Scottish Court of Session Decisions

This was the sequel of the case reported ante, June 13, 1877, vol. xiv. 570, 4 R. 885. The present action was raised by the defender in the former action of reduction, in order to set up the agreement of 7th June 1873, which was that a lease for fifteen years should be adjusted between the pursuer and defenders “in the same terms and conditions as to rent, lordship, and otherwise, as are expressed in” Mr Pitcairn's lease. The conclusion of the summons was to have it found and declared “that, under and in virtue of a minute of agreement, dated 7th June 1873, entered into between the defenders Dame Elizabeth Lucas or Beresford, Edward Averil Lucas, and Charles Davis Lucas, and the pursuer, the said defenders are bound to grant to the pursuer a lease of the slate quarries, &c., at Ballachulish, Argyleshire, for the period of twenty-one years from Whitsunday 1874, on the same terms and conditions as to rent, lordship, and otherwise, as are expressed in a lease of the said quarries entered into between Robert Tennant, Esquire, of Scarcroft Lodge, Yorkshire, and Alexander Pitcairn, formerly manager of the slate quarries at Easdale, dated 16th and 30th May 1863.” The agreement consisted of two separate sheets of paper and seven pages. The parties subscribed their names to the last page of it, and the subscription was attested by two witnesses. The prior pages were initialed by the the parties. A formal lease was afterwards adjusted between them, of date 1st and 14th November and 2d December 1873, for a term of thirty-five years, but it was reduced on the ground of the fraud of Gardner, the pursuer of the present action, and decree of removing was pronounced by the Court on June 13, 1877, which is reported as above referred to.

The pursuer Gardner now pleaded, inter alia—“(1) The defenders being bound to grant a lease in terms of their agreement, the pursuer is entitled to decree. (2) In the event of the minute of agreement being held to be not duly executed or tested, the pursuer is entitled to have these defects remedied in terms of the Conveyancing (Scotland) Act 1874. (3) In virtue of the minute of agreement libelled, and the actings of parties condescended on, the pursuer is entitled to decree.”

The defenders pleaded inter alia—“2. The averments of the pursuer are not relevant or sufficient to support the conclusions of the summons. 8. The document libelled is not obligatory, and the defenders ought to be assoilzied, in respect—(1) that although the said document consists of two separate sheets, it is signed on the last page of the second sheet only; (4) that the said document was intended to be provisional, and to be followed by the execution of a formal lease, and was in fact followed by the execution of such a lease; (5) that it was abandoned and departed from; and (6) that it was never followed by possession, or otherwise acted upon. 6. The formal lease being now reduced and set aside, the pursuer is not entitled to have recourse to the document libelled, or any other provisional or preliminary writings.”

The clauses of the statutes founded on or referred to are quoted in the opinions of the Court.

The pursuer's averments as to the plea of rei interventus and the actings of parties were these—“(Cond. 6) A draft lease was prepared by George Gardner, acting on behalf of the defenders; and, according to an agreement or understanding come to between the pursuer and them, the duration of the lease was extended to thirty-five years. The pursuer's and defenders' said agents afterwards met and adjusted the clauses of the lease. The terms thereof, as prepared by the defenders' agent, were somewhat relaxed from those of Mr Pitcairn's lease, which neither the pursuer nor his agent saw till after the meeting of 7th June 1873. The pursuer and his agent believed that the defenders' agent had their authority to make the said alterations; but the pursuer was quite ready to accept the clauses of Mr Pitcairn's lease, and has been all along willing to execute a lease in terms thereof. The lease so adjusted was submitted to the defenders, and executed by them on 1st and 14th November 1873, and by the pursuer on 2d December thereafter. The pursuer at Whitsunday 1874 obtained entry to the Ballachulish slate quarries, and has since worked the same, and paid the lordships to the defenders, and otherwise implemented the terms of the lease. Cond. 9 The pursuer having made up his mind to enter into a lease, and in reliance on the agreement to grant a lease for a term of years, made arrangements for giving up the business of a flesher, which he had successfully carried on in Glasgow for many years. During the autumn of 1873 he curtailed the said business and gradually withdrew therefrom. He also induced his son John Gardner to wind-up the business of lard and tallow merchant, which was yielding a profit of £1000 per annum, in order to join him in carrying on the Ballachulish quarries, and the said John Gardner during the autumn of 1873 gradually gave up the business, and made arrangements for having it wound up. Further, the pursuer, in reliance on the said agreement, and before the said thirty-five years' lease was completed, engaged John Ferguson as manager

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of the quarries for five years at a salary of £200 per annum, and an agreement to that effect, subject to the condition that the pursuer should become lessee, was entered into between them on 27th October 1873. Captain Lucas, one of the defenders, recommended John Ferguson, who was Mr Pitcairn's manager, to the pursuer, and assisted in arranging terms with Ferguson, and generally took part in the negotiations, and signed the agreement as instrumentary witness. The pursuer was put into possession of the quarries by the defenders as tenant, and bought and paid for one-half of Mr Pitcairn's plant in terms of the agreement. The whole price was £3625, 15s. 2d., of which he paid £2000 at Whitsunday 1874, and the balance on the 14th of December of the same year. Mr Pitcairn's plant consisted chiefly of fixtures, such as tramways, pumps, and drums. The pursuer also during the same year, and before his title was challenged, made roads, tramways, a railway a mile long, cleared out old quarries, made new levels and inclines, erected a pier and buildings, and altogether spent upon fixtures and means of working the quarries upwards of £10, 000. The pursuer likewise during the same period bought large quantities of moveable plant. In these and other ways the pursuer acted in reliance on the said agreement and on his being tenant.”

The Lord Ordinary pronounced the following interlocutor—“Repels the first plea-in-law stated for the defenders: Finds that the writing, dated 7th June 1873, is not a probative deed: Finds that there is no relevant allegation that the said writing has been validated rei interventu: Therefore assoilzies the defenders from the conclusions of the summons, and decerns, ” &c.

“ Note.—The parties concurred in asking the Lord Ordinary to decide certain legal questions which arise on the record before any inquiry was ordered.

The first question is, Whether the writing founded on by the pursuer is a probative writ? It contains a testing clause, to which the defenders stated that there was no ex facie objection; but though of more than one sheet of paper, it is signed on the last page only. The previous pages are however initialed.

The defenders contended that the document is not executed in terms of the Act 1696, c. 15, because it is not signed on every page, and in the opinion of the Lord Ordinary the objection is well founded.

By the case of Thomson, 18 D. 470, affirmed in the House of Lords, 21 D. 3, it is settled that when a deed is written bookwise the solemnities introduced by the Act must be observed in order to the validity of the deed. The provision of the Act is ‘that if they be written bookways, every page be marked by the number first, second, &c., and signed as the margins were before, ’ &c. The question then is, whether every page of the document on which the pursuer founds is signed within the meaning of the Act?

The pursuer contended that the signature on each page is not the subscription by which the granter expresses that the deed is completed, but is only required for the authentication of the different pieces of paper of which it is composed; that the Act prescribes no more than that each page shall be signed as the margins were before; and that prior to the Act deeds were held to be well executed though initialed only.

So far the Lord Ordinary assents to the pursuer's view. The signature of the pages is not, he thinks, the act by which the deed is completed, but is rather to be considered as a means of authentication. But not less does it seem to him that the Act requires the pages to be signed, and the reference to former custom is a reference to a custom of signing the margins. Initialing cannot, it is thought, be held to be signing, especially when it is not pretended that the granter of the deed is in use to subscribe by initials.

But the pursuer maintained that, even if the objection were good under the Act of 1696, it is removed by the 39th section of the Conveyancing Act of 1874. The Lord Ordinary is of opinion that this plea is not well founded. If the document was not probative under the Act 1696, it created no contract and no right in either party. He cannot hold that the Act of 1874 raises up into legal efficacy any document which at the time when it was passed was of no force—See Veasey, 2 R. 748.

2. But the pursuer contended that the informal contract contained in the writing on which he founds was validated by rei interventus. The allegation is contained in the 9th article of the condescendence, and consists of three parts—1st, That he curtailed and gradually gave up his own business as a flesher, and induced his son to give up his business as a lard and tallow merchant in order that he might join with him in working the slate quarries; 2d, that he engaged John Ferguson as manager of the quarries for five years, subject to the condition that the pursuer should become lessee; and 3d, that he entered into possession of the quarries at Whitsunday 1874, and made large expenditure thereon.

The pursuer did not maintain that the first part of this allegation was relevant. But he urged that the fact that he had engaged a manager under a contract for years was of itself sufficient to validate the writing. It is to be observed, however, that the contract is made subject to the condition that the pursuer should become lessee, and there was to be no contract unless the pursuer obtained a binding lease. Things therefore remained entire notwithstanding of the contract.

It was urged that the condition was inserted to meet the reserved right of the defenders to ‘break this agreement on giving notice prior to Martinmas 1873.’ But the condition is general, and cannot, it is thought, be limited to this case only.

The pursuer relied on the possession which he obtained at Whitsunday 1874. But the writing provides that a formal lease ‘embodying the foresaid terms’ shall be completed prior to Whitsunday 1874, which was the term of entry. A formal lease was so prepared, and it was not until it had been executed that the pursuer obtained possession. This lease was afterwards reduced. But it was to it and not to the informal writing that, in the opinion of the Lord Ordinary, the possession is to be ascribed.

The defenders urged as a separate point that the formal lease must be held to supersede the prior contract, and that the pursuer could not revert to the latter after the former had been reduced by reason of his fraud. This is an important question, but the Lord Ordinary does not think it necessary to enter on it.”

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The pursuer reclaimed, and argued—(1) On the question of the validity of the deed with reference to the provisions of the Act 1696 c. 15—The pages were to be signed “as the margines were before.” Now, this marginal signing was a custom, and no solemnity. It was therefore a question whether, in the circumstances of each case, the authentication on the different sheets was sufficient to identify them as parts of the deed. If it was, that was all that could be required. Where, as here, a number of persons joined in initialing the various sheets that was a perfect identification—Menzies' Conveyancing, 97. The cases of Sym v. Donaldson, M. 16, 713, and Ogilvie v. Earl of Findlater, M. 16, 804, showed that there was no custom anterior to 1696 that all the parties should sign at the margins. What was sufficient to identify the whole deed as the act of the granters was in custom to be held sufficient subscription, and it was no more than that custom that was by the Act 1696 applied to the new form of deeds. In the case of M'Donald v. M'Donald, M. 16, 808, the writ was held null because the last sheet contained nothing but words of style, and therefore it could not be identified as part of the same deed as the preceding sheet—cf. also Ferguson v. Burnett, 1 Elchies, Writ No. 22. Further, was subscription by initials not signing? [Lord Peesident—No. A signature is what you usually subscribe. If you usually sign initials, that is your signature, and is sufficient.] But in Grierson v. Grierson, M. 16, 802, all that was asked for by the Court was proof that the initials were signed by the parties; no proof of custom was required.

On this point the defender answered—It was settled law that “signing, ” the word used in Act 1696, c. 15, meant the ordinary subscription of a party. Subscription by initials must, in order to be sustained, be shown to be the ordinary custom of the party, and to have been adhibited by him in the particular case— Forrest v. Marshall, M. 16, 805.

On the question as to the retrospective effect of the Act of 1874, the pursuer argued—This question was left open in Maclaren v. Menzies, July 20, 1876, 3 R. 1151, where a document of this kind, executed after the passing of the Act, was set up, but the Judges there held (v. Lord Mure's opinion) that the Act as a remedial measure must receive a broad interpretation. In Veasey v. Malcolm's Trustees, June 2, 1875, 2 R. 748, Lord Young expressly reserved this question, but pointed out that the old law as to testing of deeds was mischievous. The Court could not therefore regard it with favour. There was not here the difficulty that arose in that case as to rights arising under the previous law. No rights would be trespassed on by sustaining this deed. The preamble of 19 and 20 Vict. c. 89, was illustrative of the effect which the Legislature always intended to be given to a remedial statute. It was said that the clauses of this statute of 1874, which were intended to be retrospective—viz., 11, and 51—had distinct words to that effect, and that where no such words were found the operation of the Act was only prospective. But certain clauses— e.g., 52 and 56—were specially declared to be prospective, so that where there was no special provision made the interpretation must be aided by a consideration of the general clause, viz., sec. 68, which provides that “nothing herein contained shall affect any action now in dependence or that shall be instituted before the commencement of this Act.” The inference from that was that in any action raised subsequently the Act was pleadable.

Then, as to the effect of the words “shall be deemed”—Their effect was explained in Towler v. Chatterton, November 20, 1829, 6 Bingham 258, and in Marsh v. Higgins, April 25, 1850, 9 Manning and Scott's C.B. Reps. 561, 569, and 19 L. J., C. P. 297 (Mr Justice Cresswell's opinion). In Queen v. Mill, 10 Scott's C.B. Reps. 379, and Perry v. Skinner, 2 M. and W. 476, it was laid down that the effect of such an expression as “shall be deemed” was that when the question was raised before a Court they must give effect to the provision of the statute. It laid down an absolute rule for the treatment of the particular case whenever it was brought into Court— Queen v. Leeds and Bradford Railway Company, 21 L.J. 193 (Magistrates' Cases); Pryor v. Pryor, 19 L.R., Eq. 595—on appeal, 10 Ch. App. 469. In the case of Reid, March 31, 1863, 1 Macph. 774, a statute was held retrospective.

On this point the defender argued—Where the clauses of this Act were intended to be retrospective, it was specially so declared, as in sections 11, and 51. The presumption therefore was that where no such provision was expressed the enactment was prospective only. Courts had no doubt recognised Acts as retrospective, but only where (1) privileges were taken from one party and given to another, or (2) where the Court was directed in the ascertainment of rights to take certain procedure. That was the explanation of the cases of Towler v. Chatterton and Queen v. Leeds and Bradford Railway Company. On the law of this matter see Dwarris on Statutes, 540, and Maxwell on the Interpretation of Statutes, 190, and cases there quoted. The rule was that if existing rights and obligations would be affected the Act was not to be retrospective. Now, if it was not to affect existing rights it was not to affect mine. If it was, the Court could not recognise such operation of a statute without express words to that effect.

On the question of rei interventus it was argued for the pursuer—That the expense which he had been at was in consequence of this agreement, and it was not necessary in law that the other party should be aware of it in order to set up an informal contract— Johnstone v. Grant, February 28, 1844, 6 D. 880 (Lord Medwyn's opinion).

The defender answered—All the pursuer's actings were referable to the lease which he afterwards obtained, and which had now been reduced. In order to found the plea of rei interventus the actings must be clearly referable to the contract which was to be set up, and must be such as were naturally to be expected—Bell's Principles.

At advising—