This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
It is sometimes stated, in general terms, that by the contract, the purchaser becomes, in Equity, the owner of the property: but "this rule applies only as between the parties to the contract, and cannot be extended so as to affect the interests of others. If it could, a contract for the purchase of an equitable estate would be equivalent to a conveyance of it. Before the contract is carried into effect, the purchaser cannot, against a stranger to the contract, enforce equities attaching to the property " (g); nor can he as against the vendor enforce such equities unless the contract is one of which the Court will enforce specific performance. "It is often stated that the effect of a contract for the sale of land is to make the purchaser in Equity owner of the land. I think this statement too wide ... If by reason of delay or other circumstances the Court declines to grant specific performance, the purchaser is not treated as being in Equity owner of the property" (h). Notice of an incumbrance
(other than an interest which is capable of registration under the Land Charges Act, 1925, and has not in fact been so registered), given to the purchaser before the execution of the conveyance, is effectual, though the purchase-money is actually paid (i); and even after the execution of the conveyance, if the purchase-money has not been paid (k).
General nature of purchaser's equitable ownership.
(e) Golden Bread Co. v. Hemmings, 1922, 1 Ch. 162.
(f) Plews v. Samuel, and Ridout v. Fowler, sup.
(g) Per Lord Cottenham, in Tasker v. Small, (1834) 3 M. & C. 70; 6 Sim. 625; and see Wall v. Bright, (1820) 1 J. & W. at p. 501.
(h) Per Cozens-hardy, J., in Cornwall v. Henton, 1899. 2 Ch. p. 714. The reversal of this case on the facts, 1900, 2 Ch. 298, does not affect the correctneas of this statement of the law.
Under s. 198 of the L. P. Act, 1925, registration under the provisions of the Land Charges Act, 1925, is to be deemed ,to constitute actual notice of the instrument or matter so registered. The effect of registration of a charge and of failure to register under the latter Act is dealt with elsewhere (l); but we may here remark that a contract by an estate owner (entered into after 1925) to convey a legal estate, including a contract conferring an option of purchase, a right of pre-emption, or any other like right, may be registered as a land charge; and if not so registered will be void as against a subsequent purchaser though with actual notice.
The purchaser's interest under the contract may be charged or assigned (m): but the incumbrancer, assignee or creditor can only obtain relief as against the vendor on the terms of undertaking all the purchaser's liabilities under the contract (n). "If the purchaser agrees with another person to execute an assignment" of the contract, "the agreement must, in my opinion, be read as an agreement to put the assignee into the position of the purchaser - the assignee assuming that position and taking the position of the purchaser cum onere" (o). A mortgagee or submortgagee of the benefit of a contract for purchase can sue the vendor for specific performance (p).
(i) Wigg v. W., (1837) 1 Atk. 384.
(k) Tildesley v. Lodge, (1857) 3 S. & G. 543; 3 Jur. N. S. 1000.
(l) Inf. Chap. XIX. sect. 2, especially p. 1035.
(m) Paine v. Meller, (1801) 6 Ves. 349, 352; Seton v. Slade, (1802) 7 Ves. 274; 2 Wh. & T. L. C. 9th ed. p. 425; Dowson v. Solomon. (1859) 1 Dr. & S. 1; 29 L. J. Ch. 129.
(n) Dyer v. Pulteney, (1740) Barn. C. 160; Shaw v. Foster, (1872) L. R. 5 H. L. 321.
(o) Per Lord Cairns in Shaw v. Foster, (1872) L. R. 5 H. L. p. 341.
Up to the time fixed for completion, the vendor is, in the absence of special stipulation, entitled to the crops and other ordinary rents and profits of the land, and must bear all expenses and outgoings: he would not, however, it is conceived, be entitled to take crops in an immature state, or otherwise than in due course of husbandry. After the time fixed for completion, and pending negotiation, he may, it appears, in due course of husbandry cut coppice and get in crops, but the net profits will belong to the purchaser (q). In a case where the property agreed to be sold consisted of houses let on weekly tenancies, payments were received from the tenants by the vendor after the date fixed for completion. There were in fact arrears of rent owing both at the date of the contract and at the date fixed for completion, but it was held that the vendor, being a trustee for the purchaser, was not entitled to appropriate the money so received from the tenants to the arrears of rent owing before the date of completion (r).
Vendor's right to crops, Ac. pending completion.
Everything which form© part of the inheritance belongs to the purchaser from the date of the contract; hence he is entitled to windfalls (s), and to the produce of ordinary timber cut (t), or stone or gravel quarried or dug by the vendor after the contract, unless taken from an open mine or quarry in hand, or in the form of rents and profits from a mine or quarry leased (u).
Windfalls, etc. belong to purchaser.
Any act of the vendor, which prevents his giving to the purchaser that which was substantially the subject-matter of the contract, renders the agreement voidable by the latter; e.g., the felling of ornamental timber (at): and, even as to ordinary timber, the authorities cited above merely show that the fall of it may be matter for compensation. But cases might, it is conceived, occur, in which the Court would relieve a purchaser on account of falls of wood, though neither planted nor left for ornament or shelter, e.g., where sufficient is nob left for repairs, or where the general character or appearance of the estate or of any special part of it is materially altered. Failure on the part of the vendor of a boarding house, however, to pay the rent, with the result that before completion but after the purchaser had taken possession under the contract a distress was put in, was held not sufficient to justify the purchaser in repudiating the contract (y).
Material alteration of property by vendor avoids the contract.
(p) Browne v. London Necropolis Co., (1857) 6 W. E. 188.
(q) Poole v. Shergold, (1786) 1 Cox, 273; 2 Br. C. C. 118; Sug. 14th ed. 644; Earl of Hardwicke v. Lord Sandys, (1844) 12 M. & W. 761; 13 L. J. Ex. 233; Cuddon v. Tite, (1858) 1 Gif. 395; 4 Jur. N. S. 579.
(r) Plews v. Samuel, 1904, 1 Ch. 464; 73 L. J. Ch. 279.
(s) Poole v. Shergold, (1786) 1 Cox, 273; 2 Br. C. C. 118.
(t) Magennis v. Fallon, (1828) 2 Moll, at p. 591; cf. Dashwood v. Magniac, 1891, 3 Ch. 306; 60 L. J. Ch. 809.
(u) Leppington v. Freeman, (1891) 66 L. T. 357; 40 W. E. 348.
Since as between the parties to the contract the purchaser is owner of the estate, he has the benefit of any improvements to the property which may happen after the date of the contract; e.g., the dropping of lives on the purchase of a reversionary interest (z), or a sudden rise in the value of land from its being required for a public purpose (a); and must bear any loss which occurs without the fault of the vendor; e.g., the deterioration of the property through the calamities of the times (6), the death of the cestui que vie on the purchase of an estate for life or a life annuity (c), or the destruction of house property by fire (d). As respects fire, the vendor, unless he agree that the property shall be kept insured (e), need not as a rule, keep up the insurance, or give the purchaser notice of its having dropped (f). But if the omission by the vendor to keep up the insurance renders the title impeachable (as in the case of leasehold property where there is a covenant to insure), the purchaser, it seems, may be discharged (g). So, if the vendor, though not bound to insure, effects an improper insurance, and the property thereby becomes liable to forfeiture, he cannot enforce the contract (h). In the case of contracts made after 1925, in the absence of a stipulation to the contrary, any insurance money becoming payable to the vendor after the date of the contract is on completion held by him for the benefit of the purchaser (i). The purchaser of house property must, as between himself and the vendor, make good any injury done to adjoining premises by the fall of the buildings subsequently to the contract (k).
Purchaser takes accidental benefits, and bears accidental losses, as in cases of death of tenant for life; or of cestuis que vie; or fire.
(x) White v. Nutts, (1702) 1 P. W. 61; 2 Eq. Ca. Ab. 687, pl. 3; Spurrier v. Hancock, (1799) 4 Ves. 667, 674; Magennis v. Fallon, sup. (y) Dotesio v. Biss, (1912) 56 Sol. Jo. 612. (z) Harford v. Purrier, (1816) 1 Mad. at p. 539.
(a) Paine v. Metier, (1801) 6 Ves. at p. 352.
(b) Poole v. Shergold, (1786) 2 Br. C. C. 118; 1 Cox, 273.
(c) Sug. 14th. ed. 292; and see Paine v. Metier, (1801) 6 Ves. 352.
(d) Paine v. Meller, (1801) 6 Ves. 349; Harford v. Purrier, (1816) 1 Mad. 532, 539; and see Poole v. Adams, (1864) 12 W. R. 683; 33 L. J. Ch. 639; Rayner v. Preston, (1881) 18 Ch. D. 1; 50 L. J. Ch. 472, and Castellain v. Preston, (1883) 11 Q. B. D. 380; 52 L. J. Q. B. 366. Aliter, if the vendor has agreed to repair or alter the premises, and has not done so before the fire; Counter v. Maepherson. (1845) 5 Mo. P. C. 83, 106; 4 L. T. (O. S.) 449.
Vendor, whether bound to insure.
Liability for injury to adjoining premises.
Where the accruing benefit is such that, if taken by the purchaser, it would or might be irreparably lost to the vendor (as in the case of a vacancy occurring pending discussions on the title to an advowson), the purchaser claiming the benefit must, as a general rule, accept the title (l). So, in the converse case of an estate being sold in consideration of a life annuity, and of the cestui que vie dying before completion, the purchaser will be entitled to a conveyance on payment of the arrears (m). Although in such a case the Court will compel specific performance notwithstanding the death of the annuitant, it will inquire with some jealousy into the fairness of the transaction; and will under such circumstances (n) require proof of a clear case for specific performance.
Restrictions on purchaser's right - vacancy on sale of advowson.
Sale in consideration of life annuity; and death of cestui que vie before conveyance.
(e) Poole v. Adams, (1864) 12 W. R. 683; 33 L. J. Ch. 639.
(f) Paine v. Metier, (1801) 6 Ves. at p. 353.
(g) Palmer v. Goren, (1866) 25 L. J. Ch. 841; 4 W. R. 688.
(h) Dowson v. Solomon, (1869) 1 Dr. & S. 1; 29 L. J. Ch. 129; cf. Newman v. Maxwell, (1889) 80 L. T. 681. (i) L. P. Act, 1925, s. 47.
(k) Robertson v. Skelton, (1849) 12 Beav. 260, 266; 19 L. J. Ch. 140.
(l) Sug. 14th ed. 293.
(m) Mortimer iv. Capper, (1782) 1 Br. C. C. 156; Baldwin v. Boulter, ib., cited in Mortimer v. Capper, sup.
(n) Davies v. Cooper, (1840) 5 M. & C. 270, 279; and see notes to Chesterfield v. Janssen, 1 Wh. & T. L. C. 9th ed. p. 267 et seq.