Scottish Court of Session Decisions

The late George Miller, proprietor of some acres near Markinch, executed a settlement of them in favour of his son Thomas Milier. On the narrative that his son was then absent from the country, or at least that his residence was unknown, and that it was proper to appoint some person “to manage the foresaid lands and others conveyed in his favour, and to draw the rents thereof after my decease, and during the said Thomas Miller's absence,—therefore” he (George Miller) appointed his own agent, Robert Menzies, writer in Edinburgh, to manage the lands, after his death, and “during the said Thomas Miller's absence,” and “to draw and recover the rents thereof, and to adopt all proceedings that may be necessary, either in his own name or that of the said Thomas Miller.” The deed declared that Menzies should be liable to account to Thomas Miller for his intromissions. It also appointed Menzies to be Sole executor. George Miller died on Nov. 23, 1829, at which period Thomas Miller was still absent from Scotland, and Menzies immediately caused a notarial intimation to be made to the tenants of George Miller, stating his authority to uplift the rents and manage the lands. He entered on the management, and on Dec. 10, 1829, by an exchange of missives, he let to William Haggart, feuar at Markinch, for four years, four acres of the lands which were then vacant, at a rent of £14, as from Martinmas preceding. The missives set forth “the first year's rent falling due at Martinmas next.” On the same day, Haggart, and another tenant, named Dryburgh, whose rent was £16, and whose lands were taken from Menzies at the same time with those of Haggart, granted an acceptance in favour of Menzies for £30, payable at four months. Menzies granted a relative letter to Haggart and Dryburgh, acknowledging that the bill was “in full of the current year's rent due for the lands let to you by me,” and binding himself to grant one renewal of the bill. The bill was accordingly renewed for four months, when it fell due, and afterwards was retired by Haggart and Dryburgh. In the mean-time, Menzies expede a sasine in favour of Thomas Miller, under his father's settlement, and had caused an advertisement to be inserted, in December, 1829, in the London Papers, for the purpose of discovering Thomas Miller, and about January 8, 1830, Miller came to Scotland, and in a few days thereafter had an interview with Menzies as to his affairs. In that month he had repeated interviews with Menzies, where explanations were given as to the state of his father's settlement and affairs. On March 1, 1830, Menzies fitted accounts with Miller, and, on the narrative of that having taken place, and that Miller was now returned to manage his own property, &c. Menzies renounced all the powers which were conferred on him by George Miller's settlement. Thomas Miller at the same time discharged Menzies for his intromissions. Among the accounts of Menzies, entries occurred debiting Thomas Miller with charges for the interviews and explanations above referred to, and also for intimating to the tenants his powers of management. On March 25, 1830, Miller wrote to Haggart and Dryburgh, agreeing that they should “remain in the lands” which they occupied, “after the term of Martinmas next,” if he had no occasion to take possession of them. This letter bore special reference to a counter letter received from them, of that same date, on the subject of their possession. This letter of theirs Miller subsequently failed to produce, and alleged that, if extant, he could not find it. He also, under the same explanation, failed to produce any of the vouchers or receipts relative to the intromissions of Menzies, which might have been delivered to him at the settlement of their accounts. In May, 1832, Miller raised an action against Haggart before the Sheriff of Fife, concluding for payment of £14, as the rent of the lands possessed by Haggart, from Martinmas, 1829, to Martinmas, 1830. In support of this action he alleged that Menzies had never accounted to him for the rent, and pleaded that as Menzies had no power of management excepting during his (Miller's) absence from Scotland, the lease for four years was ultra vires; and, independently of this, the whole powers of Menzies fell as soon as he returned to Scotland, which was early in January, 1830. Haggart was bound to know the nature of the powers of the party with whom he contracted; and was not entitled to anticipate the proper term of payment of the rent, which was specially stated to fall due at Martinmas, 1830. As he did so, it must be at his own risk; and as he (Miller) had never received payment from Menzies, he was entitled to recover payment from Haggart, leaving Haggart to seek his own relief against the representatives of Menzies.

Haggart stated that, at the date when he took the lands, it was necessary for Menzies to raise some funds to meet the funeral and deathbed expenses of George Miller; and that, on that account, the bill had been asked and granted, in bona fide, with a view to these funds being raised. He also alleged that Menzies had fully accounted for the rent to Miller, at fitting accounts on March 1, 1830, and that, as Miller failed to produce the vouchers relative to the intromissions of Menzies, which must then have been delivered up to him, every presumption was against him. This was more especially the case, because the letter, written to Miller by Haggart and Dryburgh, on 25th March, 1830, relative to their possession, and agreeing to remove, if required, at Martinmas 1830, would have shown, if produced, that Miller's attention was specially called to this whole matter, and that, at least for one year, Miller had homologated the actings of Menzies. But independently of this, as Menzies had full power to manage the lands and recover and draw the rents in the absence of Miller from Scotland, it would be impossible to subject the defender in second payment to Miller, after one bona fide payment to Menzies, unless it was to be laid down as a general rule, that it was ultra vires of any factor to take payment of rents for the proprietor, before the term when they fell due. But there was no such general rule. It might often be an act of prudent administration by a factor, as being the best of all security, to insist for forehand payment of rent: and a fortiori it was within his power to take the bill which was granted on this occasion.

The Sheriff-Substitute, on November 25, 1834, pronounced this interlocutor:—“In respect it appears, from the deed of settlement executed by the pursuer's father, a copy of which is produced in process, that Robert Menzies, then writer in Edinburgh, was authorized to manage the lands in question, and to draw the rents thereof, during the pursuer's absence; and in respect it appears that the defender did, bona fide, grant a joint bill, along with James Dryburgh, for the rent of said lands for crop 1830; and as it is not disputed that the defender has paid his share of said bill, being the £14 of rent in question, Finds the pursuer has no claim against the defender for the rent of said lands for said crop, and therefore assoilzies the defender from the conclusions of the libel: Finds the defender entitled to expenses, of which allows an account to be given in; reserving to him to call Mr Menzies to a count and reckoning for his intromissions, and him his defences, as accords.”

The Sheriff-Depute recalled this interlocutor, and allowed Haggart a proof in support of an allegation contained in the seventh article of his condescendence, that he had intimated to Miller, the settlement of the rent with Menzies, before Miller and Menzies settled their accounts. Thereafter the Sheriff repelled the defences and decerned in terms of the libel, with expenses. Haggart brought an advocation. Menzies died, apparently insolvent, during the discussion.

The Lord Ordinary pronounced this interlocutor:—“Finds, that by the settlement of George Miller, the pursuer's father, Robert Menzies was appointed executor, and was by a special clause empowered to manage the heritable estate, and to draw the rents during the absence of his son, the pursuer: Finds that the said George Miller died on the 23d day of November, 1829 years, and that at that time the pursuer was absent from the country: Finds that he returned about the 8th day of January, 1830, and shortly afterwards had a settlement with Robert Menzies, and discharged him from all claim on account of his actings as executor or factor: Finds that by the missives of lease granted to the defender, the yearly rent of the small possession let to him being £14, was not payable till Martinmas 1830: Finds that on the 10th of December, 1829, Robert Menzies took a bill from the defender for £14 sterling, being the year's rent payable at Martinmas 1830, which bill was afterwards paid by the defender: Finds, that in respect of the very limited and conditional powers of the said Robert Menzies in relation to the heritable estate, he was not entitled to receive and discharge in December 1829, the year's rent which, by the terms of the missives, was not payable till Martinmas 1830: Finds it not proved, either that the pursuer got the benefit of the said payment of rent in settling with Robert Menzies, or that he was apprised by the defender of such payment at or before the said settlement: Therefore, Finds the defender liable to the pursuer for the said sum of £14 sterling; and remits the case simpliciter to the Sheriff of Fife, and decerns; and finds the respondent in the advocation entitled to expenses.” ^*

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* “ Note.—It may be a hardship on the defender to pay the small sum of rent to the pursuer, after having already paid it, as ho appears to have done perfectly in bona fide, to Robert Menzies, But while the Lord Ordinary holds the pursuer's claim to be well founded in law, he cannot help thinking that the hardship, and the whole of this long litigation, entered into by the defender to escape it, might, with ordinary prudence, have been avoided. As Robert Menzies' powers of management were conditioned on the pursuer's absence from this country, they necessarily fell on his return; and with powers so limited, it is clear that Robert Menzies was not entitled to receive and discharge, in 1829, a sum of rent not payable till Martinmas 1830, before which period his powers as factor might, and, as it turned out, did cease to exist. The payment, therefore, was clearly not a good payment as against the landlord. No doubt, if the defender could have proved, that on accounting with Menzies, the pursuer had got the benefit of this payment, or even if he could have proved that before the settlement of accounts with Menzies, he had informed the pursuer of the circumstance; that might have altered the case. But not only has he failed in that proof, but it appears from the evidence that the circumstance of the bill was not mentioned by the defender to the pursuer until after Menzies had been discharged, and that from the first mention of it, the defender was made aware that the pursuer did not mean to depart from his claim against him. Now, it is admitted that Menzies continued solvent for a considerable time afterwards; and yet the defender renewed the first bill which was then current, and ultimately paid the second bill, without taking any measures whatever for enforcing his undoubted right against Menzies; a course which would have rendered the whole of this litigation unnecessary. In these circumstances, and considering the very small amount of the sum, the Lord Ordinary thinks himself bound to give expenses.”

Haggart reclaimed.

Lord Gillies.—I entertain great doubt respecting this interlocutor. Menzies was named factor to manage the property, and draw the rents, during the absence of Thomas Miller from Scotland. He assumed the management and acted. At the time when he let the land to Haggart, he was ostensibly in the entire management and administration of it. What could Haggart know farther? In these circumstances Menzies let the lands, and by a transaction which was evidently part of the same agreement, and entered into at the same time, Haggart granted a bill at four months, which was to be once renewed, for the rent of the first year. There was nothing illegal in such an arrangement between a tenant and a factor: there was nothing to excite the alarm or suspicion of the tenant. And it appears to me, that if Miller did not know, he ought to have known of this transaction before ho settled with Menzies, and, if he did not, the fault was only in himself or his own factor. The delay which occurred before raising the action strengthens this belief. The whole of the year 1831 was allowed to pass, and it was only in May 1832 that the action was raised. It is easy to explain that delay upon the supposition that Miller very properly understood he was bound by the actings of his factor, and it is not easy to explain it in any other way. I think the interlocutor of the Lord Ordinary should be altered, and that the cause should be advocated, and the defences sustained.

Lord Mackenzie.—I concur. The bill was granted unico contextu with the exchange of the missives of lease. The whole was one transaction. There was nothing uncommon or unusual in this proceeding by the factor. He might have taken instant payment of the rent in cash, and given a discharge perfectly good against the proprietor of the lands. A fortiori it was within his powers to take the bill in question, under the agreement. There is nothing on the face of the transaction to indicate that it was illegal or beyond the powers of the factor. I think the defences should be sustained.

Lord Corehouse.—I am very clearly of the same opinion. Menzies was confessedly the factor, with a full power of administration, which was only to terminate when the heir returned to the country. In these circumstances, he let a lease of these lands, which, of course, would fall for any terms subsequent to the expiry of his own power. The entry was declared in the missives to be at Martinmas, 1829, and the rent for that year to be payable at Martinmas, 1830. Menzies was entitled to stipulate for forehand rent if he chose. In common practice, either the landlord, or factor, can uplift the rent beforehand, if the tenant be willing to pay it; and though a discharge of such rent might not avail against third parties, there are none such here. The only party in the field is the landlord himself. A very reasonable and probable purpose is alleged for the arrangement which was made in this case, as it is said that the bill was intended and was applied towards payment of the deathbed expenses of George Miller, the pursuer's father, and the late proprietor of the subjects. It might, on various accounts, be a most proper act of administration by the factor to take forehand rent, and I can perceive no ground which could debar him from taking it. He took a bill and discounted it, and Miller says there is no evidence that the proceeds were applied for his behoof. But why is this the case? There was a settlement of accounts between Miller and the factor, Menzies; and, as Menzies was discharged, all his vouchers were probably delivered up to Miller. None of these are now forthcoming; and how am I to know that, if they could be produced, they would not afford ample proof that this money was applied for behoof of Miller? I think the Lord Ordinary puts the onus of proof on the wrong party. The factor performed an act of administration which, so far from being on the face of it illegal, might be an act of the most perfect propriety. Is a third party, a tenant, dealing with him on the assumption that he possessed the ordinary powers of a factor, to suffer, even if the factor, after receiving such third party's money, should misapply it? The tenant is entitled to say that it is immaterial to him whether the factor applied the money for behoof of the landlord or not; the factor had uplifted and discharged it, acting within his powers, and if he failed duly to apply it, the loss must fall not on the tenant contracting with him, but on the landlord. And every presumption in favour of the tenant, Haggart, is strengthened by the circumstance that any loss of evidence which has occurred, arises from the fault of Miller himself.

Lord President.—In the whole circumstances, I do not feel myself warranted in differing from the opinions now expressed by your Lordships. There may often be a very sufficient reason for requiring forehand rent. In this case, it was part of the original agreement of lease that it should be taken. It was not done as any after-thought, and it might very well be, that a better security was required than a mere promise to pay at 12 months afterwards, and that a bill was accordingly taken, which, by agreement, was to be once renewed, and then finally re tired at the end of eight months. This was the nature of the transaction, and I do not think the tenant, who acted bona fide, can now be made to pay his rent over again to the landlord.

Solicitor-General, for Respondent, stated to the Court, that, as a proof had been taken in the inferior court, the rule of 6 Geo. IV. c. 120, § 40, applied, and the interlocutor of the Court must accordingly separate the fact from the law, and set forth the facts articulately which were found to be proved, and otherwise satisfy the requirements of the statute.