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Driscoll owned a building which was mixed use, shops, and dwellings. Driscoll delivered a lease to P containing a clause after the habendum that P had the privilege of renewing his lease for another five years on the same terms. Driscoll then conveyed the property to Floyd by deed. The deed was recorded and contained full covenants against all encumbrances except certain mortgages. D was aware of the tenants in the building but was informed that Driscoll that none had any written leases. D made no inquiry to Floyd over the nature of his lease. Floyd discovered the nature of P's lease two months later but refused to ratify the lease. Floyd then conveyed to D. P gave D written notice of his intent to renew the lease. D refused and gave P notice to quit the premises. The lease was never recorded in the registry of deeds.

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