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Scottish Court of Session Decisions |
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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Clark v. Hume [1902] ScotLR 40_229 (17 December 1902) URL: http://www.bailii.org/scot/cases/ScotCS/1902/40SLR0229.html Cite as: (1902) 5F 252, [1902] SLR 40_229, [1902] ScotLR 40_229 |
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In the lease of a corn-mill it was stipulated that the landlord “shall insure against loss by fire the whole mills, kiln, machinery, houses, and offices … for such amount as he may consider necessary, the tenant paying one-half of the annual premium.”
The mill and machinery having been destroyed by fire during the currency of the lease, held that the insurance was solely for the benefit of the landlord, and that he was not bound to expend the money recovered under the policy of insurance in rebuilding the mill.
In December 1901 Robert Mossman Clark, miller, Ninewells Corn Mill, Berwickshire, raised an action against John Alexander Ross Hume, of Ninewells, in which he concluded (1) for declarator that in implement of the provisions of a lease dated 23rd July and 10th August 1896, whereby the defender let to the pursuer for ten years from Martinmas 1896 the corn-mill of Ninewells, with the kiln, dwelling-house, and offices attached, the defender was bound to expend the sum of £680 recovered by him from the Caledonian Insurance Company, or such part of it as might be necessary, in rebuilding the mill, &c., so as to restore the subjects leased to the condition in which they were prior to the occurrence of a fire on 12th July 1901; (2) for decree ordaining him to expend the £680 as above stated; (3) in the event of the defender failing to rebuild within a fixed time, for payment to the pursuer of £680 in order that the pursuer might himself reinstate the subjects damaged by the fire; (4) for payment to the pursuer of £200 as loss occasioned to him by the interruption of his business; or otherwise (5) as alternative to conclusions (2), (3), and (4), for payment to the pursuer of £2000 as damages.
The circumstances leading up to the action were as follows:—By the lease above referred to the defender let to the pursuer for ten years from Martinmas 1896 the corn-mill of Ninewells, with the kiln, dwelling-house, and other houses and offices belonging to the said mill, and also the lands attached thereto, the pursuer binding and obliging himself to maintain the whole mill and machinery, &c., in good tenantable condition during the lease, and leave them so at his removal, all at his own expense. The lease contained the following clause:—“And it is further stipulated that the landlord shall insure against loss by fire the whole mills, kiln, machinery, houses, and offices, in some respectable insurance office for such amount as he may consider necessary,
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the tenant paying one-half of the annual premium at the term of Martinmas yearly when paying his rent; and further, the said Robert Mossman Clark shall be bound to keep at all times insured against loss by fire the whole stock-in-trade, live and dead stock, and agricultural produce on the premises, to the extent of at least one year's rent, and pay the annual premium thereon, and report the receipts regularly to the landlord or his factor at the term of Martinmas yearly, and to assign the policy to the landlord in security of the rent whenever required so to do.” The tenant was also taken bound to take the thrashing-mill on the premises off the hands of the outgoing tenant at a valuation, it being agreed that the landlord or the incoming tenant should be bound at the expiry of the lease to take the thrashing-mill as it should then exist at a valuation.
A policy of insurance for £1190 was duly effected by the landlord in his own name with the Caledonian Insurance Company, on the buildings of the dwelling-house and corn-mill, on the machinery therein, and on the kiln and offices. This policy was kept up by the defender, and the pursuer regularly paid his one-half of the premium. On 12th July 1901 a fire occurred by which the mill and kiln and the machinery in the mill were burned down. The landlord recovered £680 from the Insurance Company in respect of the damage done, and on 12th August the landlord's agents intimated to the tenant that the landlord did not intend to rebuild the mill, as he had been advised that the insurance policy was purely for the benefit of the landlord. They added that the tenant would be entitled either to abandon the lease or to remain in possession and claim an abatement of rent in respect of the subjects destroyed.
The tenant being dissatisfied with either of these alternatives raised the present action.
The pursuer pleaded, inter alia—“(1) The defender being, on a just construction of the lease referred to, bound, in the event of the subjects of the lease being damaged by fire during the currency thereof, to require the insurance company to reinstate the said subjects, or otherwise being bound to expend the sum recovered from the insurance company, or so much of it as may be necessary, for the purpose of reinstating the said subjects, the pursuer is entitled to decree of declarator in terms of the first conclusion of the summons, and to decree for restoration in terms of the second conclusion, with expenses.”
The defender pleaded, inter alia—“(2) The insurance in question having been effected for the benefit of the defender he is entitled to be assoilzied.”
On 7th June 1902 the Lord Ordinary ( Strbmonth Darling) assoilzied the defenders from the conclusions of the summons, and decerned.
Note—[ After a statement of the facts]—“All of these claims (by the pursuer in the summons) depend on the legal question whether the landlord was bound to rebuild.
“It is, of course, admitted that apart from contract there is no obligation on a landlord to restore buildings which have been accidentally destroyed by fire. It is also admitted (or at least is clear) that the mere fact of a tenant being taken bound in a lease to pay one-half of the premium on a fire insurance policy in the landlord's name will not give the tenant such an interest in the insurance as to entitle him either to claim any part of the money recovered, or to demand that the money shall be expended by the landlord in reinstatement. That was clearly laid down in the case of The Duke of Hamilton's Trustees v. Fleming, 1870, 9 Macph 329, the judgment being unanimous on that point although there was difference of opinion on the rest of the case. The obligation on the tenant to pay one-half of the premium is a very usual one in agricultural leases, and is regarded in law as just an addition to the rent. The Juridical Styles (vol. i. pp. 585, 595, and 599) contain clauses which do give the tenant an interest in the money recovered under the policy, and do impose on the landlord an obligation to expend it in restoring the buildings destroyed by fire, but these clauses are in contrast to the bare obligation on the tenant to pay one-half of the premium, a specimen of which is to be found at p. 576.
Here, however, the tenant maintains that the same result is effected by its being made matter of express stipulation that the landlord shall insure. He distinguishes that from the case where it is left to the landlord to insure or not as he pleases. But I observe that in one of the styles to which I have referred ( i.e., what is called the ‘Ayrshire Lease, at p. 595 of the style book) the policy is’ to be effected in the name of the proprietor on the whole buildings on the farm hereby let,’ which is just as effectual a mode of stipulating that there shall be an insurance as the mode adopted here, and yet the framers of the style apparently thought it necessary to add the express obligation on the landlord to expend the money recovered.
I grant that where you are dealing with a style it may always be said that the addition of an express obligation is intended merely ob majorem” cautelam in order to make clear something which might otherwise be in doubt. But I find that the clause of insurance in the Hamilton case, which is given verbatim in the late Lord President's opinion at p. 335, was not to any extent optional, because the tenant there was taken bound ‘to have the whole houses and machinery on the premises constantly insured in some respectable insurance office to the extent of £1200 sterling, the policy to be taken in name of the proprietor, and he relieving the tenant of one-half of the premium of insurance.’ Accordingly, the taking out of a policy was made matter of stipulation just as much there as here, and yet the Court had no hesitation in holding that the insurance was for the benefit of the landlord alone. If it be pars contractus that an insurance shall be effected, it cannot make any difference on the legal result whether the insurance is to be taken out by the landlord directly or by
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The pursuer reclaimed, and argued—In the present case the tenant stipulated with the landlord that the mill should be insured. There was therefore an obligation on the landlord to insure, and an implied contract that if the buildings and machinery were burnt down he should reinstate. In this respect the case was distinguished from that of Duke of Hamilton's Trustees v. Fleming, December 23, 1870, 9 Macph 329, 8 S.L.R. 266, in which case there was no stipulation. The clause contained two correlative parts, one in favour of the tenant to the effect that the landlord should insure the buildings, and the other in favour of the landlord that the tenant should insure the stock. The agreement in the lease that the tenant was to take the threshing-mill at a valuation from the outgoing tenant, and when the lease was over hand it on at a valuation to the landlord or ingoing tenant, also showed that the insurance was in favour of the tenant as well as the landlord. The Court should sustain the first plea-in-law for the pursuer and remit the case to the Lord Ordinary for further procedure.
Argued for the defender and respondent—The stipulation in the lease was in the landlord's interest, and it was for him to judge whether or not it was for his interest to restore the subjects. If the stipulation had been in the interest of the tenant a sum would have been fixed at which the mill was to be insured. No such sum was mentioned!; the matter was left wholly in the discretion of the landlord. The case was the converse of that of Duke of Hamilton v. Fleming, supra, and was ruled by it.
The Court adhered.
Counsel for the Pursuer and Reclaimer—M'Lennan— J. H. Millar. Agents— Adam & Sang, W.S.
Counsel for the Defender and Respondent—Campbell, K.C.— Pitman. Agents— J. & F. Anderson, W.S.
