Party rescinding a part-performed contract liable to restore anything received thereunder.

Rescission must, as a vendor and purchaser summons the contract has been rescinded at the purchaser's instance for the vendor's failure to show a good title, the vendor has been ordered to pay the purchaser's costs of investigating the title; Re Higgins and Hitch mail's Contract, 21 Ch. D. 95; Re Yeilding and Westbrook, 31 Ch. D. 344; Re Hargreaves and Thompson's Contract, 32 Ch. D. 454; Re Biggins and Percival, 59 L. T. 213; Re Ebsworth and Tidy's Contract, 42 Ch. D. 23, 53; Re Bryant and Barningham' s Contract, 44 Ch. D. 218, 222; Re Hare and O'More's Contract, 1901, 1 Ch. 93; Re Waller and Oakshott's Contract, 1901, 2 Ch. 383, 387.

(r) See above, p. 751, and n. (m). It may be suggested, however, that the expenses of preparing, stamping and executing a memorandum of the contract, being those of putting the agreement into the form required by law to make it enforceable, are expenses properly incurred tinder the contract, which is not void when concluded by word of mouth only; see above, pp. 9, 781; below, p. 965. Of course the expenses of any negotiation preliminary to the conclusion of the contract could not be recoverable; below, p. 965.

(s) Wythes v. Lee, 3 Drew. 396; Rose v. Watson, 10 H. L. C. 671; Whitbread & Co. v. Watt, 1902, 1 Ch. 835.

(t) Kitton v. Hewett, 1904, W. N. 21; and cases decided on vendor and purchaser summons and cited above, n. (q).

(u) Above, p. 750.

(r) Whitbread & Co. v. Watt, 1902, 1 Ch. 835.

(x) Above, pp. 924, 930. rule, be accompanied by restitutio in integrum.

Exception in the case of a deposit.

(z) Above, pp. 726, 936. (a) Above, p. 938. (b) Above, pp. 914, 915. (c) Above, pp. 722 sq.

(d) Above, pp. 915, 916, and n. (d), p. 948, and n. (m).

(e) Dunn v. Vere, 19 W. R. 151; Howe v. Smith, 27 Ch. D. 89; above, p. 22.

(f) It is thought that this conclusion follows from the decision and judgments given by the Court of Appeal in Howe v. Smith, 27 Ch. D. 89, in which case, it is important to note, the Court considered that the purchaser had committed such a breach or made such a renunciation of the contract as entitled the vendor to rescind, that the vendor had elected to rescind, and that he had resold, not under the power of resale in the contract, but as owner. In Jackson v. De Kadich, 1904, W. N. 168, however, Farwell, J., declined, on an application made ex parte by a vendor lawfully rescinding the contract for the purchaser's default, to make a declaration that he was entitled to a deposit placed as such, but without provision for its application, in a stakeholder's hands. He remarked that the vendor cannot have rescission, and, at the same time, damages for the breach of the contract; and that in Howe v. Smith there was no rescission. On the latter point, however, he was mistaken, as we have seen. As to his other reason, no doubt the rule is that a vendor cannot at once have rescission and damages for breach: but Dunn v. Vere and Howe v. Smith, ubi sup., established that an exception may arise with regard to a deposit paid on a sale, and that, in the absence of stipulation to the contrary, the intention will be implied, from the very nature of a deposit, that it shall be a guarantee for the purchaser's due performance of the contract, and shall be forfeited on his default to the vendor. Can it reasonably be supposed that the parties intended the deposit to be returned to the purchaser in the event of the vendor electing to rescind the contract, when entitled to do so by reason of the purchaser's breach or renunciation of the contract? In Howe v. Smith the Court of Appeal thought not, where the deposit is paid to the vendor. It is thought that a deposit is placed in a stakeholder's hands for safe custody only pending the happening of some event, in which it is to be paid over to one of the parties; and that, otherwise, a deposit is paid to a stakeholder on the same conditions exactly as it is paid to the vendor himself; Collins v. Stimson, 11 Q. B. D. 142, 143; see also Expte. Barrel!, L. R. 10 Ch. 514; Farwell, J., Hart v. Porthgain Harbour Co., Ld., 1903, 1 Ch. 690, 696. It is true that in the case of Mackreth v. Marlar, 1 Cox, 259 (above, p. 948, n. (m)), a vendor suing in equity for the rescission of the contract on account of the purchaser's default was decreed to return the deposit, notwithstanding that the contract contained an express provision for its forfeiture; but it does not appear that this point was argued or contested, and it is submitted that in this respect the decision must now be taken to have been overruled by Howe v. Smith, ubi sup. And in Dunn v. Vere, 19 W. R. 151, and Olde v. Olde, 1904, 1 Ch. 35 (Farwell, J.), a vendor, actively asserting his right to rescind the contract for the purchaser's default, was allowed to retain a deposit paid to him. Besides this, it is held at law that, although a contract of sale be rescinded by the exercise of an express power of resale contained therein, any deficiency in price on the resale may nevertheless be recovered from the purchaser under a special stipulation to that effect to be implied in the agreement; Lamond v. Davall, 9 Q. B. 1030, 1032; below, p. 956.

(g) Palmer v. Temple, 9 A. & E. 508, 520, 521; Cornwall v. Henson, 1900, 2 Ch. 298, 302, 305; above, p. 916, n. {d).

Where the purchaser has been let into possession or receipt of the rents and profits pending completion on the terms that he shall pay interest on the purchase money as from the date of his entry (k), or shall pay the purchase money by instalments, and he afterwards commits a breach of contract giving rise to the right to rescind, the vendor electing to rescind the contract is entitled in equity to recover any rents or profits received by the purchaser (l), but not, it has been held (m), to charge him with an occupation rent for any part of the premises which he occupied himself. And it is thought that the vendor would be correspondingly bound to return any money actually paid to him under the agreement either for interest or principal (n). It is also conceived that a purchaser, who had been so let into possession and elected to rescind for the vendor's breach of contract, would in equity be similarly liable to account for the rents and profits received by him and entitled to recover any sums paid on account of the purchase money (o). In these cases the purchaser would not be liable at law for the use and occupation of the premises prior to rescission of the contract (p). But if he held over after the rescission, he would be so liable (q).