## Facts

- Purchasers James L. Bryant and James E. Bland contracted to buy the O. J. Morrison Building for $175,000 and paid a $10,000 down payment to the sellers’ agent.
- The contract required payment of the balance “upon delivery of the deed,” with possession to pass at that time; no closing date was set.
- The contract stated that “the owner is responsible for said property until the Deed has been delivered to said purchaser.”
- Before deed delivery and before purchasers took possession, a sprinkler-system water line broke, causing water damage to the building and flooding adjoining businesses.
- The purchasers sought either repair of the damage or rescission; the vendors refused and later sold the building to another buyer for $140,000.
- The purchasers sued for rescission and return of the $10,000 down payment; the vendors counterclaimed for the price differential and for sums paid relating to neighboring properties’ flood damage.
- At a bench trial, the vendors offered testimony that the “owner is responsible” clause was intended to address vandalism only.

## Issues

1. Whether a real-estate sales contract clause stating that the owner remains responsible for the property until deed delivery places the risk of loss on the vendors for casualty damage occurring after contract execution but before deed delivery.
2. Whether equitable conversion may be applied to shift the risk of loss to purchasers despite express contractual language allocating responsibility to the vendors.
3. Whether the purchasers could be held liable for third-party flood damages and for the vendors’ claimed losses after the vendors resold the property.

## Decision

- The Supreme Court of Appeals of West Virginia reversed and remanded.
- The court held that the contract’s express allocation—making the owner responsible until deed delivery—kept the risk of loss on the vendors until the deed was delivered.
- The court ruled that equitable conversion could not be used to shift the risk of loss to the purchasers in the face of clear contractual language.
- The court rejected limiting the responsibility clause to vandalism based on testimony, concluding the provision broadly assigned responsibility for the property before deed delivery.
- The court directed further proceedings consistent with its holding, including reconsideration of the down payment retention and the damages assessed against the purchasers.

## Legal Principles

- Equitable conversion operates as a default rule for risk of loss between contract and closing and yields to an express contractual allocation.
- When a real-estate sales contract states that the owner/seller remains responsible for the property until deed delivery, the seller bears casualty risk during the executory period.
- Courts will enforce an unambiguous risk-of-loss provision as written and will not narrow it to specific hazards through extrinsic testimony that contradicts its plain meaning.
- Liability determinations tied to pre-deed property risk must track the contract’s allocation rather than an equitable conversion theory that conflicts with the parties’ agreement.

## Conclusion

Because the contract expressly placed responsibility for the property on the owner until deed delivery, the vendors bore the risk of the pre-closing water damage, and equitable conversion could not be applied to shift that loss (or related third-party damage liability) to the purchasers; the judgment against the purchasers was reversed and the case remanded for proceedings consistent with that allocation.


Bryant v. Willison Real Estate Co., 177 W. Va. 120, 350 S.E.2d 748 (W. Va. 1986)