Scottish Court of Session Decisions

On 4th December 1893, Peter Glass bought at a public auction, conducted by Messrs James Laird & Son, auctioneers, certain building materials. These, which consisted of old houses in Princes Street and Salt—market, Glasgow, were sold on behalf of the City of Glasgow Improvement Trust under certain “conditions of sale.” It was prescribed by these conditions that the purchasers of each tenement should make a deposit of £10 with the auctioneers, as security for the due removal of the materials within the time allowed under the conditions. In case of the non-fulfilment of this obligation by the purchaser, the work was to be done by the exposers of the tenements, and the expense was to be paid out of the deposit money. The conditions also contained the following clause of reference: — (7) “The buildings

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to be taken down, and the materials removed within the time specified, and at the sight and to the satisfaction of James Laird, auctioneer, who is hereby appointed for that purpose, as well as judge of the roup; and in the event of any question or differences arising between the exposers or purchasers, or among the purchasers themselves in regard thereto, or in regard to the subject-matter of these presents, or execution or implement thereof, the same shall be determined by the said James Laird to whom the same are hereby referred, and whatever he may determine shall be binding and conclusive on the parties.”

The price obtained for the materials was £243 sterling. They were subsequently re-sold by Peter Glass to Alexander M'Dougall, who on 8th December 1893 paid to the auctioneers the purchase money, and deposited with them a sum of £30, in accordance with the stipulation contained in the conditions of sale.

The greater part of the material was again sold by Alexander M'Dougall to Thomas M'Dougall, who took over the obligation to clear away the rubbish, and was to be entitled to uplift the deposit from Messrs Laird & Son. Having — as he alleged — cleared away the rubbish and left the place in proper order, Thomas M'Dougall applied to Messrs Laird & Son for repayment of the deposit, and on their refusal to repay it, instituted the present action in the Sheriff Court at Glasgow for recovery of the amount.

The defenders averred that the conditions of roup had not been fulfilled; that the pursuer through his neglect to carry out these conditions, was bound to pay them sums amounting to £44,19s. 4d. as expenses due to the City of Glasgow Trust for work thus thrown upon it, and to themselves personally for time and trouble; that they were entitled to set off this sum against the £30; and that in any view the question fell to be decided by James Laird in accordance with the clause of reference.

The pursuer pleaded that as James Laird was a partner of the defenders' firm the reference was ineffectual.

On 29th May 1894 the Sheriff-Substitute ( Balfour) pronounced the following interlocutor:—“Finds that the claims made by the pursuer in this action are embraced by the clause of arbitration to James Laird in the seventh article of the conditions of sale referred to on record: Finds that the said James Laird is not disqualified from acting as arbiter under the said clause of arbitration: Therefore supersedes further procedure in hoc statu in order that the parties may have the pursuer's claims forthwith submitted to arbitration as aforesaid, reserving in the meantime all questions of expenses; and grants leave to appeal.”

On appeal the Sheriff ( Berry) adhered.

The pursuer appealed to the First Division of the Court of Session, and argued— Glass was the original purchaser, and was bound by the conditions of sale, but the pursuer had an independent contract with him, and was not bound by these conditions. The defenders would have a remedy against Glass if the pursuer did not implement the conditions, but had none against the pursuer. In any case, this question did not fall under the arbitration clause, being one between a purchaser and the auctioneer. The latter could not act as arbiter, being a member of the defenders'firm. The defenders had taken the responsibility of defending the action for the Glasgow Trust, and had pleaded a counterclaim of money alleged to be due both to the trust and to themselves. The auctioneer could not act as a judge in his own case, and therefore the cases quoted by the other side did not apply— Smith v. Liverpool and London Globe Insurance Company, July 15, 1887, 14 R. 931.

Argued for the defenders—The pursuer was merely an assignee, and must take under his author's liabilities and duties. The sum had been admittedly deposited with the defenders as security for fulfilment of the conditions of sale, and fell to be forfeited on the pursuer's non-compliance with these conditions. The auctioneer was merely an individual partner of the defenders' firm, and a separate persona. The mere fact of the firm defending the action should not therefore bar him from acting under the clause of reference— Trowsdale & Son v. North British Railway Company, July 12, 1864, 2 Macph. 1334; Trowsdale & Son v. Jopp, Nov. 15, 1865, 4 Macph. 31; Scott v. Carluke Local Authority, Feb. 1,1879, 6 R. 616; Addie & Sons v. Henderson & Dimmack, Oct. 24, 1879, 7 R. 79.

At advising—