This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
The right of a purchaser to recover his deposit in the event of the non-completion of the contract is a Common Law right (e). In this respect Equity simply follows the law, and considerations which govern the Court in granting relief by way of specific performance have no application (/).
Deposit, right of purchaser to recover is a Common Law right.
(u) Tolhurst v. Associated Portland Cement Co., 1903, A. C. 414 ; 72 L. J. K. B. 834. The assignment by a purchaser of his interest under a contract to purchase a reversionary interest in property is a legal chose in action under s. 25 (6) of the Judicature Act, 1873, and the assignee can sue the vendor for damages for breach of contract; Torkington v. Magee, 1902, 2 K. B. 427; 71 L. J. K. B. 712; Bateman v. Hunt, 1904, 2 K. B. 530 ; 73 L. J. K. B. 782.
(x) See sup. p. 294 et seq.
(y) See sup. p. 294.
(z) Phillips v. Hull Alhambra Co.,
1901, 1 K. B. 59 ; 70 L. J. K. B. 26 ; Griffith v. Tower Co., 1897, 1 Ch. 21; 66 L. J. Ch. 12.
(a) Moggridge v. Jones, (1811) 14 Ea. 486 ; 3 Camp. 38 ; Byles on Bills of Exchange, 16th ed. 156.
(b) Spiller v. Westlake, (1831) 2 B. & Ad. 155, 157.
(c) Bayley on Bills, 507.
(d) See also sup. p. 215 et seq.
(e) Howe v. Smith, (1884) 27 Ch. D. 89 ; 53 L. J. Ch. 1055.
(/) 2te Scott & Alvarez, 1895, 2 Ch. at p. 612; 64 L. J. Ch. 821. As to the purchaser's lien for the deposit, see sup. p. 112.
Even before the Judicature Acts the Court of Chancery had jurisdiction to order the return of the deposit (g), hut it might, and frequently did, leave the purchaser to bring an action at law to recover it (h) ; the Court would only order the return of the deposit in cases where the purchaser was entitled to recover it at law. Since the Judicature Act the Chancery Division has all the powers of a Court of Common Law; hence, though still bound to follow the law (i), it can no longer refuse to exercise its power to order the return of the deposit in proper cases if requested to do so (k). And the Court now has power to make an order for its return on a summons under the V- & P. Act, 1874 (/), where the grounds for doing so do not involve testing the validity or existence of the contract (m) in its inception (n).
Chancery jurisdiction to order return of, before the Judicature Act ; since the Judicature Act.
Where there is no condition respecting the forfeiture of the deposit, and the vendor fails to show a good title according to the terms of the contract, and the purchaser, consequent thereon, rescinds the contract, he can recover his deposit (o) ; so, also, if the contract goes off owing to other default of the vendor (p), e.g., where time is of the essence of the contract, and the vendor not having performed his part of the contract, the purchaser treats it as at an end. But the fact that the purchaser, though not entitled to rescind the contract, can resist specific performance at the instance of the vendor, will not entitle him to recover his deposit; thus, where a purchaser can only prove a defect in a title by making inquiries which he is expressly precluded from making, he cannot recover his deposit, because he has himself broken the contract (q). And where conduct of the purchaser amounts to a repudiation of the contract, there being no default on the part of the vendor, he has no right to recover his deposit (r) ; but delay on the part of the purchaser, though sufficient to deprive him of the equitable remedy of specific performance, does not necessarily amount to such a repudiation (s); and the purchaser will not acquire a right to recover by reason of the estate being subsequently sold by the vendor (t) ; nor, if subsequently to his own default and the consequent forfeiture of the deposit, it turns out that the vendor had in fact no title (u). Where the contract was a parol contract only and not binding, the purchaser on refusing to complete was held to be entitled to the return of his deposit (.r), but, it seems, without interest (y). But where the purchaser paid the deposit, knowing that the vendor's name did not appear on the memorandum, and after accepting and examining tlie abstract repudiated the contract on the ground of the memorandum not being sufficient within the Statute of Frauds, he was not allowed to recover the deposit (z).
Purchaser can recover deposit, when.
(g) Where the vendor's suit for specific performance failed ; Lord Anson v. Hodges, (1832) 5 Si. 227; Webb v. Kirby, (1856) 7 D. M. & G. 376 ; 26 L. J. Ch. 145 ; Sheard v. Venables, (1867) 15 W. R. 1166 ; 36 L. J. Ch. 922 ; and for the practice where specific performance was refused to the purchaser, see Todd v. Gee, (1810) 17 Ves. 273.
(A) Southcomb v. Bishop of Exeter; (1847) 6 Ha. at p. 225 ; 16 L. J. Ch. 378 ; Rede v. (Jakes, (1865) 2 D. J. & S. 518; 34 L.J. Ch. 145.
(i) Re National Prov. Bk. of England, 1895, 1 Ch. 190; 64 L. J. Ch. 255 ; Me Scott § Alvarez, 1895, 2 Ch. at p. 612 ; 64 L. J. Ch. 821.
(k) See Manners v. Mens, (1885) 29 Ch. D. at p. 735 ; 54 L. J. Ch. 909 ; of. Re Davis and Cavey, (1888) 40 Ch. D. 601 ; 58 L. J. Ch. 143, where the Court refused to order return of deposit.
(/) Re Higgins and Percival, (1888) 59 L. T. 213; 57 L. J. Ch. 807; Re Walker and Oakshott, 1901, 2 Ch. 383; 70 L. J. Ch. 666, on a summons taken out by the purchaser ; Re Horgreaves and Thompson, (1886) 32 Ch. D. 454 ; 56 L. J. Ch. 199 ; Re Marshall and Salt, 1900, 2 Ch. 203; 69 L. J. Ch. 542, on a summons taken out by the vendor.
(m) Re Davis and Carry, sup. ; Re Sandbach and Edmondson, 1891, 1 Ch. 99 ; 60 L. J. Ch. 60; and see Re Hughes and Ashley, 1900, 2 Ch. 595; 69 L. J. Ch. 741.
(n) Re Jackson and Woodburn, (1887) 37 Ch. D. 44 ; 57 L. J. Ch. 243 ; Re Wallis and Barnard, 1899, 2 Ch. 515 ; 68 L. J. Ch. 753.
(o) Sup. p. 175 et seq.
(p) Sup. p. 984.
(q) Best v. Hamand, (1879), 12 Ch. D. 1 ; 48 L. J. Ch. 503 ; Re Sand-bach and Edmondson, 1891, 1 Ch. 99 ; 60 L. J. Ch. 60 ; Re National Prov. Bk. of England, 1895, 1 Ch. 19b ; 64 L. J. Ch. 255 ; Re Scott & Alvarez, 1895, 2 Ch. 603 ; 64 L. J. Ch. 821.
(r) Howe v. Smith, (1884) 27 Ch. D. 89; 53 L. J. Ch. 1055. Qu. whether this would apply to a case where the purchase-money was payable by instalments, see Cornwall v. Henson, 1900, 2 Ch. 298; 69 L. J. Ch. 581.
(s) Howe v. Smith, sup.; Levy v. Stogdon, 1898, 1 Ch. 478 ; 67 L. J. Ch. 313; 1899, 1 Ch. 5 ; 68 L. J. Ch. 19 ; Cornwall v. Benson, 1899, 2
Ch. 710 ; 68 L. J. Ch. 749 ; 1900, 2 Ch. 298; 69 L. J. Ch. 581.
(t) Howe v. Smith, sap. ; Sug. 14th ed. 40; and Depree v. Bed-borough, (1863) 4 Gif. 479; 33 L. J. Ch. 134, a sale by the Court; Ex p. Barrell, (1875) 10 Ch. 512 ; 44 L. J. Bk. 138; but cf. Palmer v. Temple, (1839) 9 A. & E. 508 ; 8 L. J. N". S. Q. B. 179; and see comments thereon in Howe v. Smith, sup.; Cornwall v. Henson, 1899, 2 Ch. at p. 716.
(a) Soper v. Arnold, (1889) 14 A. C. 429; 59 L. J. Ch. 214; and see Re Scott § Alvarez, 1895, 2 Ch. 603 ; 64 L. J. Ch. 821.
(x) Casson v. Roberts, (1862) 31 Beav. 613 ; 32 L. J. Ch. 105.
(y) S. c.