Defender's Submissions

"So trees and all plants, as the birth of the earth, are carried therewith, while they are growing thereupon, even to singular successors; but if separated or contained in moveable boxes, they are not so carried with the ground as accessories, but are separate moveables. So likewise the natural fruits of the ground as grass and herbs, are carried as the fruit thereof and accessory thereto. But by our custom, corns and industrial fruits are esteemed as distinct moveables, even before they be separated or ripe, and belong not to purchasers of land or heirs."

He referred to Bankton's Institutes, Book 2, paras.9 and 10 where the same proposition is stated. He referred to Bell's Commentaries, Book 5, para.2 where it is stated that:

"Natural fruits, which require not seed and cultivation, are before separation heritable parts of the soil; industrial fruits are moveable, as manufactures, towards the creation which recourse is had to the productive powers of the earth. Woods or natural grass furnish examples of the former; corn of the latter."

He referred to Erskine's Institutes, Title II, para.4 where it is stated:

"For those annual fruits which require yearly seed and industry, as wheat, barley, etc. are accounted moveable even before separation, from the moment they are sown or planted because the seed, and labour in preparing the ground, cannot be said to be employed on the lands for their perpetual use, but for the immediate profit of the possessor."

He referred to Bell's Principles, Chapter 10, para.1473, where it is stated

"So, what is by growth connected with the soil is heritable, as trees and natural fruits not requiring seed and cultivation. There is, however, a general exception of industrial fruits. These go with the property of the seed and labour as manufactures in which the productive powers of the soil are employed."

Mr Summers drew attention to the opinion of Lord Hunter, who referred to Chalmers' Trustees and said:

"In the course of the opinions delivered by the judges both in the Outer House and in the Inner House, certain expressions of opinion were made to the effect that growing crops were partes soli and belonged in property to the landlord and not to the tenant. With reference to these expressions of opinion I do not desire to say anything one way or the other. Certainly I am not to be held as concurring with these views. But so far as the case was concerned, it was not necessary to proceed upon that view at all. You find in the different judgments recognition of the doctrine of Scots law, which is incontrovertible, that the person who sows a crop is entitled to reap it, and in that particular case the contention for the trustee would no doubt have been given effect to but for the circumstance that there were in the lease itself certain very strange conditions, the result of which, according to the view of the court, was that the doctrine of law was inapplicable and that the landlord was entitled, contrary to that doctrine to put forward the claim which he did against the bankrupt's trustee."

Mr Summers next referred to Gunn v Inland Revenue 1955 S.L.T. 266, in which a farmer entered into an agreement for the sale of two farms, included in which were certain areas sown with white crops. The agreement for sale included a condition regulating the position regarding these white crops. It was provided that they were to be taken over by the purchasers at a valuation immediately before harvest. In due course the seller received a further payment in respect of the growing crop. He then found himself in a dispute with the Commissioners for the Inland Revenue as to which year of his accounts this payment should enter into. Mr Summers drew particular attention to the opinion of Lord Sorn at page 269 where he said:

"The maxim messis sementem sequitur has a firm place in the law relating to agricultural operations and a tenant whose lease expires at Whitsunday is entitled, in the absence of any stipulation in his lease to the contrary, to reap the white crop he has sown. I think the position is no different when the cultivator is also the owner and I would suppose that if the contract of sale whereby an owner-occupier sold his farm was silent on the point, the law would imply that he had the right to reap and dispose of his way going crop."

Mr Summers contended that this opinion applied precisely to the circumstances of the case before me. He also referred me to the Sheriff Court case of Trinity House of Leith v Mitchell and Rae Ltd 1957 S.L.T. (Sh.Ct.) 38. In that case heritable creditors of a farmer brought an action of poinding of the ground in December 1955. In May and June 1956 the farmer purported to sell certain crops on the farm to be delivered after harvest in the form of grain to agricultural merchants. In July 1956 the heritable creditors poinded and later sold inter alia the crops under their decree. In subsequent proceedings the agricultural merchants claimed the value of the crops said to have been sold to them. The Sheriff held that the crops were partes soli on the authority of Chalmers' Trustees and found that the crops which the farmer purported to sell were not his to sell but were the property of the heritable creditors along with the land in light of their bond and disposition to which they had asserted a right.

"goods" include all personal chattels other than things in action and money, and in Scotland all corporeal moveables except money; and in particular "goods" includes emblements, industrial growing crops, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale and includes an undivided share in goods.

Mr Summers pointed out that according to this definition industrial growing crops are a species of moveable property. He submitted that this definition is consistent with what was said by the institutional writers. He further explained that the definition of "Goods" as found in the Act of 1893, which pre-dated the case of Chalmers' Trustees, also included industrial growing crops. Mr Summers's submission was that this definition of industrial growing crops as moveable property cut across the views expressed in both Chalmers' Trustees and in the Trinity House of Leith case. He pointed out that there was no reference to the Sale of Goods Act to be found in either of these two cases.

"Trees, plants and other crops accede to the soil in which they grow upon taking root and drawing nourishment. But industrial growing crops do not accede and remain separate items of moveable property for all purposes including sale, succession and diligence."

He referred to Professor Carey Miller's textbook on Corporeal Moveables in Scots Law, at paras.3.04 to 3.08 in which the author endorses the view expressed by Stair and Erskine that industrial growing crops are to be treated as moveable property. He also referred to Professor Gordon's book on Scottish Land Law at paras.5-38 and 5-39 where he sought further support for his proposition that industrial growing crops are indeed properly treated as a species of moveable property. Finally, in this part of his submission, Mr Summers referred me to The Law of Agricultural Holdings in Scotland by Lord Gill. He referred to page 253 where his Lordship explains the application of the principle messis sementem sequitur. He drew my attention to footnote 11 where his Lordship refers to the case of Chalmers' Trustees v Dick's Trustees. In this footnote his Lordship says the following:

"The wider dicta in Chalmers' Trustees to the effect that growing crops are partes soli cannot be supported in view of McKinlay, supra."

(1)  The submission to the effect that industrial growing crops ought to be treated as moveable property had the authority of the institutional writers. It was also supported by what Lord Hunter had said in the case of McKinlay's Trustees and by what Lord Sorn had said in the case of Gunn v Inland Revenue. Further, it had the support of the views of the Professors of Property Law.

(2) That the Sale of Goods Act covers moveables. Accordingly, the property in the industrial growing crop persisted in the hands of the defender in the absence of a specific provision to the contrary.

(3) That the case of Chalmers' Trustees v Dick's Trustees was wrongly decided.

(4) That in any event the case of Chalmers' Trustees could be distinguished from the present case on its facts. The terms of the forfeiture clause in the lease which featured in Chalmers' Trustees played an important part in the court's understanding of the law. The dicta of Lord Lowe and Lord Ardwell were obiter. The dicta were per incuriam in that they failed to notice and discuss an earlier tract of authority including Stair.

For all of these reasons Mr Summers invited me to give effect to the defender's first plea-in-law and to dismiss the action.

(1)               Any item which became fixed to the land acceded to the land and became the property of the owner of the land.

(2)               Things growing in the soil accede to the land.

(3)               All fruits of growing things accede to the land.

(4)               On the sale of land all things forming part of or fixed to the land are conveyed with it.

(5)               In cases between landlord and tenant the common law provides that certain things may be removed by the tenant even although they have acceded to the land.

(6) Industrial growing crops accede to the soil but the tenant or other temporary possessor may harvest them, meaning that a right under a lease would be a real right but not a right in property to crops.

Mr Davies explained that he had a subsidiary argument to the effect that giving vacant possession waived any right to recover the crop, but that his principal argument was that the crops concerned formed part of the land and followed with the disposition. [10] In support of these submissions Mr Davies first referred to the case of Brand's Trustees decided in the House of Lords in 1876 and reported in 1876 S.C. (H.L.) 16. As set out in the rubric, the case decided that when a tenant of minerals under a lease of ordinary duration erected upon the land fixed machinery for the purpose of working the minerals, such fixtures became partes soli and passed with the subjects to the possession of the tenant's heir succeeding to the lease. Mr Davies submitted that this case clarified the law of accession in Scotland. He referred me to the opinion of the Lord Chancellor at page 20 where he said the following:

"I would remind your Lordships that there are with regard to matters of this kind, which are included under the comprehensive terms of the 'fixtures', two general rules, a correct appreciation of which will, as it seems to me, go far to solve the whole difficulty in this case. My Lords, one of those rules is the general well-known rule that whatever is fixed to the freehold of land becomes part of the freehold or the inheritance. The other is quite a different and separate rule. Whatever once becomes part of the inheritance cannot be severed by a limited owner, whether he be owner for life or for years, without the commission of that which in the law of England is called waste, and which, according to the law both of England and Scotland, is undoubtedly an offence which can be restrained. Those, my Lords, are two rules - not one by way of exception to the other, but two rules standing consistently together. My Lords, an exception indeed, and a very important exception, has been made, not to the first of these rules but to the second. To the first rule which I have stated to your Lordship there is, so far as I am aware no exception whatever."

Mr Davies submitted that the test of accession upon the authority of this proposition is one of physical connection, but that there can be cases where a tenant has a right to remove, for example industrial growing crop. He also submitted that no matter how much one looks back to the works of the institutional writers there are cases in which the law is reformulated and the view of the institutional writers no longer subsists. Mr Davies submitted that the case of Chalmers' Trustees was decided in light of the decision in Brand's Trustees and was a case in which the law came to be reformulated.

"I cannot reconcile it to myself that 'property' is used in this and in other authorities in the full sense of the term. A prospective crop after sowing may have such attributes that, to most effects, it may be the equivalent of property, but I do not think that it is property of the tenant. If it is so, it must be so from the day it is sown. There is no particular point in its germination when it becomes what it was not before. Yet it is not poindable in the braid but poindable in the ear. The true position I think to be that, labour having been expended, seed, provided or bought, it has in equity become customary, and therefore part of the common law, to allow the executor of the deceased or the creditor of the bankrupt to follow the sowing and reap the crop as a privilege, which has so much the practical effect of property, that it has come to be regarded and spoken of as property, thought strictly it is not property."

He referred me to the passage at page 768 where His Lordship referred to what was said by the Lord Chancellor in Brand's Trustees and said the following:

"I think that the same chain of reasoning applies to the agricultural crop. When sown it becomes pars soli and naturally irremovable, but the right to sow implies the right to separate or reap, not as an exception to Lord Cairn's first rule, but to the second, and equity extends that exception to the executor and to the creditors. It is exercised by the creditors through the trustee, not because of property strictly so termed vesting in him, but by virtue of the exception enabling him to exercise the privilege for their behoof. The result is tantamount to property, and may popularly be called property, but it is not property."

Mr Davies submitted that all of the judges of the Second Division agreed with the decision of the Lord Ordinary. He referred me in particular to the opinion of Lord Lowe at page 769 where he said the following:

"I agree with the view expressed by the Lord Ordinary that a tenant's right to reap a crop which he has sown is not properly a right of property. The crop until separation is not a moveable property of the tenant, and I do not think that Mr Erskine intended to affirm that it was so. The crop is pars soli but the law recognises the right of the tenant who has sown it, to separate it from the soil, unless he has contracted not to do so."

And to the opinion of Lord Ardwell at page 771 where he said:

"The respondent will be entitled to remove the stock and implements on the farm which were the property of the bankrupt tenant, but with regard to growing crops, these are partes soli, and if by the terms of the contract between the parties all right which the tenant had in or to the soil is now null and void, it appears to me that he cannot claim any growing crop in virtue either of the rule of law embodied in the brockard messis sementem sequitur (which, I may remark is a rule primarily applicable to the right of bona fide possessors and not to those of defaulting tenants) nor can he claim them in respect of any custom or usage in favour of outgoing tenants."

Mr Davies pointed out that Chalmers' Trustees concerned a dispute between a landlord and the permanent trustee on the estate of a tenant. The effect of the tenant's sequestration was to trigger an irritancy clause which voided the lease under which he had a right to the land in question. Mr Davies pointed out that it was not the voiding of the lease which had the effect of transferring property from the tenant to the landlord. The effect of the voiding of the lease was to terminate all of the tenant's rights to manage the land and to deny him the right to return to harvest the sown crop. He pointed out that the judges in the case did not proceed upon the basis that the tenant had any property rights. Mr Davies submitted that the references to which he had drawn my attention were consistent with the institutional writers in that although they referred to industrial growing crop as being moveable, when properly understood they were meaning that it ought to be treated as moveable, and that there are certain rules which give it aspects of being moveable property. He also submitted that it is clear that the right in relation to a landlord and tenant is an equitable right in favour of the tenant. However, he submitted that the question of an owner's right is different. The owner owns both the land and the crop in the soil and accordingly can fix whatever value he wants for both. In these circumstances the same need for an equitable right, he suggested, does not arise. Accordingly, Mr Davies submission was that the case of Chalmers' Trustees established that no property right vested in a tenant because the industrial growing crop was pars soli. In these circumstances he submitted that the case was binding upon me and that I ought to apply its reasoning to the circumstances of the present case.

"It is laid down in the institutional writers that industrial crops are considered to be moveable as they 'go with the property of the seed and labour as manufactures in which the productive powers of the soil are employed', but it is explained in Chalmers' Trustees v Dick's Trustees that the true position is that the crop before separation is pars soli, and, therefore, heritable, but that the tenant who has sown it is allowed by the law to separate and remove it unless he has contracted not to do so."

Secondly, he referred me to Conveyancing Law and Practice, 2^nd ed. by Professor Halliday at paragraph 30.43 where it is stated:

"Where a farm is being purchased with vacant possession the offer should specify the whole fixtures in and upon it and all fixed plant and machinery and all live and dead stock, dung and implements as detailed in an inventory or as specified in particulars of the property as prepared by the seller. Dung made on the farm is heritable. So also are growing crops and standing timber."

Professor Halliday cites Chalmers' Trustees as authority for this proposition and Mr Davies pointed out that he does so without apparent difficulty or criticism. Thirdly, Mr Davies referred to the Law of Landlord and Tenant in Scotland by Paton and Cameron at page 198 where they explain:

"It would appear that before it is reaped a crop is pars soli, but that the tenant who sowed it has a right to reap and remove it when it is ripe. If any diligence is done on the basis that the crop is pars soli which would defeat the tenant's right to remove it, then the creditor who has done diligence is preferred to a subsequent assignee of the tenant's right. If, however, the tenant has validly assigned the right to remove the crop before steps are taken to attach it as pars soli, then the assignee is preferred."

Again Mr Davies pointed out that there was no apparent criticism by the authors of this work of the law as set out in Chalmers' Trustees. Fourthly, Mr Davies referred me to the Principles of Scottish Private Law by Professor Walker, 4^th ed., at pages 6 and 7. Under the heading of Heritable Property, Professor Walker provides as follows:

"Heritable property includes all objects naturally immovable, such as land and minerals, or united to the ground, such as buildings. Trees and annual fruits of the soil are deemed heritable until cut and separated from the soil, when they become moveable; cultivated crops are similarly heritable until harvested, when they become moveable."

For this last proposition Professor Walker refers to Chalmers' Trustees in his footnote and does so indicating that the case corrected Erskine and Bell. Lastly, Mr Davies referred me to Agricultural Law in Scotland by Sir Crispin Agnew of Lochnaw, B.T., Q.C., at page 118. There, under the heading Heritable or Moveable? the author explains the following:

"Whether a right relating to the tenancy is heritable or moveable in succession is of importance in determining what parts of the tenant's estate might be vulnerable to a claim for jus relictae or legitim. A lease is heritable in succession. The tenant's fittings, fixtures and improvements and the right to claim compensation due in respect thereof are heritable in succession. Where a lease terminates before the death, the compensation will be moveable even if paid after the death. The growing crops are heritable in succession until harvested, when they become moveable."

Again for this last proposition the author cites Chalmers' Trustees.

Vacant possession

"Subject to the rule de minimis a vendor who leaves property of his own on the premises on completion cannot in our opinion, be said to give vacant possession, since by doing so he is claiming a right to use the premises for his own purposes, namely, as a place of deposit for his own goods inconsistent with the right which the purchaser has on completion to undisturbed enjoyment."

He also relied on the comments at page 270-271 where his Lordship said:

"Occupation by a person having no claim of right prevents the giving of 'vacant possession' and it is the duty of the vendor to eject such a person before completion. The reason for this it appears to us, is that the right to actual unimpeded physical enjoyment is comprised in the right to vacant possession. We cannot see why the existence of a physical impediment to such enjoyment to which a purchaser does not expressly or impliedly consent to submit should stand in a different position to an impediment caused by the presence of a trespasser. It is true that in each case the purchaser obtains the right to possession in law, notwithstanding the presence of the impediment. But it appears to us that what he bargains for is not merely the right in law, but the power in fact to exercise the right. When we speak of a physical impediment we do not mean that any physical impediment will do. It must be an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property."

Mr Davies submitted that this reasoning had been adopted by the Inner House of the Court of Session in the case of Stewart v Lort-Phillips 1977 S.C. 244 at 253. Mr Davies then submitted that the defender's argument would allow him occupation of three fields with growing crops along with the right to attend to them and to harvest them, during which period of a number of months the pursuers would be excluded. He submitted that the better reading is that vacant possession is inconsistent with any further right to attend to the land. Accordingly he submitted that the defenders retained no right of property in the industrial growing crop after the land had been sold to the pursuers.

Defender's further submissions
[18] In reply Mr Summers, for the defender, submitted that the only tenable reading of the definition of "goods" to be found with the Sale of Goods Act is that industrial growing crops are a species of moveable property. It was clear that the Sale of Goods Act was saying that industrial growing crop were a species of moveable property and therefore capable of being sold without forming part of the heritable property. His position was that no matter what other cases may have said, the Sale of Goods Act makes it clear that industrial growing crops are to be regarded as items of moveable property. He suggested that this appreciation has a radical effect on the power of the authorities. No argument was advanced in relation to the Sale of Goods Act in Chalmers' Trustees. Mr Summers submitted that an inferior court can avoid binding authority when that authority was decided per incuriam. He invited me to decline to follow the case of Chalmers' Trustees on the basis that it proceeded upon a mistaken understanding of law in that there had been a fundamental failure to notice a statutory definition. Mr Summers did not accept that the clause allowing vacant possession limited the exercise of a right to return to reap the crop. He argued that the English case of Cumberland Consolidated Holdings Limited v Ireland was not in point. He said that the current case was not about a breach of a clause undertaking to provide vacant possession. He submitted that Lord Sorn in Gunn v Inland Revenue was the only judge to have considered a situation similar to that found in the present dispute.

Discussion

All of this is of course consistent with what one finds in the report itself. At page 769 Lord Low states:

"Dick became bankrupt on 20^th April 1908, and in terms of the lease his tenancy then came to an end, and the question which we have to determine is whether Dick (or his trustee) was entitled to the corn crop of 1908, which had been sown prior to the date of the bankruptcy, and the hay crop of the first year's grass?

The answer to that question depends upon the construction of the clause in the lease which provides for the event of the tenant's bankruptcy."

At page 771 Lord Ardwall stated:

"The decision of the question between the parties depends upon the effect of the clause of the lease which is quoted at the commencement of the Lord Ordinary's interlocutor."

At page 772 Lord Dundas stated:

"The question turns entirely upon the proper construction to be put upon a somewhat peculiar, and very stringently expressed, clause in this lease"

Although it was urged upon me that the Sheriff in the case of Trinity House of Leith had accepted the relevant comments in Chalmers' Trustees as being binding, I can detect in the report no consideration or analysis of whether their Lordship's comments were obiter or otherwise.

"We observe that there is an endeavour in the defender's case to assimilate the case of growing trees to that of an ordinary crop. There is no similarity. The difference is clear, and has been long well-known; and we think it important to set down at once the settled general doctrine of the law, in which that distinction is precisely incorporated, as it is delivered by our leading authority Mr Erskine. He informs us of the state of our law in the following clear passage, ..."

Their lordships then quoted the passage from Title II paragraph 4 relied upon by Mr Summers. Having done so, at pages 1305/6 they went on to say

"The importance of this passage lies in the principle involved in it; and we cannot but think, that if due respect had been paid to it, some part of the argument at least in the defender's case, would scarcely have been presented to the Court. The difference between annual crops and growing forest trees had been settled - entirely settled - very long before any opening for the argument in the present case arose."

At advising Lord Medwyn gave the leading opinion of the Court in which was included the following passage:

"I think the difficulty which has arisen is in not sufficiently distinguishing the case of trees - full blown timber - from the industrial fruits of the ground, which are reared by yearly sowing and industry on the one hand, and on the other, from a working coal or stone quarry. Trees, while attached to and unseparated from the ground, are reckoned partes soli. They are heritable as to succession, and pass to the heir as much as a house built on the ground, or any other fixture placed upon it. It is an exception from this fundamental rule, that industrial fruits which are intended for the immediate profit of the proprietor, and not for the use of the ground, are accounted moveable even before separation, from the moment that they are sown or planted."

Accordingly the views of the institutional writers, as founded upon by Mr Summers, were given comprehensive support in 1840. Although the case of Brand's Trustees was an appeal from the Court of Session the fact that Paul v Cuthbertson is not mentioned appears to me to vouch the proposition that their Lordships were not concerned with that line of authority.

"But I think there are two cases to which I may refer shortly - the cases of Cathcart v Shaw and Veitch of Elliock. In both of these cases a contract of sale of growing wood executed by an heir of entail in possession ceased to have any effect or value on the moment of the death of the heir of entail in possession, and that of course rests upon the law which was so clearly stated in Paul v Cuthberston, that while ordinary industrial crops which are sold and consumed from year to year are moveable before separation, trees which are intended to be parts of the ground for generations, and part of the soil, cannot be conveyed so long as they are still growing, excepting as part of the land"

The particular relevance of this decision is its date, namely 1912, three years after the decision in Chalmers Trustees. Despite all that had been said, Lord Kinnear clearly found that the authority of the decision in Paul v Cuthberston remained undiminished.