Wilde J.
delivered the opinion of the Court. This is a.i action of assumpsit, in which the plaintiff claims a certain sum of money paid by him to the defendant on a consideration which has failed. The money was paid on a parol agreement to purchase of the defendant a certain house and estate, which were to be conveyed to the plaintiff free and clear of all incumbrances, the defendant undertaking to discharge a mortgage on the estate, which was subsequently done, but before the estate was conveyed to the plaintiff the house was consumed by fire ; and the material question is, which of the parties shall eventually sustain this loss.
A previous question is interposed, arising from an objection to the form of the action, which, although it does not affect the merits of the case, is nevertheless sufficient, if well founded, to defeat the present action. It is contended by the defendant’s counsel, that the money was paid on an executory [138]*138contract still subsisting, and that the plaintiff’s remedy, if he has any, is by an action on the contract, or by a bill in equity
It cannot be denied, that if the money demanded were paid on a valid subsisting contract, the plaintiff’s remedy for the non-performance by the defendant, would be by an action on the contract, and that a general indebitatus assumpsit to recover the purchase money could not be maintained. But it is very clear that the parol contract in the present case is void by the statute of frauds, and that a part performance of the agreement, by payment of the purchase money, does not take the case out of the statute. In the case of Davenport v. Mason, 15 Mass. R. 94, it was said that the statute does not wholly vacate the contract, but only inhibits all actions brought to enforce it, and that the doctrine of courts of equity as to the effect of part performance of a parol agreement for the conveyance of real estate, seemed to have been recognised by the courts of law ; and the case of Crosby v. Wadsworth, 6 East, 602, was referred to as a case turning upon this principle. But the case of Davenport v. Mason was decided on a different point. And no case can be found, where in an action on the contract it has been decided, that part performance of a parol agreement for the conveyance of land W'ould take a case out of the statute. On the contrary, it was decided in the case of Kidder v. Hunt, 1 Pick. 328, that no action would lie on such a contract, and that part performance would not take it out of the statute.
It has been argued that this contract may be enforced in equity. But if it might be, that would not affect the plaintiff’s legal rights. This Court, however, has no authority to decree a specific performance of a parol contract. Nor could this contract be enforced by a court of equity having jurisdiction of the subject matter, for by the destruction of the bouse the defendant is no longer able to perform bis part of the contract. He may make compensation for the destruction of the house, but generally a purchaser, independently of special circumstances, is not to be compelled to take an indemnity, but he may elect to recover back the purchase money, if paid in advance, and if the vendor refuses or is unable on bis part to perform the contract, and the purchaser has no legal remedy [139]*139to recover damages. 1 Sugd. Vend. (9th edit.) 304 ; Hepburn v. Auld, 5 Cranch, 262 ; Waters v. Travis, 9 Johns. R. 464.
The only question, therefore, is, whether the plaintiff or the defendant is to sustain the loss by fire. In respect to the loss of personal property, under the like circumstances, the principle of law is perfectly clear, and well established by all the authorities. When there is an agreement for the sale and purchase of goods and chattels, and after the agreement, and before the sale is completed, the property is destroyed by casualty, the loss must be borne by the vendor, the properly remaining vested in him at the time of its destruction. Tarling v. Baxter, 9 Dowl. & Ryl. 276 ; Hinde v. Whitehouse, 7 East, 558 ; Rugg v. Minett, 11 East, 210. No reason has been given, nor can be given, why the same principle should not be applied to real estate. The principle in no respect depends on the nature and quality of the property, and there can therefore be no distinction between personal and real estate. And so it is laid down by Chancellor Kent, in his Commentaries. “ Thus if A sells his horse to B, and it turns out that the horse was dead at the time, though the fact was unknown to the parties, the contract is necessarily void. So if A, at New York, sells to B his house and lot in Albany, and the house should happen to have been destroyed by fire at the time, and the parties equally ignorant of the fact, the foundation of the contract fails, provided the house, and not the ground on which it stood, was the essential inducement to the purchase.” 2 Kent’s Comm. (2d edit.) 367.
The same principle applies to an agreement to purchase a house, as in the present case, the house being casually destroyed before the purchase is completed. Neither party being in fault, the loss must be borne by the owner of the property.
A different doctrine has been adopted in equity, founded on the fiction, that whatever is agreed to be done, shall be considered as actually done. So that if there is an agreement to purchase, it is equivalent to an actual purchase, in contemplation of equity ; and the purchaser must bear any loss which [140]*140may happen to the estate between the agreement and the conveyance In Paine v. Meller, 6 Ves. 349, where A had contracted for the purchase of some houses which were burned down before the conveyance, the loss was holden to fall upon him, although the houses were insured at the time of the agreement for sale, and the vendor permitted the insurance to expire without giving notice to the vendee. Upon this decision Sugden remarks, that it proceeded on the only principle upon which it could be supported, that the purchaser was in equity the owner of the estate. Sugd. Vend. (9th edit.) 278. And in Ex parte Minor, 11 Ves. 559, where a similar accident happened to an estate sold before a master, and the report had only been confirmed nisi, the loss was holden to fall on the vendor.
Formerly, however, a different doctrine was admitted in courts of equity. In Stent v. Baylis, 2 P. Wms. 220, the Master of the Rolls said, “ If I should buy a house, and before such time as by the articles I am to pay for the same, the house be burnt down by casually of fire, I shall not in equity be bound to pay for the house, and yet the house may be built up again.” So upon a sale of a leasehold for lives, and previously to the conveyance one of the lives dropped, although a specific performance was decreed, the Lord Keeper intimated, that if all the lives had been dropped before the conveyance the decision might be different, for that the money was to be paid for the conveyance, and no estate being left, there could be no conveyance. Thus it appears, that formerly the principle was the same in equity as it ever has been in law. And in one respect the principle still remains the same, namely, that the loss of the property under similar circumstances as those in the present case, must be borne by the owner of the property at the time the loss happened ; and it seems impossible that any different principle can be adopted.
Free access — add to your briefcase to read the full text and ask questions with AI
Wilde J.
delivered the opinion of the Court. This is a.i action of assumpsit, in which the plaintiff claims a certain sum of money paid by him to the defendant on a consideration which has failed. The money was paid on a parol agreement to purchase of the defendant a certain house and estate, which were to be conveyed to the plaintiff free and clear of all incumbrances, the defendant undertaking to discharge a mortgage on the estate, which was subsequently done, but before the estate was conveyed to the plaintiff the house was consumed by fire ; and the material question is, which of the parties shall eventually sustain this loss.
A previous question is interposed, arising from an objection to the form of the action, which, although it does not affect the merits of the case, is nevertheless sufficient, if well founded, to defeat the present action. It is contended by the defendant’s counsel, that the money was paid on an executory [138]*138contract still subsisting, and that the plaintiff’s remedy, if he has any, is by an action on the contract, or by a bill in equity
It cannot be denied, that if the money demanded were paid on a valid subsisting contract, the plaintiff’s remedy for the non-performance by the defendant, would be by an action on the contract, and that a general indebitatus assumpsit to recover the purchase money could not be maintained. But it is very clear that the parol contract in the present case is void by the statute of frauds, and that a part performance of the agreement, by payment of the purchase money, does not take the case out of the statute. In the case of Davenport v. Mason, 15 Mass. R. 94, it was said that the statute does not wholly vacate the contract, but only inhibits all actions brought to enforce it, and that the doctrine of courts of equity as to the effect of part performance of a parol agreement for the conveyance of real estate, seemed to have been recognised by the courts of law ; and the case of Crosby v. Wadsworth, 6 East, 602, was referred to as a case turning upon this principle. But the case of Davenport v. Mason was decided on a different point. And no case can be found, where in an action on the contract it has been decided, that part performance of a parol agreement for the conveyance of land W'ould take a case out of the statute. On the contrary, it was decided in the case of Kidder v. Hunt, 1 Pick. 328, that no action would lie on such a contract, and that part performance would not take it out of the statute.
It has been argued that this contract may be enforced in equity. But if it might be, that would not affect the plaintiff’s legal rights. This Court, however, has no authority to decree a specific performance of a parol contract. Nor could this contract be enforced by a court of equity having jurisdiction of the subject matter, for by the destruction of the bouse the defendant is no longer able to perform bis part of the contract. He may make compensation for the destruction of the house, but generally a purchaser, independently of special circumstances, is not to be compelled to take an indemnity, but he may elect to recover back the purchase money, if paid in advance, and if the vendor refuses or is unable on bis part to perform the contract, and the purchaser has no legal remedy [139]*139to recover damages. 1 Sugd. Vend. (9th edit.) 304 ; Hepburn v. Auld, 5 Cranch, 262 ; Waters v. Travis, 9 Johns. R. 464.
The only question, therefore, is, whether the plaintiff or the defendant is to sustain the loss by fire. In respect to the loss of personal property, under the like circumstances, the principle of law is perfectly clear, and well established by all the authorities. When there is an agreement for the sale and purchase of goods and chattels, and after the agreement, and before the sale is completed, the property is destroyed by casualty, the loss must be borne by the vendor, the properly remaining vested in him at the time of its destruction. Tarling v. Baxter, 9 Dowl. & Ryl. 276 ; Hinde v. Whitehouse, 7 East, 558 ; Rugg v. Minett, 11 East, 210. No reason has been given, nor can be given, why the same principle should not be applied to real estate. The principle in no respect depends on the nature and quality of the property, and there can therefore be no distinction between personal and real estate. And so it is laid down by Chancellor Kent, in his Commentaries. “ Thus if A sells his horse to B, and it turns out that the horse was dead at the time, though the fact was unknown to the parties, the contract is necessarily void. So if A, at New York, sells to B his house and lot in Albany, and the house should happen to have been destroyed by fire at the time, and the parties equally ignorant of the fact, the foundation of the contract fails, provided the house, and not the ground on which it stood, was the essential inducement to the purchase.” 2 Kent’s Comm. (2d edit.) 367.
The same principle applies to an agreement to purchase a house, as in the present case, the house being casually destroyed before the purchase is completed. Neither party being in fault, the loss must be borne by the owner of the property.
A different doctrine has been adopted in equity, founded on the fiction, that whatever is agreed to be done, shall be considered as actually done. So that if there is an agreement to purchase, it is equivalent to an actual purchase, in contemplation of equity ; and the purchaser must bear any loss which [140]*140may happen to the estate between the agreement and the conveyance In Paine v. Meller, 6 Ves. 349, where A had contracted for the purchase of some houses which were burned down before the conveyance, the loss was holden to fall upon him, although the houses were insured at the time of the agreement for sale, and the vendor permitted the insurance to expire without giving notice to the vendee. Upon this decision Sugden remarks, that it proceeded on the only principle upon which it could be supported, that the purchaser was in equity the owner of the estate. Sugd. Vend. (9th edit.) 278. And in Ex parte Minor, 11 Ves. 559, where a similar accident happened to an estate sold before a master, and the report had only been confirmed nisi, the loss was holden to fall on the vendor.
Formerly, however, a different doctrine was admitted in courts of equity. In Stent v. Baylis, 2 P. Wms. 220, the Master of the Rolls said, “ If I should buy a house, and before such time as by the articles I am to pay for the same, the house be burnt down by casually of fire, I shall not in equity be bound to pay for the house, and yet the house may be built up again.” So upon a sale of a leasehold for lives, and previously to the conveyance one of the lives dropped, although a specific performance was decreed, the Lord Keeper intimated, that if all the lives had been dropped before the conveyance the decision might be different, for that the money was to be paid for the conveyance, and no estate being left, there could be no conveyance. Thus it appears, that formerly the principle was the same in equity as it ever has been in law. And in one respect the principle still remains the same, namely, that the loss of the property under similar circumstances as those in the present case, must be borne by the owner of the property at the time the loss happened ; and it seems impossible that any different principle can be adopted. As we therefore cannot recognise the fiction in equity, by which a purchase and an agreement to purchase are held to be similar, and indeed identical in respect to the present question, we must hold that the defendant is bound to repay the purchase money, as the consideration upon which it- was paid has wholly failed, the plaintiff not being bound, under the [141]*141circumstances of the case, to accept a deed of the land. • Where the contract is entire, the vendor cannot recover or retain part of the purchase money, where he cannot convey or make a good title to the whole estate sold.
The rule in chancery on this point also, is somewhat different and depends more on the discretion of the court ; which has given rise to many conflicting opinions and decisions.
In the case of the Cambridge wharf, upon which Lord Kenyon, when sitting in chancery, in the case of Poole v. Shergold, 1 Cox’s Rep. 273, made some remarks, the vendor made title to all the estate but the wharf, and that part of the land was the principal object of the vendee in making the purchase, yet the purchaser, who had contracted for the house and wharf, was compelled to complete the purchase. This decision, as Lord Kenyon truly remarked, was contrary to all justice and reason. In other cases a more reasonable doctrine has prevailed, which is, “ that if there be a failure of title to part, and that appears to be so essential to the residue, that it cannot reasonably be supposed the purchase, would have been made without it, or as in case of the loss of a mine, or of water necessary to a mill, or of a valuable fishery attached to a parcel of poor land, and by the loss of which the residue of the land was of little value, the contract may be dissolved in ioio.” This rule was adopted in Pennsylvania, in the case of Stoddart v. Smith, 5 Binney, 355, and a similar rule has been adopted in South Carolina. Pringle v. Executors of Witten, 1 Bay, 256 ; Tunno v. Fludd, 1 M‘Cord, 121.
“ The good sense and equity of the law on this subject is,” as Chancellor Kent remarks, “ that if the defect of title, whether of lands or chattels, be so great as to render the thing sold unfit for the use intended, and not within the inducement to the purchase, the purchaser ought not to be held to the contract, but be left at liberty to rescind it altogether. But if the defects were not so great as to rescind the contract entirely, there might be a just abatement of price ” 2 Kent’s Comm. (2d edit.) 373.
This rule, if applied to the present case, would not alter [142]*142the result. But it is not necessary to consider the case in reference to this rule, however reasonable it may be, as the plaintiff cannot be compelled to perform the conttact ; and as no fault can be imputed to him, he is entitled to recover back the purchase money. If the house had not been destroyed, and the plaintiff had refused to perform the contract, the case would have required a different decision.
Judgment for plaintiff.