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.
Notice of the land, being in the occupation of a person other than the vendor, is notice to a purchaser that the person in possession has some interest in the land, for possession is prima facie evidence of seisin (f), and a purchaser having notice of that fact is bound either to inquire what that interest is, or to give effect to it whatever it may be (g). On this principle a purchaser is bound by all the equities which the tenant could enforce against the vendor; and the equity of the tenant has been held to extend not only to interests connected with his tenancy (A), but also to his interests under collateral agreements, e.g., a right of renewal (i) or an agreement for the sale to him of the fee simple (k) ; and though the latter has been said to be an extreme case (/), it follows logically from the principle above stated, and has been so recognized (m). In every case a prudent purchaser, who has notice that the property is not in hand, will make inquiry as to the nature and extent of the interest of the occupying tenant; but the doctrine that notice of a tenancy is notice of the tenant's equities, has reference merely to equities between the tenant and purchaser after completion of the contract; and is not necessarily notice as between vendor and purchaser, so as to affect their relative rights and liabilities while the contract is still incomplete (n). Hence, notice of a tenancy is not constructive notice of the lessor's title (o) : nor, where the vendor is himself the tenant, and has acknowledged payment of the purchase-money both in the body of the conveyance and by the usual indorsed receipt, is the tenancy notice of his lien for any part thereof which may in fact remain unpaid (p) : nor will a purchaser in good faith, otherwise without notice, be affected by the mere circumstance of the vendor having been out of possession for many years (q), nor by failure to inquire of the last occupier, where the possession is vacant (r).
Notice of occupier's interests from fact of occupation.
(c) Davies v. Sear, (1869) 7 Eq. 427; 38 L. J. Ch. 515; and see Morland v. Cook, (1868) 6 Eq. 252 ; 37 L. J. Ch. 825.
(d) Allen v. Beckham, (1879) 11 Ch. D. 790; 48 L. J. Ch. 611.
(c) Holmes v. Powell, (1856) 8 D. M. & G. 572 ; and see remarks of L. J. Knight-Bruce at pp. 580, 581.
(/) Jones v. Smith, (1841) 1 Ha. 43, 60 ; 1 Ph. 244.
(g) Barnhart v. Greenshields, (1853)
9 Mo. P. C. 18, 32.
(A) Taylor v. Stibbert, (1794) 2 Ves. 437 ; Meux v. Maltby, (1818) 2 Sw. 277, 281 ; Lewis v. Stephenson, (1898) 78 L. T. 165 ; 67 L. J. Q. B. 296.
(t) Leicis v. Stephenson, sup.
(k) Daniels v. Davison, (1809) 16 Ves. 249, 254 ; Allen v Anthony, (1816) 1 Mer. 282; Crofton v. Ormsby, (1806) 2 Sch. & L. 583.
(/) Per V.-C. Wigram, 1 Ha. 62; Miles v. Langley, (1831) 2 R. & M.
Notice that the occupier holds as tenant to A., a person other than the vendor, is notice of A.'s title (s). So, notice that the rents are received by some person whose receipt is inconsistent with the title of the vendor is notice of that person's title, and of the instrument under which he claims (t), and of the character in which he receives them (u) : but mere knowledge that they are paid to a house or estate agent will not affect the purchaser with notice (x). Notice that receipts have been given to, and accepted by, the vendor for an annual payment as " rent," but which the vendor and purchaser claiming under him subsequently contend was in fact a rent-charge, is notice to the purchaser of the payee's title to the freehold (y).
Notice of payment of rents to other than the vendor.
626, 629 ; Sug. 762 ; see Fenny v. Watts, (1850) 2 De G. & S. 501 ; 1 M. & G. 150, 165.
(m) Bailey v. Richardson, (1852) 9 Ha. 734 ; Barnhart v. Greenshields, sup. ; so, too, in James v. Lichfield, (1869) 9 Eq. 51 ; 39 L. J. Ch. 248; Phillips v. Miller, (1874) L. R. 9 C. P. 196; 43 L. J. C. P. 74 (rev. but on other grounds in Ex. Ch., (1875) L. R. 10 C. P. 420 ; 44 L. J. C. P. 265); Carroll v. Keayes, (1873) 8 I. R. Eq. 97; Hunt v. Luck, 1901, 1 Ch. 45, 49; 1902, 1 Ch. 428; 70 L. J. Ch. 30. But the extension of the doctrine to cases which still rest in contract cannot be sustained ; Caballero v. Henty, (1874) 9 Ch. 447; 42 L. J. Ch. 635.
(n) Caballero v. Henty, sup.; Sug.
14th ed. 774 ; and see inf. p. 1194.
(o) Sug. 14th ed. 762 ; Hunt v. Luck, 1902, 1 Ch. 428, 432 - 3 ; Barnhart v. Greenshields, (1853) 9 Mo. P. C. 18; see and distinguish Bailey v. Richardson, (1852) 9 Ha. 734.
(p) See White v. Wakefield, (1835) 7 Si. 401 ; Hunt v. Luck, 1901, 1 Ch. 45, 52 ; 1902, 1 Ch. 428 ; 70 L. J. Ch. 30.
(q) See Oxwick v. Plumer, (1708) Gilb. R. 13; 5 Bac. Ab. Mortgage (E), s. 3, p. 664 ; and see Jones v. Smith, (1841) 1 Ha. 43, 63 ; Barnhart v. Greenshields, (1853) 9 Mo. P. C. 18, 34.
(r) Miles v. Langley, sup.
(s) Bailey v. Richardson, (1852) 9 Ha. at p. 734.
Notice of a past tenancy is not notice of the tenant's equitable interests (z). A demise of property "as the same was late in the occupation of H. C." has been held not to be notice of an easement to which it was subject during H. C.'s tenancy (a) ; and if the reference were to an existing occupation it does not seem that this could amount to notice of any rights except those of the occupier. A statement in the particulars of sale, that "the property is now, or lately was, in the occupation of H. R. and others," the conditions providing that upon completion the purchaser was to be let into receipt of rents, was held not to be notice of the property being let on leases for lives at low rents (b) ; but in this case there was a suppression equivalent to misrepresentation.
Notice of late occupation.
On a contract to take a sub-lease or an assignment of a lease a purchaser will not be affected with constructive notice of peculiar and unusual covenants in the original lease (c) ; nor, though a purchaser of a lease is bound to know from whom the lessor derived his title, is he affected with notice of all the circumstances under which he so derived it (d); but if he buy under an engagement not to call for his lessor's title, he will have imputed to him all the knowledge, which, by prudent inquiry, he might have obtained (e). Notice of a lease is not, it would seem, notice of collateral facts mentioned in the lease (/), In order to fix notice, there ought to be a reasonable opportunity of examining the lease before entering into the contract (g) and it makes no difference whether the sale is by private treaty or public auction.