Spencer's Case

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Spencer's Case
Royal Arms of England (1399-1603).svg
Court Court of King's Bench
Full case nameSpencer v. Clark
Decided1583
Citation(s)[1583] EWHCKB J53, 77 ER 72, (1583) 5 Co Rep. 16a
Court membership
Judge(s) sitting Christopher Wray J
Thomas Gawdy J
Keywords
Leasehold; Land Covenants

Spencer's Case (1583) 5 Co Rep. 16a, is an English common law case reported by Sir Edward Coke, who was then sitting on the King's Bench. It establishes the rule that covenants in leases with a sufficiently close relation to the land "run with the land," and will bind assignees of the leasehold.

Contents

Facts

Spencer and his wife granted a lease over real property to "S" for 21 years. The lease contained a covenant that S, his executors, administrators, or assigns would build a brick wall on the property. S assigned the lease to "J", who assigned the lease to the defendant Clark. The wall was not built and Spencer sued Clark as the assignee of the leasehold.

Judgment

In 1583 the Court of King's Bench gave judgment in favor of Spencer. The central question was what kinds of covenants will bind an assignee who is not expressly named in the instrument creating the legal estate.

The court started with the proposition that a covenant over a thing in existence at the time of the demise attaches to the thing and will bind assignees, but a covenant over a thing to be created later only binds executors and administrators and not assignees. In this case, the court found, the thing (i.e., the wall) did not exist when the covenant was created.

However, the court held Spencer should nevertheless get the benefit of the covenant. Even though the wall did not exist at the time, its construction was to be done on the land and the assignee would get the benefit of the wall. The opinion went on to examine other situations where a covenant benefiting property held other than in fee simple would run with the land and thus compel an assignee to act. [1]

Influence

Spencer's Case is an early departure from strict rules of contractual privity that limit recourse for breach of covenant when brought against third parties who did not sign the contract containing the covenant. [2] It established at common law that covenants with a close relationship to the land will "run with the land." [3]

Coke's opinion is the source of the phrase "touch and concern the land," paraphrasing his observation that "if the thing to be done be merely collateral to the land, and doth not touch or concern the thing demised in any sort, there the assignee shall not be charged". Touch-and-concern is still a principal tool for distinguishing between covenants which must be honored by the assignee of a legal estate, and those which are collateral and thus subject to rules of privity. [4] While the Law of Property Act 1925 at ss 141 and 142 now uses the phrase "have reference to the subject matter of the lease" it has the same meaning. [2] [5]

It is also the source of a phrase, used later in court opinions and other writings, about the centrality of judicial interpretation in the development of the common law: [6]

Observe reader your old books, for they are the fountains out of which these resolutions issue, but perhaps by these differences the fountains themselves will be made more clear and profitable to those who will make use of them.

Related Research Articles

This aims to be a complete list of the articles on real estate.

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<span class="mw-page-title-main">Privity of contract</span> Legal Principle

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Assignment is a legal term used in the context of the laws of contract and of property. In both instances, assignment is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee. An assignment may not transfer a duty, burden or detriment without the express agreement of the assignee. The right or benefit being assigned may be a gift or it may be paid for with a contractual consideration such as money.

An equitable servitude is a term used in the law of real property to describe a nonpossessory interest in land that operates much like a covenant running with the land. In England and Wales the term is defunct and in Scotland it has very long been a sub-type of the Scottish legal version of servitudes, which are what English law calls easements. However covenants and equitable servitudes in most of the jurisdictions across North America, are slightly different. The usual distinction is based on the remedy plaintiff seeks and precedent will allow for the scenario in question. Where the terms are unmerged, holders of a covenant seek money damages; holders of equitable servitudes seek injunctions. The term used to exist in England widely before Tulk v Moxhay and as byproduct of the Judicature Acts became one of the fullest mergers of equity and common law in England and Wales so as to agree initially on the term "equitable covenant", then coming to be united in the term covenant save that "equitable" bears a particular meaning in English property rights since at least 1925: it means not fully compliant with registration/written formalities. If lacks legally routine formalities it is not a full legal covenant and therefore more tenuous, often only enforceable personally and against the original covenantor.

<span class="mw-page-title-main">Collateral contract</span>

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A covenant, in its most general sense and historical sense, is a solemn promise to engage in or refrain from a specified action. Under historical English common law, a covenant was distinguished from an ordinary contract by the presence of a seal. Because the presence of a seal indicated an unusual solemnity in the promises made in a covenant, the common law would enforce a covenant even in the absence of consideration. In United States contract law, an implied covenant of good faith is presumed.

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<span class="mw-page-title-main">Law of Property Act 1925</span> United Kingdom legislation

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<i>Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board</i>

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<i>Tulk v Moxhay</i>

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<i>Belchier v Parsons</i>

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<i>Morrells of Oxford Ltd v Oxford United Football Club</i>

Morrells of Oxford Ltd v Oxford United Football Club [2001] Ch 459 is an English land law case concerning covenants and their interpretation in a conveyance, particularly discerning and distinguishing those expressly or impliedly with no intention to bind successors — those of a personal nature, enforceable "inter partes", that is between the parties to the original deed. It concerned a restraint of trade covenant and was unlike the others surrounding it not expressed to bind all heirs and assigns.

<i>Rhone v Stephens</i>

Rhone v Stephens[1994] UKHL 3 is an English land law case, at the court of final appeal level, concerning the succession to the burden of positive covenants in freehold land within which it is of relatively broad application. It is distinguished in cases of regular payments related to easements in English law which are enjoyed and some other narrow categories, many of which are similarly well-known and well-cited notable cases.

References

  1. Spencer's Case [1583] EWHC KB J53, 1583, retrieved 10 March 2023. Bailii.org
  2. 1 2 McFarlane, Ben; Hopkins, Nicholas; Nield, Sarah (2018). Land law : text, cases, and materials (4th ed.). Oxford. pp. 142, 845–46. ISBN   978-0-19-880606-6. OCLC   1046623490.{{cite book}}: CS1 maint: location missing publisher (link)
  3. Smith, R. J. (1978). "The Running of Covenants in Equitable Leases and Equitable Assignments of Legal Leases". The Cambridge Law Journal. 37 (1): 98–121. doi:10.1017/S0008197300092904. ISSN   1469-2139. S2CID   145272155.
  4. "Note: Touch and Concern, the Restatement (Third) of Property: Servitudes, and a Proposal". harvardlawreview.org. January 2009. Retrieved 10 March 2023.
  5. "London Diocesan Fund & Ors v. Avonridge Property Company Ltd [2005] UKHL 70 (1 December 2005)". www.bailii.org. Retrieved 10 March 2023.
  6. "Lisenby v. Newton, 120 Cal. 571". casetext.com. Retrieved 10 March 2023.