Henderson v Astwood: PC 1894

A sale was undertaken by a mortgagee, ostensibly to a third party but in reality to his nominee. The land was conveyed by the mortgagee to his nominee, who executed a declaration that he held the land in trust for the mortgagee, and who subsequently sold and conveyed the land to a bona fide purchaser for value without notice of the defect in the title. This last-mentioned sale was held to be valid, but the transaction between the mortgagee and his nominee was held to be ineffective to extinguish the equity of redemption. The result was that on the taking of the mortgage account the mortgagor was entitled to the benefit of the sale to the ultimate purchaser. ‘The so-called sale was of course inoperative. A man cannot contract with himself. A man cannot sell to himself, either in his own person or in the person of another.’
Lord Macnaghten
[1894] AC 150
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Updated: 10 December 2020; Ref: scu.223767