Dai/tow j i
Peris v.Vieym:
Although, apart from the express evidence here of both plaintiffand defendant, it might have been possible to argue that the firstpayment of Es. 200 appeared on the face of it to be a payment to-bind the contract, it is quite impossible to say the same of thesecond payment of Es. 1,000. In fact I am satisfied neither paymentwas meant to be a deposit, and therefore there is here, in the absenceof express terms, no such implication as would exist in the paymentof a deposit by the purchaser as a guarantee to bind the contract.Howe v. Smith (supra) was approved and applied in Mayson v.Clouet,2 an appeal from the Straits Settlements to the Privy Council-
In Mayson v. Clouet (supra) the purchaser paid a deposit and twoinstalments of the purchase price, but failed to pay the balancewithin the stipulated time. He was therefore in default and ,thevendor rescinded the contract-. The purchaser thereupon sued to-recover the instalments paid. The Privy Council held, reversing-the decision of the Colonial Courts, that he was entitled to succeed.The contract between the parties provided that the deposit wasto be forfeited if the purchaser was in default. It did not includethe instalments. One must turn to the contract to ascertain whatis the solution in a question of this kind.
As pointed out by Lord Dunedin, who delivered the judgment ofthe. Board, all the elaborate argument in Howe v. Smith (supra) wasquite unnecessary if the case could have been solved by the simpleproposition sought to be applied in Mayson v. Clouet (supra) (whichsimple proposition was put forward in this case by the defendantin the lower Court), namely, “ you are in default as to the contract, •
In Howe v. Smith 1 also a case of a purchaser’s failure to completean agreement, the words used are that the payment was made as“ a deposit and in part payment of the purchase money,” and onthe facts of the case the conclusion come to was that the paymentmade was in the nature of an earnest or arrha. The question asto the right of the purchaser to recover it must in each case be aquestion of the conditions of the agreement. Fry L.J. puts it inthe following way: —
“ Money paid as a deposit must, I conceive, be paid on some termsimplied or expressed. In this case no terms are expressed.The terms most naturally to be implied appear to me inthe case of money paid on the signing of a contract to bethat in the event of the contract being performed it shall bebrought into account, but if the contract is not performedby the payer it shall remain the property of the payee.It is not merely a part payment, but it is then also anearnest to bind the bargain so entered into and creates bythe fear of its forfeiture a motive in the payer to performthe rest of the contract.”
1 27 Ch. Div. 89.
(1924) A. C. 980.
( 282 )
jDalton J.
Peris v*Vieyra
and: the party not in default may keep anything he has got fromthe partial fulfilment of the contract/* He also points out that inHowe v. Smith (supra) it is clear that if the learned judges had heldthat the deposit was only part payment and not a deposit proper,
. they would have ordered its return.
On the footing, as laid down in Nagur Pitchi v. Usoof (supra),that one can take cognizance of the terms of the contract in such acase as this, I can find nothing therein to debar the plaintiff fromsucceeding in his claim. No doubt on his default, the defendanthad his remedy, but he is not necessarily entitled to retain theinstalments of purchase money paid. As in Mayson v. Clouet(supra) so here there has been some suggestion for the defendant‘that inasmuch as he had suffered damage as a result of plaintiff'sdefault he was entitled to retain the instalments on account of the
-damages suffered, as liquidated damages. That he is not entitledto do. In any event plaintiff has conceded to him the sum ofUs. 260, the difference between Rs. 4,000 and Rs. 3,750, whichwould seem to be the measure of the damages he suffered, had he
sought and had he been entitled to damages.
Ror the reasons I have given the decision of the lower Court must"be affirmed, and the appeal be dismissed with costs.
' Lyall Grant J.—
I agree that there is nothing here to show that either the Rs. 200
or the Rs. 1,000 was paid with the intention that the money shouldbe forfeited in the event of the purchaser failing to complete his
On the failure which took place the vendor had the option of"treating the contract as still existing and suing for the balance of theprice, or of treating the contract as at an end and selling to someone else, and claiming damages for breach. He chose the latter•.alternative and sold before the time allowed to the original vendeefor payment had expired.
The plaintiff has agreed to pay as damages the difference between
the price actually obtained and the price he had agreed to pay.That seems to me to be a fair measure of the damages suffered bythe defendant. He cannot claim more except by proving an•express agreement that moneys paid should be retained by him,
-.and this, in my opinion, he had failed to do.
I agree that the appeal should be dismissed with costs.
Appeal dismissed.