Lysaght v Edwards: ChD 20 Mar 1876

The testator had agreed to sell a farm, but died before completion.
Held: The farm passed under a devise of ‘all the real estate which at my death might be vested in me as trustee.’ On the making of contract for the purchase of land, the purchaser acquired an immediate equitable interest in the land.
The court discussed the equitable doctrine of conversion: ‘It appears to me that the effect of a contract for sale has been settled for more than two centuries; certainly it was completely settled before the time of Lord Hardwicke, who speaks of the settled doctrine of the Court as to it. What is that doctrine? It is that the moment you have a valid contract for sale the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase-money, a charge or lien on the estate for the security of that purchase-money, and a right to retain possession of the estate until the purchase-money is paid, in the absence of express contract as to the time of delivering possession’. But the trusteeship is not an ordinary trusteeship. ‘It must, therefore, be considered to be established that the vendor is a constructive trustee for the purchaser of the estate from the moment the contract is entered into.’
Sir George Jessel MR
(1876) 2 Ch D 449, [1876] UKLawRpCh 123
Commonlii
England and Wales
Cited by:
CitedJerome v Kelly (HM Inspector of Taxes) CA 20-Dec-2002
The taxpayer had contracted for the disposal of land in three tranches. The later sales were by a Bahamian company to whom the land was assigned subject to the contract.
Held: The later sales were under the original contract. That contract . .
CitedJerome v Kelly (Her Majesty’s Inspector of Taxes) HL 13-May-2004
In 1987, trustees holding land for various beneficiaries in undivided shares entered into a contract to sell it to a purchaser. In 1989 Mr and Mrs Jerome, who were absolutely entitled to interests in the land, assigned part of their beneficial . .
CitedEnglewood Properties Limited v Patel and Another ChD 16-Feb-2005
The claimant was a property developer, which sought to sell a row of shops at auction. One lot was a Woolworths store, where the company owned both freehold and leasehold interests, with Woolworths occupying an underlease, which the claimant had . .
CitedScott v Southern Pacific Mortgages Ltd and Others SC 22-Oct-2014
The appellant challenged a sale and rent back transaction. He said that the proposed purchaser had misrepresented the transaction to them. The Court was asked s whether the home owners had interests whose priority was protected by virtue of section . .

These lists may be incomplete.
Updated: 17 July 2021; Ref: scu.196884