In Equity. owner of land to render it subject to a new species of burden at On the other hand the Court of Chancery has treated the question differently, looking not so much at general policy as at individual rights. An owner of land has bound himself by contract to limit his use of that land in a particular manner : why should his successors in title not be bound also, save in the case of a purchase for value without notice of the restriction? It is no hardship on them; for those who buy the land subject to the restriction will pay so much the less, and the intention of the parties would be frustrated if contracts of this kind were considered merely personal. The history of the doctrine is somewhat curious. Lord Brougham adopted and enforced what we have called the common law theory in an elaborate judgment which seems to have been intended to settle the question (). But this judgment, though treated as an authority in courts of law (c), has never been followed in courts of equity. After being disregarded in two reported cases (7) it was overruled by (a) Per Martin, B. Nuttall v. Bracewell, L. R. 2 Ex. 10; for the C. L. principles generally see Ackroyd v. Smith, 10 C. B. 164, 19 L. J. C. P. 315; Bailey v. Stephens, 12 C. B. N. S. 91, 31 L. J. C. P. 226. Rights of this kind are to be carefully distinguished from those created by grants in gross: see per Willes J. ib. 12 C. B. N. S. 111. (b) Keppel v. Bailey, 2 M. & K. 527. (c) Hill v. Tupper, 2 H. & C. 121, 32 L. J. Ex. 217. (d) Whatman v. Gibson, 9 Sim. 196 (1838); Mann v. Stephens, 15 Sim. 377 (1846): Keppel v. Bailey was in 1834. Lord Cottenham in Tulk v. Moxhay (a), now the leading case on the subject. The most important of the recent cases are Keates v. Lyon (b) (where the authorities are collected) and Harrison v. Good (c). This last decided that when a vendor sells land in building lots and takes restrictive covenants in identical terms from the several purchasers, neither reserving any interest nor entering into any covenant himself, this will enable the owner for the time being of one lot under the title thus created to enforce the covenant in equity against the owner of another lot: nor can the vendor release the covenant to any purchaser or his successors in title without the consent of all the rest. Thus the practical result is that a great variety of restrictions on the use of land which could not be imposed by way of easement or the like may be imposed by way of covenant for an indefinite length of time, purchases for value without notice of the restriction being obviously not probable events. So far as courts of equity have omitted to consider whether such a result is consistent with the general principles of the law concerning the tenure and enjoyment of property, perhaps it may be said that the view they have taken is really the more technical of the two. bottom one According to the doctrine of equity, the intention of the The quesparties is to fix an obligation to deal with the land in a particular tion is at manner not merely on the original contracting party, but on of policy his successors in title: then why not give effect to that inten- not of law. tion? The common law doctrine admits that such is the intention, but refuses to give effect to it because it tends to multiply undue restrictions on the freedom of ownership, in contravention of the general spirit of the law (). But the real question involved in this conflict is in truth of an economic rather than a legal kind namely whether it is or is not desirable that private persons should have the power of dedicating land to be used in a particular way for an indefinite time. Such questions of public economy cannot be adequately dealt with by means of the (a) 2 Ph. 774. See per Fry, J. in Luker v. Dennis, 7 Ch. D. at p. 235. (b) 4 Ch. 218. (c) 11 Eq. 338, dist. Mater v. Hansard, 4 Ch. D. 718. (d) See the obversations of the Court of Ex. Ch. in Dennett v. Atherton, L. R. 7 Q. B. 325. rules of ordinary private law concerning ownership and contract, and we need not be surprised if the purely legal discussion of them fails to give satisfactory results (a). APPENDIX A. (See p. 192 above.) As to Parties to Actions on Contracts made with Agents. A person who contracts or professes to contract on behalf of a principal may be in any one of the following positions : 1. Agent having authority (whether at the time or by subsequent ratification) to bind his principal. (A) known to be an agent (a) for a principal named (B) for a principal not named. (B) not known to be an agent (b). 2. Holding himself out as agent, but not having authority to bind his principal. (A) where a principal is named (a) who might be bound, but does not in fact authorize or ratify the contract (B) who in law cannot be bound. (B) where the alleged principal is not named. (a) It is worth while to note that even if Equity had not refused to follow the law on this subject, the sort of restrictions in question might still be effectually created with little more trouble than at present. For instance when it was desired to impose such restrictions on a sale of land in lots, long leases at nominal rents might be substituted for conveyances in fee simple. The restrictive covenants would then run with the reversion at law by the Stat. of Hen. 8, and provision might be made for lessees enforcing them against one another in the name of the reversioner. On the other hand it is conceived that in the actual state of the law courts of equity have by no means abandoned a discretion, which perhaps may yet be exercised with advantage, of refusing to enforce restrictive covenants when by lapse of time or change of circumstances they have become obsolete, vexatious, or useless. Cp. Duke of Bedford v. Trustees of British Museum, 2 M. & K. 552. (b) Since the cases of Calder v. Dobell, Fleet v. Murton, and Hutchinson v. Tatham (see following notes) it may perhaps be considered that the true leading distinction is whether the agent is known to be an agent or not, rather than whether the principal is named or not. for exist 1. In all cases where there is an agent dealing on behalf of a 1. Agent real principal, the intention of the parties determines whether ing printhe agent, or the principal, or both, are to be liable on the con- cipal. tract and entitled to enforce it. The question is to whom credit was really given (a). And the general rules laid down on the subject furnish only provisional answers, which may be displaced (subject to the rules as to admissibility of evidence) by proof of a contrary intention. a. Princi A. When the agent is known to be an agent, a contract is A. Known to be an made, and knowingly made, by the other party with the principal, agent: con on which the principal is the proper person to sue and be sued. tract with principal And when the principal is named at the time, then there is ab initio. prima facie no contract with the agent but when the principal is not named, then prima facie the agent, though known to be agent prima facie an agent, does bind himself personally, since the other party is does not not presumed to give credit exclusively to an unknown prin- contract cipal (b). in person. B. Principal not tract in But when the agent would not prima facie be a contracting named : party agent in person he become so in various ways. may Thus he is prima facie personally liable if he expressly undertakes to be so (c): such an does conundertaking may be inferred from the general construction of a contract in writing, and is always inferred when the agent contracts in his own name without qualification (d), though the principal is of contrary not the less also liable, whether named at the time or not (e), or (a) Story on Agency, §§ 279, sqq. 288. Thomson v. Davenport, 2 Sm. L. C. 364, sqq.; Calder v. Dobell, L. R. 6 C. P. 486. (b) But one who deals with an agent known to be such cannot set off against the principal's claim a debt due to him from the agent. If he has employed an agent on his own part, that agent's knowledge is for this purpose treated as the employer's own and this even though the knowledge was not acquired in the course of the particular employment: Dresser v. Norwood, Ex. Ch., 17 C. B. N. S. 466, 34 L. J. C. P. 48, revg. s. c. 14 C. B. N. S. 574, 32 L. J. C. P. 201. The Indian Contract Act has followed the view of the C. P. in preference to that of the Ex. Ch. See s. 229. And per haps the question may deserve to be (c) Story on Agency, § 269. (d) See Fairlie v. Fenton, L. R. 5 Ex. 169, Paice v. Walker, ib. 173. The latter case, however, goes too far; see note (ƒ) next p. (e) Higgins v. Senior, 8 M. & W. 834: the law there laid down goes to superadd the liability of the agent, not to take away that of the principal, Calder v. Dobell, L. R. 6 C. P. 486. As to when directors of companies are personally liable on documents signed by them, see Lindley, 1. 364, and in addition to authorities there collected, Dutton v. Marsh, L. R. 6 Q. B. 361. person. Evidence intention (a). rule as to deed of agent. if he himself has an interest in the subject-matter of the contract, as in the case of an auctioneer (a). And when the agent is dealing in goods for a merchant resident abroad, it is held on the ground of mercantile usage and convenience that without evidence of express authority to that effect the commission agent cannot pledge his foreign constituent's credit, and therefore conTechnical tracts in person (b). When a deed is executed by an agent as such but purports to be the deed of the agent and not of the principal, then the principal cannot sue or be sued upon it at law, by reason of the technical rule that those persons only can sue or be sued upon an indenture who are named or described in it as parties (c). And it is also held in equity that a party who takes a deed under seal from an agent in the agent's own name elects to charge the agent alone (d). A similar rule has been supposed to exist as to negotiable instruments: but modern decisions seem to show that when an agent is in a position to accept bills so as to bind his principal, the principal is liable though the agent signs not in the principal's name but in his own, or, it would appear, in any other name. It is the same as if the principal had signed a wrong name with his own hand (e). Again, an agent who would otherwise be liable on the contract of contrary made by him may exempt himself from liability by contracting in such a form as makes it appear on the face of the contract that he is contracting as agent only and not for himself as principal (f): but even then he may be treated as a contracting party and personally bound as well as his principal by the Evidence intention (B). (a) 2 Sm. L. C. 399. As to an auctioneer's personal liability for non-delivery to a purchaser of goods bought at the auction, Woolfe v. Horne, 2 Q. B. D. 355. (b) Armstrong v. Stokes, L. R. 7 Q. B. 598, 605. Acc. Elbinger ActienGesellschaft v. Claye, L. R. 8 Q. B. 313, showing that the foreign principal cannot sue on the contract: Hutton v. Bulloch, ib. 331, affirmed in Ex. Ch. 9 Q. B. 572, that he cannot be sued. (c) Lord Southampton v. Brown, 6 B. & C. 718; Beckham v. Drake, 9 M. & W. at p. 95. (d) Pickering's claim, 6 Ch. 525. (e) Lindus v. Bradwell, 5 C. B. 583, 17 L. J. C. P. 123. Cp. Ed munds v. Bushell, L. R. 1 Q. B. 97. (f) Words in the body of a document which amount to a personal contract by the agent are not deprived of their effect by a qualified signature: Lennard v. Robinson, 5 E. & B. 125, 24 L. J. Q. B. 275; and the description of him as agent in the body of the document may under special circumstances not be enough to make him safe, Paice v. Walker, L. R. 5 Ex. 173; see the remarks on that case in Gadd v. Houghton (C. A.) 1 Ex. D. 357, which decides that a contract "on account of" a named principal conclusively discharges the agent. Paice v. Walker is nearly but not quite overruled. |