Scottish Court of Session Decisions

Isabella Cameron and Margaret Cameron were pro indiviso proprietors of certain heritable subjects situated at 94, 96, and 100 Nicolson Street, Edinburgh. George Williamson, by missive-offer dated 9th January 1894, offered to purchase the said subjects at the price of £1600 sterling. The offer, which contained, inter alia, the condition “a good, valid, and complete title to be given by the exposers, and at their expense, and also searches brought down to term of entry showing a clear record, excepting existing bond for £1100, and thereafter to be brought down by exposers to the said term of Whitsunday showing a clear record,” was accepted by the proprietors on 11th January 1894. Thereafter the agents of the purchaser

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objected to the title offered, in respect that a bond and disposition in security for £300 over the subjects had only, ex facie of the record as disclosed by the search, been discharged to the extent of £200.

The bond in question was granted so far back as 1833 by John Forrest, the then proprietor of the subjects. In 1850 Forrest executed an agreement whereby, on the narrative that the creditor was about to assign the bond to James Fraser's trustees, and that he was about to pay up £100 of the bond, he bound himself to pay interest at the rate of 5 per cent. on the remaining £200. In the same year the bond was transmitted by assignation to Fraser's trustees, and in 1856 these trustees, being then unquestionably in right of the whole bond, assigned it to the extent of £200 to Miss Anna Macleod, and the assignation which they then granted, and which duly entered the Register of Sasines, contained the following declaration:—“Declaring always that to account of the said sum of £300 contained in the said bond, the sum of £100 was paid on the day; and which sum of £100 was thereby extinguished and discharged, conform to discharge and deed of restriction executed by .” Miss Macleod assigned the bond or what remained of it in 1860 to Mr George Cotton, and it passed to Knox's trustees by successive assignations, each assignation being duly recorded and bearing in gremio that the sum of £100 with the corresponding interest had, according to the granter's information, been long ago discharged. Ultimately the £200 was repaid in 1888 to Knox's trustees, who executed and recorded a discharge in favour of the then owner of the subjects, “but that only to the extent of £200, with corresponding interest and penalties, the remaining £100, with corresponding interest and penalties, having, we are informed, been long ago repaid, extinguished, and discharged.” This discharge was duly recorded, and it and the discharged bond, with all the transmissions thereof, were delivered up to the proprietor. These deeds were among the titles tendered to Williamson. So far as was known no interest had been paid, except on the £200 since 1856. But no discharge of the remaining £100—that is to say, no discharge by the creditor in favour of the debtor— had been found, and none such had been recorded in the Register of Sasines.

After some correspondence between the parties the purchaser's agents wrote to agents for the sellers on 14th February that their client refused to accept the title tendered on the ground that ex facie of the record £100 of the £300 bond was still undischarged. The agent for the sellers replied that he had agreed to clear the record of the £100, and on 17th February he wrote consenting to a suggestion which had been made by the purchaser's agents on 12th February that £100 should be consigned in bank until a formal discharge was obtained. The purchaser, however, adhered to his repudiation of the contract, and the sellers accordingly raised this action against him to have him ordained to implement the missives of sale.

The pursuers pleaded — “(3) The title tendered by the pursuers being valid and sufficient in all respects, and the record having been all along clear of encumbrances other than those mentioned in the missives of sale, the pursuers are entitled to decree in their favour in terms of the conclusions of the summons. (4) Separatim, the pursuers having repeatedly offered to clear the record of all encumbrances which could be shown to affect the subjects, and having offered to obtain a formal discharge of the encumbrance alleged by the defender, the defender is bound to implement the contract.”

The defender pleaded—“((3) The pursuers having failed to purge the record of an encumbrance affecting the title of said subjects, the defender is entitled to resile from the contract.”

Upon 16th November 1894 the Lord Ordinary ( Kyllachy) decerned against the defender in terms of the conclusions of the summons for implement, and found the pursuers entitled to expenses.

“ Opinion.—I have come to the conclusion that the title offered by the pursuer is sufficiently good, and that the defender is bound to implement the contract of sale.

The only objection which the defender now takes to the title offered is this—he says that the pursuer is bound to clear the record of all burdens, and that there is still a sum of £100, part of a bond for £300, which one time affected the subjects, and which remains ex facie of -the records undischarged. The point which I have first to consider is, whether this is so in point of fact. [ The Lord Ordinary then narrated the history of the bond for £300 given above].

In these circumstances the defender maintains that the record is not cleared. He contends that the declaration in the deed of 1856, although under the hand of the creditor, and although entering the record, does not have the effect required, because that declaration was a res inter alios acta, and moreover, by reason of the blanks which it contains, at least suggests that the discharge of the £100 was only contemplated, and may not have been executed. The pursuer, on the other hand, argues that all that is necessary is that that there should be proof scripto under the hand of the creditor for the time that the £100 had been paid, that the declaration in question contained in a deed granted by the creditor in favour of a person who had a material interest in the discharge of the £100 is good evidence scripto of the discharge, and that the deed containing the declaration having entered the record, there is no need for anything more.

I am of opinion that on this matter the pursuer is right. If the debt is once extinguished, there can be no doubt that the infeftment in security is also extinguished, and I see no reason why the defender should require more than competent and adequate evidence appearing ex facie of the records, that the whole debt in the bond has been fully extinguished. With respect

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to the circumstance that the deed of discharge of the £100 is left blank in the declaration appealed to, I do not think that it is a legitimate inference that (contrary to the words of the deed) the discharge was only contemplated. It must be kept in view, as was well urged by the pursuer's counsel, that in 1856 the assignee to the bond had a material interest to see that the £200 did not rank pari passu with another and subsisting debt of £100.

In the view which I thus take it is necessary to consider whether the pursuer would not yet be in time, and would not yet be entitled to an opportunity to obtain from the representative of Fraser's trustees, and place on record a formal discharge of the £100 in question. As at present advised, I see no sufficient reason why he should not. Time is not, as far as I can see, of the essence of the contract, and I do not find in the correspondence that the pursuer had, before the defender resiled, or has even yet, taken up the position that he will do nothing further to meet the defender's views. As to all this, however, it is not necessary to decide. It is enough that in my opinion the title is good as it stands. I shall therefore decern in terms of the summons.”

The defender reclaimed, and argued—(1) On the question of title—The defender paid a full price for the subjects in question, and was entitled to demand in payment of the price that a good marketable title should be given to him. Such a title he had not got, in respect that the search disclosed that the bond for £300 had only been discharged to the extent of £200, and he was not bound to accept the declaration in the assignation of 1856 as equivalent to a discharge of the remaining £100. The creditor in 1856, for all that appeared, might have assigned the bond to the extent of £100 to someone who had not yet put it on record— Robertson v. M'Gregor, December 11, 1840, 3 D. 213; Mitchell v. Thomson's Trustees, November 27, 1827, 6 S. 135; Cargill v. Craigie, April 1, 1822, 1 Sh. App. 134. (2) On the question of expenses—Even if the defender was bound to accept the title, the expenses of the action which was necessary to clear the record must fall on the seller— Howard and Wyndham v. Richmond's Trustees, June 20, 1890, 27 S.L.R. 800.

The pursuers, who were called upon to reply only on the question of expenses, argued— The reclaimer was not entitled to expenses, because the sellers, so far from refusing to purge the record, had offered to do so, and this offer was met by the reclaimer repudiating the contract. Besides, the present action was not one to clear the record at the instance of the purchaser, but it was an action of implement at the instance of the seller, to which the only defence was the one which had been overruled, namely, that the title was bad. In these circumstances the pursuers were entitled to expenses.

At advising—