No. 1. Feb. 14, 1873. count and reckoning in regard to the rents paid by him under the lease to Alexander Christie and Brathwaite Christie. The pursuer alleged that, on the faith of certain representations, and in reliance on them, and under an essential error as to the subject of the lease which was induced by them, he, on 2d February 1866, signed the lease. He further alleged that the result of his boring operations "has been the discovery that, while there is some freestone on the lands of Baberton, there is no such amount of freestone as was represented to him (on the faith of which representation he entered into the lease); nor is the said freestone, or any other mineral or material or substance, in the lands so let, nor are all of the said substances together, capable of being worked to a profit in a mineral lease [even if no rent were to be paid]; * and still less are said minerals capable of being remunerative at the rent stipulated for in said lease. The pursuer has tried the said lands at all points shewing indications of freestone, but he has in every case been unable to turn out such a quantity as would repay his outlay, even upon the most economical methods which can be used for the efficient working of minerals.” The first break in the lease took place at Candlemas 1869. The pursuer averred that at that date he had already so far experimented on the ground as to be led to suspect "that the lease was not workable to profit, and that there was no such freestone or other mineral in the said lands as had been represented to him. He had not, however, been able within that time so exhaustively to experiment on the said grounds as finally to act upon this, and he declined in the meantime to acknowledge the lease as an existing one, by acting on the break provided in it. He accordingly continued his operations for another year. The defender, the present Mr Christie of Baberton (who had now succeeded his brother as heir in possession of the said entailed estate), was quite aware, as were also his agents, of the experimental and doubtful way in which the pursuer was carrying on the operations both before and after the said break. The pursuer having continued his investigation for another year, finally ascertained the unworkableness to profit of the lands and minerals let to him." The pursuer pleaded;-(1) The mineral lease entered into between the deceased Alexander Christie and his successors on the one hand, and the pursuer, on the other, being unworkable to profit [that is, incapable of reimbursing a tenant for the outlay necessarily expended by him in working the same, and still more of yielding him any return over and above his rent], and having been so from the beginning of the said lease, the same ought to be reduced, and the pursuer found to be free from the same, in terms of the declaratory conclusions of the summons. (2) The said lease having been entered into under essential error on the part of the pursuer as to the subject of the same, which error was induced by the representations of the said Alexander Christie and those for whom he was responsible, the said lease ought to be reduced, in terms of the conclusions of the summons. (3) The rents and other prestations exigible under the said lease having been exacted from the pursuer and paid by him while the lease was really unworkable to profit [as aforesaid], but before he had finally ascertained this, the pursuer is entitled to repetition of the same, or at least to count and reckoning in respect of the same, both against the executors of the late Alexander Christie and against the present possessor of the entailed estate. (4) In the event of the defenders denying the fact of the unworkableness to a profit of the said lease they are bound to refer the question to arbitration, *The passages in italics were allowed to be added to the record when the case was in the Inner-House. or to consent to the ascertainment thereof in such form as may be agreed No. 1. to by the parties, or as the Court in its discretion may see fit. Gowans v. The defenders pleaded;-(1) The pursuer's statements are not relevant Feb. 14, 1873. or sufficient in law to support any of the conclusions of the summons, or Christie. at least the same are not relevant or sufficient to support the said conclusions in so far as the same are directed against the present defenders. (3) The action cannot be maintained, in respect that the pursuer did not avail himself of the break at Candlemas 1869, but continued to work the freestone after as well as before the said break. The Lord Ordinary, on 2d November 1870, pronounced this interlocutor:-" Finds that the pursuer's statements are not relevant or sufficient in law to support the conclusion in the summons for reduction of the lease, on the grounds set forth in the pursuer's second plea in law, and therefore repels the said second plea in law for the pursuer: Quoad ultra, before answer, allows the parties a proof of their respective averments, and to each a conjunct probation." The defender reclaimed. The Court allowed the pursuer to amend his record by the additions printed in italics. The First Division, on 8th February 1871, pronounced the following interlocutor:-"Recall the interlocutor: Find that the pursuer's averments are not relevant nor sufficient in law to support any of the conclusions of the summons for reduction of the lease between the pursuer and the defender's, Braithwaite Christie's brother, or the relief of the pursuer, as tenant, from any of the stipulations of the said lease: Therefore dismiss the action, and decern, and find the pursuer liable in expenses: Remit," &c. The pursuer appealed. LORD CHANCELLOR.-My Lords, this is an action by a tenant of a mineral lease against the present owner of the property and the representative of the deceased owner. The Lord Ordinary thought it right to allow proof before answer in support of certain averments in the condescendence of the appellant, the pursuer, by which he undertook to shew the unprofitableness or incapacity of producing profit to himself of this mineral lease. The parties by their pleas in law have raised the question of the relevancy of those averments, and by allowing proof before answer the Lord Ordinary did not decide one way or the other that question of relevancy. The Inner-House thought, on the case coming before them upon a reclaiming note, that there was no relevancy in the averments, and if that was the correct view I think that they very rightly were of opinion that it was not in any way proper to burden the parties with the expense of what might turn out to be very voluminous and lengthened proofs upon matters ultimately irrelevant. The real question, therefore, before your Lordships is whether the InnerHouse were right or wrong in holding these averments to be irrelevant. The burden of proof undertaken by the appellant in this case is certainly a very heavy one, because he asks for the reduction of this lease as a lease which is vitiated or void between the parties by reason of the failure-as I understood the argument as to the subject-matter of the lease. Mr Innes did not at all shrink from the principle involved in the form of remedy which is sought. He said that there was no lease at all in the view of the law; that there never had been any lease in the view of the law, and that there was nothing at all to be leased. That was a startling proposition, when we look at the lease and consider the nature of the subject-matter which it comprehends, viz., all the minerals and materials under particular lands, freestone being specially but not exclusively mentioned, and all other minerals, of whatsoever kind they might happen to be, being included in the lease. The principle of the argument was this: that by the Roman law adopted into the law of Scotland there is a warranty, implied or express (I do not know which it may be, but that there is certainly a warranty in one way or the other), of possession of a subject capable of producing the contemplated fruits or profits. No. 1. Gowans v. Christie. Now, in one point of view such a doctrine may be, and I venture to say is, perfectly intelligible and perfectly reasonable. When there is that which in the Feb. 14, 1873. language of the law of this country would be called a total failure of consideration; when the landlord has not the thing to let which he purports to let, and which is the consideration for the rents, it is perfectly reasonable that the whole lease should fail ab initio, and be capable of reduction. Nor is it a very wide extension of that same principle to say that if a landlord warrants a continuation of the subject-matter for a certain number of years, a failure of the subject-matter before that number of years has elapsed shall involve a reduction or termination of the contract at the time of that failure and thenceforward. Those views are at all events perfectly intelligible. But your Lordships will see that they all resolve themselves into either the original non-existence of the subject, the failure of the landlord to put the tenant in possession of the subject-matter of the lease, or the subsequent exhaustion or failure of that subject-matter, so that from a given time it ceases to exist. And when the authorities which have been referred to are considered they will be found with a few, if any, exceptions, to turn entirely upon that principle so understood. When the authorities on the Roman law referred to in the case as illustrations of the principle, si frui non liceat,1 come to be looked at, they prove to be all of that kind. They refer to cases where possession is not given, where there is no prestation of the subject-matter, or where some external vis major not inherent in the subject-matter, and not the fault of the tenant, takes the subject-matter away, it may be either temporarily or permanently; but the principle is always the same, resting on the destruction pro tanto, or entirely, of the subject-matter. But Lord Stair,2 the authority on the law of Scotland chiefly relied upon, goes further, and as it seems to me lays down the true principle in the most unequivocal terms. He says that there is a peril or risk undertaken by the tenant, that he is at the risk of the quantity and the value of the subjectmatter, but he is not at the risk of the being or existence of it. Now, just consider how that will apply to the case of a mineral lease. If there had been in this case a lease of some particular description of minerals,-only, for instance, of a bed or seam of coal or of a bed of freestone, and if there had been no such thing in existence, then, according to Lord Stair's principle, the tenant would not have been at the risk of the being of the coal or the freestone. But that of course cannot apply to a case where the lease is of all minerals, for although there is necessarily some uncertainty and speculation in such a lease, because the minerals may turn out to be of greater or less value, yet some minerals there necessarily must be under every parcel of land, and therefore the peril of the being of the minerals is a peril which no tenant of a mineral lease incurs ; nor does the landlord incur it either. But with respect to the quantity and value, which is the whole matter in controversy here, as I understand the case, according to Lord Stair's doctrine the whole peril of the quantity and value is upon the tenant; so that authority is directly against the appellant's case. Then we are referred to Lord Bankton, who, in the passages quoted, seems to say that the landlord warrants a capacity to produce fruits. What is the meaning of that? A capacity to produce the kind of fruits which, according to the substance of the contract, the tenant is to receive. What are the fruits within the meaning of that principle? If, for instance, land is let as good arable land, and it turns out to be totally incapable of any agricultural produce, I can understand that in that case the principle might apply, and that there is a failure of the warranty to produce fruits. Again, I can understand that if in the case of a mineral lease the landlord in substance represented that there was a workable coal, and the coal turned out, as in the case of Murdoch v. Fullerton, to be so nearly exhausted that there was no area of the least value for working, in other words, nothing which could be worked, a thin seam, for example, of a finger's length,-something which was not practically useful for the purpose of working at all,--it may be said that in such a case there was a failure of the landlord's warranty. But the fruits in this case are minerals 1 Dig. 19, 2, 15. 3 Bankton, Inst. 1, 2, 14. 2 Stair, i. 15, 2. 4 Feb. 12, 1829, 7 S. 404. to be got by working, and according to Lord Stair the quantity and the value of No. 1. them, if they can be got by working, are at the risk of the tenant; if the minerals can be got, there are the fruits, and there is no failure whatever of fruits in Feb. 14, 1873. such a case. Gowans v. There is no sterility as long as there are minerals which may be got. Christie. All the cases, as it appears to me, go to the same point. The case of Edmiston v. Preston might very possibly be differently decided at the present day, when we should no longer regard a want of proper ventilation of a mine, or a want of maintenance of proper roofing, as a thing arising from the act of God or from vis major. Such a defect would doubtless be regarded at the present day as a thing for which the tenant was responsible. But the principle upon which that case was decided was evidently the same as if an earthquake or some natural convulsion had made the mine practically unworkable. The case of Dixon v. Campbell,2 as far as it is fit to refer at all to an authority turning upon contract, and not upon general law, is strongly against the appellant's argument, because in that case, there being an express contract that if the mine should cease to be capable of being worked to advantage by reason of that class of accidents which all these authorities contemplate, the tenant might throw it up, it was expressly laid down that he could not throw it up for faults which did not occur in the mine, but in the fruit on account of variations in the market price. What has arisen in the present case but a question of market price? The 3d article of the condescendence tells us that there is freestone under the land of Baberton, that four years were occupied in boring and in other operations. to obtain it. I pass over the allegation that the quantity was less than was represented, for nothing now turns upon that. The appellant goes on to say "nor is the said freestone or any other mineral or material or substance in the lands so let, nor are all of the said substances together, capable of being worked to a profit in a mineral lease, even if no rent were to be paid." I will stop reading that sentence there, because I agree with Mr Innes that he does not take issue merely upon the point which follows, that the minerals are incapable of being remunerative at the rent stipulated for in the lease. He also says that even if no rents were to be paid they are not capable of being worked to a profit. He goes on: "The pursuer has tried the said lands at all points shewing indication of freestone, but he has in every case been unable to turn out such a quantity as would repay his outlay even upon the most economical methods which can be used for the efficient working of minerals." That allegation is consistent with the existence of an unlimited quantity of minerals, capable of being worked, and having a market, but what he says is that they are not capable of being worked to a profit, that so far as he has worked he has been unable to turn out such a quantity as would repay the outlay. Therefore the proposition really is this, that according to the principles laid down in the law of Scotland the landlord guarantees the tenant against loss by reason of any of these elements extrinsic to the mine, and independent of the nature of the subject-matter within the mine which go to the determination of the question of profit and loss. What are these elements?—the quantity, the quality, the cost of labour, the cost of materials, the demand and supply varying in the markets themselves, and the means of conveyance, all of which are things entirely extrinsic to the mine, and certainly not within the view of the principles laid down by any of the authorities to which a reference has been made. On the contrary, they are exactly those things as to which Lord Stair has said that the tenant runs the risk of quantity and value. In that state of things it appears to me that even the authorities relied on by the appellant are against him, and independently of the special stipulation in this particular lease the reason of the case wholly repels in my mind the view of the law which the appellant suggests. When we come to look at the stipulation in the particular lease we find that conclusion fortified by those stipulations. It is admitted that it is a very common thing with parties entering into mining leases to contract expressly that the tenant shall not be obliged to go on with the lease when he cannot work the mine at a profit, and the parties very wisely, because that question is a very difficult one in its nature, frequently add a clause providing 22 Shaw's App. 175. 1 Jan. 13, 1675, M. 15,172. Gowans v. Christie. No. 1. for an arbitration. There is nothing of that sort in the lease before us, but there is a provision that at the end of three years, or at the end of seven, or at the end Feb. 14, 1873. of fourteen years, the tenant may break, as it is called, or throw up the lease. The object of the provision obviously is, that if he finds it cannot be worked with profit he may relieve himself from it in that way by throwing up the lease. Now, it appears to me that such stipulations are absolutely irreconcileable with the whole principle of the argument of the appellant, because if the lease was vitiated from the beginning, which the argument assumes, and which the doctrine of reduction assumes, it must have been upon grounds which are wholly independent of the exercise of an option at certain periods to retain or throw up the lease. Suppose that at the end of three years the tenant had chosen to throw it up; I had really great difficulty in understanding whether it was seriously meant to be contended that because he had made no profit in that time, and then concluded from the experience he had had that he would make no profit if he went on working till the end of the lease, he would not only have a right to throw it up, but he would also have a right to repetition of the rent he had paid. That seemed to me to be almost a necessary consequence of the argument for the appellant; but that is entirely inconsistent with the whole intent and purpose of the express contract between the parties, which clearly shews that the landlord is to receive a stipulated rent, that during the first year that rent is to be reduced in amount on account of the outlay of the tenant, and the risk incurred by him in the whole of the earlier years (it being probably in the contemplation of all parties entering into such leases that during the earlier years while an outlay is going on the undertaking is not likely to be remunerative), and that it is agreed that the tenant shall be allowed to say at the end of three years whether he wishes to go on or to be released from his contract. In this case he determined to go on. The third year elapsed, and he did not break the lease, but after the expiration of another year he brings his action and asks for the reduction of the lease. It seems to me that both upon the grounds on which the judgment of the Inner-House expressly rested, and if it were necessary upon broader grounds still, the pursuer is wholly wrong, and therefore the interlocutors appealed from ought to be affirmed, and the appeal dismissed, with costs. LORD CHELMSFORD.—My Lords, I entirely agree with my noble and learned friend that in this case the interlocutors appealed from must be affirmed. The question is, whether the appellant was entitled to be admitted to proof of the averment in his condescendence that the mineral lease was incapable of reimbursing the tenant for the outlay necessarily expended by him in working the same, and still more of yielding him any return over and above his rent; in other words, supposing that averment had been proved, whether it would have furnished a ground for the reduction of the lease-whether it was relevant, in fact, to the conclusion of his summons for the reduction of the lease. The law of Scotland upon the subject of renunciation of leases, either for the non-existence or the failure of the subject-matter, is very shortly stated in a passage in Mr Bell's Principles of the Law, at section 1208, in these terms :-"The contract of lease implies a subject let, and if it turn out that no such thing exists as the parties intended to be the object of agreement the tenant cannot be bound to pay rent. Where the subject fails (as where a house is burnt, where a farm is by a flood or a hurricane reduced to sterility)," which must mean absolute barrenness, "where a coal-mine is exhausted suddenly and unexpectedly, the tenant's obligation to pay rent will be discharged." It is quite clear, therefore, that where there is a total destruction or exhaustion of the subject-matter of a lease, there, by the law of Scotland, the lessee is entitled to abandon it. But I am not aware, from any of the cases which have been cited in the course of the argument, that where it is a case of sterility merely, short of exhaustion, the tenant has any such right to renounce or abandon the lease. The old authorities upon the subject rather to my mind indicate directly the contrary. Take, for instance, the passage which has been cited from Lord Bankton. He says:"The tack-duty is on account of the fruits," and "sterility or vastation liberates in whole or part." Elsewhere he says:-" In other subjects beside rural posses |