exception is "in case the person claiming priority shall pre"vious to the execution of the deed or contract under which

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1900.

GLENNY

V.

priority is claimed have had an actual personal knowledge affecting him with fraud, or have been served, either person- RATHBONE. ally or through his solicitor in the transaction, with an express notice in writing of a prior deed or contract." No such notice was served, and I agree with the conclusion of the learned Judge below that the evidence does not show that the defendant had that actual personal knowledge affecting him with fraud which the Act speaks of. The Deeds Registration Act, however, does not operate to divest or prevent the accrual of rights which may arise independently of any instrument; and if the plaintiff, by virtue of his continuous possession for over twenty-one years, can rely on the Statute of Limitations, he is entitled to do so notwithstanding the provisions of the Deeds Registration Act. The question therefore is whether the plaintiff can or cannot take advantage of the statute.

The case raises the broad question whether, where land is sold, the purchase-money paid, and the purchaser enters into possession with the consent of the vendor, but no conveyance is executed, possession by the purchaser for twenty-one years will bar the right of entry of the vendor, and vest in the purchaser the legal estate in fee. That the purchaser when let into possession became tenant at will to the vendor must be conceded. The purchaser is therefore brought within the scope of the 7th section of statute 3 & 4 Will. IV., c. 27. The question, then, is whether the vendor is a trustee within the meaning of the proviso to that section. If he is, then by the express words of the section his right of entry is not barred. Two cases are especially relied on by the respondent as showing that Daniel was a trustee, and that, as he had no right of entry which he could have successfully asserted in equity as well as at law, his title could not be barred. These were the cases of Drummond v. Sant(1) and Warren v. Murray(2). In each of these cases there had been many years ago an agreement to lease for a long term, subject to certain conditions, but at a nominal rent. No lease was ever executed,

(1) L.R. 6 Q.B. 763.

(2) [1894] 2 Q.B. 648.

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GLENNY

v.

but the intending lessees entered under the agreement, and remained in possession, paying no rent. They sought to set up the statute as running during the term of the agreed RATHBONE. lease, and claimed as against the representatives of the lessor to be entitled to the fee. It was held that, although they had entered into possession as tenants at will at law, and so came within section 7 of the statute, the lessor was a trustee for them under the proviso to that section, and so that his representatives were not barred. The dicta and, indeed, the reasoning in the judgment in Warren v. Murray(1) go further than this, but these I shall refer to later.

There is, however, a manifest distinction between the case where a lessee enters under an agreement for lease and where the purchaser of the fee who has paid his purchase-money enters under an agreement to purchase. If a person enter under an agreement for lease for ninety-nine years he has in equity a lease for that period. The owner of the legal estate in fee holds it upon trust to grant such lease to the intending lessee, and that trust exists throughout the agreed term. But it is in the contemplation of both parties that the intending lessor shall himself hold the legal estate in fee during the whole of the term, and that the lessee shall

have no claim to it. The lessee's right to his lease depends on the lessor having the legal estate in fee. The lessee's possession is therefore entirely consistent with the right of the lessor to retain the legal estate in fee-simple during the whole of the proposed term.

But where there has been an agreement to purchase, and the purchaser has paid his purchase-money and has been let into possession, the case is different. If in such a case it could be said that it was in contemplation of the parties that the vendor was to retain the legal estate for ever, the case would be exactly analogous to the case of an agreement for lease; but that is precisely what the parties do not contemplate. What is contemplated is that the vendor shall make over the legal estate to the purchaser as soon as may be. The purchaser enters into possession as being entitled to the

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1900.

GLENNY

V.

fee-simple. The continued retention by the vendor of the legal estate in fee is directly antagonistic to such possession. The object of the proviso to section 7 is stated to have been to preserve the legal estate of the trustee, which under the RATHBONE. old law was secured by the necessity that possession should be adverse in order to take away the right of entry: Dart's Vendors and Purchasers(1). In both of the above-mentioned cases it was necessary that the legal estate in fee vested in the trustee should be protected in order that the trust should be carried out. The decision upon the facts in these cases is therefore within both the letter and the spirit of the proviso.

In the present case there is no necessity at all to protect the legal estate of the trustee against the cestui que trust. Had it not been for the reasoning in the cases cited there would have been no difficulty in holding that the proviso to section 7 did not apply to the case of a trustee whose retention of his legal estate during the period of limitation would be inconsistent with and pro tanto hostile to the possession of the cestui que trust. It has been, indeed, assumed by the Courts that in such circumstances the proviso did not apply The case of The Low Moor Company v. The Stanley Coal Company(2) was decided first in the Cort of Exchequer by Bramwell, Pollock, and Amphlett, BB.(3), and afterwards in the Court of Appeal before Lord Cairns, Coleridge, C.J., and Mellish, L.J.(2). A person had been let into possession under a contract of sale, and had paid his purchase-money but did not get a conveyance effectual to pass the fee, and remained in possession more than twenty-one years. It was held that the title of his vendors was barred by the statute. It is true that the objection was not taken that the statute could not run in such a case, and the defence was based on other grounds; but it is strange, if the objection was a valid one, that it did not occur either to the eminent counsel who conducted the case for the defendants or to any one of the learned Judges in either Court.

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1900.

GLENNY

v.

The present case, however, differs from the simple case of a purchaser let into possession and remaining in possession. In such a case the vendor becomes a trustee for the purchaser, RATHBONE and the purchaser is at law a tenant at will of the vendor. Here, when Davern was let into possession, Daniel became trustee for Davern, and Davern became tenant at will to Daniel. But when Davern sold to Glenny, and Glenny went into possession, Glenny did not become tenant at will to Daniel, nor did Daniel become a trustee for Glenny, although Glenny by the use of Davern's name might have compelled Daniel to convey to him. As stated in the judgment in Drummond v. Sant(1), it is only by implication that a trustee may be said to be trustee for those who claim under his cestui que trust; and section 7 of the statute applies only to an actual direct trust, and not to such possible eventual trusts as may in case certain facts are established in evidence be declared in a Court of equity. The position of a sub-purchaser is stated by Lord Eldon in Wood v. Griffith (2). The original purchaser becomes trustee of his equitable interest for the sub-purchaser, and the sub-purchaser has the right to use the name of the original purchaser, on indemnifying him against costs, to compel the original vendor to convey to the subpurchaser. There is, however, no contractual relation between the original vendor and the sub-purchaser, and it is only by reason of the contract between the vendor and the original purchaser that any right of the sub-purchaser against the original vendor can arise.

When Davern died in July, 1873, Davern's tenancy at will to Daniel came to an end. Glenny was then in possession, but there is no evidence of any recognition of his possession by Daniel, nor that Daniel knew that he had purchased, or, in fact, knew anything about him. Glenny did not become tenant at will to Daniel, because in order to constitute a tenancy at will there must be something from which it can be inferred that it was the intention of both parties to create such a tenancy. The mere occupation of Glenny without

the knowledge of Daniel would not be sufficient to make him

(1) L.R. 6 Q.B. 765.

(2) 1 Swans. 43, at p. 56.

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1900.

GLENNY

V.

a tenant at will: Ley v. Peter(1), Doe v. Rock(2). If Glenny
was tenant at will at all, it was as tenant not to Daniel,
but to Davern; but it is against Daniel, and not against
Davern, that Glenny seeks to set up the statute. The 7th RATHBONE.
section of the Statute of Limitations, 3 & 4 Will. IV., c. 27,
does not, therefore, apply to Glenny's possession.
The posi-

tion was this: Glenny was not tenant at will to Daniel. If
Daniel had at any time sued him in ejectment he would
have had no defence at law. It would have been necessary
for him to have set up an equitable defence, based on the
contract of Daniel with Davern. If Glenny is entitled to
set up the statute he must rely on sections 2 and 3. And
he certainly can do so unless there is something in the
statute from which it is to be inferred that under the
statute possession can never bar a legal right of entry where
the person in possession could have successfully invoked the
aid of a Court of equity to resist the enforcement of the legal
right. Yet this is in effect the proposition stated by the
learned Judges in the case of Warren v. Murray(3).
Murray(3). Lord
Esher says,
"If the parties against whom the Statute of
"Limitations is vouched were, according to law, including
"equity as well as common law, unable to recover the land
in question, the Statute of Limitations does not apply."
He says, again, "If it were necessary to construe the 7th
"section, I should say that it applies to tenancies at will
pure and simple, where there is no clog or difficulty like
"that in question here." Again, referring to the 2nd
section, he says that "according to the true meaning of that
"section the trustees had no right of entry or action in
"the case before him "; and he concludes by saying, "My
judgment is that where by the law, taking it as a whole,
"including equity, the person against whom the Statute of
"Limitations is vouched could not recover the land in
"question, the statute does not apply." The judgment of
A. L. Smith, L.J., contains similar expressions.

The question is whether these expressions, taken in their (3) [1894] 2 Q.B. 648.

(1) 3 H. & N. 101.

(2) Car. & M. 549; 4 Man. & Gr. 30.