Fargusson v. Talcott
| Decision Date | 29 October 1897 |
| Citation | 73 N.W. 207,7 N.D. 183 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Cass County; McConnell, J.
Action by Owen Fargusson against Frank S. Talcott and Gertrude S Talcott, to determine adverse claims to real property. From a judgment directing plaintiff to execute to defendants a warranty deed on their payment to him of the amount found the plaintiff appeals.
Modified.
John E Greene, for appellant.
Evidence of the practical construction given to a contract by the parties thereto in their dealings under it may be considered in determining a proper construction. Hosmer v McDonald, 49 N.W. 112; First Nat. Bank v. Jagger, 41 Minn. 308, 43 N.W. 70.
Leonard A. Rose, for respondent.
Where the time for the delivery of the deed has arrived, the action of the vendor is for specific performance. Shelley v. Mikkelson, 5 N.D. 22, 68 N.W. 213. Conditions will always be construed so as to save a forfeiture if it can fairly be done. Martindale Conv. 292. Respondents offer to do equity--taxes are paid and they tender the purchase price. Curtis v. Gritz, 58 N.W. 883. That clause of the contract which says: "Time is of the essence of the contract" has been waived by appellants accepting interest on delayed payments and his failure to forfeit in time. Merriam v. Goodlett, 54 N.W. 686; Robinson v. Trufant, 56 N.W. 769; Ganghan v. Kerr, 68 N.W. 694. An action will lie to foreclose the rights of the purchaser in a contract for real estate and the decree will direct that the purchaser comply with the terms of his contract within a reasonable time to be named therein or the premises be sold. Gardels v. Kloke, 54 N.W. 834.
In this action instituted to determine adverse claims to real property under § 5904, Rev. Codes, the defendants have set up an equitable interest in the land involved by virtue of a written contract with the plaintiff for the purchase thereof, and pray that the court decree specific performance of such agreement. There is practically no controversy about the facts. The land agreed to be sold consisted of a whole section. The contract was made in the spring of 1892. The purchase price was to be paid by the delivery to the plaintiff of 15,000 bushels of No. 1 Northern wheat, 3,000 bushels thereof to be delivered on or before October 15, 1892, and 4,000 bushels on or before October 15th in each of the next three succeeding years. The place of delivery was the town of Buffalo, in the County of Cass, in this state. For a failure to deliver the full amount specified in any year the defendants were not to lose their rights under the contract, but were to pay interest on the deficiency; it being the obvious purpose of the parties that the payment of such deficiency should be deferred until the next season, when it should be made good, with interest thereon at 7 per cent. But it was undoubtedly the understanding of the parties that at least one-third of the crop raised on the land in each year should be delivered by the defendants to enable them to escape the consequences in equity of a default. To insure a reasonable payment each year, the defendants bound themselves to crop at least 400 acres every season. Time was declared to be of the essence of the contract, and a clause commonly spoken of in cases of this kind as a forfeiture clause was inserted therein. The mere failure of the defendants punctually to comply with the terms of the contract was not of itself to work the termination thereof, but only after a written notice served upon the defendants in a particular manner had been given was the agreement to cease to be of further binding effect. Under this contract the defendants entered upon the possession of the land in the spring of 1892, and have been in the possession thereof ever since. In 1892, 1893, and 1894 they delivered more than one-third of the crop raised upon the farm, but did not in any of these years deliver the specified number of bushels; i. e. 3,000 bushels in 1892, 4,000 bushels in 1893, and 4,000 bushels in 1894. Whether defendants violated their contract in those years is immaterial, for it is undisputed that they were permitted by the plaintiff to farm the land in 1895, and this was a waiver of all prior breaches. But in 1895 no wheat whatever was delivered by the defendants, nor did they during this season in any manner communicate with the plaintiff explaining their failure to perform or asking further time, although they in fact raised that year 3,000 bushels of wheat upon this land. Had plaintiff promptly given the defendants the notice required by the contract, that he elected to treat it as at an end because of their violation of its obligations, his position would have been unassailable. It is evident that time was of the essence of the contract with reference to the delivery of one-third of the wheat raised each year. No extension of time as to a deficiency arising from a failure to deliver one-third of the grain in any year is contemplated so far as such deficiency is concerned. With respect to that amount of wheat, time was of the essence of the contract. But, if one-third was delivered, the failure to deliver the specified number of bushels was not to put the defendants at the mercy of the plaintiff, but would only render them liable for interest thereon because the payment was not made at a particular time. The general principles which govern the decision of this case are well settled. In equity time is not ordinarily regarded as an essential element in a contract. But the parties may make it so by express agreement. This was done by the terms of the contract here involved. It is true that there is an express agreement that, for failure to comply with the provisions of the contract, the defendants shall be liable in damages. But this did not in any manner qualify the clause making time of the essence. In the absence of a stipulation that time shall be of the essence of the contract, a failure to perform on the exact day named will not work the destruction in a court of equity of the rights of the party who is dilatory in the fulfillment of his promise. In equity he may, despite this default, have specific performance. If, however, he agrees that time shall be of the essence of the agreement, he waives his right to invoke equitable protection. But the fact that he has no standing in a court of equity to excuse his default furnishes no argument to permit him to escape the consequences of his default in a court of law. The same breach of the contract which destroys his rights in equity also renders him liable for damages in a court of law. Inserting a provision that such liability shall exist adds nothing to it. Neither should it be taken as evincing a purpose to nullify the explicit language of the contract that time is of the essence thereof. Construed as a whole, the agreement in this case merely contains provisions which entitle the plaintiff to treat a breach thereof as a termination of the defendants' rights thereunder in a court of equity, and as subjecting them to damages in a court of law. Sound policy requires that those stipulations, making time of the essence of the agreement, should be enforced where the vendor, without being in any manner responsible for the vendee's default, acts promptly, and clearly manifests a purpose to avail himself of such provisions of the contract. The owner of land, having other business interests, may foresee that he will need or can use to great advantage the money at a particular time, and that if he can have the money on the very day named he can afford to sell on the terms specified. But he may be unwilling to sell on such terms if the payment is to be deferred. The profit to him may not be in the sale of the land, but in the use to which he can put the money, provided he can have it on the very day on which the vendee agrees to pay it. For this reason he should be allowed to stipulate in his contract that a failure to pay on the day specified shall destroy the rights of the defaulting party in a court of equity as well as in a court of law. This provision need not be in any particular form, but it is usual to express it in the manner in which it was expressed in the contract in question. After some vacillation on the part of the English chancellors, the rule was there adopted, and it prevails in this country as well, that the parties may by their agreement make time of the essence thereof; and that in such a case a failure to comply with the terms of the contract, at the time named therein for performance, will debar the person in default from claiming any rights thereunder, even in a court of equity. Our statute recognizes this doctrine. Rev. Codes, §§ 3806, 3916.
But all the authorities agree that the vendor may waive, as to any installment, the provision of the contract making time of the essence of the agreement. We think that, under the facts of this case, we are compelled to hold as a matter of law that the plaintiff waived such provision as to the default occurring on the 15th of October, 1895. It was not until January 15, 1896, that he served upon the defendants the notice specified in the agreement. This was the first indication on his part of any purpose to insist strictly upon his rights. Prior to October 15, 1895, the defendants had requested an extension of time of one year on the contract and the plaintiff had put them off without any definite answer. It is true that this did not excuse the default. Had plaintiff acted promptly, and given the written notice specified in the agreement, the defendants could have claimed nothing from his silence and his evasive conduct. But where it is a question whether, under all the circumstance, he has...
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