of unincor. companies, there does not appear to be any very satisfactory difficulties way of enforcing either the claims of the company against an porated individual member (a), or those of an individual member against companies would rethe company (b). But the power of forming such companies ist main, even so much cut short by the Companies Act 1862, which renders apart from (with a few exceptions) unincorporated and unprivileged (e) compulpartnerships of more than twenty (d) persons positively illegal, visions of that questions of this kind are not likely to have much practical Companies importance in future. In like manner the transfer of shares in companies as well as their original formation is almost entirely governed by modern statutes. sory pro Act. tions B. Obligations ex contractu attached to ownership or interests Obliga. in property are of several kinds. With regard to those attached attached to to estates and interests in land, which alone offer any great property. matter for observation, the discussion of them in detail is usually and conveniently treated as belonging to the law of real property. We shall have to dwell on them however so far as to point out the existence of a real conflict between common law and equity as to the right way of dealing with burdens imposed on the use of land by contract. A general statement in a summary form will serve both to shorten our subsequent remarks and to make them better understood. OBLIGATIONS ATTACHED TO OWNERSHIP AND INTERESTS IN I. Goods. PROPERTY. A contract cannot be annexed to goods so as to follow the property in the goods either at C. L. (e) or in Equity (ƒ). By statute 18 & 19 Vict. c. 111 the indorsement of a bill of lading operates as a legal transfer of the contract, if and whenever by the law merchant it operates as a transfer of the property in the goods. (a) We have seen (supra, p. 199) that they cannot empower an officer to sue on behalf of the association. (b) See Lyon v. Haynes, 5 M. & Gr. 504, Lindley 2. 929. (c) i.e. such as but for the Act would have been mere partnerships at common law. (d) Ten in the case of banking : Companies Act 1862, s. 4, see Lindley, 1. 170, 203; as to transfer of shares, ib. 721-727; as to termi- (e) 3rd resolution in Spencer's ca. (f) De Mattos v. Gibson, 4 De G. & J. 276, 295. General view thereof. II. Land (a). a. Relations between landlord and tenant on a demise. But the stat. applies only to demises under seal (c), and includes (by construction in Spencer's ca.) only such covenants as touch and concern the thing demised (d). of lessor's covenants Note. runs with the tenancy. (i) The lessee may safely pay rent (e) to his lessor so long as he has no notice of any grant over of the reversion: 4 & 5 Anne c. 3 [in Rev. Stat. al. 4 Ann. c. 16] which is in fact a declaration of the C. L. : see per Willes, J., L. R. 5 C. P. 594. (ii) The lessee may still be sued on his express covenants (though not in debt for rent) after an assignment of the term (ƒ). (iii) The doctrine concerning a reversion in a term of years is the same as concerning a freehold reversion (g). B. Mortgage debts. a The transfer of a mortgage security operates in equity as transfer of the debt (h). Notice to the mortgagor is not needed (a) On this generally see Dart V. & P. 2. 764 sqq.; 3d Report of R. P. Commission, Dav. Conv. 1. 122 (4th ed.); and above all the notes to Spencer's ca. in 1 Sm. L. C. : and also as to covenants in leases the notes to Thursby v. Plant, 1 Wms. Saund. 278-281, 299, 305. (b) As to this distinction, see 1 Sm. L. C. 74-77. Whether a covenant not to assign without licence "extends to a thing in esse parcel of the demise," so as to bind assignees though not named, quære: ib. 76. (c) e.g. Smith v. Eggington, L. R. 9 C. P. 145. (d) For the meaning of this see 1 Sm. L. C. 72. (e) In the case of the lessee's covenants other than for payment of rent, an assignee of the reversion is not bound to give notice of the assign. ment to the lessee as a condition precedent to enforcing his rights: Scaltock v. Harston, 1 C. P. D. 106. (f) 1 Sm. L. C. 77, 1 Wms. Saund. 298. (g) 1 Sm. L. C. 70. (h) This is one of the cases in which the equitable transfer of a debt is not made a legal transfer by the Judicature Act, 1873. practice an express assignment of the debt is always added. In to make the assignment valid; but without such notice the assignee is bound by the state of the accounts between mortgagor and mortgagee (a). y. Rent-charges and annuities imposed on land independently of tenancy or occupation (b). An agreement to grant an annuity charged on land implies an agreement to give a personal covenant for payment (c): but by a somewhat curious distinction the burden of a covenant to pay a rentcharge does not run with the land charged, nor does the benefit of it run with the rent (d). d. Other covenants not between landlord and tenant, relating to land and entered into with the owner of it. The benefit runs with the covenantee's estate so that an assignee can sue at common law. It is immaterial whether the covenantor was the person who conveyed the land to the covenantee or a stranger (e). The usual vendor's covenants for title come under this head. ɛ. The like covenants entered into by the owner. The burden of such covenants appears on the whole not to run with the land in any case at common law (f). But where a right or easement affecting land-such as a right to get minerals free from the ordinary duty of not letting down the surface-is granted subject to the duty of paying compensation for damage done to the land by the exercise of the right, there the duty of paying compensation runs at law with the benefit of the grant. Here, however, the correct view seems to be that the right itself is a qualified oneviz. to let down the surface, &c., paying compensation and not otherwise (g). The burden des run with the land in Equity, i.e. a court of (a) Jones v. Gibbons, 9 Ves. 407, 411; Matthews v. Wallwyn, 4 Ves. 118, 126. (b) These must be regarded as arising from contract (we do not speak of rents or services incident to tenure): the treatment of rentcharges in English law as real rights or incorporeal hereditaments seems arbitrary. For a real right is the power of exercising some limited part of the rights of ownership, and is quite distinct from the right to receive a fixed payment without the immediate power of doing any act of ownership on the property on which the payment is secured. (c) Bower v. Cooper, 2 Ha. 408. L. C. 77. (e) Contra Sugd. V. & P. 584-5. But see 1 Sm. L. C. 80, Dart 778, Dav. Conv. 1. 137. The cases from the Year Books relied on by Lord St. Leonards (Pakenham's ca. H. 42 E. 3. 3, pl. 14, Horne's ca. M. 2 H. 4. 6, pl. 25) seem to show only that it was once thought doubtful whether the assignee could sue without being also heir of the original covenantee. See also 11 Amer. Law Rev. 658, 659. (f) 3rd report of R. P. Commissioners, in 1 Dav. Conv. Contra Cooke v. Chilcott, 3 Ch. D. 694. (g) Aspden v. Seddon (C. A.), 1 Ex. D. 496, 509. Further remarks equity will enforce the covenant against assignees who have actual or constructive (a) notice of it: and when the covenant is for the benefit of other land (as in practice is commonly the case) the benefit generally though not always runs with that other land. Explanation. Let us call the land on the use of which a restriction is imposed by covenant the quasi-servient tenement, and the land for whose benefit it is imposed the quasi-dominant tenement. Now restrictive covenants may be entered into (1) By a vendor as to the use of other land retained or simultaneously sold, for the benefit of the land sold by him: In this case the burden runs with the quasi-servient tenement and the benefit also runs with the quasi-dominant tenement. (2) By a purchaser as to the use of the land purchased by him, for the benefit of other land retained or simultaneously sold by the vendor : In this case the burden runs with the quasi-servient tenement, and the benefit may run with the quasi-dominant tenement when such is the intention of the parties, and especially when a portion of land is divided into several tenements and dealt with according to a prescribed plan (b). All these rights and liabilities being purely equitable are like all other equitable rights and liabilities subject to the rule that purchase for value without notice is an absolute defence. The only points which seem to call for more notice here are the doctrines as to bills of lading (I) and restrictive covenants of lading. as to the use of land (II. ε). as to bills As to (I) it is to be borne in mind that bills of lading are not properly negotiable instruments, though they may be called so "in a limited sense as against stoppage in transitu only ” (c). As far as the law merchant goes the bill of lading only represents the goods, and does not enable any one who gets it into his hands to give a better title than his own to a transferee ; "the transfer of the symbol does not operate more than a transfer of what is represented" (7). And the whole effect of the statute is to attach the rights and liabilities of the shipper's contract not to the symbol, but to the property in the goods. (a) Wilson v. Hart, 1 Ch. 463. (c) Per Willes, J. Fuentes v. Montis, L. R. 3 C. P. at p. 276. (d) Gurney v. Behrend, 3 E. & B. 622, 633, 23 L. J. Q. B. 265. themselves (a) the right to sue on the contract contained in the bill of lading is made to "follow the property in the goods therein specified; that is to say, the legal title to the goods as against the indorser" (b). venants with land: tween C. L. and equity Treatment may of the As to (II. e) we have to explain the discrepance between As to burden of cocommon law and equity, which is a real and serious one. The theory of the common law is to the following effect. The normal running operation of a contract, as we have already had occasion to say, real conis to limit or cut short in some way the contracting party's flict becontrol over his own actions. Among other kinds of actions the exercise of rights of ownership over a particular portion of on this. property may be thus limited. So far then an owner bind himself by [personal] covenant to allow any right he pleases question at over his property " (c) or to deal with it in any way not unlawful or against public policy (d). But if it be sought to annex such an obligation to the property itself, this is prima facie a considerable departure from the ordinary rules of contract, and to be justified only by clear convenience. How then does the matter stand in this respect? An obligation attached to property in this manner ceases to be only a burden on the freedom of the contracting party's individual action, and becomes practically a burden on the freedom of ownership. Now the extent to which the law regards such burdens as convenient is already defined. Certain well-known kinds of permanent burdens are imposed by law, or may be imposed by the act of the owner, on the use of land, for the permanent benefit of other land: these, and these only, are recognized as being necessary for the ordinary convenience of mankind, and new kinds cannot be admitted. And this principle, it may be observed, is not peculiar to the law of England (e). Easements and other real rights in re aliena cannot therefore be extended at the arbitrary discretion of private owners: "it is not competent for an (a) Fox v. Nott, 6 H. & N. 630, 636, 30 L. J. Ex. 259; Smurthwaite v. Wilkins, 11 C. B. N. S. 842, 850, 31 L. J. C. P. 214. (b) The Freedom, L. R. 3 P. C. 594, 599. (c) Hill v. Tupper, 2 H. & C. 121, 127, 32 L. J. Ex. 217. (d) It is not unlawful for a land owner to let all his land lie waste; (e) Cp. Savigny Obl. 1. 7: and = C. L. |