Scottish Court of Session Decisions

This case came up by reclaiming note against he interlocutor of the Lord Ordinary.

The summons contained reductive conclusions, and continued as follows:—“The defenders ought and should be decerned and ordained by decree foresaid to repeat and pay to the pursuer the foresaid sum of £520, being the price of said subjects, with interest thereon from the date of citation till payment, at the rate of five per centum per annum. As also the defenders ought and should be decerned and ordained by decree foresaid to make payment to the pursuer of the sum of £150 in name of damages on the premises, together with the sum of £50 sterling, or such other sum, more or less, as our said Lords shall modify, as the expenses of the process to follow hereon.”

The pursuer, Rutherford, is a spirit dealer in Leith, and the defenders an association formed for building purposes, carrying on business in Edinburgh. Early in 1871 the pursuer had a correspondence with the manager of the defenders' company in regard to the purchase of the shop No. 8 Walker Terrace, Dairy Park, Edinburgh, then in the course of erection, and the contract of sale was finally arranged in the month of March 1871. The contract was embodied in a disposition, dated 1st May 1871, of which reduction was now sought. Shortly after April 1871 Mr Rutherford obtained possession of the shop, and found that the cellar was not at all properly drained; on the contrary, water to the depth of about three feet accumulated therein. He averred that he had (Cond. 4) recently learned the reason why water accumulated in the cellar, which was that the floor of the cellar was about 3 feet below the level of the street drain; and further (Cond. 5) that the defenders, or at least their manager, who acted for them, knew at the time they sold the shop that it was intended to use it as a spirit shop, and that it was essential to have a cellar in which to store liquors; also, that they knew that the cellar was under the level of the street drain, and that it could never be dry, or fit for the purpose for which it was sold; and that they unduly and fraudulently concealed this fact. And (Cond. 6) that if he truly bought a cellar of the kind furnished, he was under essential error when he did so, induced by fraudulent misrepresentations or undue concealment on the part of the defenders. The pursuer further stated that he had suffered damage to the extent of £150, and that by certain operations at a cost of £50 the dampness might to some extent be remedied.

The defenders, in answer, stated that certain things at the time of the purchase were pointed out by the pursuer, and these were all attended to. No complaints were made by him as to the state of the premises until more than a year after his entry. They did not know his expectations or intentions, nor did they sell the premises for any particular purpose, the pursuer in purchasing having stipulated that he should be at liberty to use them as he chose. The defenders were unaware of anything defective, and believed the premises to be properly constructed; of their condition Mr Rutherford had as good opportunity of judging as they themselves.

The pursuer pleaded—“(1) The contract of sale sought to be reduced having been entered into when the pursuer was under essential error in regard to a material particular affecting the value of the subjects sold, the contract ought to be set aside. (2) The contract sought to be reduced having been entered into when the pursuer was under essential error as to the subject sold, induced through misrepresentation or fraudulent misrepresentation or

Page: 29↓

undue concealment on the part of the defenders, the said contract ought to be reduced and set aside, and the defenders ordained to repay the price. (3) The defenders having broken their contract of sale, ought to be found liable in damages as concluded for, with expenses.”

The defenders pleaded—“(1) The statements of the pursuer are not relevant or sufficient to support the conclusions of the summons. (2) The defenders are entitled to absolvitor in respect of the provisions of section 5 of the Act 19 and 20 Vict. cap. 60. (3) The statements of the pursuer being unfounded in fact, the defenders are entitled to absolvitor. (4) The pursuer having seen the condition of the premises when completed, and been satisfied therewith, and having thereafter paid the price and taken and since retained possession thereof, he cannot now insist in the present action.”

On 10th June 1873, the Lord Ordinary ( Ormidale) pronounced the following interlocutor and note:—“The Lord Ordinary having heard counsel for the parties on the defenders' first plea in law, and having considered the argument and proceedings, sustains said plea in law, and in respect thereof dismisses the action and decerns, &c.

Note.—The pursuer's object in this action is to reduce a disposition of a shop and cellar which he purchased from the defenders, for which he paid the price, and of which he obtained possession so far back as the beginning of April 1871, and has continued ever since to retain possession. Nor does the pursuer say that he intimated any objection whatever to the subjects so purchased and taken possession of by him till the present action was raised in January 1873.

The pursuer now avers, however, that the cellar which forms part of the subjects in question, owing to its being below the level of the street drain, ‘can never be free from water, or at least damp, and can never be of any use to the occupier of the house.’ He therefore concludes for reduction of the disposition to the subjects, and for repetition of the price, being £520, with interest, and £150 of damages.

The pursuer's grounds of action are embodied in his first two pleas in law, and are—1st, ‘Essential error in regard to a material particular affecting the subjects sold,’ and 2d, ‘essential error as to the subject sold, induced through misrepresentation, or fraudulent misrepresentation, or undue concealment on the part of the defenders.’ The Lord Ordinary has been unable to find in the record any statement relevant or sufficient, more especially keeping in view the length of time the pursuer has been in possession without objection, to support the action on these grounds, or any of them.

The pursuer himself says that his contract with the defenders is embodied in the disposition, which was granted to and accepted of by him. The disposition is No. 6 of process, and is in the usual terms.

It contains no provision or stipulation to the effect that the subjects were sold and purchased for any particular purpose. Nor does the disposition afford any evidence whatever in support of the pursuer's action in other respects. It, indeed, negatives the grounds on which the action is laid.

But the pursuer says that the defenders, ‘or at least their manager,’ knew that the subjects were intended for a spirit shop, and that it was essential that the cellar should be at least moderately dry; and he goes on, in the same article, also to state that ‘the defenders at and before the date of the contract knew that the cellar was under the level of the street drain, and that it could never be dry or fit for the purpose for which it was sold;’ and the pursuer adds, what in reality constitutes the whole foundation of his action, ‘this fact they unduly and fraudulently concealed from the pursuer.’ The Lord Ordinary cannot think that this is sufficient, especially keeping in view the pursuer's other statements, and, in particular, his statement to the effect that the contract of sale was arranged in March 1871, and that the shop having been finished in April, he ‘shortly after’ obtained possession, and then found that the cellar was not at all properly drained, that, ‘on the contrary, water to the depth of about 3 feet accumulated in said cellar, and did not flow away;’ and yet, notwithstanding this early knowledge by the pursuer, he not only retained possession without objection till this action was brought in January last, and continues still in possession, having used, and continuing to use the subjects as his own, but he also completed his purchase by paying without objection, as the disposition bears, £420 of the price on the 14th of June 1871, the date of its execution, the other £100 having been paid in the month of March previous.

In this state of matters the pursuer would, the Lord Ordinary thinks, have required to have averred, in the clearest and most specific manner, a case of fraud against the defenders to entitle him to rescind the contract in question; but he has entirely failed to do so. There is, indeed, no averment at all of misrepresentation, and in regard to ‘undue concealment,’ it is difficult to understand how there could have been any. The pursuer does not say that anything of the nature of device or artifice was resorted to by the defenders in order to deceive or throw him off his guard. It is obvious, indeed, on his own showing, that he had every opportunity of informing himself as to the nature and worth, advantages and disadvantages, of the subjects in question before he purchased them, and therefore, if he made a bad bargain, sibi imputet.

The Lord Ordinary is, in these circumstances, of opinion that the pursuer has made no averments relevant and sufficient to support the action, and he has accordingly dismissed it with expenses.”

At advising—