Barton v. W.O. Broyles Stove & Furniture Co.

• Decision Date: 15 January 1925
• Docket Number: 6 Div. 276
• Citation: 103 So. 854,212 Ala. 658
• Court: Alabama Supreme Court
• Parties: BARTON v. W.O. BROYLES STOVE & FURNITURE CO.

103 So. 854

212 Ala. 658

BARTON v. W.O. BROYLES STOVE & FURNITURE CO.

6 Div. 276

Supreme Court of Alabama

January 15, 1925

Rehearing Denied April 30, 1925

Appeal from Circuit Court, Jefferson County; William M. Walker Judge.

Bill in equity by A.B. Barton against the W.O. Broyles Stove &amp Furniture Company. From a decree sustaining demurrer to the bill, complainant appeals. Reversed and remanded.

W Emmett Perry, of Birmingham, for appellant.

Hugh A. Locke, of Birmingham, for appellee.

SAYRE J.

Appellant entered into a contract with appellee for the purchase of household furniture; the price to be paid in monthly installments. The contract was in writing, and belonged to the class commonly known as "lease sale contracts," the provisions of which, in a way, are generally understood. It is averred in appellant's bill that, after he had paid $222.50 of the purchase price, which was $260.65, but after default, and in the absence of appellant, appellee declared a forfeiture, entered upon his premises, and took possession of the property. Appellant filed his bill to be relieved of the forfeiture; his reliance being upon the general principle that equity will relieve against a forfeiture where it is incurred by a breach of an express contract to pay a sum of money--this for the reason that the provision for forfeiture is inserted merely to secure the payment of money, and equity, regarding the security of such payment as the real purpose of the contract, will relieve the debtor from the consequences of the forfeiture whenever the actual damages sustained by the creditor can be adequately compensated. 1 Pom.Eq.Jur. (4th Ed.) § 381. The doctrine thus appealed to rests on the maxim that equity looks to the intent rather than to the form of a transaction. The defense interposed by the demurrer, which was sustained, was that the forfeiture averred belonged to a class against which equity will not relieve, even though compensation may be easily made, as where the contract is so drawn as to make time of payment of its essence, or where the forfeiture is occasioned by the nonperformance of a condition precedent, as, for example, no title is to vest until the vendee has paid certain sums at specified times. Eaton's Equity, p. 111; 1 Pom. § 455. It is evident from an inspection of the contract that the effort of the draftsman was to bring it within the rule last stated. However, we think he was unable to disguise its true meaning.

Whatever may be the rule of the law courts in dealing with such contracts our judgment is that, on the facts averred, appellant is entitled in equity to be relieved of the forfeiture upon his offer to do equity. When "the stipulation concerning payment is only a condition subsequent, a court of equity has power to relieve the defaulting vendee from the forfeiture caused by his breach of this condition, upon his paying the amount due, with interest, because the clause of forfeiture may be regarded as simply a security for the payment. It is therefore held, in a great number of cases, that the forfeiture provided for by such a clause, on the failure of the purchaser to fulfill at the proper time, will be disregarded and set aside by a court of equity, unless such failure is intentional or willful." 1 Pom. § 455. There are cases to the contrary, but Mr. Pomeroy observes of them (note to section 455) that they seem to ignore the equitable principle of relief from penalties and forfeitures.

There are many cases in our reports which go to show that in a court of law, where only the distinctive legal title may be considered a basis for affirmative relief, such title as was reserved to appellee must prevail. But appellant appeals to equity, and in that forum there can be no doubt that the transaction in question witnessed a sale of the property with title reserved to secure the payment of the purchase money. This court has frequently recognized the fact that the vendee in such a transaction takes a substantial interest in the property. To quote the language of Williston on Sales (2d Ed.) § 330: "In fact the buyer acquires not simply a contract right, but a property right." And this court has repeatedly said that the retention of title in such cases...