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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Archibald Finnie v. The Glasgow and South Western Railway Co.. (No. 2.) [1857] UKHL 1_Paterson_709 (13 August 1857)
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Cite as: [1857] UKHL 1_Paterson_709
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SCOTTISH_HoL
Page: 709↓
(1857) 1 Paterson 709
REPORTS OF SCOTCH APPEALS IN THE HOUSE OF LORDS.
No. 107
v.
Subject_Railway Lease — Contract — Toll — Jus Quæsitum Tertio —
The Kilmarnock and Troon Railway was leased by the Glasgow, Paisley, Kilmarnock, and Ayr Railway Co., now incorporated with the Glasgow and South Western Railway Co., on payment of a fixed sum of rent, and right to charge for the conveyance of coals along that line at the rate of 1
d. per ton per mile. It was provided in the lease, that this charge was to be subject to alteration by the mutual consent of both companies; and the Kilmarnock and Troon Railway Act authorized a charge of 2 1 2 d. per ton per mile. Finnie, a third party, tacksman of collieries on the Kilmarnock and Troon line, and who used the line for the conveyance of his coals, applied for interdict against raising the charge, alleging that both companies had subsequently agreed to fix the charge for the conveyance of coal along the line at 1 1 2 d., and that a list of charges to this effect had been published, and the toll paid for some time at that rate, and that he, as tacksman along the line, had good right to interdict the company from departing from that charge so fixed. 1 8 Held (affirming judgment), That this charge of 1
d. was not fixed in concert by the in terms of the lease; but what the companies had agreed upon was, 1 1 8 d., not as toll to be charged on traders, but as rent, as between themselves, and therefore that the complainer was not entitled to interdict. 1 8 Page: 710↓
If two parties contract, and there is a stipulation in their contract in favour of a third party, the latter has a right to enforce the contract on the principle of jus quæsitum tertio.
But opinion expressed, that it must clearly appear, and be distinctly expressed, that this third party is to take benefit by the contract.
Quære— Whether overcharges by a railway company made in violation of the equal rates clause, and paid, can be recovered back? 1
The appellant was tacksman of the Annandale coalfield and Gatehead coalfield, and other coalfields, lying between Kilmarnock and Troon, on or near to the line of the Kilmarnock and Troon Railway, and he brought a suspension and interdict against the respondents, the Glasgow and South Western Railway Company, to have them interdicted and prohibited from charging a higher rate for toll than 1
The companies had been incorporated under the name of the Glasgow and South Western R. Co., which company now held the lease of the Kilmarnock and Troon line.
The Kilmarnock and Troon Railway Act of Parliament authorized a rate of 2
The Court of Session refused the interdict and found, that the rate of 1
Against this interlocutor the present appeal was brought to the House of Lords.
The Attorney-General (Bethell), and Anderson Q.C., for the appellant.—The respondents were not entitled to charge the appellant for the use of the Kilmarnock and Troon Railway a higher toll than that contained in the list of tolls published by them, dated 4th October 1848. And he can recover back the overcharge— Parker v. G. W. R. Co., 7 M. & Gr. 253; Att.-Gen. v. Birmingham Co., 2 Rail. C. 124; Stockton Co. v. Barrett, 11 Cl. & F. 590. The appellant's right to claim the benefit of the stipulation in the lease falls under a well known principle of the law of Scotland, which is technically characterized as a jus quæsitum tertio, and is thus commented upon by Lord Stair:—“It quadrates with our customs, that where parties contract, if there be any article in favour of a third party at any time est jus quæsitum tertio, which cannot be recalled by either or both of the contractors, but he may compel either of them to exhibit the contract, and thereupon the obligor may be compelled to perform. So a promise, though gratuitous, made in favour of a third party, that party, albeit not present nor accepting, was found to have right thereby.”—Stair, B. 1. tit. 10, § 8. In the same manner, when, to benefit the traders, the Kilmarnock and Troon Railway Co. consented to reduce the toll payable to them, the traders became entitled to claim the benefit of the reduction, by a reduction of the rates levied from them. The right so constituted in their favour was intimated and published to them by the table which was published by the respondents in October 1848, and which was framed in perfect conformity with the views of the Kilmarnock and Troon Co., and was a necessary result of the reduction of toll to which that company had consented. The judgment being therefore erroneous ought to be reversed.
Lord Advocate (Moncreiff), and
Rolt Q.C., pleaded for the respondents.—1. The reasons of suspension and interdict stated by the appellant are unfounded and untenable, inasmuch as— (1) No table of tolls ever was fixed in concert by the two companies, in terms of, and under the provisions of, the lease. (2) The table of tolls, of 4th October 1848, was issued by the Glasgow, Paisley, Kilmarnock, and Ayr Railway Co., entirely at their own hand, not only without being concerted with, but also without being submitted or even communicated to, the Kilmarnock and Troon Railway Co. (3) The table of tolls was never recognized or adopted by the Kilmarnock
_________________ Footnote _________________
1 See previous report
17 D. 1127;
27 Sc. Jur. 566.
S. C. 3 Macq. Ap. 177:
29 Sc. Jur. 537.
Page: 711↓
Cur. adv. vult.
The Lord Ordinary was of opinion with the applicant upon that point, but the Lords of Session took a different view, and against the decision of the Lords of Session the present appellant has brought the matter before your Lordships' House.
The Kilmarnock and Troon Railway Co. was established by an act of parliament, the 48 Geo. III. c. 46. The line was originally a mere coal line, and, in truth, might substantially be called the railway of the Duke of Portland. The Duke of Portland is said to have had 77 shares, Lord Eglintoun two shares, and some other gentleman one share. Substantially, it was a coal railway, for the benefit of the collieries on the line between Kilmarnock and Troon, in which the Duke of Portland was the person mainly interested as lessor.
By an act of the 7 Will. IV. and 1 Vict., a certain company was incorporated, called the Glasgow, Paisley, Kilmarnock, and Ayr Railway Co. That was for a railway running from Glasgow by Kilmarnock down to the coast, and to Ayr, and different places along that line, and there were several acts of parliament extending that act; and eventually that company became amalgamated with certain other companies, and they are now represented under the name of the Glasgow and South Western Railway Co., and inasmuch as all the rights of the former companies have been concentrated in that company, it may be called generally the Glasgow and South Western Co.
The act of the 9 and 10 Vict. c. 211, which received the royal assent on the 16th of July 1846, authorized leases by the Kilmarnock and Troon Railway Co. to the present respondents, or those whom the present respondents now represent, upon certain terms. The 7th section of that act provided, that it should be lawful for the Kilmarnock and Troon Co. to grant in lease, upon certain considerations, and generally, upon such terms as they should think proper, the Kilmarnock and Troon Railway, and the other works, to be held under the same powers, rights, and privileges, as the original coal line. By the 14th section it was enacted, that the new company, the lessees, should be entitled to relay and reform the whole of the line, including certain portions of the line mentioned, and maintain the same as an edge railway—that is, a railway for the carriage of passengers and goods, similar to the railways which generally we have in this country. Then, by the 24th and 25th sections, provision was made as to the tolls. By the 24th section it is provided, that all powers given to the Kilmarnock and Troon Co., for the purpose of enabling them to demand or charge any tolls, should be repealed; and by the 25th section, certain new tolls were allowed to be charged upon goods conveyed upon the Kilmarnock and Troon Railway. And with regard to coal, the provision was, that the company might take for all coals 2
Page: 712↓
My Lords, that act received, as I have stated, the royal assent in July 1846, and a lease was made in pursuance of the powers there granted, very shortly afterwards, on the 25th January, in the year 1847, and in that lease the Kilmarnock and Troon Railway Co. let to the Glasgow Railway Co., now represented by the respondents, their line, upon the following rent:—1
st, A fixed sum of £375 yearly: 2
dly, A sum equal to 1
Then there is this stipulation:—“The Glasgow, Paisley, Kilmarnock, and Ayr Railway Co.,” who are represented by the respondents, “hereby bind and oblige themselves to account for, and pay the foresaid fixed rent, and the rent calculated on the quantity of minerals carried as aforesaid to the said Kilmarnock and Troon Railway Co.:” “And it is hereby specially agreed to, that the said rent shall be calculated as if the charge on minerals per ton were one penny and one halfpenny, although the carriage should be for a shorter distance than one mile.” And then there was this provision:—“And it is hereby agreed, that the said Glasgow, Paisley, Kilmarnock, and Ayr Railway Co. shall, by themselves, have power, in terms of the Railways Clauses Consolidation (Scotland) Act 1845, to fix the rates and duties to be taken or charged in respect of goods other than the toll on minerals and for passengers on the said Kilmarnock and Troon Railway, but that the tolls to be taken and charged in respect of minerals shall, as occasion may require, be fixed by the said company and by the Kilmarnock and Troon Railway Co. in concert.”
That was an important provision for the Kilmarnock and Troon Railway Co., representing, in truth, the Duke of Portland, because it was his interest that there should be no excessive charge made for the carriage of coals along that line, as it might induce his tenants, the lessees of the coal mines, to carry their coals by some other route.
The object of the interdict which was sought for was to restrain the Glasgow and South Western Railway from charging more than 1
Now, my Lords, two questions arise upon this appeal. First of all, is it true that, in point of fact, 1
The Court of Session decided against the appellant on the first point—that is, on the point of fact, that there had ever been a settlement such as that for which he contends of 1
My Lords, I have considered the case with the best attention in my power, and, in my opinion, the Court of Session came to a correct conclusion upon the point of fact, which was the first point. From the time when the Ayrshire Company took possession of the Troon line under the lease, the traffic on that line was conducted by them exclusively by their own engines and their own carriages, and they charged 2
Page: 713↓
After some discussion this was agreed to, and the charge was fixed at 2
d. a ton per mile, and although the table of charges was not set up until October 1847, it was agreed, that this charge should have a retrospective operation to the preceding month of May, when the negotiation had been in truth concluded. And accordingly, the traders who used the line for the purpose of carrying their coals were informed, that those who had paid tonnage at the advanced or higher rate would be entitled to a reduction from the month of May, so as to make the payment which had been made since May that which it would have been according to the new rate fixed in October. A calculation was accordingly made, and it was found, that there had been paid by the traders, in respect of this additional
In October 1848 the Ayrshire Company set up a table of tolls, properly so called, for the former table which had been set up had related merely to the
2d. per ton per mile, which the company would charge, including the toll for the use of the railway, the engines and carriages. In October 1848 the Ayrshire company set up a table of tolls, in which they described the toll for the coals at 1
The question is, whether this toll had been fixed in concert between the two companies? If it had been so fixed, then it would not be competent, according to the terms of the lease, to either party to alter it. But if it had not been so fixed, but was the mere act of the respondents, the Glasgow and South Western Co., they might alter it at their pleasure. That is the main question, whether this had been so fixed in concert? and I entirely concur with the Court below, the Court of Session, in thinking that this had never been fixed in concert with the Duke. All that had been agreed upon between them was, that if the company reduced the general charge for the carriage of coal from 2
That is all that it is necessary to say; but I must add, that I think it is pretty clear also, that even if this had been agreed between these parties, it is a matter in which no third person could have come before your Lordships complaining that he was damnified, because the agreement between those parties had not been properly carried into effect. It was suggested, that this was in the nature of a jus quæsitum tertio. It seems to me impossible to contend that it is so. This matter was considered in the present session of parliament in your Lordships' House. 1 The jus quæsitum must be not merely a jus in which the tertius is interested, but it must be a jus that was intended to be beneficial in some way to a third person. Now, here the object was to make an arrangement between the owners of these two lines. It is true that if the owners of the two lines reduced their toll, every person who used the railway would be benefited by it, but they are not the tertii within the sense and meaning of that rule. It was contended, that this was meant for the benefit of the lessees of the mines on the line of railway. Even if that were so, it would be extremely doubtful, whether the doctrine of jus quæsitum tertio would apply. But it is quite obvious that, if this is a jus quæsitum tertio at all, the whole public is the tertius, because every one of the public would have a right to use this railway, and every one, therefore, would be just as much interested in the question as the lessees of the mines upon the line of railway.
Upon the whole, therefore, in my opinion, the Court below came to a perfectly correct conclusion, and the result is, that I have now only to move your Lordships that this appeal be dismissed with costs.
_________________ Footnote _________________
1 See Peddie v. Brown, ante, p. 704.
Page: 714↓
Having fully considered the judgment of the Lord Ordinary, and those of the Judges of the Second Division, and the subsequent judgment of Lord Ardmillan in the action between the two companies, and the elaborate arguments at your Lordships' bar, I must say, that I think that both these questions ought to be decided against the appellant.
The doctrine of the jus quæsitum tertio is very distinctly explained by Lord Stair, 1. 10, 5, where he says—“It is likewise the opinion of Molina, and it quadrates with our customs, that where parties contract, and there be any article in favour of a third party at any time, it is jus quæsitum tertio which cannot be recalled by either or both of the contractors, but he may compel either of them to exhibit the contract, and thereupon the obligor may be compelled to perform.” And the several instances that he cites from the decisions of the Court of Session under the head of jus quæsitum tertio, explain his meaning to be, that, where there is an express stipulation in a contract in favour of any one, it is, in effect, an agreement between those parties that the stipulation shall be performed with him, and though the person in whose favour it is made is not a party to the agreement, nor at the time assenting to it, he may afterwards adopt the agreement in his favour, and sue upon it.
It is not necessary, I think, that the stipulation should be in favour of a named party, (though the instances given in the decisions are such,) for I conceive that if the party or parties are sufficiently described, and the stipulation is clearly meant to be in his or their favour, it will be enough to entitle the person or persons so described to sue.
By a stipulation in favour of a third party, I understand an agreement that something is to be done or permitted for the benefit of a third person clearly ascertained, Mho, though not a party to the contract, may afterwards come in and insist upon its performance, and, in the mean time, the actual parties cannot revoke it.
The instances quoted by Lord Stair are of this character. If, in this case, the stipulation between the two companies had been, that Mr. Finnie nominatim, or the tenant of the Annandale coalfield, should carry all the coals from that coalfield at a less toll, or at a toll previously fixed by the two companies, that would have enabled Mr. Finnie to insist on his jus quæsitum tertio, and sue the Glasgow Railway Co.; but there is no such stipulation as this directly for the benefit of any third person.
The two companies contract with a view to their own interest as companies, to secure the greatest toll to the Ayrshire Co., and the greatest rent to the Troon Co. The Duke may have been chiefly influenced by his own interest in trying to keep the charges low, and so, by increasing the coal trade of his tenants, to increase his own royalties; but the benefit to Mr. Finnie and the other coalowners is incidental to the intended benefit of the Railway Co., and, it may be, of the Duke, but it is not the immediate object of the parties. Mr. Finnie is named, it is true, in the lease, but merely as a part of the description of the estate, the coals from which are to form part of the measure of the rent, not as a party for whose benefit a stipulation is made. There is, in effect, no stipulation at all in this case in favour of a third person, in the sense in which that word is to be properly understood. Every one who chose to use the road, might, if Mr. Finnie was entitled to insist, equally insist on a jus quæsitum tertio.
I may remark on this part of the case, that I do not think it possible to support the claim of Mr. Finnie to found on the lease, on the ground that the lease being granted pursuant to the Statute 9 and 10 Vict. c. 221, is to be considered as part of the statute, as if the statute had enacted expressly what the parties agreed to. This view of the case appears to have occurred to Lord Handyside; but I must own that I cannot concur in it. I think, therefore, that Mr. Finnie's claim to found on the lease cannot be sustained.
The next question is, whether the allegation in the note of suspension has been proved by the suspender to the extent to which it was necessary for him to prove it, as that note is the petition “to interdict, prohibit, and discharge the said respondents from taking and charging from the complainer, when using and employing the Kilmarnock and Troon Railway with carriages and engines properly constructed, any higher rate of toll, in respect of the conveyance of coals thereon, than the rate of 1
Page: 715↓
If, in order to sustain this petition, it is necessary to prove from its peculiar form that the toll of 1
But I conceive that, in order to support this petition, it would be enough for the appellant to prove that a toll of 1
It is true that, after such a toll had been agreed upon, it could not be collected until a table of tolls had been duly published, and it is probably in this sense that the Judges use the expression, that the lease requires a table to be concerted between the two companies. Certainly that which was to form the table of tolls must have been duly concerted between the two companies before it could be obligatory, but if it had been so concerted, the publication of the toll in a table by the Ayrshire Company alone would be sufficient. The question then is, has there been a toll concerted between the two companies simply for the use of the railroad, to be paid by those who use their own carriages and engines? The onus probandi lies upon the suspender to prove that fact.
Upon a full consideration of the correspondence between the two companies, upon the construction of which this question depends, I am of opinion with the Judges of the Second Division of the Court of Session, that the fact is not proved.
The lease of the Kilmarnock and Troon Co. to the Ayrshire Co., January 1847, made pursuant to the act 9 and 10 Vict. c. 221, reserves a fixed rent of £375 yearly, and a fluctuating rent, namely, a sum equal to 1
It is obvious that the rent due to the Troon Company never could be reduced without the Duke's consent, and the question of the reduction of rent was independent of the rate of tolls, understood in the sense I have just explained, to be paid to the Ayrshire Company for the use of the railway and otherwise.
The negotiations with the Duke of Portland, as representing the Troon Company, for an alteration of charges, began in the year 1847, and were conducted by the agents of both parties. In the first instance; it was found that the maximum rates for limestone, included in the term minerals, allowed by the act of 1846, was 2
d. per ton per mile for toll, haulage, and the use of waggons, for which 1
Page: 716↓
The Ayrshire Company were always desirous of preventing the establishment of a competing line then projected from Kilmarnock to Ayr, and were anxious to reduce the charges on the whole of their line, in order to prevent competition. A negotiation between the agents continued some months, with a view to a new arrangement with the Duke, and it finally resulted in an alternative offer by the Ayrshire Company to the Duke of Portland, one branch of which was, that these dues should be reduced to 2
d. per ton per mile, payable by those using the line, and that this sum should be divided in the proportion of 1
Accordingly, the Duke, on the 13th May 1847, through his counsel, the late Mr. Talbot, announced his intention to the committee on the Kilmarnock and Ayrshire bill, that he would reduce the rates on the Troon line to 2 d. per ton per mile, and the committee in consequence reported that the preamble of the bill was not proved.
Much correspondence subsequently took place between the agents as to the proper form of the agreement. A difficulty arose as to the reduction upon coals not carried to Troon. That difficulty was formally settled by the agreement on the part of the Duke to make the reduction of the dues on the Kilmarnock and Troon line universal. All the parties then agreed, that the reduction of the total charge upon the carriage of minerals to the customers should be to 2
d. per ton per mile, and the reduction of the payment to the Duke, representing the company, from 1
It is true, that in the course of the correspondence, the rent and toll for the use of road at the time of the lease having been the same, the writer of some of the letters treated the reduced rent payable to the Troon Company as a toll payable to them, but this was an inaccuracy of expression; in truth, it was only the rent payable to the Troon Company, which was really the subject of the bargain between the two companies, by whatever name it may have been called.
The Ayrshire Company published the table of nth October 1848, stating the toll to be 1
It is only on the ground that 1
Much stress was laid upon the Troon Company having paid back the excess above 1
Interlocutor affirmed, with costs.
Solicitors: Appellant's Agents, Maitland and Graham; Walker and Melville, W.S.— Respondent' Agents, Grahame, Weems, and Grahame; Gibson-Craig, Dalziel, and Brodie, W.S.
_________________ Footnote _________________
1 See a previous case between the same parties on another point, ante, p. 520.