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There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924025013792 PRINCIPLES OF SPECIFIC PERFORMANCE AND MISTAKE. PRINCIPLES SPECIFIC PERFORMANCE MISTAKE. BY J. KIELLEHEU. BENGAL CIVIL SERVICE. CALCUTTA : THACKEK, SPINK AND CO. 1888. CALCUTTA : PKINTED BY IHACKEE, SPINK AKD CO PREFACE. The object of the present Manual is to give an outline of the leading rules of Specific Performance and Mistake, with the equitable doctrines on which they are based, as expounded by great Equity Judges in modern times. It is hoped that it may assist judicial officers and practitioners in the mofussil to a better understanding of the principles which underlie the Indian law on those subjects. It has been written from notes made for my own convenience. Having found them very useful in practice, I thought it possible that, if arranged in a connected form, the result might also be of service to others. Injunctions are treated of only so far as they are employed to secure the specific performance of contracts. The Manual makes no pretension of competing with standard English text-books. These being intended for lawyers with ready access to libraries, merely indicate the course of judicial decision, giving copious references to the reports of cases bearing on each particular point. They do not always supply the wants of the mofussil lawyer who has not the reports to refer to. J. K. TABLE OF CONTENTS- INTEODUCTION. Page. Different methods of enforcing a contract at Law and in Equity 1 Specific performance and injunctions, the methods of enforcement in Equity 1 Mandatory injunctions 2 Mistake, foundation of the equitable jurisdiction ... 3 Effect of the Judicature Act, 1873 : Sect. 34 3 Sect. 24, sub-sect. 7 4 Unrestricted power of awarding damages conferred on the Court 6 Rectification and specific performance in the same suit... 6 Injunctions— ^— Sect. 25, sub-sect. 8 5 SPECIFIC PEKFOKMANCE. CHAPTER I. The Suhject-matter of Specific Performance. No difference between Common Law and Equity as to what constitutes the contract 7 The construction and interpretation of contracts the same in both jurisdictions 8 Contracts dealt with in the two jurisdictions for the pur- pose of different remedies 8 Principles of construction not to be confounded with those which guide the Court in granting or refusing specific performance .. 9 Partnership debts at Law and in Equity 9 Creditor's remedy against the estate of a deceased part- ner, in Equity 9 vi TABLE OF CONTENTS. Page. Survivorship at Law 10 Origin and limitations of the equitable rule 10 Attempt to extend the doctrine in Kendall v. Hamilton 12 The essential requisites of a contract 12 Freedom from ambiguity or uncertainty 12 Consensus ad idem 13 Definition of contract \i What the parties have agreed to by a written contract must depend on the construction 15 The Court must act on its own view of the construction 15 Erroneous construction contended for by a party no ground for holding there was no (?OM«eM?/s 15 But where a party has throughout insisted on one con- struction of an obscure agreement, he cannot get per- formance on the footing of the opposite construction 16 Contracts by correspondence, general rule of eonstructiou 18 Where both parties intended that a formal agreement should be drawn up 18 The Courts have gone far enough in " spelling out " ... 19 A lawful subject-matter of contract 21 Not all contracts specifically enforced 22 Outlines of subject-matter of specific performance — (1) executory contracts 22 (2) entered into for valuable consideration ... 21 the amount of consideration immaterial ... 25 (3) where such consideration moves from the promisee 25 Complete definition of subject-matter 26 CHAPTER II. Grounds of the Jv/risdictien. Relief for breach of contract at Law and in Equity ... 26 Failure of the Common Law remedy : where pecuniary damages are inadequate ... 27 where purchaser of real estate dies before completion ... ;.. ... 28 where vendor of real estate is unable to make a complete title 28 in some cases where time is part of the contract ■ ... 23 » TABLE OF CONTENTS. vii Page. Specific performance of a , contract analogous to the administration of a trust ... 30 Qualifications of the analogy between vendor and trustee 31 Vendor's right of retainer 31 Vendor's lien ... 31 Vendor in the mixed position of trustee and mortgagee... 32 CHAPTER III. Parties to the Action, 32 33 34 Grounds of the geaeral rule stated Th« same property sold twice over The general rule of parties Purchase of mortgaged estate from supposed owner of equity of redemption Sub-purchase from vendee Second purchase with notice of previous sale Completion with vendor unaffected by notice of sub' purchase Assignment of the contract of sale Novation ... ... Eights of vendor not affected by purchaser's assignment 38 Relation of trustee and cestui que ti'ust not created between vendor and assignee Assignment of the property and assignment of the con^ tract distinguished The various modes in which a purchaser may deal with his interest under the contract Rights of devise, alienation and charge Various ways of creating a charge Assignment of the contract Qualifications to which charge or assignment subject Essentials of a valid assignment Net results The general rule of parties not affected by the Judicature Act ... ii 34 35 SS 36 37 38 39 40 41 41 41 42 42 43 48 Tiii TABLE OF CONTENTS. CHAPTER IV. Extent of the Jurisdiction, Page. Two broad principles to be observed 45 Subject thereto, the jurisdiction- discretionary 45 Always two questions to be answered ... 45 Discretion of the Court • regulated by fixed rules and principles 46 The same rule applicable to injunctions 47 J,— Equity never interferes where there is a complete remedy at Common Law : Contract for sale of Government stock 48 Contract to . lend a sum of money on mortgage or other- wise 48 Contract to build or repair a house 48 Contract by lessee of colliery to raise and deliver all the get of coals at a fixed price for a definite period ... 49 Contract to execute a mortgage — the mortgage-money advanced - 49 Contract by A. to build a, house for B. on A. 's land ... 60 Specific delivery of chattels possessing a peculiar and intrinsic value 61 Contract for the sale of such chattels, the parties not being on an equal footing 62 Artist seeking restitution of a picture painted by himself, where he had set a price upon it 53 Contract to deliver railway shares of a particular descrip- tion ... 64 Contract made abroad for sale of foreign ship, enforced against ship within the jurisdiction 65 JL. — Equity never interferes where it cannot itself supply an adequate remedy. Relief impossible from defects in the contract itself ... 56 Contract of sale at a price to be fixed by arbitration ... 66 Relief inadequate by reason of uncertainty of subject- matter .. ... .... ..... 58 Contract for sale of goodwill of a business 68 Contract for sale of business premises, fixtures and good- will 59 Contract to enter into and carry on a partnership ... 60 FABLE OF CONTENTS. ix Page. Contract to execute a formal deed of partnership ... 61 Contract for partnership, partly performed 63 Relief impracticable by reason of incapacity of th.e Court to execute its own decree 63 Continuous acts extending over a long period of time ... 6i Indirect mode of enforcing performance 65 DiflBculty avoided by the insertion of suitable covenants 68 BuUding contracts 69 Contracts of hiring and service 70 Contracts relating to land in foreign country 73 Form of relief always discretionary 75 Inquiry as to damages directed in preference to a decree for specific performance 75 General results of the chapter 77 CHAPTER V. The Rule of Mutuality. The rule stated ... 78 Contracts partly capable and partly not capable of being specifically enforced 78 Partial performance not enforced as a general rule ... 79 Approaches to the principle of substantial performance... 81 Apparent violations of the rule : wiere the part o£ the contract which the Court could not enforce has been actually performed ... 83 where the contract is divisible into parts construed as distinct and separate contracts 84 where the remedy is held to be mutual for vendor and purchaser 85 Application of the rule to contracts of sale with defec- tive title 86 Purchaser's right of repudiation 87 Where the defect is made good before repudiation ... 88 Repudiation to be made on discovery of defect 89 Cases where purchaser's right of repudiation was lost by his own conduct 89 Where the contract to the knowledge of both parties can- not be enforced by either until the occurrence of a con- tingent event ^2 TABLE OF CONTENTS. Page. Whether such a contract ia determinable by the purchaser on notice 93 Apparent exception to the rule in oases within the Statute of Frauds, where the plaintiff has not signed 94 Suit by infant for specific performance of a contract made by him 95 CHAPTER VI. Vendor and Purchaser. Contract of sale — its nature and incidents 96 Immediate effects of a valid contract of sale 96 Vendor's position something between a bare trustee and a mortgagee 96 Further analogy between vendor and unpaid mortgagee 96 Cancellation of contract for non-payment of purchase- money 97 Distinguished from cancellation on some equitable ground of invalidity 97 Valid contract, defined 97 Title made out by vendor according to contract or accept- ed by purchaser 97 The estate converted in Equity 98 Estate at risk of purchaser from contract to completion... 98 Correlative liability of vendor in possession 99 Vendor in possession liable to account as trustee and not as mortgagee 100 Vendor's lien — form of declaration 101 Vendor's lien, how enforced 101 Liability of vendor in possession — dictum of Lord Selborne 102 Purchaser's right to require a good title 103 The rule stated in different ways ... 104 Subject to a general exception 104 The deposit 105 Purchaser's right to return of deposit primarily a ques- tion of contract 105 In the absence of express stipulation 105 Principle of the rule 106 Circumstances under which the vendor would be entitled to retain the deposit , 107 TABLE OF CONTENTS. xi Page. Relative positions of vendor and purchaser wlien ven- dor cannot convey allhe has oontraoted to sell 108 Purchaser's right to performance with compensation ... 109 Origin of conditions of sale Ill Partial performance ^Zms damages 112 Power of awarding damages conferred by Lord Cairns' Act 113 Condition precedent to damages under the Act 113 Effect of Judicature Act as to damages ... 114 Specific performance still, as before, a remedy wholly different from damages for breach of contract ... 114 Plaintiff restricted to the form of relief claimed ... 115 Suit for specific performance with an alternative claim for damages 115 Plaintiff's claim in the suit involves an offer of specific performance on his part 116 Effect of absolute repudiation. by defendant 117 Plaintiff's right to sue for damages 117 Distinction between absolute repudiation and mere omis- sion to traverse plaintiff's allegation that defendant vrill not perform the contract 117 Reasonable construccion of the alternative claim for damages 117 Rescission and forfeiture of the deposit in substitution for specific performance 118 Purchaser let into possession before completion 120 Order for payment of purchase-money into Court ... 121 With option of giving up possession 121 Special circumstances under which no option ia given ... 122 CHAPTER VII. Negative Contracts. Nature of negative contracts explained 12.? Injunction the proper remedy in form and substance ... 124 Contracts with negative and aflarmative terms .. 125 Necessity of securing mutuality 125 General result of the decisions 126 Performance confined to negative part of the contract in I/umley v. Wagner 126 No violation of mutuality 128 xii TABLE OF CONTENTS. Page. Case of a want of mutuality ... 129 Case of substantial mutuality 130 Relief refused for want of a negative term in the contract 131 Relief refused where the negative term is merely subsi- diary to the main contract 132 Substance of contracts independent of the form of ne- gative or af&rmative terms 133 The rule established by recent decisions 134 General result— substantial performance the test 137 CHAPTER VIII. Part Performance. The equitable doctrine explained 137 Examples of its application : Contract to lend money on mortgage 138 Contract to build a house 138 Contract by corporation, on a purchase of land, to make a street and market 138 Contracts involving a series of continuous acts 139 Contract by Railway Company to make a carriage road between certain points, and to make and maintain a wharf for loading and discharging vessels 139 Purchase of land by Railway Company " subject to making such roads, ways and slips for cattle as might be necessary" 140 Contract by Railway Company to construct and for ever maintain at their expense a siding of specified length for the use of a neighbouring land-owner 141 The refusal to perform amounts to fraud 142 The Statute of Frauds, sect. 4 142 The doctrine applied to cases within the Statute ... 143 Principle of its application 143 The earliest cases on the subject , ... 144 Grounds of its application explained by Earl Selborne in MaddisonY. Alderson ... 145 Limitations of the doctrine of part performance ... 148 Part performance by plaintiff ... 148 The act of part performance unequivocally referable to a contract 148 TABLE OF CONTENTS. xiii Page. Illustrations of the rule 149 Delivery of possession 150 Delivery of possession to a third person, no party to the contract 151 Retention of possession , 153 Expenditure on the property by party admitted into possession 154 Equivocal acts not amounting to part perfoimanoe ... 155 Acts preparatory to the completion of a contract ... 155 Holding over by tenant 155 Desisting from prosecution of a purchase in pursuance of an agreement 155 Act forming a condition precedent to the contract ... 156 Payment of purchase-money 156 Former conflict of authority on the question 156 Grounds of the present rule stated by different author- ities 157 Marriage not a part performance sufaoient to take a case out of the Statute 159 Parol agreement to settle property in consideration of marriage, followed only by marriage 159 Parol agreement followed by acts of part performance independently of the marriage 163 Limits of application of the doctrine of part perform- ance 164 Whether confined to cases concerning land 164 Result of the authorities stated 167 Terms of the contract to be ascertained by the Court where part performance established 168 Parol evidence admissible 169 Compliance with the Statute prevented by the fraud of defendant 169 Valuation under the contract prevented by defendant ... 170 How the defence of the Statute may be raised 170 The function of demurrers 171 The Statute taken advantage of by way of demurrer ... 171 Changes introduced by the Judicature Act 171 Demurrers abolished _ 172 Principles applicable to defences based on the Statute of Frauds and Statutes of Limitation 172 xiv TABLE OF CONTENTS, CHAPTER IX. Performance with a Variation, Page. Evidence of a parol variation inadmissible for tie plain- tiff 174 Admissible in defence to a suit for specific performance... 175 The admission of such evidence no evasion of the Statute of Frauds 175 Discretion of the Court on proof of parol variation set up by defendant 176 The Court may enforce contract with the parol variation 1 76 Or it may dismiss the suit 177 The rule of admissibility in defence applies without qualification 178 CHAPTER X. A Doubtful Title, How far it will le forced upon an unwilling Purchaser. How the question arises 178 A doubtful title defined — rules of Pyrke v. Waddingham 179 Confiicting considerations of doubtful title and of the duty of the Court Adverse decision in Lower Court Duty of the Appellate Court ... Cases of doubtful title classified Tendency of modern decisions 180 181 181 184 186 MISTAKE. CHAPTER XI. Extent of the Jurisdiction. Jurisdiction assigned to the Chancery Division 188 Relief, where mistake is pleaded by way of defence to an action in the Q. B. Division 188 Foundation of the equitable jurisdiction 189 Form of relief afforded • 189 Definition of the limits of equitable j urisdiction 189 (1) The document must be one made for valuable con- sideration 190 TABLE OF CONTENTS. xv Page. Apparent exception in the case of a voluntary trust completely executed 192 Application for relief implies the existence o£ an actual concluded contract antecedent to the instrument sought to be rectified 193 Also that something still remains to be done under the instrument 194 (2) The relief may be on the ground of mistake of law 01 ot fact 196 The rule ig nor antia juris neminem excusat 196 Limitations with which relief is granted against the consequences of mistakes of law 199 Result of the authorities 203 (3) The mistake must be one affecting the essence of the transaction 204 (4) The mistake must be common to both parties ... 205 Qualification of the rule suggested in Bentley v. MacMy 207 Suggested exception to the rule in the case of vendor and purchaser 208 Remedy where the mistake is not mutual • 210 Principle on which family arrangements are supported notwithstanding mutual mistakes of fact .., 212 Limitations with which the principle is to be applied 213 (5) The mistake must be clearly proved 215 The admission of parol evidence at Law 217 Admissible in Equity to prove a mistake as to the intention of the party 219 Illustrations of the distinction 220 (6) Rectification must not prejudice the rights of third parties 222 The TOO^e« of granting relief 223 Mode of preserving evidence of the order 226 CHAPTER XII. Mistake and Specific Performance. Mistake pleaded in defence to a suit for specific per- formance 226 xvi TABLE OF CONTENTS. Page. Suit for speoifio performance with rectification of mistake 228 Mistake of plaintiff alone 228 ,, of both parties 229 Admission of parol evidence for plaintiff— opinions of American Jurists 229 Effect of the Judicature Act, 1873, s. 21 (7) ... ... 231 Rectification and relief in the same suit 231 CHAPTER XIII. Marriage Settlements. Rectification of settlement agreed to be made by articles — general rules 233 Discrepancy between articles and settlement both made before marriage 233 Evidence of intention admissible 284 Post-nuptial settlement reformed on construction of articles 237 Objects of the settlement to be considered in construing articles 238 The evidence necessary for rectification 239 Clear proof of some different intention at time of execution 242 The onus on those who seek to alter the instrument ... 244 The Court must look at the intention of the parties at the time when the deed was executed 245 CHAPTER XIV. Powers, Statutory provisions in aid of defectife execution of powers ... 246 Equitable relief in aid of defective execution 247 Defective execution and non-execution distinguished ... 247 The principle on which defective execution is aided ... 247 Explained by Lord Alvanley in CAoymara V. CaJsore ... 248 Found fault with by Sir W. Grant in Holmes v. Coghill 248 The principle generally recognised in later oases 249 Limits of the rule in aid of defective execution 249 The defect not of the essence of the power 249 TABLE OF CONTENTS. xvli Page. Power to appoint witi conBent of a third party, executed without such consent 249 Power to appoint by deed, executed by will 249 Power to appoint by will, executed by deed 250 There must be a clear intention to execute the power ... 252 Illustrations of intention and non-intention 252 Objects of the power favored in Equity 254 Purchasers 255 Charities 255 Children 256 The favored objects considered in their relation to donee of power 256 No remedy for non-execution 257 Nor where execution has been prevented by accident ... 259 Apart from fraud 261 Supposed exception to the foregoing rules 261 A power and a trust compared 261 Cases in which a trust is implied in favor of the objects of a power in default of appointment 261 General result of the authorities 266 CHAPTER XV. Payment of Money under Mistake of Law. Considerations affecting the question 267 The rule at Law 268 Not interfered with in Equity 268 Two cases in which repayment was ordered 269 The rule does not apply in the case of payment to an ofScer of the Court of Bankruptcy 270 The principle extended in bankruptcy 271 extended to the Chancery Division 272 TABLE OF CASES. Alexander v. Mills .... 182 Alvanley r. Einnaird ... 227 Ashton V. Corrigan ... 49 Austerberry v. Corpora- tion of Oldham ... 4 Bain 11. Fothergill ... 27 Barkworth t'. Tonngf ... 171 Barren, Ex parte ... 106 Baxter r. Connolly ... 59 Beauchamp v. Winn ... 198 Beioley v. Carter ... 181 Belli). Holtby ... 185 Bentley i;. Mackay ...207 Best's Settlement Trusts, In re 238 Bingham v. Bingham ... 269 Blackett ■». Bates ... 64 Bold D. Hutchinson ... 235 Bond v. Hopkins ... 143 Bradford (Earl of) v. Eomney (Earl of ) ...220 Brett V. The East India & London Shipping Co. 132 Brewer v. Broadwood ... 87 Britain v. Eossiter ... 158, 164 Broun i;. Kennedy ... 190 Brown, In, re. Dixon v. Brown 272 Brown v. Higgs ... 261 Buekell v. Blenkhorn ... 259 Burrow v. Scammell ... 109 Butcher u. Stapely ... 144 Caird v. Moss Catling V. King Caton V. Caton Catt n. Tourle ... 195 ,.. 172 .. 148 ..130 Chapman v. Gibson ... 248 Oheale v. Kenward „ 64 Chinnook «. Marchioness of Ely 13 Clerk D. Wright ... 155 Clinan v. Cook, 150, 156, 175 Clowes i;. Higginson ... 178, Cochrane v. Willis ... 204 Cogan e. Dnffield ... 237 Collard v. Sampson ... 180 Collins V. Stimson ... 106 Cooke i;. Chiloott ... 2 Cooper V. Martin ...250 Cooper V. Phibbs ... igg Crabtree D. Poole ... 35 Crooke «. Corporation of Seaford 154 Croome v. lediard ... 84 Cuddee ». Butter ._ 43 Outts V. Thodey ... 36 Dale D. Hamilton ... 149 Darby v. Whittaker ... 66 Davenport D.Whitmore.., 84 Davis V. Morier ... 269 Dawkins v. Lord Penrhyn 172 Doeu. Stanion ... 104 Doherty «. AUman ... 47 Donuell v. Bennett ... 134 TABLE OF CASES. Page. Dowling V. Betjemann ... 53 Duncuft «. Albrecht ... 54 Dundaa v. Dutens ... 162 Ellis V. Eogers ... 105 England 1). Curling ... 61 Exeter (Marquis of) v. Exeter(Marchioness of) 225 Faloke B.Gray ... 52 Fane ». Pane ...'215 Fells V. Read ... 51 Flight ti. BoUand ... 95 Foster, Ex parte. In re Foster ... 151 Foster ■!). Wheeler ... 1 Fothergill ». Rowland, 49, 136 Fowler 11. Fowler ...216 Foxorof t «». Lyster ...144 Garrard v. Frankel ... 208 Garth v. Townsend ... 253 Gaskin v. Balls ... 5 Great North of England, &c., Ry. Co. V. The Clarence Railway Co. ... 2 Green i). Low ... 84 Greene v. West Cheshire Ry. Co. ... 141 Greenwoods. Greenwood 213 Hadley ■y. Baxendale ... 27 Hammersley v. DeBiel ... 160, 162, 166 Hanley v, Pearson ... 240 Harris v. Pepperell ... 208 Hart V. Herwig ... 55 Haywood ■;;. Permanent Benefit Building Society 4 Hermann v. Hodges ... 60 Hills V. CroU ... 128 Hipgrave '!'. Case ... 115 Hoggart D. Scott ... 88 HoUis D. Edwards Holmes v. Coghill Hooper v. Smart Howe V. Smith Hughes i>. Morris Hughes X. Wells Hussey v. Home Payne Innes v. Sayer Page. .. 144 .. 248 .. 109 .. 106 .. 157 .. 255 .. 20 .. 255 James, Ex parte. In re Condon 270 Jeston V. Key 162 Johnson «. The Shrews- bury and Birmingham Railway Company ... 71 Jones i;. Clifford 197 Keisselbrack v. Living- stone 230 Kendall s. Hamilton ... 10 Kennard v. Kenuard ... 252 Kingdou 1). Kirk 119 Laoon v. Mertens ... 156 Lamaire v. Dixon ... 46 Lamas ■». Bayley 155 Lassence ■». Tierney ... 160 Lawton f. Campion ... 214 Legg V. Gold wire ... 233 Lewis tJ. James 120 Lincoln v. Wright ... 153 Lister ■«. Hodgson ... 191 London and Birmingham Railway Co. v. Winter 176 Loxley V. Heath 234 Lumley v. Wagner 82, 126 Lysaght 1). Edwards ... 96 Mackenzie v. Coulson ... 194 Maddison 1/-. Alderson ... 145 156, 158, 165 Mair v. Himalaya Tea Co. 72 TABLE OF CASES. Page. Marshall v. Berridge ... 16 Martin 0. Swanaell ...264 May V. Thomson 18 McCormiok v. Grogan ... 143 M'Creight v. Foster ... 38 McManus v. Cooke ... 166 Mestaer v. Gillespie ... 143 Morgan «. Milman ... 257 Morphett 1). Jones ... 148 Morris v. Colman ... 124 Morse 0). Merest 169 Mortimer v. Shortall, 206, 219 Mostyn v. West Mostyn Coal and Iron Co. ... 188 Mailings v. Trinder ... 183 Mundy ^■. JoUifee ... 168 Munns v. Isle of Wight Railway Co 101 Murray v. Parker ... 219 Murrel v. Goodyear ... 89 Normanby (Marquis of) v. Duke of Devonshire ... 7 Norris D. Chambres ... 33 Ogden V. Fossik 80 Ogilvie ■!;. Foljambe ... 104 OUey v. Fisher ... 5, 231 O'Reilly 1). Thompson ... 155 Osborne I). Rowlett ... 186 Owen V. Davies ... 166 Paget V. Marshall ... 210 Pateriohe ■!;. Powlett ... 174 Pearson r. Pearson ... 221 Penn v. Lord Baltimore 73 Petoi;. Brighton, &c.. Rail- way Company 131 Phillips V. Sylvester ... 102 Phillipson r. Kerry ... 190 Powell V. The South Wales Railway Company ... 50 Powell Duffryn Steam Coal Co. V. TafE Vale Railway Company ... 66 Preston v. Luck 13 Price v. Corporation of Penzance 138 Pussy -!). Pusey 51 Pyrke v. Waddingham ... 179 Rogers 4). Challis ... 48 Rogers v. Ingham ... 267 Rooke V. Lord Kensington 205 Rummens v. Robins ... 13 Salisbury v. Hatcher ... 91 Sanderson v. The Cocker- mouth, &c., Railway Co. 140 Scott t). Rayment ... 62 Sells V. Sells 205 Shannon v. Bradstreet ... 247 Shaw V. Foster 38 Sherwin !>. Shakspear ... 99 Siohel V. Mosenthal ... 48 Simmonds, Ex parte. In re Carnac 271 Smith-!). IlifEe 239 Somerset (Duke of) i). Cookson 51 Soper I'. Arnold 201 Souter V. Drake 104 South Wales Railway Co. V. Wythes 81 Stock V. Vining 226 Stocker v. Brockelbank ... 70 Stone 1). Godfrey 199 Stone?). Smith US Surcome v. Pinniger ... 163 Sykes 1). Beadon ... .■• 21 Tamplin v. James Tasker r. Small ... 114 34 TABLE OF CASES. Terry & White's Contract, In re 7,110 Thompson v. Whitmore... 192 Tilley -!). Thomas ... 28 Townend v. Toker ... 25 Townshend (Lord) «. Stangroom 177 Tucker 1). Bennett ...242 Tnllooh r. Hartley ... 74 Vickers 1). Vickers ... 57 i: Walford 35 Walters v. Morgan 46 Warden v. Jones 159 Waring v. The Manches- ter, &e., Railway Co. ... 79 Watson i'. Marstou 227 Whaley v, Bagenal 165 Whitchurch «. Bevis 169 White V. White ... White's Trusts, Jie Williams v. Brisco Wills v. Stradling ... 221 ...' 266 ... 18 ... 155 Wilson V. Purness Rail- way Co. 139 Wilson V. Northampton, &c., Railway Co. ... 75 Withy V. Cottle ... 86 Wollaston.v. Tribe ... 241 Wolterbeek «. Barrow ... 240 Wolverhampton & Wal- sall Ry. Co. V, L. & N. W. Ry. Co. ...22,66,135 Wood V. Midgley :... 171 Wood 1). Scarth ... 177 Wycombe Ry. Co. v. Don- nington Hospital ... 12 Wylson V. Dunn ... 92 RBFBRBNCES AND ABBREVIATIONS. App. Cas, Atk. B. & Ad. Beav. Bro. Ch. Cas. C. C.A. C. P. D. Ch. D. CI. & F. Coll. Cox Cr. & Phil. D. F. & J. D. & J. D. J. & S. D. M. & G. Drew. Drew. & S. Dr. & W. Exoh. Freeman H. &M. Hare J. &H. Jac. & W. Job. John. Ch. Kep. K. & J. L.C. ... Law Reports, Appeal Cases. ... Atkyns, Chancery Reports. ... Barnewall and Adolphus, Eeports King's and Queen's Bench. ... Beavan's Reports, Rolls Court. ... Brown's Chancery Cases. ... Lord Chancellor. ... Court of Appeal. ... Law Reports, Common Pleas Division. ... Law Reports, Chancery Division. ... Clark and Finnelly, House of Lords Reports. ... Collyer's Reports, Vice-Chancellors' Court. ... Cox's Chancery Eeports. ... Craig and Phillips, Chancery Reports. ... DeGex, Fisher and Jones, ditto. ... DeGex and Jones, ditto. ... DeGex, Jones and Smith, ditto. ... DeGex, Macnaghten and Gordon, Chancery Reports. ... Drewry's Reports, Vice-Chancellors' Court. ... Drewry and Smale, ditto. ... Drury and Warren, Irish Chancery Reports. ... Exchequer Eeports. Freeman's Chancery Reports. Hemming and Miller, Reports Vice-Chan- cellors' Court. Hare's Eeports, Vice-Chancellors' Court. Johnson and Hemming, Eeports Vice-Chan- cellors' Court. ... Jacob and Walker, Chancery Eeports. ... Johnson's Eeports, Vice-Chancellors' Court. ... Johnson's Chancery Eeports (American). ... Kay and Johnson, Reports Vice-Chanoellora' Court. .. Lord Chancellor. ABBEEVJA TIONS. L.J. ... Lord Justice. L. E. Ch. ... Law Reports, Chancery Appeals. L. R. Eq. ... Law Reports, Cases in Equity. L. R. E. & I. App, Law Reports, English and Irish Appeals. (House of Lords). L. R. H. L. ... Law Reports, Appeals, House of Lords. M. R. ... Master of the Rolls. M. & G. ... Macnaghten and Gordon, Chancery Reports. M. & W. ... Meeson and Welsby, Exchequer Reports. Madd. ... Haddock's Reports, Vice-Chancellors' Court. Mer. ... Merivale's Chancery Reports. Myl. & Cr. ... Mylne and Craig, ditto. Myl. & K. ... Mylne and Keen, ditto. P. Wms. ... Peere Williams, ditto. Phil. ... Phillips, ditto. Q. B. D. ... Law Reports, Queen's Bench Division. Euss. ... Russell's Chancery Reports. Russ. & Myl. ... Russell and Mylne, ditto. Sch. & L. ... Schoales & Lefroy, Irish Chancery Reports. Sim. ... Simon's Reports, Vice-Chancellors' Court. Sim. & St. ... Simon and Stuart, ditto. Swans. ... Swanston's Chancery Reports. V. C. ... Vice-chancellor. V. C. E. ... Vice-Chancellor of England. Vern. ... Vernon's Chancery Reports. Ves. ... Vesey's ditto. Ves. Sen. ... Vesey Senior, ditto. Ves. Junr. ... Vesey Junior, ditto. Ves. & B. ... Vesey and Beames, ditto. W. & T. L. C. ... White and Tudor's Leading Cases. . & C. ... Younge and CoUyer, Reports Vice-Chancel- lors' Court. SPECIFIC PERFORMANCE AND MISTAKE. INTRODUCTION. At Common Law a contract was enforced by a judgment for damages or compensation for the non-execution of it. That was one method of enforcing a contract, but it was not the only- method. A contract might equally be enforced in Equity by a decree for its actual execution, accord- ing to its stipulations and terms; and the latter was, generally speaking, the more effectual method of the two. There are many contracts which were and are enforceable in one way but not in the other, and until recent times' the jurisdiction of Courts of Equity was limited to the more effectual remedy and failed when that could not be ap? plied. ^ Specific performance and injunctions are only the different methods by which a Court of Equity arrived at the same result of compelling a man to do the very thing which he contracted to do. If I contract to do a particular thing. Equity acting in personam compels me to execute the contract. If, on the other hand, I contract not to do a particular thing. Equity again acting in personam forbids ' Foster v. Wheeler, 36 Oh, D., 697. K., S. P. 1 2 SPECIFIC PEBPOEMANGE AND MISTAKE. me to do ifc and compels me to abide by my engage- ment. Thus, generally speaking, decrees for speci- fic performance and injunctions are only different kinds of machinery for effecting the same or simi- lar ends ; one for the enforcement of affirmative and the other for the enforcement of negative contracts. There is, indeed, one kind of injunction which is only a decree for specific performance, veiled under a thin disguise. We allude to mandatory injunc- tions. If I contract to erect a wall at right angles or in any particular way, a mandatory injunction that the wall is only to be allowed to stand in that particular way, is virtually an order for specific performance in the terms of the contract. Great lu the Great North of England, &c., Railway England, Company v. The Clarence Railway Company, andHai-Ue- a mandatory injunction was made in effect com- way Co^'u.' pelling a Railway Company to pull down walls ence Rail- "^^^lich they had built to prevent another Railway CoU ^507^ Company from crossing their line. In Coolie v. Knight Chilcott, a purchaser of a piece of land with a well v.c, 1844. or spring upon it covenanted with the vendor, Chilcott, 3 who retained land adjoining intended to be dis- Maiins, " posed of for building-sites, to erect a pump and V C 1876 ■' ' reservoir, and to supply water from the well to all houses builfc on the vendor's land. It was held that, though the covenant was not one of which the Court would decree specific performance direct- ly, as being for the construction of works which the Court could not superintend, it could be enforced indirectly by an injunction restraining the INT ROD UGTION. defendant from allowing the work to remain unperformed.^ We merely mention these cases to shew how very nearly the prohibitive character of injunctions, when they take the form of mandatory injunction, approaches to that of a decree for specific per- formance. Where, through mutual mistake, the instrument executed between the parties failed to express the real agreement between them. Equity assumed jurisdiction either to set aside or rectify the written document as the circumstances of the case might require. In cases of mistake, there is an absence of fraudulent intention, but owing to some unin- tentional act, omission, or error, the intention of the parties has not been carried out. To enforce spe- cific performance of a contract thus rectified on the ground of mistake, the party had formerly to proceed by a separate suit in Equity. Bearing in mind the above remarks, we will next see how far the law applicable to these subjects has been affected by the Judicature Act, 1873. Amongst the matters specially assigned to the Chancery Division of the High Court by section 34 of the Act, are — " The rectification, or setting aside, or can- cellation of deeds or other written instruments ; and • In two later oases the Court of Appeal has virtually over, ruled Coolie v. Chilcott, on the ground that the defendant, who was the assignee of the purchaser, was not bound by the SPKCIFIC PERFORMANCE AND MISTAKE. " The specific performance of contracts between vendors and purchasers of real estates, including contracts for leases." The object of section 34 is merely a distribution of business for purposes of general convenience, and, no doubt, also with a due regard to the ante- cedents of the several Courts and the objects in- tended to be secured by their amalgamation. Excepting, however, this rule of procedure there is nothing in the Act to alter or affect the rights and remedies previously existing. All the powers of awarding damages which before the Judicature Acts were exercised by the Common Law Courts are now vested in the High Court ; and section 24, sub-section 7, of the Judicature Act, 1873, requires the High Court in any cause to grant all such remedies whatsoever as any of the parties thereto may appear to be entitled to in respect of any and every legal and equitable claim properly brought forward by them respectively in such cause, so that so far as possible all matters in controversy between the said parties respectively may be com'- pletely and finally determined and all multiplicity of legal proceedings concerning any of such mat- ters avoided. A party aggrieved has his equitable rights and he has his legal rights, and can elect between them or take them in conjunction where that was allowed before the Judicature Act. The covenant, but these decisions do not affect the form of the decree. See Eaywood v. Permanent Benefit hnilding Society, 8 Q. B. D., 403; Avsterberry v. Corporation of Oldham, 29 Ch. D., 750, INTROU VGTION. only difference is that tlie matters have now to be disposed of in oue and tlie same action. The unrestricted power of granting damages conferred on the Court will enable it to do com^ pie te justice as the circumstances of each case may require, as, for instance, where it may be desirable to enforce specific performance of one part of a contract, and award damages for breach of the remainder. So also, cases of mistake and perform- ance can now be combined in the same acticm. It has recently been held that since the Judicature, Act, the Court has jurisdiction (in any case iu which the Statute of Frauds is not a bar), in one and the same action, to rectify a written agreement, upon parol evidence of mistake, and to order the agree- ment as rectified to be specifically performed.^ With respect to injunctions, section 25, sub- section 8, of the Act lays down that an injunction may be granted " in all cases in which it shall appear to the Court to be just or convenient." It has been distinctly laid down by the Court of Appeal that " the Act has somewhat enlarged the powers of the Court, but in the matter of injunctions it has done nothing to alter the prin- ciples which have been laid down as to the exercise of its powers, where principles have been establish- ed as being just and convenient."^ So far, then, the law relating to specific performance and injunc- tions stands unaltered by the Judicature Act. ' Olley V. Fisher, 31 Ch. D., 367. 2 GasUn v. Balls, 13 Ch. D,, 32i. SPECIFIC PERFORMANCE. CHAPTER I. The Subject-matter of Specific Performance. In regard to specific performance, the first im- portant point to bear in mind is that there is no diiFerence between Common Law and Equity as to what constitutes the contract. In a case in 2 Freeman ^ it was laid down that " Equity will never make that a good agreement which is not good by law." In the recent case In re Terry inreTerry and White's Contract, Lord Esher, M. R., thus ex- contract,32 presses himself : " This case gives occasion for me to c. a. i'sse! make a statement with regard to the mode in which I think that arguments very often brought before us with regard to alleged differences be- tween Equity and Common Law ought to be treat- ed. I believe that these arguments are based more upon phrases which have been used formerly in the Courts of Equity and in Courts of Common Law than upon any real distinction. I doubt my- self, although such a thing is suggested in the Judicature Act, 1873, section 25, sub-section 11, whether there are any principles of law which were ' Marquis of Normanhy v. Duke of Devmishire, 2 Freeman, 216. In Chancery Mich., 1697. SPECIFIC PEBFOBMANCE. differently affirmed in the old Court of Equity and the old Courts of Common Law. These Courts dealt with the same matters for the purpose of different remedies, and therefore were necessarily looking at the same matters from different points of view. But it has been often said that the rules of evi- dence in the Court of Equity were different from those in the Courts of Common Law, and that a different construction was put upon the same in- strument ; that the same instrument in the same words would be construed in one way in a Court of Equity and in another way in a Court of Com- mon Law ; and it has been said that that which in the one Court would have been deemed to be neither immoral nor dishonest, was in the other Court deemed to be both immoral and dishonest. Ever since I have been in this Court of Appeal, I have been trying to point out, not the differences, but the resemblances and the identities between Law and Equity, and I now protest against each and every one of those alleged doctrines. I protest most strongly that evidence was always the same in the Court of Equity as in the Courts of Com- mon Law as to its effect in finding out the truth. "What an absurdity it would be if the same evi- dence to prove a given fact, before one of two tribunals should be taken to prove it, and before the other tribunal should be taken not to prove it ! The idea seems to me to be monstrous ; and, as to a matter being called immoral and dishonest in one Court and moral and honest in another, if the THE CONTRACT. law were so, I should consider it perfectly hateful that a man should be branded with fraud or with dishonesty according to the Court in which his adversary brought the suit. It seems to me to be equally absurd and ridiculous to suppose that the same words, in the same contract, should be held to have one meaning in a Court of Law and an- other in a Court of Equity," p. 21. And Lord Justice Lindley remarks : " In all actions for spe- cific performance, and in all applications to the Court involving the exercise of that discretion which the Court invariably does exercise in order- ing or refusing specific performance, it is necessary not to confound the principles or rules hy which contracts are interpreted, with the principles or rules which guide the Court in enforcing or de- clining to enforce specific performance," p. 27. We have quoted those remarks at length because there has been a good deal of loose talk about equitable contracts as something vague and inde- finite ; as if Equity were more general and less precise and particular in relation to contracts than Common Law. Another of the statements commonly made is that partnership debts are joint at Common Law, but joint and several in Equity. Suppose a testa- tor at the time of his death was a partner in a partnership firm, and that some of the partnership debts then remained unpaid, there is no doubt that a creditor of the firm has a right to institute proceedings to obtain payment of his own and 10 SPECIFIC PERFORMANCE. the other partnership debts out of the assets of the deceased partner. ^ But upon what ground should a creditor, who had contracted a debt with a firm consisting (say) of A. B. and C, be entitled to claim re -payment of the whole of that debt from the estate of A., merely because A. happened to have died? ^ The answer to this' question appears more diffi- cult, if we remember that at Common Law, when a partner died, the liabilities of the partnership, being joint, survived to the surviving partners, so that they were the only persons against whom any Common Law action could be brought in res- pect of a partnership contract. ^ It would seem a simple solution of the difficulty to say, that which is stated too broadly in some reported cases, and in some text-books, viz., that while partnership debts were joint at Common Law, they were joint and several in Equity; and that it was therefore in the option of the creditor to pursue either his joint or his several remedy.^ The real origin and limitations of the rule were very carefully considered in Kendall v. Hamilton.^ In that case Lord Selborne saj's : " There is (as it seems to me) only one really consistent explana- tion of this course of practice, when taken in con- nection with the rule in bankruptcy, and with the general principles of law and Equity, viz., that ' Eddis on the Administration of Assets, p. 42, ■' i App. Cas., 504. THE CONTRACT. J J derived from the doctrine 'jus accreseendi inter mercatores locum non habet.' As in several other Avell-known classes of cases (of which mortgages and security bonds, with penalties, may be taken as examples), Equity controls the operation of a legal contract so as to give effect to the purposes and objects to which it was meant to be subsidiary, so in these partnership cases it controls, inter mercatores, the legal effect of survivorship. If that is the principle of the rule, it is one which arises upon death only. The partnership is dis- solved by death ; but in Equity it is taken as still subsisting, for every purpose of liquidation, just as if it had been dissolved inter vivos, and the creditors were taken as still creditors of that part- nership. What was before joint thus becomes several by the dissolution, and by the exclusion in Equity of the survivorship which takes effect in law ; and although when this rule was first estab- lished, it might well have been doubted whether it did not give creditors rights for which they had never contracted, there could be no doubt, after it had once become a settled rule, that the rights resulting from it were necessarily implied in all subsequent onerous contracts by co-partners. For this purpose (and, as it seems to me, for this pur- pose only, and only by operation of death) all such contracts may be described, as in Equity, joint and several." ■' • i App. Cas,, 538. 12 SPECIFIC PERFORMANCE. In Kendall v. Hamilton an attempt was made to extend that doctrine during the lifetime of the partners. In repudiating that attempt the House of Lords explained the true limits within which alone language can be properly used to the effect that partnership debts are joint and several. It is, then, strictly correct to say that, that which constitutes a contract at Common Law will constitute a contract in Equity and vice versd. It is not here proposed to examiue at length what will constitute a valid contract. For that purpose reference may be made to Mr. Pollock's standard work. There are three essential requi- sites to a contract : (1) There must be two or more parties to the contract capable of making it ; (2) there must be a mutual assent between the parties as to the same subject - matter which is usually expressed as consensus ad idem; and (3) the subject-matter of the agreement must be some law- ful thing. From the fact that mutual assent is necessary, it follows that the contract must be one Wycombe which is not ambiguous. The case of the Wycombe Company u. Railway Company v. Donnington Hospital is an Hospital, L instance of an ambiguous contract, and from that 26'n. ' it would seem that where one of the parties to the Justices, contract proves that he understood the agreement in a different sense to the other, the Court will re- fuse to decree specific performance of the aoree- ment, without considering whether the defendant's construction is reasonable or not. When the ngreement is not understood, there is no consensus. THE CONTRACT. J 3 no contract and therefore no specific performance. In Rummens v. Robins the defendants by letter Rummensr. offered to sell a piece of land to the .plaintiff at a j. & s." 88.' certain price. The letter concluded, " There will justices" ^ be the usual clauses in a contract and some limita- tions as to the length of the title to be shewn, and other minor details. " Held, that this offer with the acceptance of it in writing, did not constitute a contract which the Court could enforce, owing to the uncertainty as to the clauses to be inserted, and as to the length of the title to be shewn. In Preston ». Fr-eston v. Luck a negotiation took place as to the ch.D! 502. sale by Luck to Preston of a British Patent and '' '' certain Foreign Patents for the same inventions, and ultimately an offer was made for sale at £500 and accepted by letter, but it was not quite clear whether the offer and acceptance related to all the Patents, or to the British Patent only. Preston brought his action for specific performance, treat- ing the contract as including all the Patents, and moved for an interlocutory injunction to restrain Luck from parting with them. At the hearing of the motion he asked leave to amend his writ, and for an injunction as to the British Patent only. Kay, J., held there was no contract which Pres- ton could enforce and refused the injunction. He said : " A contract means consensus ad idem. Lord Westbury, than whom very few people had greater command of language, puts it thus in the case of Chinnock v. Marchioness of Ely. ' An agreement 14 SPECIFIC PERFORMANCE. is the result of the mutual assent of two parties to certain terms, and if it be clear that there is no consensus, what may have been written or said becomes immaterial.' If I may respect- fully say so, I concur in every word of that definition, and think it is as good a definition of a contract as I know of. It is plain to my mind that in this case there never was any con- sensus. If the plaintifis' evidence is to be be- lieved, and I do not wish for a moment to cast any discredit upon it, the plaintiffs understood that they were bargaining for the English and Foreign Patents ; the defendant Luch understood (and as it seems to me with very much more reason, because that I hold to be the construction of these letters) that he was contracting to sell, not the Foreign Patents, but the English Patent only. How is it possible for the plaintiffs to say that there was a consensus?"''- The Court of Appeal, while declining to express any decided opinion on the question whether there was a concluded agreement between the plaintiffs and ImcIc, held that there having been an offer and acceptance and primd facie a contract be- tween the parties, what ought to be done was to keep things in statu quo till the hearing, and the injunction was granted accordingly. Referring to Mr. Justice Kay's decision that there was no consensus ad idem, Lord Justice Cotton observed : ' 27 Ch. D., 502. THE CONTRACT. " Now, where parties enter into a written contract, what they have agreed to must depend on the construction of that contract. It is very true that in some cases, if the party against whom specific performance is sought to be obtained, satisfies the Court by clear evidence that what he on the terms of the contract appears to have contracted for, was not in his mind the thing in respect of which he was bargaining, the Court will refuse specific performance, but that is only because in cases of specific performance the Court does not grant that special equitable relief, if it finds, for any reason, that it would be what is C3.11ed a hard- ship or unreasonable to compel the defendant specifically to perform the contract. If here the position of the parties were reversed, and the present plaintiffs could satisfy the Court that although upon the true construction of these letters the English Patent alone was the subject of the agreement, they never intended to offer £500 for the English Patent alone, but for the English and Foreign Patents together, the Court would probably refuse specific performance against them. But if the letters themselves make a con- cluded agreement in writing, then, in my opinion, the mere fact that down to the time wiien the parties were before Mr. Justice Kay, the plaintiffs were contending that on the true construction of those letters they included something more than he has now decided they did include, is no reason for saying that there is not any agreement enforceable 15 J (5 SPECIFIC PERFORMANCE. in Equity against the defendant, who says that from the very first he intended this to be a contract for the British Patent. If the plaintiffs were to bring their action to a hearing, asking specific performance of the agreement for an assignment of the English and Foreign Patents, and the Court decided that they were entitled only to take the English Patent, they might say Then we will have our action dismissed. But the plaintifis are ready to amend their writ and con- fine the relief asked to a specific performance of the contract as regards the English Patent. That, in my opinion, if we grant an injunction, they ought to undertake to do, but the mere fact that they put an erroneous construction on a contract in writing existing between them and the defendant Luck, and insisted that it included what it does not in fact include, is, in my opinion, no ground for saying that there is no contract." ^ Marshall v. In Marshall v. Berridge it was held that although 19 Ch. d'., where an agreement is clear, the Court must act 233 C A • 1881. ' ' upon its own view of the construction without regard to the view entertained by the parties, yet where a party has throughout insisted on one construction of an obscure agreement, he cannot get specific performance on the footing of the opposite construction. There the plaintiff offered to take a lease of •furnaces from the defendant conditionally upon ' 27 Ch. D., 606-7. THE CONTBAGT. his being able to make arrangements with other persons as to ore. A loosely drawn memorandum was shortly afterwards signed by the parties, substituting certain other rents for the rents mentioned in the letter, which in other respects was to form the basis of the agreement. The defend- ant understanding that the lease was to begin immediately, offered possession to the plaintiff at once, but the plaintiff refused to take it, as he had not yet made arrangements for ores, and con- tinued to treat the agreement as conditional on his making those arrangements. Ultimately the parties differed as to the covenants to be inserted in the lease, and the plaintiff commenced his action for specific performance. On the question of construction Sir G. Jessel, M. R, said : " The plain- tiff succeeded in the Court below by inducing the Court to put upon the memorandum an interpre- tation which he had always repudiated. Now it would be a very singular thing that a man who had always insisted on one construction of the agreement, and had refused to take possession because that was its proper construction, should then come to a Court of Equity insisting that the construction for which he had hitherto con- tended was wrong, and that the agreement had a totally different meaning, and should ask the Court to attach that meaning to it and grant on that footing specific performance, the granting of which is in the discretion of the Court. I admit, indeed, that when an agreement is in writing K., S, P. 2 17 18 SPECIFIC PERFORMANCE. and is unambiguous, it is the duty of the Court to construe it quite independently of the ideas of the parties as to what it means ; but where an agreement is, as it is here, ambiguous, or capable • of two constructions, I think it would be very strange indeed if a plaintiff, who had always acted on the one construction, should succeed in persuad- ing the Court to grant speciflc performance on the footing that it ought to bear the opposite con- struction. " ^ Difficulties of construction generally arise in cases where the alleged agreement is sought to be made out from a series of letters. The only gene- ral rule that can be laid down is, that you must look at the whole of the correspondence, and if on all the letters taken together you see, that the parties did not intend to make a contract, even though on two or three letters there appeared to be a contract, you would hold that on the whole correspondence there was nowe. Where it appears from the correspondence that both parties intend- ed that a clear and formal agreement should be drawn up, that circumstance tells strongly against May V. the inference of a concluded agreement. May 20Ch!D.', V. Thomson and Williams v. Brisco were two. 1882 ;Wii- cases of correspondence, the former about the sale Bdscor22 of ^ medical practice, a,nd the latter about the C.''A°'i882! g'^^^'it of a lease to a nominee of the plaintiff. In both cases it appeared to have been the inten- ■ 19 Ch. D., 211. TBE CONTRACT. 19 tion of the parties that a formal agreement should be executed, and in both it was held, on the con- struction of the correspondence, that there was no concluded agreement between the parties. In May V. Thomson Sir G. Jessel, M. R., observed : " I think the decisions of our Courts as to letters have gone quite far enough, tiiat is, in the spelling out of a contract from letters when both parties intended a formal agreement to be executed. I think it very often happens that both parties use expressions in letters which, read alone, would amount to a contract if we did not know that in fact neither of the parties intended those general expressions to constitute a contract, and in that case, if the Court lays hold of the language of the letters to make a contract, it makes a contract for the parties which the parties never intended to enter into." -^ In the same case Lord Justice Lindley said : " Now in order to find out whether there has been an actual concluded agreement upon these letters, or whether these letters amount simply to negotiation, the first thing necessary to ascer- tain is whether the parties contemplated signing a more formal document. In ordinary mercan- tile business transactions contracts are made hj correspondence, and agreements result from letters, no more formal documents being required or ex- pected. But this is not that case at all. Here we 1 20 Ch. D., 716. 20 SPECIFIC PERFORMANCE. have to deal with a case in which a formal docu- ment was expected. It does not follow that be- cause parties intend to sign a formal document, they cannot bind themselves by their letters. That is perfectly well settled by law ; but when we examine the intentions of the parties as ex- pressed in these letters, because that is the most important element, what do we find from the whole correspondence ? It appears to me there is not any portion of this correspondence which can be fairly separated from the rest and be treat- ed as a concluded agreement. It appears to me that each letter is modified by the one which follows it, and that there is never a period through- out at which we can stop and say, here is a de- finite and concluded agreement between the par- ties. The case of Hussey v. Home - Payne^ before the House of Lords, shews that we must look at the whole correspondence from beginning to end. Of course if we find a few letters which are perfectly plain in themselves, which shew an agreement, and the parties do not follow them up by further correspondence, we have a com- paratively easy case ; but when each letter is followed immediately by another which suggests something else as a topic of discussion, it becomes most dangerou'3 to draw a line at any particular letter. Up to the last moment I cannot see that there is anything here amounting to a concluded agreement before the parties came to a quarrel. " ^ 1 i App. Cas., 311, ■ 20 Ch. D,, 723. THE CONTRACT. 21 The third essential condition is that the subject- matter of the agreement must be some lawful thing. An agreement to do what is unlawful is a conspiracy against the law, to be punished by law rather than enforced as a contract. The case of Syhes v. Beadon affords a good illustration of Sykes «. an illegal contract. A member of an association ch.D.,i70. which was regulated by a trust deed, brought an '^■^■''**'^' action against the trustees named in the deed to have the trust administered by the Court, and to make the trustees liable for alleged breaches of trust whereby part of the trust fund had been lost. The association was a combination of more than twenty persons, formed on the principle of investing the subscriptions of the members and dividing the capital fund and profits among themselves, by means of certificates convertible by annual drawings by lot into preference dividend bonds, bearing interest with a bonus. It was held to be an "association for the acquisition of gain " within the meaning of section 4 of the Companies Act, 1862, and not having been registered under that section was therefore an illegal association. It would also seem that the mode of distribution was a lottery, and therefore illegal under the Lottery Acts. A demurrer therefore was allowed on the ground that the association was illegal, and that the trust deed constituted an illegal contract, which the Court would not enforce, and it was held that no Court of Law or Equity would lend its assistance in any way towards carrying out an illegal contract ; 22 SPECIFIC PERFORMANCE. therefore such a contract cannot be enforced by- one party to it against the other, either directly by asking the Court to carry it into effect, or indirectly by claiming damages or compensation for the breach of it : though there may be some cases in which a party to such a contract may recover from a third person money paid over to that person in pursuance of the contract; and other cases in which a person may recover from the parties to such a contract moneys obtained by them from him, on the representation that the contract was legal. The general rule, then, is that the above three requisites must combine to constitute a valid legal contract. So much for contracts generally. But when we speak of the specific performance of contracts, we necessarily imply some part still remaining to be done to render them complete. We deal with incompleted contracts, or, as they are often (not very correctly) described, with executory as compared with executed contracts. The distinc- tion is explained in the valuable judgment of Lord Selborne in Wolverhampton and Walsall Railway Company v. London and North- Western Raihuay Company} His Lordship said : " Then, with regard to the argument, that upon the principles applicable to specific performance, no part of the relief asked for by this bill can be ' L. R., 16 Eq., 433 ; see post. THE GO NT B ACT. gi-anted, I cannot help observing that there is some fallacy and ambiguity in the way in which in cases of this kind those words ' specific perform- ance ' are very frequently used. There is a class of suits in this Court known as suits for specific performance of executory agreements, which agree- ments are not intended between the parties to be the final instruments regulating their mutual relations under their contracts. We call those executory contracts as distinct from executed contracts : and we call those contracts 'executed/ in which that has been already done which will finally determine and settle the relative positions of the parties, so that nothing else remains to be done for that particular purpose. The common expression ' specific performance ' as applied to suits known by that name, presupposes an exe- cutory as distinct from an executed agreement, something remaining to be done, such as the exe- cution of a deed or a convej'ance, in order to put the parties in the position relative to each other in which by the preliminary agreement they were intended to be placed. Of course, if you pass from the technical to the etymological eflfect of the words, ' specific performance ' might signify any direction given by the Court for the doing of anything whatever in specie : and I cannot help thinking that in this class of cases a little con- fusion has sometimes arisen from transferring considerations applicable to suits for specific per- formance, properly so called, to questions which 23 24 SPECIFIC PERFORMANCE. have arisen as to the propriety of the Court re- quiring something or other to be done in specie. There is a considerable class of contracts, such as ordinary agreements for work and labour to be performed, hiring and service, and things of that sort, out of which most of those cases have arisen, which are not in the proper sense of the words, cases for ' specific performance ' ; in other words, the nature of the contract is not one which re- quires the performance of some definite act such as this Court is in the habit of requiring to be performed by way of administering superior jus- tice rather than leave the parties to their rights and remedies at law. It is obvious that if the notion of specific performance were applied to ordinary contracts for work and labour, or for hiring and service, it would require a series of orders, and a general superintendence, which could not conveniently be undertaken by any Court of Justice ; and therefore contracts of that sort have been ordinarily left to their operation at law. " It is only those contracts which rested on valuable consideration that are capable of being enforced. Mere nuda pacta are not so capable. At Common Law contracts entered into with certain solemn forms (by seal, for instance) imply valuable consideration, and the presumption of law obviates the necessity of proof We mean, therefore, executory contracts entered into for valuable con- sideration. THE CONTRACT. 25 The amount of the consideration is immaterial Townend v. Toker may be referred to as a case in Townend «. which the amount of the consideration was reduced ic'i^' 443; to a minimum. There, a lady who was entitled in Ji's^jic^s''^^ fee to an estate subject to mortgages, proposed to ^''^^■ her nephew that she should come and live with him, and that he should remove into a larger house for the purpose, she contributing a yearly sum towards the house-keeping. The nephew agreed to this, provided she would settle the estate, limiting it to him after her death. She agreed to this, and the settlement was accordingly executed by which the nephew coveniuited to indemnify her from all liability in respect of the mortgages, except the pa}'- ment of the interest during her life. He removed to a larger house at considerable expense, and they lived together for some time. Then they quarrelled, the aunt ceased to live with the nephew, and agreed to sell the estate to a purchaser, who filed a bill against the aunt and nephew for specific performance : — Held, reversing the decree of the Master of the Eolls, that the settlement was not voluntary; the covenant of indemnity and the expenses incurred by the nephew on the faith of the settlement, being severally sufficient to support it as made for value. There must, then, be some consideration — little or much does not matter — and this considera- tion must move from the party to whom the pro- mise is made, and not from a stranger to the trans- action. In legal phraseology', there must be privity 2(3 SPECIFIC PERFORMANCE. of contract. Suppose a father contracts to pay A.B. £1,000 to confer a benefit on his son, the father might enforce the contract against A. B., but not the son. Therefore we have to add another quali- fication to our definition of the subject-matter of specific performance which may now be described as a final contract, though not completed, between two or more parties for valuable consideration moving from one of them. CHAPTER ir. Grounds of the Equitable Jurisdiction. So far, Common Law and Equity stood on the same ground. A great difference, however, existed between the two jurisdictions as to the mode of relief in the event of a breach of the contract. Common Law gave damages, always assuming that money was a fair equivalent for the loss sustained. We need hardly say that the assumption that money is an adequate equivalent for the loss is in many cases obviously untrue. The purchaser of an estate, a house, or a work of art, may have set, upon it a special value, a pretium affectionis founded on taste or convenience, and wholly inde- pendent of its ordinary pecuniary value. Delivery of the object itself may be to him of the ver}' essence of the contract, and it would be a mere mockery to say he might have so much money in lieu of it. This was the view of a Court of Equity, and acting in personam it compelled the parties GROUNDS OF THE JURISDICTION. 27 to do the very thing contracted for. We need scarcely quote cases to shew the inadequacy of money damages. Two great cases on the subject are Hadley v. Baxendale and Bain v. Father- Hadiey «. gill. In the former case plaintiffs, the owners ofg^^Exch^l a flour mill, sent a broken iron shaft to an office ^.^{^ „|*fo- of the defendants, who were common carriers, to 51'^7^E'aJ'j be conveyed by them ; and the defendants' clerk, l- enormous mischief may be done. " A man may have one of the best domestic servants, he may have a valet v?hose arrangement of clothes is faultless, a coachman whose driving is excellent, a cook whose performances are perfect, and yet he may not have confidence in him; and while, on the one hand, all that the servant re- quires or wishes (and that reasonably enough) is money, you are, on the other hand, to destroy the comfort of a man's existence for a period of years, by compelling him to have constantly about him in a confidential situation one to whom he objects. If that be so in private life, how important do these considerations become when connected with the performance of such duties— duties to society — as are incumbent upon the directors of a company like this." M a J r „_ In Mair v. Himalaya Tea Company, the Court TeT^Com- ^^fused to restrain the directors of a limited com- 1 e'^'^'u' P^"y ^^°™ acting upon or enforcing the resignation Page- of A., whose management and agency was made a C, 1865. prominent condition in the prospectus on the for- mation of the company, and expressly provided for hy the articles of association. The decision was based on the principle that the duties of the agent of a limited company are in the nature of personal service, and as such, incapable of being enforced in equity. In refusing to grant the in- LAND IN FOREIGN COUNTRY. 73 junction, however, the Court put the directors upon an undertaking not to take advantage, in proceedings at law to recover the amount due on A.'s shares, of his resignation, which was alleged by him to have been wholly conditional on his being relieved from all liability in respect of shares. There is an old case in 2 Wilson, Ch. Cas., 457, which Lord Eldon put upon exactly the same principle of personal service. Very much the same principle, viz., the limit of capacity in a Court of Equity to enforce specific performance in relation to the subject-matter of the contract, regulates the jurisdiction to enforce contracts in relation to land in a foreign country. Of course the land is subject to the lex loci rei sitce, and the Court may be making a merely nugatory decree. Assume that the parties are within the jurisdiction, and there remains the question whe- ther or not there is any obstacle to the decree being carried into effect, whether, in fact, it may still prove nugatory. In Fenn v. Lord Baltimore, Lord Hardwicke Penn v. Lord BaUi- decreed specific performance of articles executed in mure, iVes. England, concerning boundaries of two provinces Lord Hard- in ^m^rica. The Lord Chancellor said : "As to 1750.' ' the Courts not enforcing the execution of their judgment ; if they could not at all, I agree, it would be in vain to make a decree ; and that the Court cannot enforce its own decree in rem in the present case : but that is not an objection against making a decree in the cause ; for the strict primary decree 74 EXTENT OF THE JURISDICTION. in this Court as a Court of Equity is in personam,, long before it was settled, whether this Court could issue a writ to put into possession in a suit of lands in England ; which was first begun and settled in the time of James I, but ever since done by injunc- tion or writ of assistant to the sherifi": but the Court cannot to this day as to land in Ireland or the plantations. In Lord King's time, in the case oi Richardson v. Hamilton, Attorney-General of Pennsylvania, w^hich was a suit of land and a house in the town of Philadelphia, the Court made a decree, though it could not be enforced in rem. In the case of Lord Anglesey of land lying in Ireland, I decreed for distinguishing and settling the parts of the estate, though impossible to enforce that decree in rem, but the party being in England, I could enforce it by process of contempt in per- sonam and sequestration, which is the proper juris- diction of this Court." TuUoch V. Ill Tulloch V. Hartley, it was held that a Court Y^&GAH- °^ Equity in England will entertain a bill to settle Brucf '"v" *^® boundaries of real estates in Jamaica. Tlie c, 1841. "vyhole question is examined in a Note at 2 Swanston, pp. 323 — 24. It is there explained in detail, how, for instiince, a decree in personam in England would fail to secure a partition of lands in Ireland, because the necessary process could neither be awarded in Ireland nor supplied by the obedience of the person imprisoned in England. Specific performiince, therefore, though depen- dent on the performance of personal rights and FORM OF RELIEF DISCRETIONARY. 75 duties, is only possible when the two conditions combine ; — (1) that the parties are within the jurisdiction, and (2) that no obstacle exists to the due execution of the decree. The question always is. Will the decree be an efficient decree, or will it be merely nugatory ? And that brings us back to the fundamental prin- ciple of the equitable jurisdiction of specific per- formance and injunction, which, as before explain- ed, is based upon discretion, regulated by specific •rules and principles. "We may here note one or two other results flowing from that discretionary jurisdiction. In every case the question is whether the party injured is to have specific performance of his con- tract, or damages for the breach of it ; whether justice could be better done in the one form or in the other. Even where a decree for specific performance could be made, it may often be a very grave question whether from the complicated nature of the agreement, or difficulties attending its execution, or surrounding circumstances, justice could not be better done by an enquiry as to damages, rather than by a decree for specific per- formance. Hence we find many cases in Chancery in which specific performance was refused on that very ground. In Wilson v. Northampton and Banbury June- wiison v. ., ., J r Northamp- tion Railway, a railway company agreed tor ton & Baa- 76 EXTENT OF THE JURISDICTION. bury Jnnc- Valuable consideration with a landowner to " erect, wav L.'E.'^0'i'^^'i''^ct' ^iid fi*- "P ^ station" on certain lands L^c''*^^' ^liich they had bought from him. The agreement i8-i' "'"' contained no further description of the station, nor any stipulations as to the use of it. The company having refused to erect a station in the specified place, and substituted one at a distance of two miles, it was held (affirming the decision of Bacon, V.G.,) that the case was one in which justice could bebetter done by an enquiry as to damages than by a decree for specific performance. The case was in one sense a strong one, because the company said dis- tinctly ; " We admit ourselves to be bound by this agreemeut, but we refuse to perform it." Still the Vice-Chancellor considered it a case in which the Court could not satisfactorily do justice by means of a decree for specific performance, and that the best justice of which the case was capable would be done by giving damages. In appeal Lord Sel- borne said : " It has been a matter of some sur- prise to us that the plaintiflT should have been dissatisfied with that conclusion ; for if the view which has been already expressed is correct, sup- posing the Court had given him specific perform- ance, it could not have extended the express obligation of the company, and therefore could only have given him the very minimum of that which is expressed in the terms creating the obligation ; whereas, in the case of damages, as it appears to me, the plaintiff will be entitled to the benefit of such presumptions as, according to the GENERAL RESULTS. 77 rules of law, are made in Courts both of Law and Equity against persons who are wrong-doers in the sense of refusing to perform, and not perform- ing, their contracts." All cases must depend on their particular cir- cumstances, but resting on the piinciple that equity can intervene where its relief is adequate and when it can by that means do more perfect and complete justice. So far, then, we have arrived at these principles General re- T . . i> /. suits of tlie in regard to speciiic periormance : — Chapiei. (1) There can be none at all where the legal remedy is complete and adequate. (2) There can be none where the equitable remedy is impossible, e. g., where the subject-matter has ceased to exist, or some antecedent condition has not been performed, in which case the agree- ment does not amount to a complete contract at all. (3) There can be none, where, though theoreti- cally possible, the equitable remedy cannot be enforced. And it will follow as a corollary, that specific per- formance will be decreed where the Common Law remedy is inadequate, and the equitable remedy possible and capable of being substantially enforced once for all. But this rule is subject in every case to the discretion of the Court regulated by specific rules and principles. 78 THE RULE OF MUTUALITY. CHAPTER V. The Rui.e of Mutuality. We now come to a class of cases analogous, no doubt, to those we have been considering, but dis- tinguished by special features of their own. These rest very much on the principle of mutuality. In the case of a contract between A. and B. by which each is bound to do a certain thing, if the Court is to interfere at all, it will insist on mutuality of performance. Each must perform his part of the agreement. If A. only were compelled to perform his part, it would not be specific performance at all. Hence the rule that there can he no specific jperform- ance where the party seeking relief cannot be compel- led to perform his part of the contract. For instance, in the case of vendor and purchaser, payment of the purchase-money is a condition without which coni- pletion will not be enforced against the vendor. There are, however, cases in which mutuality of performance is not quite so simple a matter. Suppose a contract, a great part of which, if it had stood alone, the Court could have specifically enforced, but another part is incapable of being so dealt with. What would the Court do in such a case ? Would it perform the contract in part or altogether decline to interfere ? The Court was placed in this diflB- culty, that by decreeing performance of one part of the contract and referring the party to his Common Law remedy for the other part, the relief would at best have been partial and incomplete, and could PARTIAL PERFORMANCE. 79 scarcely be said to further the cause of justice. The contract is one and indivisible, and enforcing the performance of some of its terms is no perform- ance of the contract itself This was the difficulty in which the Court was placed when it had no power of awarding damages, and, therefore, as a general rule, the Court declined to 'enforce partial performance of contracts. In Waring v. The Manchester, So., Railway Com- Waring v. pany, Sir J. Wigram said: "The Court does not dies te"r^ give relief to a plaintiff, although he be otherwise Lincoln- entitled to it, unless he will, on his part, do all ^^ay^Cmn-' that the defendant may be entitled to ask from Jf "^^* Jg^ • him; and if that which the defendant is entitled ^"'■'^\)^i?" ' ram, V. C, to, be something which the Court cannot give him, ^'S'^^- it certainly has been the generally understood rule^ that that is a case in which the Court will not interfere. In the common case of a bill for specific performance by a purchaser, the Court will not direct a conveyance unless the plaintiff will pay what is due. The Court can decree that, and the Court will, therefore, in that case give relief; but if that which the plaintiff is to give on a bill for specific performance be something to be done at a future time, and which the Court cannot enforce,, the understood rule has always been, that the Court in that case will not give relief" We have, there- fore, so far a clear enunciation of the general rule that if the Court cannot enforce performance in full^ it will not interfere. As already explained, it would in fact be no specific performance at all. 80 1'tiE RULE OP MUTUALITY. Ogden J). In the case of Oqden v. Fossik, an agreement was Fossik, 4 d > a D.F. & J., entered into between Fossik a.nd Oqden, that Fossik 426 ; Lords , , , ^ , , ,. , , ^ Justices, should grant to Ogden a lease of a coal wharf at a certain rent, and should be employed throughout the tenancy at a salary of £200 a yeur, and a com' mission on the coal sold at the wharf Disputes having arisen, Ogden filed a bill against Fossik for specific performance of the agreement to grant the lease. It was held, reversing the decision of Wood, V. C, that specific performance could not be decreed, inasmuch as that part of the agreement of which the Court could decree specific performance was insepiirably connected with the stipulationfs which the Court could not enforce. " It is objected to this decree," said Lord Justice Turner, " that the agreement of which the specific performance is decreed, so far as respects the lease, contains other terms and provisions as to the service and employ- ment of the defendant Samuel Fossik, the specific performance of which cannot be enforced by this Court, and that the Court, being unable to carry into effect the whole agreement, ought not to have decreed the specific performance of part of it. That there are terms and provisions in this agreement which the Court cannot enforce is clear beyond all doubt. The Court cannot, for instance, decree the plaintiff to carry on the business, the carrying on of which is essential to the complete performance of the entire agreement. It is scarcely less clear, that it is not according to the general course of the Court to decree the specific performance of part of SUBSTANTIAL PERFORMANCE. 31 an agreement when there are other terms of the same agreement which it is beyond its power to enforce. The cases cited for the respondents are decisive ou this point, following the ordinary- principle that the aim and object of the Court is to do complete justice." Another case to the same effect is the South The South Wales Railway Company v. Wythes. There an Company''' agreement between a railway company and railway s'd. m. & contractors (who were also landowners), for the Lords Jus- construction of a branch railway, provided that *"'*^' ^^**' the company should find the land within a reason- able time and build the stations ; that the contrac- tors should give a bond to the amount of £50,000 to secure the performance of the contract, and undertake to execute the works for a double line of railway, and the ballasting and permanent-way for a single line, according to the terms of a speci- fication to be prepared by the engineer for the time being of the company ; that the company should work the branch in a reasonable and proper manner as compared to the remainder of the main railway ; and that, in case of difference as to work- ing, the same should be settled by arbitration ; and that any of the details of the arrangement, in case of difference, should be determined by a referee to be appointed by the Solicitor-General for the time being. It was held on demurrer, that this agreement was too vague, obscure, and uncertain to be enforced in a specific performance suit, and that the stipu- K., S. P. 6 82 THE RULE OF MUTUALITY. lation as to the execution of a bond could not be enforced apart from the rest, being merely an inci- dental and subsidiary part of the agreement, and not within the principle of Lumley v. Wagner, where the negative stipulation was a distinct and substantive part of the contract. Lord Justice Knight-Bruce said : '' It has been said, however, that at all events the Court may enforce specific performance, so far as regards the execution and delivery of a bond for £50,000 to secure the performance of the contract. For this the case of Lumley v. Wagner^ has been cited. Assum- ing, again, for the sake of argument, that the agreement is intelligible, and acceding as I do to the authority of Lumley v. Wagner and other cases of that description, I cannot accede to the propriety of their application to a case Avhere the main part of an agreement is not fit to be specifically performed in equity, and where it is sought to enforce the performance of a subsidiary part of it, and more especially where that subsi- diary part is of such a nature as that which, in the present case, the Court is asked to be instrumental in enforcing." And Lord Justice Turner added : " The next clause is as to the bond. Laying no stress on the reasonableness of a reference to the engineer for the time being, I put this case. Suppose the engineer required a tunnel to be made through an impracticable rock, or from the nature of the soil ' See post. APPARENT VIOLATIONS. gg not capable of construction without ruin to the contractors. The defendants would be bound, nevertheless, by the specification. The other pro- vision as to the working of the railway is open to the same observation. I think, therefore, that the substance of this agreement cannot be carried into effect by the decree of this Court." The case goes a little farther than those before cited. The decision rested on the ground not only that part of the conti'act was incapable of being specifically enforced, but that it was the essential and substantial part. The case may, therefore, be considered as in principle approaching more recent cases where the question has been whether the Court is capable of substantially enforcing the contract. There are two or three sets of cases presenting apparent violations of the above general rule, but which will be found on consideration to form no real exception to it. Suppose an agreement between A. and B. partly capable and partly not capable of being specifically enforced ; the part which cannot be enforced being that to be performed by A., and the other part that to be performed by B. Now, if A. has actually per- formed his part of the agreement, it is clear that the reason of the rule no longer applies, and that he can, as a matter of course, exact performance in full from B. Another is the set of cases in which, at first sight, there appears to have been an agree- ment, part of which was capable and part not 84 THE RULE OF MUTUALITY. capable of being specifically enforced ; but as to which, as a matter of construction, the Courts have held not to be parts of one agreement but distinct and separate contracts. This is merely a question Green v. of construction. In Oreen v. Low, the owner of a Low, 22 Beav., 625; plot of ground agreed to grant a lease of it to A. B. Sir J. Eo- miiiy, M. as soon as the latter had erected a villa thereon. But it was stipulated, that if A. B. should not per- form the agreement on his part, the agreement for a lease was t^ be void, and that the owner might re-enter. A. B. was to insure in a particular way, and he was to have the option of purchasing the fee within two years. A. B. erected the villa, but he insured in the wrong office and in the wrong name. It was held, that the contract for a lease was independent of the option to purchase ; and that, notwithstanding the forfeiture of the first, the latter still subsisted, and a specific performance of the contract for sale was decreed. Davenport Two similar cases were Davenport v. Whitmore, V. Whit- . more, 2 and Croome v. Lediard. In the former, it was Cr.,'i77; held that the Court will entertain a suit for an teniiam, c, account of the freight of a ship, grounded on a contract which also contains stipulations affect- ing to give an ultimate right of property in the Croome!;, ship, and which may not be capable of beinar Lediard, 2 ^ . , ,. / , , ,. Myi. & K., recognised or eniorced as a whole for want of being Brougham, registered ; provided the title to the freight is dis- '' ■ tinct from and does not necessarily depend upon a title to the ship claimed under such contract. In Croome v. Lediard,hy a written agreement between MUTUALITY OF BEMEDY. 85 the plaintiff and the defendant, the plaintiff agreed to sell, and the defendant to purchase, upon the terms stated, a certain property called the Leigh estate ; and by the same agreement the defendant agreed to sell, and the plaintiff to purchase another estate, called the Haresfield estate ; and it was not expressed that the two contracts were to be dependant on each other. The defendant was eventually unable to make a good title to the Haresfield estate : Held, that the plaintiff was entitled to a specific performance of the contract as to the Leigh estate. Evidence aliunde was not admitted to show that it was the real intention of the parties that the agreement should take effect on the basis of a mutual exchange. In another class of cases presenting apparent -violations of the rule, the remedy is held to be mutual for vendor and purchaser. Take the simplest form of the sale of an estate by A. to B. Here B. can enforce his contract against A. for conveyance of the estate ; but why should A. be allowed to come into equity to enforce performance against B. ? He is only entitled to so much money, although he also has his vendor's lien which may, perhaps, bring him a little into equity. Or take the case of a contract to sell a chattel of such a nature that damages in an action at law for breach of the contract would be an insufficient remedy for the purchaser, although a sufficient remedy for the vendor. There the purchaser would have good ground for demanding specific performance in 8g THE BULB OF MUTUALITY. equity, but why should the vendor claim such a right ? On the simple ground that the remedy must be mutual for vendor and purchaser. Withy V. In Withy v. Cottle, a bill was filed by the vendor Sim & St., of an annuity payable out of stock for the specific Lelcii V. performance of an agreement for the purchase of c. E., 1822. ^^ annuity. The bill was demurred to on the grounds that the Court will not entertain a bill for the specific performance of an agreement for the transfer of stock, or of a contract for the pur- chase of a chattel, and that this was not a case within any of the exceptions to the general rule, all of which proceed on the principle that, owing to some particular circumstances of the case, damages at law would not be an adequate remedy for breach of the contract. Here, it was argued, there could be no doubt that, in an action at law, the vendor could obtain a suflacient compensation in the shape of damages. The Vice-Chancellor overruled the demurrer and said : " There can be no doubt that the defendant, who is the purchaser of this annuity, might have filed a bill for the specific performance of the agreement of sale to him ; because a Court of law could not give him the subject of his contract, and the remedy here must be mutual for vendor and purchaser." Other cases for the application of the rule are those where there is a defect of title. Take the simple case of a contract of sale by A. to B., and that A. has no title. On discovering the want of title in the vendor, B. may repudiate the DEFECT OF TITLE. 87 contract. He may say, " I will not enter into the contract ; I am not repudiating the contract, for I never entered into it ; I am entitled to be off and I am off; I have contracted to buy that which you have not to give, and therefore you cannot enforce any contract against uie." In that case A. has no remedy because he is not able to do the thing contracted for ; nor has he any right to relief on the ground that he is taking steps to perfect his, title, because when the contract was repudiated, there was no mutuality between A. and B. The rule is stated by the Master of the Rolls in the case of Forrer v. Nash ^ : "I am of opinion that when a person sells property which he is neither able to convey himself nor has he the power to compel a conveyance of it from any other person, the purchaser, as soou as he finds that to be the case, may say, ' I will have nothing to do with it.' " In Brewer v. Broadwood, Mr. Justice Fry cited Brewer v. that with approval and added : " That was the wood, 22 case here, and on that principle the defendant was 105 ; Fry, T 1882* justified in repudiating the contract. That prin- '' ciple has, of course, nothing whatever to do with cases in which there ai-e outstanding interests which the vendor has the power of getting in, because in those cases he is able and he is under an obligation to get them in ; but it has a great deal to do with a case in which the only title of 1 36 Beav., 17J. 88 THE RULE OF MUTUALITY. the vendor is contingent upon the will and voli- tion of a third person. That was the case in the present instance." There a vendor contracted to sell, and a pur- chaser to purchase, an agreement for a lease. The purchaser afterwards repudiated the contract. At the date of the agreement and of the repudi- ation, the agreement to lease was voidable at the will of a third party, but the third party took no steps to avoid the agreement, but was willing to confirm it on certain conditions : Held, that the purchaser was entitled to repudiate the contract. Suppose, however, that before repudiation of the agreement by B., A. has acquired a title, and is in a position to fulfil his contract. In such a case the objection of non-mutuality would no longer apply and specific performance would be decreed. Hoggartr. In Hoggavt v. Scott, the plaintifis in a suit for Euss.' and Specific performance were the executors of a sur- Sir J. ' viving trustee, to whom the power of sale was K^,^i83o!*^' given by the will of a testator ; and, considering that the power had devolved upon them, they entered into the contract with the defendant. The surviving trustee left an infant heir, and the plaintiffs on discovering their mistake took the necessary proceedings in Chancery for the appoint- ment of new trustees in the place of the infant heir. In that suit the plaintiffs were appointed new trustees ; but before the decree was obtained in it the present bill was filed. An objection was taken at the hearing, that the plaintiffs, at the DEFECT MADE GOOD. 89 time of the contract had no power of sale, and that the contract, therefore, could not be enforced. In over-ruling the objection, the Master of the KoUs said : " The defendant, if he thought fit, might have declined the contract as soon as he discovered that the plaintiffs had no title ; and he was not bound to wait until they had acquired title ; but, he not having taken that course, it is enough that at the hearing a good title can be made." In Murrel v. Goodyear, the assignees of an in- Murrei v. solvent put up for sale an estate, which had been i d. fa j., impressed with the character of personalty, and justiMs'^^ which, if it retained that character, belonged abso- ^^^"^ lately to the insolvent. A purchaser, upon inves- tigation of the title, discovered that there was good reason to contend that a prior owner had elected to take the estate as reality, in which case the fee belonged to the heir of the insolvent's late wife, the insolvent himself being only tenant by the curtesy. The purchaser, after some corre- spondence in which he required the concurrence of the heir, abruptly gave notice to determine the contract, and immediately afterwards bought up the title of the heir. Held, that he could not avail himself of this purchase to defeat his contract, but that he had thereby removed the objections to the title, and specific performance was decreed against him, allowing him the expenses of his purchase from the heir. Lord Justice Turner said : " Mr. Langworthy, who argued this case very ably and very clearly, put the case thus : — He said, the pur- 90 ^BE RULE OF MUTUALITY. chaser is entitled to rescind the contract at once, upon the ground that there has been, not a frau- dulent dealing by the assignees in putting up the property for sale, but an attempt by them to sell that to which they must be taken to have known they had no title — the entire fee. Well, as I said before, the defendant might, if he pleased, have set up that at the time when he sent these requisitions as to the title ; but he did not do so. I do not mean to say he could have done so with success ; I do not go the length Mr. Langworthy carried his argument upon that point ; I am not prepared to hold that in the case of bond fide con- duct on the part of a vendor putting up property for sale, in which he has a partial interest, suppos- ing himself to have the entire interest, it is com- petent to a purchaser to say that the contract shall be no contract, if the vendor is able ultimately to make a title to the property according to the more extended interest he has contracted to sell. I certainly have always thought, that in such a case a purchaser could have no right to resist a specific performance of the contract. But I say, without any hesitation, that if a purchaser has any such right as has been contended for, and insisted upon, on the part of this defendant, it is a right he is bound to insist upon at the first moment ; he can- not play fast and loose and say, " I treat this as a subsisting contract," and then afterwards suddenly turn round and say, " I have a right to revert to my original position. I have a rigiit to destroy DEFECT MADE GOOD. 91; that contract, which, for months and months, during the whole treaty of negotiation upon the title, I have treated as a subsisting contract." The same rule was laid down in Salisbury v. Saiisbmy Hatcher. There the vendor at the time of the 2'Y. &Coii.', contract was tenant for life only. The purchaser Bruce, v. not having rejected the purchase as soon as he had ' ascertained the real interest of the vendor, the vendor was able by means of the consent of the parties interested in remainder to make a good prima facie title to the fee-simple at the hearing. After detailing the correspondence which went on for months between the parties, the Vice-Chancel- lor says : " In this state of things I am asked, on the ground of want of mutuality, to say that the plaintiff is not entitled to any relief. I should be trampling on all principle and authority, if I were to accede to such an argument. Even if the rule of mutuality, as it has been called, could be carried so far as it has been attempted to be carried in a case of this description, which I do not say, still the conduct of the purchaser has been amply sufficient to exclude him from the benefit of any such argument. With full notice of the state of the title, he pursues the investigation of it, and obtains the fulfilment of a requisition made by himself, and founded on the very state of the title. In my opinion, therefore, to relieve him from the contract would, as I have already said, be contrary to all principle and authority, and discreditable to a Court of Justice." 92 THE RULE OF MUTUALITY. The doctriae of non-mutuality being a bar to specific performance does not apply to a contract which, to the knowledge of both parties, cannot be enforced by either until tlie occurrence of a ^^""si contingent event. In Wylson v. Dunn, the agree- Kekewfd?' ^^^^ '"'^^ ^^^^ ^^^ plaintiffs, Messrs. Wylson and J., 1887. Long, should buy a certain field of about three acres, and that the defendant, Mrs. Dunn, should buy half an acre of it from them for the sum of £350. The plaintifis did not obtain a con- tract with the owner of the land for the purchase until the 4th November, which was three months after conclusion of the agreement. On the 13th of November, the defendant threatened to withdraw, and on the 20th November, her solicitors wrote that she did withdraw from the contract. It was held, that though the defendant might have with- drawn at any time before the 4th November when the plaintiffs first became able to perform their part, she could not withdraw afterwards. On this point Mr. Justice Kekewich said : " Now comes the question, which has been much argued, of non- mutuality. It is a technical doctrine, but like many other technical doctrines, founded on com- mon sense. It comes simply to this — that one party to a bargain shall not be held bound to that bargain when he cannot enforce it against the other. If the contract is not mutually enforceable, it is a voidable contract ; that is, it may be avoided as soon as the person who has a right to avoid it discovers that the cause or occasion for so doins PUECBASE WITH CONTINGENT TITLE. 93 occurs." He then refers to the rule as laid down in Forrer v. Nash and approved in Brewer v. Broad- wood, and continues : " But then arises the ques- tion whether this power of avoidance for non- mutuality is applicable to the case where the non-mutuality is apparent in the first instance and is an essential part of the bargain ? As I read this contract, Messrs. Wylson and Long go to Mrs. Dunn and say : " We have not got this land; you know it belongs to Mr. Hollington, but if you will agree to buy from us half an acre for £350, we will purchase the whole." That, from the first is a case of non-mutuality, and the contract could not be enforced on either side. Until Messrs. Wylson and Long have obtained that which they have agreed to sell, they cannot enforce it on Mrs. Dunn any more than Mrs. Dunn can compel them to convey that which they have not got. But the doctrine of non-mutuality — the docti'ine that a purchaser may avoid a contract when lie discovers that his vendor has not got that which he contracted to sell — seems to me altogether inapplicable to a case where the vendor in the first instance tells the purchaser, and the purchaser knows from all the circumstances of the case, that the vendor has no title, and is not likely to have one for some time. " But I now go to what is a still more important point. Is not such a contract, as I have just de- scribed, determinable by the purchaser on notice ? I think it is. I think that a purchaser having 94 THE RULE OP MUTUALITY. entered into such a contract as I have suggested, is entitled at any time to say, ' You have not got that land yet. I hoped you V70uld have got it by this time ; I do not care now to have the land, and I determine the contract.' If, in the mean- time, the vendor had incurred expense, it may be that he would have a right of action against the purchaser for expenditure incurred and labour bestowed at the purchaser's request ; but that is not specific performance. The purchaser might, I think, in the case I am suggesting, get off the contract by notice and say : ' You are not in a position to convey or to ])erform your contract, and therefore I am off.' But when must that notice be given ? Must it not be given some time before the vendor gets that which enables him to perform his contract ? Must not the purchaser be active, and bring the matter to an end before it has been brought to an end on the other side ? That is certainly my conviction as to the rule applicable to such a case." An apparent exception to the rule of mutuality arises in cases under the Statute of Frauds, where the agreement has been signed only by one of the parties to it, and the other party who has not signed brings the suit for specific performance. Here, then, is the case of a party suing the other while he himself is incapable of being sued. Lord Redesdale at one time doubted ^ whether in that ' See Flight v. BolUncl, i Russ., 301. APPARENT EXCEPTION. 95 case relief should not be refused on the ground of waut of mutuality. It has, however, long been the settled rule of the Court that a plaintiff may obtain a decree for specific performance of a con- tract signed by the defendant, although not signed by the plaintiff; and those cases are supported, first, on the ground that the Statute of Frauds only requires the agreement to be signed by the party to be charged; and, secondly, that the plaintiff by the act of bringing the suit gives the Court jurisdiction to bind him by the agreement, so that from the moment of institution there is mutuality of remedy. The supposed analogy afforded by cases under Flight v. the Statute of Frauds was relied upon in Flight i liusseii, 298- Sir V. Bolland, to support a bill filed by an infant j. Leacii, for the specific performance of a contract made i828'.' by him. Sir J. Leach, M. R, held, that neither of the above reasons applies to the case of an infant. The act of filing the bill by his next friend cannot bind him ; and, therefore, on the general principle of Courts of Equity to interpose only where the remedy is mutual, he dismissed the bill with costs to be paid by the next friend. CHAPTER VI. Vendor and Purchaser. In connection with the rule of mutuality, we propose to consider the incidents of a contract of sale, and the rules more particularly applicable between vendor and purchaser. 96 VENDOR AND PUBGHASEB. The nature and incidents of a contract of sale are thus explained by Sir G. Jessel, M. R., in hysaghtv. Lysaght v. Edwards: "It appears to me that 2Ch.D.,' the effect of a contract for sale has been settled G. Jesael, for more than two centuries ; certainly it was 1876. ' completely settled before the time of Lord Hard- wicke, who speaks of the settled doctrine of the Court as to it. What is that doctrine ? It is that the moment you have a valid contract for sale, the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase-money, a charge or lien, and a right to retain possession of the estate until the purchase-money is paid, in absence of express contract as to the time of delivering pos- session. In other words, the position of the vendor is something between what has been called a naked or bare trustee, or a mere trustee (that is, a person without beneficial interest), and a mortgagee who is not, in equity (any more than a vendor), the owner of the estate, but is, in certain events, en- titled to what the unpaid vendor is, viz., possession of the estate, and a charge upon the estate for his purchase-money. Their positions are analogous in another way. The unpaid mortgagee has a right to foreclose, that is to say, he has a right to say to the mortgagor, " Either pay me within a limited time, or you lose your estate," and in default of payment he becomes absolute owner of it. So, although there has been a valid contract of sale THE CONTRACT OP SALE. 97; the vendor has a similar right in a Court of Equity; he has a right to say to the purchaser, " Either pay me the purchase - money or lose the estate." Such a decree has sometimes been called a decree for cancellation of the contract ; time is given by a decree of the Court of Equity, or now by a judg- ment of the High Court of Justice ; and, if the time expires without the money being paid, the contract is cancelled by the decree or judgment of the Court, and the vendor becomes again the owner of the estate. But that, as it appears to me, is a totally different thing from the contract being cancelled, because there was some equitable ground for setting it aside. If a valid contract is cancel- led for non-payment of the purchase-money after the death of the vendor, the property will still in equity be treated as having been converted into personalty, because the contract was valid at his death ; while, in the other case, there will not be conversion, because there never was in equity a valid contract. Now, what is the meaning of the term "Valid Contract"? "Valid Contract" means in every case a contract sufficient in form and in substance, so that there is no ground whatever for settiug it aside as between the vendor and purchaser — a contract binding on both parties. As regards real estate, however, another element of validity is required. The vendor must be in a position to make a title according to the contract, and the contract will not be a valid contract, unless he has either made out his title according to the contract, or the purchaser K., s. P. 7 9,8 VENDOR AND PUBCHASEB. has accepted the title, for, however bad the title may be, the purchaser has a right to accept it, and the moment he has accepted the title, the contract is fully binding upon the vendor. Consequently, if the title is accepted in the lifetime of the vendor, and there is no reason for setting aside the contract, then, although the purchase-money is unpaid, the contract is valid and binding ; and beiug a valid contract it has this remarkable effect, that it con- verts the estate, so to say, in equity ; it makes the purchase - money a part of the personal estate of the vendor, and it makes the land a part of the real estate of the vendee ; and therefore all those cases on the doctrine of constructive con- version are founded simply on this, that a valid contract actually changes the ownership of the estate in equity. Tliat being so, is the vendor less a trustee, because he has the rights which I have mentioned ? I do not see how it is possible to say so. If anything happens to the estate between the time of sale and the time of completion of the purchase, it is at the risk of the purchaser. If it is a house that is sold, and the house is burnt down, the purchaser loses the house. He must insure it himself if he wants to provide against such an accident. If it is a garden, and a river overflows the banks without any fault of the vendor, the garden will be ruined, but the loss will be the pur- chaser's. In the same way there is a correlative liability on the part of the vendor in possession He is not entitled to treat the estate as his own. THE VENDOR IN POSSESSION. 99 If he wilfully damages or injures it, he is liable to the purchaser ; and more than that, he is liable if he does not take reasonable care of it. So far he is treated in all respects as a trustee, subject, of course, to his right to being paid the purchase- money, and his right to enforce his security against the estate. With those exceptions and his right' to rents till the day for completion, he appears to me to have no other rights." Reference has already been made to the peculiar position of a vendor in possession and the rights and duties attaching to it. Suppose the vendor in possession and the purchase-money not paid. The vendor is a trustee and also a mortgagee, and being in possession of the property, he is a mortgagee in possession. So far as he is a trustee, the vendor is bound to the cestui que trust for all the rents and profits received by him, but unless a special case be made, he is only liable for the rents and profits and not for wilful neglect and default. Prima, facie his liability does not extend to the consequences of wilful neglect and default. But as mortgagee for the amount of the purchase-money, he is liable to be charged with wilful neglect and default (that is the account ordinarily required from a mortga- gee in possession), so that in view of his hybrid character, it becomes a question whether the vendor shall account as trustee or mortgagee ; whether for rents and profits only, or for sums which he might have received but for his wilful neglect and default. In Sherwin v. Shalcspear, Lord Justice Knight- luaklpear, 100 VENDOR AND PURGBASER. 5D. M.& Bruce said: "It seems to have been taken for G.517; , . . . Lords Jus- granted at the bar, that a vendor remaining in tices, 1854. .,.,,. . xvi ■ possession during the discussions upon a title in which he, the vendor, has not been in default (and I repeat that the mere circumstance that in a con- siderable purchase the title is not complete at the day originally fixed, is not a default on the part of the vendor within the meaning of the expression contained in the conditions with reference to this subject), was to be treated as a mortgagee in pos- session. I have never heard that rule laid down, nor do I believe that it is according to the practice of the Court. There is an analogy between such a case and that of a mortgagee in possession, but a very imperfect analogy. There may also be an analogy between his case and that of a trustee, but that is also an imperfect analogy. In the case of a trustee, we know that a special case must be made before he can be so charged. In the case of a mortgagee, it is a matter of course and no special case is required. My impression, from the course of the Court (as far as I have been acquainted with it) and upon principle, is, that a special case ought to be made for the purpose of inserting those words in a decree for specific per- formance, where the vendor has been in possession during a time, in which he is to account for the rents. Now here there is no such special case. There appears to be no evidence that the vendors have not, in every respect, properly managed and duly dealt with the property." Thus the rule of trustee preponderates and not that of mortgagee. \ - VENDOR'S LIEN. • /1 01 '■.■ <' I If the purchase-money be not paidj the vendor can enforce his lien or charge. That is always pro'- vided for by the decree made in cases of specific performance. — " And declare that the plaintiff is " entitled to a lien upon the said hereditaments " in respect of the said purchase^money, with " interest thereon at the rate of £5 p. c. per annum " from &c. until payment, and also for the plaintiff's " said costs. And in case of default being made " in such payment or payments as aforesaid, the " plaintiff to be at liberty to apply to this Court " to enforce such lien.^ " In case of default, the lien may be enforced in some or all of the following ways as occasion may require, viz. : * (1) By sale of the property ; (2) By the appointment of a receiver pending the sale ; (3) By means of an injunction operating to restore to the vendor the possession of the property. In Munns v. Isle of Wight Railway Company, a Manns «. person who had sold a Railway Company some wigi,t Ry. land over which the railway had been made and uE.'^sch., opened, obtained a decree, ordering specific per- *^*' *'*'°" formance, and declaring his lien for the balance of the purchase-money. The company having become insolvent, an order was made, on the petition of ' Seton on Decrees, 1330. ^ Fry on Specific Performance, § 1145. 102 VENDOR AND PURCHASEB. the vendor, for sale of the land and payment of the deficiency, and for an injunction restraining the company until payment, from running any engine over, or otherwise using or continuing in posses- sion of the land. It was held (varying the order of James, V. C), that an injunction was not the proper form of relief, as it would make the land useless to both parties. The order for an injunc- tion was therefore discharged, and an order made for a receiver, with a direction to the company to give him immediate possession. On the one hand, then, the vendor is only liable for rents and profits, while, on the other hand, he is entitled to enforce his lien on the estate. Phiiiiipss. A dictwm of Lord Selborne in the case of SvlvcstGr L. R.,8Cii'., Phillips V. Sylvester is apparently at variance with Lord Chan- the law as laid down by the Court in Sherwin v. ce or, . ^/jQ/^gpg(j,, Referring to the vendor's right to in- sist upon retaining possession until payment of the purchase-money is made and the conveyance is accepted, his Lordship said : " He has that right ; but the question is upon what terms that right is to be exercised ? It appears to me that it must be upon the terms of his undertaking the duties of possession, while he insists upon retaining posses- sion. He is pro tanto a trustee in possession for the purchaser, although he holds the purchaser at arm's length, and a trustee, therefore, who is bound to do those things which he would be bound to do if he were a trustee for any other person." The case was between the trustees for a deceased BiaHT TO A GOOD TITLE. 1()3 vendor and a purchaser, tlie purchaser claiming to be entitled under his agreement to an additional piece of land. The trustees filed a bill and obtain- ed a decree for specific performance, excluding the additional piece of land. The trustees had not allowed the purchaser to take possession of the rest of the land, whilst the purchase-money remain- ed unpaid, and 'in the meantime the rest of the land was allowed to lie waste. It was held that as a set-off to the interest payable by the purchaser under the contract on his purchase-money, the vendor must be charged with what he would but for wilful default, have received for rent and also with the dilapidations ; and accounts between the parties were directed on that footing. The case is referred to and criticised in Lart and Barber's Vendors and Purchasers, and there can be no doubt that having regard to other cases defining the liability of a vendor in possession, the proposition above quoted is too broadly stated ; but at the same time the trustees had allowed the property to lie waste and had therefore committed wilful neglect and default. A purchaser has prima, facie a right to require a good title, but there is a difficulty in ascertaining the principle on which the right rests, nor is it easy to define the circumstances which will pre- vent its arising. The general rule has been stated in different ways. Lord St. Leonards says ^ : "In ' Vendors and Purchasers, 14 Edn., 16. 104. VENDOR AND PURCHASER. contracts for sale of real estate, an agreement to make a good title is always implied unless the liability is expressly excluded." In Doe v. Stan- ion^ Baron Parke says : " In contracts for the sale of real estate, an agreement to make a good title is always implied, of which the case of, Souter V. Drake ^ is a strong instance." In other cases the right to require a good title appears to be spoken of as collateral to the contract. In Ogilvie V. Foljamhe,^ Sir W. Grant, M. R., says : " Here the controversy between the parties is altogether collateral to the agreement. No term in the written agreement is sought to be varied or added to. The right to a good title is a right not growing out of the agreement between the parties, but which is given by law. The defendant insists on having a good title, not because it is stipulated for by the agreement, but on the general right of a purchaser to require it : and the answer is, he has waived it, having chosen to go on with and con- clude the agreement after he had full notice that he was not to expect it. I take this to be matter of notice, and not of contract." Whatever be the foundation of the rule, it is subject to this excep- tion, that where the purchaser at the time of the contract knows the property to be subject to charges which cannot be got rid of, he cannot resist specific performance on the ground of those ' 1 M. & W., 695. =^ 5 B. & Ad., 992. ' 3 Men, 53, 64. THE DEPOSIT. 105 charges. Generally the vendor knows his own title, and the question is how far defects were made known to the purchaser. In order to bring a case within the exception, it is necessary that there should be knowledge on the part of the purchaser that he cannot get a good title.^ On sales of real estate, it is usual for the pur- chaser to pay to the vendor at the time of the contract, a portion of the purchase-money by way of deposit. This is very generally, or perhaps almost universally, the practice in cases of sales by auction ; it is the exception in cases of sales by private contract.^ As the parties may make what bargain they please as to what is to be done with the deposit, the question as to the right of the purchaser to the return of the money must, in each case, be a question of the conditions of the contract. In the absence of express stipulation, however, the deposit money cannot be recovered by the payer if he has made such default in performance of his part, as to have lost all right to performance by the other party to the contract or damages for its non-per- formance. In his book on Vendors and Purchasers, Lord St. Leonards says : " Where a purchaser is in default, and the seller has not parted with the subject of the contract, it is clear that the pur- chaser could not recover the deposit ; for he cannot ' Ellis V. Rogers, 29 Ch. D., 661. ^ Fry, § 1450. 106 ■ VENDOR AND PURCHASER. by his own default, acquire a right to rescind the contract \" And then he goes on to state his opinion that the mere re-sale of the estate after the purchaser's default cannot in any way affect the right of the vendor to retain the deposit. In Collins v. Stimson," Baron Pollock says : " According to the law of vendor and purchaser, the inference is that such a deposit is paid as a guarantee for the performance of the contract, and where the contract goes off by default of the pur- chaser, the vendor is entitled to retain the deposit." In Ex-parte Barrell ^ before the Court of Ap- peal, where the purchaser had become bankrupt, and the trustee in bankruptcy had disclaimed the contract under which he sought to recover the deposit. Lord Justice James said : " The trustee in this case has no legal or equitable right to recover the deposit. The money was paid to the vendor as a guarantee that the contract should be performed. The trustee refuses to perform the contract, and then says, give me back the deposit. There is no ground for such a claim." Howe V. In the late case of Hoiue v. Smith, Lord Justice Ch.'D!,89; Cotton, after referring to the authorities, said: ' " ■ " There is a variance, no doubt, in the expressions of opinion, if not in the decisions, with reference to the return of the dep osit, but I think that the judgment of Lord Justice James gives us the prin- 14th Edition, p. 40. Ml Q, B. J)„ 142. ' L. R., 10 Ch., 512. THE DEPOSIT. 1()7 ciple on which we should deal with the ease. What is the deposit ? The deposit, as I under- stand it, and using the words of Lord Justice James, is a guarantee that the contract shall be performed. If the sale goes on,' of course, not only in accordance with the words of the contract, but in accordance with the intention of the parties in making the contract, it goes in part payment of the purchase-money for which it is deposited ; but if on the default of the purchaser, the contract goes off, that is to say, if he repudiates the contract, then, according to Lord Justice James, he can have no right to recover the deposit. " I do not say that in all cases where this Court would refuse specific performance, the vendor ought to be entitled to retain the deposit. It may well be that there may be circumstances which would justify this Court in declining, and which would require the Court, according to its ordinary rules, to refuse to order specific performance, in which it could not be said that the purchaser had repudiated the contract, or that he had entirely put an end to it, so as to enable the vendor to retain the deposit. In order to enable the vendor so to act, in my opinion, there must be acts on the part of the pur- chaser, which not only amount to delay sufficient to deprive him of the equitable remedy of specific performance, but which would make his conduct amount to a repudiation on his part of the con- tract." In that case, on a sale of real estate, the purchaser paid £500, which was stated in the 108 VENDOR AND PURCHASeR. contract to be paid " aa a deposit, and in part pa3'ment of the purchase-money." The contract provided that the purchase should be complet- ed on a day named, and that if the purchaser should fail to comply with the agreement, the vendor should be at liberty to re-sell and to recover any deficiency in price as liquidated damages. The purchaser was not ready with his purchase-money, and, after repeated delays, the vendor re-sold the property for the same price. The original purchaser having brought an action for specific performance, it was held by the Court of Appeal, affirming the decision of Kay, J., that the purchaser had lost by his delay his right to enforce specific performance. Held, also, that the deposit, although to be taken as pait payment if the contract was completed, was also a guarantee for the performance of the contract, and that the plaintifi^, having failed to perform his contract within a reasonable time, had no right to a return of the deposit. A great distinction exists between the right of a vendor and the right of a purchaser to specific per- formance : when the vendor cannot convey all that he has contracted to sell, he cannot compel specific performance, but the purchaser can always insist on having all that the vendor can convey, with a compensation for the difference. The rule of the Court, and the principles upon which it is founded are thus stated by Lord Eldon in Mortlock COMPENSATION. 109 V. Buller ^ : "I also agree, if a man, having partial interests in an estate, chooses to enter into a con- tract, representing it, and agreeing to sell it, as his own, it is not competent to him afterwards to say, though he has valuable interests, he has not the entirety, and therefore the purchaser shall not have the benefit of his contract. For the purpose of this jurisdiction the person contracting under those circumstances is bound by the assertion in his con- tract ; and, if tlie vendee chooses to take as much as he can have, he has a right to that, and to an abatement ; and the Court will not hear the objec- tion by the vendor that the purchaser cannot have the whole." The tendency of modern decisions has been to apply that rule liberally. In Hooper v. Smart vendors agreed to sell the Hooper ». entirety of certain freehold property for the sumR., is'Eq'., of £6,000, and to make out a good marketable title. The purchaser, in consequence of delays on the part of the vendors, filed a bill for specific per- formance of the agreement. It was afterwards discovered that the vendors were entitled to only an undivided moiety of the property : — Held, that the purchaser was entitled to a decree for specific performance of the agreement by the vendors to the extent of their moiety, with an abatement of one-half of the purchase-money. In Burrow v. Scammell, by a memorandum in Burrow v. Scammell, writing, the defendant agreed to let, and plaintms 19 Ch. D., 175; Bacon, _ — V.C.,1881. ' 10 Ves., 292, 315. 110 VENDOR AND PUBGHASEB. agreed to take, business premises for one year, witli an option for plaintiffs at the end of tlie year to have a lease for seven, fourteen, or twenty-one years. Plaintiffs having gone into possession under the agreement, and having laid out money in alterations, at the end of the year gave notice of their intention to exercise the option ; but when the defendant's title came to be investigated, it was found that she was possessed of only a moiety of the premises, the other moiety being vested in her son, a minor. The defendant was decreed to perform specifi- cally so much of the contract as she was able to perform, with an abatement of one moiety of the rent. This inequality in the relative positions of vendor and purchaser, and the remedy adopted by vendors are thus explained by Lord Esher, M. R., In re Terry i^- ^he rcceut case In re Terry and White's Con- cTontra'ct^'^ iracf : — " Here is a contract of purchase and sale 14 •'r' a' ^^ ^^^ property at an auction, and there having 1886. arisen a mistake, an innocent mistake, what are the rights of the parties ? Now I do not doubt that a Court of Equity would, if the mistake had been made by the vendor, as a general rule, though not always and invariably, have aided the pur- chaser to obtain specific performance, but giving compensation so as to make up for the mistake. If the mistake was so great as, in the opinion of the Court of Equity, to affect the whole substance and foundation of the contract, I believe that the CONDITIONS OF SALE. HI Court would not have granted specific performance to tlie purchaser, but would have said that the contract was to be treated as if it had never exist- ed. That was where there was not merely a large error, but where the error was so great as to go to the whole foundation and substance of the con- tract, so that it would be impossible to conceive that the parties ever would have entered into the contract if the mistake had not existed. But, where the vendor came for specific performance, and had made an error, I think that the Court of Equity never would grant him specific perform- ance, if he had made a substantial error to the injury of the purchaser, and would have left him to any remedy whicli he might have by bringing an action on the contract. But it does not follow that the interpretation of the contract in the action, if the vendor had been left to bring his action at law, would have been different to the interpreta- tion put upon the contract by the Court of Equity ; the interpretation would have been precisely the same, but he could not get in a Court of Common Law a remedy by way of specific performance. "Vendors finding themselves in this difficulty, that they could not get specific performance, and could not rescind the contract of their own accord — one party to a contract not being allowed to rescind it without the consent of the other — but that the purchaser could get specific performance against them with a compensation to be settled by the Court, desired to protect themselves, and it 112 VENDOR AND PURCHASER. was in order to protect themselves against that which would have been the law without conditions of sale, that conditions of sale were put in to meet that state of the law. Conditions of sale are not always the same, they vary ; some vendors may put in more stringent conditions of sale than others ; but when the conditions of sale are put in, what are the rights of the parties ? Why the pur- chaser bids, knowing of those conditions of sale, and therefore agreeing to be bound by them ; so that the conditions of sale are the agreement under which the purchaser bids and the vendor sells. Then, that is a contract, the conditions of sale forming part of the contract." In that case there was a mis-statement in the particulars of sale as to the acreage of the land sold, the true acreage being 3 A. 1 R. 37 P., and the deficiency amounting to an acre and a half. The mis-statement was inserted innocently, and the reutals of the property were correctly stated. The purchaser claimed that the contract should be carried out with compensation : the vendor refused any compensation, but offered to annul the sale. On the construction of the con- ditions of sale, the vendor was held entitled to annul. To revert to the general rule as to the partial performance of contracts, illustrated in the last chapter by the decisions of the Lords Justices Knight-Bruce and Turner, cases can well be con- ceived in which a contract may be enforced essen- tially and substantially, the incompleted parts DAMAGES. 113 being compensated by pecuniary damages. The ' difficulty formerly was that a Court of Equity had no power of assessing damages, so that by inter- fering it would have had no option but to leave its work half done, and remit the party to Common Law for satisfaction as to the other part. This difficulty was removed by the Chancery Amend- ment Act, 1858 (21 & 22 Vict., c. 27), known as Lord Cairns' Act. The second section provides that in all cases in which the Court of Chancery has jurisdiction to entertain an application for an injunction against the breach of any covenant, con- tract, or agreement, or against the commission or continuance of any wrongful act, or for the specific performance of any covenant, contract or agree- ment, it shall be lawful for the same Court to award damages to the party injured, either in addition to or in substitution for such injunction or specific performance, and such damages may be assessed in such manner as the Court shall direct. When that Act was passed, there was a strong desire to keep the jurisdictions separate, and accordingly it was early held that the intention of the Act was to give the Court power to grant complete relief in those cases only, where before the Act it had jurisdiction to entertain the case and make a decree for specific performance. The Act was very much superseded by the Judicature Act, and the decisions under it are so far obsolete.^ ' Zord Cairns' Act ia now repealed by 46 & 47 Vict., c. 49. K., S. P. 8 114 VENDOR AND PURCHASER. Under the Judicature Act, each Court has the same jurisdiction in every case before it ; there is no remittal to another tribunal, and no difficulty- stands in the way of complete justice being done in every case, partly by specific performance and partly by damages as the case may require. The Court can now give damages (1) in substitution for specific performance, where there is a case for specific performance, or (2) in addition to specific performance ia whole or in part, or (3) where there is no case for specific performance for breach of the contract. In Tamplin v. James,''- it was held by Lord Justice James that where, under the old practice, a bill for specific performance would have been dismissed without prejudice to an action at law, the Chancery Division will now proceed to con- sider the question of damages, and give the [same damages as would, under the old practice, have been given in an action at law. It is, however, important to bear in mind that with regard to the construction of a claim for specific performance, the Judicature Act has not made any difference, and that specific performance is still, as before, a remedy altogether different from damages for breach of the contract. A plain- tiff has his option as to the form of action he will bring and the remedy he will claim. If, therefore, he elects to put his claim as one for specific perform- ' 15 Ch. D,, 215. DAMAGES. 115 ance and goes to trial on those pleadings, he cannot be allowed to change the whole nature of his claim by turning it into an ordinary action for damages for breach of contract, as at Common Law. If at the trial of such a claim it should appear that there is no case for specific perform- ance, and that, moreover, the case is not one in which the Court of Chancery would, under the old practice, have reserved to the plaintiff the right to sue at law, then the action is liable to be wholly, dismissed. These principles received illustration in the re- cent case of Hipqrave v. Case. There the plaintiff, Hipgrave , , . ^ , , "• Case. 28 by his statement of claim, claimed specific per- cii.d.,356; formance of a contract by which he agreed to sell ' ' and the defendant agreed to purchase the lease, good-will, fixtures, and stock-in-trade of a business ; the plaintiff alleging that he was and always had been able and willing to perform the contract, but that the defendant refused to perform the same. The statement of claim in the alternative claimed £100 as liquidated damages fixed by the contract for the refusal to perform the contract. The state- ment of defence alleged false representations by the plaintiff as to the character of the business, and denied that the plaintiff was able and willing to perform the contract. The plaintiff, after the close of the pleadings, gave notice to the defendant that, unless the defendant completed the purchase within a week, he should re-sell the busiuess, which he accordingly did, No amendment of the 116 VENDOR AND PURCHASER. pleadings was then asked for by the plaintiflF, and the action went on to trial. At the trial before Bacon, V. C, the plaintiff's counsel, admitting that the claim for specific performance must be aban- doned, sought to recover the £100 as liquidated damages. He did not apply for any amendment of the pleadings. The Vice-Chancellor dismissed the action on the ground that the case for specific performance failing through the plaintiff's own act, the alternative claim for damages must fail also : — Held, on appeal (by Earl of Selborne, L. C, Brett, M. R., and Cotton, L. J.), affirming the deci- sion of Bacon, V. C, that, in tlie absence of any amendment of the pleadings (which ought not at that stage of the action to be allowed), the action must be treated as one for specific performance, with a claim for damages in the alternative as a substitute for specific performance, according to the practice existing before the Judicature Act in the Court of Chancery, and that the plaintiff having by his own act rendered specific perform- ance impossible, was not in such action entitled to damages. Their Lordships expressed no opinion as to whe- ther an amendment if asked for ought to have been allowed at the hearing, or if allowed, what would have been the result of such an amendment. In this case the following propositions were affirmed. (1) The plaintiff's claim in an action for specific performance involves an offer of specific performance on his part, and that he thereby alleges DAMAOESi 117 that he is still ready and willing to perform the contract. (2) Where there has been an absolute repudiation of the contract in fact before action brought, there may be a right to elect to treat it as a breach and sile for damages, the conduct of the defendant absolving the plaintiff from the obligation of being ready and willing ou his part to perform the contract. (3) For the purposes of the claim for damages it is not material that the plaintiff should be continuously ready and willing to perform up to the hearing. It is sufficient that he should be ready and willing up to the time of repu- diation of the contract by the defendant. (4) There is a difference between an absolute repudiation before action brought and a mere omission to tra-* verse the plaintiffs allegation that thedefendantwill not perform the contracts It is open to the defend- ant in an action for specific performance to accept the offer of the plaintiff stiU held out to him by that action, and to say that he will perform the contract. (5) The reasonable construction of the alternative claim for damages is, that it points merely to the jurisdiction of the Court to give damages as a substitute for specific performance, in case the Court, for any reason, should not see its way to granting specific performance, as used to be done by the Court of Chancery under Lord Cairns' Act. (6) In such a case as the present the Court of Chancery would not, under the old prac- tice, have reserved to the plaintiff the right to sue at law. 118 VENDOR AND PURCHASER. Stone «. Another instructive case on the subject is the Smith, 35 rt • i -r Ch.D., 188, more recent one of jSione v. Srmth. It was a J., 1887. ' vendor's action for specific performance of a con- tract to purchase leaseholds. The defendant by his defence pleaded the Statute of Frauds, and traversed the other allegations in the claim, but admitted that "he was unwilling to carry the contract into effect." The defendant did not appear at the trial and the plaintiff proved the contract. Counsel for the plaintiff stated that the usual judgment for specific performance would be of no advantage to him now. The defendant was insolvent, the property was leasehold and daily depreciating in value, and if the usual decree were worked out the plaintiff would be a heavy loser. Under the circumstances plaintiff applied for im- mediate judgment rescinding the contract and forfeiting the deposit. It was held, however, that he was only entitled to the usual judgment for specific performance. Mr. Justice Kekewich said : " The plaintiff is, therefore, entitled to specific performance, but he now says : ' I do not want that. The defendant has repudiated the contract, and I ask for rescission and forfeiture of the deposit,' and the point I have to decide is, whether the plaintiff is entitled to such a decree in the absence of the defendant and on these pleadings. Now, the cases cited all go to this, that when one party to a contract says he is unwilling to fulfil the contract, the other is entitled to rescind ; but they are all cases relating to commercial contracts, rescission: Ug and cannot, I think, be applied to a case dealing with real estate, and where one of the parties has come to the Court to enforce the contract. I must assume that the purchaser, though not appearing, may be waiting to hear the result of this trial and is looking out for means to fulfil the contract. To turn round upon him now and serve him with judgment for rescission and forfeiture of his depo- sit might be very unjust to him. It seems to me that if a plaintiff claims such relief he must plead it clearly, and prove his right to it at the trial." In the later case of Kingdon v. Kirk, one of the Kingdon conditions of sale empowered the vendor, in case cii.dVi*', the purchaser should fail to comply with any of ^gg^^ ' '' the conditions, to forfeit the deposit, and to resell the property. The purchaser had accepted the title, but had failed to complete at the time fixed by the agreement for completion. The statement of claim claimed specific performance of the agree- ment, or, in the alternative, a declaration that the plaintiff was entitled to forfeit the deposit, and to resell the property in accordance with the con- ditions. The defendant did not appear. At the trial, plaintiff asked for a declaration according to the second alternative of the statement of claim, on the ground that the case was distinguishable from Stone v. Smith, where the statement of claim had only asked for specific performance of the agreement. It was held, that, in lieu of judgment for specific performance, the declaration asked for may be made, even though defendant had not 120 VENDOR AND PURCHASER. appeared, But it was subsequently discovered that the writ served on the defendant had only claimed specific performance of the agreement, and the judgment was, ia consequence, limited to the relief claimed by the writ, i.e., the ordinary judgment for specific performance. Where a purchaser is let into possession before completion, the vendor may call upon him to pay the purchase-money into Court or give up posses- sion. It is not usual to make an order for pay- ment into Court without giving the option of delivering up possession. But special circumstances may vary the general rule, as, for instance, where the purchaser in possession has done things to alter or deteriorate the state of the property. In such a case no option will be given. Lewis V. In Lewis V. James an action was brought for James, 32 ° Ch.D., 326; specific performance of a contract for a lease of a mine by the plaintiffs to the defendant. The de- fendant delivered a counter-claim asking to have specific performance on a different footing, viz., to have a lease at a smaller amount of royalty than that which the plaintiffs claimed. Besides the action for specific performance by the lessors and the counter-claim by the lessee, there was pending an action in the Queen's Bench Division by the lessee against the lessors, to obtain damages for misrepresentations alleged to have been made to the lessee for the purpose of inducing him to enter into the agreement. In the meantime the defend- ant was in possession, and raising and selling large PURCHASER IN POSSESSION. 12i quantities of coal, but he alleged that he had expended on the mine more than the value of the coal raised. This M^orking had been going on for some time. In that state of circumstances tlie plaintiffs moved for an interlocutory order that the defend- ant might be ordered to pay into Court the amount of royalties which, according to the agreement, he ought to pay on the coal he had raised. It was held, on appeal, that although it would not be right, while the rate of royalty was in dispute, to order the defendant to pay into Court the amount of royalties at the rate claimed by the plaintiffs, he ought to be ordered to pay in the amount of royalties at the rate which he himself alleged to be the one agreed upon, and that as his carrying away coal diminished the value of the property, he would not have the usual option of giving up possession instead of paying money into Court. Lord Justice Cotton said : " This is in some respects like a case where a purchaser being in possession is required to pay into Court, if he remain in possession, the purchase -money agreed upon, but it is well known that in such a case under ordinary circumstances an option is given to the purchaser to go out, and the order only is that if he continue in possession he must pay the price into Court. But that is not necessarily the only order which the Court can make in such a case. Special circumstances may vary it and there are two cases to which Lord Justice Fry referred : 122 VENDOR AND PURCHASER. Cutler V. Simons ^ and Pope v. Great Eastern Railway Company 2 in which, where a purchaser in possession was doing acts which were diminish- ing the property or interfering with the value of the property, the Court ordered the money to be paid into Court without giving him an option of going out and leaving the property which he had interfered with. In Pope v. Great Eastern Railway Company, a Railway Company was in pos- session and had turned out weekly tenants, and some of the property had been pulled down. Under those circumstances the Court decided that the Company, having interfered with the property and rendered it less valuable than it wns, so that the vendor would not have a sufficient security for the purchase- money, should at once pay the price into Court. "In Cutler v. Simons and the other cases there mentioned, which were before Lord Eldon about the same time, orders were made for payment of the purchase-money into Court where purchasers in possession had committed acts of ownership tending to alter the nature of the property. The principle of those cases is this, that although under ordinary circumstances a purchaser in possession has the option of going out, and is not ordered to pay the purchase-money unless he elects tostay in, yet where he has done that which has interfered with the value of the property, the Court does not give him the option. Here the defendant is in posses- ' 2 Mer., 103. ^ L. R., 3 Eq., 171. NEGATIVE CONTRACTS. J 23 sion. and although he may have erected valuable machinery he is taking away part of the very subject-matter of the contract, and he insists that he is in possession under an agreement of which lie himself is asking for specific performance. He ought then, in my opinion, to pay into Court until the rights of the parties are decided, that royalty which he says he will have to pay when the con- tention between the parties is decided. " ^ CHAPTER VII. Negative Contracts. It is proposed next to consider negative contracts and the mode in which Courts of Equity have dealt with them. If A. agree with B. to do a cer- tain thing, the contract is positive or affirmative. If A. agree with B. not to do a certain thing, it is a negative contract. The more frequent case is that of a Tnixed contract, made up partly of negative and partly of positive terms — combining both the positive and negative elements of contract. Of that mixed contract again there may be two species. For valuable consideration a person may enter into an agreement, consisting of two separatov branches — one positive and the other negative — both springing from the same trunk ; or the agree- ment may consist of only one main branch, and the other a subordinate or subsidiaiy branch, ' 32 Ch. D., pp. 330-31. 124 NEGATIVE CONTRACTS. springing from that main branch. An example of the first kind would be a contract by a vocalist to sing at some particular place and not to sing somewhere else. The positive and negative terms are two separate branches of the same contract. An example of the second kind, consisting of a main contract and a subsidiary term, would be an agree- ment by A. to employ a person solely as his broker and not to advertise any one else as such. Taking first of all the case of negative contracts, it will be observed that if a person contract not to do a particular thing, the mode of compelling compliance is to prevent his doing it — by injunc- tion. The proper remedy, in form and substance, is an injunction. Take for instance a covenant in a lease not to dig gravel, clay, &;c., in a given place. The remedy against breach of that covenant is by injunction restraining the lessee from doing the Morris v . thing Covenanted. There is an old case of Morria Yea",^437^^ v. Golman in which the question arose upon the c"'^]'*™'"'' validity of a clause in articles of agreement re- straining Mr. Golman, the Manager of the Hay- market Theatre, from writing dramatic pieces for any other theatre. Lord Eldon merely gave an injunction in the terms of the agreement. The whole agreement, being a negative agreement, or negative claim, is entirely performed by injunction in the terms of it. It is also to be observed that no difficulty arises in enforcing such agreements by injunction, such as would arjse in decreeing speci- fic performance of the acts to which they relate, from BEMED Y BY INJUNCTION. 125 the continuous nature of those acts. It would be impossible to enforce an agreement to allow a road over land for a term of 50 years, but a covenant not to obstruct the road for a period of 50 years could be easily enforced by injunction. Breach of the injunction would then be punishable as a contempt of Court. Thus specific performance of a negative contract by injunction is a much more easy and effectual process, than of a positive contract by mandatory decree. So far, the case is simple • enough. But the difficulty arises where negative contracts get mixed up with positive terms, and then the question is whether the two terms are so far separable, that the negative contract may be enforced by injunc- tion, without the necessity of also performing the positive term ; or, in other words, whether the negative and positive terms are so far combined, as to render the enforcement of the one without the other an act of injustice. Because the neces- sity of securing mutuality is always to be borne in mind. Some nice cases have arisen on the question here indicated. They sway backwards and for- wards as the favorite principle of Equity, that a man should perform his contract, or the equally favorite principle of not interfering at all where complete justice cannot be done, is uppermost in the decision of each. The great difficulty is that where you have positive and negative terms, it is impossible to execute the agreement in full. The general result of the cases may be thus stated : 126 NEGATIVE CONTRACTS. Where by enforcement of the negative term the Court can substantially perform the contract, it will go very far in doing so. But where the sub- stantial part of the agreement is the positive term which the Court, cannot enforce, and the negative term is subsidiary, the Court is powerless, and a decree would be merely nugatory. So that in the end the matter resolves itself into the question : Can the Court substantially perform the contract ? Lumiey v. The great leading case on the subject is Lumley Wfiirner, 1 P. M. &G., V. Wagner. In that case Miss Irag'ner agreed with Leonards, Benjamin Lumley, the lessee of Her Majesty's ■' ° ■ Theatre, that she (Miss Wagner) would sing three months at Rer Majesty's Theatre in London, and that she would rot " use her talents at any other theatre, nor in any concert or re-union, without the written authorization of Mr. Lumley." On a bill filed to restrain Miss Wagner from singing for a third party, and praying for an injunction, it was held that the positive and negative stipulations of the agreement formed but one contract, and that the Court would interfere to prevent the violation of the negative stipulation, although it could not enforce tlie specific performance of the entire con- tract. In a most elaborate judgment Lord St. Leonards decided on granting the injunction. He instances the familiar case of a lease containincr afiirmative and negative covenants, where the Court will not attempt to enforce the execution of the affirmative covenants either on the part of the landlord or of the tenant, but will NEOATIVE AND POSITIVE TERMS. 127 leave it entirely to a Court of law to measure the damages ; though with respect to the negative covenants, if the tenant, for example, has stipulated not to cut or lop timber, or any other given act of forbearance, the Court does not ask how many of the affirmative covenants on either side remain to be performed under the lease, but acts at once by giving effect to the negative covenant, specifically ' executing it by prohibiting the commission of acts whicli have been stipulated not to be done. And in that case there is no violation of mutuality. At p. 618, his Lordship says : " The present is a mixed case, consisting not of two correlative acts to be done, one by the plaintifl"aud the other by the defendants, which state of facts may have and in some cases has introduced a very important difference, — but of an act to be done by Johanna Wagner alone, to which is superadded a negative stipulation on her part to abstain from the com- mission of any act which will break in upon her affirmative covenant — the one being ancillary to, concurrent and operating together with the other. The agreement to sing for the plaintiff during three months at his theatre, and during that time not to sing for anybody else, is not- a correlative contract, it is in effect one contract ; and though beyond all doubt this Court would not interfere to enforce the specific performance of the whole of this con- tract, yet in all sound construction, and according to the true spirit of the agreement, the engagement to perform for three months at one theatre must 128 NEGATIVE CONTRACTS. necessarily exclude the right to perform at the same time at another theatre. It was clearly in- tended that J. Wagner was to exert her vocal abilities to the utmost to aid the theatre, to which she agreed to attach herself. I am of opinion, that if she had attempted, even in the absence of any negative stipulation, to perform at another theatre, she would have broken the spirit and true meaning of the contract as much as she would now do with reference to the contract into which she has actually entered." Thus, performance was confined to the negative part of the contract, the real ratio decidendi being, that performance of that negative part was the substantial carrying out of the agreement. There was no violation of mutuality, because the injunc- tion was of benefit to Lumley, and did not prejudice Miss Wagner — enforced in fact the very thing she had agreed to do. It may be said that the Court could not compel Lumley to perform his part of the agreement, and that he might not allow her to sing; but his agreement was not to allow her to sing but to pay her for it, so that his refusal to permit her would be no defence to an action for her salary. Looking at the matter however from a practical point of view, it is not at all likely that Lumley would refuse her permission to sing when he himself would be the only person injured. Hills V. The case of Hills v. Croll, which is one of those Croll, 2 Phil., 60, referred to in Lumley v. Wagner, has given rise to hurst, c, a good deal of comment, and it is worth while to 1846. ° WANT OF MUTUALITY: 129 make a few remarks upon it. The contract was one of positive and negative terms. A. agreed to supply B. with all the drugs he might require for a certain manufacture, and at prices to be ascer- tained as therein mentioned, and B. on his part agreed to purchase of A., and of no other person without A.'s consent in -writing, all such drugs as he might require for the said manufacture for the term of fourteen years. The positive part of the agreement could not be enforced by the Court, but it could by injunction prevent B. from buying from anyone else. Lord Lyndhurst held that, as the positive term was not capable of being specifi- cally enforced, the Court would not interfere to enforce the negative term. He put it on the ground of mutuality. He says that B. being restrained by injunction might be ruined if A. did not keep an agreement which the Court had no power to compel him to keep. One can see at once the difference between such a case and that of Lumley V. Wagner. It might be the interest of A. not to sell his drugs to B., and from this consideration alone it will appear that Hills v. Croll is not in the least inconsistent with Lumley v. Wagner. In the one case there vsras substantial mutuality. In the other there need not have been. Hills v. Croll is often construed as overruled by Lumley v. Wagner, and therefore not regarded as a subsisting authority. Thus in Catt v. Tourle, Lord Justice Selwyn remarks " and then possibly, Hills v. Croll may have some application, though, in my opinion, K., s. P. 9 130 NEGATIVE CONTRACTS. it is very diflBcult to reconcile that case with Lumley v. Wagner, which has been repeatedly- followed, and if Hills v. Groll is to stand with that case at all, it can only be upon its particular cir- cumstances "; and the same observation is made by Lord Justice Giffard. As above pointed out, it is not necessary to go quite so far, because the mis- chief to be apprehended in Hills v. Groll had no existence in the case of Lumley v. Wagner. Catt V. Ii Cattv. Tourle the plaintiff, a brewer, sold a piece R°"/'ch.' of Isjmdi to the trustees of a freehold land society Justices""* who covenanted with him that he, his heirs and ^^^^- assigns, should have the exclusive right of supply- ing beer to any public-house erected on the land, but the plaintiff did not enter into any covenant to supply it. The defendant, a member of the society, who was also a brewer, acquired a portion of the land with notice of the covenant, and erected on it a public-house which he supplied with his own beer. The plaintiff filed his bill to restrain the defendant from supplying beer, alleging that the plaintiff had always been ready to furnish a sufficient supply of good beer at a fair price. It was held (affirming the order of Stuart, V. C, overruling a demurrer), that the covenant was not void either for uncertainty or want of mutuality, or as being an unreasonable restraint of trade, or because it purport- ed to be perpetual, and that, though it was in terms positive, it was in substance negative, and that the Court would interfere by injunction to restrain the defendant from acting in contravention of it. NO NEGATIVE TERM. 131 Several cases occurred before Catt v. Tourle in which relief was refused on the ground of there being no negative term on which the Court could fasten to grant an iu junction. In the South Wales Maihvay Company v. Wythes already cited^ Lord Justice Turner said : " It has been argued that the case of Lumley v. Wagner and cases of that kind afford some authority for such a bill. I think they afford no authority for it. In Lumley v. Wagner the negative covenant was a distinct and substantive part of the agreement. But here the other parts are the whole substance of the contract, and the agreement to give the bond is a mere inci- dent to the rest of the contract. That distinction takes the case out of the authority of Lumley v. Wagner as to the bond, for if the Court refuses to enforce the performance of the principal contract, it will not decree the execution of that which is merely incidental to it." In Peto V. The Brighton &c. Railway Company peto ». the bill stated an agreement to employ the plain- uckfieiT'& tiffs as contractors for making a railway and to w^eiis'fiy^ pay for the works in debentures and shares of the ji°''|6?' ^ Company. A motion for an injunction to restrain ^eej the Company from dealing with the debentures, ^■^•■> i^^^- and transferring the shares in question to others in derogation of the plaintiff's rights, was refused. The Vice-Chancellor said : " If there were a dis- tinct negative contract in this agreement, such as ' Ante, p. 81. 132 NEGATIVE CONTRACTS. the contract which has now become usual in ordinary agricultural leases, that the lessee will not farm otherwise than according to the custom of the country, the Court might fasten upon that, and separating that from the rest of the agreement might enforce specific performance of that contract : but when a plaintiff comes into this Court upon an agreement which does not contain any such direct negative clause, and where you must infer the negative from the necessity of the case, the instances in which the Court has found it possible to act are very few and special." Many other cases might be cited in which the Court declined to interfere on the ground of there being no negative clause in the particular form in which the agree- ment was drawn. There is another class of cases in which, although there may be a negative term, yet this is so com- pletely subsidiary and incidental to the main contract that giving effect to it would not in the least secure the substantial performance of that contract. In Brett v. The East India and London Brett u. The East Shipping Company the bill was for specific per- India and s £ i Jr London lormance of an agreement to employ the plaintiff Company, as a broker. The only negative term in the 404, Page-' agreement was a clause that plaintiff's name should Wood,T.c., appear jointly with that of the Secretary of the Company in all advertisements of the Company. It was held that this clause of the advertisements was merely incidental to the general relief sought, and that no relief would be granted in respect of NEGATIVE TERM SUBSIDIARY. 133 it, although the same clause might have been enforced had it stood alone, or had the agreement been in other respects still subsisting and undis- puted. The Vice-Chancellor said in conclusion : " The Court cannot, therefore, hold that this is a bill for specific performance of the contract as a whole, to which contract the question of advertise- ments is a mere adjunct. The Court cannot compel the defendants to advertize as their agent a person whom they do not employ as agent. The principal being gone, the adjunct must fall with it. Lumley v. Wagner was the converse case ; in that case the contract was still subsisting, and Mddle. Wagner broke a negative term of it. It is clearly absurd to say that they must issue advertisements containing the plaintiS's name as their broker, when it is obvious that they cannot be compelled to employ him as such." In Catf V. Tourle it will be observed that the Court broke through the mere form of positive and negative terms, and holding that which was posi- tive in form to be negative in substance granted the injunction. That principle was more clearly established by Lord Selborne in the case of the Wolverhampton and Walsall Railway Company V. The London and North-Western Railway Com- pany, already cited. ^ His Lordship observed : "I can only say, that I should think it was the safer and the better rule, if it should eventually be adopted ' Ante, pp. 22, 68. 134 NEGATIVE CONTRACTS. by this Court, to look in all such cases to the substance and not to the form. If the substance of the agreement is such that it woiild be violated by doing the thing, sought to be prevented, then the question will arise, whether this is the Court to come to for a remedy. If it is, I cannot think that ought to depend on the use of a negative rather than an affirmative form of expression. If, on the other hand, the substance of the thing is such, that the remedy ought to be sought elsewhere, then I do not think that the forum ought to be changed by the use of a negative rather than an affirmative." Here, therefore, we have an express judgment of the Lord Chancellor putting it upon the broader basis, that, whatever the form in which the agree- ment may be drawn, the real question is : Can you or can you not carry it into effect by injunc- tion instead of by mandatory decree ? That view is corroborated by the opinion of the late Master of the Kolls in Fothergill v. Rowland^ and Leech v. Schweder} He intimated that he was inclined to act upon it to its full extent. Donneii v. The latest case on the subject is Bonnell v. CK^.,hb, Bennett. There the agreement was between the 1883.'^ ' pliiintiff Bonnell, a manure manufacturer, and Cor- mack, a fish curer and fish smoker, to the effect that Cormack should sell and that plaintiff should buy all parts of fish not used by Cormack in his ' Ante, p. 49. "- L. R., 9 Ch., 463. SUBSTANCE AND FORM. I35 business at a stated price for the space of two years ; and in consideration thereof Coronach agreed that he would not, during the said period, sell any- fish or parts of fish to any other manufacturer whatever ; and the plaintiff further agreed to take and pay at the said price for all fish to be delivered at the plaintifi"s works. The defendant never delivered any fish under the contract to the plaintiff, but he entered into a contract with the defendant Bennett to deliver all the parts of fish which hh did not require in his business to Bennett. It was admitted that plaintiff had suffered damage by this breach of contract, and that Bennett had paid CormacJc considerable sums of money to induce him to break his contract with the plaintiff, in order that he {Bennett) might obtain the monopoly of all the refuse fish in Orimsljy. The plaintiff brought his action against Bennett and Cormack as co-defendants, asking for an injunction to restrain Cormack from selling any fish to Bennett, or any other manufacturers except the plaintiff, and to restrain Bennett from buying any such fish from Cormack. Mr. Justice Fry said : " The question which arises is by no means an easy one. It is difficult because of the state of the authorities upon the point. It appears to me that the tendency of recent decisions, and especially the cases of Fother- gill V. Rowland and of the Wolverhampton and Walsall Railway Company v. London and North- Western Railway Company is towards this view — 136 NEGATIVE CONTBAGTS. that the Court ought to look at what is the nature of the contract between the parties ; that if the contract as a whole is the subject of equitable juris- diction, then an injunction may be granted in support of the contract whether it contain or does not contain a negative stipulation ; but that if, on the other hand, the breach of the contract is properly satisfied by damages, then that the Court ought not to interfere whether there be or be not the negative stipulation. That, I say, appears to me to be the point towards which the authorities are tending, and I cannot help saying that in my judgment that would furnish a proper line by which to divide the cases. But the question I have to determine is not whether that ought to be the way in which the line should be laid down, but whether it has been so laid down by the authorities which are binding on me." After an examination of the authorities, his Lordship con- cludes : " I have come to the conclusion, therefore, upon the authorities which are binding upon me, that I ought to grant this injunction. I do so with considerable difficulty, because I find it hard to draw any substantial or tangible distinction between a contract containing an express negative stipulation and a contract containing an affirmative stipulation which implies a negative. I find it exceedingly difficult to draw any rational distinction between the case of Fothergill v. Rowland ^ and the case now ' Ante, p. 49. PART PERFORMANCE. before me. But at the same time the Courts have laid down that, so far as the decisions have already- gone in favour of granting injunctions, the injunc- tion is to go." These cases appear to involve more than they really do, but we have dwelt on them at some length, because they shew the real nature of decrees for specific performance and injunctions and the relations they bear to each other. We will con- clude, then, as we set out, by stating the general result to be, that where by granting an injunction the Court can substantially perform the contract, it will do so ; but where the substantial part of the agreement is positive, and the negative part is only subsidiary or subordinate, then the Court will not interfere with a decree which would be merely nugatory. So that the reasoning always comes round to the same point : Can the Court substantially perform the contract ? 137 CHAPTER VIII. Part Perfoemance. In all the cases we have so far considered nothing was done by the parties on either side. An im- portant and material alteration of circumstances takes place where there has been part performance on one side. In such a case to send the other party to his legal remedy by damages, would be, in fact, to violate the principle of mutuality ; to hold that one party is to have performance, while 138 P-^RT PERFORMANCE. the other is to be deprived of it. Hence, Equity often enforced specific performance, in consequence of part performance on one side, in cases where if it had been res Integra the Court would not have interfered. It has already been mentioned^ that an agreement to lend money could not be specifically enforced, but that the case is wholly altered where there has been part performance by giving the money. So, again, in the case of a contract to build a house,^ damages are a complete and effectual remedy. But if the contract has been performed in part by one of the contracting parties, Equity will enforce performance by the other. Price V. In Price v. Corporation of Penzance the con- Coipora- . tion of Pen- tract was, that the corporation, liaving purchased zance, 4- t • • n^i i ii i-i i- Hare, 606. the plamtiffs land, should, at their own expense, make a street and also a market. Adverting to the difficulty of executing a decree for specific per- formance, the Vice-Chancellor observed : " Under this contract, the corporation having taken posses- sion of the land, and converted it ; and, having had the benefit of the contract in specie, as far as they are concerned, I need not say that the Court will go to any length which it can to compel them to perform the contract in specie." The corpora- tion assigned various causes for the delay, and stated that they had taken steps towards the completion of the contract, by levelling the ground and making the excavations for the market. The • Ante, p. 49. » Ante, p. 60. THE EQUITABLE DOCTRINE. 139 cause was then ordered to stand over for six months, and the defendants having subsequently built the market, the Court stayed all proceedings without costs. So, again, as we have seen, where performance involves a series of continuous acts, the Court will not interfere from want of the necessary machi- nery to superintend execution of its own decree. But where part of the contract has been perform- ed, so that one party has got the benefit of it. Equity will struggle very hard indeed to secure to the other party the benefit of his agreement. In Wilson v. Furness Railway Company, in con- wiison v. sideration of certain landowners obtaining from Railway the Admiralty a waiver of an obligation, im- 9 g' '^"2^'' posed upon a Eailway Company by their Act, to y n^'jggg construct certain works, and upon conveyance of the necessary land by the landowners, the Eailway Company entered into an agreement with them to make a carriage road between certain specified points, and also to make and maintain a wharf for loading and discharging vessels at a specified place, of a stipulated length, and of a suitable and con- venient height. The obligation imposed upon the Company by their Act had been waived by the Admiralty ; and the land required had been conveyed to the Com- pany, who had commenced, but had not finished the road, and had not commenced the wharf : — Held, on demurrer by the Company to a bill by the landowners for specific performance of the 140 PART PEBFOBMANCE. agreement, (1) that, having obtained the benefit of the agreement by being thereby released from an onerous obligation, and allowed to substitute some- thing more easy of performance, the Company would not be allowed to evade the agreement ; and (2) that the agreement was not ultrd vires and might be enforced against them. James, V. C, said : " It would be monstrous if the Company, having got the whole benefit of the agreement, could turn round and say : ' This is a sort of thing which the Court finds a difficulty in doing and will not do.' Rather than allow such a gross piece of dishonesty to go unredressed, the Court would struggle with any amount of difficulties in order to perform the agreement." Accordingly the de- murrer was overruled, and the bill held to lie, although, apart from the part performance, an agreement to make and maintain a road or wharf would never have been enforced. Two similar Sander- cases, though not quite so strong, are Sanderson v. Cocker- The CocJcermoutk and Workington Railway Go. Working- ^'^^ Greene v. West Gheshire Railway Company, uhliiv. °" ^^ t^s former case a Railway Company, about to Langdaie*^ sever the plaintiff's land by their railroad, agreed 184^' ^^ purchase the necessary portion of land, " subject to making such roads, ways, and slips for cattle, as might be necessary." Held, that although it was very diflScult to execute an agreement thus ex- pressed, yet that the plaintiff was entitled to a specific performance : that the word " necessary " must receive a reasonable interpretation. The ex- THE EQUITABLE DOCTRINE. 141 pression was held to mean " such roads, ways, and slips for cattle, as might be necessary and proper for convenient communication between the severed portions of the plaintiff's land;" and a reference was therefore directed to ascertain what was necessary and proper. In Greene v. West Cheshire Railway Company Greene v. -r. .-, '"'est Che- an agreement was entered into between a Railway shire Ey. Company and a landowner, part of whose land i3'Eq.,44,' had been, under another agreement, taken by the v!'a,"i87i. Company, whereby, in consideration of a previous withdrawal by the landowner, of a petition to Par- liament against the Company's bill, the Company agreed to construct and for ever maintain at their expense a siding of specified length alongside the line upon land belonging to the landowner, and to be provided by him for that purpose, for the use and to the reasonable satisfaction of the land- owner. It was held that this agreement was not incapable of being enforced by a Court of Equity. The Vice-Chancellor said : " A more direct, wilful, and determined violation of a plain contract can- not be suggested. No excuse is offered for it — no suggestion tha^ it is impracticable, or even that it is inconvenient, for the Company to perform their part of the contract of which the plaintiff has per- formed his ; but what they say is, that the plaintiff may, by an action at law, recover against them in money such amount of damages as a jury may think he has sustained by their wilful breach of their contract ; and that, therefore, a Court of Car. 3 142 PART PEBFOBMANCE. Equity will not entertain the complaint. I do not understand that the law, as administered in this Court, countenances any such defence." And he accordingly decreed specific performance in a case in which, most undoubtedly, but for part perform- ance, the Court would not have interfered. In cases of this nature the Court treats the refusal to perform as a species of fraud, and will do anything rather tlian be baffled in its desire to secure complete justice. But the principle of part performance has been carried even farther than that, even to the extent of apparently overriding statuje oJ the statute of Frauds. The 4th section of that Frauds, 29 •' ^ar. 2, c. law provides : " That no action shall be brought whereby to charge any person upon any agreement made upon consideration of marriage, or upon any contract or sale of lands, tenements, or heredita- ments, or any interest in or concerning them, or upon any agreement that is not to be performed within the space of one year from the making thereof, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized." The Statute does not expressly destroy such con- tracts if made by parol ; it only says that no actions shall be brought on them to charge the contracting party or his representatives, on the ground of such contract and of some supposed breach thereof. THE STATUTE OF FRAUDS. 143 Notwithstanding this enactment, there is a well- known rule that Courts of Equity will decree specific performance of parol contracts for interests in land, in cases where, by part performance, the party seeking relief has been put into a situation which makes it against conscience in the other party to insist on the want of writing duly signed, as a bar to relief. The principle upon which Equity proceeds in these cases is that the refusal to perform amounts to fraud, and that a fraudulent use shall not be made of the Statute. The Court therefore interfered against a party meaning to make the Statute an instrument of fraud, and said, he should not take advantage of his own fraud.^ In McGormick v. Orogan, Lord Westbury said : McCoi-mick " The Court of Equity has from a very early period li. k., 4 h. decided that even an Act of Parliament shall not '' ' be used as an instrument of fraud ; and if in the machinery of perpetrating a fraud, an Act of Par- liament intervenes, the Court of Equity, it is true, does not set aside the Act of Parliament, but it fastens on the individual who gets a title under that Act, and imposes on him a personal obligation, because he applies the Act as an instrument for accomplishing a fraud." Exactly the same princi- ple was laid down by Lord Redesdale in Bond v. Bond ». Hopkins. His Lordship said : " The Statute of fgft'L, Frauds says, that no action or suit shall be main- ^^"^^ tained on any agreement relating to lands, which ' Pe7- Lord Eldon in Mestcer v. Gillespie, 11 Ves,, 621. 144 PART PERFORMANCE. is not in writing, sigaed by the party to be charged with it ; and yet the Court is in the daily habit of relieving, ■where the party seeking relief has been put into a situation which makes it against con- science in the other party to insist on the want of writing so signed, as a bar to relief. The first case (apparently) of this kind was Foxcroft v. Lyster} That case was decided on a principle acted upon by Courts of law, though not applicable by the modes of proceediug in a Court of law, to the particular case. It was against conscience to suffer the party who had entered and expended his money on the faith of a parol agreement to be treated as a tres- passer, and the other party to enjoy the advantage > A. D. 1701 Colles' Par. Cas., 108. The House of Lords there decreed specific performance of a parol agreement to grant a lease, notwithstanding the Statute of Frauds, after acts of part performance on the part of the lessee by pulling down an old house, and building new houses according to the terms of the agreement. There were, in fact, two prior cases before Lord Guilford — Hollis V. Edwards and Butcher v. Stajyely, decided in 1683 and 1685, within the first ten years after the enactment of the Statute of Frauds, in the earlier of which the Lord Keeper had refused, and in the latter had granted, relief. Butclier V. Stapely was a strong case upon its circumstances ; for the relief was there granted to a purchaser in possession of land under an unsigned agreement, against a subsequent purchaser (with notice) of the same land from the vendor, the defendant having paid his purchase-money under a signed agreement and having obtained a conveyance of the legal estate. Lord Guilford " declared that inasmuch as possession was delivered according to the agreement, he took the bargain to be executed." Per Lord Selborne in Maddison v. Alderson. GSOUNDS OF THE DOCTRINE. 145 of the money he had laid out. At law, fraud destroys rights. If I mix my corn with another's, he takes all ; but, if I induce another to mix his corn with mine, I cannot then insist on having the whole. The law in that case does not give me his corn. The case of Foxcroft v. Lyster, therefore, I conceive, was decided on clear principle ; though whether the cases founded on that case, have been all so well considered, I will not take upon me to say. But it appears from these cases, that Courts of Equity have decided on equitable grounds in contradiction to the positive enactment of the Statute of Frauds, though their proceedings are in words included in it." In Maddison v. Alderson the principle of the Maddison, doctrine of part performance is thus explained by sApp.Cas.' Earl Selborne : " That equity has been stated by of Lords"** high authority to rest upon the principle of fraud : ' Courts of Equity will not allow the statute to be made an instrument of fraud.' By this it cannot be meant that equity will relieve against a public statute of general policy in cases admitted to fall within it ; and I agree with an observation made by Lord Justice Cotton in Britain v. Rossiter, that this summary way of stating the principle (however true it may be when properly understood), is not an adequate explanation, either of the pre- cise grounds, or of the established limits, of the equitable doctrine of part performance. " It has been determined at law (and, in this respect, there can be no difference between law K., s. P. 10 HQ PART PBBFORMANCE. and equity), that the 4th section of the Statute of Frauds does not avoid parol contracts, but only bars the legal remedies by which they might other- wise have been enforced " From the law thus stated, the equitable conse- quences of the part performance of a parol contract concerning land seem to me naturally to result. In a suit founded on such part performance, the defendant is really 'charged' upon the equities resulting from the acts done in execution of the contract, and not (within the meaning of the statute) upon the contract itself. If such equities were excluded, injustice of a kind which the statute cannot be thought to have had in con- templation would follow. Let the case be supposed of a parol contract to sell land, completely per- formed on both sides, as to everything except conveyance ; the whole purchase-money paid ; the purchaser put into possession ; expenditure by him (say in costly buildings) upon the property ; leases granted by him to tenants. The contract is not a nullity ; there is nothing in the statute to estop any Court which may have to exercise juris- diction in the matter from inquiring into and taking notice of the truth of the facts. All the acts done must be referred to the actual contract, which is the measure and test of their legal and equitable character and consequences. If, therefore, in such a case a conveyance were refused, and an action of ejectment brought by the vendor or his heir against the purchaser, nothing could be done GROUNDS OF TBE DOCTRINE, 147 towards ascertaining and adjusting the equitable rights and liabilities of the parties without taking the contract into account. The matter has ad- vanced beyond the stage of contract; and the equities which arise out of the stage which it has reached cannot be administered unless the contract is regarded. The choice is between undoing what has been done (which is not always possible, or, if possible, just) and completing what has been left undone. The line may not always be capable of being so clearly drawn as in the case which I have supposed ; but it is not arbitrary or unreasonable to hold that when the statute says that no action is to be brought to charge any person upon a con- tract concerning land, it has in view the simple case in which he is charged upon the contract only, and not that in which there are equities resulting from res gestse subsequent to and arising out of the contract. So long as the connection of those res gestae with the alleged contract does not depend upon mere parol testimony, but is reason- ably to be inferred from the res gestae themselves, justice seems to require some limitation of the scope of the statute, which might otherwise inter- pose an obstacle even to the rectification of mate- rial errors, however clearly proved, in an executed conveyance, founded upon an unsigned agree- ment." ^ 8 App. Cas, 475-76. 148 PART PERFORMANCE. Having explained the general principle of the doctrine of part performance, we will next consider with what limitation it is to be applied. In the first place, the part performance must be by the person seeking to enforce the parol agree- Caton V. ment. In Gaton v. Caton Lord Cranworth, C, said : K„ 1 Oh., " If I agree with A., by parol, without writing, that I will build a house on my land, and then will sell it to him at a stipulated price, and in pursuance of that agreement, I build a house, this may afford me ground for compelling A. to complete the pur- chase, but it certainly would afford no ground for a claim by A. to compel me to sell on the ground that I had partly performed the contract." In order to amount to part performance, there must be some act so clear and definite as to be explained only by the existence of a contract between the parties. In other words, the acts relied upon as part performance must be unequi- vocally and in their own nature referable to some such agreement as that alleged. They must neces- sarily imply the existence of a contract. Morphett In Morphett v. Jones, Sir T. Plumer states the "j s^^ni, equitable rule thus : '' In order to amount to part Plumer"^ ^ performance, an act must be unequivocally refera- M.R., 1818. ^Iq iq ti^e agreement; and the ground on which Courts of Equity have allowed such acts to exclude the application of the statute, is fraud. A party who has permitted another to perform acts on the faith of an agreement, shall not insist that the agreement is bad, and that he is entitled to treat LIMITS OF THE DOCTRINE. 149 those acts as if it had never existed. That is the principle, but the acts must be referable to the contract. Between landlord and tenant, when the tenant is in possession at the date of the agreement, and only continues in possession, it is properly observed that in many cases that continuance amounts to nothing ; but admission into possession having unequivocal reference to contract, has always been considered an act of part performance. The acknowledged possession of a stranger in the land of another is not explicable except on the supposition of an agreement, and has therefore constantly been received as evidence of an antece- dent contract and as sufficient to authorize an inquiry into the terms ; the Court regarding what has been done as a consequence of contract or tenure." In Dale v. Hamilton, Vice-Chancellor Wigram Daiew.Ha- said : " It is, in general, of the essence of such an Hare, 369; act, that the Court shall, by reason of the act itself, ram, V. c., without knowing whether there was an agreement or not, find the parties unequivocally in a position different from that which, according to their legal rights, they would be in, if there were no contract. Of this, a common example is the delivery of pos- session. One man, without being amenable to the charge of trespass, is found in the possession of another man's land. Such a state of things is considered as shewing unequivocally that some contract has taken place between the litigant parties ; and it has, therefore, on that specific 150 PART PERFORMANCE. ground, been admitted to be an act of part per- formance : Morphett v. Jones. But an act whicli, though in truth done in pursuance of a contract, admits of explanation without supposing a contract, is not, in general, admitted to constitute an act of part performance taking the case out of the Statute of Frauds ; as, for example, the payment of a sum of money alleged to be purchase-money. The fraud, in a moral point of view, may be as great in the one case as in the other ; but in the latter caseSi the Court does not, in general, give relief." ciinan v. ^^ CUnan V. Cooke, Lord Kedesdale thus illus- Sch. &L.! trates the limitation of the rule : " I take it that Ee'dida'ie lotting is Considered as a part performance which li-'eland* *^°®^ ^^^ P*^* ^^^ V^^^J i"*^o ^ situation that is a 1802. fraud upon him, unless the agreement is performed j for instance, if upon a parol agreement, a man is admitted into possession, he is made a trespasser, and is liable to answer as a trespasser if there be no agreement. This is put strongly in the case of Foxcroft V. Lyster ; there the party was let into possession on a parol agreement, and it was said that he ought not to be liable as a wrong-doer, and to account for the rents and profits ; and why ? because he entered in pursuance of an agreement. Then, for the purpose of defending himself against a charge which might otherwise be made against him, such evidence was admissible, and if it was admissible for such purpose, there is no reason why it should not be admissible throughout. That, I apprehend, is the ground on which Courts CHANGE OF POSSESSION. 151 of Equity have proceeded in permitting part per- formance of an agreement to be a ground for avoiding the statute ; and I take it therefore that nothing is to be considered as part performance which is not of that nature." ■ Accordingly, where possession has been given under a parol contract, neither party wiU be allow- ed to take advantage of the Statute of Frauds, "Where, however, possession has been given, not by one party to the other, but to some third person who was no party to the contract, the delivery of possession must have been assented to by that party to the contract who is sought to be charged. In Ex parte Foster two partners in trade whose Ex parte ™ T . 1 ^1 1 . Foster. In affairs were embarrassed, without nling a liquida- re Foster, 22 Ch D tion petition, summoned a meeting of their credi- 797; c.a!| ■I QOO tors. A majority of the creditors attended, and a resolution was passed that a deed of assignment of the debtors' estate and effects should be made to three persons named as trustees for the benefit of the creditors, with power to carry on the business, or to sell the concern as they should think fit. The resolution was signed by the chairman of the meeting, but by no one else. Next day the debtors gave up their stock-in-trade, &c., and books to the proposed trustees, and these persons carried on the business for a few weeks, and proceeded to collect the book-debts. A draft deed of assign- ment was prepared in accordance with the reso- lution, but it was never executed, the other creditors not having assented to the arrangement 152 PART PERFORMANCE. embodied in the resolution. It was held, that there was as no binding contract between the debtors and their creditors, and that even a credi- tor who was present at the meeting was entitled to proceed for his debt. It was contended that the debtors having given up possession of their busi- ness and assets to the trustees, that was a part performance sufficient to take the case out of the Statute of Frauds. But until execution of the deed of assignment, the proposed trustees were not trustees under the resolution. They were simply the nominees of the creditors to whom the assign- ment was to be made, but, until the assignment was made, there was no power or authority con- ferred on them at all. What they did was not authorized by the creditors. On this part of the case Sir G. Jessel, M. E., after stating these facts, continued : " That being so, the acts of the trustees could not make that an agreement which was not an agreement at all, nor were those acts evidence of an agreement. But there is another point about this. The doctrine of part performance is founded on a change of possession, which is assented to by that party to the contract who is sought to be charged. It cannot be alleged by him that he is a trespasser. You refer his possession, if you can, to a legal origin, and you can do that by implying a contract. But you cannot make a contract by the act of a third party who is no party to the contract itself. For instance, if A. and B. contract that A. shall sell an estate to B., and B. takes pos- RETENTION OP POSSESSION. 153 session of it, that is evidence against B. of a con- tract by him to buy the estate, for otherwise he would be a wrong-doer. But if A. and B. agree that an estate shall be settled on C, for life, with remainder to B., and B. gives possession to C. that is not evidence against A. And that is really what took place here. The bargain was that the pro- perty should be conveyed to C. But how can the fact of C. being put into possession by B. be evidence that A. gave up his debt ? It is plain that A. is not a party to the taking possession ; and he is not a trespasser, and consequently, as against him, the giving of possession to the persons who are to be trustees is no evidence whatever of a contract on his part, and is not part performance by him. That puts an end to the notion that there is anything to take the case out of the Statute of Frauds!' Retention of possession has also been held to amount to part performance of an agreement, excluding the application of the statute, although of course that would require a much stronger case. In Lincoln v. Wright, a mortgagee with power Lincom v. of sale, of real estate, informed Lincoln, the mort- d.'^a J.'ie gagor, that he should sell it for £220, unless more tices,^ 1859' were offered. It was thereupon verbally agreed between Lincoln and Wright, that Wright should buy it on Lincoln's behalf for £280, and have a lien on it for that sum ; that Lincoln should pay interest and continue to occupy the part he then occupied, and that Wright should receive the rents 154i PART PERFORMANCE. of the rest to reduce the principal. An offer by Wright to purchase for £230 was sent by Lincoln's agent to the mortgagee, who accepted it, and under his power of sale conveyed to Wright's infant daughter by Wright's direction. Lincoln continued in occupation of the part he was to occupy, and paid interest, Wright receiving the rents of the rest. This continued for about ten months when Wright died. After his death, the daughter, by her guardian, brought ejectment, claiming to be absolute owner. It was held, that the Statute of Frauds was no defence to a bill by Lincoln to enforce the agreement, because Lincoln's continu- ance in possession after the conveyance being inconsistent with the theory of an absolute con- veyance, and referable only to the verbal agree- ment, amounted to part performance of that agree- ment, and excluded the operation of the statute. Possession alone is, generally speaking, sufficient to refer to the existence of a contract, but the inference of ownership is much stronger where the party admitted into possession has been allowed to Crookew. lay out capital on the land. In Crooke v. Gorpora- tion''o/sea- Hon of Scaford, a municipal corporation passed a e^Ch.^ssl- resolution in January 1860, agreeing to let to the tiiTrtej'^"" plaintiff the flat part of the beach opposite to the C, 1871. plaintiff's field, for 300 years, at a nominal rent. The plaintiff claimed all the beach comprised between the lines drawn in prolongation of the sides of his field, and he built a wall and terrace along the part so claimed. In 1864 the corporation gave AMBIGUOUS ACTS. 155 the plaintiff notice to quit, and, after much negoti- ation, in 1869 brought an action of ejectment against the plaintiff, who thereupon filed the bill in this suit for specific performance. It was held (affirming the decision of Stuart, V. 0.) that, though the agreement was not under seal, the corporation was bound by acquiescence, and must perform the agreement to grant a lease. It follows, on the other hand, that acts which admit of explanation without presuming a contract, are not to be taken as amounting to part perform- ance. "Examples of circumstances which have been held insufficient for this purpose are found in (1) Cleric V. Wright ^ and Whaley v. Bagenal^ where acts preparatory to the completion of a contract were held not to be part performance ; (2) Wills v. Stradling,^ where the mere holding over by a tenant (unless qualified by payment of a different rent) was held not to be enough " even to call for an answer " ; (3) Lamas v. Bayley,^ where the plaintiff being engaged in a treaty for the purchase of land, desisted in order that the defendant might buy it on an agreement that he should have part of it when so bought at a proportionate price ; but his "desisting from the prosecution of his purchase " was held to be no part performance ; and (4) O'Reilly V. Thompson,^ where the agreement alleged was that upon the plaintiff obtaining from a third ' 1 Atk., 13. 2 1 Bro. P. C, 345. l ' 2 Vein., 627. "3 Ves., 381. I '2 Cox, 2n. 156 PART PERFORMANCE. party a release of a right to a lease claimed by him, the defendant would grant to the plaintiff a lease of the same premises on a certain terms. The plaintiff did obtain a release from the party in question of the right claimed by him for valuable consideration ; but, nevertheless, a plea of the Statute of Frauds was allowed, Chief Baron Eyre saying : " These circumstances are not a sufficient part performance, but they are a condition annexed, and necessary to be fulfilled by the plaintiff to entitle him to call for an execution of the con- tract :" meaning, as I presume, that they were a condition precedent to the contract, as distinguish- ed from acts done after a concluded contract, and in part performance of it."^ The case is more difiScult in regard to the pay- ment of purchase-money. There was at one time some conflict of decision on this point. Lord Hard- wicke thought it consistent with the rule to treat the payment of purchase-money in whole or in part as a suflScient part performance : Lacon v. Mertens / Owen v. Davies? On that point later authorities have overruled Lord Hardwicke's opin- ion, and it is now settled that payment of the purchase-money is not sufficient to prevent the setting up of the Statute of Frauds. The reason ciinant). is thus Stated by Lord Kedesdale in Glinan v. Sch'^^&'^L. Gooke : " Payment of money is not part perform- 40; 1802. ' > Per Earl Selborne in Maddison v. Alderson, 8 App, Cas., 480. ^ 3 Atk., 1. I M Yes. Sen. 83 ; 1747, PAYMENT OF PURCHASE-MONEY. 157 ance, for it niily be re-paid ; and then the parties will be jusJkAs they were before, especially if re- paid with interest. It does not put a man who has parted with his money into the situation of a man against whom an action may be brought ; for, in the case of Foxcroft v. Lyster, which first led the way, if the party could not have produced in evidence the parol agreement, he might have been liable in damages to an immense extent." And the rule was again definitively laid down in Hughes v. Morris. That was a case to enforce a Hughes v. „, ,-- . T,.., , Morris, 2 contract for the sale oi shares in a British vessel, d. m. & G., not reciting the certificate of registry. Lord Justice justice's Knight-Bruce said : " The case appears to me to stand upon much the same footing as a parol con- tract for the sale of land without part performance. A parol contract for the sale of land, though all the money be paid, without part performance (for the payment of the money is no part perform- ance), cannot be carried into effect if the person sued chooses to avail himself of the defect. This opinion may be at variauce with that which a very eminent common lawyer has published, or per- mitted to be published in a valuable work ; and it may also be at variance with the views of the late Master of the Kolls upon this subject ; still I think that a Court of Equity is bound to declare here that there is no contract which can be recognised. How the case would be if there had been a fraud, it is not necessary to say. Fraud is as much out of the question as in a simple case under the 158 P^RT PERFORMANCE. Statute of Frauds where performance of a parol contract is resisted, although all the money has been paid. There is no fraud in the sense in which the Court uses the term with reference to subjects of this description. It appears to me that relief cannot be given, and that the plaintiff must be left to his remedy by action as far as the parties to this record are concerned." Britain «. In Britain v. Rossiter, Lord Justice Cotton refer- Q. B. b., ring to the question of part payment of the pur- 1883. ' ' chase-money says : " It is well established and cannot be denied that the receipt of any sum, however large, by one party under the contract, will not entitle the other to enforce a contract which comes within the 4th section." In Maddison v. Alderson^ Earl Selborne, after referring to the former conflict of authority on the question continues : "It may be taken as now settled that part payment of purchase-money is not enough ; and judges of high authority have said the same even of payment in full : Clinan v. Cooke ; Hughes v. Morris ; Britain v. Rossiter. Some of the reasons which have beeri given for that con- clusion are not satisfactory ; the best explanation of it seems to be, that the payment of money is an equivocal act, not (in itself), until the connection is established by parol testimony, indicative of a contract concerning land. I am not aware of any case in which the whole purchase-money has been ' Ante, p. 145. MARRIAOE CONTRACTS. 159 paid without delivery of possession, nor is such a case at all likely to happen." Suppose aparol agreement to settle property in consideration of marriage, and then the marriage takes place in consequence. Is that a part per- formance sufficient to take the case out of the statute ? It has been repeatedly held to be not suffi- cient, because the Statute of Frauds expressly pro- vides that a contract in consideration of marriage shall not be binding, unless it be in writing. In the case supposed, therefore, to hold the subsequent marriage a sufficient part performance would be a direct violation of the statute. In Warden v. Jones, Warden ». . Jones, 2 D. previously to a contemplated marriage, the intended & J., 76 ; husband and wife went to a solicitor to have a set- worth, c, tlement prepared of some railway stock, of which the intended wife was the registered proprietor, but which was subject to a mortgage, and the certificates of which were in the hands of the mortgagee. The solicitor not being able to prepare the settlement before the time fixed for the mar- riage, the husband told the wife that it would be equally good if made afterwards, and no settlement or agreement for a settlement was made in writing before the marriage. Shortly after the marriage a settlement was executed, whereby the husband covenanted to invest part of the proceeds of the stock upon trusts for the benefit of his wife and children. He sold the stock, paid ofi" the mortgage, and invested the stipulated amount according to his covenant. It was held (1) that 160 PART PERFORMANCE. the settlement was voluntary and fraudulent, and therefore void as against creditors ; and (2) that the wife had no equity to a settlement. Lord Cran- worth observed : " It was hardly argued that the marriage was a part performance. That is clearly not so. Where, indeed, one of the contracting parties agrees, as the consideration for the marriage to do something more than marry, as to settle an estate, and, in consideration of that promise, the other party either acting for her or him contract to make a settlement, then the settlement made by the one contracting party is a good act of part performance : Hammersley v. DeBiel} In this case, however, there is nothing of that sort." Lassence v. In Lasscnce V. Tierney, by a parol ante-nuptial M.^& G.', agreement, it was agreed, that the husband should Cottenham ^^^6 a Certain portion of the wife's property, and c, 1849. ^-^^^ ^jjg residue should be settled for her separate use. This agreement was carried out so far as related to the husband ; but no settlement was made on the wife. The wife subsequently to her marriage filed her bill by her next friend, stating these facts, and praying that her interests in certain property consisting of real estate coming to her might be declared accordingly. The husband, by his answer, admitted the statements in the bill. A deed was then prepared, purporting to be a settle- ment on the wife, in pursuance of the agreement, and giving her a power to dispose of her property ' 12 ci. & F,, 46. MARRIAGE CONTRACTS. Jgl by will. This deed, though signed by the wife, was not acknowledged by her. She made a will, disposing of her property iti favor of her husband and other parties, and died. The husband then filed a supplemental bill, praying, as against the heir of the wife, that the parol agreement might be carried into effect, that the want of acknowledgr ment might, if necessary, be supplied, and that the will of the wife might be established as a valid execution of the power given to her by the deed. Held, first, that in a suit thus fi'amed, there was no case established in point of proof as against the heir ; secondly, that the contract so entered into before marriage, there being nothing but marriage following, could not be carried into effect under the Statute of Frauds ; and, thirdly, that the Court would not supply the want of the acknowledgment as tending to destroy the protection which the law throws around married woman. Lord Cottenham' said : " Now, in the first place, if the wife was alive, could any equity be asserted against her ? There is nothing against her but a parol agreement before marriage, and nothing but marriage follow- ing, which will not support the co-n tract, and such a contract cannot be carried into effect under the Statute of Frauds. The case of Hammersley v. Baron de Biel was referred to in support of this equity. That case, as it came before this Court, is not reported at all, except in a note to the report of the case before the House of Lords, in which my judgment only is given. I was very glad to K., S. P. 11 162 PABT PERFORMANCE. find that, in giving judgment in that case, I guarded myself, as I supposed, against such a use being made of the case, for I there said that a parol contract followed only by marriage is not to be carried into effect, marriage being no part perform- ance of the contract. If it were, there would be an end of the statute, which says that a contract in consideration of marriage shall not be binding, unless it be in writing ; but if marriage be part performance, every parol contract followed by marriage would be binding. That is no new doc- trine ; it is what Lord Eldon lays down in Dundas V. Dutens, ^ and has always been considered and recognised as law. In Hammersley v. Baron de Biel I said that that case was distinguishable, because the husband, on his part, having contracted before marriage to do something, and having done it, there was part performance of the contract, the contract relating to property to which he was entitled. In that case, there being a contract before marriage, the question turned on whether the parties enter- ing into the contract were authorized to do so, and I was of opinion that they were. That case, there- fore, not only does not sanction the doctrine on which alone this bill is supported, but the reason given for the judgment proves directly the reverse." We rather advert to these cases because of jin observation made by Lord Justice Mellish in Jeston V. Key? He says : " I am of the same ' Yes. Juur,, 190. '■ L, U., G Cli,, 013. MARRIAGE CONTRACTS. 163 opinion. There was a marriage contract between the husband and the wife's father. They both agreed to make a settlement, and this agreement was not performed by either party. But the con- tract was partly performed by the marriage." That was not the ratio decidendi of the case, but at the same time the observation was not quite correct. Lord Cottenham's observations above quoted, point to the distinction between cases in which there is no part performance except the marriage and cases in which there is part performance inde- pendently of the marriage. Suppose, then, that we have what was wanting in Lassence v. Tierney, namely, acts of part performance besides the marriage, as, for instance, a delivery up of posses- sion and consequent change in the situation and rights of the parties, followed by expenditure on the property by the party put into possession. Such a case was Surcome v. Pinniger. A father, Surcome V. Pinniger, shortly before the marriage of his daughter, told 3 D. M. & her intended husband that he meant to give cer- Lords tain leasehold property to the couple on their i853. ' marriage. After the marriage he gave up posses- sion of the property to the husband, to whom he directed the tenants to pay rents, and handed the title-deeds to the husband. The husband expend- ed money upon the property : — Held, sufficient part performance to take the case out of the Statute of Frauds. Lord Justice Knight-Bruce said : " The son-in-law entered into possession and expended money on the property, and was 164 PART PERFORMANCE. never disturbed, but was allowed to treat it as his own. When the father-in-law dies, the adminis- trator says that all this is to go for nothing, and that the property stiil formed part of his estate. I am of opinion that the administrator cannot be heard to say that. I am of opinion that this is a clear case of a parol agreement for valuable con- sideration which has been in part performed, and it is the settled law of this country, and has been so for a great number of years, that in such cir- cumstances the Statute of Frauds is no defence." And Lord Justice Turner added : " The difficulty in these cases is, that the Statute of Frauds pre- sents an obstacle to suing upon the agreement. But it has been held in many cases, that if there be a written agreement after marriage in pursuance of a parol agreement before marriage, this takes the case out of the statute, so also does part per- formance. This view is supported hy Taylor v. Beech, where Lord Hardwicke took the distinction between the case where marriage alone follows and where other acts follow the parol agreement." The question has recently arisen whether the equitable doctrine of part performance is to be confined to contracts for the acquisition of an interest in land. It has been decided by the Britain ». Court of Appeal in Britain v. Rossiter that Rossiter, 11 '■ '■ Q. B. D. the equity of part performance does not extend, 1883*, ' ' and ought not to be extended, to contracts con- cerning any other subject-matter than land. In that case the contract had nothing to do with LIMITS OF APPLICATION. jgg land, but was merely a contract of hiring and service, which could not be performed within a year. Courts of Equity would not decree specific performance of such a contract, even if in writing. Lord Esher says the doctrine of part performance " was exercised only as to cases concerning land, and was never extended to contracts like that before us, because they could not be brought within the jurisdiction of Courts of Equity." ^ And Lord Justice Cotton says : " The doctrine as to part per- formance has always been confined to questions relating to land ; it has never been applied to con- tracts of service, and it ought not now be extended to cases in which the Court of Chancery never interfered." ^ The question came again under consideration in Maddison Maddison v. Alderson. There an intestate induced song's App. a woman to serve him as house-keeper without Hmiseof^' wages for many years and to give up other pros- \^ll^' pects of establishment in life by a verbal promise to make a will leaving her a life-estate in land, and afterwards signed a will, not duly attested, by which he left her the life-estate : — Held, that there was no contract, and that even if there had been, and although the woman had wholly performed her part by serving till the ' intestate's death without wages, yet her service was not unequivocally and in its own nature refer- able to any contract, and was not such a part ' 11 Q, B. D„ 129. 2 lb., 131. IQQ PART PEBFOBMANCE. performance as to take the case out of the opera- tion of the Statute of Frauds, sect. 4 ; and that she could not maintain an action against the heir for a declaration that she was entitled to a life-estate in the land. Earl Selborne, in his speech, pointed out that the limitation of the equitable doctrine in Britain v. Rossiter to cases concerning land is hardly reconcilable with the view expressed by Lord Cottenham in Hammersley v. Baron de Biel and Lassence v. Tierney. After an examination of all the authorities, the Lord Chancellor's conclusion is : " The acts of part performance, exemplified in the long series of decided cases in which parol contracts concerning land have been enforced, have been (almost, if not quite, universally) rela- tive to the possession, use, or tenure of land. The law of equitable mortgage by deposit of title-deeds depends upon the same principles."^ McManus The question was once more considered in the V. Cooke, 35 Ch. D., late case of McManus v. Cooke. There the plaintiff J., 1887. ' and defendant, the owners of adjoining houses, being about to rebuild, entered into a verbal agreement that the plaintiff should pull down a party-wall and rebuild it lower and thinner, and that each party should be at libert}'- to make a lean-to skylight with the lower end resting on the party-wall. The plaintiff rebuilt the party-wall and erected a lean-to skylight on his side of it as agreed ; the ' 8 App. Caa., 480. LIMITS OF APPLICATION. defendant also erected a skylight on his side, but, instead of a lean-to, so shaped it as to obstruct the access of light to the plaintiff's premises more than tlie agreed lean-to skylight would have done : — Held, that the effect of the agreement was to give each party an easement of light over the other's land ; and that the plaintiff, having per- formed the agreement on his part, was entitled to have it enforced on the part of the defendant. A mandatory injunction was accordingly granted, the plaintiff being put under a corresponding undertaking. A verbal agreement for an easement may be enforced where there has been part performance whether it is or is not within the 4th section of the Statute of Frauds. After an elab6rate examination of the au- thorities, Mr. Justice Kay found the following propositions established : (1) The doctrine of part performance of a parol agreement, which enables proof of it to be given notwithstanding the Statute of Frauds, though principally applied in the case of contracts for the sale or purchase of land, or for the acquisition of an interest in land, has not been confiued to those cases. (2) Probably it would be more accurate to say it applies to all cases in which a Court of Equity would entertain a suit for specific performance if the alleged contract had been in writing. (3) The most obvious case of part performance is where the defendant is in possession of land of the 167 168 PART PERFORMANCE. plaintiff under the parol agreement. (4) The reason for the rule is, that where the defendant has stood by and allowed the plaintiff to fulfil his part of the contract, it would be fraudulent to set up the statute. (5) But this reason applies where- ever the defendant has obtained and is in posses- sion of some substantial advantage under a parol agreement which, if in writing, would be such as the Court would direct to be specifically perform- ed. (6) The doctrine applies to a parol agreement for an easement, though no interest in land is in- tended to be acquired. We have already said that where there has been part performance of a parol contract, and the Court is satisfied that there has been an agreement, it will direct enquiry to ascertain the exact terms Mundy v. of that agreement. In Mundy v. Jolliffe Lord M.vi.&'cr., Cottenhara said; "Courts of Equity exercise their 167, Lord ••ti- -i • -n p c Cottenham jurisdiction, lu decreeing specific performance oi ' verbal agreements, where there has been part performance, for the purpose of preventing the great injustice which would arise from permitting a party to escape from the engagement he has entered into, upon the ground of the Statute of Frauds, after the other party to the contract has, upon the faith of such engagement, expended his money or otherwise acted in execution of the agreement. Under such circumstances, the Court will struggle to prevent such injustice from being effected ; and, with that object, it has, at the hear- i'jig, when the plaintiff has failed to establish the FRAUD. 1(59 precise terms of the agreement, endeavoured to collect, if it can, what the terms of it really were. It is not necessary, in this case, to adopt any such course of proceeding ; for I think the agreement for a lease sufficiently proved, and that acts of part performance are proved, so as to take the case out of the Statute of Frauds." There specific performance of a parol agreement to grant a lease was enforced against the intended landlord, on the ground of part performance, and on evidence con- sisting of a memorandum by the landlord, the parol testimony of a witness present, and the draft of a lease prepared by the landlord's steward, though the draft of the lease provided, that the tenant should do an act for the landlord's benefit, which was not mentioned in the landlord's memo- randum or the witness's testimony. It is hardly necessary to say that the same principle of estoppel would apply where the de- fendant, by actual fraud, had himself prevented compliance with the Statute of Frauds. In that case it is not part performance merely but fraud which is made the ground of specific performance bv the defendant. In Whitchurch v. Bevis, in reply Whit- . . , . ehnrch v. to counsel s proposition that where it is part of the Bevis,2Bro. . . , . Ch. Cases, agreement that it should be put into writing, it is 565, Lord held to take it out of the statute. Lord Thurlow c, 1789! observed : " If you interpose the medium of fraud, by which the agreement is prevented from being put into writing, I agree to it, " The case of Morse Morse v. . . Merest 6 V. Merest will illustrate the same principle in aMadd,,'26, 170 PART PERFORMANCE. Sir J. different way. There the plaintiff and defendant Leach, V. ^ r- i i i C.E., 1821. entered into a written agreement for sale by the defendant to the plaintiff of a considerable estate at 25 years' purchase, on an annual value to be set by A., B., and C, three persons named in the agree- ment, on or before a certain day. The valuation had not been made accordingly, but it appeai'ed in evidence that the defendant had prevented the valuation being made on or before the day named. The Vice-ChanceUor held, that in the case of a reference time was as essential in Equity as at Law ; but that in Equity, a defendant was not permitted to set up a legal defence which grew out of his own misconduct, and that this agreement was now to be acted upon as if no time were limited, or the time was not passed. The Court would therefore decree that the defendant should permit the valuation to be made according to the contract ; and if it were so made, then a supplemental bill must be filed for specific performance upon the terms of their valuation. It only remains to notice the mode in which the defence of the statute may be raised. It is a maxim of general jurisprudence that any one may at his pleasure waive the benefit of a stipulation or other right introduced entirely in his own favor ; or as it is usually expressed Quilibet potest renun- tiare juri pro se introducto. On this principle questions arose as to how far the Statute of Frauds could be taken advantage of, without being spe- cially pleaded. Could the statute be raised by way PLEADING THE STATUTE. I7I of demurrer, where the statement of claim sets out a simple agreement which the statute requires to be evidenced by a written contract ? The function of a demurrer was to insist summarily and simply that, on the assumption of the truth of the facts alleged by the bill, the plaintiff is not according to law entitled to the relief prayed. It was an appeal to the law of which the Judge was bound to take notice. On that principle it was held that the want of a contract within the statute might, when clearly appearing on the bill, have been taken advantage of by general demurrer, or by a de- murrer alleginor the want of such a contract. In Barkworth v. Young the bill was for a wife's Barkworth portion under an agreement made in consideration 4Drew.^'i, of the marriage. It was demurred to on the ground ^y" v^c., of the Statute of Frauds, the defendant insisting '*^^' that the bill did not state such an agreement in writing, or such an agreement of which there was a memorandum or note in writing, as would entitle the plaintiff to relief. The Vice-Chancellor held, that there was no objection to taking advantage of the statute by way of demurrer, and in so de- ciding, he only followed a recent decision on the same point by the Lords Justices in Wood v. Midgley. ^ The case has been different since the Judicature Acts. Order XIX. r. 23 of the Rules of Court, 1875, provided that " when a contract is alleged in any ' 5 D. M. & G., 41. 172 PART PERFORMANCE. pleading, a bare denial of the contract by tbe opposite party shall be construed only aa a denial of the making of the contract in fact, and not of its legality or its sufficiency in law, whether with reference to the Statute of Frauds or otherwise."^ In Cathing v. King^ before the Court of Appeal, their Lordships intimated an opinion, that under that rule a defence on the statute could no longer be raised by demurrer. That is to say, where the statement of claim alleges a contract without alleg- ing it to be in writing, a demurrer would not lie, but the statute must be specially pleaded. By Order XXV of the Rules of Court, 1S83, demurrers were abolished, and any party was declared en- titled to raise by his pleading any point of law for decision by the Judge. Dawkins v. In the case of Dawldns v. Lord Penrhyn before Lord Pen- , -rr j> • • riiyn,4App, the House of Lords, this question was raised in Cas. 51 House o'f connection with the Statutes of Limitations. There 1878. ' are two sets of Statutes of Limitation : first, those which merely affect the remedy and not the actual existence of the claim — the actual title ; and secondly, those which after a certain specified time destroy the title to land — extinguish the right. The fi.rst set, like the Statute of Frauds, may be waived by a defendant, and on that specific ground it was held in Dawkins v. Lord Penrhyn, that those statutes must be specially pleaded; but that Statutes of Limitation affecting the title to an estate and not ' Now replaced by Order XIX. r. 20, Rules of Court, 1883. ' 5 Ch. D., 660. PLEADING THE STATUTE. 173 the mere right to proceed for its recovery may be raised on demurrer. Lord Cairns said: "The Statute of Frauds must be pleaded, because it never can be predicated beforehand that a defendant who may shelter himself under the Statute of Frauds desires to do so. He may, if it be a question of an agreement, confess the agreement and then the Statute of Frauds will be inapplicable. Witli regard also to the Statute of Limitations as to personal actions, the cause of action may remain, even although six years have passed. It cannot be predicated that the defendant will appeal to the Sta- tute of Limitations for his protection; many people, or some people at all events, do not do so ; therefore you must wait to hear from the defendant whether he desires to avail himself of the defence of the Statute of Limitations or not. But with regard to real property, it is a question of title. The plaintiff has to state his title, the title upon which he means to rely, and the Statute of Limitations with regard to real property says that when the time has expired within which an entry or a claim must be made to real property, the title shall be extinguished and pass away from him who might have had it, to the person who otherwise has the title by possession, or in whatever other way he may have it. Therefore, if upon the face of the bill the plaintiff states that the period allowed by the statute has expired, he states in law that his title is extinguished, unless indeed he can bring himself within some of the exceptions under which 174 PERFORMANCE WITS A VARIATION. the statute allows his title to continue. It is, therefore, clearly a case in which a demurrer, where the facts appear upon the bill, is applicable as a mode of defence." CHAPTER IX. Performance with a Variation. As a general rule, when a plaintiff relies on a written contract, he must adhere to it. He cannot, on the ground of fraud, mistake, or misrepresent- ation, supply any defect in the agreement, or otherwise add to, subtract from, or vary its terms. To supply by evidence any defect in the written agreement, that which was intended to be part of that agreement, but not inserted in it, would be a direct evasion of the Statute of Frauds. " To add anything," says Lord Hard-wicke,^ " to an agreement in writing by admitting parol evidence which would affect lands, is not only contrary to the Statute of Frauds and Perjuries, but to the rule of the Common Law before that statute was in being." The Court is accordingly bound to confine the plaintiff" strictly to the terms of his written agreement. It is, however, important to bear in mind that the rule is different in regard to the defendant to a suit for specific performance. Suppose A. enters into a written contract for the purchase of certain land from B., and there is at the same time a ' In Pafceriolie r. Powlett, 2 Atk., 383. THE GENERAL RULE. l of Harris v. Pepperell, the marginal note is this . " The rule that the Court will not interfere to rectify an instrument unless it is proved that the mistake was common to both parties, does not apply to the case of a contract which has been executed between the parties in the relation of vendor and purchaser, whom it is in the power of the Court to replace in their original position. " In both these cases, so far as the decision went, there was nothing to break in upon the general rule. Both were cases in which the Court express- ly abstained from forcing the rectified instrupient on the defendant. In Garrard v. Frankel it was sought to hold the defendant liable to a rent of £230 instead of £130, specified in his lease, and Lord Romilly held that the plaintiff was not MUTUALITY OF THE MISTAKE. 209 entitled to have the lease reformed, but that the proper relief was to give the lessee the option of taking the reformed lease or of rejecting it, paying in the latter case a rental for pnst occupation. In Harris v. Pepperell, the plan on the deed of con- veyance comprised a piece of land not intended by the vendor to be included, and there also an option was given to the defendant purchaser to have his contract annulled in case he declined to assent to the proposed rectification of the deed. The decree in Harris v. Pepperell was, in fact, a consent decree, as will appear on a reference to the document it- self ^ What the Court did was to put the defend- ant upon terms, giving him tlie option of taking what the plaintiff meant to give him under the penalty of rescission if he refused the offer. In point of fact, then, those cases cannot be said to form any real exception to the general rule as to the mutuality of the mistake. That view of the effect of the above cases is in accordance with the opinion expressed in Kerr on Fraud and Mistake ^ The learned author says : In Harris v. Pepperell, Lord Romilly, M.R., said " that the rule that the Court will not rectify an instrument on the ground of mistake, except the mistake be mutual, is liable to an exception in a case between vendor and purchaser. But the dis- tinction is not supported by the authorities, and does not seem sound. Garrard v. Frankel and ' Seton on Decrees, liiJO. ' 2ud Edu., p. 41)9. K,, S. P. 14 210 EXTENT OF THE JURISDICTION. Harris v. Pepperell were, there is no reason to doubt, correctly determined ; but the principle upon which they are to be upheld is that the Court in these cases merely abstained from setting the agreement aside on the consent of the defend- ant to submit to the variation alleged by the plaintiff. In cases of rectitication, properly so called, the Court does not put it to the defendant to submit to the variation alleged by the plaintiff, but makes the instrument conformable to the intent of the parties without any such offer or sub- mission." Ma?sh,ai ^^ *^^® recent case of Paget v. Marshall, the 28 Ch. D., plaintiff wrote a letter offering to the defendant J^""""' V- to make a lease to him of a portion of a block of C*, 1884. three houses, consisting of the first, second, third, and fourth floors of all three houses at a rent of £ 500 a year. Defendant wrote in answer, accepting the offer ; and a lease was executed, wliereby all the upper floors of the block were demised by the plaintiff to the defendant at the rent of £500. Plaintiff alleged that the first floor of one of the houses was included in the offer, and in the lease, by mistake, and that he always intended to reserve such first floor for his own use. Defendant denied that he accepted the offer, or executed the lease under any mistake. The Court having found upon the evidence that a common mistake was not sufficiently proved, but that a mistake on the part of the plaintiff was, gave judgment for rescission with an option to the MISTAKE NOT MUTUAL. 211 defendant to accept rectification instead. The defendant electing to have rectification instead of cancellation of the lease, the lease was rectified by omitting from it all mention of the first floor of one house as claimed by plaintiflf. In his argument Mr. Hemming stated the law as follows : " It has been said that when a mistake has been proved on one side only, the Court will not grant relief. Tliat is an inadequate and in- correct statement. The law is this — that if two persons contract, and they really agree to one thing, and set down in writing another thing, and afterwards execute a deed on that wrong footing, the Court will substitute the correct for the in- coi-rect expression — in other words, will rectify the deed. Another class of cases is, where one of the parties only has made a mistake, and not the other. There the Court cannot rectify, because there is no contract in existence. The parties have never been at one, and there is nothing to rectify. The passage read from Kerr is consistent with this. All the Court can and will do, is to rescind the so-called agx'eement." The Vice-Chancellor said : " In all these cases on the law of mistake it is very difficult to apply a principle, because you have to rely upon state- ments of parties interested, and upon not very accurate recollections of what took place between them. But I take the law to be as stated this morning by Mr. Hemming. If it is a case of com- mon mistake — a common mistake as to one 212 extUnt op the jurisdiction. stipulation out of many provisions contained in a settlement or any other deed, that upon proper evidence may be rectified — the Court has power to rectify, and that power is veiy often exercis- ed. The other class of cases is one of what is ! called unilateral mistake, and there, if the Court is satisfied that the true intention of one of the ' piirties was to do one thing, and he by mistake i has signed an jigreement to do another, that agree* menfc will not be enforced against him, but the 1 parties will be restored to their original position, and the agreement will be treated as if it had never \ been entered into. That I take to be the clear conclusion to be drawn from the authorities." It may, therefore, be laid down as the result of the latest decisions, that, where there is mutual mistake in a deed or contract, the remedy is to I'cctify by substituting the terms really agreed to. Where the mistake is unilateral the remedy is not rectification but rescission, but the Court may give to a defendant the option of taking what the plaintiff meant to give in lieu of rescission. But where the facts are doubtful, and there beincr no misrepresentation on either side, the parties enter into an agreement determined to take their chance as to the facts, it will follow that the object of Equity in giving effect to a defeated intention will no longer exist. That is the ground on which family arrangements and compromises have been carried out, notwithstanding mistakes as to the facts ex- isting on both sides. The limitations with which FAMIL Y ARRANGEMENTS. 213 tins principle is to be applied were laid down by Lord Justice Turner in the case of Greenwood v- Greenwood Oreenwood. " In order to support a transaction Greenwood, not otherwise valid, upon the footing of family s., 28, arrangement, the parties must be on an equal justicea^ footing, and there must be a full and fair commu- "'^^' nication of all the circumstances affecting the questoin which forms the subject of the arrange- ment. It may be said perhaps that it was com- petent to the other parties to have asked for the particulars which were not communicated and that they did not do so ; but certainly I am not disposed to hold that an arrangement not other- wise valid can be supported by this Court as a family aiTangement, upon the ground that enquiry might have been made and was not made. This Court does not, according to my view of the law, deal with cases of family arrangement upon any such footing. It expects and requires, as I think, in such cases a full and complete disclosure of all material circumstances within the knowledge of any of the parties, whether enquiry be or be not made as to such circumstances. It expects and requires in such cases the most perfect bona fides, and it is not, in my opinion, consistent with bona fides that partial and imperfect statements should be made on the one side, the party making them taking the chance whether full and perfect expla- nation will be required on the other side." In that case the agreement was upset on the ground that the parties were not upon an equal 214 EXTENT OF THE JURISDICTION. footing, and that there was not in fact a full an d fair communication of all the circumstances which were material to be communicated. The validity of a compromise or family arrange- ment of disputed rights depends on the facts ex- isting at the time, and will not be affected by subsequent judicial determinations, shewing the rights of parties to be different from what was sup- posed, or that one party had nothing to give up. Lawton v. In Lawton v. Campion, the children of John, isBeav.' a deceased remainderman, insisted as against their M7 Sir J Romiiiy,' uuclc Ckarles ( a prior tenant for life in posses- 1853. ' sion) that they were entitled under the terms of a settlement, to have their portions raised from the death of their father in 1831. Some discus- sion took place and a bill was filed by them. An arrangement was come to by deed, which, proceed- ing on the foundation of the validity of the claim, compromised the amount of arrears of interest, and settled the amount of the future interest which Charles thereby engaged to pay. It having been afterwards determined, in another suit, that on the true construction of the settlement the claim of the children was unfounded, Charles instituted a suit to set aside the deed : Held, that if the right to have the portions raised in 1831 had formed one of the matters compromised, the transaction could not be disturbed, although the claim of the children had turned out to be wholly unfounded. But the Court having arrived at the conclusion that the parties had all proceeded on FAMILY ARRANOEMENTS. 215 the foundation of the children's claim being un- questionable, and that all that had been compro- mised was the amount of arrears payable on that foundation, set aside the deed. So that even a total failure of consideration would not be suffi- cient to affect the validity of an arrangement or compromise fairly entered into. A family settlement will not, however, be sup- ported if founded on a mistake of eitlier party to which the other party is accessory, although such mistake may have been innocently made. In Fane v. Fane, a son tenant in tail in remainder Fane v. shortly after attaining twenty one, joined with u.^ 20 Eq., his father, the tenant for life, in re-settling the y. c. " ' family estates. It was supposed that the property ^^^^' was subject to a sum of £5,000, but only in the event of the father choosing to say it should be so subject ; that he had therefore the means and power of bringing into settlement as part of the transaction of re-settlement the sum of £5,000 by releasing his power to charge it. As a matter of fact, the portions' charge of £5,000 was a subsist- ing charge on the property and the father's repre- sentation was the principal consideration for the execution of the re-settlement. Held, that although this misrepresentation was innocently made, the re-settlement must be set aside as founded on mistake. (5.) The next point is that the mistake must be clearly proved. Thei'e must be clear proof not only that tliere was a mistake, but what that mis- 21 G EXTENT OF THE JURISDICTION. take was. Cases often fail for want of evidence of what the real intention was. The question was very much discussed in Bentley v. MacJcay ^ already cited. The rule is nowhere better stated ■ Fowler v. than in Fowler v. Fowler. There Lord Chelmsford Fowler, 4 , , ^ D. & J., says : " The power which the Court possesses of 250; Lord „ . . Cheims- reforming written agreements where there has 1859. ' been an omission or insertion of stipulations con- trary to the intention of the parties and under a mutual mistake, is one which has been frequently and most usefully exercised. But it is also one which should be used with extreme care and caution. To substitute a new agreement for one which the parties have deliberately subscribed ought only to be permitted upon evidence of a different inten- tion of the clearest and most satisfactory descrip- tion. Lord Thurlow's language is very strong on this subject; he says, ' the evidence which goes to prove that the words taken down in writing were contrary to the concurrent intention of all parties, must be strong, irrefragable evidence ' ; Lady Shelburne v. Lord Inchiquin.^ And this expression of Lord Thurlow is mentioned by Lord Eldon in the Marquis of Townshend v. Stan- groom ^ without disapprobation. If, however, Lord Thurlow used the word ' irrefragable ' in its ordinary meaning, to describe evidence which can- not be refuted or overthrown, his language would require some qualification ; but it is probable that ' Ante, p. 207. ' 1 Br., Ch. Ca., .311. » Ante, p. 177. MISTAKE TO BE CLEARLY PROVED. 217 he only meaut that the mistake must be proved by something more than the highest degree of probability, and that it must be such as to leave no fair and reasonable doubt upon the mind that the deed does not embody the final intention of the parties. It is clear that a person who seeks to rectify a deed upon the ground of mistake must be required to establish, in the clearest and most satisfactory manner, that the alleged intention to which he desires it to be made conformable con- tinued concurrently in the minds of all the parties down to the time of its execution, and also must be able to shew exactly and precisely the form to which the deed ought to be brought. For there is a material difference between setting aside an instrument and rectifying it on the ground of mistake. la the latter case you can only act upon the mutual and concurrent intention of all parties for whom the Court is virtually making a new written agreement." In considering the mode in which the mistake must be proved, we meet with a very important difference between the rules of Common Law and Equity. At Common Law the general rule is that parol evidence cannot be received to contradict, vary, add to, or subtract from the terms of a written instrument. Parol evidence is admissible for the purpose of explaining ambiguities in a written in- strument. If the language of the instrument be applicable alike to each of several persons or objects, or if its terras be vague and general or have 218 EXTENT OF THE JURISDICTION. divers meanings, parol evidence will be admissible of any extrinsic circumstances tending to shew what persons or things were intended by the party, or to ascertain his meaning in any other respect. For this purpose the evidence is admis- sible both at Law and in Equity. As it is said, j'ou may put yourself in the chair of the testator, grantor, or settlor, and explain all the relations in which he stood. But parol evidence is not admis- sible to affect the actual intention of the party, which must be declared solely by the document itself; and the above rule does not apply where no ambiguity exists as to the meaning. Parol may, however, be received to prove that the instrument is altogether void, or that it never had any legal existence or binding force ; e. g., in de- fence to a deed evidence that it was no deed on the ground of fraud, duress, illegality of consi- deration, want of due execution, or want of capa- city as in the case or an infant or lunatic. The want or failure of consideration may also be proved by parol evidence, shewing that the written agreement is not binding ; except it be under seal, which, in the absence of fraud, is con- clusive evidence of a sufficient consideration. In all these cases the parol evidence is not admitted to contradict, vary, add to, or subtract from the terras of the instrument, but simply to prove that it had no legal existence or binding force. These cases, therefore, form no exception to the above general rule obtaining at Law. PAROL EVIDENCE ADMISSIBLE. 219 But in Equity if a deed is to be rectified, it is on the ground of its differing from the original inten- tion of the parties. Here it is altered and made to conform to what that original intention is proved to have l>een. Hence it has long been held that parol evidence outside the written contract is in Equity admissible, not only as at Common Law, to explain latent ambiguities, but also to prove a mistake as to the intention of the party. In Murray v. Parker, Lord Eomilly said : " In Murray «. matters of mistake, the Court undoubtedly has i5eav!%05 jurisdiction, and although this jurisdiction is to be R'o,„iiiy exercised with great caution and care, still it is to Jg'54^'' be exercised in all cases, where a deed, as executed ; is not according to the real agreement between the parties. In all cases, the real agreement must be established by evidence whether parol or written ; if there be no previous agreement in writing, parol evidence is admissible to shew what the agreement really was ; if there be a previous agreement in writing which is unambiguous, the deed will be reformed accordingly ; if ambiguous, parol evidence may be used to explain it in the same manner as in other cases where parol evidence is admitted to explain ambiguities in a written instrument." In Mortimer v. Shortall, Lord St. Leonards said : Mortimer " As to the rule of law I adhere to what I have 20. & w.] already laid down in Alexa^ider v. Crosbie. There e.Suh'iot is no objection to correct a deed b}" parol evidence, irei,ind when you have got anj'thing in writing beyond the '*'*^- 220 EXTENT OF THE JURISDICTION. parol evidence to go by. But ■where there is nothing but the i-ecollection of witnesses, and the defendant by his answer denies the case set up by the plaintiff, the plaintiff appears to be without a remedy. Here I am not acting upon parol evidence alone ; the documents in the cause, and the sub- sequent transactions corroborate the parol evidence, and leave no doubt in my mind as to a mistake having been made." A good illustration of both sides of the question The Earl of IS afforded by the case of Earl of Bradford v. Earl w. TheEario/ iiomwe!/, where parol evidence was tendered 30 Beav.^^' partly to construe and partly to reform a written ifomifiy ^' instrument. Lord Romilly held that on a question Jig I'' of construction of a written instrument, no evidence of the intention of the parties is admissible, though extrinsic evidence may be adduced to shew the position of the parties, the state of the funds and the rights and interests of the parties in them. But in a suit to reform a written instrument evidence of intention is admissible. He said : " I now come to consider this case as one in which it is sought to reform the settlement by introducing those recitals and provisions which as a question of construction would be inadmissible. On this subject parol evidence of intention is clearly ad- missible. It is open at all times to shew that the settlement, as drawn, was not in accordance with the real intention of the parties to the contract, and to have the same rectified so as to make the deed in all respects correspond with the intentions. PAROL EVIDENCE ADMISSIBLE. 221 This is a question of evidence and tliafc alone." Thus in this suit raising both questions, the Court, though it received the evidence on the one point, rejected the same evidence when considering the other. " Every endeavour to eke out the question of construction by evidence of intention would be a most serious violation of the rules whicli the Courts are bound to follow in these cases." It was further held that the Court will only rectify a deed when the mistake is shewn to be an error common to both parties, and it is essential that the extent of the rectification should be clearly ascertained and defined by evidence co-temporane- ous with, or anterior to, the deed. The above distinction received new illustration under the present practice in the recent case of Pearson v. Pearson. The plaintiff in that case Pearson ». was the purchaser of the good will of a business ch. D.,i4fti carried on by a deceased testator, from a beneficia- ' ' ry under the will. The agreement provided that nothing should prevent the vendor from carrying on the like business where he should think tit and under his own name. The purchaser brought this action for specific performance of the agreement and for an injunction to restrain the vendor from soliciting the customers of the old firm. There was nothing in the agreement which in terms prohibited his soliciting the old customers. The defendant, by his statement of defence, relied on letters which passed during the negotiations which preceded the agreement, as shewing that it was agreed that he 222 EXTENT OF THE JURISDICTION. should be at liberty to solicit the old customers ; and by counterclaim tlie defendant asked that if the Court was of opinion that, under the terms of the agreement as it stood, the defendant was not at liberty to solicit the customers of the testator's business, then the agreement might be rectified. For the plaintiff it was objected that the corres- pondence could not be read to construe the- agree- ment. It was held that, although the letters could not be admitted to explain the agreement, yet there being a counterclaim to rectify, the Court must hear everything that bore on the question whether the agreement as drawn up expressed the real contract. The letters were accordingly ad- mitted in evidence. Another ground for their ad- mission was, that it was consistent with the final agreement that there should have been a collateral agreement giving the defendant a right to solicit the old customers, and such an agreement would be a good defence to the claim for injunction. (6.) The last condition necessary is that the recti- fication applied for does not prejudice the rights of third parties. If, therefore, the document has been so dealt with as to bring in the rights of purchasers for valuable consideration, the interests of such persons must be preserved intact as it would be obviously unjust that they should be in any way affected by the mistake. In the case of Fane v. Fane ^ above cited, a portion of the property com- ' Ante, p. 215. RIGHTS OF TBIRD PARTIES. prised in the re-settlemenfc had been sold, and we accordingl}'- find that the decree runs thus : " Declare that the said indenture of settlement of &c., was made and executed by the plaintiff under a mistake, and that it ought to be set aside, subject nevertheless and without prejudice to the sale in the pleadings mentioned of portions of the estate comprised therein made in execution, or intended execution, of the powers therein in that behalf contained ; and let a copy of this decree be endors- ed upon the said indenture of settlement. And let &c., &c."^ This is only one of the many cases that might be cited in illustration of the proposi- tion that you cannot set aside or rectify what has been done without preserving intact the rights of third persons. Those are the principles on which Courts of Equity interfere to set aside or rectif}- instruments on the ground of mistake. As to the modes of granting relief, there are two. When the mistake is such as to affect the whole instrument the relief is the same as in the case of fraud, namely, rescission of the document with an order to be delivered up ; and, if any conveyance has taken place under it, with an order for reconveyance and delivery of the title-deeds. The more common cases, however, are those in which the mistake is such as to affect only part of the instrument. Then the relief is not rescission ' Seton on Decrees, p. 1229. 22.3 224 EXTENT OF THE JURISDICTION. but rectification of the peccant part of tbe deed. White V. The case of White v. While may be selected by E., 15 Eq., way of illustration on account of the form of the V. c., 1872! decree. Tliat was a case in which a deed was executed purporting (by mistake) to convey a moiety only of the real estate, the intention of the parties having been to pass the whole. Upon a bill for rectification, it was held that a conveyance of the other moiety by another deed was not necessary, and an order for rectification was made in the following minutes of the decree : — " Declare that the indenture dated the 22ud May 1865, in the bill of complaint mentioned, was, in the particulars hereinafter specified, executed under mistake, and that the same indenture was intended to pass thereby the entirety of the pro- perty called the Swanscombe Cement Works ; and " Declare that the same indenture ought to be rectified by omitting from the item 3 of the third schedule thereto, the words referring to a moiety of the said property called the Swanscombe Cement Works, and by inserting proper words in the said schedule, so as clearly and effectually to pass the entirety of the said property called the Swanscombe Cement Works ; and, therefore, " Order that the said item No. 3 of the said schedule to the said indenture be rectified by omitting therefrom the following words, that is to say, " one undivided moiety or half part share, or one equal moiety or half part or share of and in " and by inserting in the said item No. 3 of the THE MODES OF RELIEF. 225 said schedule, in lieu of the said words, the words " the entirety of " (and by making similar omissions and insertions throughout the description) ; and " Let a copy of this order be endorsed upon the said indenture." Here no conveyance was directed, the Vice- Chancellor being of opinion that the order for rectification would pass the estate without con- veyance. Of course it will depend on the circum- stances of each case whether or not a conveyance is necessary. Even in White v. White, it may be doubted whether a conveyance was not necessary. The decree settles the equitable rights of the parties, but it does not necessarily follow that it will also pass the legal estate. This would appear to have been the view most generally adopted in former cases on the subject. In Exeter v. Exeter, Marquis of Exeter v. the Court being satisfied upon the evidence, that Marchio- a general description of the property had been Exeter, 3 inserted inadvertently in a settlement, and not for Ci-., 32i ; the purpose of passing an estate, which the Cottenham, general description would in terms comprise, made '' ^* ' a declaration that the general description had been inserted by mistake, so far as regarded the estate in question ; that it formed no part of the proposal or of the contract, and was not intended to be in- , eluded in the settlement. And in addition to this declaration, the decree directed a reconveyance of the estate. If Exeter v. Exeter is to be followed reconveyance would be the general rule, only to be departed from under exceptional circumstances. K,, s. P. 15 226 MISTAKE AND SPECIFIC PERFORMANCE. The only other point to be noticed is the mode of preserving evidence of the order. In White v. White, it will be observed, a copy of the order was endorsed on the deed. That is the usual mode Stock V. In Stock V. Vining, the Master of the Rolls order- Beav.:'235 ed that the settlement should be reformed by Komiuy, striking out the words erroneously introduced, and ■'■'''*'■ intimated that he would add his initials. Tliis was done in White v. White, at the request of the parties, but the Vice-Chancellor did not consider it necessary' as, in his o))inion, the order would be sufficient without more. CHAPTER XII. Mistake and Specific Performance. We may now compare cases of specific perform- ance with those for rectification, and the principles upon which the Court acts in each. Jf A. convey an estate to B., both' parties acting under the influence of a mutual mistake, B. has got the estate, and if the conveyance is not rectified, he retains it. Suppose A., instead of conveying merely contract to convey the estate to B., and (a), suppose that the mistake was on the part of B. only ; and that in defence to an action by A. for specific performance of the contract, B. pleads the mistake. Now specific performance cannot be demanded as a matter of right ; it is a matter of equitable discretion, and a Court of Equity will not compel a party to perform an agreement into MISTAKE AS A GROUND OF DEFENCE. ^27 whicli he never intended to enter. In the case supposed, therefore, Equity would give effect to the defence by refusing to decree specific performance.^ In A Ivanley v. Kinnaird, Lord Cottenham Aivaniey said : " If property not intended to be sold be, by naird^i M. the ignorance or neglect of the vendor's agent f^^^' ^ ' included in a contract for sale with other property q°' j^g"^'^*™' intended to be sold, a case may arise in which the Court may refuse to compel a specific performance of the whole contract ; and if in such a case the purchaser declined to take so much as was intend- ed to be sold, the course which the Court might adopt would probably be to abstain from interfer- ing, leaving the purchaser to his remedy at law ; but it certainly would not rescind the contract." In Watson v. Marston, a mortgagee with power watson v. of sale, obtained a foreclosure decree, and then d. m. & entered into an agreement to sell the estate, with .|^|','g Lo^^g a clause providing that, as the vendor was mort- ig^g^'^^' gagee with power of sale, she would only enter into the usual covenant that she had not incumber- ed. The purchaser objected to the validity of the foreclosure decree, and insisted upon having the conveyance under the power of sale ; and on the vendor declining to convey in that form, instituted a suit for specific performauce. In defence to that suit, the vendor adduced evidence, shewing that the above-mentioned clause was inserted by in- advertence, and that she never intended to incur ' See Ante, pp. 45 — 17. 228 MISTAKE AND SPECIFIC PERFORMANCE. the risk of opening the foreclosure by conveying under the power : Held, that the misapprehension was a sufficient defence to the enforcement of a conveyance under the power. Lord Justice Turner observed : " Now, relief by way of specific per- formance, is always within the discretion of the Court. This discretion is, of course, to be exercised carefully. Specific performance is not to be with- held merely upon a vague idea as to the true efiect of the contract not having been known. But, upon the evidence in this case, I think that' although there may have been an intention to complete under the mortgage title, there was no impression on Mr. Fisher's part that the eflfect would be to convert the defendant into a trustee of the surplus for the mortgagors. He may have intended that the purchase should be completed under the power ; but it clearly was not his inten- tion to deprive the defendant of the benefit of the foreclosure." (b) In the next place, suppose that the mistake was on A.'s part, and that a suit is brought by A. for specific performance with a prayer for rectifi- cation of the contract. It was already explained^ that to supply by parol evidence any defect or omission in the written agreement would be a direct evasion of the Statute of Frauds. The entire contract must be collected from the writing, for the policy of the statute is to prevent fraud ' jinte, p. 174. MISTAKE AS A GROUND OF CLAIM. 229 and perjury, by taking all the enumerated trans- actions out of the reach of any verbal testimony. The Court, therefore, could not carry into effect a -writtea contract affecting lands with a parol variation. And for another reason, that the mis- take was only unilateral, there is no ground for relief on account of mistake. In the case supposed, then, the Court would dismiss the plaintiffs suit. (c) Suppose, however, that the mistake was mutual between A. and B., hei'e parol evidence is admissible for the purpose of rectifying the written contract, and shewing that it ought to be different from what it actual!}' is. And if the evidence shews that the contract ought to be so rectified, why should not the Court go on to give consequen- tial relief in the nature of specific performance on the footing of the contract as rectified, in every case in which the Statute of Frauds did not create a bar ? The doctx'ine that the plaintiff can never adduce parol evidence of a variation in suits for specific performance has been combated by some of the most eminent American jurists. " It is in effect," says Mr. Justice Stoi'y, " a declaration that parol evidence shall be admissible to correct a writing as against the plaintiff, but not in favour of a plaintiff seeking a specific performance. There is, therefore, no mutuality or equality in the operation of the doctrine. The ground is very clear, that a Court of Equity ought not to enforce a contract where there is a mistake, against the defendant 230 MISTAKE AND SPECIFIC PEBFOBMANCE. insisting upon and establishing the mistake ; for it; would be inequitable and unconscientious. And. if the mistake is vital to the contract, there is a like clear ground why Equity should interfere at. the instance of the party as plaintiff, and cancel it ; and if the mistake is partial only, why, at his instance, it should reform it. In these cases the remedial justice is equal ; and the parol evidence to establish it is equally open to both parties to use as proof Why should not the party aggrieved- by a mistake in an agreement have relief in all cases, where he is plaintiff, as well as where he is defendant ? Why should not parol evidence be equally admissible to establish a mistake as the foundation of relief in each case ? The rules of evidence ought certainly to work equally for the benefit of each party." ^ In delivering judgment in the case of Keissel- bracJc v. Livingstone, Mr. Chancellor Kent said : " Why should not the party aggrieved by a mistake in the agreement have relief as well when he is plaintiff as when he is defendant ? It cannot make any difference in the reasonableness and justice of the remedy, whether the mistake were to the pre-, judico of the one party or the other. If the Court be a competent jurisdiction to correct such, mistakes (and that is a point understood and settled), the agreement, when corrected and made to speak the real sense of the parties, ought to be ' Story, Eq. Jur. § 161, n. RECTIFICATION AND BELIEF IN SAME SUIT. 231 enforced, as well as any other agreement perfect. in the first instance. It ought to have the same efficacy and be entitled to the same protection, when made accurate under the decree of the Court as when made accurate by the act of the parties ^." Those authorities are quoted by Lord Justice Fry in his work on Specific Performance. He then cites the provisions of section 24, sub-section 7, of the Judicature Act 1873 ^ and adds : "It is submitted that under this provision the High Court could have no difficulty in entertaining an action for the reformation of a contract, and for the specific performance of such reformed contract in every case in which the Statute of Frauds did not create a bar." * The principle there pointed out was acted upon in the late ease of Olley v. Fisher. The plaintiff oiiey». ^ . "^ Fisher, 34 in that case had entered into a written agreement cii. d , 367; North, with defendant to build sis houses on land belong- j. i886. ing to defendant, and defendant on his part agreed to erect a certain bridge as shewn in a plan annex- ed to the agreement, and also to grant plaintifi" leases of the ground and houses at a specified rent. Plaintiff built four houses in accordance with the agreement, and alleged that four was the number actually agreed upon between him and the defend- ant ; that he had executed the agreement in the mistaken belief that it provided for the erection ' i John. Ch. Rep. 118. ' See ante, p. i. ' § 799, p. 353. 232 MARRIA&E SETTLEMENTS. of four and not of six houses ; and that defendant was attempting wrongfully and fraudulently to take advantage of the mistake. Plaintiff accord- ingly brought his action for rectification and for damages for breach of the agreement as rectified. Mr. Justice North allowed previous correspond- ence between the parties and parol evidence to be admitted for the purpose of shewing that the word " six " in the agreement ought to have been written "four." Before the examination of the plaintifi" was concluded, a compromise of the action was agreed upon, but his Lordship held that, the Statute of Frauds not having been pleaded, and, moreover, as there had been part performance by the building of the houses, there would have been no bar to relief in the nature of specific perform- ance if the evidence had made out the claim for rectification. It may therefore be laid down as a rule that the Court now has jurisdiction (in any case in which the Statute of Frauds is not a bar), in one and the same action, to rectify a written agreement, upon parol evidence of mistake, and to order the agreement as rectified to be specifically performed; CHAPTER XIII. Marriage Settlements. Having dealt with the broad principles of mis- take as grounds for altering or rectifying a written instrument, we next propose to consider two GENERAL RULES. 233 or three classes of cases in which the equitable jurisdiction is exercised. The most important is the class of marriage settlements. This is a very old head of Equity as will appear from the case of Legg v. Goldwire decided in 1736. With res- Legg v. . Goliiwire, pect to a settlement agreed to be made by articles, i w.&t.; the cases may be classified as follows : — Lord ' 1. Where the articles are made before and the Taibot, settlement after the marriage, the articles will '^ " govern the settlement, and the latter will be recti- fied in accordance with the articles. 2. Where both the articles and settlement are made before marriage, the general rule is that the settlement prima facie governs the articles ; be- cause, as observed by Lord Talbot in Legg v. Gold- wire "when all the parties are at liberty, the settlement difiering from the articles will be taken as a new agreement between them and shall con- trol the articles." 3. So far the case is clear, but the same reason- ing would evidently not apply where both the articles and settlement are made before marriage, and the settlement specially referring to the arti- cles is expressly mentioned to be made in pursuance and performance of the said articles. In that case the articles will govern the settlement, and it will be rectified in accordance with them. 4. The other case is where both the articles and settlement are made before marriage, but in the settlement no reference is made to the articles. There is a strong leaning to the presumption 234 MARRIAGE SETTLEMENTS. that the settlement constituted a new agreement between the pai-ties. It being however a mere question of intention, evidence is admissible to shew that the articles constituted the final aorree- ment between the parties, and that the discre- pancy between the articles and settlement arose from mistake; and upon this being proved, the Court would rectify the settlement, and make it conformable to the real intention of the parties. At the same time it is to be borne in mind that this evidence must be very clear and very precise. On the latter point may be cited the case of Loxiey v. LoxUy V. Heath. There a father prior to the mar- d^f''&^ riage of his daughter, in a correspondence with her J., 489; intended husband, stated that all his property Campbell, would be equally divided amongst his children C.,and . . Lords at his decease ; but in a settlement executed prior Justices, 1 ■ ,, . „ I860. to the marriage there was no expression ot any such intention : — Held, that all that was intended to be binding on the father was embodied in the settlement. Lord Campbell said: " This I repeat is, upon the face of it, a perfect marriage contract, and, prima facie, may be expected to contain all that was intended to be binding upon the parties ; and upon the faith of this settlement the marriage took place after the deed had been executed. " Still, if there were clear and convincing evi- dence that either by fraud or mistake, or without fraud or mistake, that by a clear agreement that this was only the execution of part of the mar- riage contract, and that there was intended to be ANTE-NUPTIAL SETTLEMENT. 235 a subsequent settlement, I do not say this might not have been executed ; but on the face of the instrument there is nothing to shew it to have been a partial execution of the contract or that anything more was to be done. It was final for anything that appears within the four corners of the instrument. What evidence is there of mis- take ? None. What evidence to shew this was only a partial performance ? None. It would be most dangerous if, after such a deed had been executed and after the deaths of some of the parties, and without any clear evidence of fraud or mistake, or of some agreement that this was to be only part of the marriage contract, we were to decide that this was only a partial contract, and that some correspondence which took place between the parties could have been intended to be relied on as settling the final conti-act. I can find no certain evidence for this ; I think it dan- gerous to give credence to any such evidence. Mr. Loxley may have had his just expectations disap- pointed, but if so, he has himself only to blame for the manner in which the transaction has been conducted." A leading case on the subject is Bold v. Eut- noid ». chinson. Upon a treaty of marriage, the father gon't'o' of the intended wife said to the plaintiff the in- ^g^LoJ^ tended husband,"" I pledge you my word that after p^j'.J^'i"''' the death of my wife and myself, my daughter will have £10,000 at the very least." Heads of articles which were subsequently drawn up under 23G MARRIAGE SETTLEMENTS. the sanction of and approved by the father, and intended as instructions for a settlement, con- tained the following passage : — ■" A covenant is to be drawn up by which Sir W. H. (the father) guarantees that his daughter shall at the decease of both parents have a property of not less than £10,000." In the settlement vrhich was after- wards executed before the marriage there was a recital to that effect, but there was no express covenant by the father to make good that sum. On a bill filed by the husband, who had survived his wife, against the executor of the father — Held, that although the settlement if it stood alone, could not have been rectified, yet that having re- gard to the articles and representation made by the father, there was sufficient evidence of mis- take to authorize the Court to make the settle- ment conformable to the articles, and that the estate of the father was bound to make up the portion of his daughter to the stipulated sum. At p. 566 Lord Cranworth suggests a doubt as to how far it was the practice of the Court to re- form settlements which had, as in the present case, been executed before marriage. " Unless my re- collection fails," he says, "the doctrine of this Court, as to be collected from the older cases, was, that when the articles and settlement were both before the marriage, this Court would not interfere, unless the settlement was expressed to be made in pursuance of the articles, for without such a recital, the Court supposed that the parties POST-NUPTIAL SETTLEMENT. 237 had altered their intention, as regarded the nature and terms of the contract. I rather think that is not the doctrine now ; but there is nothing on the face of this settlement which professes to be in pursuance of previous articles; and the questions which I shall reserve for consideration are, first, whether the later authorities do not dispense with the necessity of a reference to previous articles in the settlement ; and, secondly, whether upon the evidence, I am satisfied that such a connection has been established, as to make it a right exercise of discretion to rectify this settlement." In de- livering judgment his Lordship said : "The doc- trine now is, that when a settlement purports to be in pursuance of articles entered into before marriage and there is any variance, there no evidence is necessary in order to have the set- tlement corrected ; and although the settlement contains no reference to the articles, yet if it can be shewn that the settlement was intended to be in conformity with the articles, yet if there is clear and satisfactory evidence shewing that the discrepancy had arisen from a mistake, the Court will reform the settlement and make it conformable to the real intention of the parties." In Cogan v. Bujffield the husband brought no Co^an ». property into settlement. The lady was possessed l"e^ 26 of £12,000 consols, and for the settlement of this f„'''^jpe^ji^ fund articles were hastily prepared and signed ^^^- ^i before the marriage. After the marriage a settle- ment was executed in pursuance of the articles. — 238 MABBIAGE SETTLEMENTS. In the event one cliild was born of the marriage but died an infant in the life time of both parents. After that the husband died and his represen- tative claimed the fund subject to the widow's life interest. It was found that in the events which had happened, the husband's title to the fund would under the settlement have vested as next of kin of the deceased infant child. — U[)on a bill by the widow for rectification of the settlement and for a declaration that she was entitled to the fund, it was held that the settlement was not in accordance with the articles and that the Court would have carried these into effect by a settle- ment so framed that the husband would have had no title as next of kin of the deceased infant child. The settlement was ordered to be rectified accordingly, and the plaintiff declared entitled to tlie fund. In construing articles the Court in all cases looks very much to the intention and objects of the proposed settlement. The immediate object being to provide a life interest for the wife, pro- bably a life-interest for the husband, and proper provision for the issue of the marriage, the con- struction of the articles presents comparatively little difficulty, but the same is not the case in determining the ultimate trusts of the property. The question of ultimate trusts was very much jn re discussed in the case of Best's Settlement Trusts, iettiement 'wliere " persouiil representatives" was held to K'^"is'Eq. i^ean " executors." By a marriage settlement the PROOF REQUIRED FOR RECTIFICATION. 289 Avife's real and personal estate was assigned to liSB; Haii, V c trustees on trust to pay the annual income to the 1374.' husband for life, remainder to the wife for life, re- mainder as she should by deed or will appoint ; and in default, for her personal representatives. The wife pre-deceased her husband intestate and with- out issue. After the husband's death, his executors took out administration of the wife's estate, and it was held tliat they were entitled to the fund. In the cases so far considered the settlement was rectified on the evidence of articles in favor of a different intention at the time when the deed was executed. But in recent years there have been some cases in which settlements were altered many years after the marriage on the mere parol evidence of the party interested in procuring the alteration. In Smith v. Ilife before Bacon, V.C., there was a Smith v. , IHfle.L. R., marriage of an infant ward oi Court, and a settle- 20Eq.,666; inent of the wife's personalty was executed in c., i875. " pursuance of articles made under the order of the Court. The property was limited, on the death of the husband and in default of children, to the wife as she should by will appoint, and in default to her next of kin. After some years, there having been no children and the husband being dead, the lady came and said this was not what she intended, and upon her uncontradicted evidence, it was held that she was entitled to have the settlement rectified by limiting the property, in the events which had happened, to herself, her executors and administrators absolutelv. 240 MARRIAGE SETTLEMENTS. Haniey v. In the later case of Hanley v. Pearson, the Vice- Ch.D., 545; Chancellor followed his own decision in Smith v. cf°i8'79.' lUffe. In that case the property brought into settlement was real estate belonging to the wife. The settlement gave her an equitable estate for life, and in case of the death of the husband in her lifetime (which event happened) a legal estate in remainder. After the death of the husband, the wife brought an action to have the settlement rectified on the ground that by a technical mistake • in the form of the settlement, her equitable life estate and the legal estate in remainder did not coalesce within the rule in Shelley's Case, so as to give her, as was intended in the events that had happened, an absolute estate in fee. The plaintiffs case was supported by an affidavit by herself alone. The Vice-Chancellor held that her uncontradicted affidavit was sufficient, and ordered the settlement to be rectified so as to vest the legal estate in fee simple to the plaintiff. Smith V. Iliffe was lately disapproved by the Court of Appeal in Tucker v. Bennett} It was there observed that the lady's intention could not alter the settlement. It was not her settlement but a settlement insisted on by the Court for her, and depriving the husband of the rights which he •would otherwise get by the man-iage. It was further pointed out that Wolterbeek v. Barrow^ which the Vice-Chancellor had referred to as an ' SeeyoH, 242. ' 23 Beav., 423. FROOF REQUIRED FOR RECTIFICATION. 241 authority for the jurisdiction of the Court, was a case where, oa the instructions for the settlement being produced, it was found that they were contrary to what was contained in the deed exe- cuted. Altogether, it was evident that the matter could not have been presented to the Vice-Chan- cellor in such a way that he could consider whether under the circumstances it would be right to vary the settlement. After his examination of that case Lord Justice Cotton continued : " In my opinion we cannot consider that the case of Smith v. Iliffe in any way supports the contention of the respondent here. And if it intended to lay down as regards settlements any different principle from that which has hitherto prevailed, all I can say is that, with great respect to the Vice-Chancellor, I cannot follow Smith v. Iliffe. The other case to which Mr. Warmington referred in support of his contention was Wollaston v. Tribe} That was also the case of a marriage settlement, and there some years after the marriage, there having been no children, and the husband being dead, the lady came and gave evidence shewing that her instruc- tions to her solicitor (she being apparently the only person who had taken part in the negotia- tions for the settlement) were not in accordance with the terms of the settlement. If the Master of the Rolls thought the evidence was uncontra- iiicted and sufficient, it would be right to so decide, 1 L. E,, 9 Eq., 44. K., s. p. 16 242 MARRIAGE SETTLEMENTS. but I should very much hesitate to say that it was really acting in accordance with the principles which the Court has acted upon. It requires very clear and distinct evidence to shew that there was some different intention at the time when the settlement was executed, and, with the exception of this, there is hardly a single case where many years after the settlement was executed, on mere parol evidence, uncontradicted because there was no one to contradict it, the Court has altered a deed because one of the parties afterwards desired that it should not stand as it was executed." Tucker?). In the case of Tucker v. Bennett, from which Ch. D,,754; thosc observations are taken, the settlement was of J.fi887° ' money given by the father of the wife and money p Q^'^'' belonging to the husband. There was a covenant 1887. to settle the wife's after-acquired property on her for life and after her death, in default of issue, on her next of kin. There was no issue of the marriage, and fourteen years after the marriage, the wife not being satis- fied with the provision as to after-acquired property, brought this action in order to have the settlement rectified either by striking out the agreement for the settlement of after-acquired property, or by inserting before the ultimate trusts in default of issue, trusts enabling her to appoint such property by will, with a trust in default of appointment for her absolutely in case she survived her husband, and a power to appoint a life-interest in the same property in favor of her present or any after-taken PROOF REQUIRED FOR RECTIFICATION. 243 husband. Mr. Justice Kekewich held that the settlement must be rectified by giving the wife a power of appointment by will over the after- acquired property, and giving her an absolute interest in such property if she survived her husband. The grounds of his decision were that the plaintiff had no separate legal advice, and that the father could not be considered as an agent for his daughter so as to bind her as to the settlement of property coming to her through him ; that the settlement was in an unusual form ; and that, under tlie circumstances, the wife was not barred by her delay in applying to have it rectified. The Court of Appeal held that a father living on affectionate terms with his daughter is the proper person to recommend and advise her, and her natural agent in matters relating to the pre- paration and provisions of her marriage settlement, and that there is no occasion for any independent legal advice beyond that of the family solicitor who is preparing the settlement. If, however, the father is taking under the settlement a benefit from the daughter, she ought to be separately advised. The deed entered into and executed by the parties could not, therefore, be altered without proof that, at the time when that deed was exe- cuted, there was some definite arrangement in accordance with which the settlement ought to have been prepared as it was now desired to rectify it. Not only was there na evidence of any such 244 MARRIAGE SETTLEMENTS. Jifferent intention, but the evidence was all the other way. It was proved that the ultimate limi- tation as it stood was a matter insisted on by the father, that the settlement was fully discussed with the plaintiff and explained to her, that she well understood that if she had no children the after-acquired property would go to her relatives, and that it was her intention that this should be provided for in the settlement. The decision of Kekewich, J., was accordingly reversed. As to the evidence required for the rectification of marriage settlements the Lord Justices made the following valuable observations. Cotton, L. J., said : " I feel some difficulty in understanding the course that was taken in this case when before Mr. Justice Kekewich ; because it seems that on the case being opened, he threw upon the defend- ants, the trustees of the settlement, the onus of shewing why the settlement should not be altered. He did not like the trusts of the settlement, and as the lady wished them to be altered, and the husband, to whom no direct benefit was given, did not object, he apparently thought it rather lay upon those who supported the settlement to shew why it should not be altered. But it is not for this Court to take upon itself to say whether it would have made a different marriage contract from that which was in fact embodied in the deed executed by the parties. The contract is their contract. It lies on those who seek to alter the instrument to shew why it should be altered, not PROOF REQUimD FOR RECTIFICATION. 245 on those who support it, to shew why it should not be altered." And Lopes, L. J., said : " In my opinion, it requires strong evidence to justify the rectification or setting aside of an instrument under seal ; and when that instrument is a marriage settlement, the Court is bound to act with extreme caution, because it is impossible to recall the marriage, or to remit the parties to the same posi- tion in which they were before the marriage. " The Court must look at the intention of the parties at the time when the deed was executed, and not what would have been their intent if, when they executed it, the result of what they did had been present to their minds." These opinions may be usefully compared with those previously quoted from Lord Chelmsford in Fowler v. Fowler,^ and Lord St, Leonards in Mortimer y. Shortall? The Court will not interfere with a settlement without the evidence of articles, or other clear and satisfactory evidence in favor of a difierent intention at the time the deed was executed, but the effect of that evidence is intensi- fied by a consideration of tlie objects of the settle- ment. ' Ante, p. 216. ^ Ante, p. 219. 24 G POWERS. CHAPTER XIV. Powers. The class of cases next in importance is that of Powers. In Equity relief is given where, owing to mistake or accident the power has been executed in a defective or informal manner. Where power was given to a person to do a particular act in a particular manner and with particular formalities, the Common Law required strict compliance with the directions in the grant. Otherwise the execu- tion was held to be void. Before considering the rules of Equity on the subject, it may be mentioned that legislation intervened and in some instances dispensed with the strict rules of the Common Law. Thus under the Wills Act (1 Vict-, c. 26) if the forms pre- scribed by the Act are complied with, an appoint- ment by will will be valid, although some addi- tional or other form of execution may have been expressly required by the power. Another instance is aflforded by the Property and Trustees'" Relief Amendment Act (22 and 23 Vict., c. 35, s. 12) by which an appointment by deed is rendered valid if executed in the ordinary manner before two witnesses, although the instrument creating the power may have expressly required that it should be executed or attested with some additional or other form of execution, attestation, or solemnity. Apart, however, from these statutory provisions it has been a settled rule in Equity that where the DEFECTIVE EXECUTION AIDED. 247 donee of the power has expressed a clear intention to execute the power, the Court will, in certain cases and in favor of certain objects of the power, aid the defects in its execution by compelling the person having the legal interest to transfer it in the manner pointed out by the defective appointment. In Shannon v. Bradstreet, Lord Eedesdale thus siiannon v. laid down the rule : " It has been contended that iSch!&T', there is a difference between wliat is called a non- Redesdaie, execution and a defective execution, and that ir^^al though in the case of a defective execution of a '^*'^' power the Court will execute it, yet where there is a non-execution (which this is contended to be) the Court will not execute it. I apprehend that this is founded upon a mistake of the meaning of a non-execution ; a power is said to be not execut- ed, where nothing is done ; but a defective execu- tion is where the power has not been executed according to the terms of the power (for if it were executed according to the terms there would be nothing to be supplied), but where it has been in- tended to execute it, and that intention is suffi- ciently declared, but the act declaring the inten- tion is not an execution of the power in the form prescribed, there the defect shall be supplied in Equity." The principle on which Equity intervened in these cases is not easy to explain. By the instru- ment creating the power an interest is given to another person in default of execution, so that something is taken from that other person when 248 POWERS. the defective execution is aided. It may be asked why Equity should interfere to help the appointee to the prejudice of the person entitled in default of appointment. One explanation is thus given Chapman by Lord Alvanley in Chapman v. Gibson : " I have s'^o'^Ch. looked at all the cases I can to find on what Ld!'ki™n- principle this Court goes in supplying a defect and iTg'i™^' altering the legal right ; it is this : Whenever a man having power over an estate whether owner- ship or not, in discharge of moral or natural obliga- tions, shews an intention to execute such power, the Court will operate upon the conscience of the heir, to make him perfect this intention." But it is not very clear why the Court will operate on his conscience. Sir W. Grant finds fault with the principle in Holmes v. Eolmes V. Coghill. He says : " It is difficult there- Vef.'"498^- fo^^ *'0 discover a sound principle for the authority Gr \ M ^^^ Court assumes for aiding a defective execu- R., 1802. j;iQQ JQ certain cases. If the intention of the party possessing the power is to be regarded, and not the interest of the party to be afiected by the execution, that intention ought to be executed, wherever it is manifested ; for the owner of the estate has nothing to do with the purpose. To him it is indifferent, whether it is to be executed for a creditor or a volunteer. But if the interest of the party to be aflfected by the execution is to be regarded, why in any case exercise the power, except in the form and manner prescribed ? He is an absolute stranger to the equity between the LIMITS OF THE RULE. possessor of the power and the party in whose favor it is intended to be executed." In later cases the principle generally recognised appears to be this : that as a power is in a great measure the creation of Courts of Equity, those Courts will not allow a mere formal or accidental defect to interfere with the substantial and virtual execution of the power — a good principle no doubt if carried out in every case. Let us now consider the extent and limits of the rule in favor of aiding defective execution. What -were those defects and informalities which Equity would cure ? Generally, those which were not of the essence of the power itself. For in- stance, if by the instrument creating the power, the consent of a third party is necessary to the execution of the power, such consent would be an essential condition, and if not obtained. Equity could not help the defective execution. Again suppose a power to appoint by deed. The deed may be executed at any time during the life of the donee. Suppose, however, that he, in- stead, executes the power by will. At his death a will would be as operative as a deed could be, and as the will does not take effect until the death of the testator and is revocable, the execu- tion by will leaves untouched a power of discre- tion in the donee of the power during the whole of his life. Here, then, the substitution of the wiU for a deed does not affect the essence of the power and Equity would uphold the execution. 249 250 POWERS. Next suppose a power to appoint by will. The intention implied in the power is that the donee is to have the whole of his life to consider how he is to exercise his discretion in execution of the power.- In that case execution by an irrevocable deed in the lifetime of the donee would defeat the very idea of the power by putting it out of his discretion at an unexpired period of his life. Cooper ». ^"^ Cooper V. Martin, a testator gave an estate R^'s'ch^' ^V^^ trust for sale, with power of pre-emption to 47 ; The jjjg younger children, and the proceeds were to be Justices, held upon such trusts as his widow, by deed or instrument sealed and delivered before the youngest child attained the age of 25 years, should appoint, and in default for his children, except the eldest son, equally. The testator's widow, by deed- poll executed within the prescribed period, appoint- ed the proceeds of the estate among the children equally ; but reserved a power of revocation. By her will, which was also executed before the youngest child attained twenty-five, but came into operation by her death after the prescribed period, she appointed the estate by name to the eldest son. It was held that the estate was well appoint- ed by the deed-poll among the three children ; and that the power of revocation and new appoint- ment reserved by the deed-poll was not well ex- ercised by the will, for that the will having come into operation after the prescribed period, could not take effect as a new appointment under the power ; and that this was not such a defective exe- DEFECT NOT ESSENTIAL. 251 cution as would be relieved against in Equity Lord Justice Rolt said : " It was then said that the introduction of a power of revocation was inno- cuous if not exercised ; that if the power had been, in fact, executed by deed in due time, reserving a power of revocation iit any time during the donee's life, the appointment would have been good if not actually revoked before the youngest child attained twenty-five, even though the widow had survived that period. I am not satisfied that this conten- tion is sound ; but it is unnecessary to consider it, because in the case supposed the deed would have operated as an execution of the power, sub- ject to revocation, from the moment of the execu- tion of the deed, and before the youngest child attained twenty-five, as declared by the testator. Not so, in my opinion, the execution of the power by will. The will would not operate as any such execution till the widow's death. It is nothing that the will bears date within the time. It was intended to be ambulatory, and the law must assume that the donee of the power did not intend that it should operate as an execution of the power till her death. " True, if the power had been executed by deed before the youngest child attained twenty- five, with such power of revocation as that above suo-o-ested, the fact of such execution might not have been disclosed or known to the appointee till the widow's death. But the deed, if opera- tive as the execution of the power at all, would, 252 POWERS. in the case supposed, notwithstanding this want of knowledge, have been not only signed and sealed, but would have been an execution of the power before the prescribed period ; and so it would be if such an appointment had been made to the eldest son by deed, provided he should survive his mother. In every way of looking at it, the distinction between a deed which speaks from the moment of execution, and the will which speaks from the death is marked and substantial, and the latter cannot, I think, be held to be an exercise of the power before the youngest child attained twenty-five, within the terms of the tes- tator's will." The next great requisite to bring in the exercise of jurisdiction by a Court of Equity is that there must he a dear intention to execute the power. To illustrate this, two cases may be taken by way Kennard v. of Contrast. In Kennard v. Kennard a lady l.^k"'"''^ having a power of appointment by deed or will The Lorfs '^^^^ certain leasehold property which in default J'i|'><=^^' of appointment was vested absolutely in her, wrote and signed an unattested paper, by which, after referring to the property in terms sufficient to identify it, she proceeded : " If I die suddenly, I wish my eldest son to have it. My intention is to make it over to him legally if my life is spared." She died within three months, leaving this memorandum among her papers and with- out having otherwise exercised her power : — Held, (affirming the decision of the Master of A CLEAR INTENTION TO EXECUTE. 253, the Rolls) that the memorandum was a defective execution of the power, and that Equity would relieve against the defect in favor of the eldest son. Lord Justice Mellisli said : " A doubt which I felt, whether this instrument was not intend- ed to be a will, and whether an instrument intended to operate as a will, but incapable of do- ing so, could operate in another way, has been removed during the argument. The donee of the pow«r expresses an intention to give the property by a more formal instrument, but still shews her intention to give it. She means in any event to give it, but to do so by a more formal instrument if her life is spared." In Garth v. Townsend the facts were these. A., Garth v. having in the events that happened power to l. E,,7Eq'., appoint funds amongst her children by deed, or y.c., isee! by her last will in writing, or any writing pur- porting to be, or being in the nature of her last will or any codicil thereto, to be signed and pub- lished in the presence of, and to be attested by two credible witnesses, died intestate ; but left in an envelope addressed to her son, an unattested memorandum (signed by herself and dated eight years before her death) " for my son and daughters. Not having made a will, I leave this memo- randum and hope my children will be guided by it, though it is not a legal document. The (funds) I wish divided as follows " : — (amongst her children followed by bequests out of another fund, and a gift of the residue, and concluding,) 25 i POWERS. " this paper contains my last wishes and blessings upon ray dear children, and thanks for their love to me ': — Held, that this memorandum shewed no inten- tion to execute the power, and, consequently that the Court could not remedy any defects in execu- tion so as to give validity to it as an appointment. Lord Justice James said : " The true test is that mentioned by Mr. Osborne Morgan : is there a distinct intention to execute the power? Now here the persons to take and the amount to be taken, are sufficiently pointed out, but where the instrument fails is in the intention to execute the power. Mrs. Garth purposely abstained from exe- cuting it. She simply wished her children to be quite unfettered, saying, " I tell you my wishes, but I do not mean to tie you up by any legal document. I know I have power to appoint these funds, but I do not exercise that power." The jurisdiction of the Court is to supply defects occasioned by mistake or inadvertence : not to supply omissions intentionally made." As it is but natural to expect, the cases run rather finely between what the Judges call inten- tion and non-intention, but the principle is clear. The third point to be noted is that If^quity relieves in favor of those who claim on the ground of valuable or meritorious consideration. Those persons are a wife, a legitimate child, a creditor, a purchaser for value, and charities. As an in- stance relating to purchasers may be cited the FAVORED OBJECTS OF THE POWER. 255 case of Hughes v. Wells, where Sir George Turner Hughes ». stated the rule thus : " I apprehend, that in order Haret'749; to constitute a purchaser in whose favor a defec- ner V. c.' tive execution of a power can be aided, there ^^^^' must be consideration and an intention to pur- chase, either proved or to be presumed ; but the expenditure by a husband of his wife's money in the maintenance of the establishment, does not appear to me to furnish any consideration to the wife ; and assuming that the transfer by a husband of his wife's legacy into her name, and the carry- ing the income of it to her account, might amount to consideration, it certainly does not prove any intention to purchase, nor, I think, having regard to the relation of the parties, lead to the presump- tion of any such intention." The case of Innes v. Sayer may be selected as innea v. an instance of defective execution being cured in Hare! "^'377^. aid of charities. There a testatrix had power to on'^apMa'i'^ dispose of certain sums of stock by her last will eoG^'igs?'' and testament, to be by her signed and published in the presence of, and attested by, two or more credible witnesses. The testatrix by her will dated in January 1833, unattested, and not referring to the power, gave certain sums of stocks to charities. She afterwards made eight other un- attested testamentary papers, giving legacies, or revoking legacies previously inserted, the last of which papers was dated the 1st September 18S6 ; and at the foot of it she had written as follows : — " This will has not been witnessed, as I intend. 256 POWERS. if I am'spared, to write it out fair." The testatrix died in June 1844. It was held by Sir J. Wigram, V.C., that the defect in the execution of the power ought to be supplied in Equity in favor of the charities. " The principle," said his Lord- ship, " upon which the Court appears to go is this, that if a person has power by his own act to give property, and has, by some paper or instru- ment, clearly shewn that he intended to give it, although that paper, by reason of some informal- ity, is ineffectual for the purpose, yet the party having the power of doing it by an effectual in- strument, and having shewn his intention to do it, the Court will, in the case of a charity, by its decree, make the instrument effectual to do that which was intended to be done." In appeal Lord Truro, C, observed : " It ought to be considered as established by judicial decision, that a power well exercised in all other respects will, in favor of charities, be deemed to be an effective execu- tion of the power, although the form in which the power has been exercised has not conformed to the requisitions imposed by the instrument creat- ing or giving the power." Those are just two illustrative cases out of many that might be cited. It will be remembered that Kennard v. Eennard'^ was a case in favor of children. It is important to bear in mind that these per- sons in whose favor defective execution is aided ~ ' Ante, p. 252. NO REMEDY FOB NON-EXECUTION. ^517 are considered in their relation to the donee of the power, and not to the person creating or grant- ing the power ; and that the rule is strictly eon- fined to the persons above mentioned so that defective execution will not be aided in favor of a husband, grand-children, natural children, a father or mother, brother or sister, nephew or niece, cousin, or volunteers ; and resting as the jurisdiction does on equitable principles, the Court will not aid in favor of a favored person, where in default of appointment the property would go to an equally favored person. The foregoing are the general rules by which equity will aid the defective execution of a power. Equity, however, will not aid the non-execution of a power. To do that would be putting itself in the place of the donee of the power. The essence of a power being to give the donee a certain discretion in the disposition of property, there must be an exercise of that discretion by an intended execution of the power, in order to entitle the Court to interfere. In the case of Morgan v. Milman, lands were settled to such Morgan v. uses as Sir C. M., and his son should by deed d.'m.^a g. jointly direct, and subject thereto to Sir G. M., and cranwo'rth'^ his eon successively for life, with remainders over 9^'^. * S^^ to the sons of the son in tail. A Railway Com- t'"=*S' i*53. pany having under their Act power to take the lands thus settled, Sir C. M. and his son con- tracted for the sale to them of a certain part of the lands, and the Company were let into posses- K., S. P. 17 258 POWERS. sion on an agreement that the amount of com- pensation should be settled either by arbitration or a jury as Sir C. M., should choose : the Com- pany also paid a sum of money to Sir C. M., expressly on account of the compensation money to be ultimately fixed : Sir C. M., however, died before anything further was done : — Held, under these circumstances, that there was no contract the specific performance of which the Court could enforce, or aid in carrying into efiect as a defective execution of the joint power of appointment, at the instance of the son and against the parties entitled in remainder under the settlement. Where, on a sale of property, the parties have stipulated that the price shall be ascertained in a particular way and it is not so ascertained, the Court cannot, in the absence of special circum- stances, interfere to aid the carrying out of the contract by having the price ascertained in some different mode. "The Equity here sought to be enforced," said Lord Cranworth, " is one by which the Court is called upon to aid the defective execution of a power against parties entitled in default of that execu- tion. It is unnecessary to say that that is a jurisdic- tion which the Court does exercise in many cases which are well ascertained, and, amongst others, in favor of purchasers for value. There must, how- ever, have been, in order to entitle the Court to interfere, an execution or an intended execution of the power though defective. , . . , , EXECUTION PREVENTED BY ACCIDENT. 259 " The ground upon which I proceed here is this, that there has been no contract at all proved either written or parol : by no contract I mean no com- plete contract the terms of which had ever been ascertained. No doubt it had been ascertained that certain lands which the Company wanted for the purpose of their railway, and all of which they were entitled to take, would be wanted and would be taken. All that remained, therefore, to be ascertained was that which alone had been left in doubt, namely, the sum of money to be paid for them." The same principle applies where execution Buckeii ». , . , 1 . ■■ Blenkhorn, has been prevented simply by mere accident. 5 Hare,i3i; In Buclcell v. Blenkhorn, a lady had a power of c, isie! appointment over certain trust funds by deed or writing sealed and delivered in the presence of and attested by one or more witnesses. By a deed-poll duly executed in accordance with the requirements of the power, she made certain ap- pointments of the funds, but at the same time reserving to herself a power of revocation of that deed and of the appointments thereby made, by deed to be executed and attested in the same manner. The appointor afterwards made her will (which was duly executed and attested according to the statute of wills), and thereby bequeathed part of the trust funds. The question then arose between the plaintiff claiming under the deed-poll and the defendants claiming under the will. It was held that, so far as the trust property was not 260 POWERS. bound by the deed-poll, the will was a writing within the terms of the power, but that it failed to operate as a revocation and new appointment of the funds bound by the deed-poll. For the defendants it was urged that the testatrix was prevented from revoking the deed-poll by accident or disability, owing to her having forgotten the restrictions of the power, and being at the time unable to procure the deeds. It was also suggest- ed that she was prevented from procuring the deeds by fraud or collusion between the plaintiff and his solicitor. Sir J. Wigram, V.C., said : " With respect to the defence founded on the alleged ac- cident (apart from fraud), which, the defendants say, prevented the testatrix from revoking the deed-poll, and making another effectual appoint- ment of the property, I intimated an opinion during the argument that the Court could not supply the execution of the power on that ground. I think the decision Sir Edward Sugden refers to.^ in which relief (sought on the ground of mere disability) was refused, of greater authority than the dicta by which it is thought to be opposed. If the argument urged before me in this case be once admitted, it seems impossible to stop short of the conclusion, that the donee of a power should in all cases be liberated from its restraints, when- ever he bond fide intended to execute the power, but could not at a given moment ascertain what ' Treatise on Powers II., p. 143, 7th Ed, TRUSTS IN DEFAULT OF EXECUTION. 261 those restraints were, and death or accident pre- vented his compliance." It will be observed that the Vice-Chancellor states the rule "apart from fraud." There, of course, if fraud was committed by or for the benefit of a party entitled to the property in default of appointment, the Court would carry the intention into effect by supplying the appointment or treat- ing the will as an actual execution of the power. This would follow from the principle that the Court will not allow any one to profit by his own fraud. In that particular case, there was no evi- dence of fraud or collusion. It is sometimes said that there is an exception to the foregoing rules in the case of certain powers in the nature of trusts. But it will be found on examination that the cases referred to form no real exception. It is to be observed that a power is never obliga- tory. It may or may not be exercised at the discretion of the donee of the power. A trust, on the other hand, is always obligatory and must be performed, or a Court of Equity will compel its performance by the trustee. l!fow, there are certain cases in which a Court of Equity will imply a trust in favor of the objects of a power in default of appointment, and this class of cases is some- times said to form the exception above referred to. The principle is generally referred to as that of Brown v. Higgs. There a testator bequeathed a Brown v. leasehold estate (after an estate for life) to his Ves.,?©?, a; 262 POWERS. 5 Ves., nephew John Brown and the heirs male of his AivLn'i'ey'! hody lawfully begotten ; and in default of such 18M '^'^^ heirs to one of the sons of his nephew Satnuel tn^a™t^ Brown, as John Brown shall direct by a convey- rJa'^^'' ance in his life or by his last will. Another lease- is'm"' ^■' ^°^*^ estate he bequeathed to John Brown upon trust, subject to certain charges, to employ the remainder of the rent to such children of Samuel Brown as John Brown shall think most deserving, and that will make the best use of it, or to the children of his nephew William Brown, if any such there are or shall be. John Brown dying in the testator's life-time, the bequest of the latter estate was established in favor of all the children. Qucere as to the former which was not ripe for decision and, therefore, not afifected by the judgment in the case. Lord Alvan- ley said : " Upon the true construction of this will, I am of opinion it is equivalent to saying he gives it to the children of Samuel Brown or of William Brown, with a power to John Brown to select any he thinks fit and to exclude the others ; aud it is too much to contend that nothing is intended for them exclusive of the appointment of John Brown. The fair construction is, that at all events the testator meant it to go to the children ; and these words of appointment he used only to give a power to John Brown to select some and exclude the others." In appeal Lord Eldon said : " It is perfectly clear, that where there is a mere power of disposing, and that power is TRUSTS IN DEFAULT OF EXECUTION. 263 not executed, this Court cannot execute it. It is equally clear, that wherever a trust is created, and the execution of that trust fails by the death of the trustee or by accident, this Court will execute the trust. One question therefore is whether John Brown had a trust to execute, or a power and a mere power. But there are not only a mere trust and a mere power, but there is also known to this Court a power, which the party to whom it is given is intrusted and required to execute ; and with regard to that species of power the Court considers it as partaking so much of the nature and qualities of a trust, that if the person who has that duty imposed upon him, does not discharge it, the Court will, to a certain extent, discharge the duty in his room and place. Upon that principle the case of Harding v. Glyn ^ pro- ceeded." And farther on in his judgment : " The principle of that case ^ and of Richardson v. Chap- man ^ which went to the House of Lords, and all these cases is, that if the power is a power which it is the duty of the party to execute, made his duty by the requisition of the will, put upon him as such by the testator, who has given him an interest extensive enough to enable him to dis- charge it, he is a trustee for the exercise of the power ; and not as having a discretion whether he will exercise it or not ; and the Court adopts the principle as to trusts ; and will not permit his ' 1 Atk. 469. - Br. P. C. 100. 264 POWERS. negligence, accident, or other circumstances, to dis- appoint the interests of those for whose benefit he is called upon to execute it. " In that view of the case, with all the doubts and difficulties I have stated, I think the con- clusion of the Master of the Rolls is the right con- clusion." Martin v. The casc of Martin v. Swannell furnishes a Beav., 24fl; good illustration of an implied trust in favor of dale, m"!.' children being upheld independently altogether of the particular power which was not duly exercised. There a testator gave his real and personal estate to his wife for life, and after her decease " unto and amongst his three children Phoebe, Elizabeth and Tryce, and their lawful issue in such propor- tions, manner, and form, and subject to such charges, &c., as his wife should appoint.'' There was no gift over iu default of appoint- ment. The daughter Phoebe died, leaving a son and two daughters, and subsequently the widow, by deed reciting the death of Phoebe appointed the property in equal shares to the three children ( including the deceased daughter ) and the heirs of their bodies. It was admitted that Phoebe being dead at the time, the appointment of a share to her and the heirs of her body was invalid ; and then the question arose in respect of that share between Tryce Martin as heir-at-law, the surviv- ing daughter Elizabeth, and the children of the deceased daughter. On the one hand, it was con- TBUSTS IN DEFAULT OF EXECUTION. 265 tended that, there being no gift over this share in the real estates was undisposed of, and belonged to the heir-at-law of the testator. On the other hand, it was contended for the daughter Elizabeth and her husband, that there was a gift to the children of the testator in tail, subject to a power of appointment vested in the widow. For the son and heir of Phoebe it was argued that she took an estate tail, either under or in default of appoint- ment, and that this share, therefore, descended to her heir. And for the younger children of Fhoebe it was contended that under the word issue they took by purchase distributively. The Master of the Rolls held that in default of appointment the children of the testator took estates tail. He said : " A devise unto and amongst the three children and their lawful issue would entitle the three children to the real estates as tenants in common in tail. To the words which give the estate are immediately subjoined words creating the power by which the wife is enabled to nominate and determine the proportions, man- ner and form, in which the shares are to be taken, and the restrictions, charges and declara- tions, to which they are to be subjected." He then discusses and rejects the suggested construc- tion of the word issue as a word of purchase and concludes by holding that the power not having been exercised by the widow, the words giving the estate must be construed in the ordinary way, and that the effect of them was to give the 266 FOWBBS. estates tail in the real estate to the children of the testator, ^e White's Jn Re White's Trusts there was a bequest to 1 1'llStS, ^ Job., 656 ; trustees for A. for life, and if he should die child- Piige- Wood, less upon trust to apply the sum to the benefit of V C 1860 1 JT ^ ' such of testator's children or their issue, as the trustees should think fit, for the interest and good of testator's family, with no gift in default of appointment. No appointment having been made, and the tenant for life having survived the donees of the power, and died childless: — B'eW, ' that the children and remoter issue took in equal shares per capita, and that the period for ascertaining the class was the death of the tenant for life. The Vice-Chancellor said : " It is settled by Brown V. Higgs and Burrough v. Philoox, that, where there is a power to appoint among certain objects, and no gift in default of appointment, the Court will imply a gift to the objects of the power equally." Taking these cases in connection with the rules previously explained, the result may be briefly summed up thus : If the power of appointment is duly executed by the donee, well and good ; if it is imperfectly executed. Equity will in certain cases, and in favor of certain objects aid the defective execution ; if the power is not executed at all, then comes into efiect any ulterior implied trust in favor of objects of the power, to arise in the event of no appointment being made under it. 267 CHAPTER XV. Payment of Money under Mistake of Law. There is one other head of mistake which it is important to note, because Equity will not interfere except under very special circumstances. That is the case of payment of money under a mutual mistake of law. Suppose A. pays money to B., thinking that B. is entitled to it, B. also thinking that he is entitled to it, and there being thus a mistake of law which is common to both parties. Could A. recover back the money so paid ? That he could not do so at Common Law is clear, and it has been doubted whether he could recover it in Equity. Where the money is honestly paid and received with perfect knowledge of all the facts common to both, there being between those two persons no fiduciary relation whatever, and no Equity to supervene by reason of the conduct of either of them, it is evident that business could not go on if an action might afterwards lie against the receiver merely because it is said the claim to the money was not well founded in point of law. The point was very much discussed in the case of Rogers v. Ingham, where the question arose Rogers v. between two legatees under a will. An executor, ch.D.Jsi- acting on the advice of counsel on the construction ' ' of the will, proposed to divide in certain propor- tions a fund between the two legatees. One of the 268 PAYMENT OF MONEY UNDER MISTAKE OF LAW. legatees being dissatisfied took the opinioa of counsel, which agreed with the former opinion. The executor then divided and paid over the fund in accordauce with the opinions. Two years after- wards the dissatisfied legatee filed a bill against the executor and the other legatee, alleging that the will had been wrongly construed, and claiming repayment from the other legatee : — Held, (affirm- ing the decision of Hall, V.O.), that the suit could not be maintained. " There is no doubt, " said Lord Justice Mellish, " as to the rule of law that money paid with a full knowledge of the facts, although it may be under a mistake of law on the part of both parties, ' cannot be recovered back ; and I think it is equal- ly clear that, as a general rule, the Courts of Equity did not, in such cases, interfere with the Courts of Law. Nothing, in my opinion, would be more mischievous than for us to say that money paid, for instance, under a mercantile contract according to the construction which the parties themselves put upon that contract, might, years afterwards, be recovered, because, perhaps, some Court of Justice, upon a similar contract, gave to it a different con- struction from that which the parties had put upon it. I think there is no doubt that the rule at law is itself an equitable and just rule which is not interfered with by Courts of Equity ; but, on the other hand, I think that, no doubt, as was said by Lord Justice Turner, ' This Court has power (as I feel no doubt that it has) to relieve against mistakes TBE GENERAL RULE. 269 in law as well as against mistakes in fact ' ^ ; that is to say, if there is any equitable ground which makes it, under the particular facts of the case, inequitable that the party who received the money should retain it." He then proceeded to consider whether there was any such ground in this case and found there was none. The attempt to support the bill rested on two cases, Bingham, v. Binghaini and Davis v. Morier. Bingham In the old case of Bingham v. Bingham a man i Vesf^Se™.' was held entitled to get back money which he had Hardwlcke paid by mistake for a conveyance of land which *^' '^^®" was really his own. It was insisted that it was the plaintiffs own fault, to whom the title was produced and who had time to consider it. The claim was, however, decreed, for though no fraud appeared and the defendant apprehended he had a right, yet there was a plain mistake, such as the Court was warranted to relieve against, and not to suffer the defendant to run away with the money in consideration of the sale of an estate to which he had no right. In Davis v. Morier, a Uavia v. Iklorifir 2 person who by mistake had received for some Coii., 303; years a less income than he was entitled to under Brafe, " his marriage settlement, was held, under the cir- ' ''^* ' cumstances of the case, entitled to have the differ- ence made up to him out of the estate of the deceased settlor. In Rogers v. Ingham, these cases were distin- ' stone V. Godfrey, ante, p. 200. 270 PAYMENT OF MONEY UNDER MISTAKE OF LAW. guished by Lord Justice James ; Bingham v. Bingham on the ground that the consideration for the bargain failed ; and Davis v. Morier on the ground that there a fiduciary relation existed between the parties, and there was a question of the cestui que trust against his trustee, which trustee, no doubt under mistake, had retained trust money in his own possession. Whether the dis- tinctions drawn are quite satisfactory is not very material. Rogers v. Ingham is now a perfectly settled decision, and Courts of Equity will not allow money paid and received honestly and with a full knowledge of the facts, to be recovered back on the ground of a mutual mistake of law between the parties. The rule does not apply where by mistake of law money has been paid to an officer of the Court. There the Court has jurisdiction to relieve against the mistake and to order the money to be repaid. Ex parte In Ex parte James the sheriff paid the proceeds of James /» i . .1 )-e Condon, an execution-saie to the execution creditor At L. K.,9Ch., , , ,. ,. 609 ; The that time proceedings were pending on a liquida- Justices, tion petition filed by the debtor, but these came to an end on the failure of the first meeting of creditors to pass a resolution. Afterwards a bank- ruptcy petition was filed by another creditor, and on this the debtor was adjudicated bankrupt. The trustee in bankruptcy demanded the proceeds of the sale from the execution creditor, who paid them to him, believing that he was legally entitled thereto, It was held that in the circumstances of 1874. PA YMENT TO AN OFFICER OF THE COURT. £71 the case the sheriff was justified in paying the proceeds of the sale to the execution creditor and the trustee was ordered to repay the money to the execution creditor. " I am of opinion," said James, L. J., " that a trustee in bankruptcy is an oflBcer of the Court. He has inquisitorial powers given to liim by the Court, and the Court regards him as its ofEcer, and he is to hold money in his hands upon trust for its equitable distribution among the creditors. The Court then finding that he has in liis hands money which in Equity belongs to some one else, ought to set an example to the world by paying it to the person really entitled to it. In my opinion the Court of Bankruptcy ought to be as honest as other people." The principle of Ex 'parte James was extended in Ex parte Simmonds. In Ex parte James the Ex parte money was still in the hands of the trustee, where- jn re Car- as in the latter case the money had been distributed b!d., 308; among the creditors. But it was held that the ^■^•''**^' funds available for distribution among the creditors under a bankruptcy or liquidation must be regarded as one entire fund, and, if that fund had been erro- neously increased, it was a just extension of Ex parte James to say that, out of any moneys which may hereafter be iu the hands of the trustee and applicable to the payment of dividends to the creditors, the amount which had come into his hand by mistake ought to be repaid. Lord Justice Lindley observed : " The Court by means of its officer has made a mistake, and has given to the 272 -P-il YMENT OF MONEY UNDER MISTAKE OF LAW. creditors money which they ought not to have had. It would, I think, be unjust to make the creditors refund what they have thus received. But what is there unjust in saying, that no more money shall go to them until this sum has been repaid to its rightful owner ? It appears to me there will be no injustice in giving such a direction to the trustee." In re In In re Brown trust money in the hands of a Brown ; iii -t t • ,,..,. Dixon V. trustee had been paid to his trustee in liquidation cii.D.,597; by mistake of law, and it was held, in analogy to iggg' ■' the above decisions in bankruptcy that the Chancery Division had power to order him to re- fund it. On this point Mr. Justice Kay said : " Of course, I am not exercising the jurisdiction of the Court of Bankruptcy, but the question is sub- mitted to this Court, and I have no doubt or hesita- tion in saying that a Court of the Chancery Division does not consider itself bound to act on principles less honest than the Court of Bankruptcy ; and if this money was really paid to the trustee in the liquidation in mistake of law, I have no hesi- tation in saying that he must repay it, and if an order of the Court of Bankruptcy were necessary for that purpose, I presume the Court would make such an order." INDEX. A. ABATEMENT : purchaser's right to enforce contract with, 108 — See Com- pensation. from purchase-money, 109. from rent, 109. ACCIDENT : execution of power prevented by, 259. ACTS OF OWNERSHIP : payment into Court, on the ground of, 122. AGREEMENT : See Contract. ALTERNATIVE : claim, in substitution for specific performance, 115. , for damages, 116. , for rescission and forfeiture of deposit, 118, 119. relief, in cases of mistake, 189. AMBIGiriTT : iu contracts, 12. latent, parol evidence admissible to explain, 217. ARBITRATION : sale at a price to be fixed by, 56, 57, 170, 257. death of vendor before, 258. prevented by vendor, 57, 170. AREA: abatement for deficiency of, 110. ASSIGN : enforcement of contract by, 37. extent of rights of, 39. cannot by notice prevent completion with his assignor, 39, 42. notice of previous contract with, 35, 36. notice to be given to vendor by, 42, K., S. P. 18 274 INDEX. ASSIGNMENT: of contract of sale, 37 — 43. by purchaser, does Bot prejudice rights of vendor, 38. of property, distinguished from assignment of contract, 40, 43. of contract of sale, qualifications to which subject, 42. valid, essentials of, 43. AWARD : See Abbitration. B. BANKRUPTCY: trustee in, recovery of deposit after disclaimer by, 106. , payment of money to, under mistake of law, 270. BUILDING CONTRACT : where damages an adequate remedy, 48, 60, , not an adequate remedy, 50. incapacity of Court to enforce, 69. BURDEN OF PROOF : See Evidence. C. CERTAINTY : essential in contracts, 13. CHARITY : defective execution of power in favor of, aided in Equity, 255. CHATTELS : having a peculiar value, specific delivery of, 51. , where price agreed on, 53. CHILDREN : defective execution of power in favor of, aided in Equity, 252, 256. COMMON LAW : performance not enforced by, 1 . remedy, adequate, 48. inadequate, 27, 49. COMPENSATION : difference between positions of vendor and purchaser as to, 108, INDEX. 275 COMPENSATION— (eo«r!(?.) where vendor has partial interest only, 109. by abatement from purchase-money, 109. , from rent, 109. in case of iona fide mistake, 110. damages given as, 113. COMPLETION : time for — See Time. contract not liable to be set aside for defect of title after, 203. COMPROMISE : See Family Akrangbment. CONDITIONS OF SALE : origin of, 111. constitute part of the contract, 112. for repayment of deposit, 105. as to time, 28, 108, 119, 170, 201. precluding inquiry as to title, 197. coysENStrs ad idem .• essential to a contract, 12. CONSIDERATION : contract without, not specifically enforced, 24. , not rectified on the ground of mistake, 190. amount of, immaterial, 25. must move from promisee, 25. failure of, in family arrangement fairly entered into, 214. , for payment of money under mistake of law, 269. CONSTRUCTION : of contracts, the same at Law and in Equity, 8, 111. principles of, not to be confounded with those which guide the Court in granting or refusing specific perform- ance, 9. of written contract, must determine what the parties have agreed to, 15. a question for the Court to decide, 15. erroneous, contended for by one party, IE. of obscure agreement, throughout insisted on by a party, 15. of contracts by correspondence, 18. 276 INDEX. CONTINUOUS ACTS : inability of the Court to enforce performance of, 64. part-performance of contracts involving, 139. CONTRACT : how enforced at Common Law and in Equity, 1. specific performance and injunctions, the methods of enforcement in Equity, 1 . how enforced by mandatory injunction, 2. the same, at Law and in Equity, 7. conetruotioa and interpretation of, the same, 8, 111. dealt with in the two jurisdictions for the purpose of different remedies, 8, lU.' principles of construction of, not to be confounded with those which guide the Court in granting or refusing specific performance, 9. essential requisites of, 12. ambiguity or uncertainty in, 12. definition of, 13. construction of, must determine what the parties have agreed to, 1.5. the Court must act on its own view of the construction, 15. erroneous construction contended for by one party, no ground for holding there was no consensus, 16. obscure, construction of, throughout insisted on by one party, 16. by correspondence, general rule of construction of, 18. , where both parties intended that a formal agreement should be drawn up, IS. , Courts have gone far enough in •' spel- ling out," 19. subject-matter of, must be lawful, 21. the subject-matter of specific performance, 22. executory, distinguished from executed contract. 22. for valuable consideration only, capable of being enforced, 24. , amount of consideration immaterial, 25. consideration for, must move from the promisee, 25. only specifically enforced between the parties thereto, 33. of sale— j&e Contract of Sale. negative— See Negative Contract. INDEX. 277 CONTRACT OF SALE : its nature and incidents, 96. immediate effects of, 96. cancellation of, for non-payment of purchase-money, 97. , on some equitable ground of invalidity, 97. valid contract, defined. 97. title according to, made out by vendor or accepted by pur- chaser, 97. converts the estate in Equity, 98. And see Vendor, Pdechasee. D. DAMAGES : the relief given at Law for breach of contract. 1 , 26. not always an adequate equivalent for the loss sus- tained, 26. inadequacy of, illustrated by two leading cases, 27. , the most usual ground for equitable relief, 28, 34. inquiry as to, directed in substitution for specific perform- ance, 75. in addition to specific performance, 112. power of awai'ding, conferred by Lord Cairns' Act, 113. condition precedent to award of, under the Act, 113. power of awarding, conferred by the Judicature Act, 114. alternative claim for, in substitution for specific perform- ance, 115. right to sue for, after absolute repudiation by defendant, 117. alternative claim for, reasonable construction of, 117. DEMURRER : the function of, 171. on ground of Statute of Frauds, 171. abolished under tbe present practice, 172. DEPOSIT : purchaser's right to return of, a question of contract, 105. , in absence of express stipula- tion, 105. principle on which the question is dealt with, 106. circumstances under which vendor would be entitled to retain, 107, 108, 201. 278 INDEX. DEPOSIT— (coreif?.) forfeiture of, and rescission, claimed in substitution for specific performance, 118. DISCRETION OF COURT : as to specific performance, 45, 75, 228. as to injunction, 47. as to return of deposit, 107. under Lord Cairns' Act, U.S. on proof of parol variation set up by defendant, 176. DOUBTFUL TITLE : origin of the rule as to, 178. nature and amount of doubt required by the rule as to, 179. foundation of tbe rule, 180. duty of the Court in cases of, 180. adverse decision of Lower Court, 181. duty of Appellate Court, 181. cases of, classified, 184. former and present tendencies of the Court in cases of, 185—187. E. EVIDENCE : parol, for what purposes admissible at Law, 217. , admissible in Equity to prove mistake, 219. , inadmissible to construe a document, 220. , admissible to prove collateral agreement, 222. , let in by part-performance, in cases within the Statute of Frauds, 168. , let in by fraud, in cases within the Statute, 169. of parol variation, inadmissible for plaintiff, 174. , admissible in defence to a claim for specific performance, 175. , illustrations of rule of admissibility, 177. nature and amount of, required in cases of mistake, 216,219. , required for rectification of marriage settlement, 2.39. onus of proof on those seeking rectification, 244, EXECUTORY CONTRACT ; contrasted with executed contract, 22, INDEX. 279 p. FAMILY ARRANGEMENT : carried out notwithstanding mutual mistakes of fact, 212. principle of the rule as to, 212. , limitations with which to be applied, 213. validity of, not affected by subsequent judicial determina- tions, 214. invalid, if founded on a mistake of either party to which the other was accessory, 215. FOREIGN CONTRACT : to deliver a thing here, in specie, enforced against defend- ant not within the jurisdiction, 55. FOREIGN COUNTRY: contracts relating to land in, 73. , conditions necessary for enforcement of, 75. FORFEITURE : of deposit, 107, 108, 201. and rescission, claimed as an alternative to specific per- formance, 118, 119. FRAUD: an exception to the Statute of Frauds, 169, 175. prevented by the operation of the principle of part-per- formance, 143. of vendor, valuation under contract prevented by, 170. due execution of power prevented by, 261, G. GOODWILL : contract for sale of, not enforced, 58. , with business premises and fixtures, enforced, 59. HIRING AND SERVICE : contracts of, not enforced, 24, 70. I. ILLEGALITY : a bar to specific performance; 21: 280 IJWEX. IMPOSSIBILITY : of relief, fiom defects in the contract, 56, 268. of compelling arbitration, 67. of performing plaintiff's part, a bar to specific perform- ance, 78, 116. induced by fraudulent misconduct of defendant, 170. INADEQUACY : of Common Law remedy, 26, et seq. of price, a ground for refusing specific performance, 52. of equitable relief, by reason of uncertainty of subject- matter, 58, INCAPACITY : of Court to execute its own decree, 6.?. of vendor to perform the whole contract, 108. of plaintiff to perform his part, a bar to specific perform- ance, 116. INFANT : suit by, for specific performance of contract made by him, 96. INJUNCTION : how connected with specific performance, 2. mandatory, nature and operation of, 2. how far affected by the Judicature Act, 6. discretion of the Court as to the grant of, 47. for enforcement of negative contracts, 124, et seq. INQUIRY : as to variations in partnership contract, 62. as to damages, in substitution for specific performance, 75, as to wilful default, 99. as to terms of contract, on proof of part-performance, 168. J. JUDICATURE ACTS, 1873 and 1875 : specific performance and mistake specially assigned to the Chancery Division by, 3, 188. as to multiplicity of legal proceedings, i, as to injunctions, 6, as to time, 28. in relation to damages, 114. INDEX. 281 JURISDICTION : in specific performance, assigned to the Chancery Division, 3, limits of, 46, et seq. discretionary, 45—47, 76, 228. in mistake, assigned to the Chancery Division, 188. limits of, 189, et seq. L. LETTERS : constituting contract and evidence of it, 18. , general rule of construction of, 18. LIEN: vendor's, 31, 101. , declaration of, 101. , how enforced, 101. LORD CAIRNS' ACT : power of awarding damages conferred by, 113. condition precedent to damages under, 113. instance where unavailable, 117. LOSS: happening after execution of contract of sale, 98. purchaser's obligation to bear, 98. arising from wilful default, 99, 102. of right to rescind for defect of title, 89. M. MARRIAGE : contracts in respect of, 159 — 164. agreement in consideration of, must be in writing, 159. alone, is not part-performance, 159. acts connected with, may be part-performance, 163. MARRIAGE SETTLEMENT: agreed to be made by articles— general rules of rectifica- tion, 233. made before marriage, containing no reference to the articles, 233. , evidence of mistake admissible for rectification of, 234. , former and present doctrine of the Court as to recti- fication of, 236. 282 INDEX. MARRIAGE SETTLEMENT— (coft<(?.) made after marriage, reformed on construction of arti- cles, 237. objects and intention of, to be kept in view in construing articles, 238. rectification of, the evidence required for. 239. , clear proof of some different intention at time of execution, 242. , onus on those seeking rectification, 214. , intention of parties at time of execution to be looked to, 245. MISTAKE : jurisdiction in, assigned to the Chancery Division, 188. limited, possessed by the Q. B. Div., 188. foundation of, 3, 189. the relief afforded, 189. limits of, defined, 189 — See Rectification. of law, 196—204. , paymentof moneyunder — See Payment op Money, affecting the essence of the transaction, 204. common, of both parties, 205 — 209, 229. of one party only, 210. in cases of family arrangement, 212. clear proof of, 215. parol evidence admitted in cases of, 219. rectification of, — See Rectipication. rescission for, — See Rescission. compensation for, — See Compensation. modes of relief on the ground of, 223. pleaded in defence to a suit for specific performance, 226. as a ground of claim for rectification and specific per- formance, 228. , mistake of plaintiff only, 228. , mistake of both parties, 229. , American jurists on, 229. MORTGAGE : contract to lend money on, 48. contract to execute, for money advanced, 49, 138. INDEX. 283 MUTUALITY : the rule of, 78. in contracts partly capable and partly not capable of being specifically enforced, 79. where the part which the Court could not enforce is the essential and substantial part, 81. where the part which the Court could not enforce has been actually performed, 83. where the contract is divisible into parts construed as dis- tinct and separate contracts, 84. in oases where the remedy is held to be mutual for vendor and purchaser, 85. in contracts of sale with defective title, 86. where the defect is cured before repudiation by pur- chaser, 88. where purchaser's right of repudiation is lost by his own conduct, 89. where the contract to the knowledge of both parties can- not be enforced by either until the occurrence of a con- tingent event, 92. in cases within the Statute of Frauds, where the plaintiff has not signed, 94. in suit by infant for specific performance of a contract made by him, 95. in the enforcement of negative contracts, necessity of securing, 125. , no violation of in Lumley v. Wagner, 128. in negative contract, instance of want of, 129. , instance of substantial, 130. N. KE&ATIVE CONTRACT: explained, 123. injunction the proper remedy for enforcement of, 12i. with afl&rmative terms, enforcement of, 125. , result of the decisions, 126. enforcement of, necessity of mutuality in, 125. not enforced : for want of express negative term, 131. where negative term subsidiary, 132, by implication, 130. 284 INDEX. NEGATIVE CONTRACT— (cora<{TEJMTg. 7'Ae Tenure of Land and Relation of Landlord and Tenant. I. — Early Times and under the Ro- man Empire— The Feudal Sys- tem in Europe. II. — England. III. — Prussia. IV.— France. V. — Bavaria, Wurtemburg, Saxony, Baden, Hesse, and Saxe-Coburg- Gotha. VI. — Belgium, the Netherlands and the Hanse Towns. VII. — Denmark, Sweden, Geneva, and Austria. VIII. — Italy, Sicily, and Greece. IX. — Spain and Portugal. X. — Russia. XI. — Asiatic Turkey, European Tur- key, and Egypt. XII. — Ireland — Eighteenth Century. XIII. — Ireland-Nineteenth Century. XIV. — Ireland — Proposed Remedies. XV.— Ireland — Legislation of 1881- 1882. XVI. — The States of Ameripa.. XVII. — Australia, Tas_mauia, and New Zealand. Landholding and t?te Relation of Landlord and Tenant in India. XVIII.— The Condition of Things under the Native Governments. XIX.— From the First Settlement of the English to the Grant of the Dlwaul. XX.— From the Grant of the Dlwani to the Permanent Settlement. XXI. — TJie Permanent Settlement. XXII.— The Immediate Efeect of the Permanent Settlement. XXIII. — T)ie Zemindars and Raiyats from the Permanent Settlement to 1882. XXIV. — Acquisition and First Ad- ministration of Benares, and of Ceded and Conquered Provinces. XXV.— The Zemindars and Raiyats from 1822 to 1859. XXVI. — Some Account of the Settle- ment of the North- Western Provinces. XXVII.— Some Account of the Ten- ures in the Bengal Presidency. XXVIII.— The Rent Act of 1859. XXIX. — Government Khas Mahals. XXX.— The Necessity for Fresh Le- gislation since the Act of 1859 THE BENGAL TENANCY ACT, 1885, With Notes and Observations, and an Index. " We may take it that, sis regards Indian laws and customs, Mr. Field shows himself to be at once an able and skilled authority. In order, however, to render his work more complete, he has compiled, chiefly from Blue-books and similar public sources, a mass of information having reference to the land-laws of most European countries, of the United States of America, and our Australasian, Colonies."— TAe Field. "Mr. Justice Field has treated his subject with judicial impartiality, and his style of writing is powerful and perspicuous."— iVo covered, and the methods bj' which its problems must be solved." — Indian Nation. " It is, indeed, a new departure in the art of legal commentary; . ■ . . . . -, " Our author, therefore, approaches his subject as a puiuiit, and brings to bear on his original authorities all the acumen which the prolonged discipline of the Nuddea school imparts, to those of its pupils who have the patience to undergo its severest ordeal." — Statesman. " There is thus in him a combination of high Western legal education with a masterly possession of pure Eastern legal lore gathered from- the very fountain of original Sanskrit books. Such a combination is a rare thing. Yet such a combiinition is what is essentially wanted for a proper exposition of the Hindu Law. The superiority of the work before us to mere books of translation, sudh as the translation by Messrs. Colebrook, Sutherland, and Wyncli, or to di^'ests prepared by Englishmen, such as those by Messrs. Mayne, McNaughten°ahd Cowell, is owing to such a combination of qualifications in the author of the work ■ " While he has been careful to put the actual state of the Hindu Law as'inter- preted and assumed by our Courts, he has very largely dealt with theprinciprea which underlie the positive texts of the two authorities in these provincesrr- Jimutvahan and Vijnaneshwar. He has very fully explained the systems on which these two authorities respectively proceeded. He has clearly shown wherein these authorities have been rightly understood, as also wherein they have been misunderstood." — .4mrila Bazar Patrika. Thacker, Spink and Co., Calcutta. t% Belay 8«o. Boards. Rg, "8 ; Post-free, JRs. 8-4. A COMPENDIUM OF THELAW SPECIALLY RELATING TO THE TALUQDARS OF OUDH, . BEING THE OUDH ESTATES ACT (I) OF 1879 : - An Act to amend the Oudh Estates Act, 1869 (X) of 1885; Tlie Oudh Sub-Settlement Act (XXVI) of 1866; The Oudh Taluqdai-s' Belief Act (XXIV) of 1870 ; and parts of the Oudh Rent Act (XIX) of 1868 and the Oudh Laiid-Eevenue Act (XVII) of 1876. With a full Introduotiou, Notes, and Appendices. BY JOHN GASKELL WALKER SYKES, LL.B. (Lond.), Of Lincoln's Inn. BarrUter-at-LarB, , ; and Advocate. Ifigh Court, JV.-W. Provlnees, India. " An admirable compendium. Tlieiirranp;einent is clear, simple, and con- secutive, and the selections have been made with such judgment, and are so carefully explained and elucidated that nutliing essential to a tliorough and accurate understanding; of this form of Zemindary-Tenancy in Oudh has been omitted." — Calcutta Review. Royal ivo. Cloth. Bs. 3-8 ; Interleaved, Bs. i ; Postage 4 ans. AN . "' ...Z INCOME-TAX MANUAL, BEING ACT II OF 1886. WITH NOTES. By W. H. GRIMLEY, B.A., C.S., Commissioner of Income-Tax, Ben Contents : — The Act. with Notes embodying the Rules of the Government of India, the Government of Bengal, and the Instructions issued by the Commissioner of Income-Tax, Bengal, under the authority of the Board of Revenue. Rulings of the Commissioner of Inoome-Tax, Bengal, on references from various Districts. Rulings and Precedents under former Income-Tax Acts in India, and under the existing Income-Tax Act in England. Rules, Forms of Notices, Return Registers, &c. A. complete Index. ... ,,,;._. 14 .Thack'ef-:, Spink and Co., Cdlaifta. TAGORE LAW LEOTUREa, 1885. Royal^vo.i cloth, gilt. Ms. 10 ; Post-free, Us. 10-10. THE LAW KELATING TO THE JOINT HINDU FAMILY. By KRISHNA KAMAL BHATTAGHARYYA, . Late Professor of Sanshrit in the Presidency College of Calcutta. The Oonstltution of the Ancient Hindu Family aud ou the im- port of the Expression '• Joint - Hindu Family." - The Origin and Gradual Develop- ment of the Joint Hindu Fanrily. Joint Hindu Family considered as a whole. On t^e Managing Member of a Joint Hindu Family On Ijimitation as affecting the lliglits of the Members of a Joint Family. On Right to Maintenance. On the disqualified Members of a Joint Family. On the Property of Joint Hiadu Family. Alienation of Joint Family Pro- perty. On Sou's Liability for Father's Debts. On Partition. On Property not liable to Parti- tion. Presumption in relation to Joint Hindu Family. TAGORE LAW LECTURES, 1884. Soyal 8ro., cloth, gilt. Ms. 12 ; Post-free. Bs. 12-10. THE LAW RELATING TO GIFTS, TRUSTS, AND TESTAMENTARY DISPOSITIONS AMONG THE MAHOMMEDANS ^ ACCORDING TO THE HANAFI, MALIKI, SHAFIC, AND SHIAH SCHOOLS. COMPILED EBOM Authorities in tlie Oi-igiiial Arabic, with Explanatory Notes and References to Decided Cases, and an Introduction on the Growth ,and Development of Mahonimedan Jurisprudence. By SYED ameer ALI, M.A., Barrister-at-Lnw Sf Author of " The Personal Law of the Mahommedans." Importance of MahommedanLaw. The Law relating to Gifts. Formalities relative to Gifts. The Revocation of Gifts. Consideration on Emaz. The Sliiah Law relating to Gifts. The Law of Gifts according to the Shafio Doctrines. The Law of Wakf. ' The Monhiof Alaihiiti or the Ob- jects of iVakf, The Matwalli. The Powers of the Wakif. Wa?.f in favour of non-existing Objects. The Principles of Construction. The Shiah Law relating to Wakf. The Maliki Law relating to Wahf. The Law of WaJtf according to Shafie School. The Law relating to Wills. Thacker, Spink and Co., Calcutta^ 15 TAGORE LAW LECTURES, 1883.- Royal 8to., cloth, gilt. Rs. 10 ; Post-free. Rs. 10-5. THE HINDU LAW OF INHERITANCE, PARTITION & ADOPTION, AS CONTATNED IN THE OEIGINAL SANSKRIT TREATISES. By Dr. JULIUS JOLLY, Ph.D., Professor of Sanskrit and Compnrntive Philology in the University of Wiirzbvrg. Materials for a Historical Study of Hindu Law. The Hindu Family System acoord- injr to the SmritLs The Early Law of Partition. The Modern Law of Parti- tion. 'The Law of Adoption historically considered. TJnob.structed Inheritance. Obstructed Inheritance. The History of Female Property, Succession to Female Property. Exclusion from Inheritance. TAGORE LAW LECTURES, 1882. Nero Edition in Preparation. THE LAW OF LIMITATION AND PRESCRIPTION INCLUDING EASEMENTS, WITH REFERENCES TO REPORTED CASES TO JUNE, 1885,- BY UPENDRA NATH MITTER, Esq., Tagore Law Lecturer, 1882, Advocate of the High Court, TAGORE LAW LECTURES, 1881. Royal Svo., cloth. Rs, 12 ; Post-free, Rs. 12-8. THE LAW OF TRUSTS IN BRITISH INDIA. WirS AN APPENDIX. The Registration of Societies Act (XXI of 1860), Religious Endowments Act (XX of 1863), Official Trustees Act (XVII of 1864), Indian Trustee Act (XXVII of 1866), The Trustees' and Mortgagees' Powers Act (XXVIII of 1866), The Religious Societies Act (I of 1880), and The Indian Trust Act (11 of 1882). By WILLIAM FISCHER AGNEW, Esq., Of Lincoln's Inn. Bar.-at-Law, Author of ' A Ib-eatise on the Law of Patents,' and 'A Treatise on the Statute of Frauds,' ..; I^I Thacker, Spink and" Co., , Caltutta: TAGORE LAW LECTURES, 1880. JRoyalSvo., cloth. Ms.U; Post-free, Us. 16-13. THE PRINCIPLES OF THE HmDU LAW OE IIHERITAIOE, TOGETHER WITH I. — A Description, and an Inquiry into the Origin of the Sraddha Ceremonies : II. — An Account of the Historical Development of the Law of Suc- cession, from the Vedic Period to the present time : III.— A Digest of the Text-Law and Case-Law, bearing on the Subject of Inheritance. By RAJKUMAR SARVADHIKARI, B.L., Xaro Lecturer and Professor of Sansltrit, Canning College, Luchnow, I. — Introduction. II. — Origin and Growth of Ancestor- worsliip. Ill, — Nature of Sradilha Rites. Per.'ions competent to perform tliese liites. JV. — Sources of Hindn Law. V. — Principles of Succession in tlie middle af^es. VI, — Principles of Successi(m in the middle a<;es (contd.) VII.— Tlie Modern Schools of Hindu Law. VIH. — Mndern Text-writers. IX. — Development of the Principles of Succession from the Eleventh to the Fifteenth Century, X. — Development of the Principles of Iniieritance from the Sixteenth to the Eighteenth Century. XL — The' Succession of an Adopted Son. XII. — Principles of Succession under tlie Mitaksliani Law. XIIL — Order of Succession under the Mitnkshara Law. I. Gotrajas. II. Bandhus. III. The Principles of Survivor- ship. XIV. — Principles of Succession under the Dayabliaga Law, XV. — Principles of Succession under the Dayabhaga Law (continued). OPINIONS OF THE PRESS. " To the class of readers for wlmm it is primarily intended, the work should prove of great valne, and to those also who are no longer students in the sense of learners, but who still desire to devote their leisure hours to inpreiise and verify their knowledge, the work in question should afford considerable interest." — Civil and Military Gazette. ' ' ^ ' " The volume before us forms a complete guide to the complex questions of inheritance which are continually arising, and is therefore extremely useful to law students and lawyers. IJut apart from its legal merits there is much to interest the general reader, both in the account given of the Sraddhas, and in the historical development of the law of succession from the Vedic ages to the present time Before taking leave of the author, we would give as our opinion that, for a very long time, no such intelligent, clear, and masterly expositi(ni of such a difficult branch of Hindu law as inheritance is, has been brought before the public. A far more thorough knowledge of what the true Hindu law on this subject is, will be obtained from reading this book than from wading through all the reports of decided cases that have ever been written." — f.ioneer. Tkacker, Spink and Co., Calcutta. tf TAGORE LAW LECTURES, 1879. Royal Octavo, cloth. Rs. 10 ; Post-free, Rs. 10-8. THE LA.W RELATING TO THE HINDU WIDOW. By Baboo TEAILOKYANATH MITKA, M.A., D.L,, Lam Lecturer, Presidenoy College. I. — The Sources of Hindu Law. II. — The Condition of Women and the Obligation of Widows. III.— The Widow's Eights of Sacces- sion. IV.— The Obligations of the Widow as Heir. V. — The Remarriage of Widows. VI.— The Nature and Extent of the Widow's Estate. VII.— The Nature and Extent of tha Widow's Estate (Continued). VIII. — The Alienations by the Widow. IX. — The Alienations by the Widow (continued'). X.— The RiRhts of the EeTer- sioners. XI. — Suits by Reversioners. Xn. — The Maintenance of the Widow. TAGORE LAW LECTURES, 1878. Jloyal Octavo, cloth. Rs. 10 ; Post-free, Rs. THE HINDU LAW OF 10-8. MARRIAGE AND STRIDHANA. By Baboo GUEUDASS BANEEJEE, M.A., D.L., Tag ore Lam' Professor. I. — Introductory Remarks, II.— ^Parties to Marriage. III. — Forms of Marriage and Formal- ities requisite for a valid Marriage. IV. — Legal consequences of Marriage. V. — Dissolution of M a r r i a g e — Widowhood. VI. — Certain Customary and Statu- tory Forms of Marriage. VII. — ^What constitutes Stridhan. VIII. — Rights of a Woman over her Stridhan. IX.— Succession to Stridhan accord- ing to the Benares School. X, — Succession to Stridhan accord- ing to the Maharashtra, Dra- vida, and Mithila Schools. XI. — Succession to Stridhan accord- ing to the Bengal School. XII. — Succession to Wortfan's Proper- ty other than her Stridhan. TAGORE LAW LECTURES, 1877. Royal Octavo, cloth. Rs. 10; Post-free, Rs. THE LAW RELATING TO 10-8. MINORS IN BENGAL. By E. J. TREVELYAN, Esq., Barrister-at-Law. I, — The Age of Majority. II.— The Right of Guardianship, Natural and Testamentary, ni.— The Court of Wards. IV. — Appointment of Guardians by Civil Courts in the Mofussih V. — Appointment of Guardians by the High Court. VI.— Summary Powers possessed by the Courts in Bengal with reference to the custody of Infants. VII. — Maintenance Of Infants. VIIL — Liabilities of Infants. IX. — Duties and Powers of Guar- dians. X. — ^^Powers of Guardians. XI. — Decrees against Infants; Rati- fication of Acts of Guardian- Limitation of Suits ; Avoid; ance of Acts of Guardian; and Liability of Guardian. XII.— Some Incidents of the Status of Infancy. 3 1 8 Tkacker, Spink and Co., Calcutta. TAGORE LA.W LECTURES, 1876. Second, EAition. Royal Octavo, cloth. Ms. THE LAW OE lOET&l&E IN INDIA, INCLTTDING THE TRANSFER OP PROPERTY ACT And Notes of Decided Cases brought up to date, By Baboo EASHBEHAEY GHOSE, M.A., D.L., Tagore Lam Professor. Revised and re-written to date. COJ^TE|>ITIO]¥li. NEW EDITION, REVISED, 1886. THE POCKET PENAL CODE. lemo. Cloth. Bs. i ; Post-free, Rs. 4-4. THE FOGICET PENAL, CRIMINAL PROCEDURE, AND POLICE CODES, ALSO THE WHIPPING ACT, AND THE RAILWAY SERVANTS' ACT; BEING Acta XLV of I860 (witli Amendments), X of 1882, V of 1861, VI of 1864, XXXI of 1867, and X of 1886. WITH A GENERAL INDEX. THE POCKET CIVIL CODE. 16oto. Cflotli. Rs. i ; Post-free, Rs. 4-4. THE POCKET CODE OF CIVIL LAW, CONTAINING The Civil Procedure Code (Act XIV of 1882). The Court-Fees' Act (VII of 1870). The Evidence Act (I of 1872). The Specific Relief Act (I of 1877), The Limitation Act (XV of 1877). The Stamp Act (I of 1879). M^ITII A GENERAL INDEX. Thacker, Spink and Co., Calcutta. 25 THE TEXT-BOOK FOR GOVERNMENT EXAMINATIONS. Cromn 8vo., cloth.' Rs. 3; Post-free, Rs. 3-3. INTRODUCTION TO THE EE&ULATIOIS OE THE BEI&IL CODE. By 0. D. FIELD, M. A., LL.D. COJMTEJMTg. Chapter I. — The Acquisition of Territorial Sovereignty by the English in the Presidency of Bengal. „ II. — The Tenure of Land in the Bengal Presidency, „ ' III. — The Administration of Land-revenue. „ IV. — The Administration of Justice. Tliicli Octavo. Rs. H ; cash 10 ; Postage, 8 ans. THE PRACTICE PRESIDENCY COURT OF SMALL CAUSES OF CALCUTTA, UNDER THE PEESIBEirCT SMILL CiTJSE COURTS' ACT (XY OF 1882) ; witb notes and an appendix. By E,. S. T. MacEWEN, Esq., Of Lincoln's Inn, Barrlster-at-Law, one of tlie Judges of the Presidency Court of Small Ca^iscs of Calcutta. Part I. — General Ouiline of Practice. II. The Presideiipy Small Cause Courts' Act (XV of 1882), with Notes. " III. The Code of Civil Pi-oceiluie (XIV of 1882), as exteuded to the , " Small Cause Court of Calcutta, with Notes. IV. — Tlie Uules of Practice of the Court. v.— Appendix: Contaiiiiri!; Rules defiuing the powers and duties of Minis- " terial Officers and for the trimsactioii of business; the Local Limits of Calcttlta; Schedules' of Forms; Kules relating to Keferences to the High Court; Tiible of institution and Court Fees; Table of Fees for Legal Practitioners; Scale of expenses to witnesses, and other information. THE INDIAN REGISTRATION ACT, 1 e 7"7- Annotated,. and Eeports of Cases decided upon the various Sections, WITB NOTES, INDEX, Sfc. By CA.RR-STEPHEN, Esq., Of Lincoln's Inn, Barrister-at-Law, 4 2© T/iacker} Spink and Co., Calcutta. Itcdiiced ill Pi-ice to l«s. »; Post-free, Its. S-l*. WITH A Supplement containing the ainended Sections in Act XII of 1879, and Act XIV of 1882. "' ■' THE CODE OF CIVIL PROCEDUEE (ACT X OF 1877). WITH NOTES AND APPENDIX. ' ^ Bt The Hon'blb L. P. DELVES BROUGHTON. " SUMMARY OF CONTENTS : Preface. Table op Oases; Code of Civil Pkoceduke. Appendi?;. : Courts of. Civil Judicature established iu,India ; the .Chartered High| Courts at Calcutta. Bombay and BJa^ras. an^ ip the North- Western Pro-, viiiees ; Acts of Parliament and Letters Patent of 1865 and 1866. Courts' not established by Charter, in Bengal, In Madras, in Bombay, in the Punjab, in British Bui-wiih, in Oudh, in the Central- Provinces,- in Jharisi, in Scinde. in Aden, and in Coorg-. Appeals to the Privy Council. Acts of Parliament relating to the Judicial Committee of the Privy Council. Orders in Council. Eules, High Court, Calcuttar. Appellate Side and Original Side. Limitation Act. Specific Relief Act. Court- Fees' Act. 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