SUPREME COURT. BEFORE MR. JUSTICE CHAPMAN. MOREING V. EVANS.

New Zealand Spectator and Cook's Strait Guardian, Volume I, Issue 45, 16 August 1845, Page 3

SUPREME COURT. BEFORE MR. JUSTICE CHAPMAN. MOREING V. EVANS.

The plaintiff in this suit speks to have an agree ment, into which he has entered with the defen" dant for the purchase of ceitain sections of land> delivered up to be cancelled on the ground that the defendant has failed to perform his part thereof. The facts are not disputed on either side, and the parties have therefore agreed upon a case, embodying all the material facts, upon which the decree of the Court is sought. The substance of the case is as follows : — By a memorandum of agreement (the result of a previous treaty) dated 2d January 1843, the defendant agreed to sell, and the plaintiff to purchase, four sections of land, comprised in four land orders of the New Zealand Company, the property of the defendant, for the sum of £800, payable on the 2d January 1844, interest at the rate of 10 per centum, to be paid quarterly in the meantime. It was further agreed, that the purchasemoney and interest should be secured by a mortgage of two sections of land on the River Hutt, the property of the plaintiff(for which 2 town acres were afterwards substituted), and that the defendant should enter into a bond conditioned for the conveyance of the four sections of land free from all incumbrances, on receiving payment of the purchase- money on the 2d day of January 1844. By a subsequent memorandum it was agreed, that the purchase should be completed on the 2d day of March 1844, instead of the 2d day of January as at first provided. In pursuance of this agreement, a deed of mortgage was executed on the Ist day of March 1843, and the defendant at the same time entered into a bond conditioned, to execute agood and valid conveyance free from all incumbrances, on receiving the pur-chase-money on the Ist day of March 1844. The case then goes on to state, that the plaintiffwas ready and willing to complete the purchase, on having a good and valid title ; but that the defendant was not able to make a good title free from all incumbrances, and that on or about the 2d March 1844, the plaintiff gave notice to the defendant, that as he had failed to complete his agreement, he (the plaintiff) withdrew altogether fiom the contract. It further appears, that when the contract was entered into, the purchaser was aware that three out of the four sections of land were mortgaged in England, and the twelvemonth to complete, afterwards extended to fourteen months, appears to have been agreed upon in order to allow the defendant time to satisfy the English mortgagee, and make good his title. I also collect from the correspondence which forms part of the case, that the plaintiff's solicitor on the 29th of February 1844, required the defendant to produce to him the evidence of his title; and on the 21st of March 1844, the plaintiff himself wrote to the defendant, giving him notice of his intention to wiihdiaw entirely from the contract. It also appears, that some time between the date of the agreement and the Ist of March 1844, the plaintiff selected land in respect of the four land orders, which land cani not be enjoyed, as the Agent of the New Zealand Company will not undertake to give possession, or to warrant quiet enjoyment. No part of the principal money or interest has been paid. It will be most convenient first to ascertain the position of the parties under the agreement, and then to consider how far their respective rights are affected by the mortgage and the bond. The first question is — Ought time to be deemed of the essence of this contract ? and of this there can be no doubt. The tenor of the first memorandum might perhaps have let in a doubt, but it is cured by the supplemental agreement, the object of which clearly was to give the vendor more time to make his title good, and if the parties had not intended that time should be material, if their understanding was that a little delay was admissible, the subsequent agreement would have been unnecessary. It not merely^ declares their intention, but coming after the first agreement, it seems to exclude all, legal doubt, and fixes the time of completion as solemnly as words can fix it. Now, although it is the general practice (and notwithstanding some doubts, it maybe deemed the settled rule), that before the purchaser can come into Court for relief, he must prepare and tender to the seller a conveyance ; yet, it is even better settled, that a known defect in the title releases him from that formality. The case contains an averment that the defendant was not able to make a good title, and this

it strengthened by Mr. Brandon's letter of 29th February, which was followed by no result ; hence I think the plaintiff was relieved from the necessity of making such tender. Mr. Brandon's letter has a further bearing on the case. By the strict rule of law, not only must the purchaser be ready to perform his part of the contract, but the vendor must be ready with his abstract and titledeeds on the day agreed upon, and if he neglect, the purchaser may avoid the contract. But equity has established a more reasonable rule, and it is now agreed that the purchaser must shew that he himself was ready and eager to complete, by demanding the evidences of title. He is not permitted to hang back, in order to take the chance of perhaps mere forgetful ness, until after the expiration of the time, and then to urge his objection ; for in such a case equity will consider the time as waived, and will oblige the purchaser to go on with his purchase, if the vendor is then ready, and will under some circumstances even give time. I have considered that class of cases in which a court of equity has indulged the vendor with an enlargement of time, where he has not been guilly of gross negligence. The general features of these cases are, 1. That the vendor proceeded to make out his title ; and, 2. That the defect was such as could be repaired within an assignable and reasonable period. Indeed, in all the cases which I have had an opportunity of examining, the abstract was prepared, and the defect was reported upon, by the master. The strongest case of this species of indulgence is that of Lord Stourton v. Sir Thomas Meers (a), in which the reversion in fee being in the Crown, time was given to obtain an act of parliament. There the precise extent of the defect was ascertained, and there was a certainty that it could be remedied. The more modern cases show, that where an abstract has been delivered, although the master report against the title, yet provided the defect be capable of remedy — as for instance if the purchaser will have a title upon getting in a term, or procuring letters of administration — the Court will grant him some indulgence, putting him under terms, however, to complete his title speedily. But the caution of the courts in thus interfering with the original intention of the parties amounts to reluctance, and in nearly all the cases guarded expressions are used, saving the general rule, that " where a man enters into a contract, it can never be intended that he is to have his own time to fulfil it." It has been further stated, that " the courts of equity are not disposed to extend this sort of relief beyond the decided cases," which certainl)' stop considerably short of the present case. The next point to be considered is, how far the selection of the land has operated as a waiver of the objection, that the vendor is not in time, and I think it has no such effect. Selection was consistent with the agreement between the parties, and was analagous to letting the purchaser into possession, which could not be effected without selection. If it had been part of the case, that the purchaser had been guilty of gros3 negligence iv the selection, the effect would have been analogous to a purchaser in possession under a con • tract committing waste; but it is to be presumed the plaintiff acted for the best; for at the time lie selected, he was not acting- as the mere agent of the vendor, but must have acted under the impression that it was his own interest he was promoting by sucli selection ; and although it is greatly to be deplored (hat the property has since suffered depreciation, and although it may since have become manifest that an unselected order of choice is more valuable than selected land, yet I cannot trace that to any negligence, or even want of judgment, of the purchaser, and therefore I think it is no bar to his right to a good and valid title on the day named. Considering the position of the parties under the agreement, without reference to the deed of mortgage, or to the bond, I think the plaintiff Was clearly right in deeming the contract at an end, and the defendant has forfeited his right to specific performance ; but I think a court of equity would not interfere to cancel the agreement taken by itself "but would leave the parties to their legal remedies, which (apart from the mortgage deed and bond) would fully meet the whole justice of the case. If the vendor sued for specific performance, he would fail — if he brought his action for breach of contract, not averring that he was ready and willing, he would fail on demurrer; — if the purchaser had paid no deposit, he might rest quiet with the assurance that the vendor could not bring either action or suit ; — and lastly, if he had paid deposit, he could reeoyer it back. Such being the position of the parties, it would appear to be useless, or even mischievous, under any supposition, to cancel the contract, — useless, if the plaintiff was safe in remaining passive — mischievous, if he required its evidence in a court of law. It remains then to be considered how far the contract is affected by the mortgage and the bond, taken separately and together ; and lastly, whether the Court ought to exercise its equitable jurisdiction, or to leave the parties to their respective legal remedies. The mortgage deed in its recitals pursues the ierms of the agreement, and is made to secure the due payment of the purchase-money. Now, t it seems to me to be as much a conclusion of commo.n sense as of justice, that an instrument securing the payment of money, can have no more force at law or in equity, than the actual payment of the money so secured could have ; and it is quite clear to me, that if the purchasemoney had been paid, it could be recovered back on failure of title, or on refusal or inability to convey. The deed, moreover, cannot be interpreted as a waiver of the point of time, because not merely are the terms of the agreement recited, and the mortgage made in pursuance thereof, but in the operative part, the day of completion is again mentioned. Next, as to the effect of the bond. In a case in the Exchequer, Willet ». Clarke (6), a bond for title was held to stop the purchaser's mouth, but the very terms of the agreement in that case shewed that such was the clear intention of the parties. The contract was in the alternative to accept title or bond, the money being contracted to be paid by the purchaser, upon the seller making agood title, " or otherwise, if such title should no

(a) 2 P. Wms. 631. (S) 10 Price 207.

fhen be completed, upon the seller executing a bond to complete such title as soon as the same could be completed." In the case before us, the bond is not a temporary substitute for title, but was coincident in point of time with the agreement; and by it the defendant only binds himself more solemnly than before to execute a good and valid conveyance in accordance with the terms of the contract. The bond, though it gives the plaintiff an action in another form, gives him, substantially, no additional remedy. Under the penalty of the bond, he could only recover his actual damages, andthathe could also have done in assumpsit on the contract. Taking the agreement, the mortgage deed, and the bond together, they are a chain of contracts, making together one contract for the purchase of the land. It is contended that the agreement is executed by the mortgage and the bond ; and to a certain extent it is so. Each instrument executes some previous stipulation — even the agreement itself probably executes the previous treaty; and the mortgage executes one stipulation in the agreement, and the bond another; but in relation to the purchase all are executory, or if the agreement be exhausted by the mortgage and the bond, its provisions are kept alive in those higher and more solemn instruments. I come now to the question of remedy. If the agreement had stood alone, I should not have thought it necessary to exercise the equitable jurisdicdon of the Court; because, in the absence of a deposit, a distinct expression of opinion, that the delendant could not have a decree for specific performance would probably have been conclusive. Bnt we must enquire what would be the situation of the parties if left to their respective legal remedies. If the defendant brought his action on the mortgage deed, the harsh rule of the English law would not permit the now plaintiff to plead the breach of the agreement or the bond, because both involve claims for unliquidated damages. As to the bills of exchange, we have just mitigated that rule, but our new 14th rule does not apply to any other security; and therefore, if sued, the now plaintiff would merely be remitted to his cross action. It is within my own experience that a cross action, though a sufficient remedy in a legal sense, is, in point of fact, often no remedy at all ; and, as there is always some difference between the costs between party and party allowed on taxation and costs between attorney and client, it must be obvious that neither would gain what the other would lose, but there would be a balance of costs against both. The statute* of set off, the reports of the Common Law Commissioners, the " New Rules" of the Courts of Law, and lasily, our own Rules bearwitness that cross actions are not viewed with any favour. Ought not this Court, which is a Court of Equity as well as a Court of law, to interfere to prevent such circuity of action, clothed as it is with abalance of evil to both parties? For the reasons above given, 1 think the contract was at an end on the 2d March, 1844, and seeing the possible amount of litigation which might grow out of this somewhat complex contract, it appears to me that the Court consults the interests of both parties, by decreeing the delivery up of the agreement and mortgage deed on the one hand, and of the bond on the other. Decree accordingly.