Miller & Son v Oliver & Boyd
| Jurisdiction | Scotland |
| Judgment Date | 10 November 1903 |
| Date | 10 November 1903 |
| Docket Number | No. 12. |
| Court | Court of Session |
Lord Pearson, Lord Trayner, Lord Justice-Clerk, Lord Young.
Arbitration—Decree-Arbitral—Reduction—Award of lump sum where claims referred are not ejusdem generis—Proof—Examination of Arbiter—Separability of findings by arbiter which are ultra vires—Extension of scope of reference by actings of parties.—
An agreement between A and B for the transference to B of a business belonging to A, and for the future employment of A by B on a salary and commission, contained a clause referring questions between the parties regarding the true intent and meaning of the agreement to an arbiter named. Disputes having arisen, the parties went to arbitration upon a simple acceptance of office by the arbiter. In the pleadings before the arbiter, A claimed certain sums of money as being due respectively for (1) value of goodwill, (2) salary, (3) commission, (4) price of plant, and (5) damages for breach of contract. B made a counter claim for damages for breach of contract.
The arbiter issued an award in which he found B liable to A in a lump sum of £618, and decerned and ordained B to make payment thereof to A. He further found A liable to B in two-thirds of his expenses, and on the parties implementing the decree-arbitral, declared them respectively freed and discharged of all claims hinc inde in consequence of the agreement or of the claims lodged in the submission, and ordained them each to execute and deliver a valid discharge accordingly.
A brought a reduction of the decree-arbitral against B on the ground that it was ultra vires, and that it did not exhaust the reference. B admitted that the decree in so far as it ordained the parties to execute mutual discharges was ultra vires, but he maintained that this order was separable from the rest of the decree, and that the rest of the decree per se was not open to reduction. A proof was led. The arbiter, adduced as a witness by the defender, gave evidence as to how he had reached the sum of £618.
Held (1) that the parties by their actings had extended the scope of the reference; and (2) that the decree-arbitral fell to be reduced in respect (a) that A's claims were not ejusdem generis, and it was impossible to discover ex facie of the decree how far the arbiter had considered all A's claims; (b) that the decree-arbitral did not shew how the arbiter had dealt with B's counter claim; and (c) that the order for mutual discharges, which was admittedly ultra vires, was not separable from the rest of the decree.
In January 1901, James Miller & Son, printers, late of Rose Street North Lane, and Andrew Carruthers Miller, sole partner of that firm as representing the firm and as an individual, raised an action against Oliver & Boyd, printers and publishers in Edinburgh, and the individual partners of that firm, and also against Charles Ritchie, S.S.C., Edinburgh, who had acted as arbiter under a clause in an agreement between Miller & Son and Oliver & Boyd. The pursuers concluded for a reduction of the decree-arbitral.
The following extract from the Lord Ordinary's opinion explains the circumstances in which the action arose:—
‘In this action the pursuer asks for reduction of a decree-arbitral pronounced by Mr Charles Ritchie, S.S.C., in a reference between the pursuer and the defenders. The main grounds of reduction are (1) that the decree-arbitral does not decide the questions submitted; (2) that it decides questions not submitted; and (3) that the lump sum of £618, 7s. 11d., which the arbiter fixed as payable by the defenders to the pursuer, was arrived at after deducting a sum in name of damages as payable to the defenders, the question of damages payable to the defenders not being within the reference. …
‘The disputes between the parties had their origin in the carrying out of an agreement between them dated 15th and 20th May 1897.
‘Prior to May 1897 the pursuer Mr Miller carried on business as a printer in Edinburgh under the firm name of J. Miller & Son. By the minute of agreement the defenders, printers and publishers in Edinburgh, agreed to purchase from the pursuer the goodwill, plant, machinery, fittings, and entire business properties belonging to and used by him in his premises. The defenders (by Art 3) undertook to pay the pursuer £150 a year in name of salary, until such time as a rearrangement of management might take place; the pursuer in return therefor undertaking to devote his entire time and energy towards the promotion of the business prosperity of the firm and its partners and to be subject to their and their successors' directions in connection with the business of Oliver & Boyd.
‘The second article of the agreement dealt with the price of the goodwill; and the fourth and fifth articles dealt with the price to be paid for the stock, plant, machinery and fittings.
‘Article second, stated shortly, provided as follows:—(1) It declared that the price of the goodwill had been mutually arranged to be £800, on the basis that the pursuer should introduce to the defenders not less than £1600 per annum “of business turnover” prior to 30th June 1898; and, failing his introducing that amount of business turnover, the price of the goodwill was to be proportionally less. (2) The defenders bound themselves to pay the £800, or such lesser sum, to the pursuer “as at 15th May 1897”; but it was declared that in no event should such payment be demandable from the defenders until 15th May 1902, “unless this agreement shall be terminated previous to that date by the first parties,” that is by the defenders. (3) It was further declared that at 15th May 1902 it should be in the option of the pursuer to demand payment of one-half only of the price of the goodwill, and to allow the remaining half to remain in the business until 15th May 1907, at 5 per cent interest. (4) The interest on the price of the goodwill for the period down to 15th May 1902 was to be paid at the rate of 21/2 per cent per annum. (5) After certain other provisions, the article ends with an undertaking by the defenders to pay to the pursuer “a commission of ten per centum upon the net profits of the whole printing business of Messrs Oliver & Boyd.”
‘As to the price of the stock, plant, machinery and fittings, it was provided by article 4 that it should be fixed by mutual valuation; and by article 5 that it should be payable, as to £500, at 15th May 1897; as to a further sum of £500, at 30th June 1898; and as to the balance at 15th May 1899. All three instalments were to bear interest at 5 per cent per annum from 15th May 1897 till paid.
‘Then followed this reference clause—“should any question arise between the parties regarding the true intent and meaning of these presents, the same is hereby referred to Charles Ritchie, Esq., S.S.C., whom failing to James Morton, Esq., Secretary, Union Bank of Scotland, Limited, Edinburgh; whose decision, whether interim or final, shall be binding upon both parties.”
‘The parties further bound themselves to implement the agreement to each other under a penalty of £500 over and above performance.
‘Questions having arisen between the parties, they requested Mr Ritchie to act as arbiter under the agreement; and after an ineffectual attempt to adjust a separate minute of reference embracing all the points in dispute the parties proceeded with the reference under a simple acceptance by Mr Ritchie as “arbiter nominated in the submission contained in the within written minute of agreement.”’
The arbiter's acceptance was dated 5th April 1899. Condescendences and claims were thereafter lodged in the arbitration, and a record was made up.
The claim for Miller & Sons (pursuers in the present action) was in the following terms:—
‘The claimants claim as follows:—
‘First. That the said Messrs Oliver & Boyd have terminated the agreement entered into between them, of the first part, and the claimants, of the second part, dated the 15th and 20th days of April 1897, within the meaning of clause second thereof.
‘Second. That Messrs Oliver & Boyd are now liable to pay the claimants £800, being the value of the goodwill of the business of Messrs J. Miller & Son, with interest thereon at the rate of 21/2 per cent per annum from the 15th day of May 1897 till the 12th day of December 1898, and at the rate of 5 per cent per annum thereafter until paid.
‘Third. That Messrs Oliver & Boyd are due the claimant Andrew Carruthers Miller £4, 18s. 8d., being the amount of his salary unpaid up till the 12th day of December 1898.
‘Fourth. That Messrs Oliver & Boyd are liable to pay the claimants J. Miller & Son 10 per cent commission on the net profits of the whole printing business carried on by them from 1st May 1897 till Whitsunday 1907, less the sum of £27 paid to account on January 1898.
‘Fifth. That Messrs Oliver & Boyd should pay to J. Miller & Son, or their assignee, on 15th May 1899, £340, 9s. 3d., being the balance of the price of the plant formerly belonging to Messrs J. Miller & Son, with interest at 5 per cent on said £340, 9s. 3d. from 30th June 1898; and
‘Sixth. That Messrs Oliver & Boyd are now due £500 to each of the claimants, J. Miller & Son and Andrew Carruthers Miller for breach of the said agreement.’
Oliver & Boyd (defenders in the present action) in their claim disputed Miller & Son's claim, and further claimed as follows:—‘Fourth. That in respect said J. Miller & Son, and Andrew Carruthers Miller as sole partner of and as representing said firm, have failed to implement the terms of the agreement between the parties, and in addition the said Andrew Carruthers Miller has failed to discharge the duties incumbent on him in a competent manner, and caused loss to the claimants as condescended on, the said J. Miller & Son, and the said Andrew Carruthers Miller as sole partner thereof, are liable to the claimants in damages for breach of contract to the extent of £1000.’
After a proof and other procedure, the arbiter...
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