Scottish Court of Session Decisions

Gilbert Bogle & Company rented an office at No. 6 Waterloo Street, Glasgow, from Robert Gracie, No. 11 Bothwell Street, factor for and as representing the proprietors of the subjects, for three years from the term of Whitsunday 1884. Gilbert Bogle & Company described themselves as yachting agents, and had upon their premises certain pulsometers, a kind of steam-pump used on board yachts, made by the Pulsometer Engineering Company (Limited) of London. That company's name was on these steam-pumps. On 7th November l885 Gracie raised an action of sequestration for rent against Gilbert Bogle & Company, and attached the pulsometer steam-pumps which were upon the premises. The Pulsometer Engineering Company claimed delivery of these pumps, but Gracie refused to give them up on the ground that they were liable to the landlord's hypothec. This process of interdict was then brought against Gracie in the Sheriff Court of Lanarkshire by the Pulsometer Engineering Company to interdict the defender from selling them or otherwise interfering with them.

The Pulsometer Engineering Company pleaded—“The defender having attached and threatened to sell goods belonging to pursuers, and not having any right over same, the latter are entitled to warrant and decree as craved.”

The defender pleaded—“(3) The goods sequestrated and claimed by the pursuers being the sole stock and plenishing (excepting a writing-desk) of the premises in question, are subject to the landlord's right of hypothec, and have been lawfully secured under the sequestration action. (4) Even should the pursuers' allegation of ownership be proved, the goods would still, under the circumstances above set forth, be liable to the landlord's right of hypothec.”

Interim interdict was granted, and a proof allowed, from which it appeared that Gilbert Bogle & Company

Page: 240↓

had taken the premises as yachting agents; that the names of several firms for whom they acted as agents were put upon the windows of the premises, and among them that of the Pulsometer Company; that the steam-pumps in question were sent as samples of goods (which might be sold, however, if the goods were wanted in a hurry), and that in consideration of the space so occupied the company credited Gilbert Bogle & Company with £30 per annum to enable them to get a better office than they would otherwise have occupied; that besides the steam-pumps there was also in the premises a small amount of ordinary office furniture, but the steam-pumps in dispute were far the most important and valuable in the premises.

On 27th July the Sheriff-Substitute ( Guthrie) issued an interlocutor by which he found that the articles in dispute belonged to the Pulsometer Company, and were not subject to the hypothec of the landlord. He therefore made perpetual the interim interdict already granted.

“ Note.—The following propositions as to hypothec in urban tenements are I think well settled, and are to be found in Bell's Comm. ii. 30, and Prin. 1275 and seq., in the recent case of Nelmes & Co. v. Ewing [November 23, 1883], 11 R 193, and Bell v. Andrews [May 22, 1885], 12 R. 961, where the authorities are fully cited:—

“1. The landlord of urban subjects has a hypothec for his rent over all moveables brought into the place let.

“2. The hypothec as a rule applies only to articles belonging to the tenant, and therefore not to articles deposited with him for temporary purposes or in the course of his ordinary business, as things left with a jeweller or carpenter to be repaired (see below prop. 6).

“3. But in a question with the landlord, things necessary for the tenant's proper enjoyment of the place let according to its intended use, although not belonging to him, are presumed to be his and are subject to the landlord's hypothec: and the true owner is held by reason of his having allowed them to be so brought into the place let, to have taken the hazard of the rent, and assented to the landlord's hypothec. When these things are the whole ‘plenishing’ of a house or factory or shop to which the landlord looks as security for payment of his rent, and which if wanting he might insist on the tenants putting into his premises on the pain of removing, it does not appear in principle to be material whether the owner lends them for hire or gratuitously, yet if they are let for hire it has been thought to be an additional ratio for the hypothecation that the lender takes or may take the risk into account in fixing the hire.

“4. This extension of the hypothec beyond the tenant's own moveables does not affect single articles lent or belonging to lodgers or members of the tenant's family, and not forming part of the permanent and ordinary furnishing of the house or shop. Thus in the latest case a daughter's pianoforte was held exempt, and in many Sheriff Court cases, pianofortes and sewing-machines have been held not subject to hypothec though hire was paid for them. There is no authority for this practice where hire is paid beyond certain general dicta of Lords Moncreiff, Deas, and others, and indeed it is rather contrary to the case of Penson v. Robertson. It seems, however, to proceed on grounds of expediency and on the existence of a generally-known custom of hiring out such articles which precludes the landlord's reliance on them as securing his rent. In the latest cases the Court has avoided giving any opinion on the point whether such single hired articles are subject to hypothec; but the inclination of the judges in Bell v. Andrews is favourable to freedom, and Lord Shand doubts Penson v. Robertson. I think therefore that the first sentence of this paragraph may be taken as applying to single articles lent for hire.

“5. The landlord's hypothec extends over the goods in a shop—the rights of bona fide buyers being protected. Bell's Comm. ii. 31, Prin. 1276–7.

“6. It does not affect the goods in a store or warehouse for which the owner pays store rent, or the cattle on a grazing farm for which the owner pays grazing rent (Bell's Comm. ii. 31, Prin. 1276), on the obvious ground that the business forwhich the warehouse or farm is let involves the temporary occupation of the premises by the cattle or goods of third parties, and that it would be inconsistent with the implied terms of the lease to allow a hypothec except over the unpaid store rent or grazing rent.

“7. The hypothec does not extend over the effects of a sub-tenant beyond the amount of the sub-rent unpaid, unless, in urban subjects, subletting be expressly excluded by the lease.

“ The respondents' tenant here is a commission agent entrusted by his principals with samples of their goods and manufactures for sale. The claimant is a company which makes pulsometer engines, and employed the respondents' tenant to exhibit and sell them. Besides a commission the tenant had an allowance of £30 to help to pay his rent in consideration of the large space occupied by the petitioner's engines. These engines have been included in a sequestration for rent at the instance of the respondents. Although the case does not quite readily fall under any of the propositions above set forth, it seems to me that, upon the whole, there is no ground of principle on which the landlord is entitled to these machines as falling within his hypothec. There is no question as to the property of the engines, but only as to the footing on which they were brought into the premises. They were certainly not in the position of hired or lent furniture, for they were not there for the use and enjoyment of the tenant, nor did he pay hire for them. On the contrary, he got a substantial payment from the owners for standing room, and I would class the respondents rather with owners of goods stored in a warehouse, or with sub-tenants, than with a lender or hirer. The letting of an office or warehouse for the exhibition and sale of the miscellaneous articles in which a commission agent deals involves in varying degrees the possession of property belonging to third parties. The general rule, as Lord Moncreiff says (15 S. 43), applies properly only to the tenant's own property: there is as yet no authority for extending the hypothec to the goods of third parties in such circumstances as we have here; to admit it would be inconsistent with the character of the business for which the place was let and inconvenient for trade.”

The defender appealed to the Court of Session, and argued—In order to bring articles in a tenement, but which did not belong to the tenant,

Page: 241↓

under the landlord's hypothec three conditions were necessary—(1) That the goods should not be deposited on the premises fora merely temporary purpose; (2) that they should be on the premises with the knowledge of the owner of the goods; (3) that the tenant should not have informed the landlord that they belonged to another person and not to him. In this instance these conditions were present. It was not necessary, although it might be important to the question, that the goods were for the use of the premises let. The landlord had a right to ask the tenant to furnish the premises let to him in a proper manner— Jaffray v. Carrick, November 18, 1836, 15 S. 43. The pulsometers were upon Bogle's premises in his capacity as a yachting agent, and the landlord was entitled to assume that these articles belonged to him— Wilson v. Sponkie, December 17, 1813, F.C.; Hunter on Landlord and Tenant, ii. 378; Adam v. Sutherland, November 3, 1863, 2 Macph. 6; Nelmes v. Ewing, November 23, 1883, 11 R. 193; Bell's Comm. ii. 31.

Counsel for the respondents were not called on.

At advising—