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.
- of the enabling Act having been obtained by the vendors pursuant to an agreement with the purchaser. As respects landowners who have entered into no agreement, but as against whom the entire proceedings of the company have been compulsory, it is conceived that they are not bound, and do not in ordinary practice consent, to enter into any covenant (o); but as the interests of all parties are bound by the statutory conveyance, the value of covenants for title is small.
As to landowners' covenants on sale to railway company.
(k) Sug. 14th ed. 574.
(l) Re Ray, 1896, 1 Ch. 468; 65 L. J. Ch. 316; see also L. P. Act, 1925, s. 22.
(m) L. C. C. Act, 1845, ss. 12 and 13.
(n) (1842) 13 Si. 176. (o) Frend & Ware, 127, 234.
In the case of a tenant for life or other owner of a particular estate selling or consenting to a sale under the powers of the S. L. Act, or a settlement, the practice has been for him to covenant as beneficial owner in respect of his own beneficial interest, but to limit his liability under the covenants as respects the reversion, to the acts of himself and parties claiming under him (p). After 1925. however, a tenant for life will usually (q) convey as trustee: unless he is absolutely entitled to the entire beneficial interest in the property subject merely to equities overreached by his conveyance, in which case he will convey as beneficial owner (r).
Liability of tenants for life to covenant.
On a sale of leaseholds in lots by way of underlease, the vendor, in addition to the covenant for quiet enjoyment, must covenant with each sublessee to pay the rent in the original lease, and to perform the covenants therein contained so far as the same relate to the residue of the property (s). It will be observed that sub-ss. (1) and (2) of L. P. Act, 1925, S8. 76 and 77, do not apply to such a case.
As to covenants by vendor of leaseholds.
On a sale of leaseholds by a vendor who claims by purchase, his liability under the covenant, that the covenants in the lease have been performed up to the time of completion, should be limited to breaches of covenant which might have occurred during his own period of ownership. And though upon the sale of leaseholds by a vendor who claims by purchase, a covenant that the lease is valid is sometimes introduced, it is now well settled that the covenant is qualified, extending only to his own acts and omissions and those of any testator or intestate through whom he claims (t).
Where he claims by purchase.
(p) For form of covenant, see Wolst. Forms and Pr. 6th ed. p. 61; see Re Tyrell, (1900) 82 L. T. 675.
(q) It is still not unusual for a tenant for life to convey as beneficial owner, with a limitation of the implied covenant.
(r) Wolst. & Cherry, 11th ed. vol. i. p. 253; and see General Conditions of 1925, No. 25 (3).
(s) Brown v. Paull, (1856) 2 Jur. N. S. 317.
(t) See 2 Dav. pt. i. 215; L. P. Act, 1925, s. 76 (1), 2nd Sch. Part II.
Formerly, it was a common practice in cases where tenants in common, or other persons having partial interests in an estate, concurred in the conveyance and in the covenants for title, to limit the liability of each covenantor to the amount of his share in the purchase-money, apparently on the ground that the amount of the purchase-money was the measure of damages in case of eviction. Under the present practice, if such covenants are given, the covenants of each party are limited to the subject-matter expressed to be conveyed by him; in cases where the parties are numerous and the shares complicated, it may be desirable, in order to avoid the risk of misstatement, to add a clause in the operative part extending the conveyance beyond the parts expressly declared to be conveyed to all other the estate and interest, if any, of each of the parties in the subject-matter of the conveyance. Since the L. P. Act, 1925, however, land cannot be held by persons as tenants in common (s. 34); and where land is expressed to be conveyed to persons in undivided shares, the grantees are to hold the same upon trust for sale (ss. 34, 35). Where a legal estate (not being settled land) is beneficially limited to or held in trust for any persons as joint tenants, the same is to be held on trust for sale (s. 36.) It follows, therefore, that whether land is expressed to be conveyed to persons as joint tenants or as tenants in common, it is under a statutory trust for sale, and a purchaser would take free from the claims of the parties interested in the proceeds of sale. Accordingly, a purchaser in such a case cannot, it is thought (in the absence of express stipulation), require any covenants for title to be given, other than the statutory implied covenant from the grantors conveying as trustees (u).
As to limiting the liability of several covenantors to their respective shares of the purchase-money.
As a general rule, fiduciary vendors who sell as such (z), only covenant that they have done no act to prevent their selling, or to incumber the property (y); a covenant for further assurance would seem to be a reasonable addition, and is often attempted to be introduced; but it was decided in Worley v. Frampton (z), that trustees cannot, as defendants, be compelled to enter into it: even though they were not themselves the contracting parties, but represented the original vendor, who would himself have been bound to enter into such a covenant. The Court, however, raised but abstained from deciding the question whether as plaintiffs they could have procured relief except on the terms of entering into the covenant. It has been held by Shadwell, V.-c, and by Wood, V.-c, that the executors of a party who has agreed to take a lease, may, if they admit assets, be compelled to enter into the lessee's covenants, so qualified as to restrict their liability to that which they would have incurred had the lease, with corresponding covenants, been executed by their testator (a).