SECTION 4.

COVENANTS OF WARRANTY AND FOR QUIET ENJOYMENT.

§ 603. Their scope.

604. What is a breach.

605. The rule of damages.

606. Where property is the consideration.

607. Rule of damages in England and Canada.

608. Rule of damages in some of the older states.

609. Rule in case of partial breach.

610. Where covenantee has extinguished adverse title.

611. Mitigation of damages.

612. Where defect is a dower right.

613. By and against whom recovery may be had.

614. Where covenantee sues remote covenantor. 615. Notice of suit to covenantor.

616. Interest as an item of damages.

617-619. Expenses, costs and counsel fees as damages.

SECTION 5.

COVENANTS AGAINST INCUMBRANCES.

620. What are incumbrances.

621. A covenant in presenti.

622, 623. The rule of damages.

624. The Canadian and English rule of damages.

625. In some states covenant runs with land.

626. Criticism of the rule of damages.

627, 628. Damages where incumbrance permanent.

629. Liability of remote covenantor.

630. Where covenant is connected with that for quiet enjoyment.

631. Covenant to pay incumbrances.

SECTION 6.

DEFENSES AND CROSS-CLAIMS AGAINST PURCHASE-MONEY.

632. Diversity of decisions.

633. The New York rule.

634. Alabama rule.

635. Mississippi rule.

636. Rule in Tennessee, Michigan, Arkansas, Virginia, Illinois, Florida, Maine, Massachusetts and Missouri.

637. South Carolina rule.

638. Texas and Kentucky rule.

639. Pennsylvania rule.

640. Defenses under the code.

641. Defenses in equity.

566. Damages for breach of contracts for sale of realty. [191] Under this general head it will be convenient and appropriate to present consecutively the law of damages appli

cable to contracts of sale and purchase of both realty and personalty, as well as the obligations for assuring quality, quantity and title. Those which relate to lands require separate treatment, and will be first considered; then those which relate to things of a personal nature.

The sense and aim of the law in respect to contracts generally are well expressed by Hosmer, C. J., in a Connecticut case: "The rule of damages on the breach of an express contract has long been established; and whether it relate to real or personal estate, it must necessarily be the same. Whenever a person for a legal consideration agrees to do a certain act, and, in the event of his not doing it, the damages are not stipulated by the parties, the law, on the ground of reason and natural justice, implies that the person in default shall pay the damages accruing from the non-performance. The object of the parties ought to be attained as nearly as possible; and that is, that the specific act agreed to be done should be performed. If the party omits to do what he stipulated, it is just, as a reasonable substitute, that he should pay the precise value of the thing which he contracted to do, and such value to be estimated at the time when the act in question should have been executed." These principles, for the most part, apply to contracts relating to real estate. But an exceptional rule of damages to some extent has been applied, by which, instead of allowing the purchaser, as the injured party, damages equal to the benefit he would derive from performance, the amount allowed him has been fixed on the standard of rescission. This rule does not gainsay the principle of compensation, but is based on considerations of policy; and in this country is treated as an exception.

SECTION 1.

VENDOR AGAINST PURCHASER.

§ 567. Seller entitled to purchase price and interest. The utmost pecuniary redress which a vendor may claim [192] against a vendee in respect of a contract of purchase is the agreed price, and interest upon it from the time it became due. Collection thereof accomplishes specific performance.

1 Wells v. Abernethy, 5 Conn. 222.

Where the promises to convey and to pay are to be performed simultaneously, and are, therefore, mutually dependent, a court of equity will not decree performance against the vendee by requiring him to pay, except upon the terms of the vendor doing equity on his part by making effectual conveyance of the title according to the contract.1

§ 568. The legal remedy. The theory of the legal remedy on the contract is not that of specific performance; but the recovery of damages commensurate with the injury resulting from non-performance. There are a few cases in England and this country in which, on the mere tender of a conveyance not accepted, recovery at law has been permitted or countenanced of the entire purchase-money.2

1 Gaines v. Bryant, 4 Dana, 395. 2 Hawkins v. Kemp, 3 East, 410. There is an implication in favor of such recovery in Goodisson v. Nunn, 4 T. R. 761. In Glazebrook v. Woodrow, 8 id. 366, it was decided that no action for the purchase-money could be brought by the vendor without averring that he had conveyed or tendered a conveyance. Alna v. Plummer, 4 Me. 258; Garrard v. Dollar, 4 Jones' L. 175; Sanborn v. Chamberlin, 101 Mass. 409; Worthy v. Jones, 11 Gray, 168; Franchot v. Leach, 5 Cow. 506; Tripp v. Bishop, 56 Pa. St. 424. Hansbrough v. Peck, 5 Wall. 497.

See

In Richards v. Edick, 17 Barb. 260, Gridley, J., expressed disapproval of this rule, but, regarding it as settled in New York, allowed recovery accordingly. He says: "It is insisted by counsel for the defendant that the measure of damages assumed in the first count, viz., the purchase price of the land, is not the true one. He argues that the title to the land does not pass by the tender of a deed to the defendant, and the plaintiff's continued readiness to deliver it, and that the true measure of damages is the excess of the contract price over the actual value of

the land; and that inasmuch as there is no averment of such excess of the purchase price and no other damage claimed, the $100 which the plaintiff admits to have been paid more than balances the nominal damages arising on a breach of the contract by the defendant. The counsel is certainly sustained in his position as to the true measure of damages by the decision of the court in Laird v. Pim, 7 M. & W. 474. It also seems to me, that were it a new question in this state, there would be reason for adopting the principle which is now held to be law in the English courts. Because what is sought to be recovered is damages for the violation of the defendant's contract, by which the plaintiff has suffered loss. But in the case of an agreement for land the title does not pass by tender of the deed; nor does it pass by operation of law on the recovery of a judgment for the purchase price, as is sometimes true of personal property. It is a case, therefore, where the plaintiff holds the title to the land, and recovers its full value expressed in the contract; and after judgment, when the defendant seeks to obtain the land, a court of law is

§ 569. Measure of damages. In a contract provid- [193] ing for concurrent execution by the parties, it and its consideration are mutually executory, and neither party is bound absolutely to fulfill without performance on the other side; and each, on general principles, has the legal right to violate his contract on the usual terms of compensating the other for the damages which the law allows, and subject to the jurisdiction of equity to decree specific performance.1 If either can obtain, in a court of law, a judgment which enforces literal performance by the other on a mere proffer of the act which is the consideration, he obtains for himself specific performance without subjecting himself to a jurisdiction which courts of equity exercise in such cases to render the relief reciprocally just and equal. A judgment for the purchasemoney on a mere tender of a conveyance, in a legal [194] sense, is founded on the erroneous assumption that the tender of a deed is equivalent to a transfer of the property, and that the purchaser from the time it is made owes the agreed price. Such tender does not pass the title, though followed by recovery and collection of the stipulated consideration; and hence, the vendor would have both the purchase-money and' the legal seizin of the land sold. If he has not received a deed, taken or surrendered the possession, he should not be subjected to the payment of the purchase price.2 In an Eng lish case the court say the plaintiff cannot have the land and' the value too. A tender of performance will perfect a right of action; but it is not equivalent to performance for the recovery of damages. In some cases the courts have permitted. without the power of affording him any relief. The English rule would therefore seem to be more in accordance with general principles, and more in analogy to the action for not accepting personal property, as wheat, or other commodity, which the defendant has purchased and contracted to receive and pay for. There is no necessity for the exercise of this jurisdiction, for the court of chancery is competent to order a specific performance of the agreement, and, at the same time, to VOL. II-79

3

see that a valid deed conveying the title is delivered on the payment of the contract price." See Bement v. Smith, 15 Wend. 493; Shannon v. Comstock, 21 id. 457.

1 Clark v. Marsiglia, 1 Denio, 317. 2 Scudder v. Waddingham, 7 Mo App. 26.

3 Laird v. Pim, 7 M. & W. 474. 4 Eastern Counties Ry. Co. V. Hawkes, 5 H. L. Cas. 331, 376; Wilson v. Martin, 1 Denio, 602; Spencer v. Halstead, id. 606; Shannon v. Comstock, 21 Wend. 457; Hecksher

the whole purchase-money to be recovered where the deed, after tender, has been recorded1 or has been brought into court to be delivered to the defendant. In a case in Maine the defendant gave his bond in a penalty of $15,000, conditioned to pay for land according to the recited terms, which were one-third part of the purchase-money for one thousand two hundred and eighty acres at $6 per acre in thirty days, and two notes payable in one and two years, with good security, for the other two-thirds, the obligee being ready and willing to make the conveyance. An action of debt was brought on the bond without being preceded by even the tender of a deed. Emery, J., said: "This contract decidedly throws on the defendant the obligation of first tendering the money and the two notes with good security; for without this he could not expect to find the plaintiff ready and willing to make the [195] deed of conveyance free from all incumbrances. But this does not impose on the defendant the duty of parting with his money without receiving the deed of conveyance, provided he takes the precaution of demanding it, and the jury ought not to have withdrawn from them the question whether the plaintiff was on his part ready to perform. When

a contract is made to sell and convey on one side, and on the other to purchase and pay for land, on a breach of the agreement each party has an election to seek for damages in a suit at law, or proceed in equity for a specific performance. It is rather unusual for the same party to pursue both remedies. If the seller commence his suit at law, it is supposed that he is contented to keep the property, and pocket the damages which a jury may give him in satisfaction for the injury. Should he wish to get rid of the land, he will proceed in equity to compel specific performance, and in that case nothing would be recovered but the money and interest which were to be given. The appeal to the jury in this case is to be

v. McCrea, 24 id. 304; Boardman v. Keeler, 21 Vt. 77; Clark v. Mayor, 4 N. Y. 338; Derby v. Johnson, 21 Vt. 17; Philadelphia R. Co. v. Howard, 13 How. (U. S.) 307; Pitkin v. Frink, 8 Met. 12; Donaldson v. Fuller, 3 8. & R. 505; Jewell v. Blandford, 7

Dana, 473; Davis v. Ayres, 9 Ala. 292; Rankin v. Darnell, 11 B. Mon. 30.

1 Sanborn v. Chamberlin, 101 Mass. 409.

2 Robinson v. Heard, 15 Me. 296.