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.
(q) Re Lush's Trusts, (1869) 4 Ch. 591; 38 L. J. Ch. 650.
(r) Sharpe v. Fog, (1868) 4 Ch. 35.
A misrepresentation as to an existing state of facts will bind the party making it, though he make it in ignorance or mistake, if he might have known the truth (s) : and, where it is material, the purchaser may elect either to have it made good or the purchase set aside (7) : but a mortgagee, it appears, need not answer an inquiry as to the extent of his claims, unless the intended purchaser is entitled and offers to redeem him (u) ; nor need he voluntarily communicate his claim to a person whom he knows to be about to purchase (x); unless he has reason to believe that a fraud is contemplated by the vendor (y). Nor will mere assent to a purchase bind the assenting party's subsequently acquired interest in the property (z).
Effect of misrepresentation.
The purchaser will also be protected against any person who, knowing his own title, encourages, or fraudulently permits him, in ignorance of it, to lay out money in improving the property (a) : but when a party has once given a distinct notice of his claim, and the purchaser subsequently lays out money, it lies on him to show that the other has abandoned, or given reason to believe that he has abandoned, his claim (b); and this, whether the claim extend to the
Subsequent expenditure on the property.
(s) See Pearson v. Morgan, (1788) 2 Br. C. C. at p. 388 ; and West v. Jones, (1851) 1 Si. N. S. 205 ; 20 L. J. Ch. 362; sup. p. 113, where the rule is laid down yet more generally ; Hammersley v. De Biel, '(1845) 12 C. & F. at p. 88; A.-G. v. Stephens, (iS55) 1 K. & J. at p. 749 ; 24 L. J. Ch. 694 ; Crofts v. Middleton, (1855) 2 K. & J. 194; Haddison v. Alderson, (1883) 8 A. C. 467, 473 ; 52 L. J. Q. B. 737 ; but see Sug. 14th ed. p. 744, n. See also Farrer's Conditions of Sale, 44-46 ; Porter v. Moore, 1904, 2 Ch. 367 ; and inf. 1193.
(t) Raivlins v. Wickham, (1858) 3 D. & J. 304 ; 28 L. J. Ch. 188.
(u) A trustee, however, must; for the purchaser has implied authority from the vendor to make the inquiry. Where the intended transaction is a entirety, or only an undivided part of the estate (c). Nor need the notice disclose the particulars of the claimant's title; nor, if the claim exceed what he is entitled to, is the party in possession therefore justified in disregarding it (d). But though a general notice of the claimant's title, as e.g., of the deed under which he claims, may be sufficient, it will be otherwise where it is accompanied by an imperfect or erroneous statement of its contents (e) ; and where a purchaser acquires merely a temporary or partial interest in the land, his expenditure, being referable to that interest, will give him no additional rights as against the reversioner or joint owner (f). Thus a tenant building on his landlord's property does not, except under special circumstances, acquire any right to prevent the landlord from taking possession at the end of the term ; but if, being mere tenant at will, he builds in the belief that this will entitle him to a specific lease, and the landlord, knowing his error, omits to correct it, Equity will interfere to compel the grant of such a lease (g). Where a person was in possession of land in virtue of a mere licence, and at the request of the owner executed works on it at his own expense, it was held that the licence had become irrevocable from that date (h).
Mortgage the trustee need not answer inquiries; see Coote on Mortgages, 7th ed. 1276.
(x) Osborn v. Lea, (1724) 9 Mod. 96.
(y) Inf. p. 1192.
(z) Thompson v. Simpson, (1845) 2 J. & L. 110; Mangles v. Dixon,
(1852) 3 H. L. C. 702, 733 ; see Jorden v. Money, (1854) 5 H. L. C. 185 ; 23 L. J. Ch. 865.
(a) Dann v. Spurrier, (1802) 7 Ves. 230; Gregorys. Mighell, (1811) 18 Ves. 328, 333; Ramsden v. Dyson, (1866) L. R. 1 H. L. 129; Kenncyy. Browne, (1796) 3 Ridg. at p. 518.
(b) See Clare Hall v. Harding, (1848) 6 Ha. 273, 297 ; 17 L. J. Ch. 301 ; Crosse v. Reversionary Co.,
(1853) 3 D. M. & G. 698, 712. As to what constitutes acquiescence
The acquiescence of a tenant for life, etc, cannot bind the reversioner: but it has been held that the purchaser of a reversion, buying under conditions which recognized the future user by other parties of an easement over the estate, could not afterwards dispute the right of user, though the reversioner himself had never previously recognized it(/).
Reversioners, whether bound.
Sufficient to deprive a person of his legal rights, see Willmott v. Barber, (1880) 15 Ch. D. 96, 105 ; Civil Service Must. Inst. Assoc, v. White-man, (1899) G8 L. J. Ch. 484; see also Marriott v. Reid, (1900) 82 L. T. 369.
(c) See Clare Mall v. Harding, sup.
(d) S. C. at p. 273.
(e) Re Bright's Trusts, (1856) 21 Beav. 430 ; 25 L. J. Ch. 449.
(f) Titling v. Armitage, (1805) 12 Ves. 78 ; Clare Hall v. Harding, sup. ; Duke of Beaufort v. Patrick, (1853) 17 Beav. at p. 75; 22 L. J. Ch. 489.
(g) Ramsden v. Dyson, (1866) L. R. 1 H. L. 129.
(A) Plimmerv. Mayor of Wellington, (1884) 9 A. C. 699 ; 53 L. J. P. C. 104.
(i) Duke of Beaufort v. Patrick, sup.
This is not so in the case of the easement of light, the acquisition of which depends upon statutory conditions (k).
The mere fact of a purchaser or mortgagee not having possession of the title deeds, will not, in the absence of other circumstances indicative of fraud, affect his legal title as against subsequent purchasers or incumbrancers (/) : even the fact of a mortgagee having returned the deeds to the mortgagor, will not, in itself, necessarily have this effect (m) : and the same would hold good in the case of a purchaser, if a plausible reason were given for his assenting to what would, prima facie, be an unreasonable and suspicious request: but, if deeds are borrowed for a temporary purpose, they should be diligently reclaimed (n). If they are handed over to the mortgagor for the purpose of enabling him to mortgage for a specified amount in priority to the first mortgagees, he can fraudulently confer a good title on a mortgagee without notice, for a sum exceeding the authorized amount (o). Where, subsequent to the contract for sale, but prior to completion, the property is equitably mortgaged, whether with or without notice of the contract, the possession of the title deeds by the incumbrancer will not give him any priority as against the purchaser not in default claiming specific performance (p) .