Rosher v Rosher (1884)

Section 10 strikes down a condition absolutely restraining alienation, and every student can recite that. The examinable question is different: when is a restraint that is not expressed as a prohibition nevertheless absolute in substance? Rosher v Rosher is the answer, and it is the authority the Indian courts and the textbooks use for it. A pre-emption at a fifth of the value is a prohibition in disguise, and equity looks at what the condition does, not at how it is worded.

J.B. Rosher, by a will dated 26 November 1872, devised his manor of Trewyn and his other real estate in Monmouth and Hereford to his son Jeremiah Lilburn Rosher in fee, subject to three conditions operating during the life of the testator's widow:

1. If the son or anyone claiming under him should desire to sell, the estate must first be offered to the widow at a fixed price for the whole and a proportionate price for any part. 2. If he should desire to let Trewyn House for more than three years at a time, she should have the option of renting it at £25 a year. 3. If he should desire to let Lower Trewyn for more than seven years, she should have the option of renting it at £35 a year.

The testator died on 26 November 1874. The agreed facts were that the real selling value of the estates at the date of the will and at the death was "£ 15,000 and upwards", and that the real letting value of Trewyn House and of Lower Trewyn was each "£ 100 and upwards per annum".

A note on the figures. The recital of the will gives the option price as "£ 3600 for the whole", but Pearson J's judgment says "at the price of £ 3000 for the whole" and then reasons on the footing that the widow could buy at "one-fifth of their value" of £15,000 — which is £3,000. State the ratio in terms of the one-fifth proportion, which the judgment itself uses. Do not quote a figure in an answer; quote the proportion.

Whether, on the true construction of the will, the son could sell, mortgage or charge without first offering the estate to the widow at the stated price, and whether he could let the two properties for longer than the stated terms without first offering them to her at the stated rents — or whether those directions were null and void.

The condition restraining sale was void. Pearson J treated the pre-emption clause as an absolute restraint on alienation.

Pearson J states his own construction first, and it is the whole case:

"I consider that (and I mean to decide the case upon that conclusion) as an absolute restraint against sale during the life of the widow."

Why? Because "to compel him, if he does sell, to sell at one-fifth of the value, and to throw away four-fifths of the value of the estate is, to my mind, equivalent to a restraint upon selling at all". A condition that makes alienation ruinous is a condition against alienation.

He then gives the reason of policy, in the passage that is worth memorising because it generalises the holding beyond pre-emption clauses:

"If a covenant be held good which in the event of a grantee in fee simple aliening the land, merely imposes a fine upon him (or an additional rent on the lands, as in the case before us) the general rule might be evaded and the principles of it violated by fixing such an amount of fine or additional rent as would effectually prohibit the alienation, which would clearly be a `circumvention of the law."

He concludes: "to compel the son in the present case, if he chose to sell, to sell at one-fifth of the value of the estate, is really a prohibition of alienation during the widow's lifetime."

Section 10 provides that where property is transferred "subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void", with two exceptions — a lease where the condition is for the benefit of the lessor, and the proviso for a married woman who is not a Hindu, Muhammadan or Buddhist.

Rosher supplies the test of what counts as absolute:

| Condition | Effect | |---|---| | A flat prohibition on selling | Absolute; void | | Sell only to X, or only at a fraction of the value, or on payment of a crippling fine | Absolute in substance; void on Rosher | | Do not sell to a stranger, that is, outside the family | Partial; valid — Muhammad Raza v Abbas Bandi Bibi (case 07) | | Do not sell for a limited time, or not to named persons | Partial; generally valid | | A restraint in a lease for the benefit of the lessor | Valid by the express exception in s. 10 |

The letting conditions in Rosher are the same idea applied to a partial interest: an option to rent at £25 or £35 where the real letting value was £100 and upwards is, in substance, a prohibition on granting a lease of any length.

A condition annexed to an absolute transfer which does not in terms forbid alienation, but which makes alienation so unprofitable as to be practically impossible — an option to purchase at a small fraction of value, or a fine, or an additional rent fixed at a prohibitive level — is an absolute restraint on alienation and is void. The court looks at the substance and effect of the condition, not its form, because otherwise the rule against restraints could be evaded at will.