Shaddix v. Bilbro

• Decision Date: 27 March 1930
• Docket Number: 7 Div. 936.
• Citation: 220 Ala. 657,127 So. 227
• Parties: SHADDIX v. BILBRO ET AL.
• Court: Alabama Supreme Court

127 So. 227

220 Ala. 657

SHADDIX v. BILBRO ET AL.

7 Div. 936.

Supreme Court of Alabama

March 27, 1930

Appeal from Circuit Court, Etowah County; Woodson J. Martin, Judge.

Bill to avoid a forfeiture under a lease sale contract by M. L Shaddix against G. E. Bilbro and Flossie Lee Bilbro, with a cross-bill by respondents. From the decree, complainant appeals, and respondents cross-assign errors.

Reversed rendered, and remanded.

Hood &amp Murphree, of Gadsden, for appellant.

Culli, Hunt & Culli, of Gadsden, for appellees.

FOSTER J.

Appellant entered into a contract with appellees of a nature termed ordinarily a lease sale contract relating to a dwelling house. Before executing this contract, appellees at a time when they were occupying it as a dwelling rented it to appellant who moved into it, and appellees moved out, and some months later, while so occupied by appellant under his rent contract, the lease sale contract, the foundation of this suit, was executed.

Appellees claim that it is void because it was a contract to convey the homestead, and prohibited by law. Section 7883, Code.

If the homestead had been abandoned as such, the statute does not apply. Hudson v. Kelly, 70 Ala. 393. The evidence does not show that a declaration of claim was filed under section 7914, Code. Without the filing of such declaration, the leasing of the homestead temporarily is an abandonment, when the lease is for a definite time, and the owners live away from it. Trapp v. First Nat. Bank, 217 Ala. 587, 117 So. 197; Smith Lumber Co. v. Garry, 202 Ala. 473, 80 So. 857. Regardless of the value of the dwelling, it was not the homestead of appellees when the lease sale contract was executed, as they had leased it for a definite time, moved off, and had not filed a declaration of claim so far as the evidence shows. We therefore agree with the circuit court that for this reason the lease sale contract was not void.

As we interpret the purpose of the bill, it is to relieve appellant of the forfeiture of his rights under the contract on account of the failure to pay strictly according to the terms of the contract the installments of rent, which, in effect, are purchase-money installments. The basis of this claim is that a forfeiture, according to the penalty of the contract, was waived by appellees. It does not seem to be predicated upon the equitable principle that, in order to do justice, equity may relieve a purchaser in a lease sale contract of the forfeiture occasioned by a nonpayment of the installments strictly according to its terms, though there is no waiver of such forfeiture by the seller. This equitable power is now well established in this state, as well as generally throughout the country. Abrams v. Watson, 59 Ala. 524, 531; Barton v. Broyles, 212 Ala. 658, 103 So. 854; Hawkins v. Coston, 214 Ala. 135, 107 So. 50, 53; Jacobs v. Mudd, 216 Ala. 530, 113 So. 589; Carter v. Brownell Auto Co., 217 Ala. 690, 117 So. 304; note 16 A. L. R. 437, et seq. This principle in no respect conflicts with our case of Nelson v. Sanders, 123 Ala. 615, 26 So. 518, which was an action at law, nor Davis v. Folmar, 203 Ala. 336, 83 So. 60, in which such relief was not sought, but the only claim was that the forfeiture was waived. As we have stated, this appellant bases his claim primarily upon a waiver of the forfeiture. The sufficiency of the bill was not tested in any respect.

The lease sale contract was entered into November 11, 1927, and provided for one hundred and thirty-eight monthly installments, each for the principal sum of $75, except one for $15, and interest. There was a cash payment also. When the eleventh note due October 10, 1928, became payable, appellee accepted payment of one-half of it, and extended payment of the balance indefinitely. The notes which had matured, and the notes due in November and December, following, were paid; many of them several days after maturity. No objection to this course of dealing had been expressed by appellee. The note due January 10, 1929, was paid March 13, 1929, and that due February 10th was paid April 10th. There was then left unpaid one-half of the October note, and those due in March and April. Appellee testified that at the time when the last payment was made (April 10th), appellant offered to pay him half the total amount then due, and to give him a check postdated, as of April 20, for the other half. And to quote appellee's testimony: "I told him to give me a check for the money that he had then for one or more notes and it would be all right for him to take the others up when he had the money, that a postdated check wasn't worth anything." At that time appellant paid the note of February 10th, as we have stated. Their next transaction occurred May 13th. Another note had matured May 10th. The parties agree substantially on what happened. Appellant on that day (May 13th) offered to pay one note (the oldest past due-March 10th) and the unpaid half of the October note. Appellee refused to accept any further payment, and told appellant that he had forfeited all rights under his lease, and that he was going to try to repossess the place. Two days later, May 15th, this bill was filed.

The lease sale contract contains a stipulation in effect that, if appellant shall become as much as two months in arrears during the first year of the existence of the contract, or as much as three months in arrears on such payments at any time thereafter, all payments which have been made shall be taken as rent, and appellant shall become merely a tenant for the full term, and shall forfeit his right to a conveyance of the property. It appears from the evidence, as we have shown, that on May 13th, when appellant offered to pay the oldest overdue note (due March 10th) and half of the October note, he had been only three days in arrears to the extent of three months installments. It is such three days' default which appellee claims sufficiently justified his declaration of forfeiture.

It may be conceded that, so long as there was not a two months' default during the first year or for three months during the second year, an acceptance of payments after maturity did not waive a claim of forfeiture which may thereafter occur on account of a two or three months' default as the case may be. Nelson v. Sanders, supra; Davis v. Folmar, supra. The checks evidencing the payments were in evidence, and many of them were dated after the 10th of the month. The parties were very close confidential friends-one a doctor using the drug store of the other as his headquarters and office. At no time was there any intimation that a delay of three days was material, nor was complaint made of any such delay, though they frequently occurred. This court, in the case of Hawkins v. Coston, supra, referred to the fact that: "If the lessor by his acts leads the lessee to believe that strict performance of the agreements in the contract will not be insisted upon, equity will not permit the lessor to take advantage of forfeiture provisions in the contract without notice to the lessee that strict compliance will be required on the theory that the lessor is estopped from enforcing the forfeiture provisions until he has notified the other party that he intends to do so. It would be inequitable for one party to a contract to lull the other party to sleep by numerous waivers of the provisions of the contract, and then, after the property has been practically paid for, change his position and insist on the forfeiture and retake the property."

It must be conceded that, if appellant had on May 10th paid one note as he offered to do on the 13th, and the unpaid half of the October note, appellant would not have been three months in arrears. Did not appellee, by his course of dealing, lead appellant to believe that a delay of three days was not such a default as would be insisted upon as a forfeiture? If so, he cannot claim it as such until he...