COURT OF APPEAL.

New Zealand Times, Volume XXXIII, Issue 5521, 6 December 1878, Page 5

COURT OF APPEAL.

Thursday, December 5. (Before Chief Justice Prendergast, Mr. Justice Johnston, and Mr. Justice Williams). MORRIS V. KISSLISG.

This case was mentioned, and terms in connection with proposed appeal to the Privy Council arranged, BRIGHAM V. MOREIOS.

In this case it was arranged that the order of the Court below as to costs should be reversed, but that in this Court each party should pay his own costs. WAKDEIX V. BCCKERIDGE.

Mr. Justice Williams delivered judgment for himself and Chief Justice as follows :—■ WARDELL T. BUCKEBIDGE.

We think that so much of the statute 32, Henry 8, 0. 9, as prohibits the sale of pretended titles by persona out of possession is in force in the colony, and has not been repealed by the 9th section of the Conveyancing Ordinance. All that the statute did was to declare

the common law on the subject, and to add a penalty to what was contrary to the common "'jaw before. Per Montague C. J. in Strange v. Croker,Plowden 88; per Tindal O. J., Williams v. Evans, 1 0.8. 724. Even if the penal clause of the statute is not in force here, and it is unnecessary to decide that point, the common law, as declared by the Srst section of the statute, certainly prevails, unless it has been repealed by some later Act. The 9 th section of the Conveyancing Ordinance allows of the assignment of choses in action generally, and of one particular kind of disputed right of entry, viz., a right of entry for condition broken. Aright of entry undisputed by the person in possession would probably be included in the general term chose in action ; but-the circumstance that one particular kind of disputed right of entry, which arises out of privity of contract or of estate, is made assignable, would show that the scope of the section did not extend to disputed rights of entry generally. Are then the transactionssonghtto be impeached within the statute! It appears that before these transactions - Alzdorf, the Crown grantee, had contracted to sell the land in question to Parsons, and had received the purchase money. Parsons afterwards transferred his interest to the plaintiff, who let to Wiggins. The laud was occupied first by relations of the plaintiffs, and afterwards by Wiggins. No conveyance had been executed by Alzdorf, and the legal estate remained in Urn. He therefore was trustee for the plaintiff. Tne plaintiff at law would have been tenant at will to Alzdorf, and the possession of the plaintiff would have been Alzdorf s possession. Alzdorf, however, in fraud of the plaintiff, executed a conveyance of the land to Ingley, and from the findings on the twentyfourth and twenty-fifth issues it must be taken that this conveyance was a voluntary one. Ingley, therefore, not being a purchaser for value, became constructively a trustee of the land for the plaintiff. We think, however, that by this conveyance the tenancy at will of the plaintiff would have been determined, and the privity which existed between the plaintiff and Alzdorf destroyed. It has been held that where there is a trustee in possession his possession cannot become adverse to the possession of the cetlui que trust, but that where such a trustee makes a fraudulent conveyance, then though the person to whom the conveyance is made may bo constructively a trustee, yet that his possession becomes adverse, so that in the course of time he would obtain a title against tho cestui owetrust by prescription, PcrLord Eedesdale, in Hovenden v. Lord Anncsly, 2 Seh. and Lf., C 33. So hero by analogy whore a trustee out of possession makes a fraudulent conveyance the possession of tho cestui que trust which before was consistent with the title of the trustee would become adverse, A cestui rpte trust in possesion is held to be tenant at will of his trustee by virtue of an implied agreement, but the relation can no longer continue when tho circumstances from which an agreement would bo implied have ceased to exist. Wo think, therefore, that tho possession of tho plaintiff or of his tenant was adverse to the possession of Ingley at the time that he executed tho conveyance to tho defendant, and that tho title of

Xngley was controverted by the persons in peasession, that is to say, it was a pretended title within tho meaning of tho statute of Henry. The question then arises whether a sale prohibited by the statute would be void unless the purchaser was aware that the sale fell within the prohibitions. There is, so far as we are aware, no authority on this point, and indeed there is very little authority on tho construction of the statute at all. Looking, however, at the absence of authority over so long a period, and at the manifest inconvenience and injustice that would result from any other construction, we should be inclined to bold that in order to avoid a sale as against a purchaser it must be shown that he knew that his vendor was not of possession, and that his vendor’s title was in controversy, and that a jury would not be justified in finding a sale void as against the purchaser, unless on the evidence they would have been justified in finding him liable to tho penalty under the 2nd section of the statute. We do not think, moreover, that the equitable doctrines as to constructive notice should be imported into the consideration of the case—the question for the jury is whether tho purchaser knew or not. It some one other than the vendor is in occupation of the property, it cannot be said that a purchaser is to render himself liable to penal consequences if he does not inquire whether the occupation is hostile, and whether the occupier puts in controversy the title of the vendor. Now, the issues found by the jury are not, we think, sufficient to fix Wardell with knowledge. The' 17th issue finds that he knew that tho land was occupied by persons other than lugley, and the 18th issue finds that he purposely abstained from inquiring into the nature and particulars of the possession of these persons with a view to avoid express notice of their title. As we have said we do* not think that the mere fact of these persons being in possession imposed any duty upon him to make inquiries about their title, and if there was no other circumstance which made it his duty to inquire, the fact that he abstained from doing so, whatever his reasons, should not prejudice him. No other such circumstance has been found by the jury. The further question then arises as to whether, from the uncontradicted evidence given by the defendant himself or his own witnesses, it appears that he knew that the title was in controversy, and the possession adverse either at the time of the agreement or of the conveyance, and also whether the agreement as well as the conveyance was not a sale of a pretended title within the statute. It appears from the defendant’s evidence that at the time he entered into the contract with Inglcy, Wiggins was in possession, and that Wiggins had previously sued Ingley and another for trespass and had recovered. The defendant therefore knew perfectly well that the possession of Wiggins was adverse to the possession of Ingley ; and he knew, moreover, that Wiggins was net a mere trespasser, since he had recovered in the action for trespass. Ingley represented to the defendant that the land belonged to him, but the defendant was aware that then Ingley had no legal title, but was about to procure a conveyance from Alzdorf. Knowing this, he agreed to buy. The jury have found that at this time Ingley had no interest in the land at all, but this is not proved to have been known to the defendant, who therefore may be considered as purchasing an equitable interest knowing that a person not being the trustee is in possession claiming adversely to his vendor. This is, we think, within the scope of the Act. After the agreement the adverse provision of Wiggins continued, and the conveyance from Alzdorf to Ingley of the legal estate would not alter the case, nor would it have justified the defendant in believing that the possession of Wiggins had ceased to be adverse, or that the title of the properly was no longer in controversy. We think, therefore, that the agreement and conveyance mentioned in the 23rd issue are void as against the plaintiff, and that the direction of the learned Judge was correct. As to the other ground on which a new trial was sought, we are of opinion that there was evidence to justify the jury in finding as they did on the 18th issue, but in any case if the direction on the 23ri issue was right the 18th issue is immaterial. Appeal dismissed, with costs. The judgment of Mr. Justice Gillies was read by the Chief Justice as follows : In this case three main questions have been raised. Ist. Whether the Statute of Henry VIII. ever was in force in the colony. 2nd. Whether it has been virtually repealed by the Conveyancing Ordinance, 3rd. Whether the circumstances of the present case bring it within the statute. As to the first question, I hold that the statute being one of general public policy and in affirmance of the common law, was part of the law of the colonyin 1840, there being nothing in the then circumstances of the colony to render it inapplicable. As to the second question, I hold that tho true intent and meaning of the Conveyancing Ordinance was to enable all such property rights and estates as could be lawfully conveyed, either at law or in equity, to be transferable at law by such a dead as the Ordinance prescribes. Even a strictly literal and grammatical construction of the words of.tbe Ordinance would scarcely embrace snch a right or interest in land as that claimed by tha appellant. The Ordinance does not, therefore, in my opinion, repeal by implication the statute of Henry. As to the third question, I hold that the circumstances of the present case bring it within the terms of the statute. Ingley, the vendor to the appellant, sold what, from the findings of the jury, he must be taken to have known to be a pretended title (whether that expression be taken to mean a disputed title or a title which he knew ho had not), neither he nor Alzdorf, by whom he claimed, having been in actual possession of the land, or of the reversion or remainder thereof, nor having taken the rents or profits thereof by the space of one whole year, &c. The appellant bought from Ingley, knowing at the time he agreed to purchase that Ingley had then no title, and had never been in actual possession; that the plaintiff by his tenant Wiggins was in possession adversely to Longley, that is to say, by some title derived not through Ingley, bnt through some other source, and he, as found by the jury, purposely avoided inquiring into the nature of the plaintiff’s title. It is suggested that the possession referred to in the statute need not be an actual possession but a constructive possession only, and therefore that plaintiff’s was the possession of Alzdorf, in whom was still vested the legal estate. But even if it were so, there was not even a constructive possession on the pait of Ingley at the time of his buying and sale to appellant, which is the time to which the statute applies, inasmuch as he had at that time no conveyance or agreement for sale from Alzdorf. And oven after he obtained the conveyance from Alzdorf it cannot surely he said that ho obtained by virtue of this deed from Alzdorf, to which plaintiff was no party, a constructive possession by virtue of plaintiff’s possession. All he obtained by that deed was a right of possession until plaintiff in some way attorned to him or recognised his title. In these circumstances it seems to me that Ingley undoubtedly sold a pretended or preteuced title, and that appellant bought what he knew to be a pietenced, i e., a disputed title. It seems to me that the plain facts found bring the case within the plain words as well as within the spirit of the statute. In my opinion there has been no misdirection, and the judgment of the learned Judge in the Court below should ho upheld. Mr. Justice Johnston said as he had not heard the argument ho had nothing to do with the judgment of the Court. This concluded the business of the session.