Mitchell's Trustee v Galloway's Trustees
| Jurisdiction | Scotland |
| Judgment Date | 06 March 1903 |
| Docket Number | No. 113. |
| Date | 06 March 1903 |
| Court | Court of Session |
Lord Low, Lord Adam, Lord M'Laren, Lord Kinnear, Lords President.
Superior and Vassal—Feu-charter—Obligation to erect buildings of certain value—Allocation of Feu-duty—Bankruptcy of vassal—Trustee's right to insist on allocation without undertaking to implement whole obligation as to buildings.—
Under a feu-charter the vassal was taken bound within three years to erect buildings on the feu of the value of £5000. The feu-duty was declared to be £50, and the vassal was to have the power as soon as buildings of the requisite value were erected to allocate the feu-duty in such proportions as might be approved by the superior. The vassal thereafter proceeded to erect a tenement of the value of £3000 on the eastmost half of the feu, and the superior by letter agreed to allocate thereon £20 of the cumulo feu-duty ‘when the same is completed.’ Before the tenement was completed the vassal became bankrupt. His trustee thereafter completed the tenement, and called upon the superior to allocate £20 of feu-duty thereon in terms of his letter. The trustee declined to give an undertaking that he would implement the rest of the obligation as to buildings, and the superior declined to make the allocation. Held (1) (affirming judgment of Lord Low) that the letter was to be construed as an obligation by the superior to allocate £20 of the cumulo feu-duty on the eastern portion of the feu as soon as the building thereon was completed; but (2) (rev. judgment of Lord Low) that the letter was not to be regarded as creating an independent obligation by the superior, but merely as modifying one of the terms of the feu-charter, and that to entitle the trustee to take advantage of this modification he must be prepared to implement the other stipulations of the feu-charter.
By feu-charter, dated 17th, and recorded 19th August 1899, the trustees of the deceased James Galloway, house-factor, Leith, feued to Alexander Mitchell, builder, Edinburgh, a piece of ground at Jessfield Terrace, Leith, with entry as at the term of Whitsunday 1899. By the feu-charter Mitchell was taken bound to erect within three years from the date of entry buildings of the value of not less than £5000 upon the ground feued, which buildings were to be of a description and conform to plans and elevations to be submitted to and approved of by Galloway's trustees. The stipulated feu-duty for the ground was £50 sterling, with a duplicand at the end of each twenty-first year. ‘Declaring that it shall be in the power of the said Alexander Mitchell and his foresaids [viz., heirs and assignees whomsoever] so soon as buildings are erected on the said area or piece of ground of the value before mentioned, to sell any part thereof, and to allocate or apportion the said feu-duty and duplications thereof among the different purchasers in such proportions as may be approved by us.’
Before the feu-charter was executed and delivered Mitchell had submitted plans to the defenders which had met with their approval, and had already got a warrant from the Dean of Guild Court, Leith, to erect the buildings on the area of ground feued. These plans were for one tenement of dwelling-houses on the eastmost portion of the feu, and for a hall and dwelling-houses above upon the other portion.
Mitchell proceeded with the erection of the tenement on the east-most half of the ground, and to enable him to complete it negotiated a loan of £2500 from the Standard Property Investment Company, who had expressed their willingness to make that advance on condition of the superiors' consent being obtained to an allocation of £20 of the cumulo feu-duty of £50 being made on the portion of ground on which the buildings were being erected. In connection with this, in reply to an inquiry made by Messrs Emslie & Guthrie, the agents of Mitchell, Messrs Galloway & Davidson, the agents of the superiors, on 18th August 1899, wrote the following letter:—‘With reference to our telephone conversation to-day, we beg to state that the superiors are satisfied with the plans of the tenement in course of erection on the north side of Jessfield Terrace, and that when the same is completed they are prepared to allocate thereon £20 of the cumulo feu-duty payable under the charter.’
The Standard Company thereafter made the advance of £2500 to Mitchell, who granted a bond of credit therefor, in which he allocated the feu-duty payable from the subjects at £20.
On 23d February 1900 Mitchell's estates were sequestrated, and James Pollard, C.A., was elected trustee on 8th March 1900, in terms of the Bankruptcy Statutes. At this time the tenement was not completed, but the trustee subsequently completed it. The trustee thereafter accepted an offer of £3250 for the purchase of the eastmost half of the ground feued and the buildings upon it, upon condition that the superiors made the allocation of £20 of feu-duty.
On the offer being communicated to the superiors they declined to make the allocation as asked, but on 21st March 1900 they wrote offering to allocate the £20 provided the trustee implemented the conditions as to buildings contained in the charter, but the trustee declined to give an undertaking that he would erect any further buildings.
On 14th May 1901 Pollard, as trustee, raised the present action for...
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