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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> William Dixon, Esq. - Warre - Fullerton v. W. F. Campbell, of Shawfield, Esq. Murra - Abercromb - Walker [1824] UKHL 2_Shaw_175 (30 April 1824) URL: https://www.bailii.org/uk/cases/UKHL/1824/2_Shaw_175.html Cite as: [1824] UKHL 2_Shaw_175 |
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Page: 175↓
(1824) 2 Shaw 175
CASES
DECIDED
IN THE HOUSE OF LORDS, ON APPEAL
FROM
THE
COURTS
OF SCOTLAND, 1824.
No. 24.
A lease of
coal
having been granted,
with
a stipulation that if the
coal,
‘by unforeseen accidents’ occurrence,
dykes,
or “troubles not occasioned by irregular or improper
workings,
it shall become, in the opinion of skilful men, mutually
chosen
by the parties, incapable of being
wrought
to advantage,” the tenant should be entitled to abandon; and men having been appointed,
who
reported, that, so
far
as physical
difficulties
existed, the
coal
![]()
was
![]()
capable
of being
worked,
but that,
from
the state of the markets, &
c.
this
could
not be
done
to advantage;—Held, (qualifying the judgment of the
Court
of Session,) That the tenant
was
not entitled to abandon.
In the month of June 1815, the respondent let to the appellant a lease of part of the coal
in his lands of
Woodhall,
for
19 years, at a
fixed
rent of L.900, or, in the landlord's option, of a lordship of 6d.
for
each
cart.
By the lease it
was
inter alia
declared,
that “in the event of the
coal
becoming exhausted; or that by unforeseen accidents' occurrence,
dykes,
or troubles not occasioned by irregular or improper
workings,
it shall become, in the opinion of skilful men, mutually
chosen
by the parties, incapable of being
wrought
to advantage, then, and in that
case,
it shall be in the power of the said
William
Dixon,
and his
foresaids,
to relinquish the
work,
and to renounce and give up the present lease
Page: 176↓
Page: 177↓
Thereafter, on advising a representation, his Lordship, before answer, remitted to Messrs Baird and Bald to make a new report; in consequence
of
which
these gentlemen reported, interalia, that “had the state of the market of
coals
been the same at the
date
of that report as
we
have since
found
it,
we
would
have given it as our opinion, that the
Woodhall
colliery
would
have been
workable
with
advantage to the tacksman under the present lease. But
we
beg leave to remark, that the great quantity of
coals
which
must be put out at this
colliery
in order to
cover
the high
fixed
rent, being
forced
into the market, may have the effect of lowering the price of
coal
in Glasgow, and it may even be the means of reducing the price so much as to render the
colliery
not
workable
with
advantage to the tacksman, as at the
date
of our last report; because,
from
its great
distance,
and high
fixed
rent, it must be amongst the
first
that suffers
from
any
competition
in, or
depression
of, the
coal
market.”
His Lordship then reported the case
to the
Court,
accompanied by the
following
note:—“The second report of Messrs Baird and Bald leads the Ordinary to
doubt,
not of the principle of the
former
interlocutor, but of the
facts
necessary
for
its application. He remains of opinion, that the market-price must always be an essential ingredient in the question of
workable
or not
workable
in a
coal
lease; and the
word
“occurrence” in the present lease is broad enough to include an extrinsic
circumstance
of this nature. Nor
does
its requiring an inspection of neutral persons of skill at all affect this interpretation. Although the price
fall,
it may happen that the
coal
may become more easily
wrought
than
formerly,
so as to remain
workable
with
advantage to the tenant. The
first
report here
was
formed
partly on the slips in the mine, and partly on the
depreciation
in the market-price.
But although the market-price be an important ingredient in the result, it is not to be inferred that the tenant is not to bear all reasonable risk in the variation of price. A tenant who
has made profit
for
years,
could
not reasonably renounce his lease on the occurrence of a
few
weeks
of temporary
depression.
The
depression,
to avail him, must be
considerable,
and likely to be permanent. The Lord Ordinary is inclined to think,
from
the second report, that such
depression
has not, in this
case,
yet taken place.
It was
said, that a report
favourable
to the tenant being once
Page: 178↓
Doubts
were
likewise hinted as to the accuracy of the second report. The lease, however, excludes other evidence.”
When
the
case
came
before the
Court,
their Lordships, before answer, again remitted to Messrs Baird and Bald, to reconsider their
former
reports, “and to inquire into and specify more particularly the occurrences alleged to have taken place regarding the expense of
carriage,
and the
causes
which
have occasioned the alleged
downfall
of the price of
coal
in the Glasgow market since the lease
was
entered into; and how
far
these occurrences and
consequences
appear to have been unforeseen at that period, and
whether
from
their nature they are likely to be permanent, or only temporary and
fluctuating;
and to report their opinion as to the average price the
coals
in question ought to bring, in order to render them
workable
with
advantage, in terms of the lease.” A proof
was
then taken by them, under a power to that effect, as to the prices of
coals,
which
they
found
had varied between 1813 and 1819,
from
5s. 7d. to 4s. 5d. per
cart;
and they stated, that “in taking these averages, the principles upon
which
we
have proceeded have been, to take the periods and prices of each year as given us by the
witnesses,
without
regard to the quantity; and this principle
was
necessary, as
we
had taken the periods and prices in
framing
our
former
report, and not the quantities. In our opinion, therefore, the price of
coals
is likely to
fluctuate
and be lower in the Glasgow market than prior to 1817, and that
while
the out-put of so many
collieries
can
with
ease more than supply the
demand.”
On advising this report, the Court,
on the 9th of
February
1821,
found
“that in hoc statu there is not sufficient evidence to instruct that the
coal
in question is incapable of being
wrought
to advantage;” and therefore repelled the reasons of suspension, assoilzied
from
the
declarator,
and
found
no expenses
due.
An appeal was
then entered by the appellant,
who
contended
that the judgment of the
Court
was
erroneous,—
1. Because, as it was
expressly stipulated in the lease, that if the
coal
“shall become, in the opinion of skilful men mutually
chosen
by the parties, incapable of being
wrought
to advantage, then, and in that
case,
it shall be in the power of the said
Page: 179↓
2. Because it was
not
competent
for
the
Court
of Session to order subsequent reports
from
these gentlemen; and as their judgment rested upon these reports, it
was
founded
in error.
To this it was
answered,—
1. That the stipulation in the lease had plainly reference to the coal
not being
workable
on account of physical
difficulties,
and not on account of the state of the markets, or the expense of
carriage:
that Messrs Baird and Bald had in their original report expressly stated, that, in regard to physical
difficulties,
“the
coals
are not
considered
by us as unworkable;” and that although they no
doubt
reported, that,
from
the state of the markets, it
could
not be
wrought
to advantage, yet they
were
not entitled, in terms of the
clause,
to take that
circumstance
into
consideration.
And,
2. That, supposing they were
so entitled, still as it
was
necessary to take into
consideration
the state of the markets
for
a
considerable
period of time, and as they had now reported that the
coal
might be
worked
to advantage, the appellant
was
not entitled to abandon it.
The House of Lords found,
“That in hoc statu it
was
not in the power of
William
Dixon
to relinquish the
work,
and give up the lease. And therefore it is ordered and adjudged, that the interlocutor of the 9th
February
(signed 13th
February)
1821,
complained
of,
which,
in the suspension, repels the reasons of suspension,
finds
the letters orderly proceeded, and
decerns;
and
which,
in the action of
declarator,
sustains the
defences,
assoilzies the
defender
from
the
conclusions
of the libel, and
decerns;
and
which
finds
no expenses
due
to either party, be, and the same is hereby affirmed: And the Lords
further
find,
that, under the
circumstances
of this
case,
and in respect of the preceding
finding,
it is unnecessary to make any order in regard to the several other interlocutors
complained
of.”
for
the person
who
has the honour of advising your Lordships in matters judicial, to
detail
the reasons upon
which
his opinion is
founded,
if that opinion shall go to an affirmance
Page: 180↓
My Lords,—This question depends
upon the
construction
to be put upon a
clause
in the lease of a
coal-mine;
and it merits
consideration,
that this
clause
occurs immediately after the stipulations respecting the mode in
which
the lessee shall
work
the
colliery.
This lease
was
executed in 1815; and it appears that, in two years afterwards, the lessee seems to have
conceived
that such
circumstances
had occurred as entitled him to
call
for
the opinions of persons of skill,
who
might
decide
whether,
under the above
clause,
he
was
entitled to get
free
of the lease. There had been an ex parte report,
which
I lay entirely out of
consideration;
but afterwards there
was
a report
from
men mutually
chosen
by the parties, the terms of
which
are of great importance in the
decision
of this
cause.
In the
first
place, they say, “Taking into our
consideration
the state of the
colliery,
we
are of opinion, that although the slips before mentioned have been, and must be, attended
with
considerable
extra expense in the
workings,
particularly
from
the magnitude of the large slip, and the
circumscribed
limits in
which
pits are allowed to be sunk, yet the
coals
are not
considered
by us as unworkable.” So
far,
this report
can
give no ground
for
annulling the lease. But, (the reporters go on to say), “upon
considering
the
circumstances
of the
coal
trade
when
the lease
was
entered into, the occurrences
which
have taken place, both in regard to the alteration of
canal
dues,
and the present low price of
coal
in the Glasgow market,
where
the principal sale must be,
we
are of opinion that the
Woodhall
colliery
cannot,
under these
circumstances,
be
wrought
with
advantage to the tacksman under the present lease.” No such expression as tacksman occurs in the
clause
which
I have just read
from
the lease. It merely says, ‘incapable of being
wrought
to advantage.’
My Lords,—The appellant contends,
that on a
fall
in the price of
coals
he
was
entitled to get rid of this lease, as this
was
one of the unforeseen
circumstances,
the possibility of
which
had been
contemplated
as
forming
the stipulation in question. But I hold this not to be the right
construction,
and am of opinion, that parties must have had in view occurrences in the mine, and not in the price; otherwise, if the
fall
had been so inconsiderable as to afford in any one year a rent of L.850, instead of L.900, the tenant might have thrown up the lease. In the
course
of 19 years there must necessarily be some variation in the prices, of
which
parties
could
not
fail
to be aware
when
they entered into the
contract.
The
word
‘occurrence’
comes
immediately after the
words
‘unforeseen accidents.’ If the
coal
had been exhausted, then indeed the lease must have been at an end; but if the quantity brought had only
diminished,
it must still remain in
force.
At the same time, my Lords, I
cannot
throw the prices entirely out of
consideration,
as accidents, or obstructions, or troubles in the mine, might affect the price.
Page: 181↓
In conclusion,
my Lords, I may observe, that the appellant has held the report of the two referees as equivalent to a regular
decreet-arbitral.
But supposing these gentlemen had possessed powers to
conclude
the parties, the
Court
below
were,
and your Lordships are now entitled to look at the grounds of their opinions; and if these grounds, as
detailed
in their several reports, are
found
to be unsatisfactory, your Lordships may and must
decide
upon the
facts
as they appear in the
cause.
Upon the whole,
my Lords, I humbly offer it as my opinion, that the last interlocutor of the
Court
of Session ought to be affirmed. There may be some
difficulty
as to the
findings
in some of the previous interlocutors,
for
which
reason I
would
propose to
delay
giving
formal
judgment until Tuesday next.
Solicitors:
Spottiswoode and Robertson—
J. Chalmer,—Solicitors.
(Ap. Ca. No.
33.)