778. 786, 789

(e) Above, p. 195. (f) Ser above, p. 197.

(g) See above, pp. 37, 88, and oases stated below, pp. 204 -207.

(h) On this point see the writer's argument in his Conveyancing Statutes, Appendix A., p. 581, written before the case of Nottingham, etc. Co. v. Butler. The position there taken by the writer with regard to defects known to the vendor (p. 535, last sentence) is justified by the judgment of the C. A. in this case: 16 Q. B. D. 786, 789. As to the position of a vendor silling honestly and in good faith without knowledge of a defect in his title, see Re Woods and Lewis's Contract, 1898, 1 Ch. 433, 2 Ch. 211.

It is of course open to any vendor by special stipulation either to exonerate himself altogether from the obligation of showing title or to bind the purchaser to accept any partial or defective title; and if such stipulations be fair and explicit, so that the purchaser cannot reasonably be misled with regard to the title he is contracting to take, they will be enforced by the Court in granting specific performance at the vendor's suit (i). Thus purchasers have been ordered to perform specifically contracts obliging them to take such title as the vendors had (k). Such a stipulation precludes objection to the vendor's title, but does not relieve him of the obligation of abstracting and verifying it (k). But a stipulation that the vendor shall not be required to show any title, whether to the whole or to any part of the lands sold, is undoubtedly valid, and exempts him from the necessity of abstracting or otherwise proving his title (l). As we have seen (m), however, the last-mentioned stipulation alone would not preclude objection to the title on account of a defect discovered from other sources; but if words were added obliging the purchaser to refrain from any independent investigation of the title, he would certainly be bound thereby, both at law and as regards the specific performance of the contract. On this point the leading authority is Hume v. Bentley (n), where leaseholds were sold under a condition that the lessor's title would not be shown and should not be inquired into (o). The vendor sued for specific performance, and on the usual reference (p) as to title, the purchaser took the objection that the lease, which had been granted by a canal company, was void, as it appeared from the Acts of Parliament incorporating the company that the company had no power to acquire land or grant leases. It was held however that a vendor may lawfully stipulate that the purchaser shall accept the title shown without objection or inquiry; and that the words used amounted to such a stipulation and precluded the purchaser from looking into the lessor's title for any purpose. And the purchaser's objection was disallowed. As we have already noted (q), when it is intended that the purchaser shall take lands sold subject to some particular defect of title known to the vendor, such as an easement, restrictive covenants, a mortgage or a rentcharge, the stipulation obliging him to do so must clearly call his attention to the incumbrance, to which he is to submit: otherwise he will not be bound to specific performance according to the letter of the contract. The cases to which we have referred upon considering the effect of sect. 3 (3) of the Conveyancing Act of 1881 (r) also illustrate the effect given at law and in equity to special stipulations as to title.

Special stipulation as to title.

Hume v. Bentley.

(i) Above, p. 62; see Re Haedicke and Lipski'.i Contract, 1901, 2 Ch. 666.

(k) Freme v. Wright, 4 Madd. 364; Keyse v. Hayden, 20 L. T. O. S. 244; Hume v. Pocock, L. R. 1 Ch. 379, 385. See also Wilmot v. Wilkinson, 6 B. & C. 506; Tweed v. Mills, L. R. 1 C. P. 39; Sug. V. & P. 337; 1 Dart. V. & P. 150, 151, 5th ed.; 168-170, 6th ed.; 163-165, 7th ed.; 1 Davidson, Prec. Conv. 544, 4th ed.; Fry, Sp. Pert. Sec. 1323, p. 591, 3rd ed.; p. 565, 4th ed.

(l) See Southby v. Hutt, 2 My. & Cr. 207, 212, 213.

{m) Above, p. 200.

(n) 5 De G. & Sm. 520; 16 Jur. 1109.

(o) See above, p. 200.

(p) Above, p. 166, n. (n).

Here we may notice a case in which a purchaser may be obliged to take lands subject to some defect of title or particular incumbrance, without any written stipulation to that effect. Where the vendor's obligation to show a good title is not an express term of the contract, but is merely implied, as in the case of an open contract (s), it is open to him to prove that the purchaser bought with notice (though given by word of mouth only) that a good title could not be made, either wholly or partially; and the vendor will then be exonerated from showing title to the extent indicated by such notice (t). But where the vendor has expressly contracted to show a good title, he is not permitted to modify the terms of his written agreement by giving oral evidence of any such notice (u).

A purchaser with notice that a good title cannot be made.

(q) Above, pp. 73. n. (t), 176, 197.

(r) Above, pp. 195 sq. (s) Above, p. 32.

"We will now consider the authorities establishing the difference, to which we have before referred (x), in the position of a purchaser under a special contract as to title when he is resisting specific performance in equity and when he is seeking to recover his deposit at law. In Best v. Hamand(y), a railway company sold land as superfluous land under conditions that the purchasers should assume (without proof) that everything had been done by the company to enable them to sell the land as surplus land, and that the deposit should be forfeited if the purchasers failed to comply with the terms of the agreement. The purchaser discovered from other sources that some of the adjoining owners had not waived their right of pre-emption; and insisted on this objection to the title (z). The vendors thereupon claimed the deposit as forfeited; and it was held by the Court of Appeal, reversing the decision of Hall, V.-C, that the purchasers were not entitled to recover it, as they had in effect contracted to take the vendor's title without objection on this point, and had not therefore abided by the terms of the contract. But if in this case the vendors had sued for specific performance, it appears that the purchasers might have resisted their claim, except on condition of the vendors showing that they could give at least a good holding title; for the vendors, having required the purchasers to assume the truth of a statement which the vendors knew to he false, had made a misrepresentation sufficient to preclude them from enforcing specific performance according to the letter of the contract (a). So in Nottingham Patent Bride and Tile Co. v. Butler (b), we have seen that land was bought subject to the condition that it was sold subject to any matter or thing affecting the same, whether disclosed at the time of sale or not, and it was held that, the land being subject to restrictive covenants known to the vendor but not disclosed at the time of sale, the vendor could not enforce specific performance: but it was intimated that the purchaser would not have been able to recover his deposit, if he had not bought on the faith of the vendor's solicitor's representation that the land was free from such covenants. Again, in Re Davis to Cavey (c) property was sold as "leasehold business premises" under conditions that the title should commence with the conveyance to the vendors, and that no objection should be made in respect of anything contained in the lease. No information as to the contents of the lease was given and no opportunity of inspecting it. The purchaser discovered after the sale that the lease contained covenants prohibiting the tenant from carrying on any trade or business on the premises. Stirling, J., in a vendor and purchaser summons taken out by the purchaser, held that, regard being had to the sale of the property as business premises, the purchaser was entitled to have an assignment of property where he could carry on any business (d), and so the vendor had not shown such a title as the purchaser was compelled to accept. But he declined to order the return of the deposit, pointing out that Best v. Hamand (e) showed that the right to recover a deposit at law was not governed by the same considerations as the right to resist specific performance in equity. He therefore left the purchaser to bring an action at law, if so advised, for the return of his deposit. In Be National Provincial Bank: of England and Marsh (f), land was sold under the condition that the title should commence with a conveyance dated in 1869, and the prior title should not be required, investigated or objected to. The purchaser discovered from other sources that the grantor in the conveyance of 1869 derived title under a will which, the purchaser was advised, conferred a life estate only. The purchaser insisted on this objection, and took out a vendor and purchaser summons for the return of his deposit. North, J., admitted that the vendors might have a difficulty in enforcing specific performance, but held that the purchaser had no right to the return of his deposit, as the stipulation plainly barred independent investigation of and all objection to the earlier title (g), and the purchaser had not therefore observed the terms of the contract. Finally, in Be Scott and Alvarez's Contract (h), land held by underlease was sold under a condition that the purchaser should make no objection or requisition in respect of the intermediate title between the underlease and an assignment thereof in 1891, but should assume that such assignment vested in the assignees a good title for the residue of the term. The purchaser's solicitor nevertheless asked questions as to this intermediate title of the vendor's solicitor, who gave him certain information tending to cast suspicion on such title. The vendor's solicitor asserted that this was done without prejudice to the special condition. The purchaser maintained that, as the vendor had given information as to the intermediate title, he could not oblige the purchaser to accept the title shown without clearing up the suspicions raised (i). The purchaser took out a vendor and purchaser summons in support of this contention, which prevailed with Kekewich, J., but was disallowed in the Court of Appeal. The Lords Justices held that, to enable the purchaser to escape from the stringent condition into which he had entered, it was not enough to show that the title was suspicious, hut he must prove it to be bad; and as it was made to appear to them that the purchaser's main objection was removed by the Statute of Limitations, they held that he had failed in such proof. After this, the purchaser discovered that gross frauds had been committed with respect to the intermediate title, and that several documents, on which the vendor's title depended, were forgeries; and he declined to complete the purchase. The vendor, who was not in any way implicated in the frauds, then brought an action for specific performance, to which the purchaser by leave counterclaimed to review the order of the Court of Appeal made in the summons, on the ground of the subsequent discovery of fresh material facts. Kekewich, J., not only dismissed the vendor's action for specific performance, but ordered him to return the deposit. But, on the case being again taken to the Court of Appeal, it was considered that .it law the purchaser was strictly bound by the contract into which he had chosen to enter, and could not therefore recover bis deposit, as there had been no breach of contract by the vendor. But it was declared that the specific performance of the contract in equity depended on different considerations; and on this point the judgment was affirmed for the reason that, as the vendor had no holding title at all, but was liable to instant ejectment, his title was not such as the Court would oblige an unwilling purchaser to take.