N. E. 1146; Kruger v. Galewski (1895) 13 Misc. 56, 34 N. Y. Supp. 66; Green v. Heruz (1895) 14 Misc. 474, 35 N. Y. Supp. 843, affirmed in (1896) 2 App. Div. 255, 37 N. Y. Supp. 887; Composite Metal Lath Co. v. Glasco Ice Co. (1916) 171 App. Div. 221, 157 N. Y. Supp. 363, affirmed in (1918) 224 N. Y. 684, 121 N. E. 860; Roberts v. New York L. Ins. Co. (1921) 195 App. Div. 97, 186 N. Y. Supp. 422, affirmed in (1922) 233 N. Y. 639, 135 N. E. 951; Klimas v. Brumbach (1921) 116 Misc. 299, 190 N. Y. Supp. 307; Urbis Realty Co. v. Globe Realty Co. (1922) 201 App. Div. 533, 194 N. Y. Supp. 535, reversed on other grounds in (1923) 235 N. Y. 194, 139 N. E. 238; Harding v. Burke (1923) 205 App. Div. 597, 200 N. Y. Supp. 144; Giarratano v. McIlwain (1926) 215 App. Div. 644, 214 N. Y. Supp. 582.

Albea v. Griffin

North Carolina. (1838) 22 N. C. (2 Dev. & B. Eq.) 9; Lee v. Russell (1848) 30 N. C. (8 Ired. L.) 526; Chambers v. Massey (1851) 42 N. C. (7 Ired. Eq.) 286; Lewis v. Brinkley (1858) 50 N. C. (5 Jones, L.) 295; Winton v. Fort (1859) 58 N. C. (5 Jones, Eq.) 251; Barnes v. Brown (1874) 71 N. C. 507; Vann v. Newsom (1892) 110 N. C. 122, 14 S. E. 519; Pass v. Brooks (1899) 125 N. C. 129, 34 S. E. 228; Ford v. Stroud (1909) 150 N. C. 362, 64 S. E. 1; Adams v. Beasley (1917) 174 N. C. 118, 93 S. E. 454.

Oklahoma.

Seyfer v. Robinson (1923) 93 Okla. 156, 219 Pac. 902; Bishoff v. Myers (1924) 101 Okla. 36, 223 Pac. 165; Abbott v. Independent Torpedo Co. (1924) 98 Okla. 239, 224 Pac. 708; Kneeland v. Hetzel (1924) 103 Okla. 3, 229 Pac. 218; Youngblood v. Jackson (1924) 104 Okla. 302, 229 Pac. 585; Gibson v. Brannum (1924) 107 Okla. 130, 230 Pac. 861.

Rineer v. Collins (1893) 156 Pa. 342, 27 Atl. 28; McDermott V. Reiter (1924) 279 Pa. 545, 124 Atl. 187; McCloskey v. Timmons (1920) 74 Pa. Super. Ct. 12; Hopkins v. Phillips (1921) 76 Pa. Super. Ct. 243; Slavin v. Reilly (1923) 81 Pa. Super. Ct. 261. South Dakota. Stanley v. Pilker (1918) 40 S. D. 403, 167 N. W. 393; Wayne v. Butterfield (1926) S. D. - 210 N. W. 663.

Tennessee. Newnan v. Maclin (1813) 5 Hayw. 241; Wood v. Mason (1865) 2 Coldw. 251; Frazier v. Tubb (1871) 2 Heisk. 662.

Texas. Hall v. York (1859) 22 Tex. 641; Wheeler v. Styles (1866) 28 Tex. 240; Neill v. Watson (1873) 39 Tex. 375; House v. Kendall (1881) 55 Tex. 40; Calicote v. Spencer (1860) 25 Tex. Supp. 149; Evans v. Bentley (1894) 9 Tex. Civ. App. 112, 29 S. W. 497, 36 S. W. 1070; Frost v. Cramer (1917) Tex. Civ. App. - 199 S. W. 838; Ferguson v. Mounts (1926) Tex. Civ. App. 281 S. W. 616.

Utah. (1926) 1114.

Virginia.

See McBride v. Stewart Utah, -, post, 249 Pac.

Lamb v. Smith (1828) 6 Rand. 552; Thompson v. Guthrie (1837) 9 Leigh, 101, 33 Am. Dec. 225; Morriss v. Coleman (1843) 1 Rob. 478; Watts v. Holland (1890) 86 Va. 999, 11 S. E. 1015. Vermont. 13 Vt. 71.

Washington.

Sutton v. Sutton (1841)

Bidwell V. Rice (1898) 19 Wash. 146, 52 Pac. 1019; Ihrke v. Continental Life Ins. & Invest. Co. (1916) 91 Wash. 342, L.K.A.1916F, 430, 157 Pac. 866; Henderson v. Miller (1922) 119 Wash. 362, 205 Pac. 1; Frank v. E. R. Thomas & Co. (1925) 133 Wash. 243, 233 Pac. 626.

It has also been pointed out that the measure of damages for breach of covenant to convey land sold by executory contract may be the amount of the purchase money paid, with

interest. Smith v. Pitkin (1793) 2 Root (Conn.) 46; Dunnica v. Sharp (1841) 7 Mo. 71; Force v. Duteher (1867) 18 N. J. Eq. 401.

It is generally held that, where the vendee seeks to recover the purchase money paid under an executory contract for the purchase of land on the ground of inability of the vendor to convey, his action may be in assumpsit for money had and received. United States. Guttschlick v. Bank of Metropolis (1838) 5 Cranch, C. C. 435, Fed. Cas. No. 5,880, affirmed in (1840) 14 Pet. 19, 10 L. ed. 335; Baldwin v. Le Roy (1844) Fed. Cas. No. 800a.

Missouri. Winningham v. Fancher (1893) 52 Mo. App. 458.

- New Mexico. Daly v. Bernstein (1892) 6 N. M. 380, 28 Pac. 764.

New York. Howes v. Barker (1808) 3 Johns. 506, 3 Am. Dec. 526; Miller v. Watson (1830) 4 Wend. 267. Pennsylvania. Hoover v. Senseman (1886) 2 Sadler, 487, 4 Atl. 730.

Wisconsin. McKinnon v. Vollmar (1889) 75 Wis. 82, 6 L.R.A. 121, 17 Am. St. Rep. 178, 43 N. W. 800.

In Kansas, apparently, the reason for the allowance as damages of the amount paid on the purchase price is that the actions were brought for the rescission of the contract. Boothe v. Dailey (1918) 103 Kan. 255, 173 Pac. 283; Read v. Loftus (1910) 82 Kan. 485, 31 L.R.A. (N.S.) 457, 108 Pac. 850. And in Rabinovitz v. Marcus (1923) 100 Conn. 86, 123 Atl. 21, where the vendee was held entitled to recover the amount he deposited as earnest money, and the expenses incurred by him in the examination of title and preparation of papers, it was pointed out that he claimed a breach of the contract upon the part of the vendor, and chose to rescind the contract on 48 A.L.R.-3.

account thereof, and that in such case the trial court awarded the proper measure of damages. The same result was reached when the contract was rescinded by the vendee, in Janulewycz v. Quagliano (1914) 88 Conn. 60, 89 Atl. 897. An action to recover the amount paid on the purchase price has been held to evidence an election on the part of the vendee to rescind the contract, and not to sue for damages for its breach by the vendor. Weaver v. Aitcheson (1887) 65 Mich. 285, 32 N. W. 436. So, in Kicks v. State Bank (1904) 12 N. D. 576, 98 N. W. 408, where the vendor, after performance by the vendee, permitted the land to be sold under a mortgage which existed against it at the time of the execution of the contract in question, the measure of the vendee's recovery was held to be the amount he had paid on the purchase price, but it appeared that his action was brought to recover this amount and this was treated as a rescission of the contract. In Winters v. Elliott (1878) 1 Lea (Tenn.) 676, where the vendee entered into possession of land under a parol contract for its purchase, and the vendor had no title to the land, upon which ground the vendee sought a rescission of the contract, it was held that the vendee was entitled to recover the purchase money paid, with interest from the time of payment, and that the vendor was entitled to have offset against the same the rental value of the premises during the time the venIdee was in possession. In Hauert v.

Kaufman (1926) S. D., 208 N. W. 981, where the parties treated the contract as mutually abandoned, the vendee was held entitled to recover the amount he had paid on the purchase price. In Rascoe v. Myre (1918)

Tex. Civ. App., 202 S. W. 780, where the measure of damage was fixed as the amount paid on the purchase price, although the breach by the vendor was apparently wilful, the action was to rescind the contract and to recover the amount which the vendee had paid as a part of the purchase price, with interest thereon. And in Empey v. Northwestern & P. Hypotheekbank (1924) 129 Wash. 392, 225

Pac. 226, the amount paid on the purchase price was the sum recovered by the vendee for breach of the contract, which he rescinded for a cause sustained by the court. So, in Cherney v. Johnson (1925) 72 Cal. App. 725, 238 Pac. 150, where the purchaser was held entitled to the amount paid on the purchase price, the court regarded the contract as having been mutually rescinded. The vendee also elected to rescind the contract involved in Mehrtens v. Knight (1923) 29 Ga. App. 390, 115 S. E. 506, wherein the recovery was for the amount paid on the purchase price. This is also true as to Gifford v. Wilcox (1924) 81 Ind. App. 378, 143 N. E. 368. And see Webb v. Fluty (1897) 19 Ky. L. Rep. 1366, 43 S. W. 411, holding that, where the vendee went into possession of land, and took timber therefrom of a value equaling the amount he had paid upon the purchase price, upon his rescission of the contract, he was not entitled to recover the amount paid on the purchase price, as this should be offset against the value of the timber.

A recovery of the amount paid on the purchase price is a bar to an action to recover damages for breach of the contract. For example, in White v. Harvey (1916) 175 Iowa, 213, 157 N. W. 152, where the vendee asserted the right to, and did, recover the amount he had paid on a contract for the purchase of land, and also the amount he had expended for improvements on the land, the vendor being unable to make a good title to the land, although he had acted in good faith in the matter, it was held that, after this judgment was paid, the vendee could not thereafter maintain an action for damages for breach of the contract, basing his damage on the loss of his bargain. The court stated the general rule to be that where the vendor is guilty of no fraud, but has no title, and the contract is incapable of performance, the vendee is entitled to a return of the purchase price, with interest, and also to be reimbursed for improvements, and this was the extent of his recovery. In Legrotta v. Pittsburgh Plate Glass Co. (1920) Mo. App., 220 S. W. 705, where the ven

dee recovered as a portion of his damage the amount paid on the purchase price, less the reasonable rental value of the premises during the time he had the same in his possession, his right of action was based upon two counts-one for damages for the wrongful termination of the contract, and the other for money had and received. The court said that the action for money had and received under the one count was for the recovery of the same amount as under the count for damages.

It is held in Mehrtens v. Knight (Ga.) supra, that, where the vendee, upon breach of an executory contract to convey, seeks to recover as damages the partial payments made by him, his rights are limited to a recovery of the previous partial payments plus the value of any improvements made, less a deduction for the rental value of the land and any injury or damage to the property while in his possession. To the same effect is Haygood v. Kennedy (1921) 27 Ga. App. 689, 109 S. E. 522. So, in Haygood v. Kennedy (Ga.) supra, where the vendee brought suit to recover payments made by him on the contract for the purchase of land, and the evidence tended to show that the seller had expressly consented to a rescission of the contract of sale, it was held that the rule governing recovery was that the purchaser was entitled to a return of the partial payments plus the value of any improvements made, less a deduction for the rental value of the land and any injury or damage to the property during the term of occupancy. In Allen v. Gheer (1916) 98 Kan. 228, 158 Pac. 17, where the vendor repudiated the contract, and the vendee acquiesced in the repudiation, it was held that he was entitled to recover the amount he had paid on the contract price, this apparently being the quantum of relief sought.

It is held in Lowe v. M'Donald (1821) 3 A. K. Marsh. (Ky.) 354, 13 Am. Dec. 181, that, in an action for breach of covenant to convey land, the price paid for the land is the measure of damages. To the same effect is Herndon v. Venable (1838) 7 Dana

(Ky.) 371, where it is said that the measure of damages is the consideration, with interest from the time the money was payable, or began to bear interest. In Hudson v. Tilly (1923) 154 La. 839, 98 So. 265, where the vendee was held entitled to recover the amount paid on the purchase price, together with taxes paid on the land, the vendor refused to carry out the contract on a ground which was not justified, and the vendee brought an action to recover the amount paid on the purchase price. So in Brewer v. New Orleans Land Co. (1923) 154 La. 446, 97 So. 605, where the vendor contracted to sell land he knew he did not own, but which he expected to acquire, the measure of damage for his breach of contract, due to inability to secure the title within the time fixed for the conveyance, was held to be the amount paid by the vendee on the purchase price, and certain expenses. The action by the vendee, however, was to recover the amounts allowed, and he did not claim compensation for loss of his bargain. And in Donovan v. Hoenig (1914) 157 Wis. 250, 146 N. W. 1125, also, the action was to recover the amount paid on the purchase price, on the ground that the vendor's title was defective. Also, in Shelton v. Ratterree (1915) 121 Ark. 482, 181 S. W. 288, where an executory contract for the sale of land failed for inability of the vendor to convey a marketable title, the vendee recovered as his damage the amount paid on the purchase price. The question, however, was not discussed, and the action of the vendee was brought to recover the cash payment made by her, and also commissions which she had paid a third person for reselling a portion of the land, which she had resold in reliance upon securing a marketable title.

In Marsh v. Cavanaugh (1896) 15 Wash. 282, 46 Pac. 239, where the measure of damages was held to be the amount paid upon the purchase price, and interest thereon, the contract breached related to land which was not definitely described or determined. The court said that if the contract had been for the conveyance

of some specific property there would have been force in the contention that the vendee should be limited to the recovery of the value of the land.

V. Effect of a subsequent contract by the vendee.

Profits which the obligee in a bond for title would have made on the contract, where at the time the bond was executed he had agreed upon a sale of the premises to a third person, are not recoverable unless the obligor had notice of such contract at the time of executing the bond, or before he made any breach of his condition. Sanderlin v. Willis (1894) 94 Ga. 171, 21 S. E. 291; Orr v. Farmers' Alliance Warehouse & Commission Co. (1895) 97 Ga. 241, 22 S. E. 937. So, in Loney v. Oliver (1889) 21 Ont. Rep. 89, apparently upon the assumption of the good faith of the vendor, it was held that the vendee could not recover the profit lost by reason of his inability to consummate a contract of resale at an advanced price, which he had entered into before the execution of the written contract with his vendor, the latter not being aware of such contract. And in Kelly v. Simon (1924)

Tex. Civ. App., 262 S. W. 202, where the vendee objected to the title because the property was subject to an oil lease, it was held that he was not entitled to recover the profits he might have made from a resale of the property, it not appearing that the vendors knew, at the time of the purchase, that the vendee was purchasing to resell the property at a profit, and there was nothing to show that special damages were within the contemplation of the parties at the time of making the contract.

In Houston & T. C. R. Co. v. Wright (1896) 15 Tex. Civ. App. 151, 38 S. W. 836, subsequent appeal in (1898) Tex. Civ. App. —, 46 S. W. 884, it is held that where the vendee made a contract for the resale of the property at an advance in price, about a year before he was entitled to a deed, and he was unable to consummate this contract because his vendor delayed in delivering the deed, he was not entitled to recover the difference be

tween the diminished value of the land at the time he finally received the deed and the amount for which he had contracted to sell it.

But it is held in Naylor v. Parker, (1911) Tex. Civ. App. —, 139 S. W. 93, that where the vendors in an option contract for the sale of land knew before and at the time of its execution that the vendee had a prospective customer for the land at an increased price, and that subsequently he had entered into a contract for the sale thereof to such customer, the measure of the vendee's damage due to the failure of the vendors to perform, is the difference between the contract price and the amount he would have received had he been able to have carried out his contract. And see same case on subsequent appeal in (1912) Tex. Civ. App. —, 151 S. W. 1096. And it has been held that where the vendor had knowledge that the vendee had contracted to sell the land, the evidence of the amount he was to receive at the subsequent sale may be considered in determining the damage, but this rule does not apply where the subsequent disposition of the land is by an exchange of property. Merritt v. Adams County Land & Invest. Co. (1915) 29 N. D. 496, 151 N. W. 11.

VI. Application of foregoing rules.
a. In general.

The question as to whether or not the breach by the vendor of his executory contract to convey real estate entitles the vendee to recover, as an element of damages, compensation for the loss of his bargain, depends largely upon the attitude of the court of the particular jurisdiction with regard to the effect of the good faith of the vendor. For it is in cases where the contract fails because of the defective title of the vendor that the doctrine of good faith has the most complete operation. In the great percentage of the cases cited supra, III., which sustain the doctrine that the vendee must show bad faith or fraud upon the part of the vendor in order to recover compensation for loss of his bargain, the contract failed because of the defective title of the vendor.

b. Where breach is due to a defect in the title.

The rule of nonliability of the vendor for loss of the vendee's bargain, where the former's title proves defective, rests upon the decision of the court in Flureau v. Thornhill (1776) 2 W. Bl. 1078, 96 Eng. Reprint, 635. Because of the additional importance thus given this decision, it is of interest to note its exact scope. The rule as stated by De Grey, Ch. J., in writing the opinion in that case, is: "Upon a contract for a purchase, if the title proves 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." It may also be noted that this case involved the sale by auction of stock issuing out of a leasehold house. In approving the decision, Blackstone, J., said: "These contracts are merely upon condition, frequently expressed, but always implied, that the vendor has a good title. If he has not, the return of the deposit with interest and costs." It is, however, pointed out that as a matter of fact there had been no change in the price of the stock. This rule limiting the liability of the vendor where he has acted in good faith is usually referred to as the English rule. Where the English rule prevails, if an executory contract fails because of a defect in the vendor's title, and he has acted in good faith in the matter, he will be liable to the vendee only for the amount the latter has paid on the purchase price, and, as hereafter shown, the expense of searching the title. In addition to the cases hereinafter referred to, reference is also made to the cases cited supra, III. California. Smith v. Bangham (1909) 156 Cal. 359, 28 L.R.A. (N.S.) 522, 104 Pac. 689; Wilson v. White (1911) 161 Cal. 453, 119 Pac. 895.

Kentucky. - Rutledge v. Lawrence (1818) 1 A. K. Marsh. 396.

New Jersey. Rutan v. Hinchman (1860) 29 N. J. L. 112, subsequent appeal in (1864) 31 N. J. L. 496; Fair