London County Council v. Allen

BUCKLEY L.J.
This action is brought by the London County Council upon an indenture dated January 24, 1907, made between the defendant Morris Joseph Allen of the one part and the London County Council of the other part, claiming certain mandatory injunctions and damages for breach of a covenant contained in that indenture. Before the date of the execution of the deed the defendant M. J. Allen had applied to the London County Council for their permission under s. 7 of the London Building Act, 1894, to his laying out a certain new road, called Galloway Road, running from south to north, and a farther small portion of road at the northern end of Galloway Road running from east to west in continuation of a road called Dunraven Street. The London County Council gave their permission upon the terms, amongst other things, that this defendant should enter into a certain deed of covenant, and that was the deed of January 24, 1907. The covenant in question was as follows: "The applicant" (that is to say, the defendant M. J. Allen) "doth hereby for himself, his heirs and assigns, and other the persons claiming under him, and so far as practicable to bind the land and hereditaments herein mentioned into whosesoever hands the same may come, covenant and agree with the council that he and they will not erect or place, or cause or permit to be erected or placed, any building, structure, or other erection upon the land shewn by green colour on the said plan without the previous consent in writing of the council so to do, and that on every conveyance, sale, charge, mortgage, lease, assignment, or other dealing with the land herein mentioned or any part thereof he will give notice of the aforesaid covenant in every conveyance, transfer, mortgage, charge, lease, assignment, or other document by which such dealing is effected." The deed recited (but contrary to the fact) that the applicant was the owner in fee simple of the land in question. He was not. He had at the date of this deed of covenant merely an option of purchase, which might or might not result in his becoming owner of the land. The portions coloured green were two, namely, plot No. 1, being the continuation of Dunraven Street to the west of Galloway Road, and plot No. 2, being the continuation of Galloway Road to the north of Dunraven Street. It is necessary to deal with these two plots separately.
First as regards plot No. 1. On July 3, 1908, this was conveyed to the defendant M. J. Allen in fee. On the same day he mortgaged it with other land to one Willcocks to secure a sum of 3600l. On August 1, 1911, the mortgage was redeemed, and Willcocks with the concurrence of Allen conveyed the land discharged from the incumbrance to the defendant Emily Allen in fee. On October 9, 1911, Mrs. Allen charged the land together with the three messuages then recently erected thereon to the defendant Norris in fee by way of mortgage. In the interval, namely, in July, 1911, Mrs. Allen built on plot No. 1 and completed by the end of that month three houses. The writ in this action was issued on August 5, 1911.
By virtue of ss. 7 and 9 of the London Building Act, 1894, the London County Council have certain powers of control over land which the owner proposes to form or lay out in streets. But they have no estate or interest in such land. The plaintiffs at the date of the deed of covenant had no estate or interest in any land adjoining or in any manner affected by the observance or non-observance of the covenant contained in the deed. Under these circumstances the defendants Mrs. Allen and Norris, who were not covenanting parties, contend upon this appeal that as matter of law,assuming that there has been a breach of the covenant contained in the deed of January 24, 1907, and assuming (although as matter of separate contention they deny it as a fact) that they had notice of that covenant, the plaintiffs cannot as against them maintain any action upon the covenant contained in the deed. The short proposition is that as matter of law a derivative owner of land, deriving title under a person who has entered into a restrictive covenant concerning the land, is not bound by the covenant even if he took with notice of its existence if the covenantee has no land adjoining or affected by the observance or non-observance of the covenant. I proceed to examine how the law upon this point stands upon the authorities.
The respondents do not contend that the covenant here in question runs with the land. It is the better opinion, and in Austerberry v. Oldham Corporation the Court of Appeal by way of opinion and not of decision held, that the burden of a covenant, not involving a grant, never runs with the land at law except as between landlord and tenant. Cotton L.J. at p. 776 said: "In order that the benefit may run with the land, the covenant must be one which relates to or touches and concerns the land of the covenantee." The relation of landlord and tenant did not in the present case subsist between the plaintiffs, the covenantees, and M. J. Allen, the covenantor. Under these circumstances the plaintiffs admit that this covenant did not run with the land at law. As between the covenantee and the owner deriving title under the covenantor there is no privity of contract, and the law is that it is only where there is privity of estate between landlord and tenant that the burden of a covenant will run with the land. Ownership of land both by covenantor and covenantee must exist in order that Spencer's Case shall apply, and that the covenant shall run with the land. But it does not follow that the covenantee is without remedy where the covenant does not run with the land. Tulk v. Moxhay established that as between the grantor of a restrictive covenant affecting certain land and the owner of adjoining land the covenantee may in equity enforce the covenant against the derivative owner taking with notice. The reasoning of Lord Cottenham's judgment in Tulk v. Moxhay is that if an owner of land sells part of it reserving the rest, and takes from his purchaser a covenant that the purchaser shall use or abstain from using the land purchased in a particular way, that covenant (being one for the protection of the land reserved) is enforceable against a sub-purchaser with notice. The reason given is that, if that were not so, it would be impossible for an owner of land to sell part of it without incurring the risk of rendering what he retains worthless. If the vendor has retained no land which can be protected by the restrictive covenant, the basis of the reasoning of the judgment is swept away. In Haywood v. Brunswick Permanent Benefit Building Society the Court of Appeal declined to extend the doctrine of Tulk v. Moxhay to covenants other than restrictive covenants. They rejected the doctrine that, inasmuch as the defendants took the land with notice of the covenants, they were bound in equity to perform them. That therefore is not the principle upon which the equitable doctrine rests. In the present case we are asked to extend the doctrine of Tulk v. Moxhay so as to affirm that a restrictive covenant can be enforced against a derivative owner taking with notice by a person who never has had or who does not retain any land to be protected by the restrictive covenant in question. In my opinion the doctrine does not extend to that case. The doctrine is that a covenant not running with the land, but being a negative covenant entered into by an owner of land with an adjoining owner, binds the land in equity and is enforceable against a derivative owner taking with notice. The doctrine ceases to be applicable when the person seeking to enforce the covenant against the derivative owner has no land to be protected by the negative covenant. The fact of notice is in that case irrelevant.
The particular equity recognized in Tulk v. Moxhay has been said to be analogous to an equitable charge upon land subsisting in the owner of the adjoining land, or to a negative easement enjoyed, not in gross, but by the adjoining land over the land to which the covenant relates. It arises from the possession by the covenantee of land enjoying the benefit of the negative covenant coupled with notice of the existence of the covenant. In London and South Western Ry. Co. v. Gomm Sir George Jessel says: "The doctrine of Tulk v. Moxhay rightly considered, appears to me to be either an extension in equity of the doctrine of Spencer's Case to another line of cases, or else an extension in equity of the doctrine of negative easements; such, for instance, as a right to the access of light, which prevents the owner of the servient tenement from building so as to obstruct the light. The covenant in Tulk v. Moxhay was affirmative in its terms, but was held by the Court to imply a negative. Where there is a negative covenant expressed or implied, as, for instance, not to build so as to obstruct a view, or not to use a piece of land otherwise than as a garden, the Court interferes on one or other of the above grounds. This is an equitable doctrine, establishing an exception to the rules of common law which did not treat such a covenant as running with the land, and it does not matter whether it proceeds on analogy to a covenant running with the land or on analogy to an easement." At p. 587 Lindley L.J. says:
"The first thing therefore the plaintiffs must shew is, upon what legal principle the defendant is bound by a contract into which he did not enter ... Upon what principle is it that he is bound in equity? It is said that he is bound in equity because he bought the land knowing of the covenant into which his predecessor in title had entered. That proposition stated generally assumes that every purchaser of land with notice of covenants into which his vendor has entered with reference to the land is bound in equity by all those covenants. That is precisely the proposition which had to be considered in Haywood v. Brunswick Permanent Benefit Building Society, and because it was sought there to extend the doctrine of Tulk v. Moxhay to a degree which was thought dangerous, considerable pains were taken by the Court to point out the limits of that doctrine."
In In re Nisbet and Potts' Contract this view of the matter is I think accepted, and in Formby v. Barker and Millbourn v. Lyons (since affirmed by the Court of Appeal) that view was, I think, definitely accepted by the Court of Appeal. In Formby v. Barker the question arose between the assign of the covenantee and the derivative owner deriving title under the covenantor. So much of the judgment as relates to derivative title in the plaintiff is not pertinent to the present case. The London County Council have never assigned. They are original not derivative owners of the benefit of the easement. But the case is directly in point as regards the right of a proper plaintiff to sue the owner deriving title under the covenantor. There are interlocutory observations made during the argument which are important; for instance, at p. 543 Romer L.J., referring to Spencer's Case and to Stokes v. Russell, says: "In equity you could only sue on such a covenant in respect of some land"; and Vaughan Williams L.J.: "The plaintiff has no estate for the benefit of which the covenant was entered into." Vaughan Williams L.J. in the course of his judgment, at p. 549, pointed out that the plaintiff's testator had conveyed his whole estate, and had no contiguous estate which would be benefited by the covenant, and at p. 550, after pointing out that the vendor had sold all his land, he goes on to say: "It becomes necessary therefore to ascertain whether the principle of Tulk v. Moxhay applies to a case in which the vendor sells his whole estate. I have not been able to find any case in which, after the sale of the whole of an estate in land, the benefit of a restrictive covenant has been enforced by injunction against an assignee of the purchaser at the instance of a plaintiff having no land retained by the vendor, although there are cases in which restrictive covenants seem to have been enforced at the instance of plaintiffs, other than the vendor, for the benefit of whose land it appears from the terms of the covenant, or can be inferred from surrounding circumstances, that the covenant was intended to operate. In all other cases the restrictive covenant would seem to be a mere personal covenant collateral to the conveyance. It is a covenant which cannot run with the land either at law or in equity, and therefore the burden of the covenant cannot be enforced against an assignee of the purchaser." He then goes on to negative the proposition that the doctrine is based upon obligations on the conscience of the purchaser taking with notice of the covenant, quoting Collins L.J. in Rogers v. Hosegood: "The covenant must be one that is capable of running with the land before the question of the purchaser's conscience and the equity affecting it can come into discussion." There is a further passage, at p. 552, which I do not read at length. Romer L.J. gave judgment principally upon the question of the effect of the fact that the plaintiff was administratrix of the covenantee, but he says (at p. 554): "If restrictive covenants are entered into with a covenantee, not in respect of or concerning any ascertainable property belonging to him, or in which he is interested, then the covenant must be regarded, so far as he is concerned, as a personal covenant-that is, as one obtained by him for some personal purpose or object." Stirling L.J. agreed with the other members of the Court and dwelt upon the fact that the covenantee was not entitled to any land for the protection or benefit of which the restrictive covenants were or could be intended. Upon these judgments, and particularly upon the principal judgment as delivered by Vaughan Williams L.J., it seems to me that the Court of Appeal affirmed the view taken by Sir George Jessel that the doctrine of Tulk v. Moxhay was either an extension of Spencer's Case, or of the equitable doctrine of negative easements, regarding it as something arising from the relation of two estates, the one to the other. In Millbourn v. Lyons the decision rests upon a similar view. Inasmuch as at the date when the covenant was taken the covenantee had no land to which the benefit of the covenant could be attached, it was held that the benefit of the restrictive covenant could not enure against a derivative owner even where he took with notice. I have had the advantage of reading an advance copy of the judgments delivered in the Court of Appeal. They all adopt this view.
On the other hand the decisions of the Court of Appeal in Catt v. Tourle and of Fry J. in Luker v. Dennis undoubtedly create a difficulty. In Catt v. Tourle Selwyn L.J. referred to Wilson v. Hart. But that is a case upon which the difficulty, as it seems to me, does not arise. The land there was part of a building estate, and it would seem that there were other lands of the covenantee in respect of which the benefit of the covenant might be enjoyed. I do not, it is true, find that that was the case in Catt v. Tourle. But on the other hand the Court do not seem to have considered and given judgment upon the exact point here raised, namely, whether the covenantee had any land in respect of which the benefit could be enjoyed. The question of fact, whether there was or not ownership of other land, is nowhere mentioned either affirmatively or negatively, and no decision was given upon the point now under consideration. The concluding words of Selwyn L.J.'s judgment are not consistent with later authorities. Upon the general abstract question, whether a person purchasing with such a covenant, as there mentioned, is to be bound by it, the answer must be in the negative. Notwithstanding what was said by Knight Bruce L.J. in Mattos v. Gibson, it is not true as a general proposition that a purchaser of property with notice of a restrictive covenant affecting the property is bound by the covenant. This may be illustrated by the cases relating to the sale of chattels, such as Taddy & Co. v. Sterious & Co. and McGruther v. Pitcher. The proposition is true only in certain cases, such as Spencer's Case and Tulk v. Moxhay. The passage already quoted from Lindley L.J. in London and South Western Ry. Co. v. Gomm and the decision in Haywood v. Brunswick Permanent Benefit Building Society are enough to dispose of this point. In Luker v. Dennis the covenant related as well to a public-house which was leased by the brewer to the covenanting publican, as also to another public-house which the publican held under a different landlord, and Fry J. held that the covenant was binding in equity upon an assignee of the second public-house who had notice of the covenant. The point here in question certainly arose, but the point which the learned judge expressly decided was another, namely, that Keppell v. Bailey had been displaced by Tulk v. Moxhay. The decision in Luker v. Dennis was in 1877, and since that date this doctrine has been so examined and developed by London and South Western Ry. Co. v. Gomm, Austerberry v. Oldham Corporation, and quite recently by Formby v. Barker and Millbourn v. Lyons, that it cannot I think be relied upon as now accurately stating the law. Further, as regards Catt v. Tourle, which was a decision of the Court of Appeal, we are of course bound by that decision, but again that was in 1869, and since that date the decisions to which I have referred seem to me to have recognized and established the principle to which we are bound to give effect, and, as I have already pointed out, the decision in Catt v. Tourle does not deal with the exact point now in debate. As regards Clegg v. Hands I do not feel any difficulty. The case was one as between lessor and lessee.
Upon the authorities, therefore, as a whole I am of opinion that the doctrine in Tulk v. Moxhay does not extend to the case in which the covenantee has no land capable of enjoying, as against the land of the covenantor, the benefit of the restrictive covenant. The doctrine is either an extension in equity of the doctrine in Spencer's Case (in which ownership of land by both covenantor and covenantee is essential) or an extension in equity of the doctrine of negative easements, a doctrine applicable not to the case of easements in gross, but to an easement enjoyed by one land upon another land. Where the covenantee has no land, the derivative owner claiming under the covenantor is bound neither in contract nor by the equitable doctrine which attaches in the case where there is land capable of enjoying the restrictive covenant.
The appeal of Emily Allen and Norris upon the point of law in my opinion succeeds.
Under these circumstances it is not necessary to determine whether they had notice or not. Upon that question we have not heard the appellants. But if this case should go further, that point will be open to them in the House of Lords.
As regards the defendant M. J. Allen, he is not within the considerations above dealt with. He was the covenanting party. The erection of the three houses was a breach of covenant. The learned judge has refused any injunction but has given nominal damages for the technical breach. He has also given the plaintiffs, as against this defendant, the general costs of the action. The only matter which here requires observation is the question of costs. I will mention this presently.
Secondly as regards plot No. 2, the only defendant concerned in this matter is the defendant M. J. Allen. He contends first that the wall which he erected on this plot was not a building, erection, or other structure within the covenant. The object of the covenant was to secure that plot No. 2 should remain unobstructed so as to be available for the extension of Galloway Road to the north. The wall is an erection which creates such an obstruction. It is, within the literal words of the deed, an erection or structure, and it is within the object of the deed. It is to my mind plain that its erection was a breach of the covenant. But further, this defendant says that there was at this place a sharp drop in the surface of the soil, and that a fence was necessary for the protection of the public; that the wall was only a 9-inch wall bonded into the walls on either side of the roadway to prevent it from falling, and was no more than a temporary fence. If this had been the case put forward at the trial there would have been no difficulty in the matter. This defendant might have offered an undertaking to remove this which he says is a mere temporary fence, if and when requested to do so. He did nothing of the sort. He maintained that it was no breach of the covenant, and that he was entitled to maintain it. In this, in my judgment, he was wrong. In the absence of such an undertaking or offer the order to pull down this wall was, I think, rightly made.
As regards the order for costs as against the defendant M. J. Allen, I have felt some doubt whether the costs ought not to have been divided as between the two plots. As regards plot No. 2 the defendant M. J. Allen was wrong, and would have to pay the plaintiffs' costs. As regards plot No. 1 the plaintiffs failed in obtaining the order to pull down for which they asked, and they recovered merely nominal damages. I have doubted whether in respect of this latter part of the action they ought to have costs against the defendant Allen, but I have arrived at the conclusion that the case is not one in which we ought to interfere. The learned judge in his discretion did not think proper to divide the costs as above suggested, and in giving the general costs as against the defendant M. J. Allen I think he was making an order which we ought not to review.
The result is that as against the defendants Emily Allen and Norris the action will be dismissed with costs, including their costs in this Court, and as regards M. J. Allen his appeal will be dismissed with costs.
KENNEDY L.J.
read the following judgment:-I have had an opportunity of reading and considering the judgments in this case which have been prepared by Buckley L.J. and Scrutton J. I concur in the conclusions at which they have arrived. I only desire to add that, as regards plot No. 1 and the demurrer raised by Mrs. Allen and Mr. Norris to the plaintiffs' claim in regard to that property, I concur because, as the judgments of my colleagues point out, the most recent decisions of this Court, and especially the decision in Formby v. Barker, bind us, I think, so to hold, whatever might be my own opinion if I was not controlled by such recent decisions, but free, in accordance with judicial authority in earlier cases which Scrutton J. has cited in order of date, from Tulk v. Moxhay down to the year 1882, to treat a restrictive covenant in regard to the use of land as enforceable in equity at the suit of the covenantee, although he may retain no other land which can be affected by the covenant, against an assign of the covenantor who has acquired the land with notice of the restrictive covenant.
SCRUTTON J.
read the following judgment:-In this case the London County Council, on January 24, 1907, entered into an indenture with one Morris Joseph Allen, a builder, describing himself as "the owner in fee simple of certain land," by which he "doth hereby for himself, his heirs and assigns, and other the persons claiming under him, and so far as practicable to bind the land and hereditaments herein mentioned into whosesoever hands the same may come, covenant and agree with the council that he and they will not erect or place, or cause or permit to be erected or placed, any building, structure, or other erection upon the land shewn by green colour on the said plan, without the previous consent in writing of the council so to do, and that on every conveyance, sale, charge, mortgage, lease, assignment, or other dealing with the land herein mentioned or any part thereof he will give notice of the aforesaid covenant in every conveyance, transfer, mortgage, charge, lease, assignment, or other document by which such dealing is effected." The plots coloured green were two plots intended to be reserved for the making of roads. On plot No. 1, in July, 1911, three houses were built by Mrs. Allen; on plot No. 2 a wall was built by Allen. The London County Council thereupon issued a writ claiming a mandatory injunction to pull down the houses and wall respectively. Thereupon it was alleged that as to plot No. 1 the legal estate was in one Norris as mortgagee, and the equity of redemption in Mrs. Allen, who had taken title from Mr. Allen and Willcocks, his mortgagee, who had no notice of the restrictive covenant; and it was contended (1.) by way of demurrer that as the London County Council were not neighbouring landowners, or grantors of the plot in question, a covenant by Allen in their favour was only a personal covenant, and could not affect the land when in the hands of assigns of Allen, whether they had notice of the covenant or not. It was said that to affect them the right must be in the nature of a negative easement; that an easement required both a dominant and a servient tenement; and that as the council had no land to which the benefit of the covenant could attach, there could be no dominant tenement, and therefore no negative easement binding on a servient tenement, but only an easement in gross, which did not bind assigns of the land. (2.) It was alleged that the defendants Mrs. Allen and Norris could prove they were purchasers for value of the legal estate without notice of the covenant, and therefore not bound by it. Avory J. found on the second contention as a fact that Mrs. Allen and Norris had not satisfied him they had not notice, actual or constructive, of the covenant. On the first contention he said: "It was contended before me that this restrictive covenant, being in the nature of a negative easement, the action would not lie except at the suit of a covenantee who was at the time of the covenant in possession of land which required protection, and that the plaintiffs were not at the time in possession of any such land. But having regard to the powers vested in the London County Council under ss. 7 and 9 of the London Building Act, 1894, and to the admission made in the argument before me that the conditions imposed in this case were not ultra vires, I think this contention fails." He apparently treated the duty and interest of the county council in the matter of new streets as sufficient to make the covenant bind the land in the hands of assigns from Allen. This Court determined to decide the first contention before hearing argument on the second, and we have now to decide on the first contention.
Counsel on each side agreed that the burden of this covenant would not run with the land at law, so as to bind assigns, for the reason stated in the notes to Spencer's Case that "there appears to be no authority which has decided, apart from the equitable doctrine of notice" (by which is meant, as hereinafter explained, the doctrine identified with the case of Tulk v. Moxhay) "that the burden of a covenant will run with land in any case except that of landlord and tenant." This opinion appears to be justified by the judgments of the Court of Appeal in Austerberry v. Oldham Corporation, especially that of Lindley L.J. at p. 781 and of Fry L.J. at p. 784.
The question then is whether it is essential to the doctrine of Tulk v. Moxhay that the covenantee should have at the time of the creation of the covenant, and afterwards, land for the benefit of which the covenant is created, in order that the burden of the covenant may bind assigns of the land to which it relates. It is clear that the covenantee may sue the covenantor himself, though the former has parted with the land to which the covenant relates: Stokes v. Russell. To answer the question as to the assigns of the covenantor, and the land in their hands, requires the investigation of the historical growth of the doctrine of Tulk v. Moxhay. Though the covenantee in that case did hold adjacent land, there is no trace in the judgment of Lord Cottenham of the requirement that the covenantee should have and continue to hold land to be benefited by the covenant. I read Lord Cottenham's judgment as proceeding entirely on the question of notice of the covenant, and on the equitable ground that a man purchasing land with notice that there was a covenant not to use it in a particular way would not be allowed to violate the covenant he knew of when he bought the land. Lord Cottenham states the question, "Whether a party shall be permitted to use the land in a manner inconsistent with the contract entered into by his vendor and with notice of which he purchased," and answers it:
"If there was a mere agreement and no covenant, this Court would enforce it against a party purchasing with notice of it; for if an equity is attached to the property by the owner, no one purchasing with notice of that equity can stand in a different situation from the party from whom he purchased."
Up to 1881, when counsel in Haywood v. Brunswick Permanent Benefit Building Society stated (at p. 405) that Tulk v. Moxhay had been applied in fifteen cases, I cannot trace, nor could counsel before us discover, that Tulk v. Moxhay had been based on anything but notice of the covenant by the assignee. In the case cited, in which the Court of Appeal refused to extend the doctrine to an affirmative covenant to repair, Lindley L.J. said (at p. 410): "The result of these cases is that only such a covenant as can be complied with without expenditure of money will be enforced against the assignee on the ground of notice." Brett L.J. said (at p. 408): "That case" (Tulk v. Moxhay) "decided that an assignee taking land subject to a certain class of covenants is bound by such covenants if he has notice of them, and that the class of covenants comprehended within the rule is that covenants restricting the mode of using the land only will be enforced." Cotton L.J., after citing Lord Cottenham that "No one purchasing with notice of that equity can stand in a different situation from the party from whom he purchased," said (at p. 409): "This lays down the real principle that an equity attaches to the owner of the land." Meanwhile in De Mattos v. Gibson, in 1858, Knight Bruce L.J. had put the principle as applying to all property thus: "Reason and justice seem to prescribe that, at least as a general rule, where a man, by gift or purchase, acquires property from another, with knowledge of a previous contract, lawfully and for valuable consideration made by him with a third person, to use and employ the property for a particular purpose in a specified manner, the acquirer shall not, to the material damage of the third person, in opposition to the contract and inconsistently with it, use and employ the property in a manner not allowable to the giver or seller," resting the matter on knowledge of the previous contract, that is notice. In Catt v. Tourle, in 1869, A., a brewer, had sold land to B. with a covenant that he should have the exclusive right to supply all ale consumed in any public-house erected on the land. C., with knowledge of the covenant, bought part of the land from B., erected a public-house on it, but did not take his beer from A. The Court of Appeal, citing De Mattos v. Gibson, restrained C., treating the covenant as negative, and resting the judgment on the ground that C. "clearly purchased with notice of the present covenant, and ... cannot be heard to say that he is now entitled to disregard its provisions." It is to be noted that A. is not stated to have owned any land, and as he might brew beer anywhere, the covenant could not relate to any particular land of his.
In Luker v. Dennis, in 1877, A., a brewer, granted a lease to B. of public-house X., with a covenant that B. should take from him all beer consumed not only in X., but also in public-house Y., which B. held of a different landlord. C. took public-house Y. from B. with notice of the covenant, and did not take his beer from A. It was argued before Fry J. that notice was not enough unless the covenantee had some interest in the land bound by the covenant, either as vendor or lessor. That learned judge refused to accede to this argument, and, citing De Mattos v. Gibson and Catt v. Tourle, granted the injunction, giving, as he said (at p. 236), "effect to the equitable doctrine of notice." I think up to this point the doctrine had been rested on notice, and did not depend on the covenantee having land in favour of which the covenant was created.
The first departure from this position occurs in the judgment of Jessel M.R. in London and South Western Ry. Co. v. Gomm in March, 1882. The contract to be enforced was one to reconvey land on notice, and clearly therefore an affirmative covenant, and, as such, within the doctrine laid down in Haywood's Case in December, 1881, excluding such contracts from the doctrine of Tulk v. Moxhay. The Court also held that the sale was ultra vires the railway company, and void for remoteness. But Sir George Jessel, holding that the covenant did, but for its being ultra vires and void, create an interest in the land, discussed the nature of the right. He said: "The doctrine of that case,"-Tulk v. Moxhay-"rightly considered, appears to me to be either an extension in equity of the doctrine of Spencer's Case to another line of cases, or else an extension in equity of the doctrine of negative easements; such, for instance, as a right to the access of light, which prevents the owner of the servient tenement from building so as to obstruct the light. The covenant in Tulk v. Moxhay was affirmative in its terms, but was held by the Court to imply a negative. Where there is a negative covenant expressed or implied, as, for instance, not to build so as to obstruct a view, or not to use a piece of land otherwise than as a garden, the Court interferes on one or other of the above grounds. This is an equitable doctrine, establishing an exception to the rules of common law which did not treat such a covenant as running with the land, and it does not matter whether it proceeds on analogy to a covenant running with the land or on analogy to an easement. The purchaser took the estate subject to the equitable burden, with the qualification that if he acquired the legal estate for value without notice he was freed from the burden. That qualification, however, did not affect the nature of the burden; the notice was required merely to avoid the effect of the legal estate, and did not create the right, and if the purchaser took only an equitable estate he took subject to the burden, whether he had notice or not." It will be noticed that the equitable estate or burden was held to arise independent of notice; which I respectfully think was contrary to the previous authorities; and that in Sir George Jessel's view it did not matter whether it was by analogy to covenants running with the land, or on analogy to an easement. Both, however, had this in common, that some land belonging to the covenantee was required, either for him to let, that the covenant might run with the land, or as a dominant tenement for the easement, an easement in gross being merely a personal right. Whether the "analogy" or "extension" spoken of by Sir George Jessel involved this condition as to land is not discussed. The other members of the Court did not discuss the foundation of Tulk v. Moxhay, though Lindley L.J. seems again to put it on notice. Catt v. Tourle-a decision of the Court of Appeal-and Luker v. Dennis were not cited to the Court.
In 1890, in Clegg v. Hands the doctrine of Tulk v. Moxhay was applied by the Court of Appeal to a case somewhat similar to Catt v. Tourle, without any discussion of Sir George Jessel's explanation of the doctrine, the case, however, being one of landlord and tenant. In Rogers v. Hosegood, in 1900, A., the mortgagor, and B., the mortgagee, of some land, conveyed plot X. to C., who entered into a restrictive covenant with the mortgagor only, who had not the legal estate in the land. This plot X. was purchased by D. with notice of the restrictive covenant. A. also conveyed some of his adjoining land, plot Y., to E., who had no notice of the restrictive covenant on plot X. D. then proceeded to erect buildings on plot X. said to contravene the restrictive covenant. E. then sued D. to enforce the covenant. Farwell J. (at p. 394) treated D. as obviously bound by the covenant. "He is obviously bound, by reason of notice, whether the covenant as regards him runs with the land or not." (This expression of the reason why he is bound does not harmonize with the later decisions, but does, I think, with all the earlier ones.) And he held that the benefit of the covenant passed to E. at law running with his land. There was an appeal. In the course of the argument of Mr. Haldane, Q.C., that the covenant ran with the land in equity, Rigby L.J. said: "I do not think any covenant runs with the land in equity. The equitable doctrine is that a person who takes with notice of a covenant is bound by it"; a remark again which seems to me to harmonize with the earlier authorities. The Court held that the benefit of the covenant did not run with the land at law, as the covenantee, the mortgagor, had no legal interest in the land, but did run with the land in equity, as there was a clear intention to benefit that land, and equity would regard the mortgagor as the owner, and, citing Jessel M.R. in London and South Western Ry. Co. v. Gomm, continued at p. 405: "These observations, which are just as applicable to the benefit reserved as to the burden imposed, shew that in equity, just as at law, the first point to be determined is whether the covenant or contract in its inception binds the land. If it does, it is then capable of passing with the land to subsequent assignees; if it does not, it is incapable of passing by mere assignment of the land. The benefit may be annexed to one plot and the burden to another, and when this has been once clearly done the benefit and the burden pass to the respective assignees, subject, in the case of the burden, to proof that the legal estate, if acquired, has been acquired with notice of the covenant." This makes land bound or benefited by the covenant essential to bind or benefit assigns. The judgment proceeds: "These authorities"-Renals v. Cowlishaw and Child v. Douglas-"establish the proposition that, when the benefit has been once clearly annexed to one piece of land, it passes by assignment of that land, and may be said to run with it, in contemplation as well of equity as of law, without proof of special bargain or representation on the assignment. In such a case it runs, not because the conscience of either party is affected, but because the purchaser has bought something which inhered in or was annexed to the land bought. This is the reason why, in dealing with the burden, the purchaser's conscience is not affected by notice of covenants which were part of the original bargain on the first sale, but were merely personal and collateral, while it is affected by notice of those which touch and concern the land. The covenant must be one that is capable of running with the land before the question of the purchaser's conscience and the equity affecting it can come into discussion." This again appears to me to treat land as essential, on both sides of the covenant, to affect assigns whether of the benefit or burden.
This view seems to me to be adopted also by the Court of Appeal in Formby v. Barker. A., the owner of land, conveyed all his land with a restrictive covenant against its being used in particular ways to B., who assigned it to C., who had notice of the covenant. A. died; C. began to use the land in a way forbidden by the covenant; the administratrix of A., who had no land, sued C. It was argued that the right to enforce such a covenant depended entirely on notice; members of the Court suggested in argument that the benefit of the covenant, if not pursued by the covenantee, must follow some land; and this was the argument put forward for the defendant, that without land the covenant was only one in gross. Romer L.J. asked (at p. 546), "Is there any case in which it has been held that such a covenant purporting to bind land for ever is valid except for the protection of an estate?" and counsel for the plaintiff did not refer him, as they might have done, to Catt v. Tourle and Luker v. Dennis, in neither of which cases had the plaintiff an estate, but only a trade. In the judgments, Vaughan Williams L.J. points out that A. conveyed his whole estate and had no contiguous estate which would be benefited by the covenant in question. I refer to, but do not read, the Lord Justice's judgment on pp. 550 - 552, but it seems to me, adopting the language of Collins L.J. in Rogers v. Hosegood, to negative the view that the doctrine of Tulk v. Moxhay depends on notice, and to make it depend, where there is no contractual privity, on a "relation of dominancy and serviency of lands" (p. 552), and to fail if the covenantee or his assign has no land to which the covenant relates. Romer L.J. thought that the assign of a covenantee could not sue unless the covenant related to or concerned some ascertainable property belonging to him or in which he was interested. Stirling L.J., while saying that different considerations would apply if the covenantee sued, a remark which leaves it doubtful whether he thought the covenantee could, though owning no land, have sued assigns of the land restricted, rested his judgment on the ground that damages, not injunction would be the appropriate remedy.
The doctrine was again considered, and I think further developed, in In re Nisbet and Potts' Contract in 1905. The owner of certain land had entered into restrictive covenants with the vendor, who owned an adjoining estate. A squatter, without notice of these covenants, acquired a title by adverse possession, and sold to A., who did not require a forty years' title, which would have disclosed the restrictive covenants. A. sold to B., who, having reason to believe there were restrictive covenants, declined to complete. B. took out a summons for a declaration that the title was not one which he ought to be compelled to accept. Farwell J. treated the nature of the right of action created under the doctrine of Tulk v. Moxhay as analogous to an equitable charge on real estate, not depending in any way on notice for its validity, but only defeated by a legal estate acquired for value and without notice. He held therefore that the squatter, though he had no notice and had the legal estate, was bound by the restrictive covenants, as apparently he only took the land subject to the equitable interest in it, and that as the purchaser from the squatter of the legal estate for value would, if he had required a forty years' title, have had notice of the covenants, he had constructive notice and was bound by the covenants. In the Court of Appeal the appellant argued that notice was part of the cause of action, the respondent that the doctrine rested on an interest in land, binding on the land itself, with a dominant and servient tenement. The Court of Appeal adopted the latter argument, and held that the restrictive covenant was an equitable interest in the land, whether the occupier of the land had notice of it or not, unless he had purchased the legal estate for value without notice. They do not expressly refer to the necessity of there being a dominant tenement to enforce the interest, but there was in fact such a dominant tenement in the case.
Lastly, in Millbourn v. Lyons, where a person who had agreed to sell with a restrictive covenant died, and his personal representatives, having sold all their land, conveyed with a similar restrictive covenant, Neville J. enforced the title against a purchaser who knew of the restrictive covenant, and therefore objected to complete, on the ground that there was no restriction against him, as the vendors, at the date of the covenant, had no land to which the benefit of the covenant could be attached, and the Court of Appeal affirmed his judgment on similar grounds.
I think the result of this long chain of authorities is that, whereas in my view, at the time of Tulk v. Moxhay and for at least twenty years afterwards, the plaintiffs in this case would have succeeded against an assign on the ground that the assign had notice of the covenant, since Formby v. Barker, In re Nisbet and Potts' Contract, and Millbourn v. Lyons, three decisions of the Court of Appeal, the plaintiffs must fail on the ground that they have never had any land for the benefit of which this "equitable interest analogous to a negative easement" could be created, and therefore cannot sue a person who bought the land with knowledge that there was a restrictive covenant as to its use, which he proceeds to disregard, because he is not privy to the contract. I think the learned editors of Dart on Vendors and Purchasers, 7th ed., vol. ii., p. 769, are justified by the present state of the authorities in saying that "the question of notice to the purchaser has nothing whatever to do with the question whether the covenant binds him, except in so far as the absence of notice may enable him to raise the plea of purchaser for valuable consideration without notice." If the covenant does not run with the land in law, its benefit can only be asserted against an assign of the land burdened, if the covenant was made for the benefit of certain land, all or some of which remains in the possession of the covenantee or his assign, suing to enforce the covenant. It may be, if the matter is considered by a higher tribunal, that tribunal may see its way to revert to what I think was the earlier doctrine of notice, or at any rate to treat it as co-existing with the later refinement of "an equitable interest analogous to a negative easement" binding on persons who are ignorant of it. The remarks of Lord Selborne in Earl of Zetland v. Hislop are not favourable to the too rigid development or enforcement of the latter alternative; and the observations of Lord Macnaghten (p. 32), Lord Davey (p. 35), and Lord Lindley (p. 36) in Noakes & Co. v. Rice seem to suggest that the doctrine of Tulk v. Moxhay may well be reconsidered and put on a proper footing. For I regard it as very regrettable that a public body should be prevented from enforcing a restriction on the use of property imposed for the public benefit against persons who bought the property knowing of the restriction, by the apparently immaterial circumstance that the public body does not own any land in the immediate neighbourhood. But, after a careful consideration of the authorities, I am forced to the view that the later decisions of this Court compel me so to hold.
In my opinion, therefore, the demurrer of Mr. Norris and of Mrs. Allen succeeds. The action against Mr. Norris must be dismissed with costs. I regret that I do not see my way to depriving Mrs. Allen of her costs, as, whatever may be her equitable rights, I am not at all favourably impressed with her conduct as a good citizen. I see no reason for interfering with the judgment against Mr. Allen in respect of plots No. 1 or No. 2, and his appeal must be dismissed with costs.