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Wilkes v Spooner [1911] 2 K.B. 473

RESTRICTIVE COVENANT – LEASES - PURCHASER FOR VALUE WITHOUT NOTICE – SUBSEQUENT PURCHASER WITH NOTICE

Facts

A lessee of premises (L), upon which the lessee conducted his business as a general butcher, contained a covenant by which L covenanted not to carry on any noisy or offensive trade other than that of a butcher. He was also a lessee of different premises in the same street, which were used for the same purposes. L sold his interest in the latter premises to the claimant (C), and the goodwill of his business as a general butcher, covenanting with C that he, his executors, administrators, and assigns, would not use the former premises for the same purposes. L then gave up his business and surrendered his lease to the landlord, who granted a new lease to his son who subsequently set up as a competing butcher. The landlord did not have notice of the covenant, actual or constructive, yet D himself was aware of its existence.

Issues

Whether a bona fide purchaser, for valuable consideration and without notice, can give a good legal title to a subsequent purchaser who is fixed with notice of some pre-existing equity affecting the property.

Held

The appeal was dismissed with the court finding that, under the circumstances of the case, the landlord did not have constructive notice of L’s covenant, and, consequently, could grant to D a lease free from the restriction of that covenant. D, therefore, could not be restrained at the behest of C from carrying on the business of a general butcher whilst tenant of the premises.


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