penses incurred, and not the difference between the contract price and the value of the property. Haney v. Hatfield (1913) 241 Pa. 413, 88 Atl. 680. In Foley v. McKeegan (1856) 4 Iowa, 1, 66 Am. Dec. 107, the court Isaid that if the vendor has acted honestly in the transaction, and is prevented from making a conveyance by unforeseen causes which he cannot control, the vendee can recover only nominal damages, together with any portion of the purchase price that he has paid upon the land, with interest thereon. "But if the [vendor] is in fault, and either did or should have known that he could not comply with his undertaking; or, having the title, refuses to convey; or, having title at the time of agreement, afterward disables himself from completing it by a sale to a third person; or, at the time of the agreement, knew he had no title in these and in all cases where the inability arises from fraud in the [vendor], the [vendee] should recover substantial damages, 'including compensation for any actual loss, as by the increased value of the land to the time the contract should have been executed.'"

It is said in Dobson v. Zimmerman (1909) 55 Tex. Civ. App. 394, 118 S. W. 236: "In this state the general rule is that the proper measure of the damages which the vendee may recover for a breach of a contract to convey or make title to land is the amount he has paid as purchase money.. The only exceptions which appear to have been made to this rule are where the vendor either wilfully or fraudulently fails or refuses to comply with his contract to convey. In these last [mentioned] instances only, can the vendee recover for the loss of his bargain, in addition to what he may have paid as purchase money. If the vendor presents or tenders a conveyance or title which is merely defective by reason of the existence of some cloud or apparent imperfection, the vendee has no right to refuse to accept it and sue for the loss of the bargain; but, at most, he would only be entitled to have a rescission of the

contract, and the recovery of whatever may have been paid."

It is pointed out in Davis v. Beury (1922) 134 Va. 322, 114 S. E. 773, 115 S. E. 527, that under the Virginia rule, in order for the vendee to recover any damages beyond the return of the purchase money actually paid, with interest, for the breach of a contract by the vendor to convey the title contracted to be conveyed, at the time fixed for the completion of the contract, the vendee must prove that the vendor either acted in bad faith in originally undertaking to convey the title, or that subsequently, and prior to the time fixed for the completion of the contract, he voluntarily disabled himself from performing, or that he was able at such time to perform, and wilfully refused or neglected to do so.

The doctrine that the vendor will not be held responsible for compensation to the vendee for the loss of his bargain, due to his breach of the contract for a cause not involving fraud or bad faith on his part, is denied in many jurisdictions which apply to a breach of contract for the sale of real estate the same rule of damage that is applied to a breach of contract for the sale of personal property, without reference to any question of good faith on the part of the vendor. In this regard it is recognized that the consequences of the breach are the same to the vendee where the vendor has acted in good faith, as they are where he has not.

United States. Hopkins v. Lee (1821) 6 Wheat. 109, 5 L. ed. 218; Harten v. Löffler (1909) 212 U. S. 397, 53 L. ed. 568, 29 Sup. Ct. Rep. 351; Watkins V. American Nat. Bank (1904) 67 C. C. A. 110, 134 Fed. 36, writ of error dismissed in (1905) 199 U. S. 599, 50 L. ed. 327, 26 Sup. Ct. Rep. 746; Hampton Stave Co. v. Gardner (1907) 83 C. C. A. 521, 154 Fed. 805; Freeman v. Falconer (1913) 120 C. C. A. 32, 201 Fed. 785; Clark v. Belt (1915) 138 C. C. A. 1, 223 Fed. 573; Phillips & Sager v. Kern (1921) 50 App. D. C. 317, 271 Fed. 547.

Alabama. Whiteside v. Jennings (1851) 19 Ala. 784; Hamaker v. Coons (1897) 117 Ala. 603, 23 So. 655; Phe

lan v. Tomlin (1910) 164 Ala. 383, 51 So. 382.

Arkansas.

Kempner v. Cohn (1886) 47 Ark. 519, 58 Am. Rep. 775, 1 S. W. 872; McGregor v. Echols (1922) 153 Ark. 128, 239 S. W. 736. But see Shelton v. Ratterree (1915) 121 Ark. 482, 181 S. W. 288.

Georgia.-Newson v. Harris (1832) Dudley, 180; Bryant v. Hambrick (1850) 9 Ga. 133; Irwin v. Askew (1885) 74 Ga. 581; Mobley v. Lott (1907) 127 Ga. 572, 56 S. E. 637; Mitchell v. Owen (1924) 31 Ga. App. 649, 121 S. E. 699, affirmed in (1924) 159 Ga. 690, 127 S. E. 122, on this point, but reverses case for error in specific instruction (see (1925) 33 Ga. App. 665, 128 S. E. 12).

Illinois. Buckmaster v. Grundy (1836) 2 Ill. 310; McKee v. Brandon (1840) 3 Ill. 339; Plummer v. Rigdon (1875) 78 Ill. 222, 20 Am. Rep. 261; Dady v. Condit (1904) 209 Ill. 488, 70 N. E. 1088; White v. Kiggins (1906) 130 Ill. App. 404; Posvic v. Harford (1918) 211 Ill. App. 273; McMillen v. Betz (1922) 224 Ill. App. 117.

Maine. - Lawrence v. Chase (1866) 54 Me. 196; Doherty v. Dolan (1876) 65 Me. 87, 20 Am. Rep. 677.

Massachusetts. Brigham v. Evans (1873) 113 Mass. 538; Roche v. Smith (1900) 176 Mass. 595, 51 L.R.A. 510, 79 Am. St. Rep. 345, 58 N. E. 152; Hallett v. Taylor (1900) 177 Mass. 6, 58 N. E. 154; Boyden v. Hill (1908) 198 Mass. 477, 85 N. E. 413.

Minnesota. Erickson v. Bennet (1888) 39 Minn. 326, 40 N. W. 157; Fleckten v. Spicer (1896) 63 Minn. 454, 65 N. W. 926; Vallentyne v. Immigration Land Co. (1905) 95 Minn. 195, 103 N. W. 1028, 5 Ann. Cas. 212. Missouri. Kirkpatrick v. Downing (1874) 58 Mo. 40, 17 Am. Rep. 678. Nebraska. Carver V. Taylor (1892) 35 Neb. 429, 53 N. W. 386; Beck v. Staats (1908) 80 Neb. 482, 16 L.R.A. (N.S.) 768, 114 N. W. 633; Anderson v. Ohnoutka (1909) 84 Neb. 517, 121 N. W. 577; Beetem v. Follmer (1910) 87 Neb. 514, 127 N. W. 858; Cunningham v. Lamb (1917) 101 Neb. 288, 163 N. W. 149; Householder v. Nispel (1923) 111 Neb. 156, 195 N. W. 932.

New Hampshire. Chartier v. Marshall (1876) 56 N. H. 478.

North Carolina. Spruill v. Davenport (1844) 27 N. C. (5 Ired. L.) 145; Lee v. Russell (1848) 30 N. C. (8 Ired. L.) 526; Nichols v. Freeman (1850) 33 N. C. (11 Ired. L.) 99; Le Roy v. Jacobosky (1904) 136 N. C. 443, 67 L.R.A. 977, 48 S. E. 796; Howell v. Pate (1921) 181 N. C. 117, 106 S. E. 454.

North Dakota. Merritt v. Adams County Land & Invest. Co. (1915) 29 N. D. 496, 151 N. W. 11 (fixed by statute).

Ohio. McCarty v. Lingham (1924) 111 Ohio St. 551, 146 N. E. 64.

Utah. See Dunshee v. Geoghegan (1891) 7 Utah, 113, 25 Pac. 731.

Wyoming. Johnson v. McMullin (1889) 3 Wyo. 237, 4 L.R.A. 670, 21 Pac. 701; Francis v. Brown (1915) 22 Wyo. 528, 145 Pac. 750.

In Engell v. Fitch (1869) L. R. 4 Q. B. (Eng.) 659-Exch. Ch., where the measure of damage was held to be the difference between the contract price and the market value of the land, Kelly, Ch., remarked: "No case has been cited in which the purchaser of real property has been held disentitled to recover damages except in the case of Flureau v. Thornhill (1776) 2 W. Bl. 1078, 96 Eng. Reprint, 635, and the cases which followed it, and upon the one ground of the vendor's inability to make out a title; and there is no authority to show that, when the breach of contract has been on any other ground, any other rule as to damages applies in contracts as to the sale of real property than that which prevails in the ordinary case of a breach of contract." It is held Dolan in Doherty v. (1876) 65 Me. 87, 20 Am. Rep. 677, that the rule allowing the vendee to recover for loss of profits is not to be varied because the vendor, through unexpected causes beyond his control, was unable to carry out the contract. The court said: "The plaintiff, however, while he admits that this is a correct statement of the general rule in cases where a vendor refuses to convey to the vendee when he has the power to do so, contends that a differ

ent rule prevails in cases where the vendor, through unanticipated causes which he cannot control, although acting in good faith, is unable to convey; contending that in such case the measure of damages is the amount of consideration actually paid and interest thereon.. This rule, as contended for by the plaintiff, is undoubtedly the established law of the English courts. Many of the American state courts have adopted it. It prevails in New York, although much doubt of its correctness has been expressed by individual members of the courts of that state. See remarks of Denio, J., in Conger v. Weaver (1859) 20 N. Y. 140; of Mason, J., in Pumpelly v. Phelps (1869) 40 N. Y. 59, 100 Am. Dec. 463; see also s. c. sub nom. Brinckerhoff v. Phelps (1857) 24 Barb. (N. Y.) 100. The Supreme Court of the United States does not sustain the doctrine. Hopkins v. Lee (1821) 6 Wheat. (U. S.) 109, 5 L. ed. 218. . . . We do not discover that the precise point, namely, whether the measure of damages depends at all upon the cause of the failure to convey, has ever been noticed in any reported case in our own state. Still it can hardly be regarded here as a new question. We think it is virtually settled by decisions in analogous cases. In the case of personal property, the measure of damages has uniformly been based, in this state, upon the value of the articles when they should have been delivered, and not upon the consideration paid therefor. The reason assigned

in the New York cases (and in cases elsewhere) for the adoption of the rule there adopted, is the analogy that is claimed to exist between actions for the breach of the covenant to convey land, and actions for the breach of a covenant for the quiet enjoyment of land, and for warranty of title, . . But there can be no argument for the doctrine here, but conclusive argument against it, inasmuch as, while the rule of damages in those courts, under the covenants of quiet enjoyment and warranty of title, is the consideration paid for the land and interest, the measure in this state

is the value of the land at the time of the eviction."

In Fleckten v. Spicer (1896) 63 Minn. 454, 65 N. W. 926, referring to Flureau v. Thornhill (Eng.) supra, and other cases holding to the same doctrine, the court said that it did not see that the distinction between good and bad faith, as made by these cases, was well founded; that, while Erickson v. Bennet (1888) 39 Minn. 326, 40 N. W. 157, seemed to recognize the distinction, what was said on the point there was wholly dictum.

b. Rationale of rule as to good faith.

As heretofore suggested, there are several grounds advanced for denying to a vendee the right to recover compensation for loss of his bargain, due to the breach by the vendor of his executory contract to convey real estate.

Referring to the general rule relieving the vendor of the obligation to compensate the vendee for the loss of his bargain, where the vendor has acted in good faith, but is unable to carry out the contract, the court said, in Shaw v. Union Escrow & Realty Co. (1921) 53 Cal. App. 66, 200 Pac. 25, that this rule has been characterized as an anomaly in the law of damages, "which prevents a vendee under a contract for the purchase of real property from collecting in all cases full compensatory damages, which would ordinarily and naturally include damages for what is termed 'loss of bargain,' the accepted rule being that a person is entitled to have in damages the worth of that which would have been rendered him under full performance of the contract. Placing contracts to convey realty in an exceptional class, very early cases, notably that of Flureau v. Thornhill (1776) 2 W. Bl. 1078, 96 Eng. Reprint, 635, determined, as expressed by De Grey, Ch. J., that 'upon a contract for a purchase, if the title prove bad and the vendor is (without fraud) incapable of making a good one, I do not think that the purchaser can be entitled to any damages for the fancied goodness of the bargain which he supposes he has lost.' Considerable difficulty was encoun

tered in subsequent decisions in reconciling the holding there announced with different facts presented, and the effort to so distinguish the cases seems not to have been always successful. The exceptional rule is justified on the reason given, as that a vendor who contracts to convey a good title in the future, and who is unable to make such title clear, notwithstanding his best efforts so to do, should not be held for damages other than those which will return to the opposite party the purchase money paid, together with interest; and within the limitations of that reason the rule should find its scope."

One ground for denying to a vendee in an executory contract for the sale of land the right to recover damages based upon the loss of his bargain is well stated in (CRENSHAW v. WILLIAMS (reported herewith) ante, 5, where it is pointed out that the measure of the vendee's damage for breach of warranty of title is the loss of the whole or a portion of the land with regard to which the title is defective, and that this loss is based upon the contract price, no regard being had to any increased market value. The court concludes that if no other value may be taken into consideration, in estimating the damages to the covenantee in a suit by him upon the breach of warranty actually made, than that agreed upon by the parties as the consideration for the conveyance of the land, it would be difficult to perceive the reason for the application of a different rule where the obligation sued on, instead of being an executed contract, is only an agreement to execute one.

So, in Matthews v. La Prade (1921) 130 Va. 408, 107 S. E. 795, the court said that, as to the measure of damages, executory and executed contracts for the sale of real estate stand on the same footing. For breach of either contract, "the measure of damages is the value of the land at the date of sale, and not the value at the time of the breach, and, if a price has been agreed on, that is the best evidence of its value, and is to be accept

ed as such. If the purchaser has paid anything, he is entitled to recover the money paid with interest, and also any sums properly expended by him for the examination of the title," etc.

In limiting the vendee's recovery to nominal damages, where the breach was due to the vendor's defective title, in Gerbert v. Sons of Abraham (1896) 59 N. J. L. 160, 69 L.R.A. 764, 59 Am. St. Rep. 578, 35 Atl. 1121, the court said: "On principle, there ought to be

a uniformity of doctrine as to the subject of damages, where the injury is the same. There can be no distinction in principle between the damages recoverable by a plaintiff upon a contract to convey, and the damages recoverable upon a covenant of warranty upon failure of title and ouster. The injury sustained by the plaintiff is, in both cases, the samethe loss of the property. The measure of damages is absolutely settled in the case of the loss of the property under covenant of warranty." In this regard, the court reversed the case of Drake v. Baker (1870) 34 N. J. L. 358, which held that if the vendor is aware, at the time of entering into the contract, that his ability to comply depends upon a contingency, upon a breach, under these conditions, the vendee will be entitled to substantial damages to the extent of full indemnity. The court said: "The measure of damages on the breach of covenant of

warranty after ouster is firmly settled, and cannot be disturbed. The law is made irrational by the doctrine of Drake v. Baker (N. J.) supra, which was decided upon the authority of the English cases, while the English law was in a state of confusion. The authorities upon which that case was decided in the supreme court having been overruled [Hopkins v. Grazebrook (1826) 6 Barn. & C. 31, 108 Eng. Reprint, 364], and, upon a most complete and careful consideration, the doctrine having been settled otherwise by the courts of England, it is respectfully submitted that Drake v. Baker (N. J.) supra, ought not to be followed, but the case overruling the

authorities on which it is decided should be followed."

In Sweem v. Steele (1857) 5 Iowa, 352, the court said: "The measure of damages should depend upon the cause of the failure. If the person selling is honest, and is prevented from making the conveyance by unforeseen causes, and which he could not control, the plaintiff should recover only nominal damages. If he has paid the price, or any part thereof, then, of course, in such a case, he should recover that sum, with interest. But if the person selling is in fault, and either did or should have known that he could not comply with his undertaking; or, having the title, refuses to convey; or, having the title at the time of the agreement, afterward disables himself from completing it, by a sale to a third person; or, at the time of the agreement, knew he had no title—in these, and in all cases where the inability arises from fraud in the covenantor, the purchaser should recover substantial damages, including compensation for any actual loss, as by the increased value of the land, to the time the contract should have been executed."

As a ground for relieving the vendor of the obligation to make good to the vendee for the latter's loss of his bargain, it is pointed out in Bain v. Fothergill (1873) L. R. 7 H. L. (Eng.) 158: "No layman can be supposed to know what is the exact nature of his title to real property, or whether it be good against all the world or not; hence . . the undoubted owner of an estate often finds, unexpectedly, a difficulty in making out a title, which he cannot overcome. Assuming that the vendor acts bona fide, the difficulty must be equally known to the vendee as to the vendor. To enter into a contract for the purchase of land in order immediately to resell it, before the title is examined, is unusual and exceptional. It seems, therefore, more reasonable to treat the mere contract for the conveyance of land, not as based upon an implied warranty that the vendor has power to convey, but as involving the condition that the vendor has good title, and

that, if, on examination of the abstract, this turns out not to be so, the vendee cannot ask to be put in as good a position as if a conveyance with the usual covenants had been executed, but can only recover the expenses to which he has been put."

Another reason for the English rule suggested in Ontario Asphalt Block Co. v. Montreuil (1916) 52 Can. S. C. 541, 27 D. L. R. 514, Ann. Cas. 1917B, 852, is that, in England, a contract for the sale of real estate is closed almost directly, whereas in the North American countries of Canada and the United States long-term options are given, as well as long-term executory contracts, so that, while in England there is practically no fluctuation in the value of the real estate during the short time necessary for the closing of the contract, in the United States and Canada, due to the longer term of the contract, there may be considerable change in the value of the property.

It is said in Bitner v. Brough (1849) 11 Pa. 127: "On the head of damages arising from the loss of the bargain, the distinction is, whether the vendor acts with good or bad faith. When the vendor of an estate is, without fraud on his part, incompetent to make out a title, the purchaser is not entitled to recover damages for the loss of his bargain, beyond the money paid, with interest and expenses, although it appears that a considerable profit might have been derived by him from the completion of the purchase. This is a reasonable principle laid down in all the textbooks, and is abundantly supported by authority. Chitty, Contr. 311; Sugden, Vendors; Flureau v. Thornhill (1776) 2 W. Bl. 1078, 96 Eng. Reprint, 635, and the cases cited. But the rule only holds good when the vendor acts with good faith; where he is guilty of collusion, tort, artifice, and fraud to escape from the effects of a bad bargain, it is otherwise. In that case the vendee is entitled not only to compensatory damages, but to damages arising from the loss of the bargain, or the money he might have derived from the completion of the contract.