King v David Allen & Sons Billposting Ltd

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Citation: King v David Allen & Sons Billposting Ltd (1916) 2 AC 54.

This information can be found in the Textbook: Edgeworth et all, Sackville and Neave's Property Law Cases and Materials, 8th edition, Lexis Nexis, 2008, pp. 16-17 [1.25]

Contents

Background facts

  • The licensor had a property on which he intended to construct a theatre.
  • The licensor formed agreement in the form of a ‘license’ with the licensee allowing the licensee put up posters on the property walls.
    • License: Minimum 4 years from date of theatre construction and thereafter terminable by either party on 6 months’ notice; 12p rent per annum; licensor would not allow any other company to put up posters.
  • The licensor then leased the property to another company, which did not refer to original agreement with licensee.
  • After completion of the theatre, the licensee attempted to put up posters, but was forcibly stopped by the other company from doing so; licensor protested to no avail.
  • Licensee commenced action against licensor, claiming damages for breach of agreement.

Legal issues

Judgement

Lord Buckmaster LC: (for licensee)

  • Despite the situation being beyond his control, the licensor is in breach of his obligation to the licensee. He must thus be made responsible.
  • The agreement (between the licensor and licensee) did not give the licensee an interest in land (in rem) which would be enforceable against anyone (like the other company), but merely created a personal obligation on the part of the licensor to allow the licensees the use of the wall for advertisements. The rights can only be enforced against the licensor.
  • As the licensor was now unable to fulfill his obligation under the agreement, he was liable in damages for breach of contract.

Earl Loreburn: (for licensee)

  • If the agreement between the licensor and licensee was an easement (which is a property right), the licensor would not have been responsible for trespass by the licensees.
  • But looking at the document itself, there is no land interest.
  • The licensor has executed the lease with the company, and thus prevented the licensee from having the right to put up posters.
  • There may be a case against the company, but they are not here – no point deciding either way. Nonetheless, such a remedy does not release the licensor from his liability ‘to answer for breaking the contract which he made’.

Ratio:

  • A license does not qualify as a proprietary right. This is because it delivers insufficient control over the land.
  • Only proprietary rights are enforceable against third parties. However, an interest is not proprietary simply because it is enforceable against third parties.
  • A proprietary interest could have been created through clear wording in the contract as a lease – shows importance of construing the document.

References

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