Leavitt v. Fowler, 7977

• Decision Date: 18 September 1978
• Docket Number: No. 7977,7977
• Citation: 391 A.2d 876,118 N.H. 541
• Parties: Kenneth LEAVITT et al. v. Truman R. FOWLER et al.
• Court: New Hampshire Supreme Court

Page 876

391 A.2d 876

118 N.H. 541

Kenneth LEAVITT et al. v. Truman R. FOWLER et al.

No. 7977.

Supreme Court of New Hampshire.

Sept. 18, 1978.

James J. Kalled, Wolfeboro by brief and orally, for defendants.

LAMPRON, Chief Justice.

This case involves a petition for specific performance of a purchase-and-sale agreement for land and buildings located in Ossipee. The Superior Court (Brock, J.) granted specific performance and, Inter alia, ordered that the plaintiffs pay $5,350.40 to the defendants for accrued interest and rent. The defendants have excepted to the failure of the trial court to grant certain findings of fact and rulings of law. We affirm.

On April 8, 1975, the parties entered into written purchase-and-sale agreement in which the plaintiffs agreed to purchase the Ossipee property from the defendants for $37,000. In accordance with the agreement, the plaintiffs immediately took possession of the property and have continued to reside on the property ever since. The agreement stipulated that the closing was to take place on or before September 15, 1975 and that if "the Purchaser, without cause, does not purchase within a reasonable time after September 15, 1975, or that an extension of this agreement is not entered into . . ." the $2,000 downpayment plus interest would become the property of the seller as liquidated damages. The following clause was also part of the agreement: "This agreement and the obligations and rights hereunder are contingent upon the Purchaser (sic) being able to obtain Farmers Home Administration financing at such rate of interest and other terms as the Purchaser (sic) in their sole discretion shall deem reasonable."

An application for Farmers Home Administration (hereinafter FmHA) financing was filed by the plaintiffs in March 1975, approximately one month before the purchase and sale agreement was signed. On September 23, 1975, after protracted delays in processing the mortgage application the plaintiffs were orally informed that they did not qualify for FmHA financing. The trial court found that the delays were not the fault of the plaintiffs. A final written denial of the financing was forwarded to the plaintiffs on November 10, 1975.

The plaintiffs then made application to the Wolfeboro National Bank for conventional financing. Within two weeks the plaintiffs received a loan commitment from the bank, and a closing date of December 17, 1975, was established by the bank. On December 4, 1975, after learning about this loan commitment, the defendants notified the bank that they considered the contract null and void because a closing was not effected by September 15. The trial court found that the plaintiffs, at all times subsequent to the loan commitment of the Wolfeboro National Bank, have stood ready, willing, and able to perform, but the defendants have refused to convey title.

The defendants contend that the purchase-and-sale agreement is null and void for two reasons: the failure to close by September 15, and the failure of the plaintiffs to obtain the financing from Farmers Home Administration. We disagree.

When time is not made of the essence in a contract, although a certain period of time is stipulated for its completion, equity treats the time limitation as formal rather than essential, and permits a party to compel specific performance notwithstanding his own delay. Moore v. Sterling Water Industrial Investment Corp., 114 N.H. 520, 323 A.2d 581 (1974); Guy v. Hanley, 111 N.H. 73, 276 A.2d 1 (1971); 4 Pomeroy, A Treatise on Equity Jurisprudence § 1408 (5th ed. 1941); 3 American Law of Property § 11.45 (19...