Documentos de Académico
Documentos de Profesional
Documentos de Cultura
tl906]
1 Ch.
CHANCERY DIVISION.
387
'
'
CONTRACT,
Headde and his father had at that date been in possession of the
said property for thirteen years and upwards. This indenture
has been produced to the purchaser prior to the signing hereof,
and the purchaser shall be deemed and considered as having full
notice and knowledge of the contents thereof and shall buy
subject thereto and be bound thereby." A further condition
provided for the sending in of requisitions in writing to the
vendor's solicitor within seven days from the delivery of the
abstract, and that "all objections and requisitions not sent
within that time shall be considered to be waived, and for the
purpose of any objection or requisition the abstract shall be
deemed perfect if it supplies the information suggesting, the same,
although otherwise defective." Under another condition, 5,
the property was sold " subject to all rights of way, water, and
other easements, if any, subsisting thereon, and no error, mis
statement, or misdescription shall annul the sale, nor shall any
compensation be claimed or allowed in respect thereof."
The purchaser was a builder, and his intention in entering into
the contract was to erect upon the land shops and buildings of
a similar class; but on February 21, 1903, he received a letter
from a firm of solicitors acting for adjoining freeholders on
the Fillebrook Estate, of which Wallwood Farm formed part,
informing him that the land he had purchased was subject to
certain covenants in favour of those freeholders restricting
building on the land, and threatening proceedings in the event
of his erecting shops in breach of those covenants. Having
thus for the first time heard of the existence of those covenants,
the purchaser made further inquiries, and, then ascertained that
a conveyance of Wallwood Farm, dated March 13, 1872, to
William Talbott Thomas Kidd, dated November 9, 1867, con
tained a covenant by Kidd, for himself, his heirs, executors and
administrators, with the grantors, the owners of the adjoining
land, part of the Fillebrook Estate (amongst other building re
strictions), that no house or other building should be erected on
20
in re.
888
C. A.
190G
NISBET
AND POTTS'
ln re.
CHANCERY DIVISION.
[1906]
the land thereby granted within thirty feet of Hainault Eoad, and
that no building then erected or which might thereafter be erected
on
^ na ^ ^an<^ should be used as a shop or other place for carrying
o n a n y t r a a e or business, or otherwise than as a private dwellinghouse. Ultimately, on February 10, 1904, an abstract of title
was delivered to the purchaser's solicitors, commencing, as
stipulated by the contract, with the conveyance of August 11,
1890, whereby, in consideration of 700Z., the property was conveyed
\by Thomas Headde to C. S. Davis, I. Davis, and L. Levy in fee
simple. The conveyance contained no recitals, but in the parcels
it was stated that the property had formerly been in the occupa
tion of W. T. T. Kidd, and " h a s since the date of the death
of the said W. T. T. Kidd been in the possession of the said
Thomas Headde and his father for a period of thirteen years and
upwards." Another abstracted deed was one dated November 29,
1901, whereby the property was conveyed for value by I. Davis
and L. Levy, in whom the entirety had then become vested,
to the present vendor, Nisbet, in fee simple. That conveyance
was supported by a statutory declaration, dated November 25,
1901, made by I. Davis and L. Levy, and stating that before
they entered into the conveyance of August 11, 1890, they were
informed by their co-purchaser, C. S. Davis (then recently
deceased), who had previously known the property, and they
verily believed, that Thomas Headde and his father, Joseph Nash
Headde, had been in possession of the property for thirteen years
and upwards, and that during that time no rent had been claimed
or paid, or acknowledgment of title made, to any person, or
claim made or action commenced by or on behalf of the heir of
W. T. T. Kidd or any person claiming through him, or by any
other person whomsoever, for possession of the said property or
any part thereof. And the declaration went on to state that since
the execution of the said indenture of August 11, 1890, no claim
whatever had been made to the property by the heir of the said
W. T. T. Kidd or by any other person. The abstract did not in
any way disclose the existence of any restrictive covenants
affecting the property.
On February 16, 1904, the purchaser's solicitors delivered
requisitions to the vendor's solicitors, of which No. 11 w a s :
1 Ch.
CHANCERY DIVISION.
389
390
C. A.
1906
NISBET
ONTRS;TS'
In re.
CHANCERY DIVISION.
[1906]
1 Ch;
CllANCEKY DIVISION,
391
892
, CHANCERY DIVISION.
C1906]
C. A.
190G
Journal bears out this view. The doctrine is not confined to the
assigns of the covenantor in the strict legal sense of the word;
as
NISBET ^ h
been extended to a tenant from year to year: Wilson v.
AHD POTTS' Hart (1), and even to an occupier: Mander v. Falcke (2); but
in re. in both those cases the person taking possession derived title
~*~
under the covenantor, and except for the dictum of Jessel M.E.
in London and South Western Ry. Co. v. Oomm (3), there is no indi
cation that any person can be liable unless he takes possession
under a derivative title. If necessary, we say that an adverse
possessor, even before the statutory period has run, would not
be bound by the restriction; but at any rate, he would not be
bound after the expiration of that period.
Further, notice is part of the cause of action. In other words,
the burden of proving notice is on the person seeking to enforce
the restriction. That is the view of the doctrine of Tulk v.
Moxhay (4) taken by the Privy Council in McLean v. McKay (5),
and by Mellish L.J. in Leech v. Schweder. (6) The dictum of
Jessel M.E. in London and South Western liy. Co. v. Goinni.(3),
which is opposed to this view, is, it is submitted, wrong, both in
not confining the obligation to persons claiming a derivative title
and in not making notice part of the cause of action. In Tulk
v. Moxhay (4) Lord Cottenham L.C. took into consideration the
fact that the price to be paid by the purchaser would be affected
by the restriction ; but this consideration cannot apply unless
the purchaser has notice of the restriction, or unless he claims
through the covenantor. The statement of the doctrine by
Cotton L.J. in Hall v. Ewin (7) is inconsistent with the dictum
of Jessel M.E. Clegg v. Hands (8) is to the same effect. In
Mander v. Falcke (2) Lindley and Bowen L.JJ. regarded the
notice as part of the cause of action. Farwell J. relied on the
fact that the dictum of Jessel M.E. was approved by the Court
of Appeal in Rogers v. Hosegood (9) ; but in that case the ques
tion was not as to the burden, but as to the benefit of the
covenant, and the judgment of the Court of Appeal contains a
(1) (1866) L. R. 1 Ch. 463.
(5) (1S73) L. R. 5 P. 0. 327, 336.
(2) [1891] 2 Ch. 554.
(6) (1874) L. R. 9 C L 463, 474.
(3) 20 Oh. D. 562, 583.
(7) (1887) 37 Ch. D. 74, 79.
(4) 2 Ph. 774; 18 L. J. (Ch.) 83.
(8) (1890) 44 Ch. D. 503.
(9) [1900] 2 Ch. 388.
1 Ch.
OHANCEEY DIVISION.
393
CONTRACT,
in re.
894
CHANCEEY DIVISION.
tl9063
o. A.
1906
part of the chain of title, or where it may not affect the title:
Dart's Vendors and Purchasers, 7th ed. pp. 8778. In modern
NISBET
times the rigidity of the old law as to constructive notice has
AND POTTS D e e n relaxed, and the trend of the law at the present day is to
CONTRACT,
In re.
1 Ch.
CHANCERY DIVISION.
895
OHANCEET DIVISION.
396
c. A.
1906
NisBET
[1906]
^T,.T^LS
ONTRACT,
in re.
'
'
1 Ch.
CHANCEBY DIVISION.
397
CHANCERY DIVISION.
898
[1906]
C A.
1906
2 Ph. 778.
(5) [1900] 2 Ch. 388, 405.
(1881) 8 Q. B. D. 403, 409.
(6) L. R. 1 Ch. 463.
20 Ch. D. 562, 583.
(7) 2 Ph. 777.
37 Ch, D. 74.
(8) Ibid. 774.
(9) (1582) 5 Rep. 16 a.
1 Ch.
"CHANCERY DIVISION.
399
COLLINS M.E.
This appeal has been most clearly and
c. A.
succinctly argued on the part of the appellant, but I have come
1906
to the conclusion that the learned judge's judgment is right. In NISBET
point of fact, so exhaustive does his judgment appear to me to A?D POTTS'
be, that I should not venture to add or substitute anything of
la re.
my own for it, except that I feel bound, in deference to the very
able arguments which have been addressed to us, to give my
decision in my own language.
The question before us arises in this way. An application has
been made by the appellant, the vendor, to have it declared that
he has made a good title and one which the purchaser ought to
accept. What the vendor himself bought was what he himself
describes in his affidavit as a "squatting title." A certain person
had remained in undisturbed possession of freehold land for
^more than the statutory period, beginning in or about 1878, so
that, at the expiration of the necessary time, he had acquired
such right as arises to a person who has been in possession of
land under the Statute of Limitations for the statutory period,
with the result that the title of the true owner was extinguished.
Now the appellant, Nisbet, who purchased that squatter's title,
contented himself with that title; that is to say, he contented
himself with limiting his inquiries to the state of things subse
quent to 1878. But subsequently to the date of the present
contract the present purchaser, Potts, ascertained, not from any
materials actually placed before him when examining the title,
but from independent information, that, in point of fact, the
person who had been dispossessed by the squatter had, in the
year 1872, he being then the owner of the land in question,
entered into a covenant with the owner of the adjoining land
whereby certain building restrictions were placed on the user of
the land, the subject of this .contract. Having thus had notice
of that covenant, the purchaser, Potts, made a requisition upon
it to the vendor, whereupon the vendor raised two contentions:
First, that it was a matter with which he was absolutely uncon
cerned : that the squatter under whom he claimed had, by
virtue of the Statute of Limitations, acquired a title para
mount to any preceding covenants or obligations entered into
by the original owner of this property, so that any right
400
OHANOEEY DIVISION.
c. A.
1906
[1906]
arising out of those covenants or. obligations had become extinguished together with the extinguishment of the title of that
NISBET original owner, and the squatter had, as it were, come into the
AND POTTS' possession of a clean slate and was able to pass on the property
in re. entirely free from any such covenants or obligations ; and that,
coiHns M.R. therefore, inasmuch as he, the present vendor, was a purchaser
from the squatter, he in his turn received the land discharged
from those covenants or obligations, and was able to pass it on
to any purchaser from him. Accordingly, Nisbet, the present
vendor, insisted that it was wholly immaterial whether or not
any former owner prior to the statutory title acquired by the
squatter had imposed any such obligation upon himself and upon
the land.
Then the second point was this, that even if this restrictive
covenant was an obligation imposing such a burden upon the
land as would pass on through the squatter to any purchaser
from him, yet that such purchaser, unless he was a purchaser
with notice of the burden, would be discharged from it; and it
was contended that Nisbet, the purchaser from the squatter,
had neither actual nor constructive notice of the burden. .
With regard to the first point, the real question seems to me
to be whether or not the effect of the Statute of Limitations was
to vest the land in the squatter, at the expiration of the statutory
period, discharged from the obligation of the covenant which
had been created by the. owner whose title had been " extin
guished." Now, if the land was not so discharged from the
obligation of the covenant, then the burden of that covenant
remained on the land to which the squatter had become entitled
simply through the extinguishment of the right of the dis
possessed owner to turn him out; and inasmuch as that burden
still continued to be imposed on the land, notwithstanding the
squatter's acquisition of it, every person who took that land from
the squatter would take it subject to the obligation of that
covenant, unless he could prove that he was a purchaser for
value without notice.
Now, whether or not that burden was imposed upon the land
in the hands of the squatter depends upon the nature of the
obligation created by the restrictive covenant. That there was
1 Oh.
such
right
ever.
from
OHANOEEY DIVISION.
401
402
CHANCERY DIVISION.
c. A.
1906
NTSBET
[1906]
T h a t is t h e
whole ri ht
tne
g"ished-"
8
squatter acquires,
in re.
namely, the extinguishment of a title adverse to his own.
coiiins M.n. But how does that affect the question here ? What machinery
is there in the Statute of Limitations affecting the right of a
covenantee who has the benefit of a restrictive covenant?
Nothing in the Act has been pointed out to us which touches that
right at all. In fact, unless and until the right of the covenantee
has been in some way infringed, so that it becomes necessary for
him to enforce that right, there is no reason, either in principle
or in fairness, why his right should be in any way affected. The
person who stands simply with the benefit of a negative ease
ment is certainly not put upon the assertion of his right unless
and until that right has been interfered with in some way ; and
it is a matter of absolute indifference to him what person is the
owner of the land over which that right exists until that land
is used in some manner incompatible with the assertion of that
right on the part of the person entitled to it. It seems to me,
therefore, that the principal question before us is whether or not
Sir George Jessel was right in the view that he took in London
and South Western By. Co. v. Gomm (I), that an obligation created
by a restrictive covenant is in the nature of a negative easement,
creating a paramount right in the person entitled to it over the
land to which it relates. If that is so, then, in the present case,
the squatter, by his squatting, simply acquired a right to land
subject to this incident. Of course, the burden of that incident
must pass to all persons who subsequently become assignees of
the land, and the squatter is not entitled to hand it over freed
from the obligation that was imposed on the person whose title
he has ousted by his possession.
^ONTKTCT'
Now, is that the law or not ? In the first place, I do not think
there was anything inconsistent in the view taken by Sir George
Jessel with the law as laid down in the leading case of Tidk v.
Moxhay (2), though, no doubt, words are used there pointing to
the equity arising out of the injustice which would accrue if a
(1) 20 Ch. D. 562.
1 Ch.
403
CHANCERY DIVISION.
404
CHANCERY DIVISION.
C. A.
190G
[1906]
of this Court in more recent casesnamely, in Rogers v. Hosegood (1), Hall v. Ewin (2), and in Hayivood's Case. (8)
NISBET
Therefore, it seems to me that the law is clearly established in
accor( ance
CONTOACT
i
with Sir George Jessel's view of the subject, and
in re. consequently that in this case the burden of the restrictive
coiiins M.R. covenant did remain imposed on the land so as to be binding
upon any person who could not shew that he had bought for
value and without notice. Consequently it appears to me that
the squatter's title does not in any way assist the appellant in
this case.
Then that brings me to the' second point. Has the appellant,
the present vendor, shewnas the burden is upon him to shew
that, having bought this land for value, he bought without
notice of this incumbrance ? There, again, it seems to me quite
clear that he has not discharged that burden. He admits that he
accepted, possibly he bound himself to accept, a title commenc
ing in 1878. He was entitled to demand a title of forty years,
and it seems perfectly clear now that if he had insisted upon a
title of forty years he must have had before him the existence of
a covenant entered into as late as 1872 by the person whose title
' was displaced or " extinguished "to use the expression in the
statuteby the possession for the statutory period of the person
through whom the present vendor, Nisbet, now claims. That is
equivalent to notice. In point of fact, by exercising reasonable
care in demanding the title to which he was entitled, Nisbet
must have discovered the fact that there was this burden ; and,
if so, that is proof that he must be taken as having had con
structive notice of it. It is not even necessary to go as far as
that, because I agree with Farwell J. in this, as in all other
points of the case, that, the burden being upon Nisbet to shew
that he had himself bought for value without notice, he has not
discharged that burden by simply saying, " I did not push my
inquiries beyond that." It is said to be doubtful whether he
could have actually discovered the existence of the covenant:
but that does not seem to me to discharge the burden of proof
that lies upon the appellant; and therefore I am of opinion, on
(1) [1900] 2 Ch. 388.
(2) 37 Ch. D. 74.
(3) 8 Q. B. D. 403.
1 Ch.
CHANCERY DIVISION.
405
C. A.
1906
NISBBT
AND POTTS'
CONTRACT
/ re '
CHANCERY DIVISION.
406
[1906]
C. A.
1906
1 Oh.
CHANCERY DIVISION.
407
408
CHANCERY DIVISION.
[1906]
1906
CONTRACT
in re.
Romer L.J.
'
1 Ch.
OHANOBBY DIVISION.
409
c. A.
1906
NlSBET
AND POTTS'
CONTRACT,
In re.
Romer L.J.
410
C. A.
190C
NlSBET
AND POTTS'
CONTRACT,
In re.
CozensHardy ]j.J.
CHANCEET DIVISION.
[1906]
1 Ch.
OHANOEET DIVISION.
411
C. A.
the property free from the restrictive covenant, if he had made no
1906
inquiry. On the contrary, I think he would have been bound by
it, and for this reason. He had agreed by the bargain contained NlSBET
AND POTTS'
in the conditions of sale to accept a title of less than forty years. C O N T R A C T ,
In re.
That cannot relieve him from all knowledge of the prior title, or,
Cozensit would come to this,that, if a man was content to purchase Hardy
L.J.
property on the condition that he should not inquire into the
title, he would acquire a title free from any existing restrictions,
and would not have constructive notice of any incumbrance."
Of course, the law does not permit of anything so absurd
as that, and I should be sorry to think that there could be
any real doubt upon the subject. In the case of a lessee
the law has gone possibly one step further, because in Patman
v. Harland (1) it has been held, and so far as I know it has never
been questioned, that a lessee is affected with notice of any
restrictive covenants the existence of which he would have
learned if he had investigated the lessor's title, even though,
since the Vendor and Purchaser Act, 1874, the lessee is not
entitled, under an open contract for a lease, to require the pro
duction of the lessor's title. As Sir George Jessel in that case
said, that alteration of the law did not really prevent or interfere
with the application of Tulle v. Moxhay. (2) If the lessee
wanted to escape from that obligation, he, in agreeing to take
the lease, should have required the production of the lessor's
title. So that the doctrine has been extended, and I venture to
think properly extended, not merely to a case where a purchaser
under an open contract would be affected with notice of a
document forming part of the chain of title, but also, at least in
the case of a lease, to a case where a purchaser under an open
contract would not. be entitled to require production of the
documents which alone could give him notice. I think that a
squatter, who has been in possession for more than twelve years,
is certainly in no better position than any other person. He
cannot make a good title without delivering an abstract extend
ing over the full period; and if the purchaser is willing to
take a title depending upon the Statute of Limitations and
the effect of s. 84, he must take such title subject to the
(1) 17 Oh. D. 353.
OHANCEEY DIVISION.
412
C A.
190G
NISBET
oE?
in re.
Cozens-
[1906]
Hardy L.J.
C.A.
1906
lei. 5, 6.
2.]