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Bona Fide Purchaser for Value Without Notice

EQUITY & TRUST | Page 6 of 8
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legal estate, a claim to a better right to call for the legal estate cannot be sustained; mere inertia or passivity on the part of the owner of the legal estate will not be a substitute. However, an established better or superior right to legal estate will not avail against a purchas- er for value of the legal estate without notice of prior equitable interest. The right to call for the legal estate is, no doubt, inferior to the actual purchase for value of the legal estate without notice. An agreement by A to sell to B creates an equitable interest in favour of B who, by vir- tue of the agreement, has the right to call for the legal estate. But if C, for value and without notice of B's prior equitable interest, acquires the legal estate from A, he takes free from the prior equitable interest of B. See Garnham v. Skipper (1885) 55 L.J. Ch. 263. 2. Subsequent Acquisition of Legal Estate. Where a purchaser of an equit- able interest in property that is affected by a prior equitable interest subse- quently acquires the legal estate, he takes free from the prior equitable inter- est provided at the time he obtains the equitable interest he had no notice of the prior equitable interest, and that the legal estate so obtained is not in breach of trust. See Bailey Barnes (1894) 1 Ch. 25, 26. Notice of the prior equita- ble interest at the time he obtains the legal estate is immaterial. The position is clearly illustrated by Lindley L.J. in Bailey v. Barnes (supra at 36). 'The maxim Qui prior est tempore portior est jure is in [favour of a prior equitable owner], and it seems strange that they should, without any default of their own, lose a security which they once possessed. But the above maxim is, in our law, subject to an important