Sec. 1. Of the Rights and Liabilities of the Parties pending Completion in respect of the Property sold. Sec. 2. Of the Transfer pending Completion of the Rights and Liabilities under the Contract.

Sec. 1. - Of The Rights And Liabilities Of The Parties Pending Completion In Respect Of The Property Sold

The effect of the contract upon the position of the parties has already been shortly stated (a). Unlike the case of goods, the legal estate in land can never pass by the contract itself; a conveyance distinct from the contract is always required (b). But there is a considerable likeness between the effect of the unconditional sale of a particular chattel at law and the effect in equity of the sale of lands. For in equity, subject to the vendor's duty of showing a good title, to his lien for the price, and to his right to the rents and profits up to the proper time for completion, the whole estate contracted for in the lands sold is considered as belonging to the purchaser as from the date of the contract for sale (c). As from that date, therefore, the vendor is bound to use the same care in preserving or managing the property sold as a trustee must use with regard to the property subject to his trust (d). As from that date the property stands at the purchaser's risk as regards all losses caused without the vendor's fault, as through tempest, flood, fire, or fall in prices (e); and the purchaser takes the benefit of all improvements casually happening thereto, such as the death of the tenant for life on the purchase of the reversion (f). And as from that date in equity the lands sold are the purchaser's lands, and, if freehold or copyhold, are the purchaser's real estate (g), and are in the vendor's hands converted into personalty (h). But this passing of the equitable estate in the lands sold to the purchaser is subject to the condition that the contract be such as can be specifically enforced in equity; and if this condition fail, as by the want of a good title on the vendor's part, the lands remain the vendor's property in equity as well as at law (i). It is, of course, by reason of the doctrine that, as regards the consequences of any act contemplated by a binding agreement, equity regards what ought to be done as actually accomplished (k), that in the interval between contract and conveyance the property belongs in equity to the purchaser, for whom the vendor is constructively a trustee. This trusteeship is not absolute, for the vendor has a personal and substantial interest in the property, which he is entitled to protect (I). As a trustee for the purchaser, the vendor is bound, as we have seen, to take proper care of the property. His beneficial interest in the land sold consists, first, in his lien thereon for the price, involving the right to hold possession of the land until the whole purchase money be paid (m); and secondly, in the right to take for his own use the rents and profits up to the proper time for completion, that is, the time fixed by the contract for completion or, under an open contract, the time when a good title shall have been shown (n). And the vendor lies under the obligation, correlative to the latter benefit, of discharging all outgoings due in respect of the property sold up to the same time (o). We will first consider the rights of the purchaser, and the vendor's consequent liability to him, and will then examine the vendor's rights.

(a) Above, pp. 49, 50.

(b) Wms. Pers. Prop. 65, 72, 16th ed.

(c) Above, pp. 49, and n. (h), 50.

(d) Above, p. 50 and n. (k).

(e) Poole v. Shergold, 1 Cox, 273; Paint v. Meller, 6 Ves. 349, 352; Harfordv. Furrier, 1 Madd. 532, 539; Robertson v. Skelton, 12 Beav. 260: Sug. V. & P. 291; Bayner v. Preston, 18 Ch. D. 1: Castellain v. Preston, 11 Q. B. D. 380.

(f) White v. Nutts, 1 P. \V. 61, 62; Ex parte Manning, 2 P. W. HO; Sug. V. & P. 291, 292; Dart, V. & P. 248, n. (u) , 649, 6th ed.: 286, n. (u), 732, 6th ed.; 672, 7th ed.

(g) Thus, the lands sold will pass under a devise of all the purchaser's lands or veal estate: Greenhill v. Grenhill, Prec. Ch. 320; Atchery v. Vernon, 10 Mod.

518, 526 - 529: Pottery. Potter, 1 Ves. sen. 437: Capel v. Girdler, 9 Ves. 509, 510; Marston v. Roe d. Fox, 8 A. & E. 14, 63; Sug. V. & P. 175, 183 sq.; Re Kensington, 1902, 1 Ch. 203; Re Taylor, 1910, 1 K. B. 562, 571, 572, 580.

(h) A. -G. v. Brunning, 8 H. L. C. 243, 255, 265.

(i) Broome v. Monck, 10 Ves. 597: Sug. V. & P. 191, 193; Lysaght v. Edwards, 2 Ch. D. 499, 506 508: Be Thomas, 34 Ch. D. 166; Ridout v. Fowler 1904, 1 Ch. 658, 2 Ch. 93; see above, pp. 456, 458

(k)Re Cary-Elwes'Contract, 1906, 2 Ch. 148, 14; Wms. Real Prop. 187, 21st ed.

We have seen (p) that from the date of the contract the purchaser is in equity the owner of the property sold, though not absolutely, but subject to the condition that the contract be specifically enforceable. The lands sold are in equity his lands; he can sell, charge or devise them; if of inheritance, they are his real estate descendible to his heir, and are applicable as such for payment of his debts (q). He therefore bears all losses and takes the advantage of all additions or improvements which casually happen or are made to the property after that date. Thus, if after the signing of the contract, but before its completion, a house or any other building erected on the land sold be accidentally destroyed by fire, the purchaser remains none the less liable to perform the contract without any abatement of the price, and this liability may be enforced, not only at law but by a decree for specific performance in equity (r). The same rule is applicable if the lands sold be devastated by tempest, earthquake, or volcanic eruption, or be flooded, or suffer an irruption of the sea (s), or lose in value by reason of a fall in prices (t). On the other hand, the purchaser takes the advantage of all improvements effected in the property sold through extraneous causes, such as any exertion of natural forces, the dropping of lives on sale of a reversion or remainder (u), the death of the incumbent on the purchase of an advowson (x), a general rise in the price of land, or the making of any road, railway, or other public work or undertaking, through or near the property (y). And it appears that if the vendor himself make permanent improvements, as by building after the contract, the purchaser will be entitled to the benefit thereof without further payment (z). The purchaser is also entitled in equity to all things which belong to the owner of the inheritance as against a tenant for life impeachable for waste, such as timber trees blown or cut down (a), or minerals gotten after the contract either by a trespasser or by the vendor otherwise than in working, up to the proper time for completion, mines or quarries open at the time of sale (b).