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.
Upon sales by tenants for life, trustees, mortgagees, and other persons filling a fiduciary character, care is requisite in the use of special conditions. "However large may be the power of trustees under their trust deed to introduce conditions limiting the title, and other special conditions which have, or are calculated to have, a depreciatory effect on the sale, they are bound to exercise them in a reasonable and proper manner; they must not rashly or improvidently introduce a depreciatory condition for which there is no necessity," (e). It is provided, however, by the T. Act, 1925, s. 12 (replacing s. 13 of the Act of 1893, which itself replaced s. 35 of the Conv. Act, 1881), that trustees may, in the exercise of a power or trust for sale, sell subject to such conditions as they may think fit. But this, of course, would not justify trustees in unnecessarily inserting depreciatory conditions.
Special condi-tions, use of, by trustees, Ac.
(c) Lees v. Whiteley, (1866) 2 Eq. 143; 35 L. J. Ch. 412; Edwards v. West, (1878) 7 Oh. D. 858; 47 L. J. Oh. 463; Rayner v. Preston, (1881) 18 Ch. D. 1; 50 L. J. Ch. 472; but see Garden v. Ingram, (1852) 23 L. J. Ch. 478.
(d) See Collins v. Castle, (1888) 36 Ch. D. 243; 57 L. J. Ch. 76; Tucker v. Vowles, 1893, 1 Ch. 195; 62 L. J. Ch. 172; Re Birmingham, etc, 1893, 1 Ch. 342; 62 L. J. Ch. 90; Osborne v. Bradley, 1903, 2 Ch. 446; 73 L. J. Ch. 49; Rowell v. Satchell, 1903, 2 Ch. 218; 89 L. T. 267.
(e) Per James, L. J., in Dance v. Goldingham, (1873) 8 Ch. at p. 909; 42 L. J. Ch. 777.
Under s. 13 of the T. Act, 1925 (which applies to sales made before as well as those made after the commencement of that Act, and takes the place of s. 14 of the T. Act, 1893), no sale by a trustee is to be impeached by a beneficiary because of an unnecessarily depreciatory condition, unless the purchase-money was thereby rendered inadequate;, or after conveyance, as against a purchaser, unless it appears that the purchaser was acting in collusion with the trustee at the time of the sale; and upon any sale by a trustee no objection is to be taken by a purchaser on the ground of a condition being depreciatory.
Sales under depreciatory conditions, when not impeachable.
The circumstance of an estate being sold under conditions restrictive of the title, does not necessarily protect a purchaser from being affected with implied notice of matters, which he would have discovered by the ordinary investigation which follows an open contract (f). "For no lessee or purchaser who has not investigated his lessor's or vendor's title, or has only investigated it partly, can escape being fixed with notice of things which he must have discovered if he had investigated it, at all events to the full extent allowable under an open contract" (g). It is provided, however, by the L. P. Act, 1925 (which disentitles the intended grantee or assignee of a term or sub-term under an open contract from calling for the title to the reversion), that where by reason of these provisions an intending lessee or assign is not entitled to call for the title to the freehold, or to a leasehold reversion, as the case may be, he shall not, where the contract is made after the commencement of the Act, be deemed to be affected with notice of any matter or thing of which, if he had contracted that such title should be furnished, he might have had notice (h); and that a purchaser shall not be deemed to be or ever to have been affected with notice of any matter or thing of which, if he had investigated the title or made enquiries in regard to matters prior to the commencement of title fixed by the Act, or by any other statute, or by any rule of law, he might have had notice, unless he actually makes such investigation or inquiries (i).
Restrictive conditions do not necessarily protect a purchaser from notice of what might be learnt by inquiry.
(f) Patman v. Borland, (1881) 17 Ch. D. 353; 50 L. J. Ch. 642; Re Cox and Neve, 1891, 2 Ch. 109; Letchallas v. Woolf, 1908, 1 Ch. p. 648.
(g) Per Younger, J. in Re Chafer and Randall's Contract, 1916, 2 Ch. p. 13.
(h) S. 44 (5). (i) S. 44 (8).