to the general principle of Flureau v. Thornhill, he said:

"That immunity is in itself an anomaly. It probably had its origin in the difficulty in which, in the complicated and highly artificial state of our law relating to real property, an owner of real estate, having contracted to sell, is too frequently placed from not being able to make out a title such as a purchaser would be bound or willing to take. The hardship which would be imposed on a bona fide vendor if, upon some legal flaw appearing in his title, he were held liable in all the consequences which would attach upon a breach of contract relating to personalty, and the difficulty which might be thrown in the way of bringing real property into the market if the full liability attached in such a case have probably, by an understanding and usage among those engaged in the transfer of estates, led to this exception to the general law. But I can see no reason, in the absence of authority, for extending the exception to parties who, knowing that they have not any present estate to convey, take upon themselves to sell, in the speculative belief that they will be able to procure an interest and title before they are called upon to execute the conveyance."

He distinguished Pounsett v. Fuller on the ground that there the defendant was in possession, had an equitable title, and believed himself to be in a condition to convey, while in the case at bar the defendants knew that they had no title, and that they sold in the expectation of the widow's signing. The case was unanimously affirmed in the Exchequer Chamber; (^) Erle, C. J., of the Common Pleas, delivering the opinion, declared that the case must be governed by Flureau v. Thornhill, unless it came within the exception of Hopkins v. Grazebrook. He, however, put the latter decision on a different ground from that on which it was put by the Chief-Justice of the Queen's Bench, saying that the principle of the exception was "that if the intended vendor knowingly withholds from the in

(*) 4 B. & S. 421.

tended vendee that he has not a title, he is guilty of culpable want of truth, and is bound to make the latter compensation for the loss of his bargain, and ought not to have the protection of the doctrine established by Flureau v. Thornhill." Continuing he said: "If that principle is to be established whenever it comes to be well analyzed, it will be time to consider if actual fraud is necessary to take away the protection." The decision is approved by Lord St. Leonards. (*) In commenting on the case, he observes:

"The right of the sellers stood simply thus: they had not the legal estate, and they could not obtain it during the widow's life without her consent, nor could they discharge the estate of her £100 a year. But subject to that, they were owners in possession of the equitable fee simple with a right to call for the legal estate upon her death. The devise, so far from being inoperative, passed this equitable estate in fee, and the devisees had not an expectancy or even a reversion, but the entire equitable fee, and could make a good title to it, subject to the annuity of £100. The widow's promise might be considered as a full justification of the trustees in selling the estate as if free from the annuity, and if after the sale they could have procured her concurrence, the purchaser would have been compelled to take the title, and if a bill had been filed, time would have been allowed, if there was a fair prospect that a release of the annuity could be obtained."

§ 1003. Engel v. Fitch.-On the other hand, in the case of Engel v. Fitch () the views of Lord C. J. Cockburn were adopted. In this case, the defendants, who were mortgagees of the lease of a house, sold it by auction to the plaintiff, but the mortgagor, who was in possession, refused to give it up, and the defendants declined to fulfil the contract on account of the expense of obtaining possession. The plaintiff having meantime resold the premises to a third party at an advance, was allowed to (*) Sugden on Vendors, 14th ed., p. 361.

(1) 9 B. & S. 85; 10 B. &. S. 738; L. R. 3 Q. B. 314 ; L. R. 4 Q. B. 659.

recover damages for the loss of his bargain, the measure of which was the profit he would have made on the resale, besides his expenses. "The purchase of real property sold by auction for the purpose of a resale," said the Chief-Justice,(*)" is a matter of every-day occurrence, and the possibility of a resale cannot be taken to be beyond the contemplation of the parties to such a contract." Cockburn, C. J., distinguished the case from Flureau v. Thornhill, saying (p. 324):

"The obstacle to the completion of the contract had no reference to title. It was one which the vendors were not unable, but which, on account of the expense, they were unwilling to remove. They might, had they chosen to incur the expense, have ousted the mortgagor by ejectment, as they, in fact, did, after they had put an end to the present contract. Lastly, it was not the purchaser, but the sellers, who repudiated the contract."

Referring to the authority of Flureau v. Thornhill, he said (p. 325):

"The question mainly turns on whether the rule referred to is an exceptional one, and therefore only applicable to the special circumstances with reference to which it has been laid down ; or one which, from any peculiarity in the nature of contracts relating to the transfer of real property, ought, in the absence of fraud, to be extended to contracts of this description. Now, however firmly settled the law as laid down in Flureau v. Thornhill may be, it must be admitted that that case itself is anything but satisfactory."

He then proceeded to criticise the qualification of the rule of Flureau v. Thornhill, that it should only be applied in the absence of fraud. As to Hopkins v. Grazebrook, he said (p. 329):

"There is an obvious difference between the case of a man who, being in possession and the undoubted owner of real

() L. R. 3 Q. B. 314, 334.

property, is unable to make out a marketable title, and that of one who, not being the owner, but having only a contract for the purchase of real estate, takes upon himself to sell it to another as his own, and as if the title were his to convey. The difficulty of making out title, which exists in the one case, and forms the foundation of the rule, and the justification of the exceptional departure from ordinary principles, is wholly wanting in the other." (^)

Cockburn, C. J., proceeded to lay down the following rule (p. 330):

"Viewed by the light of what is said by Lord Wensleydale and Alderson, B., in Robinson v. Harman, as also upon general principles, the whole matter seems capable of being put on a clear and intelligible footing. By the law of England, as a general rule, a vendor who, from whatever cause, fails to perform his contract, is bound, as was said by Lord Wensleydale, in the case referred to, to place the purchaser, so far as money will do it, in the position he would have been in if the contract had been performed. If a man sells a cargo of goods not yet come to hand, but which he believes to have been consigned to him from abroad, and the goods fail to arrive, it will be no answer to the intended purchaser to say that a third party, who had engaged to consign the goods to the seller, has deceived or disappointed him. The purchaser will be entitled to the difference between the contract and the market price. There is nothing in the nature of real property which, either on technical or general grounds, should take a contract for the sale of real estate out of this general rule, with one single exception, namely, that owing to the state of the law as to real property, the undoubted owner of an estate often finds, unexpectedly, difficulty in making out a title which he cannot overcome. If, an obligation to make out title being implied on every such contract, the opposite party rejects the title and repudiates the contract, it seems not altogether unreasonable that he shall be entitled to no more than the return of the deposit, if any, and the expense of investigating the title. In this exceptional case, he is put, not in the condition in which he would have been if the contract had been performed, but in the condition which he would have been

(^) This language was approved by Kelly, C. B., in the Exchequer Chamber.

if the contract had not been made. He is where he was before, without the estate and the benefits it would have brought him if a title could have been made to it. But the limit of the exception is to be found in the reason on which it is based; the reason ceasing, the rule should also cease. It can properly have no application where the non-performance of the contract arises not from a difficulty as to title, but from the fact of the party who engages to sell not having first secured to himself the property in the thing of which he takes on himself to dispose. In such case there seems no sound reason why the consequences which arise on a breach of contract in the sale of goods should not equally attach. Far from seeing any grounds, either in law or reason, for extending the rule, there appear to us good grounds for the contrary. In our view, notwithstanding what is said by Erle, C. J., in Sikes v. Wild, the rule is an anomalous one -that is to say, it is a departure from general principles, and inconsistent with ordinary rules of law, based upon and applicable to a special and exceptional state of things alone. There is, therefore, no reason, in a legal point of view, for extending it; while on the other hand, there seems good reason for not encouraging men to affect to sell property, the power to dispose of which they have not secured, and thereby to entail inconvenience and possible loss on the purchasers, without, at least, bringing to the knowledge of the latter the real position in which they

stand."

He then referred to Pounsett v. Fuller and Sikes v. Wild, as establishing the doctrine that the possession of an equitable estate, and the reasonable belief of obtaining the legal estate, excuses the seller from liability for damages. In delivering the opinion of the Exchequer Chamber in the same case, affirming the judgment below, Kelly, C. B., observed, (*) as to the method of ascertaining the damages, if substantial damages are given:

"But there is a preliminary objection raised by the defendants, that this market value is not shown, and that a resale cannot be taken into consideration as within the contemplation of the parties. On the latter point, we are inclined to agree with the

(*) L. R. 4 Q. B. 659, 667.