Scottish Court of Session Decisions

954 CASES DECIDED IN THE [fourth series.

No. 177.

July 18, 1895.

Marshall v. Callander and Trossaehs Hydropathic Co., Limited.

1st Division.

Ld. Kyllachy.

William Hunter Marshall, Pursuer (Respondent).-C. S. Dickson-

John Wilson.

The Callander and Trossachs Hydropathic Company, Limited,

Defenders (Reclaimers).-Asher-W. Campbell.

The Eagle Property Company, Limited, Defenders (Reclaimers).-Deas.

John Wilson, Defender.-Craigie.

Superior and Vassal-Personal obligation in feu-contract-Disposition of feu after obligation has become prestable-Liability of old and of new vassal.-An obligation by a vassal under a feu-contract, which has once become prestable, cannot be discharged without the superior's consent, even although a new vassal has subjected himself to the same liability by entering with the superior while the obligation is still unperformed.

A proprietor by feu-contract disponed certain subjects to a company " and its successors and assignees whomsoever," and under the provision, inter alia, "that the company and its foresaids" should be bound to erect buildings suitable for a hydropathic establishment of not less value than £15,000, and to uphold buildings of that value in all time coming, and to keep the same insured against fire to the extent of not less than that sum, and in case the said buildings should be destroyed by fire, or part thereof, to rebuild the same or the part destroyed so as to maintain the total value of £15,000. Buildings were erected of the stipulated value, and insured. On 7th November 1893 they were destroyed by fire, and on the 27th November the superior raised an action against the company for performance of the obligation to rebuild. Before defences were lodged the company, by a duly recorded disposition, conveyed the subjects to a third person, who was thereafter made a party to the action. The company then pleaded that, as they were no longer vassals in the feu, they were not liable in performance of the obligation. Held (1) that the obligation having become prestable during the company's tenure continued to be binding on them, and (2) that the company's disponee was also liable, in respect that the obligation was a condition of the grant remaining unfulfilled during his possession of the subjects.

By feu-contract dated 23d February and 2d March 1881, and recorded 2d March 1882, William Hunter Marshall, the heritable proprietor of the estate of Callander in the county of Perth, disponed a part of his lands extending to about 30 acres, to and in favour of the Callander Hydropathic Company, " and its successors and assignees whomsoever, heritably and irredeemably, but always with and under the obligations, provisions, declarations, reservations, restrictions, irritancies, and others hereinafter mentioned."

The deed contained, inter alia, the following provisions:-

" That the company and its foresaids shall be bound and obliged to erect in conformity with plans and elevations to be approved in writing by the first party or his foresaids, or his or their architect for the time, upon the said intended feu, within thirty-six months from the term of entry hereinafter mentioned, a building or buildings suitable for a hydropathic establishment, and of not less value than £15,000, sterling, and that the company

vol. xxii] COURT OF SESSION, &c. 955

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

shall be bound and obliged to uphold buildings of that value in good order and repair in all time coming, and to keep the same constantly insured with a good and established insurance company to the extent of not less than £15,000 against loss by fire, and in ease the said buildings are, or any part thereof is, destroyed, to rebuild the same or the part destroyed so as to maintain the total value of £15,000."

Entry was to be " as at the term of Whitsunday 1878, notwithstanding the date hereof, to be holden the said subjects, teinds, and others, by the company and its foresaids, of and under the first party and his foresaids, as superiors of the same, in feu-farm, fee, and heritage for ever, for payment of the feu-duty, and further or additional payments after mentioned, but always with and under the obligations, provisions, declarations, reservations, restrictions, irritancies and others before specified."

On the other part the Company bound itself " and its successors whomsoever in the said subjects "to pay a yearly feu-duty of £213. " And further, the company binds and obliges itself and its foresaids to implement and perform the whole other obligations, provisions, declarations, and others herein contained incumbent on them."

In implement of their obligation the company erected the buildings of a hydropathic establishment at a cost of about £40,000.

In 1885 the company sold the subjects to the Callander and Trossachs Hydropathic Company, Limited, who entered into possession and continued to conduct the business of a hydropathic establishment until 7th November 1893, when the buildings were almost totally destroyed by fire.

At the date of the fire the buildings were insured by the Callander and Trossachs Hydropathic Company.

On 27th November 1893 Mr Marshall raised an action against the Callander and Trossachs Hydropathic Company, concluding for declarator of the defenders' obligation to rebuild, and for specific performance. There was also a conclusion for interdict against the application of the insurance money to any other purpose than that of rebuilding. The summons contained warrant to arrest and inhibit.

In consequence of a correspondence which passed between Messrs J. & J. Turnbull, W.S., the pursuer's agents, and Messrs Simpson & Mar-wick, W.S., the defenders' agents (which is set out in the opinion of the Lord Ordinary (Kyllachy) appended to the interlocutor of 1st March 1895, and which for the purposes of this report need not be fully detailed), the summons was not called until 23d January 1894, and defences were not lodged until 7th February 1894.

On the 7th February 1894 the defenders' agents sent a notice of change of ownership of the subjects to the pursuer's agents, from which it appeared that the defenders had by a disposition dated 2d and recorded 6th February 1894, conveyed the subjects to the Eagle Property Company.

The pursuer with reference to this transaction stated that the disposition was granted by the defenders fraudulently and in bad faith, with the view of attempting to defeat the pursuer's rights and claims against them under the feu-contract, and that the Eagle Property Company had a subscribed capital of only £1250.

The defenders pleaded, that in respect " that they are not now feuars under the pursuer of the subjects referred to on record," they were entitled to absolvitor.

Thereafter on the case being put out in the Procedure Roll, the Lord Ordinary (Kyllachy), on 28th June 1894, sisted process in hoc statu.

On 9th October 1894 a further notice of change of ownership was given by the defenders' agents, in respect of a conveyance of the subjects

956 CASES DECIDED IN THE [fourth series.

No. 177.

July 18, 1895.

Marshall v. Callander and Trosaachs Hydropathic Co., Limited.

by the Eagle Property Company to John Wilson, designed as a house-factor, Glasgow.

On 30th October 1894 the pursuer raised a supplementary action, in which he called as defenders the Callander and Trossachs Hydropathic Company, the Eagle Property Company, and John Wilson, concluding for declarator " (first) that the Callander Hydropathic Company, Limited, now dissolved, and the defenders the Callander and Trossachs Hydropathic Company, Limited, the Eagle Property Company, Limited, and John Wilson, have been from the dates of their respective infeftments . . . vassals in succession, and that the said John Wilson now is vassal of the pursuer in the lands, subjects, and others " contained in the feu-contract between the pursuer and the Callander Hydropathic Company, " and (a building or buildings suitable for a hydropathic establishment of not less value than £15,000 having been erected by the said Callander Hydropathic Company, Limited, on the subjects contained in the said feu-contract in terms of said feu-contract) that the defenders . . . became personally bound by virtue of the said feu-contract and of their said infeftments to uphold buildings of the foresaid value of £15,000 upon the ground of the said subjects in good order and repair during the respective periods of their tenure of the same as vassals foresaid, and to keep the same constantly insured . . . during the respective periods foresaid, to the extent of not less than £15,000, against loss by fire, and in case the said buildings were, or part of them was, destroyed, to rebuild the same or the part destroyed, so as to maintain the said total value of £15,000; and further (second) it ought and should be found and declared, by decree foresaid, that the said building or buildings so erected by the Callander Hydropathic Company, Limited, were wholly or almost wholly destroyed by fire on or about 7th November 1893, while the said-subjects were feudally vested in the defenders the said Callander and Trossachs Hydropathic Company, Limited, that they have not been rebuilt either wholly or in part," by the defenders or any of them; that the buildings were insured by the Callander and Trossachs Hydropathic Company for £15,000; that £14,000 had been recovered by them; and that no part of that sum had been applied in rebuilding the subjects.

The summons contained seven other conclusions, but it is unnecessary to give the terms of these in detail, the general purport of them being that the defenders, all or some one of them, should be ordained to rebuild the subjects, or expend the insurance money in rebuilding, or should pay damages,

It was admitted that, at the date of the fire, the buildings were insured, and that the defenders the Hydropathic Company had recovered the insurance money, which amounted to about £14,000.

The pursuer averred that the disposition to the defender Wilson did not follow upon a bona fide sale; and that none of the defenders had taken any steps to rebuild.

The pursuer pleaded;-(1) The whole defenders are liable to implement the provisions of the feu-contract as to building or repairing in respect of the obligations incumbent on them by reason of their respective infeftments; and further, in respect (a) that the Callander and Trossachs Hydropathic Company, Limited, were heritable proprietors of the piece of ground in question at the time when the said fire took place, and that the obligation to restore or build had become prestable from them as vassals prior to the transference of the feu to the other defenders ; and (5) that the defenders the Eagle Property Company, Limited, and John Wilson respectively acquired the said piece of ground in the knowledge that the said obligation was prestable; or otherwise (c) that

vol. xxii.] COURT OF SESSION, &c. 957

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic, Co., Limited.

each of the said defenders acquired and held the said piece of ground in trust for or for behoof of the said Callander and Trossachs Hydropathic Company, Limited.

The defenders the Callander and Trossachs Hydropathic Company pleaded;-(3) The obligations in the feu-contract founded upon not being natural or essential conditions of the feu, did not transmit against the defenders as singular successors. (4) Separatim, Assuming the defenders to have been bound by said obligations, they are not now liable to implement the same in respect of the recorded conveyance to the Eagle Property Company, Limited, duly followed by notice of change of ownership.

The supplementary action having been conjoined with the original action, the Lord Ordinary (Kyllachy), on 7th December 1894, allowed the pursuer a proof of his averments which were directed against the good faith of the transactions on which the defences were founded, but in the view taken by the Court of the rights of parties it is not necessary in this report to refer to the evidence.

On 1st March 1895 the Lord Ordinary (Kyllachy) pronouneed this interlocutor:-

" Finds it unnecessary to dispose of the conclusions of the original summons: Finds it also unnecessary to dispose of the third, fourth, fifth, and sixth conclusions of the supplementary summons, signeted 30th October 1894, and dismisses the same: Finds and declares in terms of the first and second declaratory conclusions of the said supplementary summons, and decerns and ordains the whole defenders, jointly and severally, forthwith to proceed to rebuild the buildings of the hydropathic establishment which were erected on the subjects contained in the feu-contract referred to in the summons in terms thereof, and which were, on or about 7th November 1893, destroyed by fire, and that to the extent necessary to maintain said buildings as of the total value of £15,000-said rebuilding to be commenced within three months of the date hereof, to be duly proceeded with to the satisfaction of John Dick Peddie, architect, Edinburgh, and to be completed to his satisfaction within two years from the date hereof: Quoad ultra continues the cause," &c.*

* " Opinion.-The pursuer here is the superior of a certain feu in the outskirts of Callander, which he gave off in the year 1881 to the Callander Hydropathic Company, Limited, and upon which that company erected a hydropathic establishment, which was burned down in November 1893.

" The present action is brought for the purpose of enforcing implement of certain obligations in the feu-contract by which the feu was constituted; and, speaking in the meantime generally, the object is to compel the re-erection upon the ground of buildings suitable for a hydropathic establishment, or at all events buildings having a value of not less than £15,000.

" It is not necessary to recite the clauses in the feu-contract by which the said obligations are imposed. They come shortly to this-(1) that the feuars shall, within a certain time, erect buildings of the value of £15,000, suitable for a hydropathic establishment; (2) that they shall uphold buildings of that value in good order and repair in all time coining; (3) that they shall keep the same constantly insured for at least £15,000; (4) that in case the said buildings or part thereof may be destroyed by fire, they shall rebuild the same or the part destroyed, so as to maintain the total value of £15,000. All these obliga-gations are made conditions of the feu-right. They are expressed as such in the dispositive clause ; they are made part of the reddendo ; and the feuars bind themselves and their successors whomsoever in the subjects to implement and perform them. Beyond doubt therefore they run with the lands, and when they emerge by the occurrence of the event contemplated, they give rise to a personal action ex contractu at the instance of the superior against the feuar for the

958 CASES DECIDED IN THE [fourth series.

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

The defenders reclaimed.

The Callander and Troasachs Hydropathic Company argued;-The decree was against three defenders, jointly and severally, to implement the same obligation, although one only was in possession of the subjects. That was a novelty and against the principles of feudal law. The Court would not grant a decree ad factum prœstandum, the implement of which necessitated interference with land, against a person who was not the owner of and had no right to enter upon the land. The Lord Ordinary had confused the present question with that of the liability for arrears of feu-duty, to which the defenders did not assimilate the obligation here. For there was no doubt that the old vassal remained liable for these, but then there was this vital distinction, that the new vassal did not also become liable for them,1 but only for the future feu-duties. In the same way past arrears were so disjoined from the right of superiority that they descended on the superior's death to his executor.2 The obligation to pay feu-duty was a several obligation, the liability of each vassal being commensurate with the duration of his possession, and it required an express

time. I say ' feuar,' because, although the point is not probably in this case material, the personal obligation attaches not only to the proper vassal for the time, but also to any subvassal or disponee, infeft or in possession, under a title derived from the feu-contract-Hyslop & Shaw, 1 Macph. 535 ; Marquis of Tweeddale's Trustees, 7 R. 620.

" The present defenders, the Callander and Trossachs Hydropathic Company, are disponees and successors of the Callander Hydropathic Company, the original feuars. The latter company, it appears, expended about £40,000 in the erection on the feu of the buildings contemplated, but their enterprise having been unsuccessful, they, in 1887, sold and disponed the subjects for the sum of £10,000 to the present defenders, who duly took infeftment, and thereby entered with the superior and possessed the subjects until November 1893, when, as I have said, the buildings were wholly-or almost wholly-destroyed by fire. Upon that occurrence the obligation to rebuild of course became prestable, and the premises having been kept insured in terms of the feu-contract, the defenders obtained from the insurance company the sum of £14,000, which was available, if they chose, for performing their obligation. They seem, however, to have conveyed to the pursuer some distrust as to their intentions, and accordingly he, on 27th November 1893, brought against them the action, which was the first step in this litigation. In that action he concluded for declarator of the defenders' obligation to rebuild, and for specific performance. He also concluded for interdict against the application of the insurance money to any other purpose. But that conclusion has not been pressed, and does not require to be considered.

" It is not maintained-at least it has not been seriously argued-that when the pursuer's action was thus raised, the defenders had any good defence to the demand made. They were the pursuer's vassals when the obligation to rebuild arose ; they still held the feu ; there was, in short, no obstacle to specific performance. Accordingly it may, I think, be taken as at least more than probable that, if the pursuer had pressed his action he must, before the occurrence of any change in the situation, have obtained decree against the defenders ad factum prœstandum.

" In point of fact, however, the pursuer did not do so. He was induced to delay by certain assurances to which I shall presently refer; and, in the meantime, there occurred certain transactions which on the one hand are said to have altered the situation and armed the defenders with a defence, and on the other hand are said to have been of the nature of a fraudulent scheme to defeat the pursuer's rights. In the view which I take of the case it is not necessary to

1 Rollo, 1629, M. 4185.

2 Ersk. Inst. ii. 2, 7.

vol. xxii.] COURT OF SESSION, &c. 959

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

stipulation to extend that liability.1 The obligation to rebuild, however, was essentially different, and the whole obligation transmitted, just like the other contractual obligations of the feu, to the new vassal.2 The decision in the Police, Commissioners of Dundee v. Straton 3 went entirely upon the special terms of the obligation, which bound the vassal "and his heirs, executors, and successors whomsoever, conjunctly and severally." It could not alter the character of the obligation that it had become prestable before the transference of the feu. A judicial demand had no effect in debarring the defenders from selling. They could not have been interdicted. There. was no litiseontestation,-though that would have made no difference,-for the conveyance had been only recorded before defences were lodged. Besides the declaratory conclusion that Wilson was vassal was inconsistent with the plea that the conveyance was bad. The ratio of the pursuer's case was that the feu with all its conditions

characterise these transactions. As, however, they give rise to the only question which is involved in the case, it is necessary that I should state what they were.

" The pursuer, as I have already said, raised this summons on 27th November 1893. Shortly after, on 4th December, he (or rather his agents) received a letter from the defenders' agents, in which they complained of his action as premature, and went on to say, ' the company has no intention of refusing to implement the obligations in the feu-contract, and your client has had no reason to infer the contrary.' To this the pursuer's agents replied on 5th December,-' In compliance with your request we shall delay calling the summons for a few days in the hope that matters may he arranged without further proceedings.' Negotiations thereupon ensued, which appear to have been directed to a pecuniary commutation of the pursuer's claims, and these negotiations continued until 19th January 1894. It is not necessary to go into particulars, but on 23d December the defenders' agents wrote with respect to a proposed modification of the pursuer's terms,-' We will communicate the modification to our clients. On the correspondence between us they have come to the decision that the terms offered by Mr Marshall are quite unacceptable.' They did not again write until 19th January 1894, when they wrote as follows,-' We refer to our letter to you of 23d ulto. Our clients have not seen their way to depart from their decision formerly iutimated, and they now desire to have the inhibition used on the dependence of the action recalled.'

" It may probably, therefore, be taken that the pursuer, who might have called his summons on 5th December, was led to delay doing so until 19th January by the dependence of negotiations, which at least commenced on the footing that the defenders had, as expressed in their agents' letter, no intention of refusing to implement the obligations of the feu-contract. In point of fact the summons was called on 23d January, with the result that defences became due on 2d February.

" Now, the use which the defenders made of the delay which thus occurred was this : As early as the 14th December, when the pursuer's pecuniary terms had been tabled, the company's agents entered into communication with certain law-agents in Glasgow, asking for any suggestion ' whereby we may defeat a rapacious superior,' and pointing to the possibility of finding some third party who might be willing to become owner of the feu. A correspondence followed on which I prefer not to dwell, but the upshot of it was that a bargain was ultimately concluded, whereby a certain Mr Niven agreed on behalf of a property company to take over the feu, and all the obligations connected with it, for a sum of £1500, it being, however, stipulated that the defenders' company should defend the pursuer's action, and that, if the defence failed, the whole

1 Alton v. Russell's Executors, March 19, 1889, 16 R. 625.

2 Macrae v. Mackenzie's Trustee, Nov. 20, 1891, 19 R. 138.

3 The Police Commissioners of Dundee v. Straton, Feb. 22, 1884, 11 R. 586, Lord Kinnear, p. 589, Lord President, p. 590.

960 CASES DECIDED IN THE [fourth series.

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

had been transmitted to the new vassal. How then could the obligation. to rebuild, which was one and indivisible, be broken up or made twofold and be laid both on the old and on the new vassal? The new vassal was bound just and only because the undischarged liability of the old vassal had been transmitted to him along with the feu. The Conveyancing Act, 1874 (37 and 38 Vict. cap. 94), sec. 4, subsec. 2, shewed that the personal liability of the old vassal to implement the conditions of the feu, except as regarded feu-duty, which was specially provided for, was extinguished as soon as notice of change of ownership was given.

The defenders the Eagle Company adopted the foregoing argument.

Argued for the pursuer;-The Lord Ordinary was right. The obliga-tion to rebuild having become prestable, the vassal could not get rid of his liability by parting with the subjects. The 1874 Act made no differ-ence on the rights of parties. Under the old law the superior might,- if that had been necessary,-have protected himself in entering the Eagle Company by reserving his claims against their author, and such a reserva-tion was assumed therefore in the case of an implied entry under the statute.1 The question really depended on the construction of the feu-

transaction should be at an end-the £1500 being repaid, and the property reconveyed to the defenders. This bargain was concluded on 21st December, and simultaneously, or shortly afterwards, Niven concluded a corresponding bargain with a company called the Eagle Property Company, the only differ-ence being that that company received only £500 out of the £1500, the remain-ing £1000 being, as it appears, divided between him (Niven) and a Mr Stark, who seems to have been the managing director and law-agent of the Eagle Com-pany. The Eagle Company was undoubtedly a suitable company for the pur-pose in view. Its whole subscribed capital was £1500; its paid-up capital was about £700; and its shareholders were about a dozen persons-all, I gather, more or less identified with the managing director. The company, however, such as it was, undertook to accept a disposition of the feu and become the pur-suer's vassals.

" The bargain, however, although thus made towards the end of December, required some time to enable it to be carried out; and it so happened that the necessary deeds were not completed when the pursuer at length called his sum-mons on 23d January, or even when on 2d February defences fell to be lodged. Unless, therefore, decree was to be allowed to pass in absence, it was necessary to obtain some further indulgence from the pursuer; and accordingly, on 2d February, a week's delay for lodging defences was asked and obtained-the object I need hardly say not being explained-but the request being based on some delay on the pursuer's part in discharging a certain inhibition. The result was that on 6th February there was recorded in the Register of Sasines a dis-position dated 1st February, whereby the defenders disponed their feu to the Eagle Property Company; and the latter company being thus infeft, and entered with the superior, the transaction was completed by sending to the pur-suer, on 7th February, a statutory notice of change of ownership under the Con-veyancing Act of 1874.

" Thereupon, defences were lodged setting forth the defenders' divestiture, and pleading that, being no longer feuars of the pursuer in the subjects referred to, the defenders were entitled to absolvitor. There were also some other pleas, but none which I think have been or could be seriously maintained.

" Whatever, therefore, the value of it all may be, there can be no doubt- (1) That when the pursuer's action was raised, the defenders, the Callander and Trossachs Company were under obligation to rebuild, and had no defence against the pursuer's demand to that effect; (2) that if they have now any defence, it is in respect of a voluntary transaction initiated by themselves after a judicial demand for implement; (3) that, but for the pursuer's delay in

1 Lord Advocate v. Moray, Feb. 16, 1894, 21 R. 553.

vol. xxii.] COURT OF SESSION, &c. 961

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

contract. The obligation to rebuild was in absolute terms. There was no suggestion in the language used that if once exigible from a vassal it should cease to be so in the event of his transferring the subjects. On the contrary, the provision that the vassal should insure was conceived in favour of the superior, and was intended to provide the vassal in pos-session of the subjects, when they were destroyed, with the necessary funds for implementing the obligation to rebuild.1 Nor was there any principle of law or any decided case which warranted the defenders' contention. The obligation having become prestable could not be extinguished delegatione. In Macrae v. Mackenzie's Trustee, the present question was not mooted. The case of the Police Commissioners of Dundee v. Siraton was no doubt very special, but there the opinions of the Judges did not support the defenders' argument.2 There was no reason why there should not be more than one person ordained to implement the obligation. In Hyslop v. Shaw3 the original vassal was held bound, in Clark v. Glasgow Assurance Company 3 the purchaser was held bound, and

calling his summons, and his farther indulgence in the matter of the defences, the transaction in question must have been preceded by litiscontestation, or at all events by decree in absence in the depending action.

" To complete, however, the narrative,-the case having come up for discussion in the Procedure-roll, it became at once apparent that, whatever might be the merits of the defenders' case otherwise, the divestiture of the defenders (assumed at that time to be absolute) was an obstacle-at least to a decree for specific performance. It also appeared that the pursuer's action contained no conclusion for damages. In these circumstances, I was asked to allow a sist in order that the pursuer might consider as to bringing a supplementary action. I did so, and the result was that, after some delay, a supplementary action was brought, which has been conjoined with the original action, and has now become for practical purposes the leading action of the two. It contains a variety of alternative conclusions, directed not only against the original defenders, hut also against the Eagle Company, and against a certain Mr Wilson, to whom, before the supplementary summons was brought, the Eagle Company had it appears disponed the feu.

" The question which I have now to decide is, whether I can give the pursuer decree under one or more of the conclusions of this supplementary summons. I should explain that a record was made up and closed, and that a proof was afterwards led, such proof being necessary to exhaust the case in view of certain averments made by the pursuer impugning the reality of the transactions on which the defence was founded.

" I shall first consider the case of the Callander and Trossachs Company, whom I shall in the meantime continue to call the defenders. The question with them is whether their divestiture in favour of the Eagle Company relieved them of the obligation to rebuild. They maintain that the implied entry of that company, as the pursuer's vassals, discharged them (the defenders) of all obligations under the feu-contract, present or future, prestable or to become prestable, except only arrears of feu-duty, as to which the Act of 1874 makes, they say, an express exception; and they contend further, that, if that is the legal result, it makes no difference whether the divestiture took place before or after the raising of the action, before or after litiscontestation, or before or after final decree, . . .

1 Clark v. Glasgow Assurance Co., 1854, 1 Macq. 668, Lord Ch. Cranworth, 680.

2 Police Commissioners of Dundee v. Straton, Feb. 22, 1884, 11 R. 586; Burns v. Martin, Feb. 14, 1887, 14 R. (H. L.) 20; Aiton v. Russell's Executors, March 19, 1889, 16 R. 625.

3 Hyslop v. Shaw, March 13, 1863, 1 Macph. 535, 35 Scot. Jur. 326; Clark v. Glasgow Assurance Company, 1854, 1 Macq. 668.

3 P

962 CASES DECIDED IN THE [fourth series.

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

apparently if the pursuers in these cases had sued both the past and present vassals they would have got decree against both. There was no inequity in holding the Eagle Company and Wilson liable, for they were well aware of the obligation they were undertaking.

At advising,-

Lord Kinnear .-The question in this case is of general importance, and it is not ruled by any direct decision. But it depends on principles that are clear in themselves and well established. I think the Lord Ordinary has decided it rightly, and I agree so entirely with the reasoning by which his judgment is supported that I have little to add in explanation of my own opinion.

The first and most material question is whether the Callander and Trossachs Company have been relieved by the sale of the land and its conveyance to a purchaser of their obligation to replace the buildings which were destroyed by fire in November 1893. The general rule on which they founded their argument in defence is not open to question. A conveyance of land held in feu operates in general as a transfer of all the contracted obligations which are

" But this brings one to what is the real point in the case, namely, the general question, whether, after an obligation ad factum prœstandum, imposed by a leu-contract, and constituting a condition of the grant, has become prest-able, the feuar (the debtor in the obligation) can discharge himself of the same by transferring the feu to a third party, who tabes infeftment, and thereby enters with the superior. The pursuer, I need hardly say, disputes this altogether, and, in my judgment, does so on much safer and simpler grounds than by reference to the specialties which I have mentioned, and which have bulked so largely in the discussion,

" Now, the first question probably is, whether the entry of the new vassal discharges, ipso facto and absolutely, both as to the old vassal and the new, all obligations which have become exigible by the superior prior to the new vassal's entry. I am not sure whether the defenders really maintained this proposition, because I rather understood them to maintain, not that the obligation was extinguished, but that it was transferred to the new vassal,-the old vassal being thereby discharged on the principle of delegation. And that, of course, is a different argument, which I shall consider presently. But the defenders did appear to assimilate the pursuer's demand to a demand for arrears of feu-duty, and I understood them, at least alternatively, to argue-(1) That all obligations of that class were, under the old law, extinguished by the entry of a new vassal; and (2) that the implied entry, which now takes place under the Conveyancing Act of 1874, has the same effect, except only as to arrears of feu-duty and past due casualties, with which the Act of 1874, it is said, specially deals.

" Now, it must be confessed that this argument, if really maintained, goes very far. It involves the proposition that the defenders here, being admittedly bound to rebuild after the fire, and having been required to do so, the law yet permitted them, not merely to transfer their obligation, but, at their own hand, and without the consent of the pursuer, to wipe it out. I must say that I think if the law so stood it would require amendment. But, in my opinion, the whole argument proceeds upon a misapprehension both of the old law and of the new.

" In the first place, I am not satisfied that obligations ad factum prœstandum, exigible but unperformed, are in the same category as liability for arrears of feu-duty. They are, I should say, rather in a category of their own-a category intermediate between, e.g. liability for arrears of feu-duty, and, e.g. liability for future feu-duties. They are, in fact, continuing obligations, not like that for a term's feu-duty, applicable to, because due for, a particular period of possession, but applicable, while unperformed, to every period of possession under the feu-right. I am, of course, speaking apart from any question of debitum fundi, and with respect only to the personal obligations of successive vassals.

" Passing, however, from that point, it is, in my judgment, an entire misapprehension that obligations of the class of arrears of feu-duty were, under the

vol. xxii.] COURT OF SESSION, &c. 963

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

attached to the enjoyment of the land by the terms of the feu-charter. This follows of necessity from the transferable character of the rights. The superior cannot prevent his vassal from alienating the feu, subject always to the condi-tions of the grant; and it follows that he is bound to accept the disponee in place of the disponer, so as to substitute the obligations of the new vassal for those of the old, whose liability is thus extinguished delegatione. But the delegation takes effect only on those obligations which become prestable after the date of the transmission. The general rule is established by a series of decisions, and it is very clearly expounded in the opinion of the Lord President in the Police Commissioners of Dundee v. Straton. The doctrine there laid down appears to me to be that when a feuar dispones the land, the disponee on the completion of his title becomes, in place of the disponer, the debtor in the obligations imposed by the feu-contract upon the vassal, and farther, that the disponer is ipso facto freed from such of those obligations as had not become prestable at the time of the transmission.

The original obligant is still liable for payment of the feu-duties and performance of the obligations which became prestable before the transmission of

old law, extinguished by the superior's entry of a new vassal. The entry of such new vassal did not, by statute or under the earlier law, imply any discharge either of arrears of feu-duty or of any other existing obligation. The doctrine was that the entry discharged only such claims as were inconsistent with the right of property, e.g., the casualty of recognition-( Ayton, M. 6464). By certain decisions, however, and particularly by that of the Tailors of Glas-gow, 13 D. 1073-decisions proceeding on what was said to be the understanding and practice of conveyancers,-the rule did come to be established that, unless the superior reserved his claim for past casualties and feu-duties, these should be held discharged. Whether the rule so established applied to the liability of the old vassal, or only to the liability of the new vassal, as for debita fundi, does not very clearly appear. Neither does it appear whether the rule applied to obligations ad factum prœstandum. But one thing is certain, namely, that what was established was a mere presumption-a presumption based upon practice-and that it applied only when the superior did not protect himself by a reservation in his charter. That the superior might do so if he pleased was quite recognised. Accordingly, if the old law still stood, the obligation here in question could never (in any view of its character) have been discharged against the pursuer's will. He would have had the right, when asked to enter the Eagle Company, to refuse to do so, except under reservation, inter alia, of all his claims against the defenders, and I do not suppose it can be doubted that, in the events which happened, he would have taken that course.

" Now that being the old law it is not, I think, possible to hold that the Conveyancing Act of 1874 deprived the pursuer of this valuable right. Indeed, I am disposed to be of opinion that, so far from doing so, the Legislature took pains in the matter to keep the position intact. For the clause in the Act which reserves the superior's claim to arrears of feu-duties, &c. (section 4, subsection 3), goes on to make this provision, * all the obligations and conditions in the feu-rights prestable to or exigible by the superior, in so far as the same may not have ceased to be operative in consequence of the provisions of this Act or otherwise, shall continue to be available to such superior in time coming.' I have not been able to see what this proviso covers if it does not cover the present case. It was suggested that it applied only to future obligations, but it was not disputed that if that was its only purpose it was unnecessary. Supposing, however, that the statute is to be held as silent on the subject-what is the result? The question must then be determined by reference to the general scheme and scope of the Act; and I think there is authority for saying that it is a legitimate deduction from the Act as a whole, that, wherever a superior under the old law might and would, in ordinary course,

964 CASES DECIDED IN THE [fourth series.

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

the lands, and while he was still in the position of being vassal in the feu, but not for the feu-duties and obligations which were not prestable until after the transmission and when he has ceased to be in that position.

There can be no question as to the application of the rule to obligations of annual recurrence, such as the payment of yearly feu-duty. There may be greater difficulty in applying it to obligations of perpetual endurance, which are not so clearly referable to fixed periods of possession by which the respective interests and liabilities of successive owners may be distinguished. But I know of no authority, and none has been cited to us, for holding that an obligation which has once become prestable by a vassal in possession can be discharged without the superior's consent, even although a new vassal has subjected himself to the same liability by entering with the superior while the obligation is still unperformed. The question, therefore, must depend upon the true meaning and effect of the contract. Does it in terms impose a personal obligation on the vassal which may be enforced in the circumstances which have occurred, irrespective of the continuance of his interest in the land. The superior stipulates that the vassal shall " be bound and obliged to erect ... a building or buildings ... of not less than £15,000, and that the company shall

have inserted a reservation in his charters by progress, the implied entry authorised by the Act will always, when the superior's interests require it, be held subject to a similar reservation. That I take to have been the opinion, if not the judgment of the Court in the recent case of the Lord Advocate v. Drurnmond Moray, 21 R. 553; and it is an opinion which, if I may say so, I entirely adopt.

" The defenders, therefore, were not discharged on the entry of the Eagle Company by the extinction of the obligation. It remains to consider whether they were discharged by its transference,-that is to say by what is known in law as delegation.

" Now it is probably true (it is at least in this part of the case common ground) that where a transfer of a feu occurs after an obligation ad factum prœstandum has emerged and become exigible but remains unperformed, the succeeding feuar becomes bound to the superior as a debtor in that obligation. He does so so soon as he enters, but he also probably does so by the mere acceptance of his disposition, such acceptance (at least when followed by possession) implying adoption of all the obligations which are conditions of the right which he has acquired. Such appears to have been the opinion of all the Judges in the case of Hyslop v. Shaw, 1 Macph. 535. At all events, it is here common ground. I shall therefore assume that the obligation to rebuild here in question is now enforceable against the Eagle Company, or at all events against their successor, Mr Wilson.

" Again, it is perfectly true that there are certain cases where a new debtor being introduced under a continuing contract, the presumption of law is against the multiplication of debtors, and in favour of the substitution of the new debtor for the old. In other words, there are certain cases where the law implies what is known as delegation, which is defined (Ersk. iii. 4, 22) as ' the changing of one debtor for another, by which the obligation which lay on the first debtor is discharged.'

" For example, where a landlord grants an assignable lease, or consents to the assignation of a lease which is not assignable, it is not unreasonably presumed that, as regards future rents and future prestations, he accepts the assignee as his sole debtor. So also when a superior enters, or is held to enter, a new vassal, it is similarly, and with equal reason, presumed that he accepts the new vassal as Ms sole debtor for future feu-duties and future prestations. These are well-established presumptions, and are familiar instances of discharge by delegation.

" But there is no rule to the effect that delegation is to be presumed wherever, with respect to obligations in a lease or a feu-right, the landlord or the superior

vol. xxii.] COURT OF SESSION, &c. 965

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

be bound and obliged to uphold buildings of that value in good order and repair in all time coming, and to keep the same constantly insured with a good and established insurance company, to the extent of not less than £15,000 against loss by fire, and in case the said buildings are or any part thereof is destroyed, to rebuild the same or the part destroyed so as to maintain the total value of £15,000."

Now, it appears that the buildings were destroyed by fire while the Callander and Trossachs Company were still in possession as vassals in the feu. They had performed their obligation to insure and obtained payment of the insurance money. The superior called upon them to rebuild; and as they delayed, he brought an action to enforce their liability. There can be no question that so long as they continued to hold the lands they had no answer to the demand, and that if the action had been pursued to judgment, the superior must have obtained decree. But before the record was made up they sold the lands; and they maintain that they have thereby absolved themselves from their liability. The question is, whether that is in accordance with the true intent and meaning of the contract. Now the obligation to rebuild is in terms

has obtained a new debtor. Nor is there any such rule even where the circumstance is added that the new debtor has become such as assignee to the lease or disponee to the feu. There are well-known examples to the contrary. For instance, it has been decided (Hyslop v. Shaw, supra) that a vassal who has dis-poned to a disponee who remains unentered continues liable to the superior for performance of all the obligations in the feu-right, and so continues notwithstanding that the disponee becomes also liable on the principle of adoption. The same result follows in the ordinary case of subinfeudation. And it also follows under the new law in the case of a transfer of a feu followed by infeft-ment, but not followed by the statutory notice of change of ownership. Even, therefore, in the case of future prestations, the acquisition of a new debtor by bo means always liberates the old debtor. "Whether it does so or not depends just on this, whether there is or is not room in the particular case for presuming the consent of the superior. And that being so, the question is, what ground exists for presuming such consent in the case of a debt which has become due, or of an obligation which has become exigible? I can myself conceive of none, and none has been suggested; and accordingly, one was not surprised to find that no ease could be cited where delegation had been presumed with respect to such debts and obligations. In point of fact, the doctrine of presumed delegation has, so far as I know, been confined to debts and obligations becoming due or exigible de futuro. It has certainly never been applied to cases like the present. In such cases-cases between superior and vassal-the principle I apprehend is that each vassal must always remain liable for the obligations, pecuniary or otherwise, becoming prestable in his own time. Whether succeeding vassals are liable along with him depends on the character of the obligation. If it is an obligation applicable solely to the possession of the previous vassal, such as that for arrears of feu-duty, the succeeding vassal will not be liable. But if, on the other hand, it is, as here, an obligation to build-an obligation which applies as much to one period of possession as to another,-there seems to be no reason in principle why each succeeding vassal -succeeding while the obligation is in default-should not also be liable. It is enough, however, for the present question that there seems to be neither principle nor authority for liberating, on the doctrine of delegation, the vassal who has first incurred the obligation,-in whose time it has emerged,-and against whom it was primarily exigible.

" I am therefore of opinion that the pursuer is entitled to decree ad factum prœstandum against the Callander and Trossachs Hydropathic Company.

" As to the other defenders, it is not probably of much consequence practically whether they are liable to have a similar decree pronounced against them

966 CASES DECIDED IN THE [fourth series.

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

absolute. The vassals bind themselves to uphold the buildings, and if they

are destroyed by fire, to rebuild them. That is not qualified by any condition that the obligation shall cease to be enforceable if the vassal shall transfer the land to someone else before the building is restored, and I can see no reason for implying a condition which would leave performance at the option of the vassal. Such an implication would appear to me inconsistent with the plain meaning of the contract. The direct obligation is to rebuild. But the vassal is also taken bound to insure to the extent of £15,000; and the covenant to insure, as the Lord Chancellor points out in Clark v. The Glasgow Assurance Company, 1 Macq. 668, is an additional benefit to the superior, by securing to the feuar the means of performing his obligations. The benefit would be nugatory if the feuar were entitled to carry off the insurance money, and relieve himself of his liability by transferring the land to a pauper. And yet that, if the defenders' argument were sound, would be the legal effect of the contract. I cannot think this a reasonable construction. It is said that the continuance of the original vassals' liability would be repugnant to the principle of delegation, by which the new vassal is substituted for the old in all the rights and liabilities of the feu-contract. But the delegation takes effect at and from the entry of the new vassal. There is no substitution of the new vassal for the old in obligations which attached to the latter before the transmission of the feu. I agree that the liability to rebuild is incumbent on the new vassal; but that is not because the undischarged liability of his author has been transmitted to him, but because the obligation is equally applicable to his own period of possession. I do not think it doubtful that the obligation to rebuild, and thereafter to uphold and maintain, attaches to the owners of the land for the time being. But it is not inconsistent with the duty of the entered vassal to perform the conditions of the grant that the former vassal should also continue liable for the obligations which had attached during his own possession, and accordingly, in Clark v. The Glasgow Assurance Company, the Lord Chancellor, while deciding that the vassal in possession was liable, seems to have said that the original vassal may still be liable also. The question did not arise for decision, and his Lordship's observations by the way can hardly be taken as the expression of a definite opinion. But still it is authority for saying that there is no manifest inconsistency in the supposition that the disponers'

or against either of them. But if the pursuer desires such decree, I think it follows, from the views which I have expressed, that he should have it. The performance of the obligation to rebuild was a condition of the right which these defenders successively acquired and accepted. They must, therefore, each be held to have undertaken the obligation, and, having undertaken it, they could not, in my opinion, free themselves from it by any transference of the feu. Possibly, as regards the Eagle Company, there may be a difficulty in the way of specific performance. The terms of their bargain with "Wilson do not appear. But no point on this head was made at the debate, and I think, therefore, it may be assumed that they have taken care to protect themselves. In any view they can only fail, and, on their failure being ascertained, the pursuer may fall back on his pecuniary conclusions.

" As to the precise form of the decree, I am disposed to think (although the point is not free from doubt), that the pursuer is entitled to have restoration of the buildings forming the hydropathic establishment, and I have found accordingly. But this matter also is of little practical moment, as the pursuer has offered, by minute, to be satisfied with any buildings of the requisite value which may be erected, according to plans to be approved by him in the usual way."

vol. xxii.] COURT OF SESSION, &c. 967

No. 177.

July 18, 1895.

Marshall v. Callander and Trossachs Hydropathic Co., Limited.

liability may subsist along with that of the disponee; and that is a sufficient answer to the argument from the effect of the conveyance. The defenders say that they are relieved of their obligation by the mere transfer of the land, and if that be so their liberation must have been effected either by the express terms of the contract when properly construed, or by the operation of some fixed rule of law, or lastly, as a necessary consequence of the transmission of the lands by reason of some manifest inconsistency or absurdity in the supposed co-existence of their personal liability with the rights and liabilities arising from the admission of the new vassal. I think they have failed to establish any one of these points. But it lies upon them to shew how their liability has been determined ; and if its continuance is not inconsistent with the contract or with the legal results of the transfer of the land, I think it must be held that it is still undischarged.

I agree with the Lord Ordinary that the implied entry under the Act of 1874 affords no additional support to the defenders' argument. The statute enables a disponee to complete his title without the intervention of the superior; and a proceeding to which the superior was no party cannot be construed as a discharge by him of claims which he might otherwise have been entitled to enforce.

For these reasons, and for the reasons assigned by the Lord Ordinary, I agree with his Lordship that all the defenders are liable jointly and severally. For where several persons are liable in an obligation ad factum prœstandum, each is bound for the whole. The Callander Company argue that so far as they are concerned the obligation has been rendered impossible of performance by the sale and conveyance of the land, because no man can build upon another man's land. If that were so, the alleged impossibility would not excuse them from performance, because it arises from their own voluntary act, and might have been effectually guarded against by their taking their disponee bound to perform the obligation, or to allow them to do so. But it might have presented an obstacle to a decree for specific implement if the vassal in possession had not himself been subject to the same liability. But he does not complain of the interlocutor, and it is therefore conclusively determined against him, that he is bound severally, as well as jointly with the other defenders, to erect the buildings required by the superior. For this reason, as well as that given by the Lord Ordinary, I think the objection taken to the form of the judgment is not well founded.

The Lord Ordinary has dismissed certain conclusions of the summons as unnecessary. This may probably turn out in the result to be quite right. But it seems to me to be premature to throw out alternative conclusions which may possibly be made available to the pursuer if the defenders fail to build. I express no opinion as to the competency of these conclusions. But in the meantime I am disposed to think that that part of the interlocutor should be recalled, so as not to foreclose any question which may be raised hereafter.

The Lord President, Lord Adam, and Lord M'Laren concurred.

The Court recalled the Lord Ordinary's interlocutor in so far as it dismissed the 4th, 5th, and 6th conclusions of the summons, and quoad ultra adhered, with this variation, that the rebuilding was to be commenced within three months from the date of the present interlocutor, &c.

J. & J. Turnbull, W.S.-Simpson &Marwick, W.S.-Wm. C. Dudgeon, W.S.-

Horatius Stuart, S.S.G.-Agents.

22 R 954

The permission for BAILII to publish the text of this judgment
was granted by Scottish Council of Law Reporting and
the electronic version of the text was provided by Justis Publishing Ltd.
Their assistance is gratefully acknowledged.