Barnard v. Lee, 97 Mass. 92

Gray, J.

The doctrine that time is not of the essence of a contract is generally applied in equity to stipulations for the payment of money upon an agreement for the sale and purchase of real estate. The principal grounds of the doctrine are that the rule of the common law, requiring performance of every contract at the appointed day, is often harsh and unjust in its operation ; that although some time of performance by each party is usually named in any agreement for the sale of land, it is often not regarded by the parties as one of the essential terms of their contract ; and that a court of chancery has the power of moulding the remedy according to the circumstances of each case, and of making due compensation for delay, without punishing it by a forfeiture of all right to relief. This equitable doctrine was formerly carried to an unreasonable extent, and the specific performance of contracts enforced after such a lapse of time and change of circumstances as to produce as much injustice as it avoided. In modern times, the doctrine has been more guardedly applied , and it is now held that time, although not ordinarily of the essence of a contract in equity, yet may be made so by clear manifestation of the intent of the parties in the contract itself, by subsequent notice from one party to the other, by loches in the party seeking to enforce it, or by change in the value of the land or other circumstances which would make a decree for the specific performance inequitable.

The best statements, in the English books, of the rule and its reasons and limitations are perhaps to be found in the opinions of those judges whose practical experience in the common law enabled them more intelligently to restrain the application of the rule within proper limits; as, for instance, by Lord Eldon in the leading case of Seton v. Slade, 7 Ves. 273, 274, by Lord Erskine in Hearne v. Tenant, 13 Ves. 288, and by Baron Alderson in Hipwell v. Knight, 1 Y. & Col. Exch. 411, 415, 416. In this age and country, as suggested by Mr. Justice Livingston in his dissenting opinion in Hepburn v. Auld, 5 Cranch, 279, by Mr. Justice Chapman, in Richmond v. Gray, 3 Allen, 30, 31, and Goldsmith v. Guild, 10 Allen, 241, 242, and by many judges in other states, the more frequent fluctuations in the value of land, and in the business and circumstances of men, than in England when the doctrine was established, are important to be considered in each case," and especially when the vendor sues to compel the specific performance of a contract for the purchase of land to which he is unable to make a good title at the time of bringing his suit. But the general doctrine has been adopted by American courts of chancery, and has been repeatedly recognized and affirmed by the supreme court of the United States and by this court. Hepburn v. Dunlop, 1 Wheat. 196. Brashier v. Gratz, 6 Wheat. 533. Taylor v. Longworth, 14 Pet. 174,175. Fullers. Hovey, 2 Allen, 325. Goldsmith v. Guild, 10 Allen, 241.

Although the parties may make time of the essence of their contract by express stipulations to that effect, it is not sufficient that they should name the time of performance in the contract, and thus manifest their intention distinctly enough for the purposes of a court of law. But it must appear that they really intended to make such time an essential element of their agreement; in the words of Lord Erskine in 13 Ves. 289, ' a material object to which they looked in the first conception of it; ” or as Baron Alderson, in 1 Y. & Col. Exch. 415, stated the result of the previous authorities, “ A court of equity is to be governed by this principle: it is to examine the contract, not merely as a court of law does, to ascertain what the parties have in terms expressed to be the contract, but what is in truth the real intention of the parties, and to carry that into effect.” The mere circumstance therefore that the instrument is in the ordinary form of a bond, concluding with the clause that it shall be void in case of a breach of the condition, otherwise remain in full force, does not necessarily make time of the essence of the the contract. Molloy v. Egan, 7 Irish Eq. 592. Jones v. Robbins, 29 Maine, 351.

It is doubtless for the party who, having failed to perform his part of the contract according to its terms, yet asks to have the agreement of the other party specifically performed, to satisfy the court that he is entitled to the relief which he seeks. Hipwell v. Knight, 1 Y. & Col. Exch. 415. Taylor v. Longworth, 14 Pet. 175. Todd v. Taft, 7 Allen, 377. But the fact that, the obligee, with the knowledge and consent of the obligor, has entered upon and occupied the premises and made improvements thereon, is ordinarily decisive to entitle him to the favorable interposition of a court of equity, when it does not appear that there has been any other change in the value of the land, when time was not originally of the essence of the contract and has not been made so by notice, and he has been guilty of no loches in applying for relief. Gibson v. Patterson, cited 4 Ves. 690, note ; West Ch. 235, and note. Waters v. Travis, 9 Johns. 457, 466, 467. Edgerton v. Peckham, 11 Paige, 352.

The decisions of this court afford no precedent for sustaining the demurrer. In Richmond v. Gray, 3 Allen, 25, the suit was by the obligor; it was one of the terms of the contract that the title should be examined ; the defendant, who had entered by agreement before such examination, and removed a cellar wall, cut trees, and done other similar acts upon the premises, abandoned the possession, upon discovering that the title was de» fective, and, after vain attempts to make arrangements with the plaintiff to perfect the title, gave him notice that he should not accept a conveyance; and the plaintiff was unable to make a title until six months after such notice, and even then subject to a liability for debts which continued when the suit was brought. In Fuller v. Hovey, 2 Allen, 324, the plaintiff, after requesting and being refused an extension of the time of payment of a sum already due by the terms of his agreement, neglected for more than three years to make any payment or bring his suit. In Goldsmith v. Guild, 10 Allen, 239, the land was in Boston, and there was evidence that it was subject to frequent fluctuations and had actually altered in value.

The land described in this bill is in the country, and there is nothing in the case as now presented to show that its value was subject to fluctuation or had in fact changed between the dates of the agreement and of the tender of payment; and it is alleged in the bill and admitted by the demurrer, that the price agreed, with interest, was tendered by the plaintiff within two months after the time stipulated, and before any demand or notice by the defendant; and that the plaintiff from the date of the agreement, with the knowledge and consent of the defendant, was ,in possession of the premises and cultivated and improved the same. Upon proof of such a state of facts, unqualified by other evidence, time could not be held to be of the essence of the agreement.

The question whether time is to be deemed of the essence of the contract depends upon all the circumstances of the case, and is not ordinarily to be decided until the hearing. Levy v. Lindo, 3 Meriv. 81. Foxlowe v. Ancoats, 3 Beav. 496. Verplank v. Caines, 1 Johns. Ch. 59. If indeed it were clear upon the face of the bill that proof of all its allegations exactly as stated would not support it, the defendant might take the objection by demurrer, without being put to the trouble and expense of further proceedings. Foster v. Hodgson, 19 Ves. 184. Havenden v. Annesley, 2 Sch. & Lef. 638. But as upon the ease set forth in this bill the plaintiff shows himself to be entitled to the specific performance for which he prays, the order must be

Demurrer overruled.

Case Details

Case Name: Barnard v. Lee

Court Name: Massachusetts Supreme Judicial Court

Date Published: Sep 15, 1867

Citation: 97 Mass. 92

Court Abbreviation: Mass.