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.
(g) See Townsend v. Wilson, (1818) 1 B. & Ald. 608; Hall v. Dewes, (1821) Jac. 180, 193; Wilson v. Bennett, (1852) 5 De G. & S. 475; 21 L. J. Ch. 741; Saloway v. Strawbridge, (1855) 1 K. & J. 371; aff. (1855) 7 D. M. & G. 594; 25 L. J. Ch. 121.
(h) See Wolst. & Cherry, vol. i. 11th ed. p. Ixxxviii.
(i) Power v. Banks, 1901, 2 Ch. 487, 496; 70 L. J. Ch. 700; Re Jenkins and Randall, 1903, 2 Ch. 362; 72 L. J. Ch. 693; and see Collinson v. Lister, (1855) 20 Beav. 366; 25 L. J. Ch. 38, where the security was a third mortgage which on sale realised nothing.
Where land has been purchased by trustees who have no power to invest in the purchase of land, they hold the purchased property under an implied trust for sale, and could, even before the legislation of 1926, make a ,good title to a purchaser with notice, provided that all the beneficiaries were not at once competent and desirous to take the land in lieu of the money; and the concurrence of any one of them in the sale or the personal incompetency of any one of them to elect was sufficient evidence of the validity of the sale (k). Under the L. P. Act, 1925, however, a purchaser is not concerned in such a case with the question of whether the beneficiaries have elected to take the property as land. Sect. 23 provides (I) that where land has (either before or after the commencement of the Act) become subject to an express or implied trust for sale, such trust shall, so far as regards the protection of a purchaser, be deemed to be subsisting until the land has been conveyed to or under the direction of the persons interested in the proceeds of sale. Where a settlement contained a power to vary securities, a mere declaration that purchased realty should be considered personalty was (before 1926) held to give the trustees an implied power of sale (m).
Doubts have been suggested as to the competency of trustees, upon the sale of a portion only ,of the property comprised in their security, to release it from the mortgage debt, without receiving the purchase-money or an adequate proportion of it. The preponderance of professional opinion seems to be in favour of the view that such a release could be made by trustees with a power to vary investments, and that a purchaser of part of the land is entitled to assume that the trustees are exercising their powers properly, and may abstain from making inquiries if there is nothing in the transaction suggestive of fraud (n). So, it is conceived, a trustee may release mortgaged property which is clearly valueless, in order to avoid being made a defendant to a foreclosure suit. In Pell v. De Winton (o), no question appears to have been raised as to the competency of trustees, with a power to vary securities, to release part of the property from the mortgage, on having an adequate portion of their debt satisfied.
Whether mortgagee trustees can release without receiving purchase-money.
(k) Re Patten and Edmonton Guardians, (1883) 52 L. J. Ch. 787; Power v. Banks, 1901, 2 Oh. 487, 496; 70 L. J. Oh. 700; Re Jenkins and Randall, 1903, 2 Ch. 362; 72 L. J. Ch. 693; and see Wiles v. Gresham. (1854) 2 Dr. 258, 270; Garner v. Moore, (1855) 3 Dr. 277; 24 L. J. Ch. 687; Holloway v. Radclife, (1857) 23 Beav. 163; 26 L. J. Ch. 401.
(l) This section replaces s. 10 (3) of Conv. Act, 1911.
(m) Tait v. Lathbury, (1865) 1 Eq. 174.
Any difficulty arising from the inability of trustees, whether vendors or mere incumbrancers, to give discharges for the purchase-money, can generally be overcome by their receiving the money and paying it into Court under the T. Act, 1925 (p); or, where the fund is under 500l, into a post-office savings bank, under the County Courts Act, 1888 (q), or by an application in Chambers by originating summons (r).
Upon a sale of superfluous lands under the L. C. C. Act, 1845, a receipt under the common seal of the undertaking, or under the hands of two of the directors or managers of the undertaking acting by the authority of the body, is a sufficient discharge for the purchase-money (s).
L. C. C. Act, 1845.
Under the old law, where there was a charge of debts created by a testator's will, either by express words or by a general direction that the debts should be paid, and, subject thereto, the land was so limited by the will as to preclude any sale being effected, except by means of a power in the executors, the executors took an equitable power of sale (t). And, though they had not the legal estate (u), yet the person in whom the legal estate was vested, whether as trustee, devisee, or heir, was a trustee thereof for the executors, and was bound in that capacity to convey the legal estate to any purchaser with whom the executors had entered into a contract for sale (x).
Charge of debts by will.
(n) See Lewin, 13th ed. p. 358, and the T. Act, 1925, s. 15.
(o) (1858) 2 D. & J. 13; 27 L. J. Ch. 230.
(p) S. 63; R. S. C. 1883, Ord. LIVb.; see Cox v. C, (1855) 1 K. & J. 251.
(q) See s. 70; formerly 30 & 31 Vict. c. 142, s. 24.
(r) R. S. C. 1883, Ord. LV. r. 3.
(s) S. 131.
(t) Robinson v. Lowater, (1854) 5 D. M. & G. 275; Storry v. Walsh, (1854) 18 Beav. 559, 566; Hamilton v. Buck-master, (1866) 3 Eq. 323; 36 L. J. Ch. 58; Greetham v. Colton, (1865) 34 Beav. 615.
(u) Doe v. Hughes, (1851) 6 Ex. 223; He Tanqueray-willaume and Landau, (1882) 20 Ch. D. 465, 477; 51 L. J. Ch. 434.
The power of an executor to sell real estate under the authority implied from a charge of debts was not barred by lapse of time, but generally after twenty years the debts would be presumed to have been satisfied (y). The twenty years' rule did not apply in the case of leaseholds on the ground that the executor's duty in connection with the testator's personal estate is not confined to payment of debts (z); but where the sale was made after eighteen years and the purchaser had notice that the debts of the testator were all paid, and no other reason for sale was suggested, the title of the executrix, without the consent of the beneficiary, was in the special circumstances of the case not forced on the purchaser (a).