Where two persons have, in conscience, an equal claim to the same property, Equity will not interfere against the one who acquires a legal right to hold it; even though his equitable title is of later date than that of his opponent (a). The rule is subject to no exception - not even in favour of charities (b).

Section 1

Where equities are equal, legal estate prevails.

Now no person can have an equity of a higher kind in respect to property than that which arises from his having fairly bought and paid for it. The execution of a conveyance to a purchaser in good faith for valuable consideration, or to his trustee, will, therefore, under the above rule, render his title indefeasible as against all equitable claimants, even for valuable consideration, of whose claims he had no notice prior to the execution of the conveyance (c) and actual payment of the purchase-money (d). Of course, if the purchaser knows of an incumbrance, either before (e) or after the execution of his conveyance, but before the payment of the whole of his purchase-money, he will be liable to the extent of any purchase-money which he subsequently, without the consent of such incumbrancer, pays to the vendor.

Purchaser buying, without notice, protected by legal estate.

(a) Oxwick v. Plumer, (1708) Bac. Abr. Mortgage, (E.) s. 3.

(b) A.-G. v. Wilkins, (1853) 17 Beav. 285 ; 22 L. J. Ch. 830.

(c) Wigg v. W., (1739) 1 Atk. 382, 384; but see inf., p. S45.

(d) Tourville v. Naish, (1734) 3 P. W. 306 (where the money being secured by bond was held insufficient) ; Jones v. Stanley, (1731) 2 Eq. Ca. Ab. 685, pl. 9 ; Story v. Lord Windsor, (1743) 2 Atk. 630; Fnre v. Moore, (1820) 8 Pr. 475, 480; see Davies v. Thomas, (1836) 2 Y. & C. 234. Under the Irish Registration Act, the legal estate and want of notice are no protection against an equity arising under a prior registered instrument, Mill v. Hill, (1852) 3 H. L. C. 828 ; and all unregistered deeds, though prior in date, are absolutely void as against the registered deed ; Carlisle v. Whaley, (1867) L. R. 2 II. L. 301. As to registration under the Yorkshire Reg. Acts, see sup., p. 703 et seq.; and under the L. T. Acts, see p. 1247. The equity applies to purchasers as well of personal as of real estate: Dawson v. Prince, (1857) 2 D. & J. 41 ; 27 L. J. Ch. 169; and see Lord Selborne's statement of the law on

Where the contract has been completed by a conveyance which proves defective, by reason of some prior conveyance, charge, or incumbrance, the purchaser may, at any subsequent period, get in any outstanding legal estate, and this notwithstanding the inadequacy of the consideration (/), and use it against all parties of whose claims he had no notice at the time of the completion of his purchase (g), unless, at the time of getting in such estate, he is aware that the person who conveys is committing a breach of trust in doing so, and even, it seems, where such is the fact, though not to the purchaser's knowledge (h), in the words of Stirling, L. J., "unless there are circumstances which make it inequitable for him to do so " (i). Where the conveyance is executed and the purchase-money is secured, he may come into Equity to have it employed in discharge of newly discovered incumbrances (k), if created by the vendor or covered by his covenants for title (I): and where the conveyance has been executed, and part only of the money paid, before notice, he may, it is conceived, clearly avail himself of the legal estate as a security to the extent of the sum so paid. The protection of the legal estate extends to a trustee who, having the legal estate, takes an assignment of the equitable interest of his cestui que trust, by way of security for money advanced; and he can avail himself of this protection as against a prior incumbrance of which he had no notice (m).

This subject in Blackwood v. London Chartered Bank of Australia, (1874) L. R. 5 P. C. 92, 111 ; 43 L. J. P. C. 25, 29.

In what cases.

(e) See Rayne v. Baker, (1859) 1 Giff. 241.

(f) Bassett v. Nosworthy, (1673) Finch, 102 ; 2 Wh. & T. L. C. 7th ed. 150.

(g) Stanhope v. Earl Verney, (1761) 2 Ed. 81 ; and Butler's note to Co. Litt. 290 b., n. xv. ; Willoughby v. W, (1787) 1 T. R. 763; and see Jones v. Smith, (1841) 1 Ha. 43 ;

11 L. J. Ch. 83 ; (1843) 1 Ph. 244 ;

12 L. J. Ch. 381. As to priority acquired by registration, see inf., p. 865 et seq. As to the equitable right of a person to bar known existing adverse claims by fine and nonclaim under the old law, see Langley v. Fisher, (1845) 9 Beav. 90 ; 15 L. J. Ch. 73.

(h) Saunders v. Deheiv, (1692) 2 Vern. 271 ; Mumford v. Stohwasser, (1874) 18 Eq. 556 ; 43 L. J. Ch. 694 ; Taylor v. Russell, 1891, 1 Ch. 8; 1892, A. C. 244 ; 60 L. J. Ch. 1 ; 61 ib. 657 ; Bailey v. Barnes, 1894, 1 Ch. 25, 37; 63 L. J. Ch. 73.

(i) In Taylor v. London § County Bkg. Co., 1901, 2 Ch. 231, 256 ; 70 L. J. Ch. 477, 485.

(k) Tourville v. Naish, (1734) 3 P. W. 307.

(I) Sup. p. 814.

Whatever may be the accident by which a purchaser has obtained a good legal title, and in respect of which he has paid his money and is in possession of the property, he is entitled to the benefit of it (n) : even the circumstance of the execution of the conveyance having been procured by the fraud of a third party has not been allowed, in Equity, to prejudice an innocent purchaser without notice; - the deed remaining unimpeached at Law (o) : but an otherwise innocent purchaser can derive no advantage from the legal estate, if acquired by means of his own fraud, or the known fraud of another person (p).

Though procured by fraud of a stranger.

Where a trustee of two different settlements, misapplied the trust funds under one, and transferred the trust funds of the other to make good the misappropriation, it was held that the transfer was, in effect, • an alienation for value without notice, the consideration being the forbearance to sue for the misappropriation; and that the cestuis que trust under the latter settlement could not follow the trust funds into the hands of the transferee (q). So where A., solicitor for B., a mortgagee, put up the mortgaged estate for sale without his client's authority, and bought it himself, and then procured B., who had been informed of the sale, to execute a conveyance and sign the endorsed receipt for the purchase-money, on the faith of representations, which, however, were not considered to be such as affected the validity of the deed at Law, and A. afterwards deposited the title deeds with C. as security for an advance, it was held that C. had priority over B., on account of the latter's negligence in executing the conveyance which enabled A. to commit the fraud (r).