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Mar 26, 2009

TPA In Noakes v. Rice [1902] AC 24, the mortgage of a leasehold public house contained a covenant with the mortgagee, a brewery, that the mortgagor and his successors in title would not, during the continuance of the leasehold term and whether or not any money should be owing on the security of the mortgage, sell malt liquor in the public house other that that purchased from the brewery. The covenant was held not to be enforceable after redemption. The point was put shortly by Lord Lindley, at page 36: “My Lords, I agree in thinking that the covenant contained in this mortgage, and by which the mortgagees have attempted to convert the house mortgaged from a free public-house into a tied public-house even after redemption, is invalid. I see no answer to the objection taken to it that upon payment off of the mortgage money the mortgagor cannot get back what he mortgaged, namely, a free public-house.”

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