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.
Where the fraud is by a person in a fiduciary character.
(m) Newman v. N., (1885) 28 Ch. D. G74 ; 54 L. J. Ch. 598; ef. Ledbrook v. Passman, (1888) 57 L. J. Ch. 855.
(n) Per James, L. J., in Pitcher v. Rawlins, (1872) 7 Ch. 259, 270 : 41 L. J. Ch. 485.
(o) Hiorns v. Holtom, (1852) 16 Beav. 259 ; and see Taylor v. Russet!, 1892, A. C. 244 ; 61 L. J. Ch. 657(p) See and consider the judgments in Pilcher v. Rawlins, sup., and in
Heath v. Crealock, (1874) 10 Ch. 22 ; 43 L. J. Ch. 169.
(q) Thorndike v. Sunt, (1859) 3 D. & J. 5G3; 28 L. J. Ch. 117; Taylor v. Blakelock, (1886) 32 Ch. D. 560; 56 L. J. Ch. 39 ; Taylor v. London § County Bkg. Co., 1901, 2 Ch. 231, 257: 70 L. J. Ch. 477 ; and ef. Case v. James, (1861) 3 D. F. & J. 266 ; 30 L. J. Ch. 749 ; where the plaintiff had concurred in the breach of trust, and was therefore held entitled to no relief.
And, for the above purposes, it has been considered immaterial that the vendor had no equitable interest in the property : - thus it has been held that a bare trustee, or a vendor whose apparent equitable title depends upon a forged instrument (s), or a false representation as to his title (t), can make a good title to a purchaser paying his money without notice, and then, or subsequently, acquiring the legal estate by means of a valid assurance. But where A. procured a mortgage from B., without any consideration, and then deposited it as a security for money advanced to him by C, who had no knowledge of the circumstances under which the deed was originally obtained, it was held that C. could stand in no better position than A.; and that the deed, being void as to A., was also void as to C. (u). So, where a solicitor procured his client to execute a mortgage to himself, on the pretence that it was only a covenant for production of deeds like several which he had previously executed, and afterwards transferred the mortgage to a holder in good faith and for value, it was held that the mortgage was void at Law, and the transfer was necessarily void also: and in such cases the Court will not merely abstain from enforcing the invalid securities, but will cause them to be cancelled (x). So, where a son who was heir to his father, and one of the trustees of his will, possessed himself of the title deeds of his father's property, and representing himself as his father, whose names were identical with his own, obtained a loan on a mortgage of the property, it was held, in an action by the trustees of the father's will, that the mortgage deed was, in effect, a forgery, and therefore passed nothing to the mortgagee (y).
Where vendor's title depends on a forged or fraudulent instrument.
(r) Hunter v. Walters, (1871) 7 Ch. 75 ; 41 L. J. Ch. 175 ; see judgment of Farwell, J., in King v. Smith, 1900, 2 Ch. 425 ; 69 L. J. Ch. 598.
(s) See Jones v. Powles, (1834) 3 M. & K. 581 ; 3 L. J. N. S. Ch. 210 ; and Bowen v. Evans, (1844) 1 J. & L. at p. 264.
(t) Young v. Y., (1867) 3 Eq. 801 ; but see and consider observations of the L. JJ. in Heath v. Crealock, (1874) 10 Ch. 22; 43 L. J. Ch. 169 ; 44 ib. 157.
(u) Parker v. Clarice, (1861) 30 Beav. 54 ; see French v. Hope, (1887) 56 L. J. Ch. 363.
In one case (s) which has been much discussed and which is now, in effect, overruled, where the vendor, believing himself to be entitled under his father's will to undivided shares in real estate, conveyed them to a purchaser in good faith for value (a), and subsequently a later will was discovered, under which the vendor took the fee simple in the entire estate, but only as trustee for himself for life, with remainder over, V.-C. Wood held that the purchaser was not entitled to hold the legal estate as against the cestui que trust in remainder ; inasmuch as the will under which the vendor alone derived his title to the fee disclosed the existence of a trust inconsistent with an absolute beneficial ownership. But in a later case (b) where a mortgage was taken by trustees, disclosing the trust, and the surviving trustee reconveyed part of the property to the mortgagor on payment of a portion of the mortgage debt which he appropriated for his own use, and the mortgagor then conveyed the part so released to new mortgagees, suppressing, by the connivance of the trustee, both the prior mortgage and the reconveyance, the Court refused at the instance of the cestuis que trust to deprive the new mortgagees of the legal estate which they acquired by means of the reconveyance, though it formed no part of the title deduced. In the same case, the surviving trustee fraudulently procured an absolute conveyance to himself of other parts of the mortgaged property without payment of any consideration ; and then, concealing both the trust and the prior mortgage, under which alone he had a legal title, conveyed the property to a new mortgagee; the Court in like manner declined to interfere to deprive the new mortgagee of the legal estate, which he innocently acquired by means of an assurance which formed no part of his apparent title.
Protection afforded though the legal estate is acquired by a different title from that which is deduced.
(x) Vorley v. Cooke, (1857) 1 Gif. 230 ; 27 L. J. Ch. 185 ; and see Rushout v. Turner, (1857) 5 W. R. 670. In neither of these cases, nor in the preceding case, does it seem that the word "void" can strictly be applied to the transaction, so as to sustain, with regard to either transaction, a plea of non est faction ; see per James, L. J., in Hunter v. Walters, (1871) 7 Ch. 75, 85 ; 41 L. J. Ch. 175; Favell v. Wright, (1801) 35 Sol. J. 227: Onward Bldg.
Soc. v. Smithson, 1893, 1 Ch. 1 ; G2 L. J. Ch. 138 ; Lloyd's Bank v. Bullock, 1896, 2 Ch. 192; 65 L. J. Ch. 680; King v. Smith, 1900, 2 Ch. 425; 69 L.J. Ch. 598.
(y) Cooper v. Vesey, (1882) 20 Ch. D. 611; 51 L. J. Ch. 862.
(z) Carter v. C, (1857) 3 K. & J. 617; 27 L. J. Ch. 74.
(a) The transaction was in fact a mortgage.