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Notes of Leading Cases.
VENDOR AND PURCHASER-INTEREST-CONDITIONS OF SALE.
De Visme v. De Visme, 1 M'N. & G. 336.
THE case of De Visme v. De Visme relates to the right of a vendor to claim interest upon purchase-money, and is important as overruling the judgment of Sir John Leach, V. C., in Esdaile v. Stephenson (1 Sim. & Stu. 122).
Where a time is specified for the completion of a contract, but the contract is not completed within the specified time, there equity, considering that as done which is agreed to be done, treats the estate as the property of the purchaser, and the purchase-money as the property of the vendor from the time fixed for the completion of the contract. Each becomes a trustee for the other. The vendor is entitled to interest on the purchasemoney, the purchaser to the mesne rents and profits of the
But as the rate of interest allowed by the court may exceed the value of the rents and profits, the court will in such a case consider to whom the delay was attributable, and if it be clearly made out to have been occasioned by the vendor, then, as no man may take advantage of his own wrong, the court gives the vendor no interest, but leaves him in possession of the interim
Such is the general rule where there is merely a time fixed for the performance of the contract, and nothing specific is said as to the time from which interest is to run. It was followed by Sir John Leach, V. C., in Paton v. Rogers (6 Madd. 256), and in Monk v. Huskisson (4 Russ. 121); and by Lord Lyndhurst, C., in Jones v. Mudd (4 Russ. 118), and is expressly recognized even in Esdaile v. Stephenson.
The decision in Monk v. Huskisson carried the rule still further. The contract in that case contained an express stipulation as to interest, that if, by reason of any unforeseen or unavoidable obstacles, the conveyances and assurances could not be prepared or perfected for execution on the day fixed for the completion of
the purchase, the purchaser should from that day pay interest at the rate of 51. per cent. on his purchase-money, and be entitled to the rents and profits of the estate. It was therefore contended, for the vendor, that the contingency of the conveyance not being perfected by the day fixed for that purpose, was contemplated at the time of the contract, and the express stipulation for payment of interest excluded the application of the general rule. But even in that case, Sir John Leach, M. R., held, that notwithstanding the stipulation, the vendor was not entitled to interest before the time when a good title was shown; the effect of the stipulation being, not to give interest when interest would not otherwise have been payable, but to fix the rate of interest at 57. instead of 4l. per cent.
The same judge who, as Master of the Rolls, extended the rule to Monk v. Huskisson, had, however, as Vice-Chancellor, excluded it in Esdaile v. Stephenson, where the stipulation for payment of interest was, if not totidem verbis, at least as favourable for the purchaser as in Monk v. Huskisson. "The interest," his Honor said, "does not depend upon any rule of the court, but upon the express stipulation of the parties; and the terms of the stipulation apply to every delay, however occasioned. It is highly probable, but I cannot in reasoning assume it as a necessary consequence, that the interest must under all circumstances exceed the mesne profits, so as to infer from thence, that the true intention of the parties must have been, that the purchaser should pay interest at 51. per cent. only when the delay in completing the contract was occasioned by himself. The purchaser must, under the circumstances of this case, pay interest according to the terms of the conditions of sale."
With this decision pronounced in 1822, that of the same judge, in Monk v. Huskisson in 1827, was directly at issue. So far, however, from being reversed by the latter, Esdaile v. Stephenson has been considered and followed as law. Thus, in Greenwood v. Churchill (8 Bea. 413), where the vendor had delayed the delivery of an abstract for more than two years, Lord Langdale, M. R., ordered the purchaser, whom he admitted to be not only innocent but to have acted in a laudable and generous manner, to pay interest at 51. per cent., on the ground that he had precluded himself from seeking a variation of his
Such was the state of the law previously to De Visme v. De Visme. There, by the conditions of sale, a time was fixed for the delivery of the abstract, and a time for the payment of the purchase-money; and it was provided, that if the money were not paid at such last mentioned time, then, from whatever cause
the delay might have arisen, the purchaser should pay interest at 51. per cent. from that day. A perfect abstract was not delivered for upwards of a year and a half from the time fixed by the conditions of sale. The purchaser, however, set apart his purchasemoney, and gave notice to the vendor. A petition by the personal representatives of the purchaser, claiming compensation for the loss sustained by the purchaser, being the difference between the amount of interest at 5l. per cent. and the interest at 21. 10s. per cent. made by the purchaser on his purchase-money, was dismissed by Wigram, V. C., his Honor stating, that he considered himself bound by the cases which decided, that in a condition of that nature, where interest is to be paid by the purchaser in case of delay from any cause whatever, the acts of vendors are among the causes of the delay referred to. From the order of the Vice-Chancellor the petitioners appealed to Lord Cottenham, C., who held, reversing his Honor's order, that the purchaser was only liable to pay interest from the time a good title was shown. Lord Cottenham said, it was not necessary for him to determine whether the words " any cause whatever" included that which had happened, viz., the neglect of the vendor to perform his part of the contract; even if it did, the court would compensate the purchaser for the loss occasioned by the vendor's nonperformance of the contract. Where a vendor sells property under a description more favourable than properly belongs to it, the court in certain cases performs the contract, but performs it sub modo, not leaving to the vendor the benefit of his error,-not compelling the purchaser to pay in full, but only so much as appears to be the value of the property which can be conveyed to him, deducting the value of so much as he contracted for and could not obtain. This rule, continued his lordship, this broad principle of compensation, which was universally adopted where principal was concerned, should in justice be applied to the case of interest. Assuming that upon the true construction of this contract the vendor was entitled to the interest from the time fixed for payment of the purchasemoney, if he had made default in performing his part of the contract, he may not get the benefit of his own wrong, but must make compensation. No property produced 57. per cent.; to pay it therefore in exchange for the rents would be a loss to the purchaser, for which, if it arose from the vendor's default, the court would give him compensation, and not specifically perform a contract with all the disadvantages that the vendor might impose upon an innocent purchaser. To hold the contrary would be to do the greatest possible injustice.
Although Lord Cottenham did not expressly determine the
ground upon which he held the purchaser entitled to forbear payment of the interest, his construction of the words " from any cause whatever" is sufficiently clear:-" When the words used are from any cause whatever,' they must mean some cause not provided for by the contract, the parties not considering the probability of either one or the other breaking the contract." This loophole has already given occasion to attempts to evade the decision in De Visme v. De Visme, by inserting in conditions of sale some stronger form of expression, which may be held to extend to the contingency of default on the part of a vendor. It is difficult, however, in the face of the judgment before us, to understand how the hope of evading its effects can be entertained. To any one who examines that judgment, it must be clear that no terms short of a distinct contract that the purchaser shall pay interest from a day certain, although prevented from performing his part of the contract by the acts or defaults of the vendor, would have been construed by Lord Cottenham to extend to such contingencies; and even if a purchaser could be found so regardless of his own interest as to bind himself by such an agreement, it would not avail the vendor, who, upon the broad principle adopted in De Visme v. De Visme, could not enforce specific performance without making compensation.
The first practical inference from the case before us is a caution to vendors not to presume upon any stipulation, however strongly worded, relative to the payment of interest upon purchase-money. The second is a caution to purchasers, in cases of such default by a vendor as occurred in De Visme v. De Visme, to abstain from setting apart their purchase-money until such time as the vendor has put himself right. As an inference from the doctrine that a purchaser is not liable to pay interest until a good title is shown, Lord Cottenham held further, that the purchaser in this case, having set apart his money at an earlier date, had done so in his own wrong; and that notwithstanding he had given the vendor notice, he must bear the loss occasioned by his money having lain idle.
De Visme v. De Visme was followed by Lord Langdale, M. R., in Skelton v. Robinson (12 Beav. 363), and is cited in Monro v. Taylor (8 Hare, 70). Rowley v. Adams (12 Beav. 476) will be found on examination not to affect the principle adopted by Lord Cottenham, the delay in that case having been held not to be attributable to the vendor.
PLEADING-DISCOVERY OF A DEFENDANT'S CASE, AND HOW HE
INTENDS TO SUPPORT IT.
The Attorney-General v. The Corporation of London, 2 M'N. & Gor. 247. LORD REDESDALE, speaking of the purposes for which discovery is given, says that a plaintiff may require a discovery of the case on which the defendant relies, and of the manner in which he intends to support it. The words in italics are disputed by Sir James Wigram in his Treatise on Discovery. "The first of these propositions," his Honor observes in reference to the passage in Lord Redesdale, " that a plaintiff is entitled to a discovery of the case on which the defendant relies, that is, that the plaintiff is entitled to know what the case is, admits of no doubt. The common rules of pleading make it necessary that the defendant should so state his case, that the plaintiff may know with certainty what case he has to meet; and in the strict observance of those rules a plaintiff is secure against surprise. It is at the peril of the defendant, if his pleadings are defective in this respect; but this is quite independent of the law of discovery. The second part of the above quotation from Lord Redesdale, viz., that the plaintiff has a right to know in what manner the defendant intends to support his case, must, it is conceived, be an inaccuracy. It is decidedly opposed to all the authorities."
The point in dispute between these high authorities was determined by Lord Cottenham in the Attorney-General v. The Corporation of London. The information in that case insisted on the right of the crown by royal prerogative to the ground and soil of the River Thames, and alleged that the corporation of London had for a long period, either by prescription or under some grant from the crown, held the office of bailiff or conservator of the river, but that they did not by virtue of such office acquire any estate or interest in the ground and soil of the bed or shore of the river. It then alleged that the corporation claimed to be seised of the freehold of such ground and soil, and had assumed to exercise acts of ownership, which were beyond their power as bailiff and conservator, and charged in the usual form of replication charges that no grant had been made, by charter or letters-patent by her majesty's predecessors, of the soil and bed of the river to the corporation; that in no charter had any immemorial right of the corporation to the ownership of the soil, bed and shore of the river, as arising from a previous grant, been recognized or confirmed; and that no 2 P. 285, pl. 372.
1 Mitf. Pl. 7.