Pre-emption covenant binds assignees and escapes the perpetuity rule because it creates no property interest.

A covenant of pre-emption in a partition award was held binding on assignees and successors-in-interest because the wording and surrounding obligations showed no contrary intention, and contractual enforcement could extend to representatives in interest, legal representatives, assignees and transferees. The same covenant was not void under the rule against perpetuities because it did not create an interest in immovable property; it was only a contractual obligation, which may be enforced against a transferee with notice. The pre-emption right was therefore upheld as enforceable against transferees and not invalid under the perpetuity doctrine.

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Issues: (i) Whether the covenant of pre-emption in the partition award bound the assignees and successors-in-interest of the original parties. (ii) Whether the covenant of pre-emption was void as offending the rule against perpetuities.

Issue (i): Whether the covenant of pre-emption in the partition award bound the assignees and successors-in-interest of the original parties.

Analysis: The contract and the surrounding clauses showed that the expression used in the award was not confined to the original contracting parties. The statutory scheme on enforcement of contracts recognized enforceability by and against representatives in interest, legal representatives, assignees, and transferees, unless a contrary intention appeared. The language of the award and its associated obligations indicated no such contrary intention.

Conclusion: The covenant of pre-emption was binding on the assignees and successors-in-interest.

Issue (ii): Whether the covenant of pre-emption was void as offending the rule against perpetuities.

Analysis: A covenant of pre-emption does not itself create an interest in immovable property. Under the Transfer of Property Act, a contract for sale of immovable property creates no interest in the property, and an obligation arising out of such contract may be enforced against a transferee with notice. The rule against perpetuities applies to future interests in property, not to such contractual obligations. On that basis, the covenant could not be treated as creating a perpetuity.

Conclusion: The covenant of pre-emption did not offend the rule against perpetuities and was not void.

Final Conclusion: The contractual right of pre-emption was upheld as enforceable against transferees and not invalid under the perpetuity doctrine, so the challenge to the decree failed.

Ratio Decidendi: A covenant of pre-emption, where the surrounding terms show it was intended to bind successors, is enforceable against assignees, and because it does not create an interest in immovable property, the rule against perpetuities does not apply.

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