138 A. 503 | Conn. | 1927
Lead Opinion
The trial court was right in holding that specific performance cannot be decreed. Malkan
v. Hemming,
There was no express agreement as to a termination. When an executory contract cannot in its then form become an executed contract through the happening of an event over which neither party had any control, the law will imply that it is abrogated, unless the facts repel this implication. 13 Corpus Juris, 640, note 74;Marks Realty Co. v. "Churchills,"
The trial court held that the plaintiff could not recover for the moneys expended upon these premises, since the terms of the contract govern their use and occupancy and do not permit such recovery. It is true the contract does provide that all moneys expended in repair, alteration and improvement shall be paid by the plaintiff; this provision merely refers to the conditions which will exist when the contract is carried out, so that the plaintiff may not require the defendants to pay them when the first mortgage is obtained and the contract is in force. The cause of action under the second count is not one for the breach of this contract; it is one to recover for the loss which the plaintiff has incurred as a result of making these expenditures, which have enriched the defendants through plaintiff's reliance upon their course of conduct leading him to believe that defendants would accept another first mortgage and would carry out the contract. Equity will not permit one to enrich himself at the expense of another in any such way. When specific performance fails, the action at law is a personal one upon a quantum meruit to recover for the expenditures so made. It is sometimes referred in courts of law to the fiction of "implied contract" resorted to to account for the existence of certain equitable rights and liabilities; really, says Pomeroy's Equity Jurisprudence, Vol. 3 (4th Ed.) § 1238, "they arise wholly from considerations of right and justice, and from the application to particular conditions of fact of those maxims which lie at the foundation of equity jurisprudence." The remedy is often availed of where one, in reliance upon a parol agreement to convey land, takes possession of the land and makes improvements upon it. If the agreement be unenforceable, the vendor will be required to pay the vendee the reasonable value of the improvements in an action *493 upon a quantum meruit, otherwise the vendor would be enriched at the expense of the trusting vendee.
Upon the same principle a like action is given the one who enters into possession of land and makes valuable improvements thereon upon the promise of the owner to compensate him in his will which he fails to do. In Wainwright v. Talcott,
In discussing this principle MR. JUSTICE BALDWIN says in Ensign v. Batterson,
There is no difference in principle between the case of a parol contract to convey land in reliance upon which possession has been taken and improvements made, and a case where possession is taken under an executory contract for the sale of land and, when one term of the contract becomes unenforceable through no fault of the parties to the contract, the parties agree to waive the time limit for completion of the contract, and to treat the contract as a continuing one, and then to endeavor to provide a substitute for the unenforceable term, and meantime the vendee, with the knowledge and consent of the vendor, continues to make expenditures in improvements upon the premises during the period of occupancy until the vendor refuses to carry out the contract and is intent upon enriching himself by securing possession of the premises with the improvements placed thereon by the vendee. In the one case the contract was ab initio legally unenforceable; in the other one of the terms became in fact unenforceable, but it was entirely probable that a substitute term might be supplied, that is, another first mortgage obtained, and in that situation the parties treated the contract as a continuing one and endeavored to supply the missing term and while the contract continued defendants deceitfully and intentionally determined to prevent the completion of the contract for the purpose of enriching themselves by appropriating *495
the earnest money plaintiff had paid in and the improvements to the premises he had made. If equitable principles intervene, by the action of quantum meruit
in the first case to prevent the wrong, they will in the second, especially when the wrong committed is intentional and savors of fraud. It can make no difference whether there be a definite agreement defining the new term which the vendor agrees to accept, or whether there is merely an agreement that the contract shall continue and that the vendee shall endeavor to secure the substitute for the missing term of the contract which shall be acceptable to the vendor. If the vendee in either case, in reliance upon the completed or the incompleted executory contract, makes expenditures for improvements upon the premises the vendor must, upon his prevention of the carrying out of the contract, reasonably reimburse the vendee for his expenditures, not because of the contract relation, but because he may not enrich himself by such unjust and unconscionable conduct at the expense of the vendee. The plaintiff made his expenditures in reliance upon the defendants' fairness and reasonableness in accepting the new term and thus completing and carrying out the contract. Conduct of the vendee which "was calculated to mislead the grantee and does mislead him to his harm" and from which the vendor will reap a benefit will not be permitted to succeed in giving to the vendor this "unjust and unconscientious advantage." The remedy for the prevention of the wrong which the law gives is that of a quantum meruit to recover the fair value of the benefits conferred upon the vendor less any benefits which have accrued to the vendee. Wainwright v. Talcott,
The facts found leave no room for question that the *496 defendants reached the determination early in May not to carry out the contract and that their course of conduct from that time on was without legal excuse and justified the plaintiff in not continuing in the fruitless effort to secure a first mortgage acceptable to the defendants.
The suggestion is made that the contract terminated upon the Federal Land Bank's refusal to make a loan and that the continued occupancy of the plaintiff was under an agreement extending the terms of the contract pending negotiations for a new contract. Then it is said that until the right to occupy is terminated no implied contract to pay for use and occupancy can arise. If the contract has terminated it is difficult to see how its terms can be extended. The legal fact is the contract never terminated; the finding makes this doubly clear. We are not concerned in this action with finding an implied contract to pay. We are concerned only in finding whether the defendants have inflicted an unjust and unconscionable wrong upon the plaintiff; if so, the law upon equitable principles will, so far as it can, make good the loss he has unjustly suffered.
The defendants could not have recovered under their counterclaim as originally filed; it was saved by the amendment suggested by the court, which was that the agreement has been terminated and plaintiff has since wrongfully continued in the possession of the premises, and prayed for the possession of the premises. Under the facts found, the executory agreement could have been terminated on account of the conduct of the defendants in May, 1925. The bringing of this action did not constitute a termination of the executory contract. The action of the plaintiff was for specific performance in reliance upon the continued existence of the contract. Until the plaintiff filed his *497
second count, seeking to recover on a quantum meruit, he had done nothing to put an end to his right of possession. The foundation of that action under that count was a termination of the contract and thereafter the defendants were justified in seeking the remedy of ejectment without previous demand based upon such termination. Catlin v. Washburn,
There is error on both appeals, and the cause is remanded to the Superior Court for the assessment of damages and for the rendition of judgment in accordance with this opinion.
In this opinion HAINES, HINMAN and BANKS, Js., concurred.
Dissenting Opinion
If the trial court had found that, after the failure to secure the Federal Land Bank mortgage, there was a subsisting contract between the parties for the purchase of the land, or if this were necessarily implied in the facts it has found, there would be much force in the reasoning of the majority opinion. But neither of these situations exists. There was no time, after the failure to secure that loan, when the plaintiff could demand of the defendants that they accept any particular mortgage; there was no time when the minds of the parties met *498 upon the very vital provision as to the nature or amount of the mortgage which would be satisfactory to the defendants. The real relations of the parties after the failure of the Federal Land Bank mortgage, are very clearly apparent from the finding: The plaintiff continued in possession under the same arrangement as that specified in the written contract, in the expectation that he would ultimately be able to secure a mortgage which would prove satisfactory to the defendants; he was not in possession under a contract, but in the hope that he would be able finally to consummate one.
To such a situation the doctrine of "unjust enrichment" has no proper application. No doubt that doctrine has its proper place in the law, but there is much force in Page's characterization of it as a doctrine "which is so broad as to include almost any case in which unfair dealing appears and so vague as to give no help in solving cases as they arise"; 3 Page on Contracts, p. 1503; and there is this danger in it, that it affords a continual temptation to courts to stray from the rules of law in an attempt to do abstract justice in a particular case. In the instance case, the terms of the written contract which had to do with the occupancy of the premises by the plaintiff, and which continued throughout to characterize that occupancy, make it clear that he never expected to be remunerated for the things he did upon the farm, just as he never expected to pay rental for it; and on the other hand, it is clear that the defendants never contemplated paying him for what he did or receiving rental from him. In such a situation, the law will not imply a promise that either make compensation to the other.Beers v. Boston Albany R. Co.,
The purpose of the defendants not to carry out the arrangement with the plaintiff for the purchase of the farm, but to use him merely as a means of keeping it occupied until they could find some other purchaser, is limited by the finding to a period of about two months before the bringing of the action. If that gave rise to a cause of action by the plaintiff, it was not one within the purview of the issues in this case.
