Sir James Montgomery of Stanhope, Bart.; Thomas Coutts and Others, Trustees and Executors of the late William, Duke of Queensberry v. The Right Hon. Francis Charteris, Earl of Wemyss and March [1819] UKHL 6_Paton_482

UKHL

Sir James Montgomery of Stanhope, Bart.; Thomas Coutts and Others, Trustees and Executors of the late William, Duke of Queensberry v. The Right Hon. Francis Charteris, Earl of Wemyss and March

[1819] UKHL 6_Paton_482

Sir James Montgomery of Stanhope, Bart.; Thomas Coutts and Others, Trustees and Executors of the late William, Duke of Queensberry, Appellants v. The Right Hon. Francis Charteris , Earl of Wemyss and March, Respondent

[Alternative Leases—Edstoun.]

House of Lords, 12th , July 1819 .

Subject_ Entail — Prohibitory Clause — Powers of Leasing — Grassums — Indefinite Term. —

In the Neidpath entail, there was no express prohibition against granting leases or taking grassums, but there was a prohibition to “alienate” the estate or any portion of the lands. A lease was granted for fifty-seven years, at a rent of £155, with a grassum paid of £300. Some time thereafter this lease was renounced for another lease for thirty-one years, or for 29, 27, 25, 23, 21, or 19, for whichever of these periods, the Duke might be found to have power to grant it. The Court would have sustained the lease for twenty-one years, but held that as a grassum had been paid for the lease renounced, the new lease must be viewed as a substitute for the former lease, and subject to the objections pleadable against it, and that the conversion of any part of the rent into a sum instantly paid, was an alienation pro tanto , and struck at by the prohibition against alienation. In the House of Lords held that tacks granted partly for rent reserved, and partly for rent paid down, were not to be considered as leases let without evident diminution of the rental.

Under the circumstances set forth in the previous appeal, the late Duke of Queensberry let leases of lands for alternative periods of duration.

In 1807, Robert Symington renounced his lease of the farm of Edstoun, and obtained a new one “for the space of thirty-one years, from and after the term of Whitsunday 1807, which is hereby declared to have been the term of the said Robert Symington's entry, notwithstanding the date hereof; declaring always, as it is hereby expressly declared, that in case it shall be found that the said William, Duke of Queensberry, is prevented by the entail of his Grace's estate of March, from granting a lease of the foresaid subjects for the above-mentioned period of thirty-one years, then, and in that case, this lease is granted for, and shall subsist and be understood to have been granted for the

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When he obtained this lease, he had a lease of the same farm for fifty-seven years from Whitsunday 1792. The rent stipulated on that occasion, was £155, 7s., and the grassum paid was £300. This lease had, therefore, a great many years to run, when it was renounced for the new lease, and the rent under the new lease was the same as under the previous; but no grassum was paid. There was also a separate contract, by which the Duke agreed, if the Wakefield case was reversed, to continue the tenant on the original footing.

June 14, 1814.

The respondent brought an action of reduction to reduce those leases, and, in particular, the lease of Edstoun, which is the subject of the present appeal. This action came before the Lord Ordinary, Hermand, and his Lordship pronounced this interlocutor:—

mentioned, or had continued to possess on their fifty-seven years' leases, executed renunciations, and accepted of existing leases, for which they paid no grassums;” as also, That when the tenants renounced their former leases, and took the present ones, contracts were entered into betwixt them and the Duke's commissioner, Mr Tait, as stated in the condescendence:” Finds, that although it be stated by the respondent, that, depending on a contingency not explained, but said not to have existed, these contracts never were acted upon, yet they afforded evidence to show that the new leases were, with the exception of the term of endurance, a surrogatum or substitute for those which had been renounced: Finds that the rents payable under the renounced leases, must of necessity have been, from the inconvenience and loss arising to the tenants from the advance of money, a consideration of the doubts of the powers of the lessor, held out in the contracts, and other circumstances, have suffered a greater reduction than the amount of the interest of the sums paid in name of grassums: Finds, that besides the prohibition of alienation, which in this Court and in the House of Lords, has been found, in questions upon the entail now under consideration, to strike at leases exceeding the usual term of endurance, that entail contains a clause, which, though placed in connection with a permission to the heirs of entail to grant leases for their own lifetimes, or the lifetimes of the receivers, is to be held as a limitation on their power, “the same being always set without evident diminution of rental:” Finds that the rent payable under the renounced leases, diminished, as it was, by the payment of grassums, cannot be considered as constituting a fair rental, such as is implied in the above clause: Finds, that upon these principles, there is no material difference between the lease of ninety-seven years, and lease of any shorter period: Finds it unnecessary to give any determination upon the effect of the clause reducing the endurance of the lease from thirty-one years progressively to nineteen years, or to the longest period which the Court of Session or House of Lords may find to be within the powers of the granter: Finds that the lease under reduction was granted with evident diminution of the rental; repels the defences in the declarator, sustains the reasons of reduction, repels the defences therein, and reduces, decerns, and declares accordingly.”

“Having advised the condescendence and answers in the process of declarator, and also the condescendence and answers in the process of reduction at the instance of the Earl of Wemyss and March, against Robert Symington, and whole processes, conjoins this process with the declaratory action between the parties, depending before the Lord Ordinary, in so far as the declarator is applicable to the present case: Finds it stated in the condescendence, and not denied in the answers, that the whole farms, whereof the leases are now under reduction, were formerly let by the late Duke of Queensberry for fifty-seven years, and with an exception stated by the defenders, of the lands of Flemington and Crook, under burden of grassums, the interests of which bore a considerable proportion to the yearly rent: Finds it admitted in the answers, “That in or about the year 1807, many of the tenants holding leases for fifty-seven years, renounced their leases and took new ones for periods equal to the terms unexpired of the old ones, but without paying any grassums for their new leases; and that soon afterwards, the tenants of all the farms as to which the present discussion relates, whether they had got new leases of the nature above

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Feb. 3, 1815.

Against this interlocutor a petition was given in for the

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the entail, so far as possible, and that the petitioner, and the other tenants did lend themselves to, and co-operate with the Duke in the said fraudulent scheme: Find, that the tack in question, and others now before the Court, were not entered into in the fair, rational, and husband-like administration of the estate, but for the purpose of forestalling the rents and profits thereof, which would otherwise have belonged to succeeding heirs of entail, and thereby enriching the Duke at their expense, by enabling him to draw from the estate more than the value of his own liferent interest in the fruits of it: Find, that the permissive clause in the entail to grant tacks for the lifetime of the granter or receiver, does not bar the heir in possession from granting tacks for any definite period, which does not amount to alienation, and that the tack in question might therefore have been restricted to the period of nineteen years, being the period then, and now, most usual in the practice of the country, and analogous to the period fixed by the statute of the 10th of Geo. III., where no improvements are stipulated: but, in respect that the tack is otherwise objectionable on the grounds above specified, and that the tenants on that account, have no claim in equity in support of their tacks, find, that the said tack cannot be restricted to any shorter period than that for which it was originally granted: Therefore, in the process of declarator, repel the defences, sustains the reasons of reduction, and reduce, decern, and declare accordingly.”

“The Lords having advised the said reclaiming petition, and having heard the counsel for the parties at great length, in their own presence, on the whole pleas and points in the cause, they find, that a tack of the lands and farms of Edstoun was granted to the petitioner, to commence at Whitsunday 1792 for the period of fifty-seven years at the rent of £155, 7s., for a fine or grassum of £300: Find it admitted in the petition, that doubts having been entertained of the validity of the above lease, the petitioner, along with most of the other tenants on the estate, renounced the said tack, from and after Whitsunday 1807, and obtained a new tack at the same rent, for thirty-one years, or for several alternative periods down to nineteen years, according as the Duke should be found to have powers to grant tacks under the entail: Find, that this current tack must be held to be merely a substitute for the former tack, and subject to any objections on the ground of grassum or otherwise, which were competent against the tack renounced: Find, that the conversion of any part of the rent, which at the time might have been obtained for the farm, into a price instantly paid, was to the manifest prejudice of the succeeding heir of entail, and operated as an alienation pro tanto of the uses and profits of the estate; and, therefore, find that the said tack is struck at by the clause in the entail, prohibiting alienations: Find, that in estimating what was the rent paid under the former lease, the value of the grassum paid at the commencement of the former lease ought to have been added, and that this not having been done, the rent payable under the new lease was in evident diminution of the rental: Find, that the whole circumstances under which the tack was granted, taken in connection with the relative contract entered into between the Duke of Queensberry and the petitioner and other tenants, again to prolong the tack to fifty-seven years, or even ninty-seven years, if found competent, together with the fact, that all the tenants renounced their tacks under similar circumstances and conditions nearly at the same time, do indicate a fixed plan on the part of the Duke to defeat and defraud

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Nov. 17 and 29, 1815.

On reclaiming petition, the Court further pronounced this interlocutor:

“Find, that the tack in question, if it had not been objectionable on the several grounds specified in their former interlocutor reclaimed against, might have been sustained as valid and effectual for the restricted endurance of twenty-one years, as the period then and now most usual in the practice of the country; and under this variation, adhered to their said former interlocutor, and refuse the desire of the said several petitions; and having also advised the counter petition of the Earl of Wemyss, they refuse the prayer of the same.”

Against these interlocutors, the present appeal was brought to the House of Lords.

Pleaded for the Appellants .—1st, The lease of Edstoun not being granted in contravention of the prohibitions contained in the Neidpath entail is not exposed to challenge on account of the grassum taken by the Duke of Queensberry.

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2d, The lease was granted for a definite term, namely, for the longest of six specific periods, to which the Court of Session, or this Honourable House, should find the Duke of Queensberry's power to lease extended.

3d, The lease ought to be sustained for thirty-one years, being a period far within the power of his Grace the Duke.

Pleaded for the Respondent .—1st, The alleged lease of Edstoun is, in its own nature, an incomplete agreement, and ineffectual in law, from the want of any definite stipulation in respect to its endurance.

In this case, the contract entered into between the parties was for a lease of no definite period of endurance, but which, in a certain event, might be reduced as low as nineteen years, and in another raised as high as ninety-seven, and which might be found good for any number of the numerous years between these periods. For, in this branch of this discussion, the respondent is entitled to look to the contract at the time it was entered into; he is not bound to look merely to the present state of matters, abstracting from the contract accompanying the lease which is now nugatory, though even if that be done, the agreement of lease appears to be for thirty-one years, or a less number down to nineteen, or for such other number as it should appear by a decision of a Court of law, that it was within the power of the Duke to give.

Such being its nature, it does not appear that it was binding in law, even as a completed contract. It wanted one of the essentials even of an agreement to grant a lease. For even an agreement of that sort must be void in law, unless the term of endurance of the lease be fixed by the parties in some complete way. Here, it is said, that the termination of the lease is to be fixed by the Court of Session, subject to the review of the House of Lords. That that Court is to be arbiter between the parties, and to say how long they are bound to each other. There seems to be very great doubt whether the Court could accept of such a submission; whether it would be decent and becoming for it to become arbiter for completing transactions which the parties ought to have completed themselves. It is the duty of courts of law to enforce the fulfilment of contracts; but it is not their duty to make contracts, if the parties have not made them. Where parties have contracted, a court of law will explain what is ambiguous, and enforce fulfilment of what is clear, but it will not supply any essential, which is defective, from the parties themselves not coming under an engagement upon that particular

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2d, But supposing the lease of Edstoun to have been in itself otherwise complete as a real right, it was let for a grassum. Vide the argument on this point in Harestane's case.

3d, The lease of Edstoun was, in respect of endurance, not a lease under the power of letting leases on the entail of Neidpath. The power is limited to leases for the lifetime of the granter or receiver; and there is no provision in the lease of Edstoun, by which it could, in any event, or may, be reduced to a lease of that kind. It, therefore, is clearly not in terms of the power. But it has been shown in the Harestanes case, that the general prohibition of alienation in its own nature, and still more, when taken, as it must be, in connection with the permissive clause, must be interpreted to extend to all leases whatever, and to exclude all leases not excepted by the permissive clause.

Journals of the House of Lords.

After hearing counsel upon this appeal, complaining of two interlocutors of the Lord Ordinary, of 14th June and 19th July 1814, and two interlocutors of the Court, and signed the 21st February 1815, and 17th and 29th November 1815. As also upon the answer of Francis Charteris, Earl of Wemyss and March, put into the said appeal: And consideration being had of what was offered on either side in this cause. The Lords Spiritual and Temporal in Parliament assembled, Find, that the said Duke of Queensberry had not power under the entail founded upon between the parties in this cause, to let tacks partly for rents reserved, and partly for sums and prices paid to himself; and that tacks granted upon the renunciation

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Counsel: For the Appellants, John Leach, F. Jeffrey, J. H. Mackenzie. For the Respondent, Sir Saml. Romilly, Geo. Cranstoun, H. Brougham.