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.
(a) Esdaile v. Stephenson, sup. See the judgment in De Visme v. De V., (1849) 1 M. & G. 336; 18 L. J. Ch. 159.
In Re Keeble and Stillwells Fletton Brick Co. (d), K., in May, 1897, agreed to purchase land from B.; completion to be on 11th October, failing which the purchaser was to pay interest. In June, K. agreed to sell the land to S., subject to "the same terms as to title, etc." as in the original contract. S. refused to complete until January. It was held that the provision as to date for completion and payment of interest could not be read into the agreement of June, and that in these respects the contract must be treated as an open one. S. was accordingly charged with interest from the date when he might prudently have taken possession, namely, the 1st November. It is a common form of condition that - "if from any cause whatever, other than the wilful default' (e) of the vendor, the purchase shall not be completed on the specified day, the purchaser shall thenceforth pay interest on so much of his purchase-money as for the time being shall remain unpaid, and shall have no claim to compensation in respect of the delay in completion." Another not unusual form of condition provides that if the delay in completion shall arise from any cause other than the default of the purchaser, and if he deposits the purchase-money at a bank and gives notice to the vendor, the vendor is only to be entitled to such interest as is produced by the deposit. Under such a condition, it was decided in Bayley-worthington and Cohen's Contract (f), where the purchaser had taken an objection to the title involving a difficult point of law - an objection upheld in the Court of first instance but overruled by the Court of Appeal and House of Lords - that the delay in completion was due to the purchaser's default and that the full interest and not the mere deposit interest (the money having been placed on deposit) was payable to the vendor.
How the condition should be framed.
(b) Denning v. Henderson, (1847) 1 De G. & S. 689; 17 L. J. Ch. 8; Jones v. Gardiner, 1902,1 Ch. 191; 71 L. J. Ch. 93. As to the meaning of "default," see Re Bayley-worthington and Cohen's Contract, 1909, 1 Ch. 648.
(c) Perry v. Smith, (1842) Car. & M. 554.
(d) (1898) 78 L. T. 383.
(e) For cases of wilful default, see Re Young and Harston, (1886) 31 Ch. D. 168; 54 L. J. Ch. 1144 (vendor goes abroad); Re Hetling and Merton, 1893, 3 Ch. 269; 62 L. J. Ch. 783 (failure to obtain execution of necessary party); Re Wilson and Stevens, 1894, 3 Ch. 546; 63 L. J. Ch. 863 (delay in procuring admissions); Re Strafford and Maples, 1896, 1 Ch. 235; 65 L. J. Ch. 124 (vendor's delay in obtaining concurrence of necessary parties); Re Pelly and Jacob, (1899) 80 L. T. 45 (vendor misinterpreted conditions and refused to deliver abstract). For cases where the default was held not to be "wilful," see Re Mayor of London and Tubbs, 1894, 2 Ch. 524; 63 L. J. Ch. 580 (omission to verify statement in conditions); Re Woods and Lewis, 1898, 1 Ch. 433; 2 Ch. 211; 67 L. J. Ch. 475 (no want of reasonable care); North v. Percival, 1898,
The common condition that a purchaser, "upon completion, shall be let into the receipt of the rents and profits," prima facie refers only to rents reserved on an ordinary tenancy; and where property was described as "now or late in the several occupations of H. R. and others," and parts of the property were subject to leases for lives at low rents, of which the purchaser had no notice, it was held that the ordinary condition as to letting him into receipt of the rents and profits did not apply, and that he could not be compelled to accept the title without compensation (g). And where the condition was that the purchaser should be entitled to "possession, or to the receipt of the rents and profits," and the vendor was in actual possession, the latter words were held to be otiose (h).
"Receipt of rents and profits."
(f) 1909, 1 Ch. 648.
(g) Hughes v. Jones, (1861) 3 D. F. & J. 307; 31 L. J. Ch. 83.
(h) Anker v. Franklin, (1881) 43 L. T. 317.
The word "possession" is a flexible term, and does not necessarily import a personal occupation. Thus, where the property, an orchard, was described "as in occupation of L. P." and the purchaser was to have 'possession on the day fixed for completion, it was held that he could not insist on being put into personal occupation of the property (i).
It is usual (k), on a sale by auction, to provide that the vendor shall, upon payment of the purchase-money, execute proper conveyances to the respective purchasers of the lots purchased by them respectively; such conveyances, etc, to be prepared by and at the expense of the respective purchasers, and to be tendered by them for execution at a specified time and place. The condition is scarcely necessary; for the contract in itself gives the purchaser a right to a conveyance upon payment of his purchase-money; and he is, prima facie, bound at his own expense to prepare and tender it (l). Where time is intended to be of the essence of the contract, it is a common practice to stipulate that a draft of the proposed conveyance shall, at a specified time before the day fixed for completion, be furnished for perusal by the vendor's solicitor.
On a sale by mortgagees or trustees, it is sometimes stipulated that they shall be required to give only the implied covenant against incumbrances; but the condition is unnecessary, provided that the particulars or conditions give the purchaser notice of the fiduciary character of the vendors (m).
Covenants by trustees and mortgagees.
(i) Lake v. Sean, (1860) 28 Beav. 607.
(k) Cf. General Conditions, 1925, No. 24.
(l) Sug. 14th ed. 541; Poole v. Hill, (1840) 6 M. & W. 835; 10 L. J. N. S. Ex. 81; L. P. Act, 1925, s. 48.