United Kingdom House of Lords Decisions

But then there comes a matter which it is somewhat difficult to understand. After that ninth article there comes the tenth—“The present agreement shall subsist and endure until the first day of February in the year 1890.” Then comes the eleventh article, which quite evidently relates to a new subject, which begins thus—The second article had provided that “the second party respectively shall, subject to article eleventh hereof as from the said date, pay to the first party” the rates in the schedule. Then this eleventh article comes in and says—“It is specially agreed that notwithstanding the rates or charges before specified, the first party shall be entitled to charge, and the second party shall be bound to pay, rates or charges similar to those which may for the time being be charged to and paid by the Eglinton Iron Company in respect of the carriage of common and fireclay bricks and tiles, and coal and dross, for land sale and shipment, not exceeding the scale of rates and charges paid by the second party, immediately preceding the first day of January 1874, and in the event of any consideration being given to the Eglinton Company for raising them, a similar consideration shall be given to the second party to this agreement.” Now, what is the meaning of that? The contention has been that the effect of that article is to say that so long as the Eglinton Company are charged as much as or more than the pursuers, the pursuers have no right to complain, and no right to redress though the ninth clause is broken—that they cannot recover on that ground. It is difficult to understand this eleventh stipulation without having seen the whole of the agreement with the Eglinton Company and knowing the facts about it, so as to see what that agreement actually was. The only thing that it is material to consider at present is—Does the mere fact (which is all that is averred—and I think it is not at all disputed) that the Eglinton Company do actually pay a higher sum, deprive the pursuers of the right to recover the £148 which, according to the construction I have already put upon the previous article of the agreement, has been wrongfully extorted, if I may use the phrase, from them in consequence of the railway company having carried more cheaply the coals from the Lane-mark Colliery? I cannot see it. It is very difficult indeed to construe this agreement without having the whole of the Eglinton agreement before us and seeing what the Eglinton Company were doing; but this much I may say—it is what the Lord Justice-Clerk says—indeed it is the whole of what he says upon this point—they say “if the Eglinton Company are charged no more than the charge now made against the complainers, they are not within the ninth clause at all. But I am not prepared to give effect to that contention, and on the whole matter I think the company is here in the wrong.”—(See ante, vol. xxii., p. 878). I thoroughly agree in that. I have felt rather a desire myself to say a little more than merely to say that I am not prepared to give effect to that contention, but upon looking at it I find that it all comes round to that. The burden is very strong indeed upon the company to show that article eleven does bear such a construction as to nullify article nine which goes before it. They have not given any grounds for that, and consequently, my Lords, I do not think I can go much further than to repeat again what the Lord Justice-Clerk has said, namely, that I am not prepared to give effect to that contention.

That being so, I think that the interlocutor appealed against is right, and that the appeal now lodged ought to be dismissed with costs, and I move your Lordships accordingly.

Lord Fitzgerald—My Lords, I entirely concur in the judgment just delivered. I only desire to say as to article eleven that I have found great difficulty in understanding the argument as to its effect and operation, and I am not at all sure that I have a very clear conception of it at present, but I certainly do decline to offer an opinion upon an agreement which is not before us, and which if it was to be relied upon in the manner in which it has been relied upon to-day by the Lord Advocate, ought to have been put forward prominently by the defenders, and ought to have been before your Lordships now.

There is one point I may advert to. As I understand the case as it stands, it is this. The condition of things at the time this agreement of 1875 was entered into was that the coalmasters were then paying rates under the agreement of 1874. The Eglinton Company were then paying rates in a lesser degree under their own special agreement which is not before us. The object and intention of the parties seem to have been to equalise these two things. The result was, as I understand by the answer to an inquiry which I made in the course of the argument, that the schedule of rates under this agreement and the rates payable by the Eglinton Company represented the same thing; they were equal in degree as I understand it, and there has been no change of circumstances since. The Eglinton rates have not been altered. There is indeed a statement that they have been diminished in reference to one particular colliery, but that being objected to they were immediately increased again, and potentially the state of facts is the same now as it was when this agreement was entered into in 1875.

My Lords, we construe every agreement not according to circumstances which may arise, but according to the circumstances existing at the time the agreement was entered into. We have not the Eglinton agreement before us, and I am at a loss to see what effect it can have upon article nine of this agreement. Article nine speaks of the “rates stipulated in this agreement.” These are the rates, and if there had been any change of rates under article eleven, that change of rates would still represent rates “stipulated for in this agreement,” and would leave as to these rates article nine in full force. The truth is that there has been no change. I do not know that the case comes before us in a light in which we ought to express any opinion upon it so far as regards the Eglinton agreement. Upon the statement which is before us, therefore, I quite agree with my noble and learned friend that as to this article eleven the less said the better; but I cannot refrain from making this observation, that the whole language of article eleven points to an increase of rates and not to a diminution—it points to an authority to charge on the one side, and a liability to pay on the other. You will find that the only additional stipulation is that in the event of the railway company having bribed the Eglinton Company to submit to an increase of rates, it shall give exactly the same bribe to the coalmasters as it has given to the Eglinton Company.

Lord Halsbury—My Lords, I cannot help thinking that the question which is raised upon article 9 of this agreement is absolutely free from doubt. I think that when the words “lower rates than those stipulated in this agreement” and “a corresponding reduction in the rates” spoken of in the latter part of the clause are looked at, it is luce clarius that what the parties were contemplating was the proportionate relation of the charges to be made to the work to be done by the company. Therefore I am of opinion that the first contention of the appellants here must fail.

With reference to the eleventh clause, I must confess myself unable quite to follow the reasoning of the Sheriff-Substitute, and to some extent of one of the learned Judges in the Court below, but I do not propose to give any exposition of my own of this eleventh clause, because I believe that the materials are not before your Lordships which would sufficiently enable us to form a precise notion of what the clause contemplates. It is enough in this case to say that I think it would be an unreasonable construction of the agreement as it stands to suppose that clause eleven is intended to over-ride and control the effect of clause nine. I can conceive of a number of circumstances, and amongst them I can conceive of an agreement with the Eglinton Company such as would render the provision of clause eleven not an unreasonable and not an unintelligible one, saving nevertheless all the rights which are conferred by clause nine upon the parties to this agreement.

Under these circumstances, my Lords, I quite concur with the rest of your Lordships on the judgment which has been moved by the noble and learned Lord on the woolsack.

Interlocutor appealed against affirmed, and appeal dismissed with costs.