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.
All persons whose concurrence is necessary in order to give to the purchaser the full benefit of the contract, must, of course, be parties to and execute the conveyance: and it is sometimes desirable that persons from whom nothing moves by the deed should be parties to it, for the purpose of affecting them with notice of its contents, and preserving indisputable evidence of the fact of notice.
Who to he parties.
In the case of a re-sale before completion, where the conveyance is made direct to the sub-purchaser and there is no increase of price, the usual practice is to make the original purchaser a party to the conveyance; although it was sometimes deemed sufficient to have a memorandum from the original purchaser authorising the vendors to convey to the sub-purchaser. The practical objection, before 1926, to making the original purchaser a party, was that if he has dealt with or incumbered his interest under the agreement, and the fact, though unknown to the subpurchaser, were to come to the knowledge of any future purchaser or mortgagee, there would be a difficulty in mating out a marketable title; for though the sub-purchaser, taking the legal estate without notice of such dealing or incumbrance, would acquire an indefeasible title, which he could transmit to another, although such other might be affected with notice, yet it might be impossible to adduce satisfactory evidence of the fact of the sub-purchaser's want of notice (a). After 1925, registration of a land charge in respect of an estate contract constitutes notice affecting a purchaser; and, in the absence of registration, a purchaser is not affected by notice of such a contract (b). It would seem, however, that a dealing or incumbrance by the original purchaser is only registrable if at the date thereof he is already entitled to a conveyance of the legal estate.
Whether first purchaser should he party to conveyance direct to subpurchaser.
(z) Anderson v. Pignet, (1872) 8 Oh. 180, 189; 42 L. J. Ch. 310; approving Doe v. Jones, (1849) 13 Q. B. 774; 18 L. J. Q. B. 260; and see Cottrell v. Hughes, (1855) 15 C. B. 532; 24 L. J. C. P. 107; Plant v. Taylor, (1861) 7 H. & N. 211; 31 L. J. Ex. 289; Shaw v. Johnson, (1861) 1 Dr. & S. 412; 30 L. J. Ch. 646.
As a general rule a purchaser can insist upon a conveyance either to himself or his nominee, but this, of course, does not apply where the nominee declines to accept the nomination or is under disability, or where such a conveyance would render the vendors liable to the risk of an action for breach of trust, e.g., where the vendors were trustees and the nominee, a sub-purchaser, was one of their number and refused to complete (c).
Purchaser can generally insist on conveyance to his nominee.
Where it is a term of the contract that certain specified persons shall concur, the vendor cannot, generally, decline to procure their concurrence on the ground that they are in fact unnecessary parties (d). Sect. 42 (1) of the L. P. Act, 1925, however, provides that a stipulation that a purchaser of a legal estate in land shall accept a title made with the concurrence of any person entitled to an equitable interest shall be void, if a title can be made discharged from the equitable interest without such concurrence under a trust for sale, or under the L. P. Act, 1925, or the S. L. Act, 1925, or any other statute.
Stipulation that unnecessary parties shall concur, is binding.
The vendor will be compelled, even in the absence of express stipulation, to procure the concurrence of necessary parties who are bound to convey at his request (e), e.g., trustees of the legal estate. A vesting order would be equivalent to a conveyance. A direction in a decree for specific performance that the vendor shall convey has the same effect as a direction that the vendor "and all other necessary parties" shall convey (f). Under s. 43 of the L. P. Act, 1925, where a purchaser of a legal estate is entitled to acquire the same discharged from an equitable interest which has been registered and which will not be overreached by the conveyance to him, he may (notwithstanding any stipulation to the contrary) require that the registration be cancelled, or that the person entitled to the equitable interest concur in the conveyance, in either case free of expense to the purchaser.
Vendor must, in absence of stipulation.
(a) Freer v. Base, (1853) 4 D. M. & G. 495; 23 L. J. Ch. 338. (b) L. P. Act, 1925,8. 198 (1); L. C. Act, 1925, s. 10 (1), Clasac (iv), and a. 13 (2).
(c) Delves v. Gray, 1902, 2 Ch. 606; 71 L. J. Ch. 808.
(d) Benson v. Lamb, (1846) 9 Beav. 502; 15 L. J. Ch. 218.
Procure concurrence of necessary parties.
Upon a sale by a mortgagee under a valid power of sale duly exercised, the purchaser cannot require the concurrence of the mortgagor (g).
Sale by mortgagee, under power of sale, mortgagor's concurrence not necessary.
A mortgagor, selling as an unincumbered owner, must, of course, procure the concurrence of his mortgagee (h): so, a tenant in tail in remainder will be decreed to convey a base fee, and to covenant to bar the remainders over upon becoming tenant in tail in possession (i).
Mortgagor selling free from incumbrances must procure concurrence of mortgagee.
Under the Bkcy. Act, 1914 (k), the bankrupt is to execute all such conveyances, deeds and instruments, and generally to do all such acts and things in relation to his property, and the distribution of the proceeds among his creditors, as may reasonably be required by the trustee, or may be prescribed by rules of Court, or be directed by special order of the Court upon the application of the trustee or any creditor. The joinder of the bankrupt in the conveyance may, in most cases, be safely dispensed with; his covenants for title are obviously of little value, and the trustee, in whom the bankrupt's estate is vested, can make a good title to it without his concurrence.