v. Hope &

9,

self, he would retain his scrip as security for such balance."

On 17th June 1910 the Lord Ordinary (MACKENZIE) pronounced this interlocutor:-"Sustains the second plea-in-law for the defenders: Assoilzies the defenders from the conclusions of the summons, and decerns: And in respect the transfer of the shares mentioned in the summons has been delivered to the pursuer, grants warrant to the Accountant of Court to deliver the consignation receipt, and to the North of Scotland and Town and County Bank, Limited, to pay the sum contained therein with the interest accrued thereon to the defenders or their agents, and that on a certified copy of this interlocutor."

Opinion. After discussing questions which are not now reported]"The next question is whether the defender was entitled to retain the transfer of the 100 Globe & Phoenix shares bought for the settlement on 26th August, and paid for then until Mr Glendinning paid him the £50, 2s. in respect of the subsequent transaction. The right to do so is founded on the lien which stockbrokers have. I think the cases of Jones v. Peppercorn, 28 L.J. Ch. 158, and London & Globe Finance Company, 1902, Ch. 416, show that such a right exists on the London Stock Exchange. The evidence in the present case is, in my opinion, sufficient to establish that there is such a right on the Edinburgh Stock Exchange. I do not think the lien is limited to transactions for the same account. It was said, however, that the transfer was in Mr Hope's hands under circumstances which excluded his lien. His clerk admitted that as the shares were to be transferred out of a parcel standing in Mr Hope's name at the National Bank, the transfer should have been sent on 26th or 27th August. I accept his explanation that it was due to an oversight that this was not done, and do not consider that there is sufficient in the circumstances to prevent Mr Hope exercising his right of lien. There is, I think, no warrant for the suggestion that Mr Hope was holding up the transfer for the purpose of getting the benefit of the additional cover for advances from the bank.

"The result of my opinion is that an interlocutor will be pronounced granting warrant for payment of the consigned money to the defender, and finding it unnecessary to dispose of the conclusion of the summons for delivery of the transfer. The defender is entitled to expenses."

The pursuer reclaimed, and argued --The custom alleged by the defenders had not been proved. The only evidence in support of it was that one witness had enforced it on one occasion. That was not sufficient to prove the existence of a custom of trade -Hogarth & Sons v. Leith Cotton Seed Oil Company, 1909 S.C. 955, 46 S. L.R. 593. Jones v. Peppercorn, 1858, 28 L.J. Ch. 158; and in re London and Globe Finance Corporation, [1902], 2 Ch. 416, did not apply to the present case. They turned on the custom of the London Stock Exchange, and that was irrelevant when the question was as to VOL. XLVIII,

the custom of the Edinburgh Stock Exchange. If the custom was not proved the defenders must fail, for a stockbroker had no lien at common law--Bell's Prin., secs. 1434, 1438, 1445, 1451, and 1452. Further, the transfer in the present case was not the proper subject of a lien. The only documents which could be the subject of a lien were documents of title and negotiable securities Hamilton v. Western Bank, December 13, 1856, 19 D. 152; National Bank of Scotland v. Dickie's Trustees, June 20, 1895, 22 R. 740, 32 S.L.R. 562 (per Lord Kyllachy). Even if the right of lien existed, the defenders were not in a position to plead such a right as against the pursuer. Under their contract it was their duty to deliver the transfer to the pursuer at a time before the question under the subsequent transaction had arisen. Their possession was thus due to their own negligence and breach of contract, and therefore they had not that lawful possession which was necessary to make a right of lien effectual-Bell's Prin. secs. 1412-14; Gloag & Irvine on Rights in Security, p. 346; Fisher v. Smith, 1878, 4 A.C. 1. A custom which gave a lien under such circumstances would be void as being unreasonable and contrary to law. [Lord Dundas referred to Bruce v. Smith, June 20, 1890, 17 R. 1000, 21 S.L. R. 785.] Meikle & Wilson v. Pollard, November 6, 1880, 8 R. 69, 18 S. L. R. 56; and Robertson v. Ross, November 17, 1887, 15 R. 67, 25 S.L.R. 62, were distinguishable. In these cases a right to retain was held to be an implied term of the contract under which possession was had. Here the contract was inconsistent with a right of retention.

Argued for the defenders-It was proved that by the custom of the Edinburgh Stock Exchange a stockbroker was entitled to retain his client's documents in security of an open account. A similar custom obtained in London, and was recognised as matter of law in the English Courts Jones v. Peppercorn (cit.); in re London and Globe Finance Corporation (cit.)—and that being so slight evidence was sufficient to prove that the custom was in force in Scotland-Strong v. Phillips & Company, March 16, 1878, 5 R. 770, 15 S. L.R. 443 (per Lord Gifford). Hogarth & Sons v. Leith Cotton Seed Oil Company (cit.) was distinguishable, because there the merchants who were to be bound by the custom deponed that they had never heard of it. If the custom existed, it was binding on the pursuer-Scott and Horton v. Godfrey [1901], 2 K.B. 726; Robinson v. Mollett, 1875, L.R., 7 H.L. 802; Mitchell v. Newhall, 1846, 15 L.J., Ex. 292-whether he knew of it or not

Fargett v. Baxter, [1900] A.C. 467, at p. 479. Further, a stockbroker was a mercantile agent, and as such had a right of retention for a general balance at common law-Bell's Comm. (M'Laren's ed.), ii, 114, 115; Gloag and Irvine on Rights in Security, p. 396; Sibbald v. Gibson & Clark, December 11, 1852, 15 D. 217. Retention might be pleaded in respect of a future or contingent debt-Bell's Prin., section 1410; Ross v. Ross, March 9, 1895, 22 R. NO. VIII.

LORD SALVESEN

[After the narrative quoted above]-The Lord Ordinary has decided that a stockbroker is entitled to retain any transfers that he has in his hands belonging to his client in security of any general balance, actual or contingent, which may be owing by the client to the stock broker. He has based his decision on an alleged custom of stockbrokers which he finds has been established in England, and which, on the evidence led before him, he considered himself justified in applying to Scotland. I am unable to reach the same conclusion.

It

The averment of custom, which was remitted to proof, is of a very peculiar nature. It is not said to apply to the whole of England or Scotland, but only to the Stock Exchanges of London and Edinburgh. is admittedly not embodied in the rules of the Edinburgh Stock Exchange, subject to which the contract was made. Neither of these difficulties, perhaps, would preclude the defenders from establishing a local custom so uniform and well recognised as to be binding on all persons contracting with Edinburgh stockbrokers. But it lies upon the defenders to prove by clear and cogent evidence the existence of such a custom, and I shall therefore consider, in the first place, the evidence by which it is said to have been established.

[His Lordship gave the summary of evidence quoted supra].

The evidence which I have thus summarised is, in my opinion, entirely insufficient to establish a custom of stockbrokers to retain a client's uncompleted transfer in security of an ascertained balance. Still less does it prove the custom averred of retaining such a document as security against all open accounts. On 10th September, when the demand for the transfer was formally made in writing, although the account for the 200 shares may be regarded as then open, it had not been ascertained that there would be any balance due by the client, and this was not ascertained till 15th September, when the defenders sold the 200 shares. Further, the balance was not payable until the 29th September, so that at best the retention after 15th September was for a debt which was not presently due. In connection with a claim of this nature. Mr Lawrie's evidence is to the effect that it would not warrant the retention by a stockbroker of the client's transfers.

, 1910

Assuming the alleged custom on the Edinburgh Stock Exchange not to be proved, it is immaterial whether such a custom exists on the London Stock Exchange, or indeed whether such a custom has been allowed by the English law courts as applicable to all stockbrokers in that country. It is no doubt true that where a custom of trade has been well settled in England it requires less evidence to establish a similar custom in Scotland than if the custom be peculiar to the latter country. Whether that principle applies to a local as distinguished from a general custom is open to doubt, but at all events it is perfectly plain that the existence of the custom in Scotland must be proved as matter of fact, and in my opinion there is an entire lack of evidence to this effect. Further, I do not read the two cases relied on by the defenders (Jones v. Peppercorn, 28 L.J. Ch. 158, and The London and Globe Co., 1902, 2 Ch. 416) as establishing the custom averred in this case even in England.

So far as I understand them they decide no more than this, that where securities had been deposited by a client with a stockbroker to cover a loan made by the stockbroker to the client, these securities were available to cover indebtedness arising upon subsequent Stock Exchange transactions after the original loan had been repaid. If so, they appear to be on precisely the same lines as the decision of the Court of Session in the case of Hamilton (19 D. 152). No doubt this Scotch case refers to the right of retention by bankers of documents of title; but I apprehend the same principle would be applied to the case of a stockbroker who was acting as his client's banker. The real point in the case of The London and Globe Finance Corporation was whether, as the securities had been deposited for a special purpose-to secure a specific loan-and that purpose having been discharged by payment of the loan, they could thereafter become subject to a general lien, The decisions of the Scotch and English Courts on questions of this kind, so far as I can gather, appear not to conflict but to be in substantial agreement.

The defenders' difficulty in establishing a customary lien of the kind averred is increased by the circumstance that the law of Scotland does not recognise the doctrine of equitable mortgage, now firmly established in England. A deposit of titles, or policies of insurance, or certificates of shares, with a bank, creates no effectual security in its favour by our law. In order to such a security there must be a disposition of the heritable subjects, an assignation of the policy of insurance, or a transfer of the shares. The single exception to this rule that exists in favour of law agents rests upon ancient usage, and has no analogue in the case of other agents or depositaries, and it is impossible to explain it on the principle which was given effect to in Meikle & Wilson v. Pollard (8 R. 69) and Robertson (15 R. 67), where the right of retention claimed was allowed on the

v. Hope

, 1910

These cases

ground of implied contract. appear to me to have no application to the present. The transfer which the defenders refused to part with was in their possession for the special purpose of forwarding it to the pursuer, and of thus completing the transaction which they had already been paid to carry through. It would have been entirely different if documents of title had been transferred to them in security, for they could then have made their claims effective, not by retention of the documents themselves, but by realising the property to which they held an ex facie absolute title. Further, the transfer ought to have been delivered long before any question could have arisen with regard to the second transaction. The defenders cannot take benefit from the circumstance that they had failed to perform their duty to their client by delivering the transfer, and so were in possession of a document which they had no right to retain. On all these grounds, therefore, I have come to be of opinion, differing from the Lord Ordinary, that the defenders' claim to retain the documents cannot be sustained, and that the pursuer is entitled to decree in terms of the conclusions of the summons. ... [His Lordship dealt with a question which is not reported.]. ..

The Court pronounced this interlocutor-

"Recal the... interlocutor reclaimed against: Find that the defenders had no right, as at the date of the action, to retain the transfer of the 100 fullypaid ordinary shares in the Globe and Phoenix Gold Mining Company, Limited, having its registered office at No. 12 Old Jewry Chambers, London, E. C., purchased by the defenders upon behalf of the pursuer on or about 19th August 1909; but in respect the said transfer has already been delivered to the pursuer, find it unnecessary to give effect to the conclusions of the summons, and dismiss the cause: Authorise the pursuer to uplift the sum of £55 consigned in bank, and grant warrant to the Accountant of Court to deliver the consignation receipt to the pursuer, and to The North of Scotland and Town and County Bank, Limited, to pay the sum therein with all interest thereon to the pursuer or his agents, and that on a certified copy of this interlocutor," &c.

Counsel for Pursuer (Reclaimer)--SolicitorGeneral (Hunter, K. C.)- Morison, K.C.— W. T. Watson-Guild. Agents - Sharpe & Young, W.S.

Counsel for Defenders (Respondents). Sandeman, K.C. Munro, K.C. — C. H. Brown-Smith Clark. Agents-W. & F. Haldane, W.S.

Wednesday, November 30.

FIRST DIVISION.

[Sheriff Court at Oban.

CAMPBELL'S TRUSTEES v. O'NEILL. Process-Sheriff — Appeal — Competency Removing-Summary Ejection-Application for Warrant-Sheriff Courts (Scotland) Act 1907 (7 Edw. VII, cap. 51), sec. 37-The Court of Session Act (Judicature Act) 1825 (6 Geo. IV, cap. 120), sec. 44.

The Sheriff Courts (Scotland) Act 1907, sec. 37, enacts-"In all cases where houses, with or without lands attached, not exceeding 2 acres in extent. . . are let for a year or more, notice of termination of tenancy shall be given in writing to the tenant by or on behalf of the proprietor, or to the proprietor by or on behalf of the tenant: Provided always that notice under this section shall not warrant summary ejection from the subjects let to a tenant, but such notice, whether given to or by or on behalf of the tenant, shall entitle the proprietor to apply to the Sheriff for a warrant for summary ejection in common form against the tenant and everyone deriving right from him. . . .”

The Judicature Act, sec. 44, enacts"When any judgment shall be pronounced by an inferior court, ordaining a tenant to remove from the possession of lands or houses, the tenant shall not be entitled to apply [as previously provided] by bill of advocation to be passed at once, but only by means of suspension. . .

In an application for a warrant for summary ejection of a tenant to whom notice of the termination of his tenancy had been duly given, the Sheriff-Substitute, after proof, granted decree as craved, and on appeal the Sheriff adhered. The defenders having appealed, the pursuers objected to the competency of the appeal.

Held that as the Sheriff Courts (Scotland) Act 1907 had left unrepealed section 44 of the Judicature Act 1825, decrees in actions of removing, which this in reality was, could only be reviewed by suspension, and the appeal was therefore incompetent and must be dismissed.

Removing Notice of Termination of Tenancy-Validity of Notice-Sheriff Courts (Scotland) Act 1907 (7 Edw. VII, cap. 51), sec. 37, and First Schedule, Rule 112, Form J-Removal Terms (Scotland) Act 1886 (49 and 50 Vict. cap. 50), sec. 4.

The Sheriff Courts (Scotland) Act 1907, sec. 37, enacts--"In all cases where houses, with or without land attached, not exceeding 2 acres in extent, are let for a year or more, notice of termination of tenancy shall be given in writing to the tenant by or on behalf of the proprietor, or to the proprietor by or on behalf of the tenant, Provided that the notice provided for

...

Form J is "You are required to remove from at the term of Whitsunday [insert year] [or Martinmas, as the case may be, inserting after the year the words, being the 15th day of May or the 11th day of November, or the 28th day of May or the 23th day of November, as the case may be]."

Held (diss. Lord Johnston) that a notice of removal given to a tenant under section 37 of the Sheriff Courts (Scotland) Act 1907, forty days before 15th May 1910, requiring him to remove "at the term of Whitsunday 1910," but which did not specify that Whitsunday meant the 28th and not the 15th of May, was a good notice, no special paction between the tenant and the proprietor with regard to notice of removal being averred.

The Sheriff Courts (Scotland) Act 1907 (7 Edw. VII, cap. 51), sec. 37, First Schedule, Rule 112, and Form J, and the Court of Session Act (Judicature Act) 1825 (6 Geo. IV, cap. 120), sec. 44, are quoted supra in rubrics.

On 2nd June 1910 Richard Watson and another, trustees of the late Dr Campbell, Oban, brought an action in the Sheriff Court there against Francis O'Neill, draper and clothier, 4 Argyll Square, Oban, in which they craved the Court "to grant warrant... summarily to eject the defender" from the said premises. The pursuers' complaint, as stated in the initial writ, was that though the defender's occupancy had expired at Whitsunday 1910, and though he had, in terms of section 37 of the Sheriff Courts (Scotland) Act 1907, been duly warned to remove, he had refused to do so.

The notice of removal served upon the defender was as follows:--"Sir, you are required to remove from the shop 4 Argyll Square, Oban, presently tenanted by you, at the term of Whitsunday 1910."

O'Neill lodged defences, in which he averred that he was by agreement, subsequently incorporated in a missive signed by him, entitled to six months' notice of the termination of his tenancy.

He pleaded-“(1) The action is incompetent. (2) The defender not having got the notice contracted for, should be assoilzied.”

On 30th July 1910 the Sheriff-Substitute (WALLACE) repelled the defender's first plea-in-law, allowed him to instantly verify his defence, and appointed a diet of proof.

A proof having been taken, the Sheriff. Substitute on 25th August 1910 found that the defender had failed to prove that any

30, 1910

such notice had been stipulated for, and granted decree as craved.

The defender appealed to the Sheriff (M'CLURE), who on 24th September 1910 adhered.

The defender appealed.

The respondents objected to the com. petency of the appeal, and argued - (1) On the Competency-The present action, though described in section 37 of the Sheriff Courts (Scotland) Act 1907 (7 Edw. VII, cap. 51), as an action of "summary ejection,” was in its essence an action of removing. Decrees in such actions were only reviewable by suspension-Judicature Act 1825 (6 Geo. IV, c. 120), sec. 44-and this appeal therefore was incompetent. Prior to the Act of 1907 the merits in such actions were discussed in the action of removing raised forty days before the termination of the tenancy, the decree obtained therein if not implemented being followed by a warrant or precept of ejection, as described by Lord Curriehill in Hally v. Lang, June 26, 1867, 5 Macph. 951, at p. 954, 4 S. L.R. 146. Such warrants or precepts were purely ancillary processes, and were the appropriate legal diligence for enforcing the decree. The Act of 1907 had reversed the order of procedure, for the notice of removal now took the place of the action of removing, leaving the merits to be discussed in the so-called "summary ejection." The summary ejection, therefore, of section 37 was in substance if not in name an action of removing in the sense of the Judicature Act 1825, sec. 44. Esto that prior to the Act of 1907 appeals in actions of ejection had been entertained, these appeals were in processes of ejection properly so called, viz., the summary ejection of a squatter or a person possessing without a title. Such processes were entirely different from the separate and independent action of removing applicable to the case of a tenant at the due termination of his tenancy. (2) On the Merits-(a) The procedure in the Sheriff Court had been in accordance with the statute. This was a "summary application" in the sense of section 3 (p) of the Act of 1907, and the procedure prescribed by section 50 for such applications had been duly complied with. (b) The notice was in proper form, for the Act did not provide that notices not strictly in the form prescribed should be invalid. The notice given was not ambiguous, for where a tenant's term of removal from a house or shop was Whitsunday that meant the 28th of MayRemoval Terms (Scotland) Act 1886 (49 and 50 Vict., c. 50), sec. 4. (c) The appellant had failed to prove that he was entitled to six months' notice.

Argued for appellant-(1) On the Competency of the Appeal-The appeal was clearly competent. Esto that prior to 1907 this appeal would have been incompetent, that Act had altered the procedure as regards review, for sec. 37 allowed a landlord to apply for warrant of summary ejection "in common form," and if he chose to proceed by initial writ he must take the consequences, one of which was

that an appeal was thereby rendered competent-Act of 1907, secs. 27 and 28. (2) On the Merits-(a) The procedure in the Sheriff Court had been wrong, for the Sheriff-Substitute had followed that applicable to sec. 38, which related to cases where the let was for a period less than a year-vide Rules of Procedure in First Schedule to the Act, rules 115-122. That being so the Court could interfere even although the appeal were incompetent. (b) The notice of removal was not in the statutory form, viz., Form J, appended to the Act of 1907, and therefore the whole proceedings following thereon were inept - Johnston v. Pettigrew, June 16, 1865, 3 Macph. 954; Somerville v. Kinnaird, December 18, 1905, 8 F. 335, 43 S.L.R. 337; Brown v. Kinnaird, December 18, 1905, 8 F. 340, 43 S. L. R. 340. (c) The evidence showed that the appellant was entitled to six months' notice, and this he had not received.

At advising

LORD JOHNSTON-The Sheriff Courts Act 1907, in sections 34-38, makes provision for removings which, whether intended as a complete code or not, is manifestly very incomplete. But it does more. In its general repeal of statutes it purges a good deal of previous legislation on the same subject, e.g., the Act of 1838 (1 and 2 Vict., cap. 119), secs. 8-14, the Act of 1853 (16 and 17 Vict., cap. 90), secs. 29-32, the Act of 1889 (52 and 53 Vict., cap. 26), secs. 6, 7, while it leaves standing the admittedly obsolete Act of 1555, the Judicature Act 1825 (6 Geo. IV, cap. 120), sec. 44, and the Agricultural Holdings Act 1883 (46 and 47 Vict. cap. 62), secs. 27, 28, and of course does not touch various Acts of Sederunt, particularly the important Act of Sederunt of 1756, bearing on the subject. The result has been, I am persuaded, to throw the whole matter, which was by no means devoid of confusion at any rate, into still greater confusion. If nothing else, the repeal of the Act of 1853, sec. 29, without substituting anything in its place, is a retrograde movement which will some day cause trouble. But in the present case we are concerned only with a novel shorthand method of removing, introduced by section 37 of the Act of 1907, in cases where houses without land attached, or with land not exceeding two acres attached, or lands not exceeding two acres without houses, or mills, fishings, shootings, &c., are concerned. Where these are let for a year or more, removing is to be in this manner: For the action of removing, or at least for that portion of it which concludes for a decerniture to remove, there is to be substituted a mere notice to remove, in form provided by rules of procedure, sections 112-114, and Schedule J, given at least forty days before 15th May or 11th November, whichever is the termination of the tenancy. It is therefore assumed that all such tenancies terminate on one or other of these dates, which is far from being the case, leases of fishings and shootings, for instance, seldom terminating then. But though the notice is substituted for the decerniture to

remove, it is provided "that notice under this section shall not warrant summary ejection from the subjects let to a tenant, but such notice, whether given to or by or on behalf of the tenant, shall entitle the proprietor to apply to the Sheriff for a warrant for summary ejection in common form against the tenant and everyone deriving right from him." Now "summary ejection" in a popular sense is an intelligible thing, though I doubt whether the statement that the notice shall not warrant summary ejection really bears that simple explanation. But an application "for a warrant for summary ejection in common form" is an expression difficult of construction. Whether the application or the warrant is to be in common form, what is meant by "common form?"

At the date of the Act there was such a thing known as a warrant for summary ejection. But it had nothing to do with tenants. Its purpose was to eject those who were possessing without title - vi, clam, aut precario. It was a substantive action, in no way accessory to any other proceeding, and it was essentially summary, for it proceeded without forty days' or any other notice. But the application for it and the warrant following thereon may properly be said to be common form.' I do not, however, think that there is any other warrant for summary ejection or any application for such which could be so described.

Now the awkwardness created by this loose use of language is that by the Judicature Act (6 Geo. IV, cap. 120), sec. 44, a decree of removing is not subject to advocation, now appeal, but only to suspension, with its accompanying requirements of caution, &c., whereas a decree of summary ejection is open to appealRobb v. Brearton, 22 R. 885, following on the cases of Fletcher, 2 R. 71; Clark, 17 R. 1064; and Barbour, 18 R. 610.

The

In the present case an application in the form of an initial writ, under the Act of 1907, was presented to the Sheriff-Substitute at Oban, craving him summarily to eject the defender from certain premises there, the rent of which was £80. Sheriff-Substitute evolved a course of procedure for himself, and ultimately granted decree as craved, and the Sheriff adhered. The defender has appealed. There is no difficulty as to the value of the cause. But the primary question is, whether the defender's appeal is competent, or whether his only remedy was not a suspension.

I do not think that the question can be properly dealt with without consideration of the history of process in this matter.

The Act of 1555, cap. 12, for the first time regularised removings, though it was applicable only to the removing of properly agricultural tenants. The essentials were a forty days' warning to the tenant, which has remained the period of notice to this day. Failing the tenant obeying the warning, on production of an execution thereof either to the Court of Session or to the Sheriff, the landlord might obtain a decerniture to remove, with certification