Lombard v. the Chicago Sinai Congregation.

• Decision Date: 30 September 1872
• Citation: 64 Ill. 477,1872 WL 8353
• Parties: BENJAMIN LOMBARDv.THE CHICAGO SINAI CONGREGATION.
• Court: Illinois Supreme Court

64 Ill. 477

1872 WL 8353 (Ill.)

BENJAMIN LOMBARD

v.THE CHICAGO SINAI CONGREGATION.

Supreme Court of Illinois.

September Term, 1872.

OPINION TEXT STARTS HERE

APPEAL from the Superior Court of Cook county; the Hon. JOSEPH E. GARY, Judge, presiding.

This was a suit, by appellant, for the specific performance of a written contract, entered into by the trustees of the Chicago Sinai Congregation September 15, 1871, for the sale, by said corporation to appellant, of certain parcels of land in Chicago, upon which there was at the time a church edifice, containing seats and a church organ, specifically embraced in the contract, for an entire consideration of $62,500, to be paid by appellant as follows: $2500 as earnest money at the time of executing the contract; $7500 upon the delivery of a warranty deed of the premises; the like sum 60 days from October 1, 1871, with ten per cent interest; the balance in three equal annual payments, bearing interest at the rate of eight per cent, payable annually; all deferred payments to be secured by notes and trust deeds (in the usual form) on the premises, dated October 1, 1871.

The vendors were to furnish abstract of title, which was to be examined within 14 days. It was provided that if there should be any legal objections to the title, it should be optional with the vendors to return the earnest money, and declare the agreement canceled, or to make the title good.

Upon completion of the contract, appellant was to execute a lease to the vendors of the premises running from October 1, 1871, to May 1, 1872, at the rent of $200 per month.

The $2500 was paid by appellant, and abstract furnished at the execution of agreement. The abstract failed to show title in the vendors. The defects were pointed out, in a written opinion of counsel, and delivered to vendors September 28, 1871.

October 6, 1871, appellant notified vendors, in writing, that they must obviate the legal objections to their title, by obtaining the necessary deeds to perfect title, within a reasonable time, say 20 days, or he should require them to return the earnest money; that if they found they could not so perfect the title, to advise him of the same, without delay, and return the money, and he would cancel the contract. To this no reply was made; nor did the trustees, so far as this record shows, make the election before or within the 20 days from said notice.

The purchaser never having taken possession of the premises, at the great fire in Chicago, October 8 and 9, 1871, the building and contents, of the value of about $15,000, were destroyed. In November next after the fire, the purchaser caused the contract to be recorded in Cook county, where the premises were. Without any notice to the purchaser of their election, it seems that the vendors proceeded, after the fire, to perfect their title, but which they do not pretend was made good until about February 17, 1872. April 3, in same year, they prepared and tendered a deed, but to which the purchaser objected, as not sufficient in form or execution; and on the 5th of the same month, he filed this bill for specific performance as to so much of the property agreed to be sold as vendors could give him, for compensation for the portion destroyed, and to be exempted from paying the interest accruing, by the terms of contract, during the delay in making the title good. The vendors, in their answer, admit the contract, the making and notifying of them of legal objections to title, and that they were valid; also admit receiving the notice October 6, and in their answer avow their right to declare the contract canceled, and so declare it, offering to return the earnest money. They filed a cross bill to have the contract declared canceled. Purchaser filed replication to their answer, and answer to cross bill. The case was heard upon pleadings and proofs, and decree dismissing cross bill. for specific performance as to land, but disallowing the claim for compensation and exemption from interest; charging purchaser's interest according to terms of contract; approving the deed tendered by vendors April 3, and requiring complainant to pay costs of suit. From this decree complainant appealed to this court.

Mr. SAMUEL W. FULLER and Mr. M. T. PETERS, for the appellant.

Messrs. ROSENTHAL & PENCE, for the appellee.

Mr. JUSTICE MCALLISTER delivered the opinion of the Court:

This was a bill, by appellant, as purchaser, for the specific performance of a contract for the sale of certain parcels of land, a church edifice thereon and contents, including a church organ, for the entire consideration $62,500, of which $2500 were paid down. Between the agreement and the exercise by vendors of an option given them, in case legal objections should be made to their title, to declare the agreement canceled or to make their title good, a casualty occurred, by which building and contents, of the value of about $15,000, were destroyed by fire.

The bill sought specific performance as to land and compensation for building and contents destroyed; alleged delay of vendors in making title good, and sought exemption from interest during the delay. The court below decreed specific performance, but, aside from certain insurance received by vendors, disallowed the claim for compensation; allowed purchaser the rents and profits, but required him to pay interest accruing during the delay.

The questions of compensation and exemption from interest are so blended that they may be considered together as substantially one question.

There seems to be no precedent in the cases which directly covers this case. The circumstances are peculiar, and differ materially from those of any of the cases cited by counsel for either party. It can be determined, therefore, only by the application of recognized principles of equity to the facts of the case.

Before entering upon a consideration of the peculiar features of this case, and the relations of the parties, we must advert to some of the relations regarded by equity as existing between vendor and vendee in the ordinary case of an executory contract for the sale of real estate. They are very familiar, but a brief recurrence to them is necessary to elucidate our views. The effect of such contract is very different at law and in equity. At law, it confers upon the vendee a mere right of action. The estate remains the estate of the vendor, and the money that of the vendee. In equity, it is otherwise. Here, the estate, from the making of the contract, is regarded as the real property of the vendee, attended by most, if not all, the incidents of ownership, and the purchase money as the property of the vendor. If we seek for the basis of this result--the principle underlying the doctrine--we find it in the principle of the familiar maxim, that “equity looks upon things agreed to be done as actually performed.”

This maxim is but a legal fiction by which to work out certain ends or secure the attainment of a more complete justice. In most cases of contracts for the sale of real estate, the purchase money, in fact, remains in the hands of the purchaser, as the estate does with the vendor. Hence, as a corollary of the application of the maxim, equity recognizes and attaches all the proper consequences to another relation, viz: that the vendee is to be considered as the trustee of the purchase money for the vendor, who is regarded as trustee of the land for the vendee.

These are some of the prominent features and relations arising out of the ordinary absolute contract of sale of real estate, and are regarded as fundamental in adjusting equities between vendor and vendee. The general proposition does not admit of controversy, upon the authorities, that from the making of an absolute contract of sale, the land is regarded, in equity, as the property of the vendee, who may dispose of it or incumber it in like manner with land to which he has the legal title, subject to the rights of the vendor under the contract. Fry on Specific Perf. sec. 889; Sexton v. Slade, 3 Lead. Cas. in Eq. (side p. 429); 1 Sug. on Vend. 175; Smith v. Price, 42 Ill. 399.

The true test in determining which party should bear the consequences of an accidental loss, pending a contract of sale, is, which was the owner at the time? In such a case, the Supreme Court of Massachusetts, in a recent case, laid down the general rule thus: “When property, real or personal, is destroyed by fire, the loss falls upon the party...