v. Gray & Ors

15, 1887

The pursuer denied this, and pleaded that the ground in question being improved and cultivated ground, the Act did not apply.

The nature and character of the ground, and the improvements mide upon it, are fully explained in the note of the Sheriff-Substitute, infra.

The Sheriff-Substitute (DOVE WILSON), after proof, pronounced this interlocutor on 21st February 1887-"Finds that the pursuers have failed to prove that the defenders have exceeded the rights conferred upon them by the statute 11 Geo. III. c. 31, sec. 11, and therefore assoilzies the defenders from the conclusions of the petition: Finds the defenders entitled to expenses, &c.

"Note. This seems to me a very difficult case, and I should not be surprised if differences of opinion were entertained as to it. The piece of ground in dispute lies between a road and the

sea.

The extent is about 4 acres. It is not, and never has been enclosed; and on the side next to the sea it is plain that it could not be enclosed except at great expense. The ground consists of shingle and rock, and prior to 1868 it was properly designated as beach, and it undoubtedly then lay waste. Its surface was then partly bare and partly covered with rough grass and thorns. It was uneven, partly from natural inequalities, and partly because it had been used as a place for depositing stones from the adjacent lands. The situation of the ground is immediately above high water-mark, and within 100 yards of it. High waves occasionally wash over it, or parts of it, in storms, but this does not make it foreshore. The highest place where the water has left any mark is the steep bank of shingle spoken to by the witnesses, and the bare strip 3 or 5 yards wide along the top of it. No one has produced any title which can apply to the ground, except the pursuers, the one as proprietor and the other as tenant. In the absence of any competing title, the land down to highest highwater-mark must be taken to be theirs-Macalister v. Campbell, 7th February 1837, 15 S. 490. In 1869 and 1870 it was improved. It was levelled, the thorns removed, the bare parts covered or top-dressed with a coat of earth of an inch or two in thickness, and it was then sown out with grass seeds. This work was done at an outlay to the proprietor of between £14 and £15, the tenant performing the cartages. No estimate of the value of the latter was or probably could be given, but they must have borne a fair proportion to the rest. Assuming that the whole expenditure was from £20 to £30, this makes an expenditure per acre of from about £5 to about £7. The result has been that in place of a piece of beach with very rough pasture, and only partial accommodation for nets, a piece of fairly good pasture and of good net ground has been provided. The object was to improve the ground for both purposes, and it may be doubted whether, if it had. not been for the sake of increasing the rents for nets, the improvement would have been undertaken. The improvements alleged to have been made by the fishermen apparently did not amount to much. When spreading their nets they seem to have thrown aside stones brought up by the sea, to have occasionally filled up holes, and occasionally cut

6

away thorns. The principal use of the lands hitherto has been for spreading nets, and the statute now founded on by the defenders having apparently been forgotten, the fishermen appear to have made annual payments for the privilege, both before and after the improvements; and these payments being made to the adjacent tenant, who did the carting, also covered anything that could be claimed either for it or for the ground. The defenders claim the right for spreading their nets on the disputed ground without charge, both under the Statute 11 George III., cap. 31, sec. 11, and on the plea of prescription. The latter may at once, I think, be dismissed. It is inconsistent with the statute, and the defenders set forth no title to any property which could acquire a servitude right by means of prescription. The true question in the case is whether the defenders have a right to use the ground for nets under the statute. What the statute says is that the persons employed in the British white and herring fisheries may use the forelands below the highest high-water mark, and for the space of 100 yards on any waste or uncultivated land beyond such mark, within the land, for landing their nets, casks, and other materials, utensils, and stores, and for erecting tents, huts, and stages, and for landing, pickling, curing, and reloading their fish, and in drying their nets, without paying any foreland or other dues.' Under this statute the defenders have right to use the ground for the purposes claimed, if it be waste or uncultivated land.' There is room for a great deal of argument as to whether the ground in dispute comes under the definition of waste or uncultivated land.' If it had been land enclosed by a permanent fence it might have been brought under the category of permanent pasture, and thus have been considered to be neither waste nor uncultivated. But it is not enclosed, and, as already pointed out, apparently could not be enclosed, except at great expense, on the sea side. It is not waste land, as it apparently has some annual value; but if it is not uncultivated land' within the meaning of the statute, I am at a loss to see what land there is which the statute could have meant to include. If any trace of the exercise of human skill upon land is to be held as taking it out of the category of uncultivated,' of course this land is cultivated, because something has been done to it. This, however, is a very strict view, and it does not preclude the possibility of the view that, in the ordinary use of language, this is what would be called uncultivated land.' The Legislature must have been thinking of the division of land into cultivated and uncultivated, and it is necessary to see what it meant to include in the latter description. I have consulted a large number of dictionaries, but I have found no better definition of the word 'cultivate' than that contained in the original edition of Johnson, viz., to forward or improve the product of the earth by manual industry.' This at once excludes from view all that has been done to the land simply to improve it as a net ground, and to do this seems reasonable under the statute. If the fishermen have a right to use the ground in a state of nature for net ground, the Legislature cannot have meant that they were to be obliged to pay rent for it simply because the proprietor made it better for their purposes than they asked it to be made.

It is only the industry which has gone to improve or forward the product of the earth-in this case the pasture-which can be taken into account. This view probably throws out of consideration the bulk of the improvement which was done, as but for the chance of drawing rents for the nets, the ground would probably not have been worth the touching. Then as to the agricultural improvement, if a little top-dressing with earth and the sowing of some seeds is enough to take away the statutory right, it can be taken away wherever it is valuable. This consideration would be immaterial if it appeared that such a treatment of the land could be called cultivation in the ordinary sense of the word. I do not think it can be so called. It is only land still in its natural condition, though somewhat improved. Of cultivation in the ordinary sense the land indeed seems incapable, and it does not occur to me that anyone desirous of describing this piece of ground, apart from any ulterior motives, would think of describing it as a piece of cultivated land adjoining the sea-shore. It seems to me that, while he would naturally speak of the farms on the other side of the road as being cultivated land, he would speak of this as a bit of still uncultivated land between them and the sea Whatever a more persevering system of improvement may have been able to do with the adjacent lands, the mere skin of soil which overlies the shingle seems as yet uncultivated, and incapable of anything that could be called tillage. If it can be cultivated, in the ordinary sense of the word, the pursuers are at liberty to do so, and the statutory rights of the defenders to its use would at once end."

On appeal the Sheriff (GUTHRIE SMITH), on 9th March 1887, recalled this interlocutor, and found that the defenders had failed to prove that the ground to which access was claimed was waste or uncultivated land within the meaning of the Act of Parliament; repelled the defences, and granted interdict as craved; and found the defenders liable in expenses.

"Note. The ground in question lies between the sea-beach and the road leading from Gourdon to Johnshaven. Beyond doubt it is part of the pursuer's estate, and without his consent no one is entitled at common law to enter upon it for any purpose whatever. The question whether the defenders, being fishermen, are entitled to use it during the herring fishing for the purpose of spreading and drying their nets turns on the construction of the Act 11 George III., cap. 31, sec. 11. The Sheriff-Substitute has thrown on the pursuer the burden of proving the negative. In my opinion there is no onus on the pursuer at all. The field-if it may be so called-is embraced in his title, and having established this much, it is not for him, but for the defenders, who are claimants in solo alieno to make out their case. The Act on which they found applies to 'waste or uncultivated land' within a certain distance of the sea. We all know what these words mean in popular speech. All along the sea-coast there are great stretches of rocky shingly barren land, void and worthless, but excellent for the spreading and drying of nets; and it is enacted that wherever this may be found the fishermen may take it for net ground without asking anybody's leave. It is assumed that no one will object, or rather that no one will have

any interest to object, for it is supposed to be lying unoccupied and valueless in its natural state. But when by a little expenditure the proprietor has been able to reclaim it to the extent at least of making it worth something for agricultural purposes, it was never contemplated that it should remain subject to those uses which the Act sanctions for the benefit of the fishermen when it was in a state of nature. The operations carried out by the pursuer consisted in first filling up the holes, levelling down the hummocks, and spreading any soil which they contained on the surface. This occupied the witness Caird and three assistants six or seven weeks. Some carts of soil were then strewn on the levelled ground wherever it was required, and the whole sown over with grass seeds. These grew abundantly, and there is now a good sole of grass upon it, worth, according to the skilled witnesses, 10s. or 12s. an acre. In my opinion ground which has been treated in this manner is properly called pasture and not waste. I attach no importance to the fact that it is still unenclosed, for it lies along the sea-beach, and it is not necessary to fence against the sea; nor that it has no depth of soil sufficient to bear the plough, for when grass is the crop to be cultivated no ploughing is required. In my opinion all the evidence tends to show that the field in question has by the judicious operations of the pursuer ceased to be the description mentioned in the Act of Parliament, and that in a question with the public he is entitled to be protected in this property."

The defenders appealed and argued-Fishermen were, under the Act 11 George III. cap. 31, entitled to use waste and uncultivated ground along the sea shore, within the specified limits, for the purpose of drying their nets, as an encouragement to the fishing trade. The ground in question had admittedly up to 1869 been waste ground. After that a very small sum of money and a little labour had been expended upon it, with the result of taking it out of the category of waste land, but it still remained uncultivated ground. The fishermen could not be excluded from exercising their statutory rights, or made to pay rent, because the ground had been made more suitable for their purpose.

The respondent argued-Waste and uncultivated land was one and the same thing-that is to say, land that could not be used for any agricultural purpose. Here substantial improvements had been made upon the land, which turned it from waste and uncultivated into cultivated land, and if fishermen were to use it for drying their nets they must pay rent. Any other reading of the statute would allow fishermen to dry their nets upon any cultivated ground along the seashore, within the specified limits, if it was not fenced in-Hoyle v. M'Cunn, Dec. 10, 1858, 21 D. 96 (Lord President, p. 101); Stephen v. Aiton, Feb. 27, 1875, 2 R. 470.

At advising

LORD YOUNG-The question which this case presents is one of pure fact, and is solely, whether the piece of ground about which the present dispute has arisen, is waste and uncultivated, or whether it is not. If it is waste and uncultivated ground, then the pursuers must fail; if it is not, then they must succeed. Upon that question of

fact the Sheriffs have differed, and the Sheriff-Substitute at the outset of his thoughtful and well considered judgment says that he should not be surprised if differences of opinion should be entertained about it.

Now there was expended upon this ground some money and some labour, not very much perhaps, but still some, and it was thereby converted into what the Sheriff-Substitute in his note describes "as a piece of fairly good pasture and of good net ground. With great deference to the SheriffSubstitute, that language which is applicable to this piece of ground is inconsistent with holding it to be waste and uncultivated. It was cultivated to some extent and at some expense, and with the result of making it a piece of "fairly good pasture." That being the condition in which it is, the pursuer lets it along with the farm of which it forms a part, and his tenant partly pastures it, but also draws a rent from it by letting it out to fishermen to dry their nets upon, as it is a "good net ground." But if the terms "waste and uncultivated are inapplicable to this piece of ground, then the pursuer must succeed. That being my view upon the matter of fact I think that the judgment appealed against ought to be affirmed.

LORD RUTHERfurd Clark concurred.

LORD JUSTICE-CLERK-I do not wish to dissent from your Lordships' opinion, although my impression rather leans to the other view, but I think the line of demarcation is very slender.

LORD CRAIGHILL was absent on circuit when the case was heard.

The Court pronounced this interlocutor :

"Find that the ground to which access is claimed by the defenders is not waste or uncultivated: Therefore dismiss the appeal and affirm the judgment of the Sheriff appealed against: Find the pursuer entitled to expenses," &c.

Counsel for the Appellants-Pearson-Graham Murray. Agents — Tods, Murray, & Jamieson, W.S.

Counsel for the Respondents-D.-F. Mackintosh.-Johnston. Agents-Cowan & Dalmahoy,

W.S.

Wednesday, November 16.

SECOND DIVISION.

[Sheriff-Substitute at Elgin.

ALLAN AND OTHERS v. URQUHART AND OTHERS (TRUSTEES OF THE FORRES INVESTMENT COMPANY).

Assignation- Intimation - Shares in Friendly Society.

The manager of a friendly society, who was also the clerk, treasurer, and law-agent, assigned, on 18th July 1882, certain shares in the society belonging to him in security of

a loan. There was no intimation to the directors, and no change was at the time made upon the ledger of the society, which was the only register. Under the rules of the society a member might withdraw on giving three months' notice, and might sell or transfer his shares, but there was no provision for mortgaging shares. On 25th November 1885 the assignor, at the suggestion of one of the assignees, altered the heading in the ledger of shareholders, so that, as altered, the shares stood in the name of the assignees, conform to assignation intimated to me." At the same time he handed to the assignees a letter signed by himself as manager of the society acknowledging intimation, and adding that the shares had been transferred to the names of the assignees.

In an action at the instance of the assignees against the trustees of the society to recover the value of the shares, the defenders pleaded that the assignation had not been intimated, and that they were entitled to set off against the value of the shares, debts due by their manager to them. Held that the assignation had not been duly intimated to the defenders, and action dismissed.

Opinions that under the rules of the society the shares could not be assigned in security for a loan.

This action was raised in the Sheriff Court at Elgin by Alexander Grigor Allan, William Charles Young, and James Hutcheson, the individual partners of the firm of Grigor & Young, solicitors, Elgin, as trustees for behoof of the firm and the partners thereof, against Robert Urquhart, James Hamilton, and Alexander Cunningham, trustees nominated by and acting for the Forres, Burghead, and Findhorn Permanent Investment Company, registered under the Acts of Parliament relative to friendly societies, to recover the sum of £200, or such other sum as might be due on fourteen shares of the company, which had been assigned to the pursuers by Arthur Duffes, solicitor, Forres, in security of a loan. The amount claimed was afterwards restricted to £128, 15s. 2d., exclusive of interest, as the sum due in respect of the shares.

The facts of the case were these-By bond and assignation in security, dated 18th July 1882, and registered in the Books of Council and Session 5th November 1885, Arthur Duffes, solicitor, Forres, granted him to have instantly borrowed and received from the pursuers as trustees, the sum of £300, which sum he bound and obliged himself to repay to them at the term of Martinmas 1885, with interest and penalty in case of failure, as therein stipulated, and for the further security of the pursuers, and more sure payment of principal, interest, and penalty, he assigned, bargained, transferred, and conveyed to the pursuers, as trustees, inter alia, fourteen shares standing in his name in the defenders' company. The sum sued for was the balance of this loan remaining unpaid,

The shares were of the value of £25 each. With regard to four of the shares assigned it appeared in the course of the action that they belonged to Mrs Duffes, and any claim to them 1 was given up. The amount at the credit of

In

Duffes at the date of the assignation, in respect of the remaining ten shares, was £77, Os. 10d. Duffes was the manager of the company and also the clerk, treasurer, and lawagent down to 8th December 1885, when he resigned. No intimation of the assignation was made to the directors of the company. October 1885 Duffes showed Mr Grigor Allan, one of the pursuers, his pass-book with the company, which was balanced as at 18th May 1885, bringing out a sum of £128, 15s. 2d. as then due to him. On 25th November 1885 Mr Grigor Allan called on Duffes at his private office and asked him if he had entered any note of the assignation in his books, and, on learning that he had not, said it would be better to do so. Duffes then altered the heading of the account for the ten shares in question in the ledger of shareholders, so that as altered it read thus"ARTHUR DUFFES, solicitor, Forres, now in name of ALEX. GRIGOR ALLAN, WILLIAM CHARLES YOUNG, and JAMES HUTCHESON, Solicitors, Elgin, for behoof of the firm of GRIGOR & YOUNG, Solicitors, Elgin, conform to assignation intimated to me. "ARTHUR DUFFES, Manager,

25th Nov. 1885."

This ledger was the only register of the company. At the same time Duffes handed to Mr Allan a letter in these terms

"Messrs Grigor & Young, Solicitors, Elgin.

Forres, 25th Nov. 1885.

"DEAR SIRS, -I acknowledge intimation of bond and assignation by myself as an individual to your firm of fourteen shares in the Forres, Burghead, and Findhorn Permanent Investment Company, of date 18th July 1882, and recorded 5th November 1885.-Yours truly,

"ARTHUR DUFFES, Manager of the said Forres, Burghead, &c., Co. "P.S.-The said shares haye been transferred to your name. "ARTHUR DUFFES, Manager." Mr Grigor Allan paid Duffes another visit on 13th January 1886, when he examined the ledger, and was satisfied that it was then all right. Subsequently, however, this entry was made in "Drawn the ledger in Duffes' handwriting

£100." The sum at his credit was then altered to £23, 19s. 7d. This sum of £100 had been paid by the directors to Duffes on 18th July 1884, as part of the subscriptions at the credit of his shares. Criminal proceedings were taken against Duffes in connection with the affairs of the company, and he absconded.

The rules of the company bearing on the present question were as follows:

"IV.-Subscriptions.-. . . The directors shall furnish the shareholders with pass-books (at the shareholder's expense) in which all payments made to this company shall be signed or marked by the manager, or such other party as may be authorised to receive the money, and which receipt alone shall be binding on the company. The pass-book may be required by the directors to be sent into the manager to be laid before them or the auditors when necessary. The company's books shall be held legal evidence in all cases of dispute.

"VII.-Balance of Books and Division of Profits. -The books of the company shall be brought to a balance, and the profits ascertained as on the 30th day of May in each year, and the said profits

shall be credited in the books of the company to each shareholder according to the number and value of shares held by him, whether he shall hold advanced or unadvanced shares. So soon as the sum standing in the books of the company at the credit of any shareholder shall amount to £25 for each share he or she may hold, the amount of such share or shares if unadvanced shall be paid over to such shareholder, who shall then cease to be a shareholder in so far as regards such paid-up shares. . . . . It is, however, specially provided that any shareholder withdrawing before the subscriptions and the profits credited thereon have accumulated to the full amount of £25 per share, shall have no claim on the company but for the amount of subscriptions paid by him, and simple interest thereon, in terms of rule eighth.

VIII.-Shareholders withdrawing: Sale and Transfer of Shares.-Any shareholder not having received an advance of money, or whose advance shall have been repaid, shall be allowed to withdraw from the society on giving written notice to the manager, and shall be entitled to receive, at the end of three months from the receipt of such notice, the full amount of his subscriptions, together with Savings' Bank interest thereon; provided always that it shall appear from the company's stock, as ascertained at the preceding annual balance or by special minute of the directors, that such payment shall not exceed the value at the time of such shares so withdrawn ; and it is specially provided that, notwithstanding the value of said shares so withdrawn shall, with the profits credited thereon, as by rule seventh, exceed the amount of subscriptions paid by the shareholders withdrawing, and simple interest thereon as aforesaid, the shareholder so withdrawing previous to his shares being fully paid, as stated in rule seventh, shall have no farther claim than for said subscriptions and simple interest as aforesaid, or for the value of such shares, should the value be less than said subscriptions and interest. Any shareholder shall be allowed to sell or transfer his shares to any other person, whether a member of the Society or not; provided always that in the case of a sale or transfer, a transfer fee of threepence per share shall be paid to the company at the completion of the transfer, over and above the legal expenses of the same, if any, and that all arrears, fines, penalties, or sums otherwise due to the company, shall be paid previous to the transfer being registered.'

There was no provision made by the rules of the company for a member mortgaging shares held by him.

The pursuers pleaded-"(3) The transfer of said shares being in competent form, and duly intimated to the company, the pursuers are entitled to decree as craved. (4) The alleged payment of £100 to the said Arthur Duffes being ultra vires of the company, and in violation of its rules, cannot be pleaded as a set-off against the pursuers' claim.

The defenders pleaded-"(1) The pursuers not being shareholders of the said company have no title to sue for payment of sums due under shares belonging to or in name of a shareholder of the company. (2) No intimation of the bond and assignation in security in question having been made to the defenders, or to the president,

vice-president, and directors of the said company, the present action is unfounded, and ought to be dismissed, with expenses. (3) The said Arthur Duffes being himself the manager of the said company, while at the same time he was the cedent and debtor of the pursuers, intimation to him alone was insufficient, and such intimation, in order actually to reach the proper parties, should have been made to the defenders, and the president, vice-president, and directors of the company. (4) There having been no absolute sale or transfer of the shares held by Duffes in the said company to the pursuers duly completed, they are not entitled to insist in the present action." The defenders also pleaded (5) that they were creditors of Duffes for a much larger sum than ever stood at his credit in connection with the shares in question, and that they were entitled to set off this sum against the pursuers' claim.

On 9th April 1887 the Sheriff-Substitute (RAMPINI) pronounced this interlocutor:--"Finds that by bond and assignation in security for £300, dated 18th July 1882, and registered in the Books of Council and Session 5th November 1885, Arthur Duffes, solicitor, Forres, conveyed to the pursuers, inter alia, fourteen shares of the defenders' company in security of the said advances made by the pursuers to him: Finds that the said assignation was not duly intimated to the defenders: Therefore sustains the defenders' 1st, 2nd, 3rd, and 4th pleas-in-law: Dismisses the action, and Finds the pursuers liable in expenses, &c.

"Note.-It appears to the Sheriff-Substitute that there are two questions on which his decision is required (1) Were the shares assignable? and (2) Was the transference completed? These questions arise only as to the shares held by Duffes in his own name. It is admitted that the pursuers have failed to establish any claim to the four held by Mrs Duffes.

"1. It is not disputed that as a general rule, independent of any authority to this effect in the regulations of the company, shares in a benefit society like the present are assignable. But it is objected that the rules do not authorise an assignation in security. This is true so far as the letter of the regulations go, but by rule 8 it is provided, that Any shareholder shall be allowed to sell or transfer his shares to any other person whether a member of the society or not.' And in the opinion of the Sheriff-Substitute not only (1) must the greater right hereby conferred be held to include the less, but (2) so far as the company is concerned, the transfer, if a transfer actually took place, was out and out an absolute one. But

2. Was the transference actually completed? The pursuers' argument is, that if there was no formal intimation, there were at least the equipollents of intimation. And here it is important to keep in view that this is not a case of competition between the assignees and third parties claiming under a duly intimated assignation, but between assignees and the common debtors as creditors of the cedent. It is plain that unless the pursuers can show a completed transference of the cedent's right, they cannot claim to be considered as shareholders of the company, and this they do (1) by asserting private knowledge on the part of the debtor. They allege that the cedent was, if not

VOL. XXV.

actually the company, at least the company's principal officer, and this may be held as proved. But admitting this, is private knowledge on the part even of the principal officer of a company sufficient to do away with the necessity of intimation or its equipollent. The Sheriff-Substitute has been unable to find any authority for this proposition. It may be that private knowledge will raise a personal exception to the debtor paying the cedent, but, as the Sheriff-Substitute thinks, this question does not arise here. In the Faculty of Advocates' case (M. 866) private knowledge was found insufficient without a promise to pay, and Dickson's case (M. 873) was corroboration of his doctrine. If this view is correct, then there was here no intimation unless (2) the alteration in the ledger and the letter No. 22 of process, both of date November 25, 1885, can be held to have been equivalent to intimation.

"This leads us to consider Duffes' position quoad the company, and with regard to this the SheriffSubstitute only desires to say that the directors, against whose bona fides there is not the slightest imputation, undoubtedly erred in judgment apart from any question as to the violation of the rules, in sanctioning the accumulation of the offices of manager, clerk, and law agent, on one person, and they have themselves to blame if, as it has turned out, they have been made the victims of their misplaced confidence. But it does not follow that they were in mala fide in making the payment of £100 to Duffes in July 1884, or that even if they had paid away the amount of these shares after the 25th November 1885, they could have been found liable in repetition. The alteration of the heading in the ledger was made by Duffes in his private office (the company's office being apparently the Mechanics' Institute), where also the letter No. 22 of process was written by him in Mr Allan's presence. Was it sufficient to constitute knowledge on the part of the company that Duffes signed this letter and made this alteration in his private office, and added to his signature the word 'manager?' The Sheriff-Substitute thinks that in their own interests, having the suspicion of Duffes which they had, the assignees ought to have taken further steps to have informed the company of this transaction, the more so that this is not one of those cases where the legislation has provided a statutory mode of intimation. In Keir's case (M. 738) there was both arrestment and intimation.

66

3. It is plain that if the Sheriff-Substitute is right in holding that even at the 25th November 1885 the pursuers were not shareholders of the company, and that they are not so even yet, it is unnecessary to refer to the payment of £100 made to Duffes, very irregularly it must be admitted, in 1884.

"The result, therefore, at which the SheriffSubstitute has, after a careful consideration of the evidence and the authorities, arrived at, is that in his opinion the pursuers were in error in assuming that no intimation was necessary, and that they have by so doing deprived themselves of a right which would otherwise have been undoubted. It was plain to the Sheriff-Substitute from the first that whichever way this case was decided, hardship would ensue to one or other of two innocent parties. And though, perhaps, if it had been possible to have invoked equity, it would have been more in accordance with the

NO. IV.