arguments by one of the appellants personally, and a print of these arguments has been furnished to us. The Valuation Act requires that the valuation roll shall shew the yearly rent or value of the whole lands and heritages within the county or burgh, and it interprets lands and heritages so as to include not only lands and buildings, but waterworks and all machinery fixed or attached to any lands and heritages. Where the lands and heritages are unlet, the assessor is required to estimate the rent at which, one year with another, they might in their actual states be reasonably expected to let from year to year. In this case the facts are that the subjects owned and occupied by the appellants are certain portions of land called millsteads, through which is conducted an artificial aqueduct constructed by the Shaws Water Company upon, and held by them in feu along with, certain ground feued by them from Sir Michael Shaw Stewart, "with power to sub-feu, sell, or dispose of the said ground in thirty lots, each lot to contain one of the millsteads." The appellants' mills are erected on a millstead called No. 12, but they have rights also to the millsteads Nos. 13, 14, 15, 16, and 17. Their feu-contract shews that they hold their millsteads as sub-feuars, of and under the Shaws Water Company, for payment of the feu-duty therein specified. The description of the ground called a millstead is by measurement, and includes that portion of the aqueduct which runs through it, but it is declared that the ground so described is to be held under the burden of a servitude in favour of the Shaws Water Company, of using and maintaining the conduit or aqueduct formed by them for the purpose of conveying water from the high land above to the town of Greenock. Along with the ground there is conveyed and secured a certain privilege of waterfall, and the benefit and use of the water, to the extent of at least a supply of the amount therein specified, "for the purpose of impelling the machinery to be erected on the said ground, or for such other purposes of the works there as shall not sensibly diminish the quantity or affect the regular and uniform passage of the water to the mills below, or deteriorate the quality thereof so as to render it unfit for washing, bleaching, and ordinary culinary purposes.' The appellants as feuars are thus heritable proprietors of the whole ground, including the conduit or aqueduct, so far as constructed therein, with the privileges of waterfall and the use of the water thereby secured to them, but are subject to certain regulations in their use of the water which are made a part of the feu-contract. For the privileges of water and waterfall secured to them by their feu-right the appellants as feuars are also to pay an annual duty therein specified (amounting for the whole millsteads held by them to £972), and this annual duty, in the case of each millstead, is declared to be a real burden on the lands, and secured thereon in the same manner as the feu-duty. Upon these facts I am still of opinion that the aqueduct and right of water and waterfall held by the appellants under their feu-contract is a heritage within the meaning of the Valuation Acts, and must be valued. It appears to me that the arguments of the appellants serve rather to illustrate than to controvert this proposition. The case is essentially, and I think obviously, different from that of furniture hired along with a house, or motive power in the form of steam or electricity purchased ab extra for use within a mill. No doubt the relative cost of steam and water power may influence the lettable value of the mill, just as the fact that people can live on board of yachts or steam vessels may influence the lettable value of a dwelling house on land. But these considerations do not affect the question what is to be valued. If the subject in its actual state be within the description of lands and heritages it must be valued The appellants contend that if they were to let their mill with the use of the water power, that portion of rent which the tenant should pay for the use of the water power would fall to be deducted. This seems to me to approach very nearly to a reductio ad absurdum of the appellants' argument. The fact that the water-course is there, that it is included in the appellants' title, that the supply of water is secured as a part of the heritable subject, and that it can thus be let by the appellants to a tenant of their mill, is conclusive in my mind that it must be valued as a recognisable part of the appellants' property, and that the rent obtained for it must in that case be taken as the annual value if the statute is to be observed. In the present case the subjects are unlet, but no reason is stated against taking £972 as the annual value of the water rights, if these are proper subjects of valuation. That is the sum which the appellants pay annually for the right, and it is not said that they would let it to any tenant at a lower rate. They admit that in 1860, when they let the mill for £1050, the tenant was taken bound to pay the water duty. On the whole, I remain of opinion that the determination of the Commissioners is right, though with regard to the £191 added to the assessor's valuation of buildings and fixed machinery, had any separate argument been offered, I should have been disposed to consider a reduction to that extent. No explanation of that change has been given. LORD FRASER-I adhere to the opinion which I expressed on this case last year. The assessor who had valued the property of the appellants before the present assessor came into office, fixed it at £750,-proceeding upon different lines from those followed by the present assessor. I need not repeat what I said last year; and I will only just add that the case is susceptible of being stated in a few words. If a man has a piece of ground through which a burn runs, which supplies his bestial and his household with needful water, of course that property is of more annual value than another property which is destitute of water. If he were obliged to go to a neighbouring proprietor and buy from him a water supply, the water so given him would not be a heritage to be valued but would be a deduction to be made from the value of his heritage. Now that is the case with which we have here to deal. The occupants of the water which constitutes the motive power which drives the appellants' mill are not the appellants; the occupants are the Water Trust of Greenock. The cardinal mistake made by the assessor and the Magistrates is in holding that the appellants are proprietors or occupants (in the sense of the statute) of the water. The appellants merely buy from the Trust at a very heavy rate a certain motive power. The case is just the same as if the appellants bought motive power under another shape from a person who had it upon neighbouring land. Such would be the case if the neighbour had 488 horses (the assumed motive power of the water) on that land, and by their means communicated (by the aid of machinery) the power of that number of horses to the appellants' mill. It would also be the same case (common enough in the manufacturing towns of England) if a person having steam power should hire it out to the required strength for the use of mills or adjoining factories. Anyone would say that it would be absurd to regard the sum paid for the 488 horses, or for the use of the steam power, as part of the annual value of the mill. It is a portion of its expenditure in working the mill— like rates and taxes, or money paid to operatives -but it is not heritage to be valued. No doubt in estimating what is the annual value of the mill, the privilege which it possesses (if it be a privilege) must be taken into account. The appellants contend that it is no privilege, but an expensive burden, and that if they had not been obliged to take this water power they could have conducted their business much more efficiently and cheaply by the use of steam. Be this, however, as it may, the value must be ascertained by taking into consideration the fact that there is such a motive power in existence; but this is not to be done by merely taking into consideration what is the sum paid to the Water Trust by the appellants. I am of opinion that the determination of the Magistrates is wrong, and that they are imposing liabilities, by the valuation that they have adopted, upon the appellants, contrary to justice. For this the appellants themselves are partly responsible. The question is, what is the rent which the mill would bring with all its advantages and burdens. If the appellants chose to disclose the net profits that they made from the mill,— say on an average of three years,-one could very soon determine the rent that a tenant would give for it. But this they have not done. There remains however, another mode of ascertaining what rent a tenant would give for it, and that is by leading evidence of men in the trade as to the amount of rent that a tenant could afford to pay. This evidence might be illustrated by cases, if not precisely similar, yet nearly similar, of mills in other quarters where rents are paid. Instead of this kind of evidence we have been favoured with proof to the effect that steam power would be less expensive than the water power which the appellants possess. All this is quite beside the question, and does not aid one in coming to a conclusion as to what is the rent that could be paid for the subject as it stands-if in the present state of trade it is lettable at all. As we are divided in opinion, the result is that the determination of the Magistrates stands. The Judges being divided in opinion, the determination of the Magistrates stood. Counsel for Assessor-Shaw. Agents-Cumming & Duff, S.S. C. April 15, 1885. Wednesday, April 15 J. B. SHERIFF AND OTHERS. (ISLAY DISTILLERS). Valuation Cases—Annual Value-Distillery. Commissioners of Supply having fixed the valuation of distilleries, which were in the occupation of the proprietors, at a certain rate per bushel of mashing capacity-held that this mode of valuation was lawful, and should be confirmed. These were appeals from the valuations fixed by the assessor and confirmed by the Commissioners of Supply upon the various distilleries in Islay. The principle of valuation adopted by the assessor was to take so much per bushel of the mashing capacity of the works, with additions and allowances for advantages and disadvantages according to the various individual distilleries. The rate per bushel was taken by him at 5s. 6d. The Commissioners having confirmed this mode of valuation, the distillers craved Cases for the opinion of the Judges, and Cases were stated accordingly. At advising— LORD LEE-In the absence of any other data for ascertaining the lettable value of distilleries in Islay, I think that the mashing capacity affords an intelligible and reasonable basis of calculation. It was settled last year that the lease of Tobermory Distillery could not be taken as a reliable guide in fixing the annual value of the Islay Distillery Company's subjects; and in that case it was no doubt held that 3s. 6d. was a fair rate. But it was not settled that 3s. Gd. was the true rate in all cases, or even in that case. The question in that case was not between 3s. 6d. and 5s. 6d., but between the mashing capacity as a mode of valuation contended for by the Distillery Company, and a valuation by the assessor on the principle of taking the Tobermory lease as a guide. In the present year the County Committee have gone fully into the question what ought to be the rate per bushel on the footing of taking the mashing capacity as a basis, and on the facts stated I see no reason to doubt that they have arrived at a just conclusion. I am therefore of opinion that their determination in all these cases is right. In LORD FRASER-The sixth section of the Valnation Act gives the rule according to which the yearly value of subjects shall be ascertained. the case where the property is let at a bona file rent, that rent is to be taken as the annual value. Sometimes subjects are let at nominal rents, on the ground of friendship or relationship; and in such cases the rent actually paid is not taken as the basis upon which the rateable value is to be estimated. The cases, however, which involve the greatest difficulty are those where the owner is also the occupant. There the assessor must endeavour, as best he can, to find out what rent a tenant might be expected to give; and the only sure mode of doing so, as it has always appeared to me, is to ascertain what are the profits to be made from the concern. There are cases where no profits are earned because of the a man destine his property for the use of the public-such as a building to be used for educational purposes or social entertainment,-and under conditions which render it impossible to get any profitable pecuniary return, the assessor then must take the potential value of the property, and fix the value according to what the house could be let at if employed for any profitable pecuniary purpose. No man is entitled to withdraw his property from valuation, and consequent taxation, however philanthropic may have been his motives. Such was the case of the Blyth Hall Trustees v. Assessor for Fifeshire, February 24, 1883, 10 R. 659. There are other cases, too, where the provisions of Acts of Parliament come into play to modify the rule. This is illustrated by the case of the Local Authority of Dalbeattie v. Assessor for Kirkcudbright, March 1, 1882, 10 R. 23. The premises belonging to a water company had in this case to be valued, and the value was held not to be what a tenant would give if he had the premises with the right to sell the water at the highest price he could obtain. The statute imposed a rate to be paid by the inhabitants who received the water, and no higher sum could be exacted from them for it than that rate. This statutory restriction rendered it necessary in consequence to resort to some other mode of ascertaining the value than the possible rent that a tenant might be expected to give for the subjects if there were no statutory restrictions. But in the case where a company or an individual is the owner and occupier of gasworks, factories, mills, distilleries, there need be no difficulty in ascertaining what rent a tenant would give. All that is there necessary is for the owner or occupier whose premises are to be valued to exhibit his books, and show the gross profits he makes from his trade on an average of years. On this being done, the assessor, the magistrates, and this Court could in a few minutes settle what rent might be expected from a tenant. You have to deduct from the gross profits a sum to be allowed to a tenant as tenant's profit, the interest on his capital, the sum paid for insurance, the expenses of management, and other deductions that ought to be made in order to ascertain net profits. The result would enable an aspiring tenant at once to see how much rent he could afford to pay. But this simple and sure mode of arriving at the desired result has not been followed in any case that I have seen, in consequence of the reluctance of the trader to show his books, and thereby to disclose how much profit he is making in his business. Thus in every one of the cases from Argyllshire which are before us at these sittings, the distillers have refused to produce their books; and the assessor, in consequence, has made guesses at the amount of profits, which the distillers meet simply by the statement that these guesses are entirely erroneous and misleading. But they do not enter into any details showing where the error is, nor make any positive statement of their own as to the amount of profits that they earn. The valuation committee of the Commissioners of Supply have a power under the 10th section of the Valuation Act in the following terms: It shall be competent to the commissioners of supply and magistrates of burghs respectively in the hearing of appeals under this Act to cite and examine the parties and their wit VOL. XXII. nesses on oath, and to call for all papers and documents which they may deem necessary.' Therefore the valuation committee have power to order the distillers to produce their books, the production of which each of the appellants refused to make to the assessor. The committee, however, did not deem it necessary to do so; and while they have reported (in the cases submitted to us) the opposing statements of the assessor and the distillers, as to the amount of the latter's profits, they have given no finding upon the subject, and have taken no proof in regard to it. This mode of ascertaining value must therefore be discarded. In consequence of the inability of valuation committees and magistrates to pronounce a finding as to the possible rent that a tenant might give, looking to the profits made by the concern, they are obliged to grope their way by other means in order to discharge their duty. One of these sometimes resorted to is to ascertain what was the cost of the building and of the fixed machinery in it, and then take a percentage upon the amount. This has always appeared to me to be a very loose way of ascertaining the annual value of subjects, even assuming (and this is making a large assumption) that all the expenditure made has been economical and judicious, and will prove of practical use. If the cost of the buildings and the machinery originally paid be taken, this would be clearly erroneous, because through the lapse of time, and the ordinary effect of tear and wear, both buildings and machinery would become deteriorated, while it is only the value of the present year that ought to be looked to. Hence if this course were to be adopted, there would require to be a new valuation of the subjects every year. And then, farther, the selection of the percentage rests upon no principle, so far as I can see. There is no reason why seven per cent. should be taken rather than ten per cent., -or any other percentage. We had last year another illustration of the difficulty of finding the value, in consequence of the non-production of the traders' books, in regard to the Campbeltown distilleries. The value was fixed by comparison with valuations, acquiesced in, of a great number of similar distilleries of the same capacity. Now, in the present case, the mode adopted by the assessor, and sanctioned by the valuation committee, is to take the mashing capacity of the distillery. The amount of trade produce which the distillery is capable of turning out is not an unfair way of ascertaining the annual value. It is the course which we sanctioned last year in regard to the Campbeltown distilleries, and I am prepared to uphold it again, in the absence of any evidence as to profits. In the case of the Campbeltown distillery it was held that the basis of letting value should be 3s. 6d. per bushel of mashing capacity. This the Magistrates of Campbeltown, who are the Appeal Court, held to be a reasonable way of ascertaining a fair annual value, and that the rate per bushel should be 3s. 6d. Now, when the Campbeltown case came up to this Court, no question whatever was raised as to whether 3s. 6d. was the proper figure to take. The only point that was argued was, that the criterion to be resorted to was the rent payable for the Tobermory distillery. The Court held that this was not a sound criterion because of the exceptional NO. XXXIX. character of the Tobermory lease; and 3s. 6d. per bushel of mashing capacity was allowed to stand, because the magistrates had held it to be a fair value, and no one objected to it. In the present case the valuation committee of the Commissioners of Supply have raised the sum from 3s. 6d. to 5s. 6d., which they think to be a fair rate of valuation in regard to the Islay distilleries. What were the grounds upon which the magistrates of Campbeltown fixed upon 3s. 6d., or upon what grounds the valuation committee have fixed upon 5s. 6d., we have no information. I cannot tell whether these figures are reasonable or unreasonable, and in affirming the determination of the valuation committee in the present case I do no more than affirm that it is a competent mode of ascertaining annual value to take a rate per bushel of mashing capacity. If the rate is to be objected to as unreasonable, the materials for so doing must be laid before the Court. It is not enough for the appellant to say that 3s. 6d. per bushel was fixed for the Campbeltown distillery, and that therefore that should be also the rate for the Islay distillery. And this was the sole argument submitted in this case against the rate of 5s. 6d. It is necessary to go a little farther than this. It must be shown by evidence that this rate is unjust and unreasonable; and as there is no such evidence before us, we must affirm the determination of the valuation committee of the Commissioners of Supply. The Court pronounced this judgment-The Judges being of opinion that it is in the case of unlet distilleries à lawful mode of ascertaining annual value to fix a rate per bushel of mashing capacity, and there being no evidence before them that the rate adopted by the Valuation Committee of the Commissioners of Supply is unfair or unreasonable in the circumstances of the case as stated, the Judges are of opinion that the determination of the Valuation Committee was right. Counsel for Distillers - Dickson. Hamilton, Kinnear, & Beatson, W.S. Agents - COURT OF SESSION. Friday, March 20, OUTER HOUSE. [Lord Kinnear. MENZIES V. GIRDWOOD & FORREST, AND ROBERT GIRDWOOD. DONALD BLACK SENR. AND DONALD BLACK JUNR. V. GIRDWOOD & FORREST, AND ROBERT GIRDWOOD. Partnership--Retiral-Notice of Retiral-Liability of Former Partner-Election. G was a partner of a firm till 1878, when he retired, and the business continued to be carried on by the only other partner and a person whom he assumed as a partner. G's retiral was not duly announced to certain customers till 1884, and between G's retiral and that date they had dealings with the firm. Scarf v. Jardine, June 13, 1882, L.R., 7 Question, whether by claiming in the sequestration the creditors had exercised their election? These were two actions in which the pursuers sought to make Robert Girdwood, wool-broker, responsible for transactions they had with the firm of Girdwood & Forrest, wool-brokers, Glasgow. The pursuers, the Blacks, had consigned wool to Girdwood & Forrest in 1882 and 1883, and the pursuer Menzies had consigned wool to them in 1882 and 1884. The estates of the firm of Girdwood & Forrest, and of Thomas Forrest and W. W. Sykes, as partners thereof and as individuals, were sequestrated on 11th October 1884, being then indebted to the pursuers. Mr Jackson, C.A., was elected trustee. The pursuers averred that they had all along believed that the defender Girdwood continued a partner in the firm, and that they had trusted to his credit. They brought these actions against Girdwood & Forrest as a company, Jackson as trustee thereon, Robert Girdwood, Thomas Forrest, and W. W. Sykes, as the individual partners thereof, as such partners and as individuals, and Jackson as trustee on the estates of Forrest and Sykes, conjunctly and severally. Girdwood was at first a wool-broker in Edinburgh, but subsequently opened a business also in Glasgow. In 1877 he assumed into the Glasgow business Forrest, formerly his manager there, and the firm was styled Girdwood & Forrest. In 1878 he sold to Forrest, as from 12th November 1878, his interest in Girdwood & Forrest, reserving right to re-enter the firm (under certain conditions) up to May 1882, which was not done. Sykes became a partner with Forrest in the firm of Girdwood & Forrest on 1st September 1881. In 1883 Girdwood issued a trade circular, which was duly posted to the pursuer Menzies properly addressed. It contained a statement of his retiral from the firm, and requested consignments for him to be sent to Edinburgh, but it was mainly occupied with other matters than the retiral from the firm, and did not bear to be a notice from Girdwood & Forrest of the dissolution of partnership. In May 1884 Girdwood sent out another circular, which was duly posted to the pursuer Menzies, and which was seen and read by the pursuers Black. By this circular the intimation of the retirement of Girdwood was made perfectly clear. In this action Girdwood denied that the pursuers relied on his credit, and averred that he was not even aware till January 1884 of the partnership between Forrest and Sykes in the firm of Girdwood & Forrest. He stated also that his retiral was well known in the trade from and after 1878, and that the pursuers had lodged claims in the sequestration of Girdwood & Forrest setting forth that Forrest and Sykes were the only partners thereof. He pleaded, inter alia—“(5) In respect of the circulars referred to, and the notice given to the pursuers that Mr Girdwood had retired from the firm, Mr Girdwood should be assoilzied. (6) The pursuers not having relied on this defender's credit, the latter should be assoilzied. (8) The pursuers having sued Messrs Girdwood & Forrest, and the two partners thereof, Messrs Forrest and Sykes, and claimed in their sequestration as condescended on, when they knew this defender had ceased to be a partner in the firm in 1878, or otherwise prior to 1881, they are not now entitled to sue this defender; et separatim, they are not entitled to sue all the defenders as conjunctly and severally liable, but must make their election as to whom they will sue.' The Lord Ordinary pronounced this interlocutor:-"Finds that prior to November 1878 the defender Robert Girdwood was a partner of the firm of Girdwood & Forrest, wool-brokers in Glasgow; that the only other partner of the said firm was the defender Thomas Forrest, and that in 1878 the said firm was dissolved: Finds that the said defender Robert Girdwood is not, and never was, a partner with the defenders Thomas Forrest and William Wade Sykes in the firm of Girdwood & Forrest, whose estates were sequestrated on the 11th of October 1884: Finds that the defender Girdwood is not liable jointly with the other defenders in the sums sued for, therefore assoilzies the defenders from the action as laid: Finds the defender Robert Girdwood entitled to expenses," &c. "Opinion. It is not disputed that the defender Mr Girdwood will still be liable to the pursuers in the same manner as if he had continued to be a partner of the firm of Girdwood & Forrest if he has failed to give due notice to them of the dissolution of the partnership between him and Mr Forrest, and if they have continued to deal with the firm as before in ignorance of the change. There can be no doubt that in a question with persons who have had previous dealings with the firm a Gazette notice is insufficient unless it can be brought home to the knowledge of the customer. The first question, therefore, is, whether the defender is relieved of his responsibility by reason of his having given direct notice of the dissolution to the pursuers, or either of them. It must be taken as settled that intimation by a circular letter traced to the possession of the customer, or duly posted with a proper address, is good notice; and upon the evidence I think it proved that the circulars of May 1883 and 1884 were properly addressed and duly posted to the pursuer Mr Menzies, and that the circular of May 1884, although it is not proved to have been sent to him by the defender, was seen by the pursuer Mr Black. Mr Menzies, however, denies that he received either of the circulars; and it does not appear to me that the circular of 1883 is so conceived as to throw upon him the onus of proving that, although duly posted, it was not in fact delivered at his address. It is a document of some length, and mainly concerned with other matters; it does not bear to proceed from the Glasgow firm of Girdwood & Forrest, and I think it very possible that it may have been opened and partially or cursorily read, although it could not have been attentively read through without the reader becoming aware that it contained an intimation of the dissolution of the firm. If it is incumbent upon a retiring partner to give notice of his retirement to the customers of the firm, I think it follows that he must do so in such a form as to call their attention to the statement of dissolution, or at least to the fact that the letter which he has addressed to them relates to the concerns of the firm. He is not entitled to assume that a printed document of some length, which bears on the face of it to be an ordinary trade circular as to markets, and does not bear to come from the firm, will be read from beginning to end by every customer to whom it may have been addressed. I am of opinion, therefore, that the circular of 1883 is not sufficient notice to relieve the defender of his responsibility; nor do I think that Mr Black is precluded from founding upon the defender's failure to give notice by reason of his having heard a rumour of the defender's retirement in 1883. He was entitled to expect that as a customer of the firm he would receive notice of the retirement, and was therefore entitled to assume that the rumour was unfounded or premature until he heard to the contrary from Mr Girdwood himself; and it is admitted that he received no notice from him until he had had an opportunity of seeing the circular of 1884. This second circular is in a different position from the former, because it was impossible from its form and the manner in which it is printed that anyone who looked at it should fail to see that it contained a statement of the dissolution of the firm. It appears to me, therefore, to be perfectly sufficient. The result is that neither of the pursuers is entitled to hold the defender responsible for the transactions of the firm subsequent to May 1884, but that both will be entitled to hold him liable for transactions prior to that date, if they are not barred from maintaining their right by the manner in which they have stated their claims against him and against the sequestrated firm. But I am of opinion that assuming Mr Girdwood's liability to the extent I have mentioned, the pursuers are not entitled to decree in the actions as laid. "It appears that after Mr Girdwood's retirement, Mr Forrest, who had acquired his interest in the business, assumed a new partner, Mr Sykes, and continued to carry on the business in partnership with him under the old firm name. Mr Girdwood was never a partner of the new firm so constituted, and knew nothing of the assumption of Mr Sykes until January 1884. The new firm, of which Forrest and Sykes were the sole partners, was sequestrated in October 1884, and it is in consequence of their bankruptcy that the question has arisen. Before raising the present actions each of the pursuers claimed in the sequestration for the sums for which they now sue, setting forth in their affidavits that Messrs Forrest and Sykes are the sole partners of the firm of Girdwood & Forrest. In each of the actions the conclusions are directed against the firm of Girdwood & Forrest, and Thomas Jackson, the trustee on the sequestrated estates thereof, and against Girdwood, Forrest, and |