Scottish Court of Session Decisions

The North British Railway Company, pursuers, brought an action against the Lord Provost, Magistrates, and Council of the City of Edinburgh, defenders, concluding as follows:—“Therefore ( first) it ought and should be found and declared by decree of the Lords of our Council and Session that the defenders are bound in all time corning to exempt and relieve the pursuers and their successors in the subjects situated at the east end of Princes Street in the city of Edinburgh, known as numbers ten, eleven, twelve, thirteen, and fourteen Princes Street, and numbers two, four, six, and eight West Register Street, Edinburgh, and described and contained in the titles of the pursuers to be produced in the process to follow hereon, from all town's burdens, burgh and county cess, stents, taxations, and all other public burdens of whatever kind now imposed or hereafter to be imposed upon the said subjects or upon the proprietors and occupiers qua such, and in particular from burgh assessments, poor and school rates, and lunacy assessments; and ( second) the defenders ought and should be decerned and ordained by decree foresaid to make payment to the pursuers of the sum of Nine hundred and thirty-two pounds two shillings and fourpence, with interest thereon at the rate of five per centum per annum from the date of citation to follow hereon until payment.”

The titles referred to in the summons went back to three charters, two of which were granted in 1769 and the other in 1770. They all contained obligations of relief of public burdens in practically identical terms; one of those clauses, taken from the charter in favour of John Humble dated 8th November 1769, was—“To be holden the said piece of ground and houses erected or to be erected thereon of and under the said magistrates and town council and their successors in office for payment of one penny Scots yearly if asked allenarly, in feu-farm, fee, and heritage for ever, free of all the town's burdens, borough and county cess, stents, taxations, and all other public burdens of whatever kind now imposed, or hereafter to be imposed, and of all feu and blench duties, ministers' stipends, and schoolmasters' salaries imposed or to be imposed, and due and payable for or furth of the same in all time coming, the said Magistrates and Town Council and their successors in office being obliged to relieve the said John Humble and his foresaids of all the burdens generally and particularly before mentioned, excepting the said yearly feu-duty.”

The pursuers pleaded, inter alia—“1. The said property of the pursuers being, in virtue of the contract between the predecessors of the pursuers and the predecessors of the defenders contained in the said feu-charters free of all public burdens of whatever kind imposed at the dates of the said charters or thereafter to be imposed, the pursuers are entitled to decree of declarator as concluded for, and to payment from the defenders of the sum sued for. 2. In respect that the burgh assessments, poor and school rates, and lunacy assessments are town's burdens or public burdens, or otherwise fall within the obligation of exemption and relief in the original feu-charters of the said property, the pursuers are entitled to decree of declarator and for payment as concluded for. 3. In virtue of the decree [in Ainslie v. Magistrates of Edinburgh] founded on, the liability of the defenders, of which declarator is sought in terms of the first conclusion of the summons, is res judicata, and the pursuers are entitled to decree in terms of the said first conclusion. 4. The defenders are barred by homologation, rei interventus, and usage, from opposing the conclusions of the summons, and decree should be granted in terms thereof.”

The defenders pleaded, inter alia—“3. In respect that the obligation of relief in the said charters does not apply to the assessments and rates particularly specified (other than the poor rate to the extent condescended on) in the first conclusion of the summons, the defenders should be assoilzied from the conclusions of the action. 4. The pursuers being legally liable in the rates and assessments under dispute and having no right of relief other than as aforesaid, the defenders should be assoilzied from the conclusions of the summons. 5. Separatim, the pursuers are not entitled to recover from the defenders in virtue of said clause of relief the amount of any rates or assessments paid by pursuers to or on behalf of the tenants, except in so far as such rates or assessments are recoverable by said tenants from the pursuers in virtue of the law regulating such rates or assessments. 6. In any event, in respect that the pursuers have not transmitted said obligation of relief to their tenants by lease or otherwise, the pursuers are not bound to relieve their said tenants of occupiers' rates and assessments, or entitled to recover any amount thereof paid by them to or for their said tenants. 7. In respect that the same subject-matter does not now come directly in question, the decision in the case of Ainslie v. The Magistrates of Edinburgh is not res judicata against these defenders, and in any event it can form res judicata in favour of the pursuers only in so far as they are successors of Ainslie in his feu.”

On 4th April 1919 the Lord Ordinary ( Blackburn) after a proof pronounced the following interlocutor—“Finds and declares that the defenders are bound in all time coming to exempt and relieve the pursuers and their successors in the subjects mentioned in the summons from all town's burdens, burgh and county cess, stents, taxations, and all other public burdens of whatever kind now imposed or

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hereafter to be imposed upon the said subjects or upon the proprietors and occupiers qua such or upon any tenants to whom they may be bound in relief thereof by the warrandice of their leases, and in particular from poor rates; assoilzies the defenders from the conclusions as to burgh assessments, school rates, and lunacy assessment; continues the cause to ascertain the sum which the pursuers are entitled to recover under the petitory conclusion of the summons in respect of said poor rates; reserves the question of expenses and grants leave to reclaim.”

Opinion (from which the facts of the case appear)—“The pursuers are the owners of lands and buildings at the east end of Princes Street, which comprise the subjects now known as Nos. 10–14 Princes Street and Nos. 2, 4, 6, and 8 West Register Street. They were purchased by the pursuers in the year 1891 at the price of £85,000.

“The subjects in question are held of the defenders as superiors and include (1) parts of land originally feued out by their predecessors under a charter in favour of Charles Robertson, dated 8th November 1769; (2) the whole lands feued out by their predecessors under a charter in favour of John Humble of same date, and (3) the whole lands feued out by their predecessors under another charter in favour of John Humble, dated 21st February 1770.

Before they acquired these subjects the pursuers' authors were themselves proprietors of other lands situated partly on and partly to the south side of Princes Street in the immediate vicinity of the lands in question. The defenders' predecessors desired to acquire these other lands for the town and a contract of excambion was entered into between them and the pursuers' authors, following on which the charters referred to were granted. One of the conditions of this transaction related to the rates and taxes payable by the vassals in respect of the subjects conveyed to them and is contained in the tenendas clause of each charter. These clauses although not expressed in precisely the same language are in similar terms, and I take that in the charter in favour of John Humble, dated 8th November 1769, as typical of all three. It is in the following terms:—… quotes, v. sup….

It is admitted that the obligation contained in this clause has been repeated in all the writs granted by the superiors renewing the investiture and that the pursuers are now in right thereof, but the parties are at issue as to its meaning and effect.

The pursuers maintain that the clause is one of exemption, the effect of which was to enfranchise the subjects for all time coming from all taxes no matter by whom imposed and whether levied on the owner or occupier. In their summons they ask a declarator that the defenders are bound to exempt and relieve them ‘from all town's burdens, burgh and county cess, stents, taxations, and all other public burdens of whatever kind now imposed or hereafter to be imposed upon the said subjects or upon the proprietors and occupiers qua such, and in particular from burgh assessments, poor and school rates, and lunacy assessment.’ There follows in the summons a petitory conclusion for the sum of £932, 2s. 4d. which is the amount of the said burgh assessments, poor and school rates, and lunacy assessments levied on and paid by them and their tenants during the year 1915.

The defenders, on the other hand, while they admit that the effect of the clause may originally have been to exempt the land from some assessments levied by the superiors themselves in their capacity as magistrates of the burgh and which were payable to the Common Good, maintain that quoad any other municipal assessments the clause is merely one of relief and must be construed as applicable only to taxes in existence at the date of the charter or to such more modern taxes as are similar to them in object and in incidence.

The pursuers support their argument as to the meaning and effect of the clause by a reference to the construction which has been placed upon it by the defenders themselves from the date of the charters down to the year 1914. It is the fact that during that period of nearly 150 years practically all assessments payable both by owners and occupiers in respect of the subjects have been paid by the town.

It will, I think, be convenient to refer at once to the history of this, which is remarkable. It divides itself into two periods, the one prior and the other subsequent to the year 1833.

In that year the affairs of the City of Edinburgh having become embarrassed, trustees for the creditors were appointed by Act of Parliament to take over the town's estates and wind up the debts. These trustees refused to acknowledge any obligation to exempt or to reiieve the properties in question from public burdens, and accordingly from 1833 to 1837, when the trust was brought to an end, the proprietors and tenants were compelled to pay the taxes and impositions leviable from them. Thereupon Alexander Ainslie, who was proprietor at that date of a portion of the pursuers' property which is included in the charter in favour of Charles Robertson and which is shown hatched in red on the plan produced with the summons, refused to pay to the trustees certain feu-duties in which he was liable to the town in respect of other properties belonging to him, and claimed right in virtue of the obligation in qnestion to retain these feu-duties as against the taxes levied on him by the trustees. Thereafter in 1836 he raised an action of declarator against the trustees and the magistrates, which contained one conclusion in somewhat similar terms to that in the present action but applicable to the then existing taxes, and another that he was entitled to retain the feu-duties. I shall have to consider this case, which is reported 1839, 2 D. 64, and 1842, 4 D. 639, at some length hereafter, but in the meantime it is sufficient to say that the effect of the judgment was to find that one way or another the magistrates were bound to free the owner and occupier of the subjects of all the existing taxes with the exception

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of an improvement tax, which being of a ‘temporary nature’ was held not to fall within the obligation, but ‘without prejudice to any question arising from the peculiar nature of any new tax which may be hereafter imposed.’ It appears from the session papers in the case that up to the date of the action the method adopted by the magistrates of giving effect to the obligation had been to instruct the stent-masters, who were their servants and by whom the stent rolls which were the basis of taxation were prepared, to omit the subjects from the roll altogether. This ingenious plan must not only have enfranchised the property but also have freed the magistrates from the necessity of relieving their vassals of assessments which might otherwise have been levied upon them by the heritors or other bodies. At the date when the final judgment in Ainslie's case was pronounced the trust for creditors had come to an end and the magistrates being again in control of their own affairs were the only defenders in the action. In spite, however, of the reservation in the interlocutor as to ‘new taxes’ they continued to pay all assessments on the owners and occupiers of the subjects down to the year 1915 with the exception only of imperial taxes. They could no longer follow their previous plan of omitting the subjects from the roll, but they exempted the subjects from all assessments leviable by and payable to themselves and paid all other taxes levied on the subjects by any other assessing body. This includes all the assessments specially referred to in the summons. It was not until the year 1915 that it seems to have occurred to the defenders that the reservation as to new taxes in the interlocutor in Ainslie's case might apply to some of the taxes which they were paying, and accordingly they repudiated liability for the whole of the taxes specially mentioned in the summons. It is not surprising that such a course of dealing over so long a period led to the universal and popular belief that the properties in question were completely enfranchised, and that numerous transactions of a most onerous character have been entered into with regard to them on this understanding. The price paid for the subjects by the pursuers themselves and the rents paid to them by their tenants were all fixed and ascertained on this basis. If the effect of a clause of this character can be determined by the actings of parties it would be difficult to conceive a stronger case than that which the pursuers are in a position to present.

Turning now to the clause itself, and leaving for future consideration the effect that usage may have upon its construction, it appears to me that the first thing to ascertain is whether its legal meaning is to exempt the lands or to bind the superiors in an obligation of relief, or whether it is partly the one and partly the other. I think the third alternative was the view taken by the Court in Ainslie's case, but unfortunately no attempt was made to mark the clear distinction which exists between exemption and relief or to indicate the particular assessments from which the vassals were supposed to be exempt and those from which the superiors were bound to relieve them. The result is a somewhat perplexing judgment, parts of which I have found it difficult to understand. I think it quite clear that the defenders' authors intended so far as lay within their powers to exempt the land from burdens of all kinds, and the position of the clause in the tenendas seems to support this impression. But both parties to the charter may have doubted whether the granters had any power to exempt, and they must at all events have realised that such powers as they might possess could not extend to all assessments. I think the obligation of relief, which applies generally to all the taxes specified in the clause, must have been intended to cover not only the burdens from which it was realised that the Magistrates could not grant exemption, but also those as to which their powers of exemption were considered doubtful or open to challenge. In other words, if exemption proved ineffectual the vassal could fall back upon the obligation of relief.

There is no doubt that it was within the powers of the defenders' predecessors as superiors of the subjects in question to exempt them from feudal prestations. This does not concern the present question, but so far as the clause relates to feudal prestations it is effectual as a clause of exemption.

There is, I think, equally little doubt that neither as superiors nor as magistrates vested with statutory authority to assess and levy taxes in the burgh for some particular purpose, had the defenders' predecessors any power whatever to exempt the subjects from such assessments. These are imposed by law, and exemption by either the superior or the assessing body would be quite ineffectual. It may be, as the Lord Advocate suggested, that in their joint capacity as superiors and magistrates they were entitled in giving a grant of property from the Common Good to exempt the subjects from assessments made for the purpose of reimbursing the Common Good for outlays on the town establishment. Such assessments are no longer levied. Accordingly, the conclusion I come to as to the legal effect of the clause is that while it effectually exempts the lands from certain feudal prestations and may originally have done so to a limited extent from certain burgh assessments, it is only effectual to-day so far as taxation is concerned as an obligation of relief.

I do not think that this conclusion conflicts with anything decided in Ainslie's case. Dealing with the effect of the clause in his first interlocutor ( 2 D. 67) the Lord Ordinary (Lord Moncreiff) pronounced the following findings, the italics being my own—‘Finds, that the clause is effectual to give both the pursuer and his tenants in the property exemption and relief, first, from all burdens, stents, or taxations, payable “for,” or on account of the subjects of the feu-right, directly to the Magistrates of Edinburgh, or their collector, or which have come in place of taxes previously paid to them in the administration of the affairs of the city, whether the same are or are not

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strictly payable “furth” of the said lands; and finds that it does specially comprehend the burgh and county cess: Finds, that it is effectual, secondly, to give exemption or relief from all feu and blench duties exigible either by the magistrates or by any other party as superiors at and prior to the constitution of the right other than the stipulated feu-duty: Finds that it is effectual, thirdly, to entitle the pursuer and his tenants to relief from all ministers' stipends and schoolmasters' salaries which may in any manner be exigible “for” the said lands or subjects.’

The first of these findings deals with taxes levied by and payable directly to the magistrates, and recognises that the clause is effectual to give both exemption and relief from such taxes. Although the learned Judge does not discriminate between the taxes to which exemption and those to which relief apply, the finding seems to me to indicate clearly enough that in his opinion there were or had been taxes payable to the magistrates from payment of which they could exempt their vassals and others in which the only obligation effectual against them would be that of relief.

The second finding relates to feudal prestations, and the third to assessments by bodies other than the magistrates. In the latter case the Lord Ordinary finds that it is only under the obligation of relief that any liability rested on the Magistrates.

I do not think these findings are in any way inconsistent with the view I have expressed that to-day there is nothing left so far as concerns taxation but the obligation of relief.

The next question I propose to consider is the effect of the clause as to tenants' taxes.

It is with regard to this question that the decision in Ainslie's case has caused me most difficulty. It will be observed that in the findings already quoted the tenants, who were not parties to the action, are expressly dealt with as if they had a direct personal right of relief against the superiors. If the lands were exempted from taxation it is intelligible that the tenants should be free, but I am quite at a loss to understand how an obligation to relieve a vassal of taxes could be extended to give the vassal's tenants a direct claim of relief against the superior. But this appears to be the plain meaning of the third finding, and it is emphasised by the following passage in the interlocutor. Dealing with the question of retention, the Lord Ordinary found that the pursuer was entitled to retain his other feu-duties payable to the trustees against the taxes assessed on or paid by him ‘or any tenants to whom he may be bound in relief thereof by the warrandice of their leases.’

In the note attached to his interlocutor the Lord Ordinary says—‘Whether the tenants could themselves claim relief of the taxes from the defenders may possibly admit of doubt. But assuming that they could, they could not plead retention of the pursuer's feu-duties due to the trustees for other feus. The point therefore must come to this, that in extricating the matter the pursuer must show that the exaction of the taxes from the tenants does in fact bring the burden upon him personally. It is on this point that the Lord Ordinary has found the most difficulty; and as the facts are not sufficiently explained, he has found it necessary to qualify the interlocutor so as to leave the point open.’

This interlocutor was affirmed by the Second Division ‘as to the effect to be given to the clause of exemption in the charter,’ but a remit was made to the Lord Ordinary to hear parties further on the question of retention. Voluminous cases were lodged in which the effect and meaning of the clause was again fully canvassed on both sides. The Lord Ordinary then issued a second interlocutor ( 4 D. 640), in which he again found that the pursuer was entitled to retain the feu-duties with the same qualification as to tenants' taxes, and in which he inserted a fresh finding dealing with the effect of the clause. After referring to the previous interlocutors in the case, he ‘finds and declares that the Lord Provost, Magistrates, and Town Council of the City of Edinburgh, as representing the said city and the community thereof, are bound to exempt or relieve the pursuer and his successors in the subjects libelled from all town's burdens, burgh and county cess, stents, taxations, and all other public burdens, of whatever kind, now imposed or hereafter to be imposed upon the subjects libelled, or upon the proprietors and occupiers thereof qua such, subject to the qualification as to tenants above expressed, and in particular from the special impositions libelled, with the exception of the improvement tax, without prejudice to any question arising from the peculiar nature of any new tax which may be hereafter imposed.’

In form this interlocutor was recalled, but in effect it was affirmed and the above finding was incorporated ipsissimis verbis in the new interlocutor pronounced by the Division. This final interlocutor varies the former one by omitting the suggestion that the tenants have a direct claim against the superior; by finding that the vassal can claim against the superior for tenants' taxes where he himself has come under a similar obligation in his tenant's lease; and finally by reserving the question of subsequent taxation.

I do not understand on what legal grounds this method of extending the superior's obligation to tenants' taxes can be justified, but had the pursuers in the present case undertaken any such obligation in their tenants' leases, I think that I should have been bound to follow the decision in Ainslie's case so far as to find the defenders liable under their obligation to relieve them of their liability to their tenants. The pursuers aver in the condescendence that the property has been let by them to their tenants on the footing that the same was free of taxes, and a proof was allowed on this point. This established without doubt that the rents were fixed on

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the understanding that the properties were free from all municipal taxes. It was also stated that the burgh assessor in entering the subjects in the valuation roll made a deduction of 15 per cent. from the gross rent as representing the consideration paid for the exemption from taxation, and no evidence to contradict this was led by the defenders. Under these circumstances the pursuers have considered themselves bound to relieve their tenants, and have paid the municipal taxes levied on them. They may feel that they are under a moral obligation to do so, but this falls far short of a legal obligation such as was desiderated in Ainslie's case as a condition of their recovering the taxes from their superiors. In the absence of any such legal obligation to relieve their tenants the decision in Ainslie's case does not apply, and I know of no authority or legal principle to justify me in holding that the pursuers are entitled to recover tenants' taxes from the defenders.

Assuming now that the obligation on the defenders, so far as present day taxation is concerned, is only one of relief, I have next to consider the taxes to which the obligation extends. I had not thought it doubtful that it was well settled by the law of Scotland that as an ordinary rule of construction an obligation of this character applied only to taxes exigible at its date, or to taxes becoming exigible thereafter similar in character and in incidence to those in existence at its date. After much litigation this was unanimously held to be settled by the whole Court in the case of Scott v. Edmond, 1850, 12 D. 1077, and this decision was afterwards approved in Dunbar's Trustees, 1878, 5 R. (H.L.) 221, 15 S.L.R. 772. In both these cases the clauses under consideration were as wide and as general in their terms as that now in question. But it was argued for the pursuers that these authorities must be reconsidered, if indeed they are not overruled, by the recent decision of the House of Lords in Associated News papers, Limited v. City of London, [1916] 2 A.C. 429. This case dealt with a statutory exemption ‘from all taxes and assessments whatsoever,’ and it was held that the exemption applied to all local taxes and assessments whether present or future, except so far as any act imposing a new tax qualified or repealed the exemption. I should have been slow to assume that a decision in an English appeal, in which no reference was made to the law of Scotland, was intended to override the result arrived at by a long train of Scottish decisions culminating in one by the House of Lords itself, but I am satisfied that the case referred to has no such effect. The Legislature which grants an exemption from taxation in an Act of Parliament retains the power to prevent the exemption being extended to include taxes imposed by supervenient legislation. The superior contracting with his vassal has no such power, and having made his bargain is bound by it for all time. Accordingly it appears to me that the considerations which apply to the construction of a clause of exemption in an Act of Parliament can have no application to the construction to be placed on a similar clause in a feu-contract.

It was next argued for the pursuers that the rule that such a clause in a feu-contract is not to be construed as applying to supervenient legislation is founded on the presumed intention of the parties to the contract and that any presumption as to their intention must give way to the construction which they themselves have placed upon the obligation by their subsequent actings. This argument derives support from a passage in the judgment of the Lord Ordinary (Lord Cunninghame) in Scott v. Edmond. He states ( 12 D. p. 1083) that the general rule that an obligation of relief only refers to existing taxes applies ‘unless it appear from a long course of payments and from the conduct of the parties that they themselves actually understood and admitted the obligation to comprehend new taxes enacted by subsequent laws.’ His authority for this statement are the cases of Ainslie and Reid v. Williamson, 1843, 5 D. 644. I shall have to refer again to the former of these decisions, but the latter does not appear to me to afford any support to Lord Cunninghame's conclusion. The obligation in Reid v. Williamson was the usual one to relieve the vassal of certain named taxes and generally of all ‘other public burdens whatever.’ It was argued that poor's rates—the tax in question—not being in the enumerated list could not be held to fall under the general words. The Lord Ordinary (Lord Ivory) in refusing effect to this argument, which he appears to have done on general grounds, pointed to the fact that the superior had himself relieved the vassal of other taxes which were not specially referred to in the enumerated list, and accordingly that the conclusion that the general words might apply to poor's rates was only ‘to follow out the charger's own principle of construction.’ The ultimate decision that the obligation applied to poor's rates was on the ground that it was an existing public burden at the date of the obligation, and does not appear to have depended in any way whatever on usage.

But the opinions of the other Judges in Scott v. Edmond do not appear to me to favour this part of Lord Cuuninghame's opinion or to support the pursuer's argument. Lord Robertson, who gave the leading opinion, and with whom several eminent Judges concurred, assimilates an obligation of relief to an ordinary clause of warrandice. This undoubtedly can only refer to a state of matters existing at its date, for ‘nothing can infer eviction or recourse but that which had a cause anterior to the warrandice'— Watson, 1667, M. 16,588; see also More's Notes to Stair, vol. i, note M. In my opinion Scott v. Edmond definitely decides that a clause in such terms as that now under consideration has a clear and unambiguous meaning which is independent of any presumed intention of the parties as to the construction to be put upon it. The pious hope expressed by the Lord President (p. 1087) that the question was finally at rest and might never be raised again is quite inconsistent with the

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suggestion that every such clause is liable to be interpreted by the actings of the parties.

Had such a method of construction remained open an admirable opportunity of giving effect to it was afforded by the subsequent case of Dunbar's Trustees. There the obligation was contained in two feu-charters dated 1803 and 1823. Down to 1875 the only relief demanded from or given by the superior had been from minister's stipend and schoolmaster's salary. By that date the whole character of the subjects had changed, a harbour having been made and a large village built on the lands feued. The vassals then for the first time claimed relief from road assessments and poor's rates, the annual amount of which was about three times that of the feu-duty payable to the superior. The case was admitted by all the Judges who took part in it to be a hard one for the superior, but the construction put upon the clause for far more than the prescriptive period availed him nothing, and he was found bound to relieve the vassals of poor's rates, which in the year in question amounted to £500 and were much in excess of the feu-duty. Lord Gifford in the Inner House stated the general paramount and governing canon of construction to be ‘that the meaning and intention of the contracting parties as expressed in the contract must form the rule and the limit of liability,’ and in addition to this general rule ‘that unless the contrary be very clearly expressed the obligation will not apply to burdens or taxes imposed by future or supervenient laws.’ These words were quoted with approval by Lord Hatherley in the House of Lords ( 5 R. 225), and seem to me to be conclusive that it is from the language of the contract alone that you can arrive at the intention of parties. It appears to me that it was on this ground that no effect was given to usage in the case, and not on the special ground that failure by the creditor in an obligation to enforce his rights does not necessarily imply abandonment.

The subsequent case of Jopp's Trustees v. Edmond ( 1888, 15 R. 271, 25 S.L.R. 211), which was founded on by the pursuers as an authority for their proposed reference to usage, contains dicta by L.J.-C. Moncrieff and Lord Young which certainly do not support the view I have expressed as to the effect of the decision in Dunbar's Trustees. The facts of the case are somewhat complicated. In 1807 Jopp had acquired the tenant's part of a long lease of land granted in 1788 at a rent of £130. At the date of the action the lease still subsisted, and his trustees were the tenants under it. In terms of the lease the tenants were bound to free and relieve the proprietor of land tax, teind duties, stipend and augmentations thereof, and all other public burdens affecting the lands, and to pay the same annually and regularly and report discharges to the proprietor. In 1854 Edmond acquired the property, and being anxious to obtain full possession he took a sub-lease of the tenancy from Jopp's trustees. In terms of the sublease he was taken bound to pay ‘the following rents, including the sub-tenant's share of public burdens.’ It was also agreed in the sub-tack that Jopp's trustees should ‘continue to pay the principal rent of £130 with the poor's rate for the lands as formerly, and shall also pay and free and relieve the proprietor of the feu-duty and other burdens specified in the principal tack.’ From 1854 to 1884 the occupier's rates were paid by Edmond in addition to his rent, and the owner's rates were paid by Jopp's trustees. Edmond then claimed for the first time that in terms of the clause in the sub-lease the occupier's rates were included in the rent and should not have been paid by him in addition to the rent, and he raised an action accordingly. Jopp's trustees thereupon retaliated by raising an action of declarator that the clause of relief in the principal tack only applied to taxes existing at its date. These actions were heard together, and Lord Trayner (Lord Ordinary) substantially decided in favour of the pursuers in each action. The Second Division, however, reversed his interlocutors, and decided that the parties by their actings had construed the meaning of both clauses. The ground of decision in the case in which Jopp's trustees were pursuers was that the construction of the clause itself, coupled with the subsequent agreement between the parties contained in the sub-lease, created ambiguity as to the meaning of the contract between them. If there be ambiguity in the meaning of the contract a reference to usage for its interpretation is legitimate, but I do not think the clause in the present case now admits of other than one construction, and it follows that in my opinion the decision in Jopp's Trustees has no application. But the dicta of both the Lord Justice-Clerk and Lord Young go far enough to make me doubtful whether I have not over-estimated the effect of the decision in Dunbar's Trustees.

The case of University of Glasgow v. Kirkwood, 1872, 10 Macph. 1000, 9 S.L.R. 634, which was also founded on by the pursuers, and in which effect was given to usage in construing a clause of exemption, does not, I think, support the pursuers' argument. The obligation was contained in a series of royal grants ratified by Acts of the Scots Parliament. ‘Such grants,’ says Lord President Inglis (p. 1008) ‘are liable to be controlled and explained by usage in the same manner and to the same effect as grants by Crown charters, grants of customs, dues or tolls on transit, and the like. These can only be enforced in so far as they are supported by usage. And in like manner an exemption such as we are dealing with at present can only be supported in so far as it is in conformity with the usage which has followed on the grant.’ These words, used in justification of a reference to usage seem to indicate that in the Lord President's opinion such a reference would not be legitimate in order to ascertain the meaning of a clause of exemption or relief in a charter by a subject superior,

So far then as actual decisions go, Ainslie's case, in which effect was undoubtedly given to usage, appears to me to stand alone. It is difficult to extract from the report to what extent the judgments

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depend upon it. All that Lord Moncreiff claims for it in dealing with the taxes specially referred to in the summons is that they should not be ‘disturbed by strained criticisms.’ The taxes in question in 1836 as compared with those in existence in 1769 are conveniently shown in a table in the joint minute in the present case. The only ones with respect to which any question could be raised were poor's rate, police tax, Bride well assessment, and improvement tax. The last of these was held not to be included in the obligation, being for ‘temporary purposes,’ and poor's rates is now decided not to have been a ‘new’ tax so that usage can have had nothing to do with the decisions as to these two. The Bridewell assessment, though it certainly appears to have been a new tax, only amounted to one shilling according to the statement by the Magistrates in their case, and cannot have been treated as a matter of much importance. There remains only the police tax. As the first Police Act was passed in 1771, and the City Guard was not abolished till 1817, and the incidence of the police tax and the City Guard assessment were entirely different, I do not think that any criticism directed to show that they were different taxes could be fairly described as ‘strained.’ But the question whether a tax is ‘new’ or merely a continuation of an old tax is one of fact and not of law, and in 1833 the police were undoubtedly discharging one of the duties which fell upon the City Guard in 1769, viz., that of watching, and to this extent at any rate the police tax might be regarded as a continuation of an existing burden. If usage was relied upon at all with reference to the taxes I think it can only have been with regard to this tax and founded on as establishing an admission in fact that the one tax was a continuation of the other. It is quite clear that the Court did not consider that usage had extended the obligation to all supervenient legislation for in addition to the exclusion of the improvement tax the question as to new taxes emerging after 1840 was expressly reserved. I think it is probable that the usage was mainly founded on for the extension of the obligation to include tenants' taxes, and this seems to have been the view of the case taken by Lord Cowan in Wilson v. Magistrates of Edinburgh ( 1868, 6 Macph. 483, at 488, 5 S.L.R. 312). I can suggest no other explanation for this extension, but even with regard to the tenants the Court placed a limitation on the usage that had been followed. But whatever be the extent to which the Court proceeded to interpret the obligation by reference to usage, I think that the decision of Dunbar's Trustees precludes me from applying a similar method of construction based on usage to the taxes which have come into existence since 1842.

But I feel bound to follow the actual decision in Ainslie's case so far as it goes and so far as it can be applied to the present action, and it remains to consider how far this is the case.

I think that I am bound to grant decree in terms of the general part of the declaratory conclusion of the summons which is taken verbatim from the final interlocutor in Ainslie's case, subject to this that it omits the qualification as to tenants which I shall restore in my interlocutor.

As to the assessments specially referred to in the summons, the defenders admit liability for poor's rates so far as directly exigible from the pursuers. It was hardly disputed for the pursuers that school rates and lunacy assessment were new taxes. The latter was first imposed in 1857, and the former was held in Stuart v. Earl of Seafield ( 1876, 3 R. 518, 13 S.L.R. 318), to be a different burden to schoolmaster's salary.

The principal discussion centred on the burgh assessments. Treated as a single indivisible assessment this is of course entirely different to any tax in existence either in 1769 or in 1836. But as the assessment form shows, the general assessment is divided into five heads, and the proportion of assessment applicable to each head is ascertained. I see no reason why in connection with the question in this case the assessments under each of these heads should not be regarded as separate assessments grouped together for purposes of administration and collection, but which can be quite easily extricated from the general assessment levied as burgh assessments (see Islington Borough Council v. London School Board, [1903] 2 KB 354). If any one of these heads represented an assessment levied either in 1769 or in 1836 I should be prepared to hold that the defenders were obliged to relieve the pursuers to that extent, on the ground that it either was a continuation of a former assessment or that it had been held to be so in Ainslie's case. The only head which has any resemblance to former assessments is the first, which is for general police purposes and is levied upon occupiers only. The purposes embrace watching, lighting, cleansing, fire-engines, public parks, baths, wash-houses, libraries, and various miscellaneous purposes. In 1769 there was no assessment in any way corresponding to this. In 1836 the police assessment, held to be included in the obligation by the decision in Ainslie's case, was levied on tenants, occupiers, and owners, and appears to have embraced only watching, cleansing the streets, the maintenance of order and of a fire brigade establishment. But the distinction now existing between the police rate in 1836 and to-day does not include all the changes which have taken place in the interval. In 1854 the police assessment was extended to include a rate for the Water of Leith Sewerage Works and in 1867 a general sewer rate and a rate for inprovement expenditure. In my opinion the present assessment for general police purposes is not only a ‘new’ tax as compared with those in existence in 1769 but one differing so entirely in character and in incidence from the police tax dealt with in Ainslie's case that I do not feel bound by the decision in that case to hold that it falls within the obligation. I may add that in Scott v. Edmond county police assessments created by Acts of Parliament subsequent to the decision in Ainslie's case

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were held to be ‘new’ taxes. The result is that, in my opinion, the only one of the assessments specially referred to in the summons which falls under the obligation is the poor's rate. It will be necessary to continue the cause to ascertain the sum which the pursuers are entitled to recover under the petitory conclusion in respect of the poor's rates paid by them as owners, but meantime I shall pronounce an interlocutor in terms of the above findings and grant leave to reclaim.”

The pursuers reclaimed, and argued—The Lord Ordinary was wrong and his interlocutor should be recalled. The clauses here in question were in plain and unambiguous terms. It was immaterial whether the right conferred was of exemption or relief. The words were absolutely universal; obviously great care had been taken to omit nothing. The words “of whatever kind” distinguished the clause from all others previously considered, and clearly indicated that what was covered was not only the future impositions of existing taxes but also taxes introduced by later legislation for the first time. On the plain meaning of the clauses the pursuers were entitled to succeed, and the observations of Lord Gifford in Dunbar's Trustees v. British Fisheries Society, 1877, 5 R. 350, at p. 369, 15 S.L.R. 227, applied. Apart from a consideration of the words themselves, the clauses in question had been interpreted by the actings of the parties. Apart from the period between 1833 and 1837 which led to Ainslie v. Magistrates of Edinburgh, 1839, 2 D. 64, and 1842, 4 D. 639, the usage of parties had been uniformly in favour of the pursuers' contention. The Court should be slow to give a meaning to a deed other than that which the parties had accepted and acted on practically since 1769. But in the present case usage was especially potent as a key to interpretation, for the question arose each year; further the usage had persisted in spite of the change from the stent to the valuation rolls. In the stent rolls the pursuers' authors were omitted: the subjects necessarily had to go into the valuation roll, and year after year the defenders assessed themselves in respect of the subjects. Further, the right had been challenged in the period between 1833 and 1837 and litigated in Ainslie's case, and thereafter the usage had still persisted. Even if Dunbar's case was not distinguishable upon the words of the deed and laid down an interpretation against the pursuers, the usage in the present case put a different interpretation on the words. The usage in the present case was consistent with the natural meaning of the words used. When there was no usage and the Courts had to construe the words merely, they endeavoured to discover the intention of the parties as expressed in the words, and they assumed that the words related to the then existing state of affairs and were meant to cover the then existing taxes and future impositions of those: it was not thought reasonable that the parties were bargaining about the unknown taxes which might come into existence in the future for the first time. The result was a canon of construction or a presumption whereby such words were considered not to cover new taxes imposed by supervenient legislation. That was the whole effect of Dunbar's case, 1878, 5 R. (H.L.) 221, 15 S.L.R. 772. Where usage existed the meaning of the parties ceased to be matter of conjecture or inference and became definitely fixed by the usage, consequently the canon of construction or the presumption had to yield to the usage. Whenever there was usage the Courts proceeded upon it and disregarded presumptions or conjectures as to the meaning. In Sprot v. Governors of Heriot's Hospital, 1829, 7 S. 682, the vassal had paid the taxes in dispute and the Court decided in accordance with that usage. Scott v. Edmond, 1850, 12 D. 1077, was a case of pure construction of the words and proceeded on conjecture, see Lord Robertson at p. 1085, but Lord Cunninghame at p. 1083 correctly stated the effect of usage. In Hunter v. Chalmers, 1858, 20 D. 1311, per Lord Cowan at p. 1317, the usage was not proved. In Reid v. Williamson, 1843, 5 D. 644, the decision was in favour of the interpretation set up by the usage. Lord Ivory, at p. 647, recognised Ainslie's case as proceeding upon usage, and Lord Fullarton, at p. 648, applied Ainslie's case. In Wilson v. Musselburgh Magistrates, 1868, 6 Macph. 483, 5 S.L.R. 312, the usage was against the vassal but the principle maintained by the pursuers was affirmed and Ainslie's case regarded as one example of its application— per Lord Cowan at p. 488. In the University of Glasgow v. Kirkwood, 1872, 10 Macph. 1000, 9 S.L.R. 634, usage again was decisive. Jopp's Trustees v. Edmond, 1888, 15 R. 271, 25 S.L.R. 211, was an express decision affirming the contention of the pursuers. In Dunbar's case there was no usage. The question as to the poor rates was regarded as fully covered by authority, and quoad ultra, there being no data to rebut the established canon of construction, the Court proceeded upon it. Usage was the best guide for the interpretation of ambiguous phrases in deeds, especially those of ancient date. Only ancient statutes could be so construed, but all contracts, including modern contracts, could be so construed; the usage need not be ancient—Dickson on Evidence, sec. 1087, referring to Bruce v. Carstairs, 1773, M. 2333, and Attorney-General v. Drummond, 1842, 1 Dru. & War. 53, per Lord Chancellor Sugden at p. 368; Broom's Legal Maxims, 8th ed., p. 529; Chapman v. Bluck, 1838, 4 Bing, N.C. 187; Beal, Rules of Legal Interpretation, 2nd ed., pp. 125–6; Macgill v. Park, 1899, 2 F. 272, 37 S.L.R. 203; Sadlier v. Biggs, 1853, 4 H.L. Cas. 435, per Lord Cranworth at p. 455. In England a clause in a statute similar to the present had been construed to cover all taxes— Associated Newspapers Limited v. City of London, [1913] 2 KB 281; [1914] 2 KB 603; [1915] A.C. 674; Associated Newspapers Limited v. City of London, [1914] 2 KB 822; [1915] 3 K.B. 128; [1916] 2 A.C. 429; Sion College v. London Corporation [1901], 1 Q.B. 617. There was no reason why a statute should be interpreted differently

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from a contract. Ainslie's case was directly in point; the usage was shorter but the decision was that all taxes, including those imposed by supervenient legislation, were covered. The reservation of new taxes of a peculiar nature implied that all ordinary new taxes were covered. Sprot's case had not been cited because in it the usage was against the wider interpretation. The point that it was ultra vires to grant exemption from taxes imposed by statute had been taken and was rejected. Ainslie's case was res judicata as regards the new taxes imposed up to its date; quoad ultra it was an authority covering the present case. As regards tenant's taxes the usage had again been uniformly in the pursuers' favour, and no distinction had been taken as between tenants and occupiers. The lands had been regarded as enfranchised no matter how they were used. Ainslie's case had decided that. Even if the claim in question only applied to the vassal it covered tenant's taxes if it was shown that the burden of those fell upon the vassal, which was the case when he had bound himself to relieve his tenants. If that was a change upon the original clause a written contract could always be modified by writing—Dickson on Evidence, sec. 1016—and the leases and other writs plus the usage showed that even upon that view the obligation to relieve of those taxes had been set up. Hunter's case, per Lord Mackenzie at p. 1313, Lord Wood at p. 1316, and Lord Cowan at p. 1318, was directly in point. Montgomerie v. Hamilton, 1841, 3 D. 942, was in the pursuers' favour. Latto v. Magistrates of Aberdeen, 1903, 5 F. 740, per Lord M'Laren at p. 756, 40 S.L.R. 488, was distinguished.

Argued for the defenders—The clauses in question must be construed as clauses of relief. It could not be construed as an exemption of the lands, for at the date of the charters the town's burdens were imposed under statute, and the magistrate had no power to exempt from statutory provisions. The present clauses were historically both in fact and in form clauses of warrandice. They were regarded as warrandice clauses in all the earlier decisions and must be so construed. They must be therefore strictly construed, and had reference to the state of things existing at their date, i.e., the risks to which it was then known the lands were exposed by way of increase in then existing taxes. It was quite unreasonable to suppose the clauses contained an indemnity against every possible tax which might be imposed in the future. The fair construction was just that which applied to a warrandice clause, viz., indemnification against any increase of the burdens existing at the date of the deed—Duff on Deeds, p. 89; Stair, ii, 3, 46; More's Notes, Note M, at p. xciii; Ersk. Inst. ii, 3, 29; Watson v. Law, 1667, M. 16, 588. Consequently such clauses were construed to cover future impositions of taxes existing at their date, but not new taxes imposed by supervenient legislation— Elliot v. Lothian, 1824, 3 S. 348, N.S. 248; Sprot's case; Scott v. Edmond; Preston v. Magistrates of Edinburgh, 1870, 8 Macph. 502, 7 S.L.R. 291; Dunbar's case; Latto's case. That was in effect construing the clauses in the light of what the parties had in contemplation. “All” was not universal. The Associated Newspapers case had no bearing on the present question, for exemption was always legitimate and possible for the Legislature but never for the parties to a private contract. In the present case there was no room for the application of usage as an aid to construction. An appeal to usage was competent only when the words were ambiguous—Dickson on Evidence, referring to Magistrates of Dunbar v. Heritors of Dunbar, 1835, 1 Sh. & M'L. 134, per Lord Brougham at p. 195; Broom, op. cit.; Beal, op. cit.; North-Eastern Railway Company v. Hastings, [1900] AC 260, per Lord Halsbury at p. 263. Here there was no ambiguity, for even if such clauses were originally ambiguous they had received a fixed and definite meaning by the series of cases ending in Dunbar's case. If usage was appealed to in the present case it was to contradict that crystallised meaning. Further, usage could not be appealed to to construe modern deeds— Scott v. Howard, 1881, 8 R. (H.L.) 59, per Lord Watson at p. 67, 18 S.L.R. 454. The rule that such clauses as the present did not apply to taxes imposed by supervenient legislation was difficult to apply, and when usage was appealed to it was solely to decide what were taxes imposed by supervenient legislation and what were not. Usage had never been utilised to decide whether or not such a clause covered taxes imposed by supervenient legislation. In Bruce's case usage was considered to determine the meaning of “public burden.” The same applied to Reid's case and Scott's case. Wilson's case did not depend on usage. Kirkwood's case turned on specialties. In Hunter's case the question was, was the poor rate after 1845 a rate imposed by supervenient legislation? Jopp's case turned on the specialty of the sub-lease, and in it Dunbar's case was applied per Lord Traynor at p. 276. That case contained no more than dicta which were against the defenders, and there was no decision applying usage for the purpose which the pursuers sought to apply it. Had usage been available for that purpose it was difficult to understand why usage had not been pleaded in Williamson's case, Dunbar's case, and Latto's case, where it would have afforded an easy solution. In the present case the usage existed, because the attitude of the Courts as to what were taxes imposed by supervenient legislation had hardened in the course of time. That explained why the usage included some taxes which would now be regarded as supervenient. But the usage as a whole was to be explained as being due to the belief that the taxes in question were not supervenient. If usage could be appealed to it would not in the present case support the contention of the pursuers, viz., that all supervenient taxes were covered. For that it would be necessary to prove usage with regard to every supervenient tax as it was imposed. The usage must be flawless, and if it applied to some only of the supervenient taxes it was useless for the pursuers

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’ purpose. Here there was no such uniformity of usage. Ainslie's case could not have meant that the clause applied to all supervenient taxes, because if so it would have covered the improvement tax. The truth was that the taxes of a peculiar kind referred to in Ainslie's case were just taxes superveniently imposed. The other defect in the usage was the case of the public water rate. From that the defenders had never relieved the pursuers. Ainslie's case was not in that connection against the defenders. It merely raised the question of what taxes were the modern equivalents of the older taxes existing at the date of the charters. Lord Moncreiff in that case considered the improvement tax to be of a peculiar nature because it had no earlier prototype, i.e., it was supervenient. That was clear from Lord Moncreiff's opinion in Scott's case ( cit) at p. 1086. Further, any usage subsequent to Ainslie's case could not avail the pursuers, for in that case the defenders had tabled their opposition to the wider view of the clause. Such usage alone was founded on by the pursuers, for the taxes now in question were different from those in Ainslie's case. Further, usage was useless in the case of recently imposed taxes. In any view usage only gave a right to relief in so far as it had actually been operating, and it was competent to split up a consolidated rate in order to distinguish its parts— Sion College v. London Corporation; Islington Borough Council v. London School Board, [1903] 2 KB 354—and to consider how far usage applied to each. The clauses in question had no effect as regards tenant's and occupier's taxes. There was no authority to the contrary, unless it be Ainslie's case. That case was on a different clause and applied to different taxes, and was very special— Wilson's case ( cit.), per Lord Cowan at p. 488. If it did decide that question the decision was erroneous. The clauses were plainly in favour of the vassals only. They neither expressly nor inferentially applied to tenants. Hunter's case raised no question of tenant's rates. In Nesbit v. Lees, 1869, 7 Macph. 881, 6 S.L.R. 569, the decision was as to owner's rates. Latto's case decided that the right of relief was co-extensive with the feudal relationship. Consequently it could not extend to that of landlord and tenant. Such an obligation was personal in character, and could only be enforced by the vassal— Maitland v. Horne, 1842, 1 Bell's App. 1; Sinclair v. Marquis of Breadalbane, 1846, 5 Bell's App. 353; Spottiswoode v. Seymer, 1853, 15 D. 458; Stewart v. Duke of Montrose, 1863, 1 Macph. (H.L.) 25, 4 Macq. 499; Campbell's Trustees v. Dingwall, 1865, 4 Macph. 50, per Lord President M'Neill and Lord Curriehill at p. 55, 1 S.L.R. 31. In Wilson's case that claim had been negatived. Usage was unavailing here, for it would contradict the clause in question. In any event tenant's taxes would only be covered in so far as the vassal had taken burden upon himself for those. Of that in the present case there was no evidence.

At advising—