T. 10. CH. 3. PART III requisitions, that the title is bad (q). Where a lease is sold, although the reference to the lease binds the purchaser, yet unusual covenants should be stated in the conditions (r). As surrendered leases are given up to the lessor, if the premises are held under a renewed lease expressly granted in consideration of the surrender of a former lease, there should be a condition that the purchaser "shall not require the production of, or the deduction of the title to, any surrendered lease which is referred to in the subsisting lease" (s). 1662. Penalty. A proviso in a contract for sale, that, if either party break the agreement, he shall pay a sum of money to the other, does not give either party an option to break the agreement, but it is of the nature of a penalty; and consequently a specific performance will be decreed, just as if no such proviso had been inserted (t). 1663. (q) Sugd. Concise View, 14, 268; 9 Jarm. & Byth. by Sweet, 13; Waddell v. Wolfe, L. R. 9 Q. B. 515. (r) Sugd. Concise View, 19. CHAPTER IV. SOME MISCELLANEOUS POINTS IN THE LAW OF VENDORS AND PURCHASERS (a). T. 10, CH. 4. Obligation of purchaser application purchase General rules. IN cases under the old law, where real property is devised, PART III. or conveyed to be sold for, or is charged with, the payment of definite and ascertained sums only, and such payment to see to the is to take place at the time when the required amount is to of the be raised, the purchaser of such property is bound to see money. that the purchase money is applied in the fulfilment of the trust, unless expressly exempted by a provision by the author of the trust, although the estate be sold under the decree of a Court of Equity. But where the property sold constitutes the natural and primary fund for the payment of debts generally, or is expressly charged with, or conveyed or devised for, the payment of debts generally, and therefore, in order to ascertain the sums to the payment of which the property is liable, it would be necessary for the purchaser to take proceedings in Chancery; or where the purchaser, if bound to see to the application of the money, would be involved in a trust of long continuance; there, the purchaser, unless he has notice that there are no debts or notice of fraud, is not bound to see to the application of the purchase money (b). 1664. points in illustration In illustration of these rules, it may be observed, that, Specific as the personal estate, whether consisting of chattels sonal or of chattels real, is liable at the Common Law, constitutes the natural and primary fund for the payment obligation. (a) See also next title. (b) See Story's Eq. Jur. § 11261128, 1130-1134; Sugd. Concise View, 517, 518, 520. As to the per- of the above and the pur payment by mistake of part of the rules as to chaser's T. 19, CH. 4. PART III of the debts of the testator generally, the purchaser of the whole or of any part of it, without notice that there are no debts, or that the sale was not made for payment of debts, is not bound to see that the purchase money is applied by the executors in the discharge of the debts (e), even if the testator has directed his real estate to be sold for payment of debts, whether specified or not, and has made a specific bequest of a part of his personal estate for a particular purpose or to a particular person, although such specific bequest is known to the purchaser, but he has no reason to suspect any fraudulent or unauthorized purpose; for, otherwise, before a person could become a purchaser of personal estate specifically bequeathed, it would be indispensable for him to come into a Court of Equity to have an account taken of the assets of the testator, and of the debts due from him, so as to ascertain whether it was necessary for the executor to sell (d). 1665. The same rule, for the same reason, applies to real estate devised for or charged with the payment of debts generally (e); even though the trust is only to sell, or is a charge for, so much as the personal estate is deficient to pay the debts; and even though a specific part of the real estate is devised for a particular purpose or trust; if the whole real estate is charged with the payment of debts generally by the will. If, however, the trustee has only a power to sell, and not an estate devised to him, then, unless the personal estate is deficient, the power to sell does not arise (ƒ). 1666. III. Where, in cases of real estate, the trust is for the pay- PART 4. ment of legacies or annuities only, or of specified or scheduled debts alone, or of both, but not of debts generally, the rule is different; for they are ascertained, and the purchaser must therefore see that the money is applied in discharge of them. But where the devise is for payment of debts generally, and also for the payment of legacies or annuities or specified debts, the purchaser is not bound to see to the application of the purchase money; because, to hold him liable to see the legacies or annuities or specified debts paid, would in fact involve him in the necessity of taking an account of all the debts and assets (g). 1667. And the purchaser is not bound to see to the application of the purchase money where the specific objects of the trust are not pointed out (h). 1668. But if there is collusion between the purchaser and the trustees, who are guilty of a misapplication, or if there is notice that the sale or mortgage is made for the purpose of a breach of trust, the estate will be liable (i). 1669. In determining as to the liability of the purchaser, the Court will look to the deed or will alone, and not to subsequent events: so that where a testator makes a charge for payment of debts generally and legacies, and the debts are paid after the death of the testator, and the legacies only are left as a charge, that circumstance alone does not prevent the application of the rule (k). 1670. Where the time appointed by the will for a sale of real estate is arrived, and the persons entitled to the money are infants or unborn, there the purchaser is not bound to see to the application of the purchase money; because that might involve him in a trust of long continuance (g) Story's Eq. Jur. § 1132; 2 Spence's Eq. Jur. 379, 382, 386, 389; Sugd. Concise View, 518, 520; Robinson v. Lowater, 17 Beav. 592. VOL. I. (h) 2 Spence's Eq. Jur. 381. (k) 2 Spence's Eq. Jur. 383. T T T. 10, CH. 4. PART III. But, if an estate is charged with a sum of money payable to an infant at his majority, the purchaser is bound to see the money duly paid at that time; for the estate will remain chargeable with it in his hands (1). 1671. Power to Five receipts Where the money is to be applied by the trustee to certain purposes which require, on their part, time, delay, and discretion, it seems the purchaser is not bound to see to the application of the purchase money (m). 1672. A general power to give a receipt in all these cases was under the provided by the stat. 7 & 8 Vict. c. 76. And although it was repealed as from the 1st of October, 1845, so that the 7 & 8 Vict. c. 76, and the stat. 22 Receipt clause. Vendor's lien. power to trustees to give receipts under that Act extends only from the 1st of January to the 1st of October, 1845 (n); yet a general power is given by the stat. 22 & 23 Vict. c. 35, s. 23, and by the stat. 23 & 24 Vict. c. 145, s. 29 (0). 1673. If the names of the trustees are inserted in the usual clause, that the receipts of the trustees shall be discharges, every trustee who has accepted the trust must join in the receipt for the purchase money, although he may have subsequently released the estate to the other trustees. But a trustee who never acted in or accepted the trust, but has renounced or released, need not join in any receipt (p). 1674. Where a vendor delivers possession of an estate to a purchaser, without receiving the purchase money, whether the estate be or be not conveyed, Equity gives the vendor a lien on the land for the purchase money, that is, a hold upon it for the satisfaction of the money; and, to the extent of the lien, the purchaser becomes a trustee for the (1) Sugd. Concise View, 519; Story's Eq. Jur. §1133; 2 Spence's Eq. Jur. 387. (m) Sugd. Concise View, 519; Story's Eq. Jur. § 1134; 2 Spence's Eq. Jur. 387. (n) Sugd. Concise View, 521. |