order sale. "One effect of this Act, which confers upon the Court a very Power to beneficial power," said Jessel, M.R., " is to allow a mortgagor whose property is worth more than the mortgage money, but who cannot raise it to obtain a sale and get the benefit of the surplus the Court has power to impose terms so as to take care that no injustice shall be done to any one" (1). A mortgagee, as has already been pointed out (ante, p. 103), may pursue all his remedies at the same time, when once default has been made by the mortgagor. If a mortgagee takes possession when there is no interest due to him, an account will in general be directed against him with annual rests, i.e. the surplus of rents and profits over the interest will be applied in reduction of principal (2). It must be remembered that the county courts have jurisdiction in all actions "for foreclosure or redemption or for enforcing any charge or lien where the mortgage, charge, or lien, shall not exceed in amount the sum of £500," and that a plaintiff who commences proceedings in the High Court where the mortgage does not exceed £500, runs the risk of finding himself ultimately in the unpleasant position of only obtaining such costs as he would have been allowed in the county court (3). assignment of the equity of redemption, the assignee has further charged the property either to the original mortgagee or to some other person. (1) Union Bank of London v. Ingram, 20 Ch. Div. 463; Woolley v. Colman, 21 Ch. D. 169; and see Brett's Leading Cases in Modern Equity, p. 175, et seq. (3) Thorneycroft v. Crockett, 2 H. L. C. 239; Parkinson v. Hanbury, (3) Scotto v. Heritage, L. R. 3 Eq. Definition. Grounds for grant ing and refusing specific perform ance. CHAPTER VI. SPECIFIC PERFORMANCE. Specific performance of a contract is its actual execution according to its stipulations and terms, as contrasted with damages or compensation for the non-execution of the contract (1). The principal ground on which the Court grants specific performance is that the remedy by damages is inadequate, and that compensation in the shape of money would not put the party in as beneficial a situation as if the agreement was specifically performed (2). The chief grounds on which the Court declines to enforce specific performance : 1. Where the remedy by damages is adequate. 2. Where the performance of the contract would prove useless, e.g. a contract to enter a partnership not for a definite time, as the partnership might be dissolved at once. 3. Where the Court would find it impossible or too difficult to enforce performance, e.g. a contract for services of a personal character. On this principle the Court will not enforce continuous acts or the continuous employment of persons. 66 The Court," said Lord Justice James, "will, in a proper case, restrain a man from singing at a theatre, but it will not undertake to compel him to sing at another. It may restrain him from writing a book for one publisher, but it cannot compel him to write a book for another " (3). (1) All "causes and matters" for the specific performance of contracts between vendors and purchasers of real estates, including contracts for leases, are assigned to the Chancery Division of the High Court of Justice by the 34th section of the Supreme Court of Judicature Act, 1873 (36 & 37 Vict. c. 66). A remarkable circumstance in connection with this doctrine is that no system of jurisprudence except that administered by the Courts of Equity in England and its past or present colonies has ever attempted directly to enforce the specific performance of contracts: Fry on Specific Performance, 2nd ed. p. 3. (2) Falcke v. Gray, 4 Drewry, 651, 657. (3) Powell Duffryn Steam Coal Co. v. Taff Vale Railway Co., 9 Ch. App. Cas. 331, at p. 335. 4. When the contract is voluntary (1). Grounds In considering the question whether an action will lie for for granting and the specific performance of a contract, attention must be directed to many circumstances. First, among these, it must be remem- specific performbered that the jurisdiction of the Court is discretionary. The ance. meaning of this proposition is, not that the Court may arbitrarily or capriciously perform one contract and refuse to perform another; but that the Court has regard to the conduct of the plaintiff and to circumstances outside the contract itself, and that the mere fact of the existence of a valid contract is not conclusive in the plaintiff's favour (2). The contract must be an actually concluded contract between the parties. So long as the matter rests in mere negotiation, or expectation of contract, there is no case for specific perform ance. It must, however, be borne in mind that the maxim certum est quod certum reddi potest applies, and that accordingly where the price is left to be agreed upon in some definite way, or where the thing proposed is merely left for the other party to decide upon, the Court regards the contract as concluded. When there is want of fairness and equality in the contract, the Court will not enforce specific performance. The fairness of the contract must be judged of at the time when the contract is entered into and not by the light of subsequent events. The Court will look at all the surrounding circumstances, e.g. if the person against whom specific performance is sought is illiterate or in distressed circumstances. The Court will also decline to enforce a contract if the result would be to inflict great hardship, to be judged of at the time. If, said Lord Thurlow, a man contracts to purchase an estate for a certain price, and the intending purchaser knows at the time that there are mines under the estate of which the vendor is ignorant, still, as the Court is not a Court of honour, the Court will not set aside the contract; but nobody can doubt that the Court would not decree specific performance of such a contract (3). It is not, however, the doctrine of the Court, that a man cannot contract without his solicitor at his elbow, or that a man in insolvent circumstances, or in prison, is disabled from selling (1) For a more exhaustive enumeration of the cases, in which the Court declines to enforce specific performance, see Fry on Specific Performance, 2nd ed. p. 14, et seq. VOL. II. (2) Fry on Specific Performance, 2nd ed. p. 12, citing Lamare v. Dixon, L. R. 6 H. L. 414. (3) Quoted in Falcke v. Gray, 4 Drew. 661. 2 Q Mutuality. 4th section of Statute of Frauds. Specific performance of contracts not in writing. his estate; and if a contract is made under such circumstances as will bear the careful examination of the Court and the full light of day, it will be specifically performed. Again, in order that the Court should grant specific performance of a contract, there must be mutuality of obligation. On this principle an infant cannot have specific performance of a contract because the contract could not be specifically enforced against him. It has been decided, however, that the doctrine of non-mutuality being a bar to specific performance does not apply to a contract which, in the knowledge of both parties, cannot be enforced by either, until the occurrence of a contingent event, e.g. until the plaintiffs were able to buy the land, part of which they proposed to sell to the defendant (1). The Courts have also always proceeded on the principle laid down by Lord Alvanley nearly ninety years ago, that a party cannot call upon a Court of Equity for a specific performance unless he has shown himself "ready, desirous, prompt, and eager" (2) to perform his part of the agreement. The 4th section of the Statute of Frauds provides that "no action shall be brought to charge any person upon any contract or sale of lands, tenements, or hereditaments, or any interest in or concerning them unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized" (3). : On these words it has been judicially observed as follows:"The Statute of Frauds says that no action or suit shall be maintained on an agreement relating to lands, which is not in writing, signed by the party to be charged with it; and yet the Court is in the daily habit of relieving, where the party seeking relief has been put into a situation which makes it against conscience in the other party to insist on the want of writing so signed, as a bar to his relief” (4). The cases in which contracts not in writing may be specifically enforced are in (1) Sales by the Court; (2) Contracts where the non-reduction to writing was caused by the fraud of the other party; (3) In cases where the defendant omits to plead the statute; (4) If part performance of a verbal contract has occurred. (1) Wylson v. Dunn, 34 Ch. D. 569. Milward v. Earl of Thanet, 5 Ves. 720 n., decided in 1801. (3) See as to the admission of parol evidence to connect independent documents, Oliver v. Hunting, 44 Ch. D. 205. (*) Bond v. Hopkins, 1 S. & L. 433. In order, however, that specific performance should be granted of a parol contract with regard to land, or, as it is sometimes expressed, that the case should be "taken out the statute," it is necessary that the following points should be found in the case: (1) The act of part performance must have relation to the Part peragreement relied upon, and to no other; (2) There must be some clear evidence to connect the alleged part performance with the alleged agreement; (3) The act must change the relative positions of the parties as to the subject-matter of the contract; must in fact be such as to render non performance a fraud. The contract must be one with relation to land (1). Acts preparatory to the completion of a contract, ancillary or introductory acts, e.g. the payment of a part, or even of the whole of the purchase-money, the delivery of the abstract, are not regarded by the Court as acts of part performance which take a case out of the statute. "Courts of Equity," said Lord Cottenham, "exercise their jurisdiction, in decreeing specific performance of verbal agreements, where there has been part performance for the purpose of preventing the great injustice which would arise from permitting a party to escape from the engagements he has entered into, upon the ground of the Statute of Frauds, after the other party to the contract has upon the faith of such engagement expended his money, or otherwise acted in execution of the agreement. Under such circumstances, the Court will struggle to prevent such injustice from being effected; and, with that object, it has, at the hearing, when the plaintiff has failed to establish the precise terms of the agreement, endeavoured to collect, if it can, what the terms of it really were" (2). It must, however, never be forgotten on the other hand that, though a contract be in writing, it by no means follows that it will be enforced. "The Statute of Frauds says an unwritten agreement shall not bind, but it does not say a written agreement shall bind." It should also be remembered that the defence of the Statute of Frauds must be specially pleaded (3). And now, having considered the principles on which the Court proceeds in granting or refusing specific performance (1) Maddison v. Alderson, 8 App. Cas. 467, where the authorities are collected, and notes Brett's Leading Cases in Equity, p. 99, et seq. See also McManus v. Cooke, 35 Ch. D. 681, where the proposition that the doctrine is confined to contract with (2) Mundy v. Jolliffe, 5 My. & Cr. (3) R. S. C., 1883, Order XIX., r. 15. formance. |