Kirkpatrick v. The Allanshaw Coal Co.

Factual and Procedural Background

The case concerns a mineral lease dated 24th December 1873, whereby the Plaintiff leased coal and fireclay minerals to the now deceased original tenant, whose tenancy passed to Company A. The lease was for thirty years with a right for the tenant to break at three-year intervals. The tenant was bound to pay a fixed yearly rent of £3000, or alternatively, at the landlord's option, a lordship payment based on quantities of minerals extracted. The dispute arose when Company A and its partners (Defendants) allegedly reduced the fixed rent from £3000 to £2000 by a verbal agreement with the Plaintiff, which the Plaintiff denied.

The Defendants offered £1000 as half-year rent for Whitsunday 1880, which the Plaintiff rejected, leading to this action for payment of the full £1500. The Defendants' defence relied on an alleged verbal agreement to reduce rent, supported by averments of acquiescence and rei interventus (acts consistent with and relying on the verbal agreement). The Lord Ordinary allowed proof on the averments, which the Plaintiff challenged by reclaiming, arguing the defence was irrelevant and could not be proven by parole evidence due to the written lease terms.

Legal Issues Presented

1. Whether a verbal agreement can alter the terms of a written lease, specifically the rent clause, and be proven by parole evidence.
2. Whether averments of acquiescence or rei interventus can warrant admission of proof of such a verbal agreement despite the written lease.
3. The extent to which acts following a verbal agreement must be inconsistent with the written lease to allow proof of variation.

Arguments of the Parties

Plaintiff's Arguments

• The defence alleging a verbal agreement to reduce rent is irrelevant and cannot be supported by parole evidence due to the written lease's clear terms.
• Averments of rei interventus and acquiescence are insufficient unless the acts are plainly referable to the alleged agreement and inconsistent with the lease terms.
• The alleged verbal agreement is a variation of a formal written contract, which cannot be altered by parole agreement alone.

Defendants' Arguments

• The Lord Ordinary was correct in allowing proof of the averments; the Defendants are entitled to investigate the alleged verbal agreement.
• The acts alleged, though not inconsistent with the lease, were naturally consequent on the verbal agreement and intended by the parties to follow it.
• A verbal agreement followed by rei interventus consisting of acts in direct pursuance thereof can alter the original contract and be proven by parole evidence.
• Refusing proof would impose undue restrictions on the law of contract variation and evidence.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed the nature of the lease and the alleged verbal agreement to reduce rent. It emphasized that the lease was deliberately negotiated with precise terms, including a fixed rent and alternative lordship payments. The court recognized that a verbal agreement to alter a written contract is generally not enforceable unless supported by writ or oath.

However, the court considered the doctrine of rei interventus, whereby a verbal agreement followed by acts of sufficient importance done in reliance on that agreement may alter the original contract. The court noted that acts need not be inconsistent with the lease but must be unequivocally referable to the verbal agreement.

The court rejected the Plaintiff's argument that acts must be plainly inconsistent with the lease, holding instead that proof should be allowed to determine whether the acts are unequivocally referable to the alleged verbal agreement. It analogized to cases where improbative writings followed by part performance validate obligations, emphasizing that proof is necessary to clarify factual disputes.

The court acknowledged the difficulty and prima facie improbability of the Defendants' case but stressed that this did not justify excluding proof. It concluded that parole evidence was competent to establish whether the verbal agreement and subsequent acts existed and were binding.

Holding and Implications

The court held that parole evidence of a verbal agreement to vary a written lease, supported by acts of acquiescence or rei interventus, is admissible for proof. It ruled that the Defendants are entitled to lead evidence to establish whether the alleged verbal agreement to reduce rent and the acts relying on it occurred.

The direct effect is that the case proceeds to proof on the merits of the alleged variation. No new precedent was set beyond affirming the applicability of the rei interventus doctrine to variations of written contracts where acts are done in reliance on verbal agreements. The decision preserves the possibility of contract variation by parole evidence under specific factual circumstances but does not relax the formal requirements for contract alteration absent such acts.