Bonafide purchaser
sridhar pasumarthy
(Querist) 07 November 2011
This query is : Resolved
Respected Experts,
May I know what are the instances under which, the claim of a bonafide purchaser for value without notice prevails upon other transactions?
prabhakar singh
(Expert) 07 November 2011
There are four separate elements to the defence of bona fide purchase, a purchase made in good faith, for valuable consideration and without notice. Where a purchaser has obtained legal title for valuable consideration in good faith, the resolution of the dispute will depend on notice. There are different kinds of notice, actual notice and constructive notice where a person or entity is legally presumed to have knowledge of something .
prabhakar singh
(Expert) 07 November 2011
A leading case Jared v Clements provides a useful illustration of this requirement of actual notice.
In the case Clements found out through his solicitor that the property he was trying to buy off Taylor had an equitable mortgage upon it from Jared. Parr, Taylor and Jareds solicitor fraudulently completes a receipt suggesting that this equitable mortgage had been paid off and Clements bought the property. Once it was ascertained that Jared was guilty of no negligence or misconduct (and that Parr was not acting within his remit as his lawyer), the judgement was held in his favour because it was held that a purchaser with actual notice of a prior claim (in this case the equitable mortgage) completes the
purchase at his own risk. Would the purchaser in the case have had constructive notice if his solicitor had not searched the file in bankruptcy? He would not.
prabhakar singh
(Expert) 07 November 2011
In Joseph v Lyons what interest did the plaintiff have in Mannings stock-in-trade and how did it arise? Joseph had a bill of sale giving him an equitable interest (legal title does not pass until either
delivery or contract). What interest did the defendant have in those assets and how did it arise? The defendant gained legal title as he acquired the jewellery in the normal course of his businessasapawnbroker. Joseph sues Lyons for the goods claiming conversion or detention of them. Held in
favour of Lyons, he had no notice of the equitable title belonging to Joseph and had no duty to inquire into the register of bills of sale as to goods pledged with him in the course of his business as a
pawnbroker. If he had notice of the equitable title he would have had that duty. Until the property passes to the buyer, he can have only an equitable title which may be postponed to the legal claim
of some third party acquired for value and in good faith.
prabhakar singh
(Expert) 07 November 2011
Like wise you may look for indian cases like:
1]Arunachala Thevar And Ors. vs Govindarajan Chettiar And Ors. on 23 December, 1976
2]Jagan Nath vs Jagdish Rai & Ors on 28 April, 1998
3]Biswakesan Ramanuj Das vs Krushna Chandra-Auction ... on 3 January, 1950
4]Deepak Raj vs Smt. Sarita Rani And Others on 30 July, 1999
5]Ramabai Govind vs Raghunath Vasudeo on 12 July, 1951
6]Vasantha Ammal vs R4 Impleaded As Party on 7 October, 2008
7]Hindustan Dorr Oliver Ltd. vs A.K. Menon And Ors. on 16 August, 1993
8]Ram Prakash vs Baddal Husain on 4 May, 2007
9]Jagjiwan Prasad (D.) Through ... vs Babu (D.) And Ors. on 4 January, 2005
10]D.Kamalavathi vs P.Balasundaram (Deceased) on 31 January, 2011
all could be found on http://www.indiankanoon.org
ajay sethi
(Expert) 07 November 2011
well advised by mr prabhakar singh
