land law issue

A) On the execution of the contract the vendor becomes a trustee for the purchaser. He is not however a bare trustee for he has a personal and substantial interest to the extent of the unpaid purchase moneys. He is 'in progress towards' bare trusteeship and finally becomes such when the whole of the purchase moneys are paid and he is bound to convey: Wall v Bright (1820) 1 Jac & W 494; 37 ER 456 per Sir Thomas Plumer MR.




B) The purchaser may devise, alienate and charge his equitable interest so that it is plainly not a mere right in contract.


C) The extent of the equitable interest is measured by the amount of the purchase moneys paid. Thus to the extent of the payments the purchaser acquires a lien exactly as if the vendor had given a mortgage to secure them them: Rose v Watson (1864) 10 HL Cas 672; [11 ER 1187] per Lord Cranworth at p 684.


D) Where there is a clear and undisputed contract, the court will not permit the vendor to transfer the legal estate to a third person and the reason for this was explained by Turner LJ in Hadley v London Bank of Scotland 3 De GJ & S 63 at p 70; 46 ER 562 at p 564 as being because in equity the property was transferred to the purchaser.



E) The incidents of trusteeship exist only if and so far as a Court of Equity would in all the circumstances of the case grant specific performance of the contract'.