Scottish Court of Session Decisions

Lord Moncreiff—I remain of the opinion which I, along with Lord Kyllachy, expressed in the case of Hughes v. Stirling ( 19 R. 840), that goodwill of a publican's business is, or may be in certain circumstances partly heritable and partly moveable, and that although perhaps it is in most cases chiefly attached to the premises there is or may be a personal element in it, and in particular that by selling the goodwill the proprietor impliedly agrees with the purchaser not to compete with him for the licence or canvass old customers, and not to represent himself as carrying on the old business. Therefore the only question which I have to consider is whether the views there stated by Lord Kyllachy and myself have been overruled or modified by later decisions, and in particular the decision of the majority of the Judges in the Seven Judges case of Philp's Executor ( 21 R. 482). After carefully considering the opinions in that case, and in particular the opinion of Lord Rutherfurd Clark, which was concurred in by Lord Adam and Lord Kinnear, I am of opinion that the case was decided upon specialties, and that it does not conflict with the case of Hughes v. Stirling. Indeed, it would be strange if it did conflict with that decision, because the Lord Ordinary whose judgment was affirmed was Lord Kyllachy.

The special features on which the case turned I think were these. On the death of the owner of the public-house, who died intestate, the business was carried on by his widow until her death about three months later, in February 1891. Shortly before her death she applied for a transfer of her husband's licence to her own name, and succeeded in obtaining it, notwithstanding the opposition of her husband's executor. After her death the business was carried on by the widow's executor until May 1892, when it was sold along with the stock and fittings by the widow's executor for the sum of £1500, £250 of which was paid to the heir-at-law of Philp as his share of the goodwill.

Now, it will be observed that neither the widow nor her executor had any right whatever to the business, and that when the widow's executor sold the goodwill in May 1892 he sold not on account of Philp's executor but on his own account as executor of Philp's widow, he having arranged with the heir-at-law to satisfy his rights in the goodwill.

Now, the view which Lord Rutherfurd Clark took of the case was this—first, that if Philp's executor had any right or interest in the goodwill it was not affected by the sale by the widow's executor, which proceeded on the false assumption that he had a right to dispose of it. But, secondly, he says—“I concur with the Lord Ordinary in holding that not later than the transference of the licence the business was the business of the widow. The business of J. H. Philp necessarily perished because it could not be carried on by his executor, and the executor could not carry it on because he had no licence and no right to the premises. The widow in no sense represented her husband, and did not carry on the business on account of his executry estate.”

From this it will be seen that the case was very special, and although there are in Lord Rutherfurd Clark's opinion indications that he regarded the goodwill of such a business as entirely heritable, I do not think that view was required for the decision of the case. In this case the matter can be tested by asking whether the second party would have given £950 for the occupancy of the premises and the fittings, &c., Murray being left free to compete for the licence and carry on the old business in the neighbourhood. I think it not doubtful that he would not.

I therefore should be disposed to answer the first two questions in the negative and the third in the affirmative.

I understand that parties are agreed as to proportions.

Lord Justice-Clerk—I have never on my own opinion been able to concur in the view that such a goodwill as we have to deal with in this case was necessarily wholly heritable, and would only yield to that view if it had been so authoritatively ruled by the Court. I agree in thinking that this has not been decided as a general question. In this case I have no difficulty in concurring with your Lordships in the view you have expressed.

Lord Young was absent.