The Doctrine Of Notice Flashcards
Explain the doctrine of notice
Equity evolved the doctrine of notice to protect equitable interests which it has accorded recognition. By this, an equitable interest is good until the property to which it is attached is acquired by a bona fide purchaser for value of the legal estate without notice of the equitable interest. Once a plea of bona fide purchase of legal estate for value without notice is made and sustained in law, all other interest in the same land are postponed. The plea has been described as “an absolute. unqualified, unanswerable defence and an unanswerable plea.”*
What is a Bona fide purchaser ?
The equitable interest is good until the property is acquired by a bona fide purchaser for value of legal estate without notice of equitable interest. The salient points of the
doctrine are as follows:
3.1.1. Bona fide
This requirement embodies the whole equitable idea of conscience. It must be admitted that the conscience of one who pays for a legal estate and who is ignorant of the equitable interests to which it is subject is without blemish. But if he has notice of the equitable interest and nevertheless purchases the property, he will forfeit privileges of a purchaser in the eyes of equity on the ground that he had not acted in good faith.
Types of notice
Actually notice
Constructive notice
Imputed notice
What is actual notice?
(a) Actual notice
Here the purchaser himself acquires knowledge of the existence of the equitable interest. It has been said that the information must be gained either from the purchaser’s own observation or from a person interested in the property and in the course of the nego-tiations, but probably a purchaser cannot safely disregard information from any source, provided a reasonable and prudent man of business would have acted on it. Vague rumours. however, will not affect a purchaser with notice.
What is constructive notice?
The principle of equity is that where the purchaser of would have discovered existence of the interest if he had used ordinary diligence and care in investigating the property and its title, he is deemed to have notice of that interest, even thound be was not actually aware of it 3
Thus, for instance, a purchaser of land will have constructive notice of an equitable mortgage created by deposit of title deeds if he knows that the deeds are deposited with some person and he fails to inquire into the reason,’ or if he neglects to call for the deeds or is satisfied with an unreasonable excuse for their non-production.
As well as examining the title deeds of the property, the purchaser should also inspect the land itself, for he will be deemed to have constructive notice of the interest of any person in occupation of the land.• Thus a lessee, X, who obtains a formal lease, will have constructive notice of the interest of a person, Y, who is in possession of the land under an agreement for a lease, and the equitable interest of Y will prevail over the legal estate of X.
What is imputed notice?
If a purchaser employs an agent such as a solicitor or estate agent, any actual or constructive notice which the agent receives is imputed to the purchaser. Thus, for example, where a solicitor in investigating the title discovered the existence of an equitable mortgage over the property, but was deceived by a forged receipt into believing that the mortgage had been discharged, the purchaser was held to have imputed notice of the mortgage and was bound by it.?
Name a case under constructive notice?
Thus, in Kaba & ors v. Young.?? the plaintiff claimed possession and mesne profits in respect of certain premises which were resisted by the 2* defendant on the ground that he was in possession through his tenant, the first defendant. It was found that before the plaintiff’s purchased, vendor had told the first defendant to pay rent to the second defendant and that the plaintiff was aware of those facts affecting his title as prior to the plaintiff’s purchase of the land and 2nd defendant had paid the vendor part of the sum of money agreed upon for the premises.
It was held that notice of the land being in occupation of a person other than the vendor is a notice to a purchaser that the person in possession has some interest in the land and a purchaser having notice of that fact is bound either to inquire what that interest is or to give effect to it, being bound by all equities which the tenant could therefore enforce against the vendor. The plaintiff’s claim for possession was therefore rejected.
Where two or more legal interest are created in a property, what will happen?
Where two or more legal interest in a property conflict:
The first in time prevails. In Adu Kofi VAdje, a single landed property was validly sold at two authorised auctions to different people at different times. The court held that the plaintiff who bought the property at the earlier auction obtained a better title
