Source: https://chestofbooks.com/real-estate/Law-Purchase-Real-Estate-2/Purchaser-s-remedies-against-vendor-Part-5.html
Timestamp: 2019-04-20 21:08:48+00:00

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The whole question, however, came before the House of Lords, on an appeal direct from the Court of Exchequer, in Bain v. Fothergill (h), which seems to have been erroneously considered as identical with Engell v. Fitch, and for that reason was not brought before the Court of Exchequer Chamber. In Bain v. Fothergill, A., having contracted for the purchase of the W. R. mine, held under an agreement for a lease, with a clause against assignment without licence, entered into possession, and, without taking any assignment, agreed to sell to B. At the date of this sub-contract A. was aware that the assent of the lessors was necessary to complete his title, but did not anticipate any difficulty in obtaining it; and, treating the matter as unimportant, did not mention it to B. Subsequently the lessors, having first verbally promised, withdrew their assent, and the sale to B. consequently fell through. In an action by B. against A., for non-performance of the contract, the House of Lords, affirming the decision of the Court of Exchequer, held that B. could only recover the expenses which he had incurred, not damages for the loss of his bargain (i) ; and, after expressly overruling Hopkins v. Grazebrook, laid it down that the rule as to the limits within which damages may be recovered upon the breach of a contract for the sale of real estate must be taken to be without exception (k) : and Lord Chelmsford expressed it as his opinion, though it was not necessary to decide the point, that even where there has been mala fides oh the part of the vendor the same rule still applies; and that the appropriate remedy, if full damages are claimed, is by an action for deceit, not by an action for breach of contract (/).
(h) (1874) L. R. 7 H. L. 158 : 43 L. J. Ex. 243.
The decision in Bain v. Fothergiil, however, applies only to cases where the vendor acting in good faith and without any default on his part is unable to give a title, and does not conflict with the only point which was really decided in Engell v. Fitch, viz., that a purchaser is entitled to substantial damages from a vendor who, to save himself trouble or moderate expense, or from mere caprice, absolutely refuses, or, which is the same thing, wilfully neglects, to perform, to the best of his ability, his part of the contract (m). Neither Lord Chelmsford's nor Lord Hatherley's speech is an authority for making the exceptional rule laid down in Flureau v. Thornhill apply to the case of a vendor who can make a good title, hut will not, or will not do what he can and ought to do, in order to obtain one (n) ; thus, where the vendor of leasehold premises not only omitted to do his best to obtain a necessary licence to assign, but also induced the lessor to refuse it, the purchaser was held entitled to damages for loss of his bargain in addition to the return of his deposit with interest thereon (o). The distinction, however, between the measure of damages in cases coming under the rules respectively of Bain v. Fothergill and Engell v. Fitch is anomalous, for the actual damage done to the purchaser, i.e., the loss of his bargain, is the same in either case : the only reason that can be assigned for deciding that he is entitled to more in the one case than the other is that the rule which limits his damages in the first case is itself an anomalous rule based upon and justified by difficulties in showing a good title to real property in this country, but one which ought not to be extended to cases in which the reasons on which it is based do not apply (p). In Compton v. Bagley (q), where the contract was rescinded on the ground of the vendor's capricious refusal to make a good title, the damages were limited to the return of the deposit and interest and the costs of investigating the title, a limitation which appears inconsistent with the subse-cpient case of Day v. Singleton.
(i) (1870) L. R. 6 Ex. 59.
(k) See the judgments, and the opinions given by the Common Law Judges on the points submitted to them ; see comments thereon in Dag perforin it he is liable to full damages (r). But the rule of Bain v. Fothcrgill has been held to apply to a case where it would have been a breach of trust in trustees to renew a lease under a covenant contained in the lease granted by their predecessors in the trust; and the lessee was not allowed damages for the refusal to renew (s) ; and it excludes damages for delay arising from want of title no less than for nonperformance (t), with a like exception to the rule if the delay has been caused by the vendor's default not in consequence of conveyancing difficulties, but by reason of his not having cared or troubled or taken reasonable pains to perform his contract (u).
V. Singleton, 1899, 2 Ch. 320; 68 L. J. Ch. 593.
It has been held that where A. agrees to convey at a future date, for a consideration to be immediately given by 13., and it appears on the face of the agreement that A. has not yet acquired a sufficient title, his engagement will be considered to be an absolute one; and if he is unable to nor where consideration is paid and vendor engages to make title at a future date.
(m) See L. J. Turner's judgment in Williams v. Olenlon, (1866); 1 Ch. 209.
L. J. Ch. 593, 59o.
(o) Day v. Singleton, sup.
(p) lb., at p. 329.
(q) 1892, 1 Ch. 313; 61 L. J. Ch. 113.
Applies where performance would be breach of trust.
This exceptional rule above referred to is, however, strictly confined to the case of a contract for the sale of real estate, and does not apply where the land has been actually conveyed, and the vendor has entered into a covenant for quiet enjoyment. Thus, where A., lessee in possession under a lease which had several years to run, obtained from B. a renewed lease to commence from the expiration of the subsisting term, and it subsequently transpired that B. had only a partial interest, and was incompetent to grant a reversionary lease, A. was held entitled to recover not merely the consideration money and the costs of preparing the void lease, but also the difference between the value of the lease which B. professed to grant, and the value of a lease for a shorter period and at an increased rent which was procured from the reversioners (.r).

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