United Kingdom House of Lords Decisions

There was a railway about to be made, which it was thought would in some way interfere with their interests as tenants of this colliery. What the previous negotiations between the parties were does not distinctly appear, but negotiations had been entered into between the railway company and these tenants, over whose land the railway was to pass—some stipulations had been made, but, however, eventually they ended in nothing—and finally an agreement was come to between the company forming the railway then in progress and the tenants, that, with a view to stop all further discussion, and to prevent the tenants raising any further difficulty, the railway company would pay the tenants, as a compensation for all their damage, a sum of £5000; and then the tenants further say—“We will agree to make a branch railway, which shall be sufficient in our estimation for the use of the colliery, to run from the colliery to join the line.” That agreement is entered into, and the railway is accordingly made.

I have said that that was the agreement entered into with the tenants, but they were tenants under a lease, in which there was a stipulation, that, when the coals should be exhausted, which fact was to be ascertained in a particular mode pointed out, they were to be at liberty to surrender the residue of their term. The circumstances which enabled them to make such a surrender did arise. It was reported, that the coal was exhausted, and they accordingly surrendered the term.

But then the landlord says—“What you are surrendering to me is not what you ought to have surrendered; you should have surrendered the whole property of which you were tenants, whereas you are surrendering to me some ten acres less, that have been taken by the railway company; and in respect of that taken by the railway company, you have received a compensation of £5000. Now I ought to have a proportion of that £5000, as having been received on my account.”

I do not think that Mr. Rolt at all confidently argued, that any claim could be established by the landlord except by the application of the doctrine of jus tertii. It has, however, been argued by Mr. Anderson, not only that the landlord is entitled by virtue of the doctrine of jus tertii, but also that this is a contract that enures for his benefit. The answer is, that it is nothing of the sort. It is a contract between the tenants and the railway company, under which one is to pay and the other to receive a certain sum of money; and in consideration of the tenants doing something for the company, which the company thought it desirable they should do, (whether the tenants have done it or not is a matter with which your Lordships have no concern,) that money was paid, and that money was put into the pockets of the tenants, and they had a perfect right to put it into their pockets; for it is quite clear, that they were stipulating on their own account, and on their own account only.

But then it is said, that, by the law of Scotland, there may be a right acquired by a third person who is not a party to the contract. No doubt that is so in some obligations, and that may be taken to be a doctrine of equity in the Courts of England, as laid down in the case of Synnot v. Simpson, to which allusion has been made, and in many other cases where the point has been considered, and the same doctrine recognized.

I entirely concur, not, perhaps, in the words used by the Lord Ordinary, for I think they were not happily selected, but in the principle that he meant to enunciate I entirely concur. He says the jus tertii is only where the tertius is named. I think that is wrong. To take the case which has been alluded to by Mr. Anderson, where the person is clearly designated though not named, I think, in that case, to restrict the jus tertii to the person named would be wrong. But it must be not only a jus tertii, but a jus quæsitum tertio; it must be something that was intended to enure to the benefit of the third person. Those words are all appropriate, and are all necessary in order to enunciate correctly the principle; and that, I have no doubt, was what the Lord Ordinary meant to say. And taking that to have been said by him, it entirely disposes of this case, because here there was no privity of contract with the landlord; the tenants were not authorized by the landlord to negotiate anything for him, and the right which is said to have accrued to the landlord is a right which was merely accidental. It might have been an important right, or it might not; but did anybody ever hear a proposition so startling as this:—Supposing the tenant of a farm, held for 21 years, engaged with a builder to build certain cottages upon the farm, and afterwards he is minded not to build them, can the landlord, years after, say, “There was this agreement entered into by you to build cottages on the farm; I should have been benefited if that agreement had been carried out, and therefore I claim it as my right to have these cottages built?”

In this case there was neither a contract under which the landlord could derive a right, nor was there a jus quæsitum tertio in the landlord. There was a stipulation entered into, which, if the parties had carried it into effect, might have been beneficial to the landlord, but that would have been mere accident, and clearly it is something upon which he is not entitled to insist.

The view I take of this case quite gives the go-by to one or two questions, which have some difficulty attending them. If this was not something which could be enforced upon the tenants,

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