1869 ENGELL V. FITCH. delivered to the plaintiff's attorney, and he attended at the office of the defendants' attorneys and inspected the deeds. On the 28th of November, the plaintiff's attorney sent in requisitions of title to the defendants' attorneys, which the latter duly answered on the 13th of December following. On the 30th of November, the plaintiff's attorney wrote to the defendants' attorneys, stating that his client, the plaintiff, had resold the premises, and asked defendants' attorneys to produce the deeds to Mr. Richardson, the solicitor for Mr. Gilbert, the new purchaser from the plaintiff, to which the defendants' attorneys assented. The plaintiff had resold the leaseholds on the 17th of November, to Mr. Gilbert at an advance of 1057. Mr. Richardson afterwards attended the defendants' attorneys and examined the deeds, and on the 15th of December sent to them, with their consent, further requisition sof title, of which the 11th was as follows:-" One of the houses being in possession of Holdsworth, possession must be given on completion :" and on the 8th of January, 1866, the defendants' attorneys sent to Mr. Richardson the following answer:-"We cannot give possession of this house." On the 15th of January, 1866, the plaintiff's attorney wrote to the defendants' attorneys: "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, in my client's behalf, consent to complete without having possession given to us as stated in particulars 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 ?" On the 1st of February the defendants' attorneys wrote to the plaintiff's attorneys: "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 of February the plaintiff's attorney wrote to the defendants' attorneys: "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." On the 16th of February the defendants' attorneys wrote: "The purchaser requires possession to be delivered up. Mr. Holdsworth, the mortgagor, denies the right of the vendor to possession, and the vendors will have to incur considerable expense to obtain the same. The vendors have, therefore, rescinded the contract." On the 31st of January, 1866, the defendants commenced an action of ejectment against Holdsworth to recover possession of the house, No. 48, to which action Holdsworth appeared; and on the 24th of the following April, they got judgment against him, that they were entitled to possession from the 31st of January. The mortgage deed to the trustees was dated the 1st of August, 1862, and contained a power of sale and re-entry, and it was admitted at the trial that the power of sale had been duly exercised by the defendants. The plaintiff commenced this action on the 17th of March, 1866, and it was tried at the sittings in Middlesex, in Hilary Term, 1867. The plaintiff sought to recover his deposit and damages for the defendants' breach of contract. It was admitted at the trial, that the money paid into court was sufficient to cover every claim of the plaintiff, except in respect of the loss of the value of his bargain, and a verdict was taken for the plaintiff by consent for 1057. beyond the money paid into court, with leave to move to enter the verdict for the defendants. The defendants accordingly, on the 21st of January, 1867, obtained a rule nisi, on the ground that the plaintiff was not, under the facts of the case, entitled to recover in respect of the profit of re-sale or goodness of his bargain. This rule the Court of Queen's Bench, on the 17th of April, discharged. (1) The question for the opinion of the Court of Appeal is, whether or not the plaintiff is entitled, under the facts of the case, to recover in respect of the profits he would have made in the re-sale if the defendants had completed their contract with the plaintiff. (1) Law Rep. 3 Q. B. 314. 1869 ENGELL v. FITCH. 1869 ENGELL v. FITCH. Manisty, Q.C. (with him Beasley), for the defendants (1), contended that the general rule of law was, that on the contract of sale of real property, apart from all question arising on a condition for rescinding, the vendor is not liable, in the event of not completing his contract, to make compensation to the vendor for the loss of his bargain; that the case was within the rule as enunciated in Flureau v. Thornhill (2), and not within the exception engrafted on it by Hopkins v. Grazebrook. (3) The rule was approved, and the propriety of the exception questioned, in Sugden's Vendors and Purchasers, 14th ed. pp. 359-360; and in Sedgwick on Damages, 4th ed. pp. 206, 209-210. He cited and commented upon Sikes v. Wild (4); Walker v. Moore (5); Worthington v. Warrington (6); Pounsett v. Fuller (7); Locke v. Furze (8); Robinson v. Harman. (9) He contended, secondly, that even if the plaintiff was entitled to damages beyond the sum paid into court, he could not recover for the loss of the profits of a re-sale, as that was not in the contemplation of the parties within the rule in Hadley v. Baxendale. (10) He also cited on this point, Redmayne v. Great Western Railway Company. (11) Field, Q.C. (with him Clare) for the plaintiff, was not heard. KELLY, C.B. This is an action by the vendee of a leasehold estate against the vendors, and the declaration alleges that the defendants refused to complete the purchase and deliver up possession, and that the plaintiff has suffered a certain amount of special damage in consequence. There is no plea of rescission of the contract; the only plea being a plea of payment into court, (1) The argument was commenced at the sittings after Easter Term, May 10, and was adjourned at the suggestion of the Court, in order, if possible, to have the case amended by stating what was the value of the property at the time of the breach of contract. The case remained, however, without amendment, as the parties could come to no agreement. Field, Q.C., intimated that he should contend that the fact of the resale at an advance of 1057., uncontradicted by other evidence, was evidence of the increased value. (2) 2 W. Bl. 1078. (3) 6 B. & C. 31. (4) 4 B. & S. 421; 32 L. J. (Q.B.) 375. (5) 10 B. & C. 416. (6) 8 C. B. 134; 18 L. J. (C.P.) 350. (7) 17 C. B. 660; 25 L. J. (C.P.) 145. (8) 19 C. B. (N.S.) 96; 34 L. J. (C.P.) 201; on appeal, Law Rep. 1 C. P. 441. (9) 1 Ex. 850; 18 L. J. (Ex.) 202. with a replication of damages ultra. It is admitted that the money paid into court is sufficient to cover the expenses of investigating the title, &c., and the only question is, whether the plaintiff is entitled to recover damages in respect of the loss of profit which he would have made by a re-sale of the property. The statement in the case is, that a verdict was taken for the plaintiff by consent for 1057., beyond the money paid into court, with leave to move to enter the verdict for the defendants; and the ground on which the rule was obtained is, that the plaintiff was not, under the facts of the case, entitled to recover in respect of the profit of resale or goodness of his bargain. If the question was whether, as a general proposition of law, the vendee on a breach of his contract by the vendor is entitled in all cases (always excepting cases within the ruling in Flureau v. Thornhill) (1), to recover for the loss of the value of any bargain for re-sale, we should at once hold that, as a general proposition, such damages cannot be recovered. But we must look at the circumstances of the particular case, and give such a meaning to what the parties appear to have done as is consistent with their intention and the justice of the case. If we look at what took place at the trial, we find that the plaintiff gave evidence that he had entered into a bargain for a re-sale of the premises at an advance of 1057., and no evidence was given by the defendants in a contrary direction to shew that this bargain did not represent the market value of the premises, and we think under such circumstances the fact of the plaintiff's bargain must be taken as evidence of the market value of the property. What we then have to consider is, when a vendor, not by reason of any want of title, but by reason of not choosing to oust the mortgagor, refuses to complete, and the action is really for a breach of contract to deliver possession, whether under such circumstances the vendee is entitled to recover the difference between the contract price and the market value at the time of breach. We think the vendee is entitled to this difference. And I may add that we think this would be so in all cases of this kind, excepting those within the rule of Flureau v. Thornhill (1), which is confined to the single case of failure of title. We adopt the general rule as enunciated by Parke, B., in Robinson v. Harman (2), “that the (1) 2 W. Bl. 1078. (2) 1 Ex. at p. 855; 18 L. J. (Ex.) at p. 204. 1869 ENGELL V. FITCH. 1869 ENGELL บ. FITCH. rule of the common law is that, when a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. The case of Flureau v. Thornhill (1) qualified the rule of the common law. It was there held that contracts for the sale of real estate are merely on condition that the vendor has a good title; so that when a person contracts to sell real property there is an implied understanding that, if he fail to make a good title, the only damages recoverable are the expenses which the vendee may be put to in investigating the title." We are far from wishing to throw any doubt on the decision in Flureau v. Thornhill (1); it took place nearly a century ago, and there has been a long series of decisions since, and the practice of conveyancers has been founded upon it. But what is the doctrine laid down by that case? Simply, that under a contract between vendor and purchaser of real estate, the vendor shall not be liable for any other damages, beyond the deposit and costs of investigating the title, when he is unable to perform his contract by reason of his inability to make out a good title. That has been truly called an exception or qualification of the rule of common law (I need not go so far as to call it an anomaly), founded entirely on the difficulty that a vendor often finds in making a title to real estate, not from any default on his part, but from his ignorance of the strict legal state of his title. That was all that was decided in Flureau v. Thornhill (1), and we are far from dissenting from that proposition in the most extensive terms it can be laid down. Is the present breach of contract within the rule? The defendants contracted to sell and deliver possession on the completion of the purchase and payment of the purchase-money on the 26th of December; the contract was not completed on that day, and certain requisitions were made, and the fifth condition was relied on by the defendants, but there is no plea to meet that view of the case; the requisitions were abandoned, and the contract went off on a different ground, and not only was there no doubt about the title, but the case shews that the defendants had a good and valid title. In the month of January, there being some difficulty in obtaining possession, the defendants being mortgagees with a (1) 2 W. Bl. 1078. |