Scottish Court of Session Decisions

By decree-arbitral dated 12th March 1729–1730, following upon two submissions by the Magistrates and Merchant Council and Deacons of Crafts and Trade Counsellors of Edinburgh, it was, inter alia, found and declared “that by the sett of the town neither the merchants among themselves nor the crafts and their deacons or visitors can have or make any particular or general conventions as deacons with deacons, deacons with their crafts, or crafts among themselves, without the advice and consent of the provost and council, … and that bye-laws made by the incorporations for themselves are of no force unless they are ratified by the magistrates and council, but … that the said magistrates and council have no power to make bye-laws whereby the said incorporations and their successors can be bound to admit all such persons as shall request the same and shall appear to the magistrates and council to be well skilled and qualified to occupy and practise in their crafts, upon payment of such valuable consideration as should be rated and determined by the said magistrates and council, and … that they had no power to control the management of the several stocks belonging to the said incorporations, or to make bye-laws concerning the same.”

From the date of this decree-arbitral to 1812 the Incorporation of Cordiners fixed the entry-money for admission to the craft as it pleased without obtaining any sanction. From 1812 to 1840 it submitted its bye-laws, which contained the table of entry-money, to the Town Council for approval, and when approved these were observed till superseded by a later set. The bye-laws approved7th July 1840—the last set prior to 1846—contained the following provision:—“ Alterations and Amendments. The present members of this Incorporation and all who may hereafter enter bind and oblige themselves to conform and adhere to to the foregoing regulations, reserving to them the power … to alter or amend the same as exigencies may require, but any alteration or additional regulation must be laid before the Incorporation in writing at a quarterly meeting, and if the motion shall appear worthy of further consideration it shall lie over till next quarterly meeting, when it shall be fully discussed. If the motion be then approved of, it shall be inserted into the minutes of the Incorporation and shall be binding upon all concerned.”…

The Burgh Trading Act 1846 (9 and 10 Vict. c. 17), which abolished the exclusive trading privileges in burgh of trading incorporations, enacts:—Section 3—“And whereas the revenues of such incorporations as aforesaid may in some instances be affected, and the number of the members of such incorporations may in some instances diminish by reason of the abolition of the said exclusive privileges and rights, and it is expedient that provision should be made for facilitating arrangements suitable to such occurrences, be it therefore enacted that it shall be lawful for every such incorporation from time to time to make all bye-laws, regulations, and resolutions relative to the management and application of its funds and property, and relative to the qualification and admission of members in reference to its altered circumstances under this Act, as may be considered expedient, and to apply to the Court of Session by summary petition for the sanction of the said Court to such byelaws, regulations, or resolutions; and the said Court, after due intimation of such application, shall determine upon the same, and upon any objections that may be made thereto by parties having interest, and shall interpone the sanction of the said Court to such bye-laws, regulations, or resolutions, or disallow the same in whole or in part, or make thereon such alterations, or adject thereto such conditions or qualifications, as the said Court may think fit, and generally shall pronounce such order in the whole matter as may to the said Court seem just and expedient; and such byelaws, regulations, or resolutions, subject to such alterations and conditions as aforesaid, shall be, when the sanction of the said Court shall have been interponed thereto, valid and effectual, and binding on such incorporations: Provided always that nothing herein contained shall affect the validity of any bye-laws, regulations, or resolutions that may be made by any such incorporation without the sanction of the said Court which it would have been heretofore competent for such incorporation to have made of its own authority or without such sanction.”

In 1849 the incorporation submitted to the Court of Session for its approval a set of bye-laws which contained a table of entry-money. These bye-laws as approved by the Court on 20th July 1850 provided by article 43—“The present members of this incorporation and all who may hereafter enter bind and oblige themselves to conform and adhere to the foregoing regulations, reserving to themselves the power … to alter or amend the same as exigencies may require; but any alteration or additional regulation must be laid before the incorporation in writing at a quarterly meeting, and if the motion shall appear worthy of further consideration, it shall lie over till next quarterly meeting, when it shall be fully discussed. If the motion be then approved of it shall be inserted into the minutes of the incorporation and shall be binding upon all concerned, after duly receiving the sanction of the Court of Session, as required by the Statute 9 and 10 Vict. c. 17.”

The entry-money required by these byelaws of 1850 from an applicant for entry at the far hand between the ages of 35 and 40 was £160. The incorporation, however, thereafter without obtaining the sanction

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of the Court, increased from time to time the entry-money until in 1903 for a similar applicant it was £1500.

Upon the 9th July 1903 James Allan, shoemaker, Edinburgh, raised this action against the incorporation and its deacon and its treasurer, as representing the said incorporation, in which he sought to have it found and declared “( First) That the pursuer, upon proving his qualifications and satisfying the conditions required by the bye-laws and regulations of the defenders' incorporation, dated 1850, or by any other bye-laws and regulations which may be found to be applicable to the said incorporation, is entitled to be admitted as a member of the said incorporation in the character … of an entrant ‘at the far hand;’ ( Second) … that the defenders are not entitled to exact as a condition of admitting the pursuer as a member of the said incorporation any higher dues of entry than those prescribed by the said bye-laws and reglations, dated 1850, or by any previous bye-laws and regulations which may be found to be applicable to the said incorporation; and ( Third) the defenders ought and should be decerned and ordained … to admit the pursuer as a member of the said incorporation as at 24th June 1903, or at such other date as may be determined by our said Lords, on payment of such sum, not exceeding £160, as may be determined to be the dues of entry legally exigible by the defenders from an applicant for membership in the said incorporation entitled to apply as an entrant ‘at the far hand.’”

Upon 5th March 1904 the Lord Ordinary ( Kyllachy) pronounced the following interlocutor—“Finds that the alterations on the rules of the defenders' incorporation, including the rules as to entry-money made subsequent to the rules sanctioned in 1850 by the Court of Session, require as a condition of their validity the sanction of the Court of Session: And with this finding continues the cause for further procedure.”

Opinion.—“The pursuer, who is a master bootmaker in Edinburgh, seeks in this action to declare his right to be admitted to the ancient Incorporation of Cordiners upon payment of a certain entry-money, being the entry-money specified for intrants at the far hand in the rules and regulations of the incorporation approved in the year 1850 by the Court of Session in terms of the Act of 1846. Apart from the question of entry-money there is no dispute as to the pursuer's qualifications or as to his right to admission. He is not a freeman's son in the sense of the rules. That is now conceded. But he is a burgess of Edinburgh and a member of the trade who has made an approved essay; and, assuming the rules and regulations upon which he founds to be still in force, there appears to be no doubt that the entry-money which he tenders is all that is exigible.

“The answer made by the corporation, which now consists of six members and one annuitant, is simply this:—That the rules and regulations in question are, as regards at least the matter of entry-money, no longer in force, having been altered from time to time since 1850 by resolutions of the corporation passed in the prescribed manner, and altered ultimately to the effect of raising the entry-money payable by intrants at the far hand, of the pursuer's age, to £1500.

“The reply of the pursuer is, that the alterations in question were and are ineffectual, inasmuch as they were not at the time, and have not yet been, sanctioned by the Court of Session; such sanction being, as he contends, required under the rules sanctioned in 1850, by the 43rd article of which it is provided.… [ His Lordship quoted the article, supra]

“The pursuer says, and so far I agree with him, that although elliptically expressed, the fair meaning of these words is, that while the rules may, so far as the corporation is concerned, be altered after certain procedure, all alterations so made require, as a condition of their validity, to be submitted to and approved by the Court of Session.

“To this, however, the defenders again answer that, assuming the above restriction on the autonomy of the corporation to have been imposed by the said rules, the result only is, that the said rules were to that extent ultra vires of the Court, being so on the ground that prior to the Act of 1846 the corporation had power to make bye-laws and regulations of its own authority, and that the last clause of section 3 of the Act provided with regard to all rules approved by the Court ‘that nothing therein contained shall affect the validity of any bye-laws, regulations, or resolutions that may be made by any such incorporation without the sanction of the said Court, which it would have been heretofore competent for such incorporation to have made of its own authority or without such sanction.’

“So far the controversy seems to be brought to what might be thought a comparatively narrow point, the defenders' case depending on the corporation's alleged power prior to 1846 to make bye-laws, &c., of its own authority, and the pursuer's case resting upon the two propositions—(1) that prior to 1846 the corporation, according to the sett of the burgh, as interpreted by usage, could only make bye-laws subject to ratification by the Town Council, and (2) that, supposing this to be otherwise, the corporation having submitted to the Court of Session in 1850 a set of rules and regulations, and having proposed or accepted without objection as one of those rules the requirement above expressed, cannot now at this distance of time dispute that the requirement in question is part of the law of the corporation. I should perhaps add that the pursuer has also a third point which raises a large and general question with which I do not propose to deal, viz., that, assuming everything else in the defenders' favour, the amount to which they have now raised the entry-money at the far hand, although in accordance with a principle upon which they have always acted, constitutes practically a breach of

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trust, as being in fact prohibitory of the entry of members of the trade, and having the effect of confining the benefits of the corporation (which are now very large) to one or two persons and their respective families. As I have said, however, I do not think it necessary, in the view which I take of the case, to do more than notice this point. I shall accordingly proceed to consider the pursuer's other points, taking first that second above mentioned, viz., that the defenders are now barred from contending that the rules of 1850, as sanctioned by the Court of Session, were to the extent in question ultra vires under the statute.

“I must say that I should have some difficulty in sustaining the suggested bar. In the first place, I do not think that the lapse of time makes here very much difference. For although fifty years' have now elapsed without any challenge of the rules of 1850, there appears to be no doubt that during all that time the matter of entry-money has been in fact dealt with as if it had been entirely in the hands of the corporation. In other words, as regards entry-money, the requirement as to the sanction of the Court has been since 1850 entirely ignored. The question must therefore, I apprehend, be taken, as if, for instance, it had been raised by an action of reduction brought, say, in the year 1860, when the entry-money was first raised. And in that view it is, I think, difficult to say that by reason simply of acquiescence the corporation could in 1860 have been held bound for all time to accept restrictions on its autonomy which ex hypothesi it was ultra vires to impose. I rather think that if the question had been raised in 1860 there must have been inquiry.—inquiry into the question whether at the date of the statute the corporation had in fact the autonomy claimed. Not that I doubt that the absence for fifty years of any assertion of the supposed autonomy must have been then, as it must be now, an important element in the inquiry. But that, as it appears to me, is the extent to which the pursuer's argument can be fairly pressed.

“Inquiry being thus open, how stood the matter in 1846 when the Act passed? Had the corporation of their own authority—that is to say, as I read the statute, without the sanction of the Town Council or of any outside body—power to alter their entry-money, and in particular their entry-money at the far hand. And here the defenders' first argument is a short one, and it is this. They concede that from about 1812 to 1846 the matter of entry-money was regulated by bye-laws of the corporation made from time to time, and submitted to and sanctioned by the Town Council. But they say that by the latest of these bye-laws made in 1839, and sanctioned by the Town Council in 1840 (being the bye-laws in force when the Act of 1846 passed), the matter of future additions and alterations was specially dealt with, and the power to make additions and alterations was declared to be fettered only by certain requirements as to procedure, and not at all by any requirement as to the sanction of the Town Council. They say, in short, that the Town Council in 1840 either waived for the future their right of ratification, or recognising that they in truth had no such right, acknowledged as from that date the autonomy of the corporation.

“Now, as to this, I should doubt very much whether, if it be once assumed that under the sett of the burgh the sanction of the Town Council was required, it was in the power of the Town Council of 1840 to divest themselves and their successors of a function which involved both the exercise of a right and the performance of a duty. Such a delegation of function by a public body would, I apprehend, raise rather a large question. But this at least seems clear, that the presumption is, and must be, against such a construction of the rules of 1839, and particularly such a construction of the article founded on. The matter of sanction is not, it will be observed, dealt with expressly, as it subsequently was, in the regulations of 1850. In other words, the review of the Town Council was certainly not excluded in terms. And that being so, I must say one would hardly expect so important a change to be left to mere implication. The presumption is, I think, against the implied finality. And altogether I am of opinion that the more reasonable construction of the rules of 1839 is that the sanction of the Town Council is not mentioned simply because its necessity was assumed as a matter of course.

“The question therefore comes back to this—What in 1846 were the powers of the corporation under the sett of the burgh, interpreted of course in dubio by the usage which followed? And on that question the first observation is that there is at least no dispute as to the documents which constitute the sett of the burgh. These are enumerated in the joint-minute of admissions. And the important documents are, it is I think admitted, (1) the submission to, and (2) the decreet-arbitral by, the Earl of Ilay dated in 1729–1730, of which passages are printed.

“There was at the recent hearing much argument upon the construction of those passages. The pursuer founded specially upon the general assertion of what may be called the visitorial power of the Town Council over its subordinate corporations, and on the express finding and declaration ‘that bye-laws made by corporations for themselves are of no force unless they are ratified by the Magistrates and Council.’ The defenders, on the other hand, founded on the immediately subsequent clause, which forbade the making of bye-laws by the Town Council with respect to the affairs of the corporations, and particularly on the last clause of the decree, which ‘likewise finds that they (the Magistrates and Council) have no power to control the management of the several stocks belonging to the said incorporations or to make bye-laws concerning the same.’ What I have to determine is, what is the fair reading of these passages, read of course in connection with the decreet-arbitral as a whole?

“I have come to be of opinion that with respect to all bye-laws (that is to say, all rules and regulations laid down by the

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corporations as binding until lawfully altered) the enactment which I have quoted is absolute. The instance must be with the corporation, but the Town Council must ratify. And while with respect to their ‘stocks’ (whatever that expression covers) the corporations are to be free, it seems enough for the present purpose to say that ‘management of stocks,’ while it may cover the investment and application of capital, or even also of revenue, can hardly be held to cover such matters as conditions of entrance—conditions which in these days involved not only pecuniary considerations but considerations of civic policy. In short, if the decreet-arbitral had had to be construed as at its date, I should have, I confess, thought it fairly clear that, in such matters as the conditions of entry, the corporations must have been held bound to proceed by bye-laws, which bye-laws were to be of no effect until ratified by the Town Council.

This, however, brings us to the question of usage; and as to that I must acknowledge that, if the present dispute had arisen, say, in the year 1810 (when a somewhat similar dispute did in fact nearly arise), it would have been rather difficult to say what, having regard to the usage since 1729, must have been taken as the law of the corporation. For whatever was the just construction of the decreet-arbitral, it is quite certain that the corporation acted on the assumption that in fixing its entry-money—at least its entry-money at the far hand—it was bound by no rules and required no sanction. For what it in fact did was to make in each case as it arose the best bargain it could with the applicant. It is true that the number of entries at the far hand was very limited—about 30 in all for eighty years. It is true also that, although the rise of the entry-money (from £5 in 1729 to £40 or £50 in 1810) was very substantial, it was never so increased as to be prohibitory; while as regards the entry of freemen's sons and apprentices there was really no change during the eighty years. Still the corporation seem to have charged all stranger craftsmen very much what they chose; and perhaps I might go further and say that they plainly enough considered that, even apart from any question of entry-money, they were not bound to admit at the far hand any applicant who was not ‘agreeable to the corporation.’

“It is not, however, in my opinion necessary to consider what would have been the situation if this state of matters had continued, not down to 1810, but down to 1846. For about 1810, or even earlier, it seems to have been brought home to the then members of the corporation that they had been acting irregularly; and that instead of wrangling over the entry-money to be charged in each individual case, they behoved to have rules or bye-laws dealing with that and with similar matters. They also seem to have assumed or been advised that according to the sett of the burgh they were bound on making such rules or bye-laws to submit them to the Town Council. At all events for that or some other reason they did about this time begin to adopt that course. For in 1812, and again in 1817, there were prepared and passed by the corporation and submitted to the Town Council, in professed obedience to the sett of the burgh, successive tables of entry-money, which, being sanctioned by the Town Council, were observed until superseded by other tables similarly sanctioned. Again in 1828 (when, the funds having greatly increased, annuities to members at a certain age irrespective of poverty were first introduced), formal bye-laws were prepared and similarly sanctioned—bye-laws of which new tables of entry-money were an important part. And then lastly, in 1839, as already mentioned, those bye-laws were superseded by another set of bye-laws dealing with the same subjects, and, inter alia, increasing the rates of entry-money—bye-laws which were, as already said, submitted to and sanctioned by the Town Council.

“In short, the history of the matter was in substance just this. For about eighty years from its date the decreet-arbitral was, I will not say ignored, but treated as if it did not apply, at all events to the matter of entry-money. Then for about thirty-five years, and down to the statute of 1846, there was a contrary usage—a usage in entire conformity with the decree-arbitral as I am disposed to construe it.

“The ultimate question is whether in that state of the facts the Court can fairly affirm that in 1846 the defenders' corporation had according to the sett of the burgh in the matter of entry-money an absolutely free hand. On the whole, having given the matter my best consideration, my conclusion is that they had not. I think the usage up to 1810 is more than balanced by the usage from 1810 onwards; and that, apart from usage, and also taking the usage as a whole, the sanction of the Town Council was in 1846 still required. The result of course is that the corporation were not when the Act of 1846 passed, in the matter in question, autonomous; and not being so, their rules became from 1846 onwards subject to the sanction of the Court of Session.

“Whether the defenders may now by application to the Court have the alterations made by them since 1850 sanctioned, and what will be the effect of that sanction if obtained, I do not, at least at present, propose to consider. Something may depend on what the Court do, and particularly on whether they may see their way to make their sanction retrospective.”

The defenders reclaimed, and argued—The decree-arbitral of 1729–1730 was quite clear in excluding from the Town Council altogether all questions connected with finance. These were for the incorporation alone, and among such questions was that of the amount of the entry-money. To increase the entry-money was a power naturally in such incorporations— Reid v. United Incorporations of Mary's Chapel, May 27, 1790, M. 1977; Duncan v. Magistrates of Aberdeen, July 21, 1786, M. 2003.

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Following upon the decree-arbitral there was the invariable usage down to 1812 of the incorporation altering its entry-money without any outside sanction. Usage for so long a period would have been sufficient to entitle the incorporation to ignore the Magistrates and Council even had the sett of the burgh provided for their sanction— Gardiner v. Magistrates of Kilrenny, March 5, 1828, 6 S. 693; Gray v. Smith, June 30, 1836, 14 S. 1062. In 1812 therefore the incorporation's right to alter its entry-money was undoubted, and it could not be lost by its having submitted to the Town Council for sanction during the short period 1812–1840 three or four different sets of bye-laws which happened to contain tables of dues. The Act of 1846 brought in approval of Court where approval was then required, but specially reserved to the incorporations freedom where they then had it, and the Court in granting its sanction in 1850 and stipulating for such sanction to alterations did not intend and could not impose any restriction to which the incorporation was not already liable— Incorporation of Wrights, &c., of Leith, June 4, 1856, 18 D. 981. It was its duty to adjust the annuities, &c., and it must also regulate the entry-money so as to keep a balance of funds— Muir v. Rodger, November 18, 1881, 9 R. 149, 19 S.L.R. 121. The action of the incorporation towards the pursuer was merely following lines laid down long ago and followed ever since. The incorporation's power was good in 1845, and nothing had been done since to affect it.

Argued for the pursuer and respondent—These entry-dues were illegally imposed, because they had not received the sanction of the Court. (1) The regulations which were sanctioned in 1850 were quite clear on the matter, for they required the sanction of the Court to any alterations. The matter was before the Court then, and its decision amounted to res judicata as against the defenders. (2) But if that was not enough, and they had to look at the question prior to that date, they found undoubtedly at first alteration of entry-money required sanction. It was not a matter of small importance, and did not come within the term “management of stocks.” Up to the Act of 1846 the conduct of the incorporation had not been uniform, for while during the later years it had obtained the sanction of the Town Council to alterations of the entry-money, during the earlier it had not done so. But in such a matter it would not be sufficient that sanction was not obtained; it would be necessary to prove the Town Council was deprived of power. Nothing short of positive waiver could be of any use, and a town council could not waive such powers for its successors— Incorporation of Tailors in Glasgow v. Trades House of Glasgow, November 21, 1901, 4 F. 156, 39 S.L.R. 109.

The following authorities were also referred to— Ritchie v. Cordiners of Edinburgh, December 9, 1823, 2 S. 565; Tait v. Muir, December 19, 1902, 5 F. 288, 40 S.L.R. 242; Webster v. Tailors of Ayr, November 14, 1893, 21 R. 107, 31 S.L.R. 89; Incorporation of Tailors in Glasgow v. Inland Revenue, May 26, 1887, 14 R. 729, 24 S.L.R. 516; Kesson v. Aberdeen Wrights and Coopers' Incorporation, November 2, 1898, 1 F. 36, 36 S.L.R. 38.

At advising on 15th November—