Cape May Real Estate Co. v. Henderson
| Decision Date | 20 March 1911 |
| Docket Number | 126 |
| Citation | 79 A. 982,231 Pa. 82 |
| Parties | Cape May Real Estate Company v. Henderson, Appellant |
| Court | Pennsylvania Supreme Court |
Argued January 19, 1911
Appeal, No. 126, Jan. T., 1910, by defendant, from judgment of Superior Court, Oct. T., 1909, No. 128, reversing judgment of C.P., No. 5, Phila. Co., March T., 1909, No. 2,438, for defendant in case of Cape May Real Estate Co. v. James D. C Henderson. Affirmed.
Assumpsit to recover installments of purchase money on a contract for the purchase of land.
Demurrer to statement. See 42 Pa.Super. 1.
The facts appear in the opinion of PORTER, J., as follows:
The plaintiff filed a statement averring that it had, on March 11, 1907, entered into a written contract with the defendant under the terms of which it agreed to sell and convey, and the defendant covenanted to buy and pay for, a certain lot of ground at Cape May, New Jersey. A copy of the written agreement was attached to and made part of the statement, and under its provisions the plaintiff agreed to sell and convey the lot described, and the defendant covenanted to purchase the same and pay therefor the sum of $1,600, of which sum $160 was to be paid in cash and the balance in installments of $120, each and every three months following the date of the agreement.
The contract contained the following provision upon the construction of which, under the pleadings, this case must turn, viz.: "If default of payment is made of any one or more of said installments of said principal sum, for a period of thirty days after the expiration of the time herein limited for the payment thereof, or said party of the second part shall fail to perform any other of the agreements on his part herein contained, all rights of the said party of the second part under this agreement, and all his right, title interest and claim in said described premises shall become null and void: it being expressly stipulated and understood that no process or decree of law or equity shall be necessary to this effect, and all moneys theretofore paid as well as the premises shall in such event, belong to said party of the first part as liquidated damages for the time said property was under the control of the said party of the second part." The statement averred that the defendant, the party of the second part to said agreement, had paid the cash installment of $160 and the installment of $120 which became due on June 11, 1907; but that he had wholly failed and refused to pay the seven quarterly installments, of like amount, which subsequently became due according to the terms of the contract, and that this action was brought to recover $840, the amount of said installments in default, with interest thereon at five per centum per annum. The defendant demurred to this statement, assigning as ground of demurrer, "that the contract upon which the suit is brought limits the amount of damages which the plaintiff may recover upon the defendant's breach, to the amount of the installments he may have paid prior to the breach, and the forfeiture of his interest in the premises;" and quoting the covenant above set forth. The court below sustained the demurrer and entered judgment for the defendant. The plaintiff appeals.
Did the provision of the contract hereinbefore quoted vest in the defendant the right to set up his own default, to work a forfeiture of his own contract? The earlier cases in Pennsylvania might have sustained the position that it did so; those cases were referred to and the history of the departure from the doctrine which they asserted reviewed by Mr. Justice CLARK, in Ray v. Natural Gas Co., 138 Pa. 576. The general rule is that a party cannot take advantage of his own wrong or set up his own default to work a forfeiture of his own contract, unless the contract expressly gives him the right to do so. While parties may contract that on default the contract shall become void at the option of either party, yet such intent in the agreement must be so plain as to be unavoidable in order to sustain such a construction. The clause of forfeiture or termination of the estate, upon the failure of a purchaser or lessee to pay purchase money or rent at the time by the contract required, is presumed to be for the benefit of the grantor or lessor, and as against him no default of the grantee or lessee can release the latter from his covenant to pay unless the intent of both parties to that effect be made to appear by clear, precise and unequivocal language. Covenants that the contract shall become void, or that the estate shall cease and terminate, on failure by the grantee or lessee to pay at the time specified, are not self-operating and do not make the contract void except at the option of the grantor or lessor, "and that legal effect, no matter what form or cumulation of phrases be used, can only be changed by an express stipulation that the contract shall be voidable at the option of either party," is well settled: Cochran v. Pew, 159 Pa. 184. These principles are firmly established by many decisions, a number of which were referred to in the opinion of President Judge RICE in Steele v. Maher, 38 Pa.Super. 183. The same rule applies to the construction of contracts for the sale of...
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