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.
Until the conveyance is executed by all necessary parties, the vendor remains liable in respect of all defects in title. He must, for instance, refund the purchase-money, if the purchaser having paid it, even though he has taken possession, is evicted by an adverse claimant (z). So, if incumbrances are discovered, he must discharge them, or the purchaser may pay them off out of unpaid purchase-money (a): and a person to whom the vendor has, for valuable consideration and without notice of any particular incumbrance, assigned the unpaid purchase-money, takes subject to the purchaser's right so to apply it (6): but the purchaser cannot retain any part of it as an indemnity against a contingent charge against which he has agreed to accept the vendor's covenant (c).
Vendor liable for incumbrances and defects of title until conveyance executed.
(t) Re Collingwood, (1859) 6 W. R. 536; Re Cuming, (1869) 5 Oh. 72, where there does not appear to have been such a covenant.
(u) Re Russell's Est., (1866) 12 Jur. N. S. 224; 35 L. J. Ch. 461; cf. Re Lowry's Will, (1872) 15 Eq. 78; 42 L. J. Ch. 509.
(x) Re Wilkinson, (1864) 12 W. R. 522.
(y) Re Badcock, (1854) 2 W. R. 386.
(z) Cripps v. Reade, (1796) 6 T. R. 606; Johnson v. J., (1802) 3 B. & P. 162; Jones v. Ryde, (1814) 5 Taun. 488, 494; Awbry v. Keen, (1687) 1 Vern. 472; Sug. 14th ed. 549; secus where the eviction is after conveyance, see Thomas v. Powell, (1794) 2 Cox, 394.
(a) Sug. 14th ed. 552. (b) Lacey v. Ingle, (1847) 2 Ph. 413.
(c) Vane v. Lord Barnard (case of a marriage settlement), (1708) Gilb. R. 6.
In some cases a purchaser may, after the conveyance is executed, retain out of unpaid purchase-money the amount of incumbrances which then come to his knowledge (d). And a purchaser, with notice of an incumbrance which he intends to be discharged, should take care that it is discharged, or that satisfactory security for its being done is given to him, before he pays his money. Where, on a sale by the Court, a purchaser, with knowledge of an incumbrance, and without waiting to have his requisitions in respect of it answered, accepted the title and took his conveyance, he was held not to be entitled to have it discharged out of the purchase-money which he had paid into Court (e).
Retention of incumbrances oat of unpaid purchase-money after conveyance executed.
By s. 50 of the L. P. Act, 1925 (which takes the place of s. 5 of the Conv. Act, 1881), where land subject to any incumbrance, whether immediately payable or not, is sold, the Court has a discretion, on the application of any party to the sale, to direct or allow payment into Court of such an amount as when invested in Government securities will be sufficient to provide for the incumbrance with an additional amount not exceeding 10 per cent., except in special cases, to meet contingencies., And the Court may thereupon declare the land to be free from the incumbrance and make any necessary order for conveyance or vesting (f).
Discharge of incumbrances under L. P. Act, 1925, s. 50.
The L. C. C. Act, 1845, enables promoters of undertakings to dispense with the concurrence of incumbrancers who refuse to receive their money or to release, or who cannot make out a satisfactory title (g): and also provides for cases where part only of incumbered lands is required for the purposes of the undertaking.
Discharge of incumbrances under the L. C. C. Act, 1845.
(d) See inf. Ch. XIII. s. 7.
(e) Miller v. Pridden, (1856) 3 Jur. N. S. 78; 26 L. J. Ch. 183.
(f) See Wolst. & Cherry, vol. i. 11th ed. p. 219, where the view is expressed that the powers conferred by s. 50 of the L. P. Act, 1925, will seldom be required, in view of s. 2 of that Act and ss. 1 (1) (v), 21 and 72 of the S. L. Act, 1925. But see now s. 1 of the L. P. (Amend.) Act, 1926. And see inf. p. 972
(g) Ss. 108 et seq., 115 et seq.