A grant was given to repurchase property, but was void at common law for the uncertainty of the triggering event.
Held: The ‘right’ to ‘take away’ the claimants’ estate or interest in the farm was immediately vested in the grantee of the right to repurchase.
Jessel MR set out the basis on which an equitable interest arises in the case of an option: ‘The right to call for a conveyance of the land is an equitable interest or equitable estate. In the ordinary case of a contract for purchase there is no doubt about this, and an option for repurchase is not different in nature. A person exercising the option has to do two things, he has to give notice of his intention to purchase, and to pay the purchase money; but as far as the man who is liable to convey is concerned, his estate or interest is taken away from him without his consent, and the right to take it away being vested in another, the covenant giving the option must give that other an interest in the land.’
He went on to consider the possibility of it being enforced in equity: ‘With regard to the argument founded on Tulk v. Moxhay, 2 Ph. 774 that case was very much considered by the Court of Appeal in Haywood v. The Brunswick Permanent Benefit Building Society, 8 Q.B.D. 403, and the court there decided that they would not extend the doctrine of Tulk v. Moxhay to affirmative covenants, compelling a man to lay out money or do any other act of what I may call an active character, but that it was to be confined to restrictive covenants. Of course that authority would be binding upon us if we did not agree to it, but I most cordially accede to it. I think that we ought not to extend the doctrine of Tulk v. Moxhay in the way suggested here. The doctrine of that case appears to me to be either an extension in equity of the doctrine of Spencer’s case to another line of cases, or else an extension in equity of the doctrine of negative easements.
The covenant in Tulk v. Moxhay was affirmative in its terms, but was held by the court to imply a negative. Where there is a negative covenant expressed or implied, the court interferes on one or other of the above grounds. This is an equitable doctrine, establishing an exception to the rules of common law which did not treat such a covenant as running with the land, and it does not matter whether it proceeds on analogy to a covenant running with the land or on analogy to an easement. The purchaser took the estate subject to the equitable burden, with the qualification that if he acquired the legal estate for value without notice he was freed from the burden.’
Lindley LJ said that because in Haywood v. Brunswick Permanent Benefit Building Society (1881) 8 Q.B.D. 403 it was sought to extend the doctrine of Tulk v. Moxhay: ‘to a degree which was thought dangerous, considerable pains were taken by the court to point out the limits of that doctrine.
The conclusion arrived at was that Tulk v. Moxhay, when properly understood, did not apply to any but restrictive covenants.’
Jessel MR, Lindley LJ
(1882) 20 ChD 563
England and Wales
Cited – Tulk v Moxhay 22-Dec-1848
Purchaser with notice bound in Equity
A, being seised of the centre garden and some houses in Leicester Square, conveyed the garden to B in fee, and B covenanted for himself and his assigns to keep the garden unbuilt upon.
Held: A purchaser from B, with notice of the covenant, was . .
Cited – Haywood v The Brunswick Permanent Benefit Building Society CA 1881
The land had been conveyed in consideration of a rent charge and a covenant to build and repair buildings.
Held: A mortgagee of the land was not liable on the covenant either at law or in equity even though he had notice of it.
Brett LJ . .
Cited – Neville and Another v Wilson and Others CA 4-Apr-1996
A parole agreement by all the shareholders in a company, to liquidate it, created a constructive trust. That a specifically enforceable agreement to assign an interest in property, created an equitable interest in the assignee, was unquestionably . .
Cited – Sainsbury’s Supermarkets Ltd v Olympia Homes Limited, Hughes etc ChD 17-Jun-2005
The claimant sought rectification of the land register. In a development deal, an option agreement had not been registered, and the land sold on. The land was required to allow the building of a roundabout necessary for the intended store. An . .
Cited – Chattey and Another v Farndale Holdings Inc and others CA 11-Oct-1996
The plaintiffs had paid deposits for apartments which were to be built. After the developer became insolvent the plaintiffs sought recovery of the deposits, saying they had a lien which preceded the claims of chargees.
Held: The one appeal . .
Cited – Rhone and Another v Stephens HL 17-Mar-1994
A house was divided, the house being retained along with the roof over the cottage, and giving a covenant to repair the roof on behalf of the owner of the house. The cottage owner sought to enforce the covenant against a later owner of the house. . .
Lists of cited by and citing cases may be incomplete.
Updated: 22 December 2021; Ref: scu.180918