Hodgson v Marks

Hodgson v Marks [1971] Ch 892;

An oral declaration of trust can amount to an equitable interest for actual occupation.

Facts:

The appellant, Hodgson, who owned the house where she lived, transferred the property to her lodger. She and the lodger had an oral agreement which made it clear that Mrs Hodgson was to remain the equitable owner and that she was only transferring legal title to the house. The lodger subsequently sold the property to the respondent. The appellant sought a declaration that the defendant was bound to transfer the house to her free of any charges.

Issues:

Under s.701)(g) of the Land Registration Act 1925 the interest of a person who is in actual occupation and who does not do anything to abandon that interest overrides a registered disposition provided that on any enquiry he revels those rights. The appellant argued that she was still the equitable owner of the property and had done nothing to abandon those rights. No enquiry had ever been made of her by the purchaser, and she had remained in occupation. Therefore, her interest bound the purchaser.

Held:

The court allowed the appeal. Mrs Hodgson was in actual occupation and had an overriding interest under s,70(1)(g) of the 1925 Act. She could be in occupation even though she shared occupation of the property with the registered proprietor, the lodger. Therefore, her overriding interest bound the purchaser. Furthermore, since Mrs Hodgson was the true beneficial owner of the entire property the purchaser had to transfer the entire estate over to her.