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United Kingdom House of Lords Decisions |
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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Charles Ferrier and Others, Lyell's Trustees - Giffor - Cler - Jameson v. James Hector - Cranstou - Vere [1822] UKHL 1_Shaw_159 (24 July 1822) URL: http://www.bailii.org/uk/cases/UKHL/1822/1_Shaw_159.html Cite as: [1822] UKHL 1_Shaw_159 |
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Page: 159↓
(1822) 1 Shaw 159
CASES DECIDED IN THE HOUSE OF LORDS, ON APPEAL FROM THE COURTS OF SCOTLAND.
1 st Division.
No. 36.
Subject_Trust — Mutual Contract. —
A tenant having entered into an agreement with his landlord to renounce his lease at a particular period in consideration of a certain sum, and the landlord having prior to that period become bankrupt, and conveyed his estates to trustees—Held, (reversing the judgment of the Court of Session,)—1.—That the tenant had no right to insist that the trustees should accept of the renunciation, and pay the stipulated price, but that he was bound to elect either to retain his lease, or rank as an ordinary creditor under the trust for the price;—and,—2.—That there were not sufficient circumstances alleged to infer an adoption of the agreement by the trustees, so as to bind them to implement it specificially, either officially or personally.
In 1787 Robert Davidson obtained a lease of the farm of Fernieflat, part of the estate of Kinneff, for the lifetime of the tenant in possession, at the yearly rent of £276: 5: 6. This lease Davidson assigned to Hector, who took possession; and some years
Page: 160↓
In October thereafter, Lyell's affairs becoming embarrassed, and while he was arranging as to conveying his estates to trustees, Hector executed an inhibition against his whole heritable property, but in the following month of March it was restricted to the estates of Kinneff and Largie. In April 1811 Lyell made a trust-deed in favour of the appellants, for behoof of themselves and his other creditors, by which, after narrating the various debts due by him, (several of which were heritably secured,) he conveyed his estates to these trustees, “for and to the use and behoof of my creditors before named, and of any others my just and lawful creditors here omitted, whom the said trustees shall assume into the benefit of this disposition.” The trustees were empowered to sell the lands, and apply the price in payment of the debts; but it was declared that they should have no power to prefer any one creditor to another, or to affect the legal rights acquired by them by diligence or otherwise. The trustees immediately took possession, were infeft on the 30th December 1815, managed the estates as the sole and exclusive proprietors, and Hector followed the course of cultivation prescribed by the terms of the agreement. In 1813, 1814, and 1815, the trustees repeatedly advertised the lands of Kinneff for sale, and among other advantages they stated, that “on the principal farm (viz.
Page: 161↓
Having been unsuccessful in selling the lands, the trustees afterwards advertised the farm to be let, stating that the term of entry was to be at Martinmas 1816. In this they were also unsuccessful; and when that period arrived, Hector, under form of protest, declared that he was ready to renounce the lease, and required payment or security from the trustees in terms of the agreement. This being rejected, Hector brought an action against Lyell and them, both personally and officially, concluding that they should, in one or other of these characters, be ordained “to receive and accept a renunciation of the lease of the said lands from the pursuer, and thereupon to deliver to him a bond, with sufficient caution or other satisfactory security, for the payment of the foresaid sum of £10,000 sterling at the terms specified in the said agreement, with interest;”—“or otherwise, in case the said defenders shall fail to accept the said renunciation, and accept the premises as aforesaid,” then they ought to be ordained “to make payment to the pursuer of the sum of £15,000 sterling,” as the damages sustained by such failure.
In support of the conclusions against the trustees, Hector contended, that, by their conduct, they had homologated and adopted the contract which had been made with Lyell; and that they were equally as much bound as he was to implement it. To this it was answered, 1. That they had not acted in such a manner as to have adopted the contract, either as trustees or personally;— that, in order to make this out, it was necessary, not merely to infer such an adoption by facts and circumstances, but to show a clear and distinct consent to do so;—that the advertisements and other acts were done in the performance of their duty to the other creditors; and that they were entitled to advertise the farm, in order to ascertain its value. 2. That the contract merely gave Hector a personal claim against Lyell for the £10,000, and that he was not entitled to demand from the trust-estate full payment of that sum, in preference to the other creditors; and that, by the terms of the trust, they were prohibited from giving any creditor a preference. Thereafter the trustees raised an action before the
Page: 162↓
In relation to the advocation of the action for rents, the Lord Ordinary found, “That as the landlord stands indebted to the tenant, by a liquid ground of debt, to a much greater amount than the rents in question, he is entitled, in a question with Mr. Lyell's trustees, to retain his rents in extinction of that debt which was contracted prior to the trust; and in respect that it is in the power of any of the heritable creditors who held heritable rights prior to the obligation granted by Lyell, and the inhibition following thereon, to take possession of the estate by mails and duties, and thereby to secure not only the interest, but the principal sums due to them, and that no appearance has been made in this case but by the trustees acting under a voluntary trust executed by Lyell himself long subsequent to the obligation granted by Lyell to Hector, and inhibition following thereon; and therefore sustained the claim of retention made by Hector.”
Page: 163↓
Hector having reclaimed against the former of these interlocutors, and the trustees and an heritable creditor against the latter, the Court, on the 28th June 1819, * altered, and found “it sufficiently established that the defenders, Mr. Lyell's trustees, did, by their acts and proceedings, assume the agreement libelled on as beneficial to the trust-estate, and the objects of the trust-deed in their favour; and that the said defenders qua trustees, and the estate and effects under their management, are therefore liable and answerable for specific implement of the said agreement;” and decerned accordingly, with expenses; but refused the petition for the trustees and the heritable creditors, “in respect the lawful rights and claims of all the heritable creditors are expressly reserved in the interlocutor reclaimed against, and are open to be proponed in due and competent form of law.”
Thereafter the estates of Lyell were sequestrated in terms of the bankrupt act; and Ferrier having been appointed trustee, he and the other voluntary trustees entered an appeal to the House of Lords, who found, “That it was not sufficiently established that the appellants, trustees of the said George Lyell, did, by their acts and proceedings, adopt and assume the agreement libelled as beneficial to the trust-estate, and the objects of the trust-deed in their favour; and that the said appellants qua trustees, and the estate and effects under their management, are not liable and answerable for specific implement of the said agreement: And it is ordered and adjudged, that the interlocutors complained of, so far as the same are inconsistent with this finding, and especially so far as the same decern against the said appellants, qua trustees, for specific implement in terms of the libel, accordingly, and so far as the said interlocutors find them liable to the pursuers in the expenses of process, and all directions consequent thereupon, be reversed: And it is declared and adjudged, that the respondent could only demand implement of the said agreement against the said appellants, as trustees as aforesaid, according to the terms of the said trust-deed, without preference to any other creditor of the said George Lyell entitled to the benefit of such deed, and according to the terms of the said agreement: And it is further declared and adjudged, that the respondent is bound to elect either to perform the said agreement specifically on his part, and seek for implement thereof on the part of the said George Lyell as a creditor of the said George Lyell, according to the terms of the trust-deed, or to retain the benefit of his lease, and demand damages for
_________________ Footnote _________________ * Not reported.
Page: 164↓
Counsel: Appellant's Authorities.—(1.)—4. Dow, 341; 1. Espinasse, 233; 7. East. 335; 3. Campbell, 340.
Solicitors: J. Campbell,— C. Berry,—Solicitors.
( Ap. Ca. No. 23.)
