1868. ENGEL against FITCH and others. [Thursday, April 16th.] 1. The rule laid down in Flureau v. Thornhill, 2 W. Bl. 1078,-that upon Vendor and a contract for purchase of real property, if the title proves bad and the purchaser. vendor is without fraud incapable of making a good one, the purchaser Sale of real is not entitled to damages beyond the amount of the deposit and interest property. thereon and the expenses of investigating the title,--is anomalous, being Refusal of founded on the state of the law as to real property; and does not apply vendor to where the non-performance of the contract arises not from a difficulty convey. as to title but from the fact of the party who engages to sell not having Damages. secured to himself the property in or the possession of the thing of which Loss of profit he takes on himself to dispose. 2. The defendants, mortgagees with a power of sale, sold to the plaintiff by auction the lease of a house, the particulars of sale stating that possession would be given on completion of the purchase. The transaction was by the conditions of sale to be completed by the 26th December. By the 5th condition, in case the vendor should be unable or unwilling to remove or comply with any objection or requisition as to the title, he was at liberty to rescind the contract and to return the deposit money without interest, costs or other compensation. The mortgagor being in possession refused to give it up; and the plaintiff, having sold to a purchaser who bought the house for occupation, required possession before completion. Thereupon the defendants rescinded the contract on account of the expense they would incur in order to enable them to complete. Held, (1). That the defendants were not entitled to rescind under the 5th condition. (2). That the plaintiff could recover damages for the loss of profit on the resale, and the expense consequent on it. (3). That such damages were not too remote, according to the rule in Hadley v. Baxendale, 9 Exch. 341. THIS was an action by purchaser against vendor for not performing an agreement to sell the lease of a house. On the trial, before Shee J., at the Middlesex Sittings during Hilary Term, 1867, the facts were as follows. The defendants put up to auction, subject to certain conditions of sale, the lease of two houses mortgaged to them as trustees with a power of sale, which power they had become entitled to exercise. One house was described in the particulars of sale as being let to weekly on resale. 1868. ENGEL V. FITCH. tenants; as to the other it was stated in the particulars that "possession would be given on the completion of the purchase." The plaintiff being the highest bidder, the lease was knocked down to him for the sum of 1957, and thereupon the deposit required by the conditions was duly paid by him. The transaction was by the conditions of sale to be completed by the 26th of the ensuing December, 1865. The 5th article of the conditions stipulated :-" All objections or requisitions as to the title or conveyance (if any) shall be delivered in writing to Messrs. Lewis & Sons, 7, Wilmington Square, W. C., the vendor's solicitors, within seven days after the delivery of the abstract, and in default of such delivery, and as to all matters not therein specifically objected to, the title shall be considered as accepted, and every answer to any original or subsequent statement of objections or requisitions shall, within seven days after the delivery of such answer, be replied to by a statement in writing delivered as aforesaid, and any such answer not so replied to shall be considered as satisfactory and final, and in case any objection or requisition shall be so delivered, and the vendor shall be unable or unwilling to comply therewith or remove the same, the vendor is to be at liberty by notice in writing under the hand of the vendor's solicitors to rescind the contract, and on receiving back the abstract to return the deposit money without interest, costs or other compensation, notwithstanding any attempt made to satisfy, remove or comply with any such objection or requisition or any negotiation or litigation in reference thereto, or other proceeding consequent on the sale." No difficulty arose as to the title of the defendants, but the mortgagor, being in possession of the second house, refused to give it up, so that the defendants, though fully able to convey, were not in a situation to give possession according to the contract. The plaintiff having in the meantime resold the premises to a Mr. Gilbert, who had bought the house for occupation, at an advance of 100%., Mr. Richardson, the solicitor of the latter, was put into communication with the solicitors of the defendants for inspection of the deeds. Some slight delay occurred, and a letter having been written by the defendants' solicitors, with a view to despatch, the following letter was written by the solicitor of the plaintiff :-" 15 January, 1866. Dear Sirs. I have seen Mr. Richardson herein. The only reason the matter is delayed is your not being able to give possession, and as I would not on my client's behalf consent to complete without having possession given to us as stated in the conditions of sale matters would not be improved by my proceeding on their behalf to carry out the contract. What is the difficulty in ousting the tenant?" To this letter the following answer was given: February 1, 1866. Dear Sir. The purchaser having made an objection which the vendor is unable and unwilling to comply with, the vendors rescind the contract, and the purchaser can obtain back his deposit by application to the auctioneer, Mr. Tebb, at 139, Cheapside." : On the 9th February the plaintiff's solicitor wrote:"Please specify the objection upon which the vendors affect to rescind the contract, and the grounds upon which they allege their inability to comply with it.” The answer to this letter was:- “16 February, 1866. 1868. ENGEL V. FITCH. 1868. ENGEL V. FITCH. Dear Sir. The purchaser requires possession to be The defendants subsequently brought an ejectment and ousted the mortgagee. The defendants having thus refused to perform the contract the plaintiff brought this action to recover not only his deposit and interest thereon and the expenses of investigating the title but also the loss of the profit on the resale, as well as the expenses which he had incurred in preparing for the sale to his vendee. The defendants paid into Court enough to cover the amount of the three first. A verdict was entered for the plaintiff for 105%., the loss of the profit on the resale as also for the expenses incurred with reference to the resale, leave being reserved to move to enter a verdict for the defendants. In the following Easter Term, Hayes Serjt. obtained a rule accordingly. The case was argued in Michaelmas Term, November 4, 1867, and Hilary Term, January 29, 1868; before COCKBURN C. J., SHEE and LUSH JJ. Field and W. Y. Clare shewed cause.-They contended that the rule as to damages for breach of contract in the case of sales of real estate which was recognized in Flureau v. Thornhill (a) and Sikes v. Wild (b) affirmed on appeal (c) did not apply to the present case, in which (a) 2 W. Bl. 1078. (b) 1 B. & S. 587. (c) 4 B. & S. 241. the sale did not go off for want of title. They cited Hayes Serjt., in support of the rule, contended, first, that the fact of the vendor not having a right to possession, and therefore being unable to give possession to the purchaser, was an objection of the same nature as a defect of title, within the rule in Flureau v. Thornhill (e), Sikes v. Wild (f), affirmed on appeal (g). He cited Bratt v. Ellis and Jones v. Dyke, Sugd. Vend. and ́ Purch. App. v. and vi., 14th ed, Walker v. Moore (h), per Bayley and Parke JJ., as contrary to Hopkins v. Grazebrook (a), Tyrer v. King (i), Pounsett v. Fuller (j ), per Williams J. Secondly, that, if the plaintiff was entitled to damages beyond the expense of investigating the title, the damages for the loss of his bargain on a resale were too remote. He cited Hadley v. Baxendale (k). Cur. adv. vult. COCKBURN C. J. now delivered the judgment of the Court. This case was argued before the late Mr. Justice Shee, my brother Lush and myself; but in consequence of the illness and death of that learned Judge, whose loss we in common with the whole profession most sincerely lament however admirably the vacancy is filled by his (a) 6 B. & C. 31. (e) 2 W. Bl. 1078. (g) 4 B. & S. 421. (i) 2 C. & K. 149. (b) 1 Exch. 850. 855. (d) H. & R. 379. 384-5. (f) 1 B. & S. 587. (h) 10 B. & C. 416. 420-1. 422-3. (k) 9 Exch. 341. 354-5. 1868. ENGEL V. FITCH. |