Scottish Court of Session Decisions

In 1851 William Dixon of Govan Colliery, Glasgow, became proprietor of the mineral estate of Carfin. He subsequently acquired various detached pieces of land in the immediate neighbourhood of the estate. In all these latter cases, however, the surface only was acquired, the minerals being reserved by the seller or superior.

In 1851 William Dixon proceeded to sink pits and lay out a colliery for the working of the minerals in Carfin, and erected partly upon the Carfin estate, but mainly on these detached pieces of land, stores, manager's house, and dwelling-houses for the use of the workmen and others employed in the colliery.

William Dixon died on 23rd February 1859, and by his directions his trustees in November 1873 conveyed the lands of Carfin and the detached pieces of land in their neighbourhood to his son William Smith Dixon.

In 1873 the business of iron and coal-master carried on by William Smith Dixon was converted into a limited liability company under the name of “William Dixon, Limited,” Mr Smith Dixon taking a large interest therein as one of the shareholders. He subsequently granted a lease to the company for thirty-one years as from 1st September 1872, of the coal, ironstone, &c. still remaining in the lands of Carfin, with the usual enabling rights for working, winning, and carrying away the same. “With right also to the said second party, the company, during the currency of this lease to use and occupy the stores, manager's house, and dwellings for workmen, and other houses and gardens attached thereto, situated at Carfin, the second party paying and so relieving the first party and his foresaids of all feu-duties payable to their superiors in respect of those held by them from other parties in feu, and also paying to the first party and his foresaids a ground rent for those built on land belonging to them forming part of Carfin estate, at the same rate as the rent payable by the second to the first party for land under the separate lease of Carfin farm and others, and paying and relieving the first party and his foresaids of all public and parochial burdens and taxes of every kind in respect of the said houses and others, whether exigible from landlord or tenant, and also insuring the stores and managers' houses against fire, and also maintaining the said houses in a proper state of repair during the currency of this lease … For which causes, and on the other part, the second party bind and oblige themselves to content and pay to the first party, and his heirs, executors, and assignees the yearly rent or lordships after specified, and that half-yearly on the last days of February and August respectively in each year, by equal portions, beginning the first payment as on the last day of February 1873 for the half-year preceding, and the next payment as on the last day of August following, and so forth half-yearly thereafter during the currency of this lease, with a fifth part more of each half-year's payment of liquidate penalty in case of failure in the punctual

Page: 362↓

payment thereof, and the interest thereof at the rate of 5 per centum per annum from the time at which the same falls due until payment thereof, videlicet—the sum of £800 sterling yearly of fixed rent, or or in the option of the first party or his foresaids the royalties or lordships following … And further, the second party bind and oblige themselves to satisfy and pay to the first party's tenants in the surface of the lands the minerals in which are hereby let, for such portions of the said lands as are now occupied or which may be hereafter occupied by the second party, excepting only the houses and others hereinbefore mentioned, and that at such rates as may be arranged between the second party and such tenants, and failing arrangement, as may be fixed by two arbiters mutually chosen, or by an oversman to be appointed by such arbiters, and that in addition to the fixed rent or lordships hereinbefore mentioned.”

William Smith Dixon died on 16th June 1880, and in accordance with his testamentary instructions his trustees disponed and conveyed to his half sister, Mrs Anna Jane Napier or Church, whom failing her nearest heir in heritage according to the law of Scotland, his lands and estate of Carfin, with the whole mines, metals, and minerals therein, with all rights and privileges connected with the said lands, but subject to the existing leases of the minerals and surface.

By antenuptial contract of marriage Mrs Church had conveyed to trustees in general her whole means and estate, heritable and moveable, real and personal of whatever nature or denomination, or wherever situated, then belonging to her, or which she should thereafter acquire during the subsistence of the marriage.

The detached feus with the houses erected on them remained the property of William Smith Dixon's trustees. The lordships stipulated in the lease, greatly in excess of the paid rent, were for some years paid to Mrs Church's marriage-contract trustees. Recently, however, the point was raised by Mrs Dixon's trustees that, as a portion of the consideration for the lordships was the occupation of the houses and others upon the detached pieces of ground, which belonged to them, and not to Mrs Church's trustees, they were therefore entitled to share in the lordships to a certain extent. The contention of Mrs Church's trustees was that the right of working the minerals was the essential matter under the lease, and that the right of occupying the detached houses and others above referred to could not be separated from it. Intimation was given by Mr Dickson's trustees to the tenants to cease paying the lordships until this point was settled, and Mrs Church's trustees demanded that payment should be paid as usual. In these circumstances the present action of multiplepoinding was raised to have the rights of parties settled. The fund in medio consisted of the lordships due under the lease as at 31st August 1892, and amounted to £3198, 10s. 5d.

Lieutenant-Colonel Charles Sewell and others, Dixon's trustees, averred—“The gross annual value of the said detached pieces of ground and buildings thereon is £562, from which certain deductions, amounting in all to £287 or thereby, fall to be made in respect of feu-duties, rates, taxes, &c., which under the lease are payable by the tenants. The claimants' said properties have, since the pursuers' company was formed, been used and possessed by them as tenants and occupants under and in respect of said lease in connection with their said business. The value of this said use and occupation to the pursuers has been not less than £562 per annum, or £275 after deducting said sum of £287. The nett annual value of the claimants' said properties, one year with another, is not less than £275, which sum ought to have been annually accounted for and paid by the real raisers to the claimants, and said sum should accordingly have been in each year deducted from the rents or royalties paid by the real raisers to or on behalf of Mrs Church. The total amount thus erroneously withheld from these claimants, with interest thereon, is £4219, 2s. 2d. They claimed to be ranked and preferred to the whole of the fund in medio in payment pro tanto of the said sum of £4219, 2s. 2d., or otherwise, to the sum of £550, being the rent due in respect of the tenancy of the claimants' said properties for the two years ending respectively 31st August 1891 and 31st August 1892, with corresponding interest thereon.”

They pleaded—“(1) These claimants being proprietors of the properties condescended on, and the same having been used and occupied by the pursuers, the claimants are entitled to be ranked and preferred in terms of the first alternative of their claim. (2) The sums set out in these claimants' state being due and payable in respect of the use and occupation by the pursuers of these claimants' properties, the latter should be ranked and preferred in terms of the first alternative of their claim; et separatim, in any event, in terms of the second alternative thereof.”

Robert Duncanson Mackenzie and others, Mrs Church's marriage-contract trustees, maintained that all the items composing the fund in medio were payable in respect of the subjects in which they were in right, and that no part of the fund was payable in respect of or attributable to the occupation of the houses, stores, &c. The clause in the lease which conferred on the mineral tenants the right to occupation expressed in gremio the full agreed-on consideration therefor.

They pleaded—“(1) The claimants being in right of the whole of the subjects in respect of which the various items of rent and lordship composing the fund in medio are payable, are entitled to payment of the whole amount of said sum.”

Upon 17th June 1893 the Lord Ordinary repelled the claim of Dixon's trustees, and ranked and preferred Mr and Mrs Church's marriage-contract trustees.

Page: 363↓

Opinion.—The fund in medio here consists of certain mineral rents or lordships due by Messrs Dixon, Limited, as lessees of the mineral field on the estate of Carfin. The question is, whether those rents or lordships belong wholly to Mrs Church, who is now owner of the estate of Carfin, or have to be shared by her with the other claimants, the trustees of the late William Smith Dixon. These trustees claim, as owners of certain miners' houses let to the pursuers under their lease, and situated not on the estate of Carfin but on certain lands adjacent, which are now the trustees' property.

“I do not think that I need resume the facts. The original lessor was the late Mr William Smith Dixon, who owned at the date of the lease both the minerals and the miners' houses. He left by his settlement the estate of Carfin to his sister Mrs Church, but the conveyance for some reason did not include the lands on which these miners' houses were built. These houses accordingly fell to his general trustees, and they claim a share of the mineral rents on the ground that the same are payable partly for subjects which are now their property.

The question appears to me to depend upon this, whether, upon the just construction of the lease, the miners' houses in question are let simply as part of the mineral subject, or, on the other hand, are let as a separate subject, and for a separate consideration.

I am of opinion that the latter is the correct view. The right to occupy the houses (along with other houses as to which no question arises) is certainly let by a separate and distinct clause in the lease; and that clause undoubtedly specifies certain definite payments or prestations which are the conditions of such right of occupation. In particular, the tenants are taken bound to pay for the houses on the estate of Carfin proper, certain groundrents which are to be calculated in a certain manner, and for the houses in question, which are built upon feus, the feu-duties payable to the superiors. They are also bound to relieve the lessor in both cases of all public and parochial burdens effeiring to the houses which are thus let to them; and all this is stipulated apart from and in addition to the proper mineral rents or lordships, which are imposed upon the tenants by the clauses in the lease which follow.

It is true that the obligation to pay the mineral rents or lordships begins in the usual way with the words ‘For which causes, and on the other part;’ and the trustees found upon that expression as implying that the mineral rent or lordship is payable, inter alia, for the right to occupy the houses. But it rather appears to me that this is giving too much weight to the mere collocation of the clauses, especially seeing that as matters stood at the time, the question which has now arisen was not foreseen and was of no importance. And on the whole, I prefer the construction which assumes that according to the scheme of the lease the houses were let as one subject on certain terms, and the mineral field as a separate subject on certain other terms. I am the more disposed to adopt this view that it appears to have the support of two judgments pronounced in the Valuation Court by Lords Fraser and Lee in 11 R. 844 and 12 R. 640.”

Dixon's trustees reclaimed, and argued—The presumption was that rent was due for a subject occupied— Glen v. Roy, November 28, 1882, 10 R. 239. If there was a construction of the lease compatible with the payment of rent, that construction ought to be adopted. The Lord Ordinary's note showed sufficiently that there was such a construction. He did not say that the present claimants' claim was absurd, merely that he preferred the other. “And for which causes” included the possession of the houses according to the natural meaning of the words. It might be difficult to apportion the items, but that was not the question here. The decisions by the Lands Valuation Judges were not authoritative—here at least. The present claimants were not parties there. These decisions proceeded on the assumption that the rent or royalties were a consideration for the minerals alone. That was an ill-founded assumption.

Argued for Church's trustees—The Lord Ordinary had taken the sound view. The consideration for the rent or royalties was the minerals only; the houses were a mere incident of the lease, which was a mineral lease. The consideration for the right of occupancy of the houses was the payment of feu-duties and taxes. If the houses were not occupied, the tenant was under no obligation to pay the taxes, but the rent did not diminish if the houses were not occupied. Further, if royalties instead of rent were paid, the rent of the houses, if any was due, would rise, for it must be a certain proportion of the rent or royalties actually paid. It was absurd to suppose that the value of the houses increased because the output of coal was increased.

At advising—