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.
(c) Blackett v. Bates, (1865) 1 Ch. 117 ; 34 L. J. Ch. 515; Gervais v. Edwards, (1842) 2 D. & War. 80; Bills v. Croll, (1845) 2 Ph. 60 ; Firth v. Ridley, (1864) 33 Beav. 516.
(d) See Peto v. Brighton, §c. R. Co., (1863) 1 H. & M. 468 ; and as to builders' contracts, see sup. p. 1025.
(e) Rogers v. Challis, (1859) 27 Beav. 175; Sichelv. Mosenthal, (1862) 30 Beav. 371; 31 L. J. Ch. 387; Larios v. Bonany y Gurety, (1873) L. R. 5 P. C. 346; Western Wagon Co. v. West, 1892, 1 Ch. 271, 273; 61 L. J. Ch. 244 ; S. African Territories, Ld. v. Wellington, 1898, A. C. 309; 67 L.J. Q. B. 470.
(/) Hermann v. Hodges, (1873) 16 Eq. 18; 43 L. J. Ch. 192; Seton, 6th ed. 2041.
(g) Cooth v. Jackson, (1801) 6 Ves. 12, 30.
(h) Mortlock v. Bulla; (1804) 10 Ves. 292, 313 ; Orel v. Noel, (1820) 5 Mad. 438; Bridger v. Rice, (1819) 1 J. & W. 74; Turner v. Harvey, (1821) Jac. at p. 178 ; Wood v. Richardson, (1840) 4 Beav. 174 ; Baylies v. B., (1844) 1 Col. at p. 546 ; Bellringer v. Blagrave,(1847) 1 De G. & S. 66 ; White v. Cuddon, (1842) 8 C. & F. 766; Sneesby v. Thome, (1855) 7 D. M. & G. 399; Maw v. Topham, (1854)
It has been held that, if an agreement he entered into by an agent, the omission of all usual and proper stipulations in favour of his principal (7) may be a reason for refusing specific performance: although, as a general rule, the Court will not decline to enforce a contract on the mere ground of its improvidence (m). But it is conceived that the decision in question may be explained on the ground of mistake, and that a contract entered into through an agent stands on no different footing from one made directly by the principal.
Improvident contract by agent.
A contract not infrequently contains on the one side a negative, on the other a positive, stipulation. The jurisdiction of the Court to restrain a breach of the negative covenant was formerly regarded as being, except in partnership agreements, confined to those cases where it could also specifically enforce the positive side of the contract (n). But this limitation of the jurisdiction was finally broken down by the decision of Lord St. Leonards in Lumley v. Wagner (o). The principle acted upon in that case was, apparently, intended to apply only to cases in which there is an express negative covenant (p) ; it has, however, been extended to many cases in which a negative stipulation could only be implied from that which was in terms positive (q). But while, on the one hand, to limit the jurisdiction by way of injunction to cases where there is an express negative stipulation is not a rational distinction, because many contracts, positive in terms, are in substance also negative; yet, on the other hand, as almost every contract may be so analysed as to imply a negative, it is difficult to place any limits on the remedy by injunction in the case of positive contracts, if, where specific performance is impossible, the Court will indirectly grant it by means of an injunction wherever a negative stipulation can be implied (r).
Contracts containing positive and negative terms;
19 Beav. 576 ; Naylor v. Goodall, (1878) 47 L. J. Ch. 53 ; Shrewsbury R. Co. v. L. § N. W. R. Co., (1853) 4 D. M. & G. 115 ; 26 L. J. Ch. 482 ; Dance v. Goldingham, (1873) 8 Ch. 902; 42 L. J. Ch. 777, where trustees were selling under depreciatory conditions ; Dunn v. Flood, (1885) 28 Ch. D. 586 ; 54 L. J. Ch. 370.
(i) Thompson v. Blackstotie, (1843) 6 Beav. 470.
(h) Rede v. Oakes, (1864) 4 D. J. & S. 505 ; 34 L. J. Ch. 145 ; but as to the law at the present day, see sup. p. 74.
(/) Helsham v. Langley, (1841) 1 Y. & C. C. C. 175. As to contracts by agents, see Fry, 4th ed., 235 et seq.; and Chadbum v. Moore, (1892) 61 L. J. Ch. 674.
(m) Sullivan v. Jacob, (1828) 1 Moll. 472, 477.
(n) Kemble v. Kean, (1829) 6 Si. 333 ; Kimberley v. Jennings, (1836) ib. 340; Baldwin v. Soc. for Diffusing Knowledge, (1838) 9 Si. 393; Hills v. Croll, (1845) 2 Ph. 60.
(o) (1852) 1 D. M. &G. 604; 21 L. J. Ch. 898.
The conclusion to be drawn from the authorities is, it is conceived, correctly stated at p. 373 of the 4th edition of Fry on Specific Performance, and is as follows : That the Court will probably hereafter, except so far as it may be bound by existing authorities, consider whether the contract in respect of which the injunction is sought is or is not of a kind fit for specific performance; that, if it be, the Court will tend to restrain acts inconsistent with it, whether there be negative words or not; that if it be not, no injunction will be granted, even though negative words may be present (s).
Injunction, when granted.
Etpiity has refused to enforce contracts on the mere ground of their hardship as against the defendants (t) ; as where one-half the purchase-money would, under a clause of forfeiture contained in the will of a prior owner, have gone to a third party (u) ; and where the contract provided that a road should he made by the vendor over property retained by him, and it appeared that the making of the road would risk the forfeiture of the lease of part of the estate (x). And the case is the same where specific performance would involve the breach of a prior agreement made by the defendant with a third party. Thus, where A., who held under a lease from B., with a covenant not to assign or underlet without B.'s consent, agreed to underlet part of the property to C, with the option of purchasing the whole within five years, and B. refused his consent; it was held that C. was not entitled to a decree for specific performance against A., as that would involve a breach of the latter's covenant with B. (y). But before the validity of such a defence is admitted, the Court requires to be satisfied that forfeiture will be the necessary result of enforcing the contract, and also takes into consideration who is responsible for the forfeiture (z). For example, it will not permit a defendant to put himself in such a position that his performance of the agreement shall create a forfeiture, and then to turn round and say that the plaintiff shall not have specific performance of the agreement, because the defendant has, by his own act, enabled the landlord to enter, upon the agreement being performed (a). So, it has been held, that a mortgagor contracting to grant a lease should not be compelled to pay off the mortgage in order to enable him to complete the contract (b). So, where a mortgagee, after foreclosure, contracted to sell at a profit, and inadvertently contracted in the character of a mortgagee with a power of sale, the Court refused to compel him to exercise the power, and so run the risk of being held accountable for the purchase-money as mortgagee instead of absolute owner (c); and, where there was a mutual understanding, but no definite agreement between the mortgagee and intending lessee that the agreement for a lease should be approved by the mortgagor, and he declined to concur, the Court refused to enforce the agreement against the mortgagee, or to hold him liable in damages (d). So, it is conceived, specific performance would be refused against a mortgagee with no power of sale, who enters into the contract in the mistaken belief that his mortgagor will concur. And where an estate, subject to a rent-charge of 63/., was contracted to be sold for 868/., "free from incumbrances," the Court refused to insist on the vendor paying into Court the value of the charge under s. 5 of the Conveyancing Act, 1881, and allowed him to rescind (e).