Professional Documents
Culture Documents
Oct., 1934]
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with the Statute and hence could not be relied upon by the
defendant to justify his retention of the money. But Mellor
and Quain JJ. held that the plaintiff could not support her case
merely by showing non-compliance with the Statute.
'Now
where, upon a verbal contract for the sale of land,' said
Quain J., 'the purchaser pays the deposit and the vendor is
always ready and willing to complete, I know of no authority
to support the purchaser in bringing an action to recover back
the money.'
With this case may be compared the case of Jones v. Jones
(1840) 6 M. & W. 84; 151 E. R. 331. There the defendant gave
the plaintiff a promissory note to secure the payment of the
purchase price of a house and land which the plaintiff had
verbally agreed to sell to the defendant. The defendant having
refused to pay the note, the plaintiff commenced an action, and
the defendant contended that there was no consideration for the
note, inasmuch as the contract of sale was unenforceable. If the
defendant's contention had been sound, then it would have
followed that had the defendant paid cash, he could have proceeded as a plaintiff to recover the amount paid. The Court
of Exchequer, however, overruled the defendant's contention.
'It is clear,' said Lord Abinger C.B., 'that this is a case where
the parties have paid their money down-or, what is equivalent,
given a promissory note payable on demand-for a future conveyance. Can anybody say that they are not bound to pay it;
unless they show that the plaintiffs have refused to execute that
conveyance?"
Thomas v. Brown and Jones v. Joines would seem to be
sufficient authority for the proposition that where a contract
has been wholly or partly executed by one party, that party
cannot subsequently claim, purely on the ground that the
contract does not comply with the Statute, to undo what he has
already done. If money has been paid, or the property in goods
or land has passed, or a security has been given, these matters
can be supported by the defendant by reference to the unenforceable contract. ' The contract is not a nullity,' said Lord
Selborne, L.C., in Maddison v. Alderson (1883) 8 App. Cas. at
475.; 'there is nothing in the Statute to estop any Court which
may have to exercise jurisdiction in the matter from inquiring
into and taking notice of the truth of the facts. All the acts
done must be referred to the actual contract, which is the measure
and test of their legal and equitable character and consequences.'
In cases such as Thomas v. Brown. and Jones v. Jones the
promise by the one party which is contained in the unenforceable
Oct., 1934]
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In Russell's Case the defendant sought to justify his continuance in possession by pleading a contract for sale and purchase.
But against the legal owner of land a contract is available as
a defence to an action of ejectment only if it confers on the
defendant an estate in the land or otherwise is of such a nature
as to bind the land: i.e. it will afford a defence only to the
extent that it creates a right in rein. At Common Law the only
manner in which the right of the legal owner to the exclusive
possession of his land can be restricted is by a legally operative
conveyance or grant. A mere contract will not have any such
efficacy: Wood v. Leadbitter (1845) 13 M. & W. 838; 153 E. R.
351.
Clearly, therefore, the contract in Russell's Case was
incapable of creating any legal estate or other legal right in rem,
but operated in personam merely. But a contract operating at
Common Law purely in personam may yet in equity operate
in rem. Whether or not it thus operates in equity depends on
whether it is specifically enforceable. If specific performance
is available, then, on the principle that equity looks on that
as done which ought to be done, the defendant will be regarded
as owner, either of the fee simple or of such less estate or interest
as he has contracted for, and entitled, therefore, to continue in
his possession to the extent justified by his equitable ownership:
cf. per Farwell J. in Manchester Brewery v. Coombs [1901] 2
Ch. at pp. 617-8. It was the application of this principle that
brought about the downfall of the defendant in Russell's Case.
Had be come as a plaintiff seeking specific performance he could
clearly have been defeated by the Statute. His suit would
perhaps not, have been an action within the meaning of the
Statute (see Re Hoyle [1893] 1 Ch. 97), but equity follows the
law, and an action at law on the contract could have been
defeated by a plea of the Statute. Therefore, in the absence of
any special ground for equitable relief, such as part performance, a suit in equity would likewise be defeasible. It may be
said, therefore, that the defendant in Riissell's Case, when he
sought to defend the action by pleading his contract, really
combined in himself the character of a plaintiff; and that that
was why he could be met with the reply that the contract did
not conply with the Statute.
It would seem, indeed, that Evatt J. partly based his judgment
upon the assumption that were the defendant to be permitted
to plead the unenforceable contract to defeat the action of ejectment, he could subsequently plead the Statute when the plaintiff,
having failed in the action of ejectment, sued in a second action
for specific performance. 'The defendant,' he said (p. 155),
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other contracting party in respect of acts done in pursuance of it prior to that other party's forbidding those
acts by repudiating it or otherwise.
(3) In other cases it will be no defence if the plaintiff replies
by pleading the Statute of Frauds.
JAmES WILLIAMS.