ABDULLAH BEY CHEDID Vs. TENENHAUM

JUDGEMENT

(1.) On 14 July 1925 C had entered into a contract with the plaintiff-respondent where he agreed to sell and the respondent agreed to purchase certain miri land situated at Haifa in Palestine. The purchase under the contract had not been completed at the death of C. The price fixed by the contract was ?E 260 per dunum. ?E.6,000 was paid on the signing of the contract, and the balance of the price ?E.28,000 was to be paid at the transfer into the name of the respondent. The contract contained also the following clause : "5. If the first Party commits breach of any terms of this contract, he shall return to the second party the ?E.4,000 received by him and shall pay to him. ?E.10,000 as liquidated damages and penalty for the non carrying out of this contract, and if the second party commits breach of any terms of this contract, he shall pay to the first party ?E.10,000 as liquidated damages and penalty after deduction of the ?E. 4,000 paid."

(2.) The prescribed period for the transfer after the payment of the price was postponed with the consent of both parties to 30 November 1927 and the heirs of C, whereby the respondent as he did not have the sum owing to the then present conditions, asked the heirs of C to give a year's period to 30 November 1928, under the conditions therein contained.

(3.) The conditions in effect provided : (1) for the payment then made of an additional deposit of ?E.5,000; (2) for the extension of the time for payment of the balance to 30 November 1928; and (3) for the reduction of the penalty under clause of original contract from ?E.10,000 to ?E.7,000. The plaintiff alleged that the vendor had not transferred the land to him by the agreed date, and therefore he claimed the refund of deposit and stipulated damages of ? E.7,000. The defendant put in a defence and counter-claim in which he alleged that he had offered to transfer the land by due date and that the plaintiff was in default in not accepting the same and that the real reason of the refusal of the respondent to accept the transfer was that he had no money to pay the balance of the purchase price and he was himself in default and accordingly the defendant counter-claimed to keep the deposit and to be paid a further sum of ?E.5,000 to make up damages or penalty of ?E.7,000. Their Lordships found that the defendant did not on the agreed date proffer a transfer which the plaintiff was bound to accept and to that extent the plaintiff had made good his case. Accordingly the plaintiff was held entitled to a refund of the deposit. But as the plaintiff was not in a position to perform his part of the contract (that is, to pay the remainder of the purchase price) he was not entitled to recover any damages for breach of contract.