Kerr et al. v. Day

• Decision Date: 01 January 1853
• Citation: 14 Pa. 112
• Parties: Kerr et al. versus Day.
• Court: Pennsylvania Supreme Court

14 Pa. 112

Kerr et al. versus Day.

Supreme Court of Pennsylvania.

ERROR to the District Court of Allegheny county.

The case was argued by Woods, for plaintiffs in error.

Watson, for defendant in error.

The opinion of the court was delivered by BELL, J.

The ground upon which a chancellor executes an executory contract for the sale of lands, is, that equity looks upon things agreed to be done, as actually performed; consequently, when an agreement is made for the sale of an estate, the vendor is considered as a trustee for the purchaser, of the estate sold, and the purchaser as a trustee of the purchase money for the vendor: Green v. Smith, 1 Atk. 572; Craig v. Leslie, 3 Wheat. 578. The vendee is, in contemplation of equity, actually seized of the estate, and is, therefore, subject to any loss which may happen to it between the agreement and the conveyance, and will enjoy any benefit which may accrue in the same interval. As a consequence, he may sell or charge the estate before conveyance executed; Selon v. Slade, 7 Ves. Jr. 265; 1 Ves. 220; 6 Ves. Jr. 352; and the death of either vendor or vendee, even before the time of completing the contract, is held to be entirely immaterial: Winged v. Lofebury, 2 Eq. Ca. Abr. 32, pl. 43; Paul v. Wilkins, Tothill 106; Baker v. Hill, 2 Ch. R. 113. As a result of this principle, which seems to be of general application, it is settled, that an estate under contract of sale is regarded as converted into personalty, from the time of the contract, notwithstanding an election to complete the purchase rests entirely with the purchaser; and if the seller die before the election be exercised, the purchase money, when paid, will go to his executors as assets: Sikes v. Lister, 5 Vin. Abr. 561, pl. 28; Baden v. Pembroke, 2 Vern. 213. But if, from defect of title, insufficiency of contract, or other cause, the court should think the contract ought not to be carried into execution, a conversion is prevented, and the estate will go to the heir at law of the vendor, as though no contract had ever existed: Lacon v. Waters, 3 Atk. 1; Buckmaster v. Harrop, 7 Ves. Jr. 361; Rose v. Conyngham, 11 Ves. Jr. 550. So also, if one covenant to lay out a sum of money in the purchase of land, generally, and devises his real estate before he has made the purchase, the money agreed to be laid out, will pass to the devisee, as representing land: Green v. Smith, 1 Atk. 573. These illustrations of the doctrine of conversion are familiar instances in which the rule that agreements to be performed are considered as performed, has been practically applied, and might, I think, without further aid, be accepted as decisive of the doctrine which the defendant below invoked as sufficient for his protection in this action. Upon the trial, however, it was distinctly made a question whether the option, vested in Cuddy, by the agreement of April 1, 1845, to purchase the property or not within a given period, does not distinguish this case from those I have adverted to; or, if not, then whether the plaintiff below can be considered as a bona fide purchaser, without notice of Cuddy's equity, and so relieved from the obligation to convey which vested in his vendor, Alexander? A little further examination will show both these points to be definitively settled against the plaintiff by a train of uncontroverted authority. These decide that equitable conversion takes place, although the election to purchase rests solely with the purchaser, whose optional right may be transmitted to his vendee; and that notice of this right will be imputed to a second purchaser from the original vendor through an actual possession of the land agreed to be sold, consistent with the contract.

The first instance in which, I believe, the principal question arose, was before Lord KENYON, at the Rolls, in 1785, and was singularly like the case in hand in its leading features. It is thus stated by Lord ELDON, in Ripley v. Waterworth, 7 Ves. 436, where, as well as in subsequent cases, it was approved and followed. Whitmore demised to Douglass, for seven years, with a covenant that if the tenant, after the 29th of September, 1761, and before the 29th of September, 1765, should choose to purchase the inheritance for £3000, Whitmore would convey to him. In 1761, before any election, Whitmore died, and left all his real estate to Bennett in fee, and all his personal estate to Bennett and his sister equally, as tenants in common. In 1765, before the time mentioned, Walter, who purchased the lease and benefit of the agreement from Douglass, called on Bennett to convey for £3000, which conveyance was made in consideration of that sum. Afterwards the sister and her husband filed a bill against the representative of Bennett, claiming a moiety of the £3000 and interest, and it was decreed accordingly, and, added the chancellor, "though the testator could never have compelled the lessee to purchase, yet when the assignee made the election, it was held the personal estate of the testator, and not to belong to the devisee of the real estate." Another case, parallel in principle, is noticed as having been mentioned before Lord KENYON, of one, who having a timber estate, agreed to sell a given quantity per annum, to be chosen by the vendee. The owner died, and a vast deal of timber was cut after his death. That timber, though in the option of the buyer, was held to be the personal estate of the party to the contract. In Townley v. Bedwell, 14 Ves. 591, Lord ELDON again cited the first of these cases, as Lawes v. Bennett, and followed it as furnishing a governing rule. The principal case was this. A testator had executed a lease to one Townley, for thirty-three years, with a proviso that if Townley, his executors, administrators, or assigns, should be desirous to purchase the premises within six years, he should pay to the testator, his heirs or assigns, £600 for the purchase, upon having a good title made to him, (Townley,) his executors, administrators, or assigns. The testator died before the expiration of the six years, and within that period Townley declared his option to purchase, according to the proviso. The heir of the testator claimed the rents and purchase money, on the ground that until Townley declared his option, the estate continued to be realty, and the declaration being made after the death of the testator, it so descended, and, consequently, the price of...