Murdock v. Gifford, 18 N.Y. 501 (1881)

A vendor of real property must convey the property in substantially the same condition as it was when the agreement of sale was made; removal of fixtures constitutes a failure of performance, barring a legal claim for damages.

Summary

This case addresses whether a buyer was obligated to purchase property after the seller’s tenant removed fixtures between the contract signing and the closing date. The New York Court of Appeals held that the seller materially breached the contract by failing to deliver the property in the same condition as when the agreement was made. The buyer was justified in refusing to complete the purchase, and the seller (or their assignee) could not recover damages for the buyer’s failure to perform. The court reasoned that the buyer was entitled to receive the property with all fixtures intact and functioning as part of the real estate.

Facts

The vendor, Trask, agreed to sell stores to the defendant. At the time of the agreement, the property included gas piping, partitions, lead pipe, plumbing work, a water closet, and basins. These items were attached to the building and appeared to be part of the realty. The tenant, after the sales agreement but before conveyance, removed these fixtures, cutting pipes and dismantling partitions. The defendant then refused to take the property in its altered condition.

Procedural History

The vendor, Trask, assigned his right to damages (if any) to the plaintiff, Murdock. Murdock sued Gifford for breach of contract. The General Term affirmed the lower court’s decision in favor of the defendant, Gifford. The case then went to the New York Court of Appeals.

Issue(s)

Whether the removal of fixtures from a property between the signing of a sales agreement and the closing date constitutes a breach of contract by the vendor, excusing the purchaser from their obligation to buy the property and precluding the vendor from claiming damages.

Holding

Yes, because the purchaser is entitled to receive the property in substantially the same condition it was in when the agreement was made, and the removal of fixtures constitutes a failure of performance by the vendor.

Court’s Reasoning

The court emphasized that the agreement to sell contained no reservations regarding the fixtures. “The defendant was entitled to the stores in the condition in which they were when bargained for, and his refusal to take them in an altered and inferior condition was not a breach of his contract.” The court acknowledged that in equity, the vendor might have been able to compel performance with a monetary adjustment for the removed fixtures. However, because the vendor (through the assignee) sought damages at law, strict compliance with the contract’s terms was required. The vendor’s failure to deliver the property in its original condition constituted a breach, thus barring the vendor’s (or assignee’s) claim for damages. The court distinguished between remedies at law (strict compliance) and remedies in equity (where compensation could potentially remedy the breach). Because the plaintiff sought legal damages, they had to show the vendor performed all conditions of the contract. Since the fixtures were removed, the vendor failed to perform.