Brief Fact Summary. The Plaintiffs entered into a land purchase agreement with the Defendants for sale of property to be paid in monthly installments to the Plaintiffs. Defendants defaulted and Plaintiffs sued for possession.
Synopsis of Rule of Law. Upon execution of a contract for the sale of land, the vendor holds legal title in trust for the vendee and the vendee for all practical purposes is the owner of the property subject only to the terms of the contract.
Facts. In 1973, the Plaintiffs agreed to sell and the Defendants agreed to buy a single family home for the price of $15,000. The agreement provided for monthly payments over a 15-year period, with interest to the Plaintiffs who would retain title until the Defendants had paid in full. The contract gave the Plaintiffs the right to repossess the house if Defendants failed to cure a late payment within 30 days. The Defendants did default on the contract and the Plaintiffs filed this suit seeking ejectment of the Defendants. The trial court granted summary judgment for the Plaintiffs and the Defendants appealed.
Issue. What are the rights between a vendor and a defaulting vendee under a land purchase contract?
Held. Reversed. Plaintiffs must pursue an appropriate remedy and a suit for ejectment is not a remedy available to them.
Upon the execution of a contract for the sale of land, the seller (vendor) holds the legal title in trust for the buyer (vendee). The vendor also has an equitable lien on the property. Further, for all practical purposes, the vendee in possession is the owner of the property, subject only to the terms of the contract.
The vendor may not enforce his rights by an action in ejectment. Instead, a vendor must instead proceed to foreclose the vendee’s equitable title or bring an action at law for the purchase price. The same options that a mortgagee would have.
Discussion. The court focused on the inequitable result that would occur if it were to allow the Plaintiffs to be successful on their suit for ejectment. The court noted that sale of land contracts are different than ordinary contracts and thus the rights that attach upon execution of them are different. The Plaintiffs were essentially the mortgagee and are bound by the equitable remedy of foreclosure. A suit for ejectment is not available for a breach of a land purchase contra