On the sale of a public-house or other licensed property as a going concern, the vendor is bound, on the day fixed for completion, to produce a valid and effectual licence of the kind promised by the contract, and to indorse or to procure the holder thereof to indorse the same to the purchaser, so that the purchaser may be enabled to apply at once for interim authority to carry on the business until the next special sessions, and to apply at such sessions for a transfer of the licence (z). And on the sale of such property, time is of the essence of the contract; so that if the vendor cannot perform his obligation in this respect on the very day fixed for completion, the purchaser is entitled to repudiate the contract (a). But in the absence of special stipulation to the contrary, the vendor is not bound to do more than this, or to procure for the purchaser a transfer of the licence or even interim authority to carry on the business, and does not warrant that such transfer or interim authority shall be procured; and the purchaser buys subject to the risks that the licence will not be renewed at the next annual Brewster sessions (b), that the transfer of the licence to him will be refused at the special sessions, and that interim authority will not be accorded to him (c).

Sale of licensed property.

(z) Tadcaster Tower Brewery Co. v. Wilson, 1897, 1 Ch. 705. As to the duties now imposed on liquor licences, see stat. 10 Edw. VII. c. 8, ss. 43 - 53.

(a) Seaton v. Mapp, 2 Coll. 006; Day v. Luhke, L. R. 5 Eq. 336; Claydon v. Green, L. R. 3 C. P. 511; Cowles v. Gale, L. R.

7 Ch. 12; Powell v. Marshall, Parkes & Co., 1899, 1 Q. B. 710, 712.

(b) See Sharp v. Wakefield, 1891, A. C. 173; stat. 4 Edw. VII. c. 23, s. 1; Grimsdick v. Sweetman, 1909, 2 K. B. 740; below, p. 490 and n. (n).

(c) Tadcaster Tower Brewery Co. v. Wilson, 1897, 1 Ch. 705.

By the Licensing Act, 1904 (d), where Quarter Sessions refuse the renewal of an existing on-licence under that Act, the amount therein specified (representing the difference between the value of the licensed premises with and without the licence (e) ) is to be paid as compensation to the persons interested in the licensed premises. And the Act authorised a compensation charge at the rates therein specified to be imposed by Quarter Sessions in respect of all existing on-licences renewed in each year (f). This charge is imposed for the period from April 5th of the year in which it is payable until April 5th of the succeeding year; and on the sale of any licensed property during such period the amount of the charge is an outgoing apportionable between the vendor and purchaser accordingly (y). The Act further provides (h) that such deductions from rent as are set out in the Second Schedule thereto (i) may, notwithstanding any agreement to the contrary (k), be made by any licence-holder who pays the charge and also by any person from whose rent a deduction is made in respect of the payment of the charge. The deductions so authorised constitute a charge upon the rent as against the person, who would otherwise be entitled to receive it (l); and regard must of course be had to this liability on the purchase of the freehold or leasehold reversion on a lease of licensed property. When a licensed house has been demised for a term of years by a lease containing a covenant by the lessee to use the premises as a licensed house and not otherwise, and the renewal of the licence is afterwards refused, the covenant is discharged for impossibility of performance (m), but in other respects the lease remains valid and the lessee is accordingly bound to pay the rent reserved without any deduction on that account (n).

Compensation for nonrenewal of licence.

Compensation charge on licences.

(d) Stat. 4 Edw. VII. c. 23, s. 2 (1); see the Licensing Rules, 1904, Nos. 21 - 34, W. N. 14th Jan. 1904. Under these rules the persons interested are the licensee, the registered owner of the premises, and any other person duly claiming and determined to be entitled to compensation thereunder; and the amount of compensation, when determined, is divided between those persons in the shares settled by the compensation authority, or otherwise as therein provided; see Liverpool Corpn. v. Peter Walker & Son, Ltd., 1908, 2 K. B. 33. Any compensation money so awarded to any person interested in the premises as owner (whether he be freeholder or lessee) stands in the place of his interest therein, is equivalent to the proceeds of a compulsory sale thereof, and is payable, where he has mortgaged that interest, to the mortgagee; Law Guarantee, etc. Socy. v. Mitcham, etc. Co. Ltd., 1906, 2 Ch. 98; Noakes v. Noakes & Co. Ltd., 1907, 1 Ch. 64: Dawson v. Braime's, etc Ltd., 1907, 2 Ch. 359; Re Bentley's Yorkshire Breweries, Ltd., 1909, 2 Ch. 609. And where his interest in the premises is subject to any trust or equity, or his claim of compensation was made as agent for others, the compensation money awarded to him is subject to the same trust or equity or to his principals' rights: Birkin v. Smith, 1909, 2 K. B. 112; see also Bent's Brewery Co. Ltd. v. Dykes, 1909, W. N. 51, 100 L. T. 476.

(e) See Re Ashby's, etc. Co., 1906, 2 K. B. 754; Liverpool Corpn. v. Peter Walker & Son, Ltd., 1908, 2 K. B. 33.

(f) Stat. 4 Edw. VII. c. 23, s. 3 (1).

(g) Horton v. Penn, 1907, 1

K. B. 561; see above, pp. 50, 67, 74.

(h) Sect. 3 (3).

Effect of refusal to renew licence in case of a leasehold licensed house.

(i) The amount which may be so deducted varies by degrees from 100 per cent. of the charge where the tenant's unexpired* term does not exceed one year down to 1 per cent. of the charge where the unexpired term exceeds 55 but does not exceed 60 years: but the amount to be deducted is in no case to exceed half the rent. The unexpired term is to date from the day on which the compensation charge is payable by the licence-holder; London County Council v. Watney. etc. Ltd., 1900, 1 K. B. 637. It has been held that the word term is here used in its proper legal meaning, so that a tenant holding under an unexpired term of not more than two years was entitled to deduct the amount allowed (88 per cent.) in respect of that term, notwithstanding that he also had a reversionary lease (which only gave him an interesse termini at law) for a further period of years from the day hut one after the date of the expiration of his existing term; Liangattock v. Watney, etc. Ltd., 1910, 1 K. B. 236, affirmed, 1910, A. C. 304; see above, p. 372.

(k) Whether made before or after the Act; Wooler v. North Eastern Breweries, 1910, 1 K. B. 247.

(I) Re Smith, 1906, 1 Ch. 799, 803, deciding that, where the person entitled to the rent is a tenant for life, he is not entitled to have the amount of the charge raised out of capital. See also Hancock v. Gillard, 1907, 1 K. B. 47; Smith v. Lion Brewery Co. Ltd., 1909, 2 K. B. 912.

(m) See below, Chap. XVIII. Sec.1.

(n) Grimsdick v. Sweetman, 1909, 2 K. B. 740.