The vendors agreed to sell a house which they had insured against fire risk. The house was damaged by fire after contract but before completion, and the issue was whether the purchaser was entitled to the benefit of the insurance.
Held: (Majority) The purchaser, who had completed his contract, was not entitled as against the vendor to the benefit of the insurance.
The court discussed the trusteeship arising on a contract for the sale of land: ‘An unpaid vendor is a trustee in a qualified sense only, and is so only because he has made a contract which a Court of Equity will give effect to by transferring the property sold to the purchaser . .’, but the trusteeship arose in respect of the property only and not any associated insurance policy. Brett LJ: it was a misnomer to describe the vendors as trustees of the house, but even if they were trustees the contract of insurance did not run with the land. James LJ (dissenting) The vendors were trustees and held the insurance money for the purchaser because any benefit which accrued to a trustee by reason of his legal ownership was taken as trustee for the beneficial owner.
Judges:
Cotton LJ, Brett LJ, James LJ
Citations:
(1881) 18 Ch D 1, [1881] UKLawRpCh 110
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – Jerome 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 . .
Cited – Englewood 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 . .
Cited – Nelson v Greening and Sykes (Builders) Ltd CA 18-Dec-2007
The builders had obtained a charging order for the costs awarded to them in extensive litigation, and a third party costs order but without the third party having opportunity to test the bill delivered. They had agreed to sell land to the defendant, . .
Cited – Scott 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 . .
Cited – Michaels v Harley House (Marylebone) Limited CA 6-Nov-1998
Appeal from dismissal of claim for relief from forfeiture . .
Lists of cited by and citing cases may be incomplete.
Land, Contract, Equity
Updated: 26 November 2022; Ref: scu.196887
