of the lessor or his representatives. See 2 Saunders, by Williams, 418 c.; Pluck v. Digges (5 Bligh, 31).

It will be argued that there is a reversion by estoppel.

But though a tenant cannot dispute his landlord's title he can confess and avoid it.

Moreover, there is no estoppel; for, according to Lord Coke (Co. Litt. 45 a.), "whensoever any interest passeth from the party there can be no estoppel against him;" and again, Co. Litt. [222] 47 b., “ A., lessee for the life of B., makes a lease for years by deed indented, and after purchases the reversion in fee; B. died, A. shall avoid his own lease."

In Hicks v. Downing (1 Ld. Raym. 99) it was resolved that, "if lessee for three years assigns his term for four years, or demises the house for four years, he does not by this gain a tortious reversion, and it does but amount to an assignment of his

interest.

During the interval which elapsed before the reversion was acquired, the so-called under-lease must have operated as an assignment; and it was impossible afterwards to give a new and contrary effect to it: at least the title was too doubtful to force on a purchaser.

There is no right of distress, he cannot take the benefit of the condition for re-entry -as stat. 32 Hen. 8, c. 34, only applies where there is a reversion-covenants will not run with a rent (Milnes v. Branch, 5 M. & S. 417, was mentioned), the incidents of an assignment and under-lease are altogether different.

Mr. Shapter, for the vendors. First, the deed of 1833 was a lease: Serjt. Manning's note to King v. Wilson (5 M. & Ry. 156), Poultney v. Holmes (1 Strange, 405), Pollock v. Stacy (9 Q. B. 1033).

Secondly, it was a good lease by estoppel, conferring on the lessor by estoppel a reversion and a right of distress directly he acquired the freehold interest. The passages cited from Co. Litt. only shew that, where the whole estate can take effect out of interest, there is no estoppel. The instances given by Coke prove his meaning. There are [223] cases of tenant for life or pour autre vie making grants or leases for years, which possibly could and were reasonably expected to take effect wholly out of the interest possessed by the grantor. It was matter of contract that the assurances should so take effect, or, if not expressly declared to be the contract, the law presumes that the parties intended to do what might lawfully and regularly be done. That is the rule laid down by Coke himself, at Co. Litt. 42 a., b. But how can it be supposed the parties contemplated that a termor (with a right too to purchase the fee) intended that a lease exceeding his term should take effect wholly out of his term?

At p. 367 a., Coke on Litt. puts the case of a lessee for years or tenant by elegit making a feoffment in fee, and adds, "A feoffment de facto made by them that have such interest or possession as is aforesaid, is good between the parties, and against all men, but [i.e., except] only against him that hath right;" and Littleton, 667 section, states the case of a husband, who had an interest in right of his wife, being estopped by his conveyance of the fee.

Patteson, J., in Doe v. Barton (11 Ad. & E. 311), correctly states the rule thus: "A deed, which can take effect by interest, shall not be construed to take effect by estoppel."

In Gilman v. Hoare (1 Salk. 275) it is expressly declared that a lease may take effect partly out of estate and interest, and partly by estoppel. In that case, and in Sturgeon v. Wingfield (15 M. & W. 224), reversions on leases were created by estoppel : Weale v. Lower (1 Pollexf. 54), Vick v. Edwards (3 P. Wms. 372), Doe v. Oliver (10 B. & C. 181), Cole v. Sewell (2 H. L. Cas. 186), Bensley v. Burdon (2 S. & S. 519), Webb v. Austin (7 M. & G. 701), are all cases of estoppel where some interest passed.

[224] In this case there is no recital of title or other matter on the face of the deed to prevent estoppel.

It is admitted, according to the resolution in Hicks v. Downing (1 Ld. Raym. 99), that a tortious reversion is not gained by a lessee demising or assigning his whole term, or beyond it. But that has no bearing on the question whether, if the grantor acquire a further interest, there is not a reversion by estoppel.

The setting up a case of estoppel admits the clear doctrine that a tenant may

confess and avoid, and so shew the determination of his landlord's title. The question is whether he is under the circumstances estopped from so doing. If a tenant for life or pour autre vie make a lease for years, and die, the tenant may shew the facts from which it is to be inferred that, as the lease could wholly take effect out of interest, it was intended and did so, and so shew the determination of the term. But if a lessee for ten years, assuming to be owner of the fee, grant a lease for twenty years, and then acquire the fee, surely he is bound to give effect to his contract-at law as well as in equity. He is estopped-estoppels are mutual-and his lessee is also estopped from denying his landlord's title to grant a lease for twenty years.

The tenant, in this case, has gone on paying rent after his landlord acquired the fee, and has paid rent up to the present time. Neither party is in a situation to dispute the title of the other.

Thirdly, it is admitted by the vendors that the case is not within the 9th section of the stat. 8 & 9 Vict. c. 46, for that preserves the remedies against the tenant, only when the immediate reversion is lost by merger.

[225] But it is submitted that the acquisition of the fee may be deemed a renewal of the lease within the 5th section of the stat. 4 Geo. 2, c. 28.

If the rent be a rent-seck the 6th section of the stat. 4 Geo. 4, c. 28, gives a right of distress.

If it be a rent-service, the tenant cannot object to pay it, and must submit to distress, for, by the stat. 11 Geo. 2, c. 19, s. 22, it is not necessary for a landlord to plead his title.

Mr. W. M. James, Q.C., in reply. Most of the cases cited are cases of feoffments or fines, which were tortious conveyances, having a peculiar effect in creating estoppel, which innocent assurances have not.

Gilman v. Hoare (1 Salk. 275) is differently reported by the name of Holman v. Hore (3 Id. 152), and there it appears that estoppel depended on no interest passing.

The principle which prevents a tenant from denying his landlord's title is, he cannot plead that his landlord "nil habuit in tenementis;" but if he acknowledges a title and interest, however small, he can deny the rest.

THE VICE-CHANCELLOR reserved judgment.

VICE-CHANCELLOR Sir W. PAGE WOOD. There is no doubt that, from the description of the property given in the particulars of sale, the purchaser was justified in believing that he was buying a freehold ground-rent, with all the remedies of the reversioner. The only [226] question, therefore, is whether, under the circumstances of the title, he would, upon the completion of his purchase, acquire such remedies.

It appears that the vendor's testator, being possessed of a lease for the residue of a term of ninety-nine years, with the option of purchasing the fee-simple in reversion, granted a lease for a term which exceeded the residue of his own term.

One point arising in this case is free from doubt. It was conceded that, if a termor, or the owner of any estate in land, which might possibly be sufficient to allow an interest created by his deed to take effect out of such estate, make a deed purporting to grant such interest, which in the event fails to some extent, from the circumstance of the grantor's own estate not being of sufficient duration to enable the grantee to take all that the deed purported to give him-as in the illustration given in Co. Litt., if a tenant for life were to demise for a term, and then to die during the term-an actual interest will pass by the grant, and the grantee will not be estopped from shewing the determination of such interest, as by the death of the grantor during the term-that is to say, admitting that the lease was for a term of so many years, he would be at liberty to prove that the lessor had only a life interest; and that, accordingly, by his death, the lease had determined: for, though it is an admitted principle that a lessee cannot dispute the title of his landlord, it is equally clear that, where he can confess and avoid it by shewing that the landlord's estate has determined, he is permitted to do so, and thus to prove that the lease exists no longer.

In truth, the question in this case is whether or not there is any reversion on which the purchaser of the ground-rent would have a right to proceed for its recovery by distress or [227] re-entry. As respects the reversion, the case is in a singular position. Unquestionably, a termor who grants a lease longer than his term thereby

parts with his whole interest; and, during the term of the original lease, the tenant would hold of the owner in fee-simple who had granted the original lease; but the argument is that, on the subsequent acquisition of the fee-simple by the original lessee, an estoppel arose by which, on the expiration of the original lease, the supposed under-lessee will hold of the under-lessor who had affected to demise to him, at a rent of £6, for a term greater than he was possessed of at the date of the under-lease. There is no authority for such a proposition; and the only argument in favour of it has been that, although there is not a complete estoppel where there is an interest which might be sufficient to effect the whole object of the deed, yet where the interest was ab initio insufficient, there, in order that the deed may not lose its effect, the parties are estopped from saying that the actual interest which it purported to grant has not passed. The only authority which has been cited is Gilman v. Hoare, which was of a different character. That was a case where a person having a reversionary interest made a grant, and it was supposed, from the report in 1 Salkeld, that an interest there passed by way of estoppel during the first period, and out of the estate during the latter period of the demise. It appears, however, from another report of the same case, 3 Salkeld (and it is impossible therefore to treat it as an authority), that there was no interest at all, because there had been no attornment in respect of the original interest of the lessor which he purported to grant, and therefore, the lessor having no interest, the rule applied that a lessee cannot say that his lessor had no interest at the time of making the lease, and, accordingly, there was a perfect estoppel as between the lessor and the lessee; and therefore there was no difficulty in that case, because the true reason of the rule is that a lessee, having accepted a lease, cannot [228] plead to an action by his lessor, that the lessor nil habuit in tenementis. That is the principle of estoppel; but I never heard it doubted that, when a person has granted a lease exceeding in duration the actual term which he held, the effect of that would be a demise of the whole term, so that the grantee would hold of the grantor of the original term, out of which the under-lease was intended to be made. There is a note by the learned editor to the case of King v. Wilson (5 Man. & Ry. 140), in which he considers the question whether or not, as terms of years are not within the statute of quia emptores, there might not be tenure where there had been a demise of the whole term by way of under-lease, and, although there would be no substantial reversion, whether there would not be the relation of landlord and tenant created, and whether the rights of the landlord might not be said to exist. He suggests, indeed, a doubt whether the law of tenure was ever held to have effect on such interests as terms of years.

At the time of that statute it would have caused much astonishment if it had been suggested that it was necessary to include terms of years therein, or that a mere termor could create a tenure between himself and his grantee by the grant of the term of years; he might by feoffment have acquired a tortious fee, and then a tenure might be created; but it never before was suggested that there could be any tenure between a lessee for years and a person to whom he granted the whole of his term. The reason that a termor is a reversioner, where he has sub-let for a part only of his term, is that he has the interest of the reversioner, that is of the freeholder, still in him during the rest of his term.

V.

The case cited and controverted by Serjt. Manning is a plain decision on another point, which was raised in argu-[229]-ment, namely, on the effect of the stat. 4 Geo. 4, c. 28, giving power to distrain for a rent-seck. It is an Anonymous case (Cooper, 2 Wils. 375), arising on a replevin, and the question was what right of distress existed where the whole of the term had been granted reserving a rent; and the Court gave judgment for the Plaintiff without hearing his counsel, and said, “There are two ways of creating a rent, the owner of the lands either grants a rent out of it, or grants the lands and reserves a rent; there is no such thing as a rent-seck, rentservice or rent-charge issuing out of a term of years."

That seems to meet the question of the application of the statute.

In this state of the law there is nothing to support the view which has been contended for, that, where a deed cannot operate to its full effect, it shall do so by way of estoppel, the true ground of estoppel being a different one, namely, that a tenant may not dispute the right of his landlord, by saying that he had nothing in

the property. It is equally clear that he may, nevertheless, shew that the landlord had an interest at the date of the lease, which has since determined; and although there is no precise authority deciding this point, as the whole current of cases seems to be adverse to the argument of the vendor, it is impossible for me to hold that the purchaser is compelled to buy these ground rents, with such grave doubts as to the remedies which he may have for recovering them.

[230] BECK v. KANTOROWICZ. KANTOROWICZ v. CARTER. KALB v. Kantorowicz. March 2, 3, 6, 1857.

[See Imperial Mercantile Credit Association v. Coleman, 1871-73, L. R. 6 Ch. 563 (n.); L. R. 6 H. L. 189; Lydney and Wigpool Iron Ore Co. v. Bird, 1886, 33 Ch. D. 94.]

Fraud. Trust and Trustee. Principal and Agent.

Four out of five persons, who entered into a provisional contract to purchase a mine, which they agreed to sell for their joint benefit to a company, were deceived by the fifth who, assuring them that the vendors would not take less than £85,714, obtained secretly from the latter an agreement that, if the contract were perfected, and money paid, he should receive thereout a bonus of £20,000 for his pains in effecting the sale.

Two of the four, having absolute powers from the rest to sell to the intended company, then formed themselves with others into a committee of management, and, still ignorant of the surreptitious agreement, issued a prospectus stating that a contract had been entered into for the purchase by the company of the entire property for £125,000, including all preliminary expenses, and a premium to the parties who incurred the risk and responsibility of the original purchase." The company having been established, the requisite capital paid up, and the provisional contract perfected: Held, that the £20,000 transaction was fraudulent and void, not only as against the four original purchasers, but also as against the company, notwithstanding the mine proved cheap at the price (£125,000), at which they became shareholders. It was not enough that the company got the whole of their bargain. They had a right to the best bargain which the two members of the committee of management, had they known the facts, would have been in a position, acting fairly and rightly, to give them.

Early in the year 1853 the Defendant, Kantorowicz, entered into a negotiation with the Defendants, Carter, Moriarty, Twynam and Werninck, with a view to a purchase by himself and them of the mining Concession "Wildberg," in Germany, then the property of the widows Hunsdiecker and Merttens and Leopold Hunsdiecker, for which he represented to his Co-defendants that the proprietors would not consent to take less than 1,000,000 florins Rhenish (£85,714).

By a contract in German, dated the 15th of June 1853, and made between the widows Hunsdiecker and Merttens and Leopold Hunsdiecker of the one part, and the Defendants, Carter, Moriarty, Twynam, Werninck and Kantorowicz, of the other part, reciting that the parties of the first part were sole, exclusive and irrevocable proprietors of the Concession; that the parties of the second part wished to purchase the Concession, should the same after examination answer their expectations, such purchase to be for a society or company, which they intended to form among themselves or with other parties, or exclusively for other [231] parties; and that the parties of the first part were willing to transfer their property for 1,000,000 florins Rhenish. In order to give the parties of the second part liberty to become acquainted with the peculiarities of the mine, and in order to form the company in whose interest they intended to purchase, but, at the same time, in order to indemnify the parties of the first part in the event of the non-completion of the contract, it was stipulated (inter alia), 1st, that the parties of the second part having paid to the parties of the first part 100,000 dollars (£15,000), in consideration of that payment, the right was thereby conceded to the parties of the second part to purchase the said Concession as their property and for

ever, within six months from that day, by simple declaration of acceptance before the notary drawing up that instrument, either on their own behalf, or on behalf of that person or society which they might name, for 1,000,000 florins Rhenish (571,428 dollars); 2dly, that, if any acceptation should take place within the six months, the 100,000 dollars should become the irrevocable property of the sellers, and serve as first instalment of the purchase-money, the remaining 471,428 dollars to be paid on or before the 15th of January 1854; of which payment the purchasers should have the right to hand over 143,000 dollars in paid up shares, at the nominal value of the company purchasing the mine, should such company be formed; 3dly, that, from the day of acceptance, the purchasers should enter upon the real possession of the object of sale, in such manner as if they had possessed and used the same from that date; 4thly, that, up to such time of acceptance, the parties of the first part should remain in possession, work the mines, and hold the clear produce in trust for the eventual proprietor; and, 5thly, that, if the declaration of acceptance should not have been made within the six months, the parties of the first part should be authorised, without previous summons, and by the mere expiration of the term, to dispose of their property, [232] and should acquire out of the 100,000 dollars the amount of 50,000 dollars as indemnity for the non-completion of the negotiation, the remaining 50,000 dollars to be paid to the account of the Defendant, Carter.

On the same 15th of June 1853, and previously to the execution of the lastmentioned contract, an indenture of even date was executed by Carter of the first part; Twynam of the second part; Moriarty of the third part; Kantorowicz of the fourth part; Werninck of the fifth part; and the Defendant, Harris, of the sixth part, in reference to the deposit of the 100,000 dollars (£15,000); whereby, after reciting that the parties of the first five parts had agreed to purchase the premises, and the conditions for the payment of the deposit of £15,000, and for the forfeiture of a moiety of that sum by the last-mentioned parties in the event of their not completing the purchase; and reciting that the deposit had been contributed in the proportions following, viz., Carter, £3000; Twynam, £6000; the Plaintiff, Beck, £3000; and a Mr. Vallance, £3000; making together the sum of £15,000; and further reciting the contract of purchase of even date then about to be executed, it was agreed that in the event of the contract not being carried out, the forfeiture of a moiety of the deposit should be borne equally by the parties of the first five parts; and the same indenture contained a covenant by Harris, in the event of Kantorowicz or Werninck failing to perform their part of the agreement, to pay to the parties of the first three parts such sums as might be found to be the proportions payable by Kantorowicz and Werninck, or either of them in respect of the forfeiture.

By a letter of the same 15th of June, and by an indenture of the 20th of July following, Kantorowicz and Werninck agreed to pay to Harris £1000 and interest; and that their one-fifth share in the mine, or in the beneficial [233] interest in the contract, should be charged with payment of that sum, and also by way of indemnity to Harris in respect of his having entered into the guarantee on behalf of Kantorowicz and Werninck.

On the same 15th of June 1853, after the execution of the contract and indenture of that date, articles of agreement or partnership of even date were made between Carter of the first part; Twynam of the second part; Moriarty of the third part; Kantorowicz of the fourth part; and Werninck of the fifth part; whereby, after reciting the contract for purchase, it was declared and agreed, 1st, that the contract for purchase had been entered into by the said parties thereto for their mutual benefit, and that they were and should be jointly interested in the profit or loss arising therefrom, in equal shares and proportions; 2ndly, that the said contract had been entered into on the distinct understanding and agreement that any three of the parties thereto, of whom the Defendants, Carter or Twynam, should be one, should have full and absolute power and authority to negotiate and deal with the said mine and property in as full and ample a manner, to all intents and purposes, as if all the parties thereto joined and concurred personally in any act so as to be done by any three of the said parties, provided that either Carter or Twynam should be one of such three parties; and, 3dly, each of the said parties thereto expressly and fully authorised and empowered any three of the others, of whom Carter or Twynam