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.
(d) But see Barnhart v. Greenshiclds, (1853) 9 Mo. P. C. 18.
(e) Bast Grinstead case, (1G33) Duke's Char. Uses, 640.
(/) A.D. 1G33.
(g) Greenslade v. Bare, (1855) 20 Beav. 284.
(h) Taylor v. Baker, (1818) 5 Pr.
306 ; and nee Jones v. Smith, 1 Ha. 58.
(i) Farrow v. Bees, (1840) 4 Beav. 18 ; see Lacey v. Ingle, (1847) 2 Ph. 413 ; Gibson v. Inyo, (1847) 6 Ha. at p. 124.
(k) Re Bright's Tr., (1856) 21 Beav. 430 ; 25 L. J. Ch. 449 ; and see inf. p. 879
In one case (/), where a trustee had only indirect notice of his cestui que trust's insolvency, the assignee, having omitted to give formal notice, was postponed to a subsequent incumbrancer, who gave due notice of his claim; but, on appeal, this decision was reversed as inconsistent with the established principles of the Court; and it was laid down by Lord Cairns that if the trustee can be shown to have in any way acquired a knowledge which would operate upon the mind of any rational man, or man of business, and make him act with reference to the knowledge so acquired, then there is fixed upon the conscience of the trustee, and through that upon the trust fund, a security against its being parted with in any way which would be inconsistent with the claim of the incumbrancer (m).
It seems probable that a purchaser having notice of an executory instrument - (e.g., marriage articles,) - of doubtful meaning, would, as a general rule, be bound to take notice of the construction which would be put upon it by a Court of Equity; and must, therefore, see that any instrument which may have been executed in pursuance thereof, and which is material to the title, has been framed in accordance with such construction (u) : but, where a long period has elapsed since the sale, the Court may decline to fix upon a purchaser a difficult construction of a doubtful instrument, though it might have granted relief as between the parties thereto if there had been no sale (o).
Purchaser, whether affected by notice of construction of doubtful instrument.
Constructive notice, (which, in its general effects, is similar to actual notice (p),) is a doctrine not to be extended (q).
Constructive notice, nature of.
(I) Lloyd v. Banks, (1867) 4 Eq. 222 ; see Re Brown's Tr., (1867) 5 Eq. 88; 37 L. J. Ch. 171.
(m) Lloyd v. Banks, (1868) 3 Ch. 488; 37 L. J. Ch. 881. The question whether actual knowledge, however acquired, is or is not notice, was discussed but not decided by the H. L. in Mildred v. Maspons, (1883) 8 A. C. 874, 885, 888 ; 53 L. J. Q. B. 33.
(n) Sug. 14th ed. 781 ; Davies v. D., (1841) 4 Beav. 54.
(o) Thompson v. Simpson, (1841) 1 D. & War. 459.
(p) Sheldon v. Cox, (1764) Amb. 624, 626.
(q) English and Scottish Mercantile Co. v. Brunton, 1892, 2 Q. B. 700, 708; Molyneux v. Hawtrey, 1903, 2 K. B. 487, 494; 72 L. J. K. B. 873.
"It is a doctrine based on good sense and designed to prevent frauds on the owners of property, but it must not be carried to such an extent as to defeat honest purchasers" (r). It has been defined to be, "evidence of notice, the presumptions of which are so violent that the Court will not allow even of its being controverted" (s). This, perhaps, scarcely conveys a satisfactory notion of the nature of the doctrine; the reported decisions upon which clearly show, that constructive notice is often held to exist in the absence of any idea by the
Court of the existence of actual personal knowledge. If, for instance, a purchaser has notice of a deed relating to the title, and forming part of the chain of title, he has notice of the contents of that deed : and it is no excuse to him for not looking at it to say that he was told that it contained nothing which it was necessary for him to see, even though he show conclusively that he believed the statement so made to him (t).
In such a case he will be fixed with notice not only of the contents of the deed, whether he actually see it or not, but also of everything which he might reasonably have learned from insisting on an inspection of it, as, e.g., that it had been deposited as a security (u). Of course, however, there may be cases where the deed cannot be got at, or where for some other reason with the exercise of all the prudence in the world a purchaser cannot see it: and then there may be no constructive notice affecting the title (a?). But the doctrine of constructive notice does not apply to cases either where the deed of which notice is sought to be imputed does not form part of the chain of title, or where it may or may not affect the title, and the purchaser is induced to dispense with its production relying in good faith on a false or erroneous statement that it does not affect the title (y). For instance, if on a purchase of land from a married man the purchaser is told that there is a settlement but that it does not affect the land in question, and he completes the purchase, relying in good faith on that statement, he will not be fixed with constructive notice of the contents of the settlement (s). On the same principle, where property was subject to restrictive covenants contained in a separate and collateral deed which was not in any way referred to in, and did not form any part of, the necessary title, the purchaser was held to have no constructive notice of the contents of that deed (a). Constructive notice may, perhaps, be rather considered to consist in those circumstances under which the Court concludes, either that notice must be imputed on grounds of public policy to an innocent person, or that the party has been guilty of such negligence in not availing himself of the means of acquiring it, as, if permitted, might be a cloak to fraud, and which, therefore, the common interests of society require should, in its consequences, be treated as equivalent to actual notice. Sect. 3 of the Conv. Act, 1882, - in enacting that a purchaser shall not be prejudicially affected by notice of any instrument, fact, or thing, unless it is within his own knowledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him, - has merely enunciated the principle above stated (b). What degree of negligence is sufficient for this purpose remains to be considered.