mas.

under contract of sale has been entirely apart from the law governing sales of chattels, and has taken place chiefly in courts of equity. The matter was first touched upon by Sir Joseph Jekyll, M. R., who said, "If I should buy an house, and, before such time as by the articles I am to pay for the same, the house be burnt down by casualty of fire, I shall not, in equity, be bound to pay for the house." 55 The leading case on the subject is Paine v. Meller, 56 a decision by Lord Eldon. This was a suit for specific performance. The contract was made on September 1 for a conveyance at MichaelOwing to the seller's failure to make out a good title, the conveyance was not made then, but on December 16th or 17th the parties continued treating with each other, and there was evidence that the defect in the title was remedied to the buyer's satisfaction. On December 18th the house was burned. Lord Eldon held that if the purchaser had accepted the title he was bound to complete the purchase, but otherwise not. The case is generally cited as a decision that the purchaser is liable from the date of the contract, and it seems that such is the effect of it, though it has been cited also as deciding the contrary.57 As the time for performance Mortimer v. Capper, 1 Bro. C. C. 156. Cf. Pope v. Roots, 1 Bro. P. C. 370. On the same principle, the case of Akhurst v. Jackson, 1 Swanst. 85, is entirely right. There a trader agreed to take two persons in partnership for a period of eighteen years, in consideration of a sum payable in several instalments. Five months later, when only one instalment had become due, the trader became bankrupt. It was held that his assignees were entitled to recover the remaining instalments when they became due. Such cases do not differ in principle from appreciation or depreciation in the market value of property between the days of contract and conveyance, and do not fall properly within the subject of this and the following sections which relate to risks not only accidental, but extraordinary. 56 6 Ves. 349.

55 Stent v. Bailis, 2 P. Wms. 217, 220. The case of Cass v. Rudele, 2 Vernon, 280, s. c. Eq. Cas. Ab. 25, pl. 8, is not in point, because according to the reports the houses in question were destroyed after the purchaser was in default, and, according to a note in the latter report, after conveyance. There is also a whole series of cases which should be distinguished. White v. Nutt, 1 P. Wms. 61, may be taken as an instance. That was a suit to enforce a contract to purchase an estate for two lives. Before the time for conveyance one of the lives determined. Specific perfor mance was decreed. This clearly follows from the nature of the contract. The contingency the happening of which lessened the value of the estate was an ordinary one necessarily in the contemplation of the parties. An agreement for the purchase of an annuity is subject to a similar risk.

57 A Brief Survey of Equity Juris

had passed, owing to the vendor's default, the purchaser could clearly not be compelled to take the property unless this default was waived, and it was for this reason that Lord Eldon made the question turn on the acceptance of the title. His language makes his view clear: "As to the mere effect of the accident itself, no solid objection can be founded upon that simply; for if the party by the contract has become in equity the owner of the premises, they are his to all intents and purposes. They are vendible as his, chargeable as his, capable of being encumbered as his; they may be assets; and they would descend to his heir."

§ 932. Exceptions to the English rule.

Before examining the statements in the preceding sections and considering their bearing on the particular matter in issue, the limits of the English rule should be more exactly defined. If the promise of the purchaser is expressly conditional upon receiving a conveyance of the property in good condition, it can hardly be doubted that no liability will arise unless the condition is complied with. If there is no express condition to the purchaser's promise, but an express promise by the vendor to convey and deliver in good condition, it is held in Kentucky that failure to comply with the promise, though excused by impossibility, will prevent any right of action for the price. 58 Reasonable as this doctrine

diction, C. C. Langdell, 1 HARVARD LAW REVIEW, 375, note 1. "Lord Eldon held that the vendee must bear the loss, provided he had been put in default by the vendor before the loss happened, but not otherwise." The vendee could hardly be considered in default on any view. Though it rested with him to make the deeds, he would certainly not be in default immediately upon expressing himself as satisfied with the title. He would have a reasonable time thereafter to prepare the deeds, and in fact it was said when the title was accepted that the deeds would be ready in two or three days, a time which had not expired at the time of the fire.

58 Marks v. Tichenor, 85 Ky. 536, 538, 4 S. W. 225. See also Morgan v. Hymer, 18 Ky. L. Rep. 639, 37 S. W. 576. Indeed, it has been held in Indiana that such a promise binds the promisor to pay damages. Goddard v. Bebout, 40 Ind. 114. But see Maggort v. Hansbarger, 8 Leigh, 532; Warner v. Hitchins, 5 Barb. 666; Young v. Leary, 135 N. Y. 569, 32 N. E. 607. Similarly, a promise to return leased personal property in good condition has been held to amount to an assumption of the risk. Barrere v. Somps, 113 Cal. 97, 45 Pac. 177, 572; Harvey v. Murray, 136 Mass. 377; Laughren v. Barnard, 115 Minn. 276, 132 N. W. 301; Direct Nav. Co. v.

seems, it leads to the destruction of the whole English rule, for a promise to convey must always mean a promise to convey in substantially the same condition as at the time of the contract.

On any view, too, the vendor is not entitled to the price unless at the time of the calamity the obligation of the purchaser to take and pay for the property was absolute. If, therefore, the vendor had not at that time a good title, 59 or was in default, 60 or if either the vendor or the purchaser had any option in regard to performance of the contract, the loss falls upon

the vendor. So too if the loss was due to the vendor's own negligence.62

§ 933. English doctrine originated when mutual promises were independent.

It is interesting to observe that the doctrine in Chancery that a trust relation is created by an executory contract to buy and sell land grew up at a time when the promises in all bilateral contracts, in the absence of express conditions, were held to be independent. In 1738 when Lord Hardwicke said that "the vendor is from the time of his contract, considered as a trustee for the purchaser, and the vendee, as to the money, a trustee for the vendor," 63 the obligation of the vendor at law as well as in equity was an absolute one. He was in the same position as is now a vendor who has been paid the purchase money, since at that time it was his duty to convey whether the purchase money was paid or not.64 Under these circumstances the vendor in possession if not quite in the position of a trustee for the vendee since still entitled to the beneficial use of the property came much nearer justifying that description than he does to-day when the promises in bilateral contracts are mutually dependent. Whether the English equity doctrine would ever have arisen had implied conditions been part of the early law may be very much doubted. The failure of the English courts of equity to apply the maxim cessante ratione cessat ipsa lex, when the promises of vendor and purchaser became by implication concurrently conditional, even in the absence of express conditions, is an illustration of an unfortunate but common habit of the law to follow precedents when the reason for them no longer exists. There is a close parallel in the development of the judicial sale gains no title either legal or equitable, until the date fixed for the transfer of the deed. Cheney v. Woodruff, 45 N. Y. 98; Robbins v. Arendt, 4 Misc. Rep. 196, 23 N. Y. S. 1019; Mitchell v. Bartlett, 51 N. Y. 447."

62 Marks v. Tichenor, 85 Ky. 536, 538, 4 S. W. 225.

63 Green v. Smith, 1 Atk. 572. This

was said in 1738, nearly forty years before Lord Mansfield's epoch-making decision in Kingston v. Preston, 2 Doug. 689, S. C. Lofft, 194. The idea which Lord Hardwicke expressed is to be found also in earlier cases cited in 1 Ames Eq. Jur. 191-193.

64 See supra, § 815; Pordage v. Cole, 1 Wms. Saund. 319.

same topic in the law of Rome and Continental Europe which clung to its early doctrine that the purchaser bore the risk long after the mutual dependency of promises was established." The law of the United States if not of England may yet, as the law of the continent of Europe ultimately has done, discard a doctrine of risk fundamentally inconsistent with that of the mutual dependency of bilateral promises.

§ 934. The result at law and in equity should be the same. In jurisdictions at least where equitable defences and replications are allowed at law, there should be no difference in the effect of a decision on this point by a court of law and a decision of a court of equity. If the promise of the purchaser is made expressly conditional on receiving the property in good order, a court of equity can disregard the expressed intent of the parties no more than a court of law. On the other hand, if the promise of the purchaser is in terms absolute, this promise should not be held in a court of law subject to an implied condition of performance by the vendor, if the contrary is held by a court of equity. The basis of implied conditions is that there is a failure of the consideration for a promise if the performance promised in return is not given. Whether there has been such a failure of consideration is a question which should be decided in the same way by a court of law and a court of equity. If it is proper for a court of equity to hold that a purchaser before conveyance is the owner in equity and hence liable for the price, a court of law should hold either that there are no implied conditions that the legal title to the property shall be transferred and that the property shall be in substantially the same state, or that, if there are such conditions, accidental destruction or injury of the property is an excuse for non-performance. Or, if the matter is put in another way, if equity requires the purchaser to accept a tender of a deed in spite of the destruction of a building, and to pay the full price, a refusal of such a tender should give ground for an action at law. The case is not like one where the plaintiff is entitled in equity to specific performance if he makes compensation, and a conditional decree

65 See infra, §§ 947 et seq.