No. 21763 | Neb. | Dec 21, 1921
Lead Opinion
This is an action for specific performance of an executory contract for the sale of certain lands, brought by the assignee of the purchaser against the vendor. The plaintiff prayed for a decree of specific performance, with an abatement of the purchase price to the extent of the value of a house upon the premises, which had been destroyed by fire after the date of the contract. The plaintiff also prayed that, should specific performance with abatement from the purchase price be denied, the defendant be decreed to return to the plaintiff the purchase money which had theretofore been paid upon the contract. The trial court entered a decree for the plaintiff for specific performance, and allowed him an abatement of the purchase price to the extent of the insurance money which the defendant had collected. From this judgment the plaintiff appeals. He now asks that this court, upon a trial de novo, grant specific performance of the contract, and that it decree the loss occasioned by the destruction of the house to fall upon the vendor, and that the purchase price.be abated to the extent of the full value of the house.
The facts out of which the controversy arises are as follows: On'July 2/1919, the defendant, Martha Forrest,-who was the fee owner of the W.% of the N. W.% of section 11, township 9, range 7 east of the sixth p. m., in Lancaster county, Nebraska, entered into a written contract wtih one Jacob M. Miller, by the terms of which she agreed, upon the payment of the purchase price by
While the authorities are not entirely uniform, the great weight of judicial decisions, as well as text-writers, upon this subject support the view that where a contract for the sale of land contains no express provision as to which party shall bear the loss in case of destruction of the buildings thereon before the final delivery of the deed, or that the vendor should deliver the land with the buildings thereon in the same situation as when the contract was made, or words of similar import, and the buildings on the land are accidentally destroyed by fire, through no fault of either party, pending the contract and before conveyance, the vendor having at the time of the sale a fee simple title and there being no default on the part of the purchaser, the loss in equity, as upon a bill for specific performance, will fall upon the purchaser, he being regarded as the real owner. All of the decisions agree that the loss should be borne by the owner, but there is some diversity of opinion upon the question as to which party, vendor or purchaser, is to be regarded as the owner. The cases supporting the majority rule are based upon the theory that equity regards that as done which ought to be done, and that, when a valid and enforceable contract for the sale .of land has been made, equity will regard the vendor as holding the title for the benefit of the purchaser, and the purchaser as holding the unpaid purchase money for the benefit of the vendor, and that, therefore, the purchaser must be regarded in equity as the real owner.
The leading case in. which the rule is announced is Paine v. Meller, 6 Ves. Jr. (Eng.) *349, and this rule has been followed by many state decisions in this country, among them the following: Marks v. Tichenor, 85 Ky. 536" court="Ky. Ct. App." date_filed="1887-05-05" href="https://app.midpage.ai/document/marks-v-tichenor-7131868?utm_source=webapp" opinion_id="7131868">85 Ky. 536; Skinner & Sons Co. v. Houghton, 92 Md. 68" court="Md." date_filed="1900-12-07" href="https://app.midpage.ai/document/wm-skinner--sons-ship-building--dry-dock-co-v-houghton-3485239?utm_source=webapp" opinion_id="3485239">92 Md. 68; Thompson v. Norton, 14 Ind. 187" court="Ind." date_filed="1860-05-31" href="https://app.midpage.ai/document/thompson-v-norton-7034612?utm_source=webapp" opinion_id="7034612">14 Ind. 187; Lombard v. Chicago Sinai Congregation, 64 Ill. 477" court="Ill." date_filed="1872-09-15" href="https://app.midpage.ai/document/lombard-v-chicago-sinai-congregation-6956128?utm_source=webapp" opinion_id="6956128">64 Ill. 477; Manning v. North British & Mercantile Ins. Co., 123 Mo. App. 456" court="Mo. Ct. App." date_filed="1907-02-04" href="https://app.midpage.ai/document/manning-v-north-british--mercantile-insurance-6622353?utm_source=webapp" opinion_id="6622353">123 Mo. App. 456; Marion v. Wolcott, 68 N. J. Eq. 20; Sutton v. Davis, 143 N. Car. 474; Dunn
In Lombard v. Chicago Sinai Congregation, supra, the court pointed out that there is a difference in the rights and relations of the parties in the ordinary case of an executory contract for the sale of land at law and in equity, and it was held that in law the contract conferred upon the vendee a mere right of action, the estate remaining in the vendor and the unpaid purchase money re-' maining that of the vendee. In equity, however, the estate from the making of the contract is regarded as the real property of the vendee, attended by most of .the incidents of ownership, and the purchase money as that of the vendor. Whether there is a sound distinction to be drawn between the rights of the parties in law or in equity, it is not necessary to determine, but it is proper to note that in some of the decisions in which the minority rule is announced the actions were at law.
The rule above announced is not applicable unless there is an ability, as well as a willingness, on the part of the vendor to convey, and it has been held that where the vendor is in a position where he cannot make title according to the contract, and the property is damaged, the loss will fall upon the vendor. The case of Kinney v. Hickox, 24 Neb. 167" court="Neb." date_filed="1888-07-15" href="https://app.midpage.ai/document/kinney-v-hickox-6645675?utm_source=webapp" opinion_id="6645675">24 Neb. 167, cited by the appellant, falls within the exception to the rule. In that case at the time of the loss the vendor was not in a position to convey good title. There were certain liens upon the premises which he could or would not remove, among them being taxes, a judgment, and a mechanic’s lien. Other cases cited by appellant were either law actions, or within the minority rule.
No claim is made by the defendant that there was an improper application of the money collected on the insurance policy, and that question will not be discussed
The decree of the district court is right, and the judgment is
Affirmed.
Dissenting Opinion
dissenting.
While the authorities conflict, in respect of the sole question which is presented by the record,- it does not appear that the great weight of authority supports the rule adopted by the majority. I respectfully submit that a drastic rule, which is admittedly based on a legal fiction, has been adopted, and a reasonable and well-recognized rule of law, which is applicable to the facts, has been ignored.
When the rule, adopted by the majority, is applied in the present case to the facts before us, its injustice is apparent. The contract, as made by the parties, is so simple in form and so clear in expression that it affords no room for strained and technical interpretation. It should be enforced only as made. An element should not be interpolated that was not in the minds of the parties when the contract was made. When the buildings were destroyed, the time fixed by the parties for the delivery of the deed and property to the vendee had not yet arrived.' True, as the opinion suggests, the parties might have agreed, in their contract, as to which of them should suffer the loss of the building in case of fire or other casualty. A sufficient answer is that they made no such agreement. In the language of the opinion, “the contract is silent upon that subject.” Is not the law fulfilled when the contract is enforced to Avhich the parties themselves gave voice? The main opinion, after observing that the contract contains “no express provision as to who should bear the loss,” straightway proceeds to impose the loss, for which the parties made no provision, upon the vendee. This was done by the grace of a legal
It is elementary that, in the absence of fraud or of mistake or of ambiguity in the terms of a contract, the duty of the court is fully accomplished when it enforces contractual obligations according to the plainly expressed provisions of the contract. The court should not supply material stipulations nor in any case make a contract for the parties. Clearly, the vendor, who was in possession, should be compelled to account to the vendee for the reasonable value of that which he- contracted to deliver but did not deliver. From the viewpoint of natural justice, as some law-writers express it, and from a practical viewpoint and for reasons that are obvious, the party in possession should be holden for the loss. I respectfully submit that the rule to which the majority opinion commits the court has been adopted, not because it appeals to the reason or to the conscience, nor because it is right, but merely because the weight of authority is said to be on that side. The weight of evidence is not determined by counting the witnesses, and by the same token the better rule is not always determined by counting the authorities.
When the authorities conflict as between two opposing rules of law, the court should choose the rule that more nearly accords with reason and with settled principles of equity. The question before us is new in this state, but it has been' discussed at some length in other states. In Wicks v. Bowman, 5 Daly (N. Y.) 225, it was held that, while it may be equitable and just that the vendee should bear the loss where the building is burned down after he enters upon the possession, “it is not just nor equitable to impose it upon him Avhilst the vendor is in possession of the premises.”
Sewell v. Underhill, 197 N.Y. 168" court="NY" date_filed="1910-01-04" href="https://app.midpage.ai/document/sewell-v--underhill-3618070?utm_source=webapp" opinion_id="3618070">197 N. Y. 168, cites and approves the rule of law announced in the Wicks case. But the decision in the Sewell case turned on another point, as
Thompson v. Gould, 20 Pick. (Mass.) 134, involved a parol agreement for the purchase of land with its appurtenances. Before a deed was given or tendered the house was destroyed by fire, and it was expressly held, as disclosed in the syllabus, that the vendee “was entitled to recover back the money, on the ground of a failure of the consideration.” In the bocLy of the opinion it was observed that the contract could not be enforced by the vendor, even though it had been commenced in a court of equity, because, the house having been destroyed, the vendor was no longer able to perform his part of the contract. The court then made the terse observation that no reason has been given, nor can be given, why the same principle that applies to the sale and purchase of personal property, that has been destroyed before delivery, should not be applied to real estate. It was declared that there can be no distinction between the two classes of property in this respect. '
Wells v. Calnan, 107 Mass. 514" court="Mass." date_filed="1871-09-15" href="https://app.midpage.ai/document/wells-v-calnan-6416540?utm_source=webapp" opinion_id="6416540">107 Mass. 514, involved facts similar to those before-us. Judge Gray, who wrote the opinion for the court, held that the vendee’s agreement to pay the purchase price contemplated the tender of a deed of the whole estate, including both the land and the buildings, and, the latter having been wholly destroyed by fire be
In Phinizy v. Guernsey, 111 Ga. 346" court="Ga." date_filed="1900-07-12" href="https://app.midpage.ai/document/phinizy-v-guernsey-5570079?utm_source=webapp" opinion_id="5570079">111 Ga. 346, 50 L. R. A. 680, it was held that to require a vendor to pay damages to his vendee, for a failure to convey property which subsequent to the execution of the contract of sale was destroyed by fire, is no greater hardship than to require a vendor to pay damages on account of his having ignorantly, though honestly, sold something which he did not own, but which he believed was his own. In Conlin v. Osborn, 161. Cal. 659, it was held that where improvements are destroyed by fire, while in the vendor’s possession, he is excused from further performance of the contract, but in such case he can neither retain purchase money paid nor can he enforce the collection of money remaining unpaid, and the vendee may rescind the contract and recover back money that has been paid or deposited under the contract. The court further observed that, whatever may be the rule in other states, the rule is settled in California. Besides the foregoing authorities the following cases seem to support the, so-called, minority rule: LaChance v. Brown, 41 Cal. App. 500" court="Cal. Ct. App." date_filed="1919-06-09" href="https://app.midpage.ai/document/la-chance-v-brown-3285273?utm_source=webapp" opinion_id="3285273">41 Cal. App. 500; Wilson v. Clark, 60 N. H. 352; Powell v. Dayton, S. & G. R. R. Co., 12 Or. 488" court="Or." date_filed="1885-11-16" href="https://app.midpage.ai/document/powell-v-dayton-sheridan--grande-ronde-r-r-6894681?utm_source=webapp" opinion_id="6894681">12 Or. 488; Good v. Jarrard, 93 S. Car. 229; Huguenin v. Courtenay, 21 S. Car. 403, 53 Am. Rep. 688; Smith v. Cansler, 83 Ky. 367" court="Ky. Ct. App." date_filed="1885-11-03" href="https://app.midpage.ai/document/smith-v-cansler-7131662?utm_source=webapp" opinion_id="7131662">83 Ky. 367; Gould v. Murch, 70 Me. 288" court="Me." date_filed="1879-10-29" href="https://app.midpage.ai/document/gould-v-murch-4933591?utm_source=webapp" opinion_id="4933591">70 Me. 288, 35 Am. Rep. 325.
Paine v. Meller, 6 Ves. Jr. (Eng.) *349, the leading English case, as announced in the majority opinion, is discussed by Chief Justice Daly in the Wicks case, and it is there pointed out by the distinguished chief justice that the English rule, announced by Lord Eldon in the Paine case, was “where the purchaser had expressed himself satisfied with the title, but before the conveyance was prepared the houses were destroyed by fire.” Lord Eldon, with respect to the premises, and the purchaser’s
Stent v. Bailis 2 P. Wms. (Eng.) 217, 220, is the English case above referred to. It bears date as of 1724. The head note, and the opinion throughout, both bear the imprint of blunt and rugged honesty. The head note reads: “Against natural justice that any one should pay for a bargain which he cannot have.” In the body of the. opinion is this observation': “If I should buy an house, and, before such time as by the articles I am to pay for the same, the house be burned down by casualty of fire, I shall not in equity be bound to pay for the house, and yet the house may be built up again.”
I fear the opinion of the majority contains possibilities of substantial embarrassment to those who may hereafter buy real estate in any form, whether it be a home, a business property, or lands, that have not heretofore obtained in this state. If the vendee must suffer loss by fire, after execution of the contract and while the property is in possession and under control of the vendor, unless he protects himself in advance by his contract, it may be that
Some legal writers refer to the so-called English rule as a legal fiction. It is well named. Legal fictions are .the bane of the law. They should not be permitted to propagate further in this state. Why should we lift the lid from a Pandora box of legal plagues?- There is a better way pointed out in the wholesome rule that prevails in Maine, New Hampshire, Massachusetts, New York, California, Oregon, South Carolina, Georgia, and Kentucky; I submit the “great weight of authority” in this country can scarcely be claimed for a rule of law which does not find support in the jurisdictions just cited. Nor should Stent v. Bailis, 2 P. Wms. (Eng.) 217, be lost sight of. We should adhere to the reasonable rule of law there announced. Where a vendor contracts to deliver an entire estate, it is clear that his obligation is unfulfilled if he delivers only a part of it. Lord Bacon said: “Chancery is ordained to supply the law, not to subvert the law.” 2 Story, Equity Jurisprudence (14th ed.) title page.
An argument that is advanced in support of the conclusion of the majority opinion is that, if a man buys real estate for an agreed price and pays a part of the earnest money and agrees to pay the remainder on a given date, he is entitled to his bargain, even though in the meantime the value of the land should have appreciated. Even so. The thing is in existence. The land contracted' for is there for delivery, and under the contract the buyer is, of course, entitled to that which he bought. If the land depreciated in value he would, of course, be compelled to
A contract to deliver an entire estate can no more be fulfilled by delivery of a part of the estate than it can be fulfilled by failing to deliver any part of the estate. It is nowhere asserted that the contract is ambiguous. But, even if it Avere, the construction that the parties themselves placed upon it would prevail. It appears, in the majority opinion, that the vendor collected the insurance, a trifling sum, thereby asserting' an act of ownership.
For the reasons herein expressed, I respectfully dissent from the judgment of the majority of the court.