abstract only showed that the legal estate had long since been vested in persons who would be trustees for the vendor, but did not show in whom the legal estate was then vested, the defect was one of title and not of conveyance.(g) § 1362. A distinction has also been taken between showing and making a good title. A good title is shown when all the matters essential to the title are stated in the abstract: it is made, when those matters are proved. (h) § 1363. It is evident, further, that there is a distinction to be drawn between matters of title and of the evidence, whereby that title is supported. The verification of the abstract may be either the one or the other: thus, the verification of the deeds stated in the abstract is matter of evidence; whilst, on the other hand, the proof of a fact essential to the title, which can only be proved by evidence documentary or oral-as, for example, the identity of a person, or of parcels apparently different on the deeds-is a matter of title.(i) (g) Wynne v. Griffith, 1 Russ., 283. See, further, as to what is a perfect abstract, per Wigram, V. C, in Morley v. Cook, 2 Ha, 111; Ward v. Ghrimes, 11 W. R., 794; and per Kindersley, V. C., in Oakden v. Pike, 13 W. (h) Parr v. Lovegrove, 4 Drew, 170, 181. CHAPTER V. OF INTEREST, RENTS, DETERIORATION, AND PAYMENT INTO COURT. § 1364. In the case of every contract of sale, the question arises-At what time does the property in the thing sold pass from the vendor to the purchaser?1 In the case of a contract for the sale of real or chattel real property in this country, the answer to this question involves important consequences, some of which it is proposed to discuss in the present chapter. It will be convenient, therefore, briefly to consider the effect of such a contract as between the parties to it. § 1365. Where such a contract is entered into, the legal estate in the property passes, not by the contract, but only upon and by virtue of the execution of a subsequent formal deed of conveyance. (a) The equitable estate or beneficial ownership, however, passes, as between the contracting parties, by the contract itself(b) but only sub modo, or, in other words, conditionally upon the contract being ultimately completed by the fulfillment by the vendor and purchaser respectively of the mutual obligations imposed on them by the contract." (a) See Austin's Jurisp, 388, 1001-2; and per Grant, M. R., in Fludyer v. Cocker, 12 Ves., 27. (b) Per Lord Westbury in Rose v. Watson, 10 H. L. C, 678. Cf. Edwards v. West, 7 Ch. D., 862, and supra, § 892. 1 In equity, a vendee under a contract for the sale of lands, is considered as a trustee of the purchase money for the vendor, who is regarded as a trustee of the land for the former. The land is, in equity, the property of the vendee, who may dispose of it, or incumber it in like manner with land to which he has the legal title, subject to the rights of the vendor under the contract. Wing v. McDowell, Walk. Ch., 175. Immediately upon the contract to purchase, an equitable estate arises in the vendee.] "The doctrine of the English courts is necessary to give effect to the principle that, in equity, immediately on the contract to purchase, an equitable estate arises in the vendee, the legal estate remaining in the vendor for his benefit Qualified by the obligation to make compensation to any subsequent bona fide purchaser, who has paid only part of the consideration money, for all disbursements made before notice, the rule is every way consonant with correct principles. Such indemnity is protection pro tanto. The rule of law which deprives a subsequent purchaser who has contracted and accepted a conveyance, and paid part of the purchase money, in good faith of the fruits of his purchase, without indemnity, is extremely harsh, and often oppressive in its application. Mitigated by the obligation to make indemnity for payments It follows (it is conceived) that upon the completion of the contract the condition is satisfied, and the vesting of the equitable as well as of the legal estate becomes absolute; but that upon the contract coming to an end in any other way than by completion the equitable estate revests in the vendor.(c) § 1366. It is, then, important to inquire what are the mutual obligations of the parties to a contract of the kind under discussion. It is submitted that, in the absence of express stipulation, they are shortly as follows: § 1367. The vendor is bound 1. To show a good title to the property contracted to be sold. 2. (a) To take reasonable care of the property, and 3. Upon being paid the purchase-money, and any interest on it that may have become payable, (c) to execute and procure the execution by all other necessary parties (if any) of a proper deed of conveyance vesting the legal estate in the purchaser, and (d) to put him in possession of the property. § 1368. It is in regard of these or some of these obligations that the vendor has been said to be a constructive trustee, or a trustee sub modo, of the estate for the purchaser from the time when the contract is constituted. (d) § 1369. On the other hand, the purchaser is bound 1. As soon as either the vendor has shown a good title, or he (the purchaser) has accepted such title as the vendor shows or has, (c) See per Plumer, M. R,, in Wall v. Bright, 1 J. & W, 501. (d) See per Plumer, M. R., in Wall v. Bright, 1 J. & W., 500-503; Shaw v. Foster, L. R. 5 H L, 338, 349, 356; per Jessel, M. R., in Lysaght v. Edwards, 2 Ch. D., 506-510; per James, L. J., in Rayner v. Preston, 29 W. R., 550. and expenditures before actual notice, its operation is nevertheless frequently inequitable. A party who seeks the enforcement of a rule of this nature against another who is innocent of actual fraud, must seek his remedy promptly. He may lose his right to specific relief against the land by laches, and be remitted to the unpaid purchase money as the only relief which will be equitable." Dupue, J., in Houghwout v. Murphy, 22 N. J. Eq., 531. (a) to pay the purchase-money, and any interest 2. To bear the loss resulting from any accidental injury to the property happening after the contract has been constituted.(e) In regard to the first of these obligations the purchaser has been said to be constructively a trustee of the purchasemoney for the vendor. (ƒ) § 1370. In addition to the above obligations, the contract gives or may give rise to certain liens of the vendor for unpaid purchase-money, and of the purchaser for the deposit or other portion of the purchase-money paid before completion, but these really result from the non-performance, in some respect, to the contract, rather than from the contract itself. § 1371. If the foregoing statement of the obligations of the parties to the contract of the kind under discussion be correct, it follows that, where the contract contains no express stipulation on the point, the transfer of the possession of the estate from vendor to purchaser ought to be contemporaneous with the completion of the contract. In practice, however, possession is often taken by the purchaser at an earlier date, in pursuance either of an express term of the contract, or of some extrinsic act of, or arrangement between, the parties.' § 1372. Now it is obviously inequitable, in the absence of express and distinct stipulation, that either party to the contract should at one and the same time enjoy the benefits flowing from possession of the property and those flowing (e) See Lysaght v. Edwards, 2 Ch. D, 507; (f) See the cases cited at the foot of § 1368 and cf. Inst. fi 23, 3. Distinguish Counter supra. v. Macpherson, 5 Moo. P. C. C. 63, supra, § 893. Purchase of property pendente lite.] Where a party purchases property pendente lite, he is bound by the decree made against his vendor. It is not necessary that he should be made a party to the action. Sorrell v. Carpenter, 2 P. Wms., 482; Garth v. Ward, 2 Atk., 175; Gaskell v. Durdin, 2 B. & B., 169; Masson's App., 70 Pa. St., 27; Metcalf v. Pulnertorft, 2 V. & B., 205; Snowman v. Harford, 57 Me., 397. from possession of the purchase-money. The estate and the purchase-money are things mutually exclusive. "You cannot," said Knight Bruce (then) V. C., in a case arising out of the sale of some slob lands in Chichester harbor, "have both money and mud." And so neither party can at the same time be entitled both to interest and to rents.(g) § 1373. The general principles laid down in the preceding section of this chapter are of primary importance in determining (1) The respective rights and liabilities of vendor and purchaser in regard of interest on the purchase-money and the rents and profits and outgoings of the estate: (2) their respective rights and liabilities in regard of the deterioration of the estate after the constitution of the contract: (3) the right of the vendor to have unpaid purchasemoney paid into court. The application of these principles to any particular case of contract may, however, be, and in practice usually is, modified by express stipulations embodied in the contract. § 1374. With these preliminary observations it is proposed to consider the rather complicated questions which arise between vendor and purchaser in respect of rents, interest, outgoings, deterioration, and payment into court, under the following heads, viz. : I. Where the vendor is in possession of the estate, either by receipt of the rents or by personal occupation. II. Where the purchaser is similarly in possession of the estate. 1. Where the vendor is in possession. § 1375. Where the contract fixes no time for the completion of the purchase, and is silent as to the rents and interest, there prima facie the vendor, it is conceived, is entitled to the produce of the purchase-money, in the shape of interest, and the purchaser has a corresponding right to (g) As to manorial fines, see Garrick v. Earl Camden, 2 Cox, 231; Cuddon v. Tite, 1 |