King v David Allen & Sons Billposting Ltd [1916] 2 AC 54
Facts
King agreed that David Allen & Sons could use part of the wall of a proposed cinema for advertising in return for payment. He subsequently granted a lease of the premises to a cinema company. The tenant would not permit the advertising company to exercise the promised right. The dispute concerned whether the earlier agreement had created an interest in land that bound the tenant, and the consequences for King if it had instead created only personal obligations. The advertising company sought to hold him responsible for the loss of the use he had promised.
Legal Issue
Did the advertising agreement create a proprietary right binding the cinema tenant, or a personal licence leaving King liable in damages when performance became impossible?
Held
The House of Lords held that the advertising agreement created a personal contractual licence, not an estate or other proprietary interest binding the cinema tenant. Its payment provisions and fixed duration did not transform permission to use the wall into a lease or easement. King nevertheless remained contractually responsible to the advertising company. By granting possession on terms that prevented him from honouring his earlier undertaking, he put performance beyond his power and was liable in damages. The failure to bind the later occupier therefore did not make the original promise legally meaningless. The court separated the company's contractual remedy against the promisor from any claimed property right against a third party.
⭐ Legal Principle
A contractual licence can bind the licensor personally without creating a proprietary interest enforceable against a later tenant. A licensor who disables performance of that promise may remain liable in damages even though the licensee cannot compel the third party to permit the use.
Significance
King is a foundational distinction between contractual and proprietary rights in land. Consideration and a specified term may establish an enforceable contract without conferring an estate or easement. The case also demonstrates why the identity of the defendant matters: a claim against the original promisor differs from a claim against a later occupier. Any separate undertaking, estoppel or trust affecting that occupier would require its own basis; knowledge of a personal licence should not simply be treated as making it proprietary.
Common exam questions about this case
Why did payment for the advertising right not make it proprietary?
Consideration can support a binding personal promise without creating an estate or easement. The agreement's substance remained permission to use the wall for advertisements. Its enforceability against King therefore did not establish an interest that automatically burdened the later cinema tenant.
Why could the advertising company still recover damages?
King had undertaken a contractual obligation and then granted possession in a way that prevented him from performing it. The later tenant's freedom from the licence did not release King from that promise. The company's remedy was consequently directed against the original contracting party.
What should an exam answer ask before suing a later occupier?
First identify the nature of the right: lease, easement, other proprietary interest or personal licence. Then ask whether a separate legal basis binds the later occupier. A contract with the previous owner is not itself enough; the original promisor's damages liability is a different issue.