Scottish Court of Session Decisions

Robert Christie, heir of entail in possession of the estate of Durie, let to the Fife Coal Company, Limited, two coalfields on the estate of Durie. The tenancy of the West Field originally stood on a lease beginning in 1879 and ending at Martinmas 1907, but it was modified as regards amount of royalties, &c., by a lease dated in 1888, which extended the term of endurance to Martinmas 1917. The tenancy of the East Field depended entirely on the second lease of 1888

Robert Christie died on 27th August 1896, and was succeeded in the entailed estate by his son Robert Maitland Christie. On 26th October 1896 the Fife Coal Company intimated that they gave up the lease of the East Field as at Martinmas 1897, and on the following day the renunciation was accepted on behalf of Mr Christie, but on the footing that it included the clauses making alterations on the lease of the West Field. The Fife Coal Company, on the other hand, maintained that their intimation referred solely to the East Field, and that the clauses in the lease of 1888 referring to West Field remained unaltered.

Thereafter, on 24th February 1898, Robert Maitland Christie raised an action against the Fife Coal Company to have it declared that the lease of 1888 had been renounced and relinquished, and had terminated and come to an end wholly and in all the clauses therein contained at the term of Martinmas 1897, or alternatively to have it declared that Robert Christie as heir of entail was not entitled to grant the lease, and that the same was invalid and not binding on the pursuer, and to have the lease reduced. In this action the Fife Coal Company lodged defences.

After the case had been sent to the procedure roll, a meeting took place on 2nd September 1898 between the pursuer and the defenders in order to try and settle the points of difference between them. On that day the pursuer addressed and delivered to the defenders a letter containing an offer in the following terms:—“As arranged at the meeting with your directors to-day, I hereby agree to grant your company a new lease of the West Field under the following conditions:—(1) The termination of the lease to be at Martinmas 1922.” The other conditions referred to the amount of royalties and wayleaves, but no mention was made of a term of entry. On the same date the defenders endorsed on the pursuers' letter a docquet agreeing to the conditions proposed by the pursuer, and wrote to the pursuer with a copy of his own letter and the endorsement. In their letter the defenders said—“As arranged between you and the chairman of the company, intimation of the withdrawal of the action by you against this company will be forthwith made, and I beg to confirm the arrangement he made with you that this company is to pay £50 towards your expenses in said action, this company to pay its own costs.”

The pursuer acknowledged receipt of that letter in his reply of 5th September, which concluded thus—“On receipt of the £50 the withdrawal of the present action by me against your company will be forthwith made.” He at the same time expressed the view that the lease agreed on was to commence to run from the date at which the old original lease of the West Field ended, viz., Martinmas 1907, and that until that date the company were bound to fulfil the obligations of the original lease. To this letter the defenders replied on 9th September dissenting from these views as quite erroneous. On 5th September the defenders sent the pursuer their cheque for the £50, and on the following day the pursuer wrote acknowledging receipt of their cheque, and added—“I have instructed my agents Messrs Mylne & Campbell to withdraw the present action raised by me against the Fife Coal Company.” Some correspondence followed, in which each of the parties maintained their respective views of the agreement come to by the offer and acceptance of 2nd September, and ultimately the pursuer returned the cheque for £50.

Thereafter the defenders lodged a minute moving the Lord Ordinary ( Stormonth Darling), on consignation of £50 being made by them, to dismiss the action on the ground that it had been compromised. The defenders put in answers opposing the motion, on the ground that either the agreement come to between the parties was that the action was to be withdrawn on the pursuer granting a new lease to begin at the expiry of the original lease of the West Field, or alternatively that there was no completed agreement between the parties for the settlement of the action.

On 15th March 1899 the Lord Ordinary pronounced the following interlocutor:—“Having considered the minute for the defenders and answers thereto for the pursuer, refuses the defenders' motion to dismiss

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the action: Finds neither party entitled to expenses in connection with said minute and answers, and of new appoints the cause to be put to the procedure roll.”

Note.—“The defenders ask me to hold that this action was settled by offer and acceptance dated 2nd September 1898, and their motion is that on consignation by them of £50 I should dismiss the action.

The parties met on that day, and there is no doubt that they intended to settle the action, and believed that they had done so, for on 6th September the pursuer accepted from the defenders a cheque for £50 as the stipulated contribution which they were to make towards his expenses, and instructed his agents to withdraw the action. But the parties very soon discovered that they were at variance as to the terms of settlement, and the cheque was returned. The question thus raised is one of construction of the offer and acceptance. If the interpretation of either party is clearly and undoubtedly right, the action has been settled on the terms so contended for. If, on the other hand, the document is ambiguous, the parties were not at one, and the action is not settled.

It is necessary to consider what they were fighting about. The defenders were tenants of two coalfields on the estate of Durie. The tenancy of the West Field originally stood on a lease beginning in 1879, and ending at Martinmas 1907, but it was modified in certain particulars by a lease dated in 1888, which extended the term of endurance to Martinmas 1917. The tenancy of the East Field depended entirely on this second lease of 1888. In 1896 the defenders intimated that they gave up the lease of the East Field as at Martinmas 1897, and the pursuer accepted this renunciation, but on the footing that it included the clauses making alterations on the lease of the West Field. The defenders, on the other hand, maintained that their intimation referred solely to the East Field. This was the question raised by the action. Both parties agreed that the defenders were to be no longer tenants of the East Field, but they differed as to the instrument under which the defenders were to continue tenants of the West Field.

That being the nature of the lis, the attempted settlement proceeded on the footing that a new lease of the West Field was to be granted on certain conditions, and was to terminate at Martinmas 1922. But it omitted to say when the new lease was to begin. The pursuer says that he understood it was to begin at Martinmas 1907 on the termination of the old lease of 1877. The defenders, on the other hand, say that they understood it was to begin as at Martinmas 1897 (when the tenancy of the East Field was relinquished) or at all events not later than Martinmas 1898, being the first term after the date of the settlement.

Now, my impression is that the defenders' view is the more probable and reasonable of the two. But that is not enough to entitle me to hold that the parties were at one. For that purpose I should have to be satisfied that the pursuer's view was wholly and absolutely inadmissible. And I am not prepared to go so far as that. Both parties are to blame for leaving so important a point as the commencement of the new lease to inference and conjecture. The mere fact that the defenders are driven to suggest alternative dates is significant of the looseness with which the so-called agreement was drawn. I must therefore refuse the defenders' motion, but inasmuch as I think both parties responsible for the bungle, I shall find neither party entitled to expenses.”

The defenders reclaimed, and argued—The question was, Did the parties enter into a compromise? It was quite plain that they did. A contract of compromise must be construed like any other contract. The question of compromise was quite distinct from the question, What were the terms of the settlement? The parties might differ as to the terms of the settlement, but the settlement was there all the same. It might be pointed out, however, that the Lord Ordinary thought their view of the terms of the settlement the more reasonable. The pursuer maintained that the disagreement between parties as to the date of the commencement of the lease vitiated the contract. This was not so. The want of a term of entry did not vitiate a tack. If not expressed the lease would be presumed to run from the date of the lease or the following term of Whitsunday or Martinmas—Stair, ii. 9, 26; Ersk. ii. 6, 24; Bell on Leases, i. 213; Hunter on Landlord and Tenant, ii. 204; Rankin on Leases (2nd ed.), 314; Oliphant v. Peebles, Dec. 4, 1629, M. 11,535; Seton v. White, Nov. 13, 1679, M. 15,173. On these authorities, therefore, if the lease were made in terms of the agreement of 2nd September, the lease would be valid. The compromise being in writing must be construed by its terms: it was incompetent to vary it by parole proof— Hamilton & Baird v. Lewis, Nov. 15, 1893, 21 R. 120. The action being compromised it ought to be dismissed.

Argued for pursuer—The Court must take into consideration the circumstances in which the action was compromised. The parties did not differ as to the meaning of the terms of the compromise; they differed as to the terms themselves. The defenders argued that in no case could the want of a term of entry vitiate a tack. But the authorities on which they relied were all based upon two ancient cases— Oliphant, supra, and Seton, supra. Neither of these cases had the least resemblance to the present. Both were cases in which the lease was followed by rei interventus. In the present csae there were no rei interventus. There had been no consensus in idem, and therefore no contrAct — Lang v. Kerr, Anderson, & Co., Feb. 26, 1878, 5 R. (H.L.) 69. Even if there were a presumption that where no term of entry was mentioned in a lease, the lease ran from its date or from the next term thereafter, that presumption might be redargued. The correspondence and what passed at the meetings between the parties showed that the presumption did not apply in this case.

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