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.
(p) Rcynell v. Sprye, (1846) 10 Beav. 51 ; and see Warde v. W., (1851) 3 M. & G. 365, a case of husband and wife ; and Tugwell v. Hooper, (1847) 10 Beav. 348; 16 L. J. N. S. Ch. 171, where the solicitor taking the opinion was a trustee for both the litigants; Dc-vaynes v. Robinson, (1855) 20 Beav. 42.
(q) Enthoven v. Cobb, (1852) 2 D. M. & G. 632 ; Few v. Guppy, (1830) 13 Beav. 457.
The consideration of how far the purchaser is bound by notice of an executory or executed agreement, which is, either wholly or in part, void or voidable, gives rise to questions of greater difficulty.
Notice of void or voidable estates, agreements, etc, how far binding.
Where A., seised in fee, in consideration of his son's marriage settled the estate on himself for life, with remainder to his son for life, with the usual limitations in strict settlement on his son's issue, with remainder to himself (A.) in fee; and with power for A. to lease, and with his son to sell the estate ; and A. agreed to grant a lease exceeding the power; and then A. and his son sold the estate, the purchaser, who had notice of the agreement, was compelled to perform it at the suit of the intended lessee (t). Lord Rosslyn thought that A.'s agreement bound the estate except as against the son and other remaindermen claiming under the settlement, and that the sale took the estate out of the settlement and left it undefeasibly impressed with the agreement (n). Lord Eedesdale expressed an opinion that the purchaser, except to the extent of A.'s life estate and remainder in fee, ought not to have been bound (x). Lord St. Leonards seems to have considered (y) that the decision could be supported on the ground that the purchaser was bound to indemnify the vendor against his liability to damages under the contract; and he refers to a case (z) where a copyholder having granted a lease renewable with the lord's licence, and the lord having, in the name of a trustee, purchased the copyhold interest with notice of the lease, and having refused to renew, a bill was filed by the lessee for specific performance, and Lord Eldon directed a case to he submitted to the Common Pleas as to whether damages could be recovered by the lessee upon the lessor's covenants, and upon receiving an opinion in the negative dismissed the bill. This, however, can scarcely be considered a decision: and it may be doubted whether the vendor's right to an indemnity (supposing it to exist) can give to the lessee a better hold upon the estate than he originally possessed.
Purchaser from tenant for life and remainderman held bound to give effect to agreement by former for grant of unauthorized lease : sed qit.
(r) Sug. 14th ed. 749 ; Taylor v. Stibbert, (1794) 2 Ves. 437, 439.
(s) Dowell v. Dew, (1842) 1 Y. & C. C. C. 345 ; Rose v. Watson, (1864) 10 H. L. C. 672 ; 33 L. J. Ch. 385.
(t) Taylor v. Stibbert, (1794) 2 Ves. 437 ; Steele v. Mitchell, (1840) 2 D. & Wal. 568, 596 ; Sug. Pow. 765.
(u) (1794) 2 Ves. 442.
(x) See Crofton v. Ormsby, (1806) 2 Sch. & L. 583, 599 ; and Harrisson v. Duignan, (1812) 2 D. & War. 295, 304.
(y) Sug. 14th ed. 751.
(z) Lufkin v. Nunn, (1805) 11 Ves. 170 ; and see NbJces v. Gibbon, (1856) 3 Dr. 681.
It has been held that a purchaser who buys expressly subject to a partial interest which has no existence (a) or is voidable (b), cannot dispute the right of the party in whose favour the reservation is made. But this doctrine only applies to cases where the interest created is of such a character as to enable the person entitled to it to obtain damages if he be disturbed in its enjoyment (c). Thus, where a mortgage to A. falsely recited an equitable charge in favour of B., and such charge was subsequently created by the owner of the equity of redemption, it was held that A. must stand as first incumbrancer (d) : so, where a mortgage was given by A. and B. as his surety, to secure C. against the payment of a sum of money which the deed represented him to be liable to pay to D. as surety for A. and B., or one of them, and C, though morally bound, was in fact under no legal obligation to repay D., it was held that B. was not liable under the mortgage for the debt due to D. (e).
Purchaser who buvs expressly-subject to non-existent or voidable interest, bound thereby.
It has even been held in Ireland (f) that where an estate is sold, subject to void or voidable leases, the vendor may set them aside for his own benefit, upon securing to the purchaser the payment of the rents and performance of the covenants : but the point is treated as doubtful by Lord St. Leonards (g) ; though he judicially admits that "if a man buys an estate subject to an incumbrance, and it turns out that it is not a valid incumbrance, yet he may so buy it as not to leave him the power to impeach it " (//).
Where sold subject to voidable leases.
(a) Pretty man's case, cited in Wal-ton v. Earl of Stanford, (1692) 2 Vern. 279 ; but the rule seems to be otherwise at Law, see Doe v. Archer, (179G) 1 B. & P. 531 ; see also Mer-cantile, etc. Co. v. River Plate Co., 1894, 1 Ch. 578 ; 63 L. J. Ch. 366.
(b) See Neild's case, (1828) cited 1
Moll, at p. 453.
(c) Smith v. Widlake, (1877) 3 C. P. I). 10, 17 ; 47 L. J. Q. B. 282.
(d) Frazer v. Jones, (1846) 5 Ha. 175 . affd. (1818) 12 Jur. 443.
(e) Lakev. Brutten, (1856) 8 D.M. & Gr. 4 10; 25 L. J. Ch. 812.
(f) Maguire v. Armstrong, (1814)
In the case last referred to (i), where the vendors attempted to set aside leases for their own benefit without the consent of the purchaser of the reversion, Sugden, C, held that they had no such equity, and could not impeach the leases, unless they could also impeach the sale of the reversion (k). This decision was reversed by Plunket, C.: he considered Maguire v. Armstrong an authority, and as founded on the clearest principles of common sense. He, however, went on to observe (/), that "the purchaser had a right to be secured in his rents by proper covenants in any new leases; this was done in Maguire v. Armstrong: " thus admitting the right of the purchaser to have as good a security as he had under the original leases; - and not adverting to the impossibility of determining the relative values of covenants by the lessees and covenants by the vendors (m). Now Maguire v. Armstrong seems to be no authority for disregarding this difference ; for the Court there appears (n) to have recognized the purchaser's right to have as good a security as he before had for the rents and covenants, and to have founded its decision upon the assumption (which seems to have been acquiesced in by the plaintiff) that, in the particular case before the Court, the covenants of the defendant might be considered equivalent to the covenants of the lessees. An appeal to the Lords from Lord Plunket's decision went off upon another point (o).