Cue v. Johnson

• Decision Date: 12 May 1906
• Docket Number: 14,417
• Citation: 85 P. 598,73 Kan. 558
• Parties: C. E. CUE et ux. v. L. G. JOHNSON
• Court: Kansas Supreme Court

85 P. 598

73 Kan. 558

C. E. CUE et ux. v. L. G. JOHNSON

No. 14,417

Supreme Court of Kansas

May 12, 1906

Decided January, 1906.

Error from Trego district court; JAMES H. REEDER, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. CONTRACTS--Time of the Essence--Forfeiture. Courts abhor forfeitures, and will resort to any reasonable rule of construction to avoid them. But when in a contract for the sale of real estate it is stipulated that time shall be of the essence of the agreement, and a forfeiture upon default is provided for, such contract will be upheld and enforced, unless under the circumstances shown it would be grossly inequitable.

2. CONTRACTS--Right to Forfeit Must be Promptly Asserted--Waiver. When the right to declare a forfeiture under such a contract exists the party entitled thereto must assert his right promptly, and his acts relating thereto must be unequivocal, and inconsistent with the continuance of the contract, or he will be held to have waived such right.

W. E. Saum, for plaintiffs in error.

J. J. Schenck, for defendant in error.

GRAVES J. All the Justices concurring.

OPINION

GRAVES, J.

This suit was brought in the district court of Trego county to cancel a contract for the sale of real estate which the plaintiff had executed to the defendants, who had made default in payments due thereon.

The contract sought to be canceled was executed June 13, 1903. By it the grantor agreed to convey 320 acres of land, upon payment by the grantees of $ 4505.10, as stipulated. Payment was to be made in instalments. Time was by express terms made of the essence of the contract. Under a prior agreement of sale the grantees had been in possession of the land one year, and had paid to the grantor $ 500. The balance remaining due on the sale of the land at the date of the contract sought herein to be canceled was the aggregate sum therein stated, $ 4505.10. Of this amount the grantees had paid $ 822.03. On May 1, 1904, an instalment of $ 133 became due; it was not paid; the grantor declared the contract at an end and demanded possession of the land, which being refused he brought this suit. Upon a trial a decree was granted in favor of the plaintiff, and the defendants now ask that such decree be reversed.

By the terms of this decree the grantor retains $ 1322.03 paid on the purchase-price, and also recovers the possession of the land. The grantees have been in possession two years. Upon these facts the plaintiffs in error claim: (1) That the defendant in error is not entitled to a forfeiture, and (2) if he was entitled thereto, it has been waived.

This court, in the case of National Land Co. v. Perry, 23 Kan. 140, held that where parties to a contract for the sale of real estate make time of the essence of the contract a forfeiture will be upheld as stipulated, unless under the circumstances of the case it would be grossly inequitable. At the same time courts do not favor, but on the contrary they abhor, forfeitures, and will resort to very liberal rules of construction to avoid them. (English v. Williamson, 34 Kan. 212, 216, 8 P. 214; Hartley v. Costa, 40 Kan. 552, 559, 20 P. 208; Ritchie v. K. N. & D. Rly. Co., 55 Kan. 36, 39 P. 718; Forest City Ins. Co. v. Hardesty, 182 Ill. 39, 55 N.E. 139, 74 Am. St. Rep. 161; Grigg v. Landis, 21 N.J.Eq. 494; Robinson v. Cheney, 17 Neb. 673, 24 N.W. 378.) In the case last cited, in speaking of a contract where time was made of the essence of the agreement, and provision was made for a forfeiture in case of default, the court said:

"A court of equity will not declare a forfeiture unless compelled to do so. It violates every principle of justice to take the property of one man and give it to another without compensation upon a simple failure to pay at the day, where there had not been gross laches." (Page 680.)

It seems to be a well-established rule in such cases that the party claiming the benefit of a forfeiture must show himself to be strictly within the terms of the instrument which confers that right. He must act promptly in asserting his claim, and his acts relating thereto must be positive, unequivocal, and inconsistent with the continuance of the contract. (Faw et al. v. Whittington, 72 N.C. 321; 29 A. & E. Encycl. of L. 677, 681; Boone v. Drake, 109 N.C. 79, 13 S.E. 724; Hipwell v. Knight, 1 Y. & C. Ex. [Eng.] 401.) In the case last cited Baron Alderson said:

"The result of the cases on this subject seems undoubtedly to be that slight circumstances are sufficient in a court of equity to prevent a party from taking the benefit of such a stipulation; and that whenever a party has done any act inconsistent with the supposition that he continues to hold his opponent strictly to this part of his agreement, he is to be taken to have waived it altogether." (Page 418.)

In addition to the facts before stated it appears that all payments had been made according to the contract prior to May 1, 1904. At that time interest to the amount of $ 133 became due. A short time before that date--on April 28 or 29--defendant C. E. Cue informed the plaintiff that he would be unable to pay promptly, asked for further time, and offered additional security for the delay. The plaintiff...