Court Opinion

ID: 3607834
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:52:50.152033+00
Date Added: 2024-06-11T14:07:29.711345
License: Public Domain

It is an unjust rule which imposes an unequal burden upon the parties to a contract. In the case before us, if the purchaser had refused to complete his purchase without adequate cause, the court would have compelled him to perform his contract, and would have required him to pay all reasonable expenses arising from his default. In fact, however, the default was not made by the purchaser, *Page 240 
but by the seller, and the courts have thus far relieved him from the payment of such expenses as, mutato nomine, it would have imposed upon the purchaser. He has thus been exempted from a liability which would have been cast upon his adversary under like circumstances.
The reason given for this discrimination is that the seller is a receiver and that his agreement to sell is virtually the agreement of the court. This distinction has no adequate foundation, for a court which compels all persons to perform their contracts, or make good the default, should not fail to keep its own promise and then refuse to compensate the other party for the expenses incurred in reliance thereon. Is an agreement made by an officer of the court, under its direction, less sacred than one made by an individual? The failure to perform by either party results in certain damages of the same nature, and why should not the duty of compensation be the same? If a promise made under the sanction of the court means less in law than the same promise made upon individual responsibility, there should be some plain reason for it capable of easy statement. The only reason given is that an individual represents himself only, while a receiver represents creditors. But why should creditors, thus promising through their representative appointed by the court, be under no legal obligation to pay damages for a default which, if made by the other party, would call for compensation as matter of law? The promise of the receiver was made for the purpose of benefiting the creditors, and the consequences of his mistake should fall upon them, if he acted in good faith, otherwise upon himself, but in no event upon the innocent purchaser. Creditors are entitled to their own, but they must get it from their debtor. If they directly or indirectly contract with a third party they are entitled to no exemption because they are creditors. The law is not guilty of favoritism in the enforcement of contracts or in awarding or withholding damages for a violation thereof. Even interest on the sum deposited by the purchaser when the contract was made was not allowed him. Thus the representative of the creditors is permitted to *Page 241 
retain for their benefit the amount earned by the deposit while it was in his possession. The rule laid down by the prevailing opinion will lead to a want of confidence in dealing with receivers, even when their action is approved by the court, and the result will be that they cannot sell property by executory contract for what it is really worth. Every risk lowers the price.
The purchaser, as I think, was entitled to some compensation, as a legal right, for the violation of his contract by the receiver. While the amount to some extent may depend upon the sound discretion of the court, the refusal to allow anything whatever was an error of law which requires the reversal of the order appealed from.
CULLEN, Ch. J., O'BRIEN, EDWARD T. BARTLETT and CHASE, JJ., concur with HAIGHT, J.; HISCOCK, J., concurs with VANN, J.
Appeal dismissed.