Scottish Court of Session Decisions

Smith, Laing, & Coy., flax-spinners at Russell Mill, near Cupar-Fife, brought this action against James Maitland of Lindores, Fife, whereby they asked for a declarator that the defender was bound, in terms of a feu-charter granted by Charles Maitland younger of Rankeillour, dated 5th May 1814, to free and relieve them of all poor-rates imposed on or paid by them from 15th October 1856, or to be imposed on them in respect of the property of the subjects at Russell Mill conveyed in the feu-charter, and belonging to them. There was a further conclusion for payment of £35, 11s. 3d., being the sum they had paid as poor-rates, less six half-years' feu-duties, of which they had withheld payment from the defender in respect of their claim for reimbursement of poor-rates.

By the feu-charter above mentioned Charles Maitland, on the narrative that he was heritable proprietor of the mills and lands thereinafter disponed, and in consideration of the feu-duty thereinafter mentioned, sold, alienated, and in feu-farm disponed to George Moon, yarn-spinner at Russell Mill, “All and Whole the corn, barley, and lint mills of Russell Mill, now converted into a flax spinning-mill, with the houses and yards belonging thereto; also the ground adjoining to the said mills, consisting of about two acres, and the haugh, the whole of which lands and mills are now possessed by the said George Moon, with full power and privilege to the said George Moon and his foresaids to erect houses, mills, and every other kind of buildings and machinery upon the grounds and river hereby feued; and to hold all and sundry the mills, lands, and others above disponed by the said George Moon and his foresaids of and under me the said Charles Maitland, and my heirs and successors whomsoever, as their immediate lawful superiors of the same, in feu-farm, fee, and heritage for ever, giving yearly the said George Moon and his foresaids for the saids mills, lands, and others above disponed to me and my foresaids, immediate lawful superiors of the same, the sum of £36, 15s. sterling in name of feu-farm duty, at two terms in the year, Whitsunday and Martinmas, by equal portions, beginning the first term's payment at Whitsunday 1812, and the next payment at Martinmas thereafter, and so furth, yearly and termly thereafter, during the existence of the present feu-right, but always with and under the following express declarations, and not other-ways:— First, That the vassal for the time being shall keep the mill-dam and mill-lead always in good order, and buildings at all times on the lands hereby disponed of the value of £150 sterling, and in case of the irritancy of the present feu-right in any manner whatever, the vassal shall put the whole houses, mills, and others, standing at the period of his removal, although exceeding in value the foresaid sum of £150 sterling, in a tenantable order and condition. Secondly, That if two full years' feu-duty shall remain unpaid after the term of payment thereof, then this present feu-right shall, in the option of the superior, cease and determine without any process of declarator for that effect, and it shall not be lawful to purge this irritancy at the bar. Thirdly, That during the existence of the present feu-right, all public and parochial burdens or taxes, imposed or to be imposed, shall be paid by the superior and vassal, as if the former was proprietor and landlord, and as if the latter was tenant under him. Fourth, That these declarations shall be inserted in the infeftment to follow hereon, as well as in every subsequent precept of sasine and infeftment that may be granted of and taken over the said mills, lands, and others, otherways such precept and infeftments, and deeds following thereon, shall be null, void, and of no effect.” Moon was infeft on the feu-charter, the instrument of sasine in his favour being dated 7th, and recorded 11th, May 1814.

The pursuers acquired the subjects and others described in the charter in 1856, and obtained entry on 15th October of that year. At that time, and until March 1865, when she died, Lady Maitland, as liferentrix of the subjects in question under the trust-disposition and settlement of her husband, had drawn the whole feu-duties. The said subjects, by the same deed, were destined to the present defender in fee, and from the date of Lady Maitland's death he was in receipt of the feu-duties.

The annual value of the subjects feued by the charter did not at its date exceed £36, 10s., but the erection of extensive works and machinery had increased the value to about £400.

The defender upon record made offer to relieve the pursuers of a proportion of poor-rates payable by the landlord corresponding to a rent of equal amount with the feu-duty, i.e., of £36,15s.

The defender pleaded, inter alia,—“(1) The conclusions of the action are not warranted by the terms of the feu-charter upon

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which the pursuers found, and the defender is entitled to absolvitor. (2) According to a sound construction of the said feu-charter the defender, as superior, is not bound to relieve the vassals of taxes payable by the landlord upon a rent exceeding the amount of the feu-duty, and the defender, having offered to pay a proportion of poor-rates effeiring thereto, is entitled to be assoilzied, with expenses. (3) The pursuers' claim is untenable, being inconsistent with the intention of the parties to the said feu-charter, as evinced by the terms thereof, and by the usage following thereon. (4) In any view, the defender is not liable to relieve the pursuers of poor-rates for the period prior to March 1865, when he succeeded to the superiority of the subjects feued.”

The defender afterwards put into process a minute stating that Russell Mill was originally a corn, barley, and lint mill, which in 1801 was let for 999 years at a yearly rent of £36, 10s. The mill was shortly afterwards converted into a flax spinning-mill; and it having been thereafter judged expedient to change the tenure from a tack to a feu-right, a renunciation by the parties having right was executed, and the landlord granted the feu-charter mentioned above. The tack and deed of renunciation were produced.

The defender having died during the dependence of this action, his heir and executor were sisted as defenders.

The Lord Ordinary pronounced the following interlocutor:—

“ Edinburgh, 24 th June 1875.—Having considered the cause, finds that the defenders are not liable to pay to the pursuers the sums sued for beyond the proportion thereof, of which payment has been offered, in terms of the answer to article sixth of the condescendence: Therefore assoilzies the defenders from the conclusions of the action, and decerns: Finds them entitled to expenses, and remits the account thereof when lodged to the Auditor for taxation, and to report.

Note.—The pursuers are the proprietors of Russell Mill flax-mill, Cupar-Fife, and adjoining ground, in virtue of a feu-charter granted by the late Charles Maitland younger of Rankeillour, in 1814, in favour of the late Charles Moon, and titles following, and they occupy the mill and property in carrying on their business. Having paid poor-rates since they acquired the property in 1856, both as proprietors and tenants and occupants, it seems to have lately occurred to them that they had a claim of relief against the superior for the proprietor's or owner's half of these rates. Accordingly, since Whitsunday 1871, they have withheld payment of their feu-duties, and by this action they seek to have the superior found liable to relieve them of the half of the poor-rates leviable in respect of ownership since 1856, amounting, according to the state No. 28 of process, to £143, 17s. 11d. The defender, the late James Maitland (now represented by his heir and executor, who have both sisted themselves as defenders) objected to the claim entirely for the period prior to March 1865, on the ground that Lady Maitland, who had a liferent of the superiority from 1840 till her death in 1865, drew the feu-duty annually from the pursuers, granting them receipts for the amount; and that the claim, if to be made, was a proper charge against Lady Maitland, and should have been deducted from the feu-duties paid to her. In regard to the period since March 1865, the defender offered to pay a proportion of the owner's or landlord's share of the rates effeiring to a rent of £36, 15s., being the amount of the feu-duty, and disputed his liability beyond this. The pursuers' claim is founded on a clause in the feu-charter of the property in the following terms:—‘ Thirdly, That during the existence of the present feu-right, all public and parochial burdens or taxes, imposed or to be imposed, shall be paid by the superior and vassal, as if the former was proprietor and landlord, and as if the latter was tenant under him.’

This clause is expressed in unusual and peculiar terms. The vassals, as owners of the property, are of course assessed for all owner's taxes, and being occupants as well as owners they are assessed for the full amount of all taxes, including those in respect of tenancy or occupancy to which the property is liable; but they claim relief under the clause now quoted of all owner's rates.

In ascertaining the sound construction of the clause, it is plainly competent, and it is desirable, to look at the circumstances in which the parties to the feu-contract were placed when it was entered into; for the language of the deed ought to receive the effect which the parties then intended it should receive, if in the light of the surrounding circumstances it fairly bears the meaning which will give it that effect.

The history of the property, as appearing from the deeds produced, is this. It was let by the proprietor Charles Maitland, Esq. younger of Rankeillour, in 1801 for 999 years, from Martinmas 1803, at the rent of £36, 15s. The tenant's right belonged in 1814 to the late Mr Moon, who had purchased the tack and subjects in 1811, but without having completed his title. In 1814, the parties having the title to the lease, by renunciation, dated 5th May of that year, on the narrative that ‘the said George Moon has been in possession of the said mills and others since Martinmas 1811, and that it has been judged expedient to change the nature of the tenure by which the said possession is held from a tack to a feu-right, and which the proprietor has been so obliging to grant the said George Moon, therefore to enable him to do so, and relieve the property of the said original tack, the renunciation follows. The feu-right was granted on the same day. It thus appears that the feu-right of 1814 was merely a different form of title substituted for the previous 999 years' lease, which the proprietor agreed to grant as a favour to the tenant, without consideration or advantage. The feu-duty was the same as the old rent, viz., £36, 15s. Keeping this in view, there appears to me to be no doubt as to the true construction of the clause of relief as to public burdens. These burdens are to be divided, or, in other words, the vassal is to have relief, as if the superior ‘was proprietor and landlord,’ and as if the vassal ‘was tenant under him’—that is, so far as burdens are concerned, as if the relation which existed between the parties under the lease still continued, and the vassal were paying a rent of £36, 15s. in place of a feu-duty of that amount.

Such clauses of relief are strictly construed. The pursuers must show that the relief they ask is distinctly given by the language used. Even

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without the light furnished by the previous history of the property derived from the deeds produced, I do not think the clause would fairly bear the construction put on it by the pursuers, that the superior should relieve them of all owner's taxes. If that had been the agreement, it admitted of being expressed in very simple terms, without any reference to the relation of landlord and tenant. The superior is to relieve the vassal as if he were landlord and the vassal tenant. The relation of landlord and tenant necessarily implies a fixed rent, and the feu-duty supplies the measure of the rent. The clause must, I think, be read as if the words followed at its close ‘at the rent herein stipulated as feu-duty;’ for the feu-duty is as it were the rent which the parties had in view. The matter is, however, in my opinion made clear when regard is had to the circumstances in which the feu-right was granted, and which quite explain, not only why so peculiar an obligation was undertaken, but give material aid, if that be needed, in the construction of the clause.

I am further of opinion that as the pursuers recognised Lady Maitland's rights to the liferent income from the superiority, they were bound to retain the poor-rates in making their payment to her, if they intended to enforce such a claim. The right of liferent only gave a claim to the free income or feu-duties, and the pursuers were not entitled to pay more than they owed, and come upon the superior with a claim for sums which were proper deductions to be made annually from the feu-duty.”

The pursuers reclaimed, and argued—The Lord Ordinary had proceeded upon the history of the grant, which was incompetent. The feu-contract should be construed on itself alone. The clause in question providing for total relief included the increased value of the subject. If it was competent to go beyond the charter, no further light was given beyond the fact that the subjects were previously held on lease.

Authorities— Traqudir's Trs. v. Heritors of Innerleithen, Dec. 9, 1870, 9 Macph. 234; Gilmour and Others v. Hart, Dec. 2, 1875, 13 Scot. Law Rep. 105; Hunter v. Chalmers, July 16, 1858, 20 D. 1311; Lees v. Mackinlay, Nov. 11, 1857, 20 D. 6; Paterson's Trs. v. Hunter, Dec. 10, 1863, 2 Macph. 234; Nisbet v. Lees, June 15, 1869, 7 Macph. 881; Preston v. Magistrates of Edinburgh, Feb. 4, 1870, 8 Macph. 502.

The defenders argued—The proper construction of the clause was that in regard to taxes the relation of landlord and tenant should subsist. It was competent to refer to the position of parties when the feu-charter was granted if there were ambiguities in the deed itself. For the purpose of the liabilities in question, this deed was to be read as a contract of lease. The purpose of the obligation was that the taxes were to be divided, but the landlord was not to be liable beyond the amount of his rent. According to the pursuer's contention, if the tenant let the subjects, the landlord would have to pay the whole taxes, which was not the intention of the charter. Where there was an absolute relief from taxation, that covered the enhanced value by buildings, and the superior paid the taxes in an absolute obligation accordingly; but here there was division.

Authorities— Glasgow, Barrhead, and Neilston Railway Co. v. Caledonian Railway Co., Feb. 10, 1860, 22 D. (H. L.) 1; Hunter on Landlord and Tenant, ii. 291; Stewart v. Duke of Montrose, Feb. 15, 1860, 22 D. 755, 1 Macph. (H. L.) 25; Horne v. M. of Breadalbane's Trs., Jan. 23, 1835, 13 S. 296, 1 Bell 1; Forlong v. Taylor's Exrs., April 3, 1838, 3 Shaw and Maclean's App. Cases, 177; Davidson v. Magistrates of Anstruther Easter, Jan. 28, 1845, 7 D. 342.

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