Kelly v Duffy

• Jurisdiction: Ireland
• Judgment Date: 01 January 1924
• Docket Number: (1921. No. 241.)
• Date: 01 January 1924
• Court: Chancery Division (Ireland)

(1921. No. 241.)

Kelly v. Duffy

KELLY

and

DUFFY

Vendor and Purchaser - Specific performance - Vendor not having any title - Breach of contract - Deceit not pleaded - Damages for loss of bargain not recoverable.

Action.

On November 25th, 1918, Patrick Duignan, who was the lessee of the house and premises known as St. Gerard's, 83 Iona Road, Dublin, held by him at the yearly rent of £7 6s., agreed to sell his interest in an unexpired term of years to Mrs. Teresa Kelly, the plaintiff, for the sum of £820, and received from her £100 as a deposit, the sale to be closed and clear possession given on December 28th, 1918. On the 20th of March, 1918, Patrick Duignan had assigned the premises on trust for the Superioress of the Ballinamore Convent, Co. Leitrim, to be applied towards the maintenance and support of the convent for carrying on its charitable and educational work. This assignment was disclosed and relied upon in the defence. Patrick Duignan died on November 16th, 1919. The plaintiff now sued the defendant as personal representative of Patrick Duignan for specific performance of the agreement and for damages for loss sustained by the delay in carrying out the agreement.

The vendor agreed with the purchaser for the sale of certain leasehold premises, and the purchaser paid a deposit on his purchase-money. At the date of the agreement the vendor had no interest in the premises agreed to be sold. The vendor died without having completed his contract. In an action by the purchaser against the vendor's personal representative for specific performance and damages:

Held, that the action being founded upon breach of contract and not upon fraud or deceit, the damages awarded in lieu of specific performance must be confined to the loss occasioned to the purchaser by the vendor's failure to complete.

Bain v. Fothergill (L. R. 7 H. L. 158) applied. Day v. Singleton ([1899] 2 Ch. 320)distinguished.

O'Connor M.R. :—

This was an action by a purchaser against the personal representative of a vendor for the specific performance of an agreement for the sale of land, and for damages for loss sustained by the delay of the vendor in carrying out the agreement. There is a claim also for further and other relief.

The subject-matter of the agreement is a dwelling-house and premises, situate on Iona Road, Drumcondra, in the City of Dublin. The tenement is held under a lease for 990 years at the yearly rent of £7 6s., and the price was fixed at £820.

In addition to traverses of the cause of action, special defences were pleaded. One was that the vendor was to the knowledge of the plaintiff of unsound mind and incapable of understanding the agreement, and that he had no independent advice; another was that the contract was rescinded; another that the plaintiff by accepting a return of a deposit of £100 made in part payment of the purchase-money waived his right under the agreement. But none of these special defences was insisted upon at the trial, and I may therefore disregard them, and direct attention to a further special defence on which the action turns.

It was pleaded that at the date of the agreement the vendor was not the owner of and had no interest in the premises agreed to be sold, the same having been previously conveyed by the vendor to trustees for the Convent of Mercy, Ballinamore, by two indentures dated respectively 20th March, 1916, which were duly registered.

It goes without saying that if the vendor had no estate or interest in the premises, he could not have carried out his agreement, nor could his personal representative, the defendant. The action should, therefore, fail so far as it claimed specific performance, and the only relief open to the plaintiff would be in damages for breach of contract.

It was open to the plaintiff on getting the statement of defence to call immediately for production of the indentures referred to, or to get discovery of documents. The plaintiff did get discovery, and copies of the two indentures were discovered. On reading the copies (which were admitted) it clearly appeared that the vendor at the time he entered into the agreement had no estate in the premises, because he had previously parted with any estate he had.

The first of the indentures mentioned is made between the vendor, therein called the grantor, of the one part, and the Most Rev. Dr. Finnegan, Roman Catholic Bishop of Kilmore; the Rev. Francis M'Kiernan, Parish Priest of Ballinamore; the Rev. Mother Margaret Mary Carlos, Superioress of the Convent of Mercy, Ballinamore; Sister Mary Catherine Ryan and Sister Mary Patricia Gilferman, members of the convent, and therein called the grantees, of the other part. It recites the lease, and that all the estate and interest of the lessee therein had become vested in the grantor, and that he had agreed to assign to the grantees the leasehold interest in consideration of the covenants by the grantees therein contained. It then witnessed that the grantor, in pursuance of the agreement, thereby assigned to the grantees the demised premises, to hold to the grantees, their executors, administrators, and assigns for the residue of the term of 990 years, subject to the rent and to the covenants and conditions therein reserved and contained; and the grantees covenanted with the grantor for the payment of the rent and the observance and performance of the covenants.

Contemporaneously with this indenture there was executed another indenture, which was made between the grantees in the first indenture of the one part, and the grantor therein—viz., the vendor in the agreement—of the other part, whereby it was recited that the Order of Mercy have a convent at Ballinamore, and that the entire purposes and duties of the said order and of the said convent are fully and entirely devoted and appointed to works of charity and benevolence in and about the town of Ballinamore and adjoining districts, and that the said order and the said convent educate such poor persons as attend their schools without fee or remuneration, and that the nuns of the said convent attend the sick and infirm and administer care and consolation to the dying, and give charity by alms or otherwise to poor persons without reference to creed; and that the grantor was desirous of aiding the convent in their works of charity and mercy, and had by an indenture of even date assigned the premises to the grantees to the intent that they should hold the same until sold, and when sold should hold the proceeds of sale and the investments representing the same upon the trusts therein after declared. It was then declared that the grantees should hold the premises upon trust to pay the net annual rents until sold to the superioress of the convent, to be applied towards the maintenance and support of the convent for carrying out the charitable and...