(g) Re Highett and Bird's Contract, 1902. 2 Ch. 214; 1903, 1 Ch. 287.

(h) Bridges v. Longman, 24 Beav. 27, 30: Davenport v. The The Queen, 3 App. Cas. 115; Jacob v. Down, 1900, 2 Ch. 156.

(i) Pennant's Case, 3 Rep, 64: Ewart v. Fryer, 1901, 1 Ch. 499, 502, 511; S. C. nom. Fryer v. Ewart, 1902. A. C. 187; Matthews v. Smallwood, 1910. 1 Ch. 777. 786 sq.

(k) See Marsh v. Cur leys, Cro. Eliz. o28; 3 Rep. Go a; Price v. Worwod. 4 H. & N. 512.

(l) Re Moody and Yates' Contract, 28 Ch. D. 661; 30 Ch. D. 314. In this case there was a covenant to finish a house within six months to the satisfaction of the lessor's surveyor, and it was held that the surveyor's certificate to this effect was a part of the vendor's title, and that the expense of procuring the same was therefore not payable by the purchaser under sect. 3 (6) of the Conveyancing Act of 1881; see above, pp. 33, 105, 121, 136.

(m)Above, p. 203.

W

Covenant that cannot or will not be remedied.

Be Highett and Bird's Contract.

(n) 1902, 2 Ch. 214; 1903, 1 Ch. 287. (o) Above, p. 352.

(p) See above, p. 50, and below, Chap. XI.

(q) Above, p. 352.

(r) 7 M. & W. 364. (s) Pp. 203, 354.

23 (2)

(t) Above, p. 352.

(u) See 7 M. & W. 366, 367.

(x) Re Allen and Driscoll's Contract, 1904, 2 Ch. 226, 231.

Where land held by underlease is sold as such, the purchaser cannot of course reject the title because he is not getting a term granted by a lease from the freeholder; but he has the same right as the purchaser of such a lease to object to the title on the ground of liability to unusually onerous covenants not brought to his notice at the time of sale (z). Where the underlease sold and the superior lease are both determinable by re-entry for non-payment of rent and breach of covenant, it is of course material to the title to show that no cause of forfeiture of either has occurred. And where the head lease includes other lands than those demised by the underlease, it is important to ascertain that no forfeiture of the head lease has been incurred through omission to comply with the head lessee's covenants relating to such other lands (a). Under the Conveyancing Act of 1881 (b), a provision similar to that considered above is implied, in the absence of stipulation to the contrary, in contracts made after the year 1882 for the sale of land held by underlease; the purchaser being bound to assume, unless the contrary appears, on production of the receipt for the last payment due for rent under the underlease before the date of actual completion of the purchase, that all the covenants and provisions of the underlease have been duly performed and observed up to the date of actual completion of the purchase, and further that all rent due under every superior lease, and all the covenants and provisions of every superior lease, have been paid and duly performed and observed up to that date. It has been held that the vendor of an underlease does not comply with this provision by producing a receipt given by the superior landlord for rent paid to him by the vendor under threat of distress; what is required is the receipt for the rent due under the underlease (c). Where the receipt for the rent last due under the underlease had been produced, but it appeared that the superior landlord had brought, though he had practically ceased to prosecute, an action to recover possession of the premises on the ground of breach of covenant to repair, it was held that the purchaser must accept, as sufficient proof that the covenants in the superior lease had been performed, an affidavit by the vendor that he had been in possession of the premises without any other disturbance than the above, that he had repaired the premises, and that, to the best of his knowledge and belief, the covenants had been performed (d). As already mentioned, it is desirable for a vendor of land held by underlease to stipulate expressly that the last receipt for rent thereunder shall be conclusive evidence of the performance of the covenants and conditions of the underlease and of every superior lease, and also, where necessary, that the giver of the receipt shall be assumed to be the reversioner or his agent (e).

Sale of land held by underlease.

(y) Above, pp. 79, 352 353, (z) Above, p. 361, and cases cited in n. (u) thereto; Hyde v. Warden, 3 Ex. D. 72

(a) See Dewar v. Goodman, 1907, 1 K. B. 612: 1908, 1 K. B. 94; 1909, A. 0. 72, deciding that, in case of such a forfeiture, the underlessee has no remedy against the assigns of the underlesser under covenants by him to per-form and to indemnify the under-lessee against the covenants of the head lease relating to other lands than those comprised in the underlease.

(b) Stat. 44&45 Vict. c. 41, s. 3 (5, 9, 10, 11).

When leaseholds are sold, which are subject to a covenant not to assign without the landlord's licence (f), the vendor is bound to procure such licence at his own expense, and if he fail to do this, he will not have shown a good title and will have broken the contract (g). But it appears that the procuring of the necessary licence is at first to be treated as a matter of conveyance rather than of title (h), and the purchaser cannot object to the title on the ground of the absence of any licence to assign, if the vendor procure such licence before the day fixed for completion (i'). If such property be sold under an express stipulation that the sale is subject to the landlord's approval or to his consent to the assignment, the vendor is still bound to use his best endeavours to procure the necessary licence; and if he do this and the licence be refused, he will be discharged from his contract (k). If, on the other hand, he fail to assignable without the landlord's licence.

Sale of leaseholds not fulfil this duty, he will have broken the contract; and in such case he will be liable to compensate the purchaser in damages for the loss of his bargain (l), contrary to the general rule (m). Whenever leaseholds subject to a covenant against assignment without the lessor's consent are offered for sale, it should be stated that the property is subject to such covenant (n), and it should be expressly stipulated that, if the lessor's consent cannot be obtained, the contract shall be rescinded, the vendor returning the deposit, if any, but not paying the purchaser's expenses of investigating the title or otherwise (o). If the person to give the licence to assign should not be the original lessor, the vendor would have to prove that such person was the proper person to give the licence; and as this would involve investigation of the landlord's title, it is better for the vendor to relieve himself by express stipulation of the obligation of giving such proof (p). Leaseholds subject to a covenant not to assign without the lessor's licence may be sold and conveyed, without committing any breach of the covenant, either by way of underlease (provided that the covenant do not also prohibit underletting) (q), or by any disposition operating as an assignment in equity only and not at law, such as a declaration of trust for the purchaser (r). But if the vendor propose to carry out the sale in either of these ways, he must make an express stipulation to that effect, or the purchaser will not he bound to accept the same as a due performance of the contract. If leaseholds be held subject to a covenant by the lessee not to assign without the lessor's licence, which is not to be unreasonably withheld, and the lessee sell them under an open contract, and the landlord refuse to consent to the proposed assignment on grounds which are apparently unreasonable, it appears that the vendor cannot oblige the purchaser to perform the contract specifically by accepting an assignment without the lessor's consent (s); for the lessor may have some good reason for refusing it (t), and would be at liberty to prove this in an action brought by himself to enforce his right of re-entry for breach of the covenant. The title would therefore be too doubtful for a Court of Equity to force upon an unwilling purchaser (u).