grounds the valuation properly took into account ( a) the existence of trees and ( b) the restrictions imposed by the landlord with a view to preserving the amenity of the mansion-house and its approaches. It was doubtful whether policy parks were teindable—Erskine, ii, x, 43; Buchanan on Teinds, p 197; Connell on Tithes, vol. i, page 195; Juridical Styles, 6th ed., vol. i, pp. 443 and 447; Bell on Leases, vol. ii, p. 280; Baird v. Wemyss, 1906, 8 F. 669, per Lord M'Laren at p. 683, 43 S.L.R. 614. Assuming, however, that they were, the respondent was entitled to deduct “oncost” charges, and it was only the surplus rent after deduction of these charges that was teindable—Erskine ii, x, 32; Buchanan on Teinds, p. 199 et seq.; Watson v. Heritors of Northmavine, 7th March 1821, F.C. Insurance premiums could not be considered part of the fruits of the lands in respect of which they were paid, and it was from the fruits of the lands that the teinds fell to be paid. They were debita fructuum not debita fundi— Marquis of Breadalbane v. Robertson, 1914 S.C. 215, 51 S.L.R. 156; Bennie v. Mack, 1832, 10 S. 255; Earl of Morton v. Micrray's Representatives, 1793 M. 13, 872; Baillie v. Earl of Douglas, 1730 M. 15, 738; Clark v. Duke of Queensberry, 1747 M. 15, 747.

At advising—