The doctrine of compensation often comes before courts of equity, and the various questions to which it gives rise have been very variously decided. Much uncertainty hangs over many of them at this moment The most usual form in which this subject is presented is where there is a contract for the sale of an estate, and it cannot be carried into exact execution, by * reason of some change or mistake about it, and specific performance is decreed with compensation to the party who would otherwise lose by the change or mistake, (d) At law it is
(w) Martin v McCormick, 4 Sandf. 366.
(x) Bank of Chillicothe v. Dodge, 8 Barb. 233; Merchants Bank v. Spalding, 12 Barb. 302; Leslie v. Baillie, 2 Younge &C, Ch. 91; Ring V. Doolittle, 1 Head, 77(Y) United States v. Bartlett, Daveis, 9.
(a) Champlin v. Lay tin, 18 Wend. 407; Hall v. Reed, 2 Barb. Ch. 500.
(b) Ken von p. Weltv, 20 Cal. 637.
(C) Williams v. Bartholomew, I B.& P. 326(d) Hill v. Buckler, 17 Ves. 401. For the circumstances which may entitle a defendant to compensation, though not difficult to adjust the damages to such circumstances, or, indeed, in many of these cases, to maintain the action, (e) So, at least, it is said, and undoubtedly is, at common law; but in some States a jury may find conditional damages to be released on specific performance of a contract(f) nor are we aware of any inherent difficulty in this. In equity, at this time, the amount of this compensation is often ascertained by a jury, on an issue framed for that purpose; and, formerly, it is said, this was almost always done, (g) instead of referring the case, as is more usual now, to a master, (h)
It is now generally admitted, that if the defect or diminution or incapacity is large and substantial, compensation cannot be made for it, and it is good ground for withholding a decree for performance, (i) It should seem, therefore, that only when the substance of the agreement can be fully executed, and only when a comparatively trifling adjustment is needed to satisfy the equities of the case, that compensation can be made. (j)
But this rule, if it be a rule, is very liberally construed.
So also, it is said that compensation is not damages, but must be carefully discriminated from them, (k) But it is not easy to understand this rule very clearly. If it is meant that * compensation is made only where it can be exactly ascertained and proportioned, and not estimated in general as damages often are, numerous cases contradict this. Formerly, a purchaser has been compelled to take an estate which was liable to an uncertain and nearly contingent diminution or charge, with a compensation for this possibility, but it seems now to be admitted that these cases were erroneous (l) sufficient to enable him to refuse a specific performance, see the judgment of Sir William Grant, M. R.. Dyer v. Hargrave, 10 Ves. 506, where it was held, that a vendee cannot obtain compensation for a defect which he knew, or from its evident character most be presumed to have known, to exist, notwithstanding it was represented by the vendor not to exist
(e) Lord Al vanley, C. J., Johnson v, Johnson. 3 B & P. 169, 170
(f) At least, such has been the practice in Pennsylvania, Gibson, C. J., Decamp v. Feay, 5 S. & R. 328; Coulter, J., Haube rger v. Root, 5 Barr. 112; Kribbs v. Downing, 25 Pa, 399.
(g) I Fonb Eq c 3, § 8, note (b)
(h) And if the parties have themselves stipulated that the compensation for errors in the description of the property shall be estimated by arbitration, upon their failure to get it settled in that manner, the court will settle it by reference to the Master. Leslie v Thompson, 9 Hare, 268, 5 Eng. L. & Eq 171.
(i) Peers r. Lambert, 7 Beav 546 A want of title to 209 acres, out of 698, was held to be too great a deficiency to be supplied by compensation, although the parcel of 209 acres was separated by a public road from the residue, and all the buildings were on the latter. Jackson v. Ligon. 3 Leigh, 161.
(j) Shackleton v. Sutcliffe, 1 De G 4 S. 609.
(k) See White v. Cud don. 8 Clark & F 792 Lord Brooke v Rounthwalte, s Hare, 298.
(l) A purchaser will not be compelled to accept an indemnity as compensation. Balmanno v Lumley, 1 Ves & B 224: Fildes v Hooker, 3 Madd. 193 In the
It is settled, also, that no purchaser is bound to take another thing - one different in nature- from that he bargained for;(m) as not a lease for an underlease, or vice versa; (n) nor a life-estate instead of a fee; (o)1 nor an estate in reversion instead of one in possession, (p)
If a purchaser find that he cannot have the estate he bargained for without a considerable deduction from it, he may insist on this, and on being allowed adequate compensation, (q) * But a seller could not insist that a purchaser should take an estate, with an equally large diminution, although he offered an adequate deduction from the price, (r) The reason is latter case, the Vice-Chancellor noticed a distinction between a risk going to the very estate in the land, and therefore putting in jeopardy the specific subject of the contract, in which case he held it to be clear, that the acceptance of an indemnity would not be required; and the case where a good title can be made, but it is subject to a pecuniary charge; and he stated that in cases of the latter kind, a court of equity had compelled a specific performance of the contract upon security against the charge. Though even that course, he said, might have been questionable, as imposing, at all events, a considerable degree of trouble upon a purchaser, to which he had not subjected himself by the terms of his contract. Neither can a vendor, as it seems, be compelled to give an indemnity. In Balmanno v. Lumley, 1 Ves. & B. 225 (which was an application by a vendor), Lord Eldon, Ch., said " he did not apprehend the court could compel the purchaser to take an Indemnity, or the vendor to give it." And in Aylett v. Ashton, 1 Mylne & C. 114, it was held, that an indemnity could not be required. And see Paton v. Brebuer, 1 Bligh, 66, 67. But Lord Eldon himself had decreed an indemnity in Milligan v Cooke, 16 Ves. 13, and whether the explanation of that case, suggested in the note in 1 Bligh, 67, be supported by the facts, quaere. Lord St. Leonards, whose opinion appears to be that an indemnity cannot be required in any case, has questioned the propriety of the decree in Milligan v. Cooke, 1 Sugd. V. & P. ch 7, § 1, p. 35.