Rogers Bros. Coal Co. v. Day

• Decision Date: 04 November 1927
• Citation: 1 S.W.2d 540,222 Ky. 443
• Parties: ROGERS BROS. COAL CO. v. DAY ET AL.
• Court: Kentucky Court of Appeals

1 S.W.2d 540

222 Ky. 443

ROGERS BROS. COAL CO. v. DAY ET AL.

Court of Appeals of Kentucky

November 4, 1927

Rehearing Denied, with Modification, Jan. 27, 1928.

Appeal from Circuit Court, Pike County.

Action by Effie P. Day and another against the Rogers Bros. Coal Company. From a judgment for plaintiffs, defendant appeals. Affirmed.

Newton Belcher, of Greenville, and Roscoe Vanover, of Pikeville, for appellant.

Moore &amp Childers, of Pikeville, for appellees.

THOMAS J.

On August 29, 1917, Effie P. Day and her husband, P. W. Day jointly owned a one-fifth undivided interest in and to a large tract of land in Pike county, which is referred to in this record as the "Long Branch" tract. Adjoining it in the same county was another large tract referred to in this record as the "Victoria Williamson" tract, and both of which appear to have been formerly owned by one Benjamin F. Williamson. On the day referred to the appellees (to whom we shall hereafter refer as plaintiffs) and the appellant (to whom we shall hereafter refer as defendant) Rogers Bros. Coal Company, entered into a written contract by which plaintiffs agreed to sell and convey to defendant their undivided one-fifth interest in the Long Branch tract, and in which defendant agreed to pay plaintiffs therefor the sum of $50 per acre. At that time the precise acreage of the entire tract, and consequently the acreage of plaintiffs' aliquot part thereof, were unknown, and in view of that fact the contract said:

"Said parties of second part are hereby granted the privilege of taking the above-described interest for 800 acres, or to survey the said tract at the expense of second party at the election of second party; i. e., second parties may elect which plan they shall pay upon, price per acre to be $50. * * * It is mutually agreed that, if the second party elects to make survey, the said survey shall be made within the year 1917. The balance of the purchase money shall bear interest from the 3d day of September, 1917; it is further agreed that if survey is not made within the present year the acreage shall be taken at 800 acres and note executed for the balance due thereon as herein stipulated."

Defendant also agreed in the contract to pay plaintiffs at that time the sum of $20,000, which it did, and further agreed to pay the balance within 4 years thereafter, with interest from September 3, 1917, for which it was to execute its note. On January 2, 1918, plaintiffs demanded the execution of the note pursuant to the terms of the written contract, but defendant objected upon the ground that it had not surveyed the land. Plaintiffs thereupon called its attention to the contract whereby it only had the privilege of ascertaining the true acreage by survey during the year 1917, and insisted that, defendant not having exercised it, the land should be taken and settled for at the agreed acreage of 800 acres, but which defendant at that time refused to do. In the meantime, and on November 28, 1917, at the request of defendant, plaintiffs executed and delivered to it their deed conveying their one-fifth interest, and at that time a collateral contract was executed whereby plaintiffs agreed not to retain a lien in the deed on the land for the balance of the purchase money, and defendant agreed therein to execute a note therefor, indorsed by Fon, Lon, and J. L. Rogers, and all of which was to be done "as per agreement heretofore given."

Nothing was done after January 2, 1918, until September 2 of that year, when defendant wrote plaintiffs a letter, in which it inclosed its check for $802.95, in payment of what it claimed was the first year's interest on the deferred payment, and which was calculated upon an acreage that it said was ascertained from a completed survey made in 1918, whereby the amount of land sold was found to be 667.65 acres, which at the price of $50 per acre would aggregate the total sum of $33,382.50, leaving a balance of purchase money due thereon of $13,382.50, and upon which the tendered interest check was calculated. On the next day (September 3, 1918) plaintiffs wrote defendant a letter in which it refused to accept the check and returned it therein. In that letter it was insisted by plaintiffs that the interest due was $1,200, and specific attention was again called therein to the terms of the contract, supra, in which it was specified and agreed that the survey if made by defendant should be done in the year 1917, and, if not, then the land should be accepted and paid for upon the agreed acreage of 800 acres. No reply to that letter seems to have been made by defendant, but on September 18, 1920, it wrote one (signed by Fon Rogers, as president) to plaintiffs in which it inclosed its check payable to them for $13,382.50 (based upon the calculation of 667.65 acres) and interest thereon from September 3, 1917, amounting to $1,976.15, a total aggregate of $15,358.65. A part of that letter said:

"I am directed to say, in view of your former claim for a larger amount of this property, that this payment is made without any prejudice whatever to your rights, and is made as a payment in full of amount as shown by the survey. If you are able to show a greater acreage than was shown by the survey made by Amick & Haynes, the Rogers Bros. Coal Company will be glad to pay you therefor."

Plaintiffs thereupon accepted the check and afterwards brought this action against defendant to recover the balance of the purchase money calculated upon the basis of 800 acres at the agreed price of $50 per acre, and upon trial the court (the action having been brought and heard in equity) sustained the prayer of the petition and rendered judgment in favor of plaintiffs for the difference between the amount of the check sent plaintiffs of September 18, 1920, and $20,000, with accumulated interest, and to reverse it defendant prosecutes this appeal.

A number of grounds for reversal are argued in briefs of counsel for defendant, but we deem none of them of sufficient substantiality to require consideration or discussion by us except (1) that time was not of the essence of the contract to sell, of date August 29, 1917; but, if mistaken in this, then (2) that defendant was excused from making the survey as stipulated in the contract through an act of God, which as alleged was excessively cold weather preventing it from doing so, and that it made the survey as soon thereafter as practicable; and (3) that, if neither grounds (1) nor (2) should prevail, then this action is one in all respects for specific performance, and under the rules governing the application of the remedy plaintiffs are not entitled to recover--each of which will be discussed and determined in the order named.

1. The general rule, long since declared and followed by the courts, is that, at law, time is of the essence of the contract, but that generally it is not so regarded in equity. In the latter forum the question is viewed from the standpoint of the intention of the parties as gathered from the particular involved contract, and, unless the intention to make time the essence of the contract is clearly expressed, or necessarily implied, it will not be so regarded. 6 R. C. L. 898, par. 285. However, in the same text the learned compilers state the universal rule to be that: "Where the parties have expressly stipulated that time is to be regarded as of the essence of the contract, there is no room for doubt. That is a contract which the parties are competent to make, and when they do make it, it is binding upon courts in equity, unless expressly made so by the contract itself. It may be said, however, that time is an essential part of a contract, when it appears from the contract that the parties so intended. * * * Any words that show the intention of the parties to be that time shall be of the essence of the contract, or any clause which provides in unequivocal terms that if the fulfillment is not within a specified time the contract is to be void, will have that effect. * * * Time is of the essence of a contract giving to one of the parties an option to purchase property."

There seems to be no contrary statement of the correct principle by any court or text-writer, and we in an unbroken line of opinions have upheld and applied it under facts calling therefor. One case applying the stated rule that time is of the essence of the contract in an option to purchase, and which is a privilege that the optionee may or may not exercise it at his pleasure, is that of Magoffin v. Holt, 1 Duv. 95, and which has been followed in a number of later cases which will be found by consulting Caldwell's Notes to the Kentucky Reports. Some of our more recent cases recognizing the principles announced by the text from R. C. L., supra, are Monarch v. Owensboro City Railroad Co., 85 S.W. 193, 27 Ky. Law Rep. 380; Ethington v. Rigg, 173 Ky. 355, 191 S.W. 98; Napier v. Trace Fork Mining Co., 193 Ky. 291, 235 S.W. 766; and Schmidt v. Martin, 199 Ky. 785, 251 S.W. 999. Some foreign cases of the same tenor are Cheney v. Libby, 134 U.S. 68, 10 S.Ct. 498, 33 L.Ed. 818; Brown v. Guaranty Trust Co., 128 U.S. 403, 9 S.Ct. 127, 32 L.Ed. 468; Meier Dental Manufacturing Co. v. Smith (C. C. A.) 237 F. 568; Telegraphone Corporation v. Telegraphone Co., 103 Me. 444, 69 A. 767; and Jennings v. Bowman, 106 S.C. 455, 91 S.E. 731. See, also, 4 Page on Contracts, § 2108. In that section the learned author says, inter alia:

"A provision in a contract of partition for paying for any excess of land, if shown by a survey within a specified time, makes such time of the essence of the contract, at least if the contract provides that in case of the failure to make such survey the area as provided in the contract shall be taken as conclusive."

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