Topic 3 - Equitablr Interest AndDoctrine Of Notice Flashcards
Birch v Ellames
A person shall have constructive notice of an equitable mortgage if he knows the deed is deposited with someone and he fails to inquire into the reason.
Pato v Hammond
Constructive Knowledge is imputed where the purchaser fails to call for the deed or is satisfied with an unreasonable reason.
Daniels v Davison
There was a person was already in possession of the land, constructive notice was imputed on the purchaser.
Ogunbambi v Abowaba
The Oloto family in Lagos sold a portion of its family property to x who paid the purchase price and was given a receipt. There was implied agreement to execute a conveyance on demand. X went into possession but no conveyance was executed in his favour. Subsequently, the Oloto family sold and conveyed the same land to the defendant, Y.
Held:
Buying land from the Oloto family is buying a law suit. Though the defendant had a conveyance, he was bound by the equitable interest vested in X. The ratio is based on the fact that Y was aware of X’s earlier equitable interest in the property. He was not a bonafide purchaser for value without notice.
It was also held that a purchase receipt though not admissible to prove title, was nevertheless admitted as an acknowledgment of the payment of money which, coupled with the X’s possession, raised a presumption that he entered into possession under a contract from which arose an equitable interest. Thus Verity. A.P said “It is true that the ‘mere payment of money is not sufficient part performance, for it is not unequivocal in the absence of contract. But where it is coupled by, his being let into possession of the property, it is to be presumed that he entered into the property not as a stranger and therefore, prima facie, trespasser but under a contract for sale of land; and from this arises an equitable interest which may be converted into legal estate by specific performance” “The case is indeed in this respect like many which come before this court: one in which the Oloto family either by inadvertence or design sell or purport to sell the same piece of land at different times to different persons. It passes my comprehension how in these days, when such disputes have come before this court over and over again, any person will purchase land from this family without the most careful investigation, for more often than not they purchase a law suit, and very often that is all they get”
Orasanmi V Idowu
The respondent had been in possession for 20 years but was not in possession at time of sale. The court held that the purchaser was not negligent for constructive notice could not be implied here.
Jared v. Clements (1903) 1 Ch. 428
Thus where a solicitor discovered an equitable mortgage on the title was deceived by a forged receipt into believing that the mortgage had been discharged, the purchaser had imputed notice of mortgage and was bound by it:
Olowu v Oshinubi
The same fact as in the case of ogunbambi v Abowaba
ADU KOFI vs. G.A ADJE 1 (1942) 8 WACA 198.
A landed property was sold at two different auctions over two different writs issued by two different Tribunals of competent jurisdictions, the court held that the plaintiff who bought the landed property in the earlier auction which was a day before the 2nd auction had in point of time, obtained a better title and that the subsequent sale to the defendant had no effect.
Cave v Cave
X, a sole trustee used trust money to purchase a parcel of land and conveyed the land to Y, his brother. Y then mortgaged the land to A by way of legal mortgage and then to B by way of equitable mortgage. Both A and B were unaware of the trust.
Held:
It was held that A’s legal mortgage had priority over the beneficiary’s interest whilst B’s equitable mortgage must be postponed to the beneficiary’s interest, being later in time i.e The interests of the beneficiaries had priority over B’s mortgage, since they were earlier in time
Rice v Rice
FACT: A conveyance on which a receipt clause for the purchase price was endorsed was handed over to the purchaser, without the vendor actually receiving the purchase money. The vendor therefore had an equitable lien for the unpaid purchase money. Subsequently, the purchaser deposited the conveyance with Y, who had no notice of the vendor’s equitable lien. The question for determination was who of the two was entitled to priority. Held:
It was held that Y had priority over the vendor; that though the vendor’s equity was earlier in point in time, nevertheless the equities were not equal since his conduct had facilitated the creation of the later equity. Under the rule in Dearle v Hall a subsequent equitable encumbrancer can have priority over an earlier equitable encumbrancer.
Pilcher v Rawlins
Fact: A father settled real estate on trust for his children. One of the trustees, P, was the uncle of the beneficiaries. The trustees advanced money to R on the security of a mortgage (the mortgage deed explained the existence of the trust). Two of the trustees died leaving P as the sole trustee. P and R devised a fraud whereby the property would be mortgaged to S and L, who had no notice of the trust or the existence of the beneficiaries’ equitable interest. The fraud was revealed and the beneficiaries sought a declaration that S and L took legal title subject to their equitable proprietary rights in the property and an order that it be reconveyed to the trust. This case called for a consideration of how the competing interests of innocent parties ought to be balanced, where it was not possible to give effect to one without unduly prejudicing an equally blameless party. Moreover, the court were required to address the extent of the defence available to a bona fide purchaser for value, without notice of any pre-existing equitable interests.
Held:
The court found in favour of S and L, whom thus took their charge free of B’s equitable rights. S and L had acted diligently and reasonably believed they had taken good title, they had ‘neither knowledge nor means of knowledge’ of the trust; where the equities were equal, as was the case here, the law must prevail.
Fire insurance Company v. Whipp (1884) 26 ch.D 482.
Fry L.J stated the following relevant principles.
First, the court will postpone the prior legal estate to a subsequent equitable estate where the owner of the legal estates has assisted in or connived at the fraud which has led to the creation of a subsequent equitable estate without notice pf the prior legal estate. Such assistance or connivance may be inferred from an omission on the part of the prior legal owner to use ordinary care in inquiring after or keeping title deeds, especially where such conduct cannot be explained.
Secondly, where the mortgagee of the legal estate has constituted the mortgagor, his agent with authority to raise money or the security of the mortgage, and the estate thus created has by the fraud or misconduct of the agent been represented as being the first estate.
Note however, that a prior legal estate will not be postponed to a subsequent equitable estate on the ground of mere carelessness or want of prudence on the part of the legal owner.
Tulk v Moxhay
The plaintiff sold part of his land to one Elms who agreed not to build upon it but to preserve it in its existing condition. The land was later sold to the defendant who though, knew of the restriction imposed on the use of the land, proposed to build on it. The plaintiff brought action.
Held:
The injunction was granted against the erection of the proposed building on grounds of the defendant ‘s awareness of the existence of the restrictive covenan
The British and French Bank Ltd v Akande, (1961) All NLR 820
The defendant deposited the title deed of his property with the plaintiffs to secure overdraft facilities. The plaintiffs granted the defendant an overdraft during 1958-60. By the end of April 1960, the defendant had become indebted to the plaintiffs for the sum of £869.18.4d.: for which sum the plaintiffs obtained judgment on the 20th June 1960. It was the defendants’ defence that the title deed of his property was deposited with the plaintiffs to secure overdrafts other than that in respect of which the plaintiffs had obtained judgment against him.
Held:
On careful consideration of the evidence, the judge accepted the evidence given on behalf of the plaintiffs and rejected that given by the defence. He was fortified in this view by the fact that the plaintiff’s interest was noted on the insurance policy taken out by the defendant in respect of the property to which the deed related, the purpose of this being to protect the plaintiff’s interest in the property.
The court held that an action for foreclosure is available notwithstanding the fact that the plaintiff had earlier sued on the personal covenant except to repay, had obtained judgment.
here was a person was already in possession of the land, constructive notice was imputed on the purchaser.
Ayorinde v. Scolt.3021
Here the plaintiff sold and conveyed a plot of land in Lagos to X. X at the time of the conveyance paid only N4,000 of the full purchase price of Nl2,000, agreeing in writing to pay the balance within 30 days. The conveyance contained a receipt which stated erroneously that the full purchase price had been paid. X failed to pay the balance, and he subsequently sold the land to the defendant. The plaintiff’s claim for an order of sale of the land to satisfy his equitable lien for the unpaid purchase-money was dismissed by Odesanya J. on the ground that the defendant was a bona fide
Coker v Ogunye
Principles
Registration of an instrument under the Land registration laws is regarded as one of the factors fixing a purchaser with notice
Case Summary
An objection was taken against the tendering in evidence of an agreement for sale of land on the ground that the agreement has not been registered under the Land Registration Ordinance. Held: The court overruling the objection, held that the documents were not such as were required to be registered under the Land Registration Ordinance.
Jamal v Saida
The court held that an agreement of sale is a registrable instrument.
Ogunbambi v Abowaba (principle)
Receipt of purchase price is a registrable instrument.
Akande v Elemosho
Contrary to Omosanya v Anifowose, the court held that registration of a registrable instrument confers a constructive notice.
