Report No. 86
V. Legislation of 1925
Reasons for repeal of Partition Acts.- The Partition Acts of 1868 and 1876 have now been repealed by the Law of Property Act. The reasons for repeal of the Partition Acts (in England) may be briefly stated. In a tenancy-in-common, the existence of a number of persons interested in the land, each of them entitled to a separate share, raised a serious difficulty in transfer. There was no one person in whom the legal estate could properly be vested, because all tenants had the equal right to present enjoyment and possession. Not only was it necessary to obtain the consent of each party, but also the title of each of them had to be deduced for transfer. This created confusion.1
Effect of 1925 Act.- To end such a confusion, the Law of Property Act, 1925 radically altered the law relating to tenancies-in-common.2 The object of this legislation was to enable land which is subject to tenancies-in-common to be sold without casting upon the purchaser any obligation to consider the titles or the beneficial rights of the tenants. Section 1(6) of the Act of 1925 therefore provided, as a first step,3 that a legal estate is not capable of subsisting or of being created in "an undivided share in land". It is then enacted that an undivided share in land shall not be created except behind a trust for sale. This involves two consequences:4-5
First, the legal estate must be held by trustees holding as joint tenants upon trust for sale. Secondly, the subject-matter of the tenancy in common is converted6 from land to money, for land directed to be sold is regarded by equity as having already been sold. The third step is the group of provisions in sections 34-38 of the Law of Property Act, 1925 whereunder, the legal estate must be held upon a "statutory trust for sale". As a result of this statutory trust for sale, the purchaser is released from the old duty of checking the title of each person. Further, the receipt in writing of the trustee is sufficient discharge to the purchaser, and he is not bound to see to application of the money.7-8
Advantage to the purchaser.- The advantage to the purchaser by this scheme is that he is no longer compelled to investigate the title to each tenant in common. He is concerned only with the legal estate held by the joint tenants upon trust for sale; since the rights of the persons beneficially entitled exist merely as equitable interests behind the trust for sale, and they are over-reached upon a conveyance of the land by the trustees for sale, provided that the purchase money is paid to at least two trustees or to a trust corporation. It is a matter of indifference, therefore, that some of the tenants in common are minors, or that some of them are unwilling to acquiesce in the sale. Although, in the case of a statutory (as distinct from an express), trust for sale the trustees are required, so far as practicable, to consult, and give effect to the wishes of the beneficiaries entitled in possession, or in the case of a dispute, of the majority in terms of value, yet it is expressly enacted that it shall be no concern of a purchaser to see that this requirement has been complied with.9
Why English Acts repealed.- In view of these detailed provisions, retention of the Partition Acts became unnecessary in England. Sale is now the rule in the case of all lands held by co-owners (subject to certain exceptions which are not relevant for the present purpose), and partition an exception, unless by consent.
1. For a summary, see Halsbury's, 3rd Edn., Vol. 32, pp. 345 and 346, para. 543, and footnote (h), p. 346.
2. As to conversion, see Snell Equity (1966), pp. 517-519.
3. q Cheshire Modern Law of Real Property, (1976), p. 222.
4. Section 36(4), L.P.A., 1925.
5. Cheshire Modern Law of Real Property, (1976), p. 225.
6. As to conversion, see Snell Equity, (1966), pp. 517, 519.
7. See section 14(1), Trustee Act, 1925 (15 & 16 Geo. 5, C. 19).
8. Snell Equity (1966), p. 273.
9. L.P.A. 1925, section 20(3); as amended by L.P.(A.) A., 1926, Sched.