Lead Opinion

*1196OPINION.

Phillips:

The single question involved in this appeal is whether the profit from the sale of the timber lands of the petitioner to the Southern Pine Lumber Co. is income in 1916 or in 1917. The undisputed evidence is that on December 27, 1916, the parties arrived at an agreement as to the value of the land and the purchaser expressed satisfaction with the title. No contract of sale was made *1197on that date, however, for the purchaser found it necessary to make arrangements for financing the purchase price. A ten-day option was granted the Southern Pine Lumber Co. On December 30, 1916, it gave notice of its intention to exercise such option, thereby creating an enforceable contract between the parties for the sale of the property. It is contended that at that time the sale of the property became executed, that the purchaser acquired title and that the purchase price became due to the petitioner. The deed to the property was delivered and the purchase price paid on January 5, 1917.

In support of its contention, petitioner points out that on December 30, 1916, the purchaser was ready, able, and willing to perform the contract, that it had already passed upon the title of the petitioner as satisfactory, that the petitioner withdrew from the property the workmen who had theretofore been engaged in the construction of a mill, that upon the closing of the title adjustments were made as of January 1, 1917, and that the purchaser paid taxes after January 1, 1917. None of these factors, however, seem sufficient to vest title to the property in the purchaser or to entitle the seller to have maintained an action in 1916 for the purchase price.

We do not question that equitable title passed to the purchaser at the time the option was exercised and a contract to sell came into effect, so that any loss or damage to the property would have been the loss or damage of the purchaser. We do not understand, however, that because equitable title may have vested, the vendor then has a legal right to recover the purchase price, which is the principal question here involved since the books of the petitioner were kept upon an accrual basis.

Ordinarily one who has entered into a contract for the sale of property, whether real or personal, has no right to recover the purchase price until the delivery of the property sold. In the case of real property a right to recover by way of an action for specific performance may exist when a proper tender has been made. Here there was no delivery of the property to the purchaser either by giving it possession of the property, by delivery of a deed, or otherwise, until January 5,1917, and no tender of delivery, and it was not until 1917 that any night to demand or receive payment of the purchase price arose.

Counsel for the petitioner calls attention to the decision of the United States District Court in Davidson & Case Lumber Co. v. Motter, 14 Fed. (2d) 137; 5 Am. Fed. Tax Rep. 6126. The court in that case' appears to decide that title passed to the purchaser despite the fact that no conveyance was made and that the vendor remained in possession. There is room in that case, however, for the belief that the possession of the vendor continued under an agreement with the purchaser and was that of a tenant. We have no such situation here, *1198for, while the taxpayer removed its employees from the property on December' 30, 1916, the purchaser did not go into actual possession either directly or through tenants or otherwise.

In its last analysis the contention of the petitioner is that the vendor of property becomes entitled to receive the purchase price of property at the time a contract for the sale of the property is entered into, if the title is satisfactory and the purchaser able to perform the contract. Certainly this is not the general rule throughout the United States and no decisions have been cited showing it to be the law in Texas. While we have preferred to base our decision upon the broader ground, it might be noted that Kelly Morse, a minor who held title to a part of the tract to be conveyed, was not a party to the contract, and for that reason, even though such a contract could be considered as a sale, the title which the petitioner was to deliver was incomplete.

Reviewed by the Board.

Decision will be entered for the respondent.