Anderson v. Yaworski

• Decision Date: 08 October 1935
• Citation: 120 Conn. 390,181 A. 205
• Court: Connecticut Supreme Court
• Parties: ANDERSON v. YAWORSKI.

181 A. 205

120 Conn. 390

ANDERSON v. YAWORSKI.

Supreme Court of Errors of Connecticut.

October 8, 1935

Appeal from City Court of Hartford; Edwin M. Ryan, Judge.

Action by Thomas F. Anderson against Annie M. Yaworski, to recover money paid to defendant under a bond for a deed, wherein defendant filed a counterclaim and the issues were tried to the court. From a judgment for plaintiff, defendant appeals.

No error.

BANKS and HINMAN, JJ., dissenting.

Leon A Winslow, of Hartford, for appellant.

James B. Henry, of Hartford, for appellee.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

MALTBIE Chief Justice.

On November 13, 1933, the plaintiff and the defendant entered into a written agreement, by the terms of which the defendant agreed to sell and the plaintiff to buy for $2,745 a certain parcel of land with the buildings thereon. The agreement acknowledged the receipt of $100 upon the purchase price and provided that the plaintiff would, on or before April 1 1934, pay the defendant the balance of the purchase price, in part in cash and the rest by the assumption of a mortgage already upon the premises and by giving to the defendant a second mortgage for the remaining sum due; and it also provided that if the plaintiff failed to make the payments stated, he should forefeit all claims to the premises and all money paid. Upon the execution of the contract the defendant paid a commission of $140 to a real estate agent for his services in negotiating the sale. The plaintiff intended to occupy the premises as his home. On January 26, 1934, the dwelling house on the premises was totally destroyed by accidental fire without the fault of either party. Shortly before April 1st the defendant informed the plaintiff that she would be ready and willing to carry out the contract on March 31st; and she also offered to assign to him all rights under an insurance policy which had been issued to her upon the buildings on the property. This offer the plaintiff refused and, declining to make further payments, he demanded the return of the $100 he had paid. He brought this action to recover that sum, and the defendant filed a counterclaim seeking damages for his failure to perform the contract. The trial court concluded that, as there had been a substantial failure of consideration by the destruction of the dwelling house, the plaintiff was relieved of his obligation to fulfill the provisions of the agreement and was entitled to recover the amount he had paid. Judgment entered for the plaintiff upon the complaint and counterclaim, and the defendant has appealed.

It is undoubtedly true that the majority of courts have adopted the rule that, where a contract is made to convey real estate upon which a building stands, the burden of the loss by the burning of the building without fault of either party falls upon the vendee, no matter how material a part of the substance of the contract it was or whether or not the time for the performance had arrived when it was destroyed. Notes, 22 A.L.R. 575; 41 A.L.R. 1272; 46 A.L.R. 1126. This rule, differing from that applied to contracts for the sale of personal property, is based, as far as legal principles are concerned, upon the nature of the estate of the vendee, which equity regards as arising out of the contract. The legal foundation for the rule does not bear analysis. See Langdell, a Brief Survey of Equity Jurisdiction (2d Ed.) p. 58 et seq. (1 Harvard Law Review, p. 375 et seq.); 2 Williston, Contracts, § 928 et seq. (9 Harvard Law Review, p. 106). While for many purposes the vendee in equity is recognized as the real owner of the property, it cannot be said with accuracy that the entire beneficial interest has vested in him; for instance, pending the time fixed for the performance of the contract, the vendee has not one of the principal incidents of ownership, the right to the enjoyment and profits of the property. 66 C.J. p. 1034, § 784 et seq. For this reason, if for no other, the vendor cannot properly be said to be a trustee of the land for the vendee; Brett, L. J., Rayner v. Preston, L. R. 18 Ch. Div. 1, 10; Pound, The Progress of the Law, 33 Harvard Law Review, p. 830; rather their relationship is like that between a mortgagor in possession and the mortgagee, which is more aptly described as one in the nature of a trust than as one of a trust in fact, although, as in similar situations, equity may for certain purposes undoubtedly treat the vendor as a quasi trustee. Andrews v. New Britain National Bank, 113 Conn. 467, 472, 155 A. 838.

The maxim that equity regards that as done which ought to be done and its outgrowth, the equitable doctrine of conversion, cannot be broadly applied to such a situation as the one before us. The basis of the maxim is the existence of a duty; " unless the equitable ought exists, there is no room for the operation of the maxim" ; 3 Pomeroy, Equity Jurisprudence (4th Ed.) § 1160; agreements " ‘ are to be considered as done at the time when, according to the tenor thereof, they ought to have been performed" ’ ; Hall v. Hall, 50 Conn. 104, 111; Manice v. Manice, 43 N.Y. 303, 372; and equity can hardly regard that as presently done which the parties to a contract have agreed shall be done only in the future. The basis of the doctrine of conversion whereby for certain purposes real estate is considered in equity as personal and personal estate as real, is the intent of the party creating a right in the property, or in the case of a contract, the intent of the parties to it; " this, like all other questions of intention, must ultimately depend upon the provisions of the particular instrument." Pomeroy, Op. Cit. § 1162. " The doctrine of equitable conversion is an equitable one, adopted for the purpose of carrying onto effect, in spite of legal obstacles, the intent of a testator or settlor. It is not a fixed rule of law, but proceeds upon equitable principles which take into account the result which its application will accomplish. Its application is, therefore, governed by somewhat different considerations, according to the connection in which it is invoked." Emery v. Cooley, 83 Conn. 235, 238, 76 A. 529, 530. In determining the devolution of estates, equity may regard real property as converted into personal or personal into real even though by the terms of a will the actual conversion is postponed to some future time, and may hold that a contract to sell real estate works a conversion in so far as the rights of those interested in the estate of the vendor are concerned, where he dies before the time of performance has arrived. Emery v. Cooley, supra; Bowne v. Ide, 109 Conn. 307, 315, 147 A. 4, 66 A.L.R. 1036. But in doing this, equity is giving that effect to the transaction which will most nearly work out the rights of those interested in the estate in accordance with the aspect of the property which it may fairly be assumed it had taken in the mind of the deceased. But, as between the parties to the contract, to regard the land as converted into personalty before the time for performance of the contract has come is to do violence to their expressed intent. Under such a contract, the vendor's right to the money in lieu of the land and the vendee's right to the land in lieu of the money can arise only when the time agreed upon for performance has arrived.

Nor do the distinctions between the effect of the contract for the sale of real estate and those for the sale of personal property, often adverted to in the opinions, afford sufficient basis for the application of a different rule as to risk of loss. While it is true that in most jurisdictions of this country, by the recording of a contract to sell real estate, notice of the rights of the vendee will be imputed to all the world and hence he is protected to a greater extent than is the vendee of personal property, that is only because of the effect of the recording statutes; and a vendee of personal property enjoys a like protection where, as in the case of conditional sales, the statutes provide for the recording of the contract. Liquid Carbonic Co. v Black, 102 Conn. 390, 394, 128 A. 514; Tire Shop v. Peat, 115 Conn. 187, 189, 161 A. 96. While contracts for the sale of real estate may usually be specifically enforced, but contracts for the sale of personal property can only be so enforced in exceptional circumstances, this distinction is due to the fact that in the case of the latter the disappointed purchaser may ordinarily repair his loss by the purchase of other like property, while each parcel of land has usually its own peculiar characteristics and one parcel cannot often afford a complete and adequate substitute for another in the mind of the purchaser. " Courts of equity decree the specific performance of contracts, not upon any distinction between realty and personalty, but because damages at law may not, in a particular case, afford a complete remedy. Thus a court of equity decrees performance of a contract for land, not because of the real nature of the land, but because damages at law, which must be calculated upon the general money value of land, may not be a complete remedy to the purchaser, to whom the land may have a peculiar and special value." Adderley v. Dixon, 1 Sim. & S. 607, quoted 5 Pomeroy, Op. Cit., p. 4869. Nor are we impressed with the practical reasons sometimes advanced in support of the majority rule, that as the vendee would have the benefit, upon the performance of the contract, of any excess of value accruing subsequent to its making, it is only just that he should bear any risk of loss due to the destruction of the building upon the property during this time. Whether the one could fairly be set off against the other involves considerations...