McCreary v. Stallworth ( 1924 )

The action is for damages for the breach of an option contract to convey real estate. By the terms of the option, the vendor agreed to sell and convey a described tract of lands at a fixed price, to be paid within a specified time. The vendee elected to take the property under the option, and offered to pay the agreed price within the time named. The vendor refused upon the ground that he could not convey a complete title; that he was the owner of a five-eighths undivided interest, and the other three-eighths were owned by tenants in common, who would not join in the conveyance. The vendee then offered to take his five-eighths interest and pay therefor five-eighths the price agreed to be paid for the whole. This offer was refused.

Thereupon, the vendee and his associate, to whom he had transferred an interest in the option, filed a bill for specific performance, offering to pay five-eighths of the agreed price, and praying that they be permitted so to do, and be decreed all the right, title, and interest of the respondent in the lands. There was a prayer for general relief. The bill was answered, and on June 5, 1920, the cause proceeded to a final decree upon pleadings and proof awarding complainants the relief prayed. This decree was executed, and complainants received a deed for the five-eighths interest in the lands.

The present suit is an action at law to recover damages for breach of the option agreement, by reason of failure to convey the remaining three-eighths interest in the lands. The controlling question here presented is: Does the decree of specific performance create a bar to this action by way of estoppel or res adjudicata?

A partial failure of title is a complete bar to specific performance at the suit of the vendor. This for the manifest reason that the court will not make a contract for the parties, and require the vendee to accept a conveyance to a less interest than agreed. It is also a bar to full performance at the suit of the vendee. The court will not compel the vendor to purchase an outstanding title, nor cast a cloud on the title of strangers to the suit.

The vendee may, however, waive full performance, elect to accept the title which the vendor is able to convey, and maintain a bill for specific performance accordingly. The court, having jurisdiction in such case, proceeds to do complete equity. If the vendee has paid the purchase money, it will decree compensation to him for the partial loss of title. If not, it will make a just abatement of the purchase money, and decree a conveyance of the vendor's title upon payment of the balance.

These principles have been long recognized in Alabama and given application to contracts, wherein the vendor contracted to sell lands of greater area than he owned, or disabled himself to perform by a sale of a portion of the land, or where the land was incumbered with a dower interest. Bass v. Gilliland's Heirs, 5 Ala. 761; Springle's Heirs v. Shields,17 Ala. 295; Bell v. Thompson, 34 Ala. 633; Bogan v. Daughdrill,51 Ala. 312; Minge v. Green, 176 Ala. 343, 58 So. 381; Gachet v. Morton, 181 Ala. 179, 61 So. 817; Manning v. Carter,192 Ala. 307, 68 So. 909; Id., 201 Ala. 218, 77 So. 744. See also 25 R. C. L., pp. 248, 249, §§ 52 and 53; 36 Cyc., p. 740, § 2.

In fixing a just abatement, the prevailing rule is to allow a proportionate part of the purchase money — the same measure of damages or compensation recoverable on breach of warranty of title, if the vendor had executed the contract. Thus in Springle's Heirs v. Shields, 17 Ala. 295, it was said:

"So, also, if the vendor have no title to a portion of the land sold, as a general rule the purchaser may have a specific performance of the contract, so far as it can be performed, and is entitled to compensation for that portion which he cannot get. 1 Ves. Beam, 358; Wheatley v. Slade, 4 Sim. 126; Sug. on Vend. 301. And if the purchase money has not been paid, equity will relieve the purchaser from the payment of such part as shall be equivalent to the portion of the land for which no title can be made. Story's Eq. Jurisp. § 779, note 1; Graham v. Oliver, 3 Beav. 124-128; King v. Wilson, 6 Beav. 124. But in such cases, it is said that, if the purchaser should insist upon such a performance, the court will grant the relief only upon his compliance with equitable terms. 2 Story's Eq. Jurisp. 106, § 779, citing Patton v. Rodgers. 1 Ves. Beam, 351; Thomas v. Dering, Keene's Rep. 729, 743, 747."

See, also, Minge v. Green, 176 Ala. 343, 58 So. 381.

Whether this abatement be looked upon as an allowance for partial failure of consideration, or by way of compensation or damages for the loss resulting from nonperformance in full, it is the measure of relief in equity, to which the vendee is entitled because of partial failure of title, when he elects to claim partial performance. It is not questioned that, if full performance is had in equity, it is a bar to an action at law for damages for a breach of the contract. The specific performance of a contract leaves no breached contract. In some cases of doubt, concurrent actions for specific performance, and for damages at law, have been allowed to proceed without forcing an election; but final relief under both forms of action is not allowed. In either case the relief is full and exclusive. The equity jurisdiction in cases of specific performance is rested on the inadequacy of the remedy at law, and, where the legal remedy is found adequate, equity declines jurisdiction.

The case is not different when the vendee elects a partial performance. The entire transaction — the res — is drawn within the jurisdiction of the court. The equities are determined as to both parties. The abatement of the purchase money involves as, of course, a determination of the extent to which title has failed, and the naming of the equitable terms upon which the vendee shall have specific performance.

It follows that the decree of specific performance in the case at bar was a complete adjudication of all the rights of the parties growing out of the transaction. This without the aid of the agreement in writing, filed and made a part of the decree.

The defendant was entitled to the affirmative charge on the evidence.

Reversed and remanded.

ANDERSON, C. J., and SOMERVILLE and THOMAS, JJ., concur.

On Rehearing.