Good v. Jarrard

• Citation: 76 S.E. 698,93 S.C. 229
• Parties: GOOD v. JARRARD.
• Decision Date: 02 December 1912
• Court: South Carolina Supreme Court

76 S.E. 698

93 S.C. 229

GOOD v. JARRARD.

Supreme Court of South Carolina

December 2, 1912

Appeal from Common Pleas Circuit Court of Greenville County; Geo. W Gage, Judge.

"To be officially reported."

Action by Nannie J. Good against J. C. Jarrard. Decree for plaintiff, and defendant appeals. Reversed.

Haynsworth & Haynsworth, of Greenville, for appellant. McCullough & Blythe, of Greenville, for respondent.

GARY C.J.

This is an action for specific performance of the following contract into which the plaintiff and defendant entered at the time therein mentioned: "This agreement, made this 23d day of July, 1910, between J. C. Jarrard, of the first part hereinafter designated as 'purchaser,' and W. S. Good and Nannie J. Good, of the second part, hereinafter designated as the 'owners,' witnesseth: The purchaser has paid to the owners ten dollars ($10) as part payment on the storehouse and lot in Marietta, in said county, the purchase price of which is to be one thousand one hundred dollars ($1,100), one-half to be paid on December 1, 1910, and the balance on December 1, 1911, with interest from date of the deed at 8 per cent. No deed is to be made until the first one-half portion of the purchase price is paid, when the purchaser is to deliver to the owners a first mortgage for the unpaid balance, bearing interest as aforesaid. Payment is to be made to William G. Sirrine or to H. P. McGee. The said purchaser agrees to buy and pay for the land at the price and time mentioned, and the owners agree on their part, when one-half of the purchase price is paid, to make unto the purchaser a good and sufficient fee-simple deed, with general warranty and free from all incumbrances." Then follows a description of the premises. The provision in the agreement that payment was to be made to William G. Sirrine or to H. P. McGee was inserted for the purpose of requiring payment of certain mortgages out of the purchase money that incumbered the property at the time of the agreement, and were still subsisting liens when the storehouse was destroyed by fire, on the 31st of August, 1910.

The following is taken from the testimony, which the plaintiff gave when examined as a witness: "Q. Had you made arrangements to have this lot cleared of the lien of those mortgages, if he had complied with his contract? A. Yes, sir. *** Q. What were you to do with the purchase money, when you received it? A. I was to go to Mr. McGee or Mr. Sirrine, just like the contract reads. Q. And they were to release the mortgage? A. Yes, sir." At the time of the agreement, J. C. Jarrard & Bro., a mercantile firm, of which the defendant was a member, were in possession of the house and lot, under an agreement with the plaintiff, entitling them to the possession from December 1, 1909, to December 1, 1910, and at the time of the fire, on the 31st of August, 1910, they had paid the rent that was then due.

His honor, the circuit judge, decreed that the plaintiff was entitled to specific performance, and the defendant appealed.

The main question is whether the loss arising from the destruction of the storehouse by fire should be sustained by the plaintiff or the defendant. The rule is thus stated in Hawkes v. Kehoe et al., 193 Mass. 419, 79 N.E. 766, 10 L. R. A. (N. S.) 125, 9 Ann. Cas. 1053: "When, as in this case, the conveyance is to be made of the whole estate, including both land and buildings, for an entire price, and the value of the buildings constitutes a large part of the total value of the estate, and the terms of the agreement show that they constituted an important part of the subject-matter of the contract, it is now settled by the decision in Wells v. Calnan, 107 Mass. 514, 9 Am. Rep. 65, that the contract is to be construed as subject to the implied condition that it no longer shall be binding if, before the time for the conveyance to be made, the buildings are destroyed by fire. The loss by the fire falls upon the vendor, the owner; and if he has not protected himself by insurance, he can have no reimbursement of this loss, but the contract is no longer binding upon either party. If the purchaser has advanced any part of the price, he can recover it back. Thompson v. Gould, 20 Pick. (Mass.) 134, 138. If the change in the value of the estate is not so great, or if it appears that the buildings did not constitute so material a part of the estate to be conveyed as to result in an annulling of the contract, specific performance may be decreed, with compensation for any breach of agreement, or relief may be given in damages." See, also, the notes to the said case reported in 9 Am. & Eng. Ann. Cases, 1053. It was held in the case of Phinizy v. Guernsey, 111 Ga. 346, 36 S.E. 796, 50 L. R. A. 680, 78 Am. St. Rep. 207, that where a binding executory contract for the sale of improved realty has been made, and the improvements are destroyed by fire before the vendor is in a position to convey the legal title, and before the vendee obtains possession, the loss is that of the vendor. The following language of the court shows that its conclusion was based upon the principle that the vendor was still the owner of the property at the time of its destruction by fire: "As the vendee had not gone into possession before the fire, and the vendors were not, prior to that occurrence, in a position where they could make to the vendee, an unincumbered title to the property, they were the owners of the property at the date the fire occurred, and the loss resulting therefrom must fall upon them."

Those who contend for a contrary doctrine rely, principally, upon the case of Paine v. Meller (1801) 6 Vesey, 349, in which the opinion of the court was delivered by Lord Eldon. The facts of that case were as follows: On the 1st of September, 1796, the plaintiffs sold to the defendant, at auction, some houses in Radcliffe Highway, upon the usual terms of a deposit of 25 per cent., and a proper conveyance to be executed, upon payment of the remainder of the purchase money, at Michaelmas next. At the time specified for the performance of the contract an abstract of title was delivered which was so defective that the purchase could not be completed at that time. A further abstract was delivered to the solicitor of the defendant about the beginning of October. Negotiations as to the abstract of title continued through October, and about the end of that month the defendant's solicitor agreed to waive all objections, if the plaintiff would allow him 11 guineas, and refused a proposal to give up the purchase. The plaintiff agreed to make the allowance desired. On the 4th or 5th of November the defendant's solicitor sent a draft of a conveyance. The draft was returned to the defendant's solicitor, the deeds were engrossed, and on the 16th and 17th of December he declared himself satisfied with the title, and said the deeds would be ready in two or three days, and that he should complete the purchase, under the promise of the 11 guineas. On the 18th of December the houses were burnt; the insurance having been suffered to expire at Michaelmas, 1796. The plaintiffs brought an action for specific performance of contract. The court used this language: "The abstract first delivered was undoubtedly imperfect in certain respects. *** Unquestionably that abstract was not satisfactory, and the express condition of the sale could not be complied with. Of course, the defendant could not be called on to pay his purchase money. Then it was with the vendee to choose to go on with the bargain, or to put an end to the contract. The agent, however, chose not to put an end to it, and, though a circumstance took place at Michaelmas sufficient to put an end to any action of law, the contract was kept alive, at least to the 10th of December. *** If in equity these premises belonged to the vendee, he would have a title to the rents and profits at Michaelmas by relation; and he must pay the purchase money, with interest from that time. First, it is said, the title was never accepted in fact; secondly, if not, under these circumstances, a court of equity will not compel a specific performance. As to the second point, the objection is grounded upon two circumstances: First, the simple fact of the fire; secondly, that the premises had been insured prior to the contract, that that fact, and the fact that the insurance expired at Michaelmas, 1796, were not disclosed, and that the premises afterwards remained uncovered by any insurance. *** The question whether insured or not is with the vendor solely, not with the vendee, unless he proposes something upon that, and makes it matter of contract with the vendor, that the vendee shall buy according to that fact, that the house is insured. I am therefore of opinion that, if the agent on behalf of this purchaser did accept this title previously to the destruction of the premises, the vendors are in the situation in which they would have been if the title and conveyance were ready at Michaelmas, 1796, but by the default of the vendee were not executed; but the title was accepted, and the premises were burnt down, on the quarter day. *** There ought to be some reference to the master, or an inquiry before a jury; but that must not be upon the validity of the title, for it is clear the objection to the freehold title, that it was not old enough, and the other objection, that the purchaser had the right to insist upon the release of the annuities, were waived. The inquiry must be whether the title had been accepted by the agent on behalf of the defendant on or before the 18th of December, 1796." There was a reference to the master, directing him accordingly.

That case seems to have been misunderstood. The court decided that all objections to the validity of the title had been...