Scottish Court of Session Decisions

Braithwaite Christie, the petitioner, was heir of entail in possession of the estate of Baberton, and Mrs Christie, the respondent, was widow of Alexander Christie, who died on 7th August 1868, and who was the previous heir in possession of the estate.

In virtue of the powers conferred by the 1st section of the Aberdeen Act, 5 George IV., cap. 87, Mr Alexander Christie had granted in favour of the respondent two bonds of annuity, dated respectively 1st December 1864 and 1st April 1867, which, amounting as they did to £375 yearly between them, exceeded the sum of one-third of the free yearly rent or value of the estate which he was entitled to grant.

The free agricultural rental of the estate amounted to £764, 16s. 8d.; the minerals upon it were let to Mr Gowans by a lease dated 26th January and 2d February 1866. The rent was £200 per annum, the first half-year's rent being payable at Lammas 1867 for the half-year preceding, and the next at Candlemas 1868, and so during the currency of the lease. It was further thereby stipulated that the first year's rent should not be exacted, but that if the tenant removed any minerals from the ground during that period, he should pay £100 in name of rent. The lease further contained a break in the tenant's favour on giving six months' notice prior to any term of Candlemas occurring at the end of the third, seventh, or fourteenth year of the lease.

Mr Gowans in 1870 brought a reduction of the lease, on the ground that the minerals thereby let were not workable to profit. That case was decided against him in the Court of Session, on the ground that by the special terms of the contract he had undertaken the risk of profit; and in the House of Lords, upon that ground, and also upon the further ground that there had been no failure of the subject let, and that there was in law no implied warranty that the subjects should be workable to profit. — Gowans v. Christie, Feb. 8, 1871, 9 Macph. 485; H. of L., Feb. 14, 1873, 11 Macph. 1. Mr Gowans accordingly took advantage of the second break in the lease, and put an end to it at Candlemas 1873.

The minerals had not since been let, or worked; and the petitioner averred that there were not now, and never were, minerals on the estate capable of being worked to profit, or, in other words, minerals of any yearly value. The respondent averred that there were then, and were now, minerals in the estate of the yearly value at least of the rent paid by Mr Gowans.

So long as Mr Gowans continued to pay rent for the minerals, no question arose between the parties. An annuity of £300 was paid to the widow, as being one third of the yearly rent or value of the estate, but this sum was made up by including the rent paid by Mr Gowans in the yearly rent or value of the estate; and this rent having ceased to be paid, Mr Christie presented this petition to have the annuity restricted to one-third of the rental of the estate, maintaining that the rent should never have been taken into account.

The sum agreed opnu between the parties as the sum falling to be paid to the respondent, if the mineral rent was included, was £300, whereas if it were deducted the sum would be £242, 4s.

The Lord Ordinary ( Adam) allowed an inquiry as to the value and extent of the minerals in the estate, adding a note, which, after narrating the facts, proceeded:—

Page: 205↓

“ Note.—It appears to the Lord Ordinary that the rule of the statute that the free yearly rent of the lands and estate when they are let is to be taken as determining the amount of the provision, is intended to apply to the ordinary case of agricultural subjects where the present rent affords a sufficiently true criterion of the future value.

But the case of a lease of minerals is essentially different.

In such a case the subject let is consumed in the use, and therefore the rent or lordship payable may afford no criterion of the value of the minerals either at the date of the granter's death or for the future. It is not difficult to see that cases of great hardship must arise to the heir of entail if the principle were to be adopted that where minerals are let the rent or lordship payable must be taken as determining the amount of the widow's annuity. Take, for example, the case of the heir of entail dying when a mineral lease is approaching its termination, and when the minerals are nearly all worked out. In that case if the rent or lordship is included in fixing the amount of the widow's provision the result would be that the heir of entail might have to pay during a long series of years a larger sum to the widow than the whole rents of the estates remaining to him after the expiry of the mineral lease.

In the present case it is an admitted fact that the minerals have not been let, and have been yielding no return since 1873, and the petitioner avers that there are no minerals in the estate workable to profit. If this be so, and if the rent of £200 which was payable by Mr Gowans is taken into computation in fixing the amount of the annuity, the result will be that the present, and it may be future, heirs of entail will be deprived of more than two-third parts of the free yearly rent or free yearly proceeds of the lands. But it is by the 13th section of the Act provided that the powers therein granted shall in no case be exercised to such an extent as to deprive the heir in possession of any entailed lands of more than two-third parts of the free yearly rent or free yearly proceeds of the same.

On the other hand, it may be truly said that it is an equally great hardship on the widow where there are valuable minerals in an estate, but which do not happen to be let at her husband's death, but may be let immediately after, that she should not participate in the rent obtained from them. Whether or not the widow would be entitled in such a case to have the value of the minerals taken into consideration in fixing the amount of her annuity it is unnecessary to determine in this case.

But the Lord Ordinary thinks that when minerals are let at the death of the granter of the provision, if the rent actually paid is not to be taken in computing the amount of the widow's annuity, the only other alternative is to allow an inquiry as to the value and extent of the minerals, and what was the free yearly value of them at that date. In this case the respondent avers that there were valuable minerals in the estate, and the petitioner denies it, so that an inquiry into the facts seems to be necessary.

Although the Lord Ordinary proposes to allow an inquiry into these facts in this case he sees the difficulties attending such inquiries. It may be that there are at the granter's death valuable minerals in an estate, yet if these minerals are capable of being worked out in a few years the result will be that the whole proceeds will go into the pocket of the heir in possession at the time, while if their value be taken into account in fixing the amount of the widow's annuity the burden will be laid not only on him, but on future heirs, who may receive nothing. There is also this further difficulty, that where the minerals, as in this case, are not let, and there is neither rents nor proceeds derived from them, if any value be put upon them in fixing the amount of the provision the result will be that the heir of entail will for the future be liable to pay more than two-third parts of the free yearly rents or proceeds actually received by him, which appears to be contrary to the provisions of the 13th section of the statute. Assuming, however, as the Lord Ordinary must assume, that minerals are to be taken into computation in determining the amount of the provision he sees no other way of extricating the case than by allowing an inquiry as to their value and extent.”

The case was reported under the 6th sec. of the Distribution of Business Act (20 and 21 Vict. cap. 56). The petitioner argued—There must be a reasonable permanency in the return to justify the reckoning of it as part of the rental of the estate— Wellwood v. Wellwood, July 12, 1818, 10 D. 1480—December 20, 1848, 11 D. 248; Douglas v. Scott's Trustees, December 17, 1869, 8 Macph. 360; Sinclair v. Duff us, November 24, 1842, 5 D. 174. Now, here there was no such permanency.

The respondent argued—Mineral rent must be taken into account. Many things much more uncertain and fluctuating had been, e.g., game, in case of Sinclair v. Duffus. Any hardship was obviated by the 13th clause of the statute, which provided that the heir was not to lose more than two-thirds of the rental. The cases of Wellwood and Douglas were cases where the payment was by way of lordship, and the principle adopted there was to take an average of these lordships for a number of years, and hold that to represent the fixed rent. But here you had a fixed rent assigned by the terms of the lease.

At advising—