Midland Bank Trust Co Ltd Vs Green (No. 1)  1 AC 513
Green was granted a farm by his father to purchase a farm. Although the farm
which was given as an option to Green was no listed/registered in the Register
of Title. As it was not listed as an option so Green's father sold the property
to his mother for $500, but the original cost of the farm was $40,000.
The son sought a declaration that the option was binding on the mother's estate
in front of the courts after the mother died. First the judge declared that it
was a genuine sale which defeated son's argument that it was an unregistered
option, but then in the court of appeal the decision was reversed and was
appealed to the House of Lords by the mother's estate.
Under Section13 of Land charges Act which says that a land charge is void unless
registered against a purchaser of the land charged provided the purchase is 'for
money or money's worth', but argument by the son was that minimal purchases
should be excluded and even stated that section13(2) did not protect the person
who did in bad faith.
Here the purchase done by his mother was clearly done so that the option offered
to Green by his father will be defeated or should not be considered. As the
offer was done in bad faith so his option is still binding and can't be declared
as void in the House of Lords.
Their Lordships allowed the arguments put forward by Mr. Green and stated that
if a purchase is done then it must be done in good faith which in this case was
purely done in bad faith by the mother. In fact, the section13 did not exclude
any amount of money which was provided the purchase for money or money's worth.
According to Their Lordships, even if statutory rights were used dishonestly,
relying on them was not fraud. As a result, the mother's estate was not bound by
the son's option.