Beckett v. Kornegay

Chinn, J., delivered the opinion of the court. By a contract in writing dated May 25, 1925, Walter639 Beckett agreed to sell, and C. W. Kornegay agreed to buy, a certain parcel of land belonging to said Beckett, situated at Virginia Beach, at-the price of $2,000.00. According to the terms of the agreement, $50.00 was paid on the purchase price at the time of the execution thereof; $450.00 was to be paid when the deed Y/as “delivered” and “full settlement” made; and the balance of $1,500.00 was to be secured by a deed of trust, and paid in installments of $500.00 each on December 10, 1925, June 10, 1926, and December 10, 1926, respectively. The vendor agreed to convey the property “with general warranty deed and the usual covenants of title,” and the deed of trust was to be prepared and all deeds recorded at the expense of the vendee. The contract further provides that all taxes should be prorated as of the date of settlement; that the title should be free of all liens and indebtedness of every kind; and that “settlement is to be made on or before June 5, 1925.” Settlement not having been made as stipulted, on July 6, 1925, Mr. Charles S. Grant, acting as attorney for Beckett, mailed to Kornegay’s attorney, Mr. M. Earl Woodhouse, the following letter: “Mr. M. Earl* Woodhotjse,' “Attorney at Law, “No. 148 Granby Street, “Norfolk, Va. “Dear Sir: “By reason of the delay of your client, Mr. C. W. Kornegay, to make settlement with my elient, Mr. Walter Beckett, pursuant to their contract dated May 25, 1925, please be advised that Mr. Beckett treats the contract as having been breached by Mr. Kornegay, will therefore decline to deliver the property mentioned in the contract, and accordingly hereby tenders a — 640 — cheek for fifty dollars payable to you as attorney for Mr. Kornegay in return of the money paid under the contract. “Yours very truly, “Charles S. Grant.” Promptly upon receipt of this letter Woodhousereturned the check, and notified Mr. Grant that Kornegay stood ready to perform his part of the agreement, and demanded a deed. Beckett adhered to his refusal to consummate the sale, and thereupon Kornegay instituted this suit in equity to enforce the specific performance of said contract. Beckett duly answered, and depositions were taken, and upon the hearing of the cause the court below decreed performance in accordance with the prayer of the bill. From that decree Beckett appeals. It is contended in behalf of the appellant that time was the essence of the contract in question, and,, appellee having failed to make the cash payment and tender the deed of trust specified on or before the date stipulated for the settlement, he forfeited his rights-, under the contract and appellant has the right to refuse performance on his part. The established doctrine is, that in equity time is not usually regarded as; of the essence in contracts for the sale of real estate,, unless it has been expressly so provided in the contract,, or it necessarily follows from the conduct of the parties, or the nature and circumstances of the agreement that, time should be considered as of the essence. In Jackson v. Ligon, 3 Leigh (30 Va.) 161, Judge Tucker said: “At law, in every case of dependent covenants,, time is of the essence of the contract, since the plaintiff cannot recover without showing performance on his' part, or readiness and ability to perform. But, in. — 641 — equity, it is upon general principles otherwise. * * * * Although a vendor may not have complied in strictness with his contract to convey — or the vendee may not have paid his money precisely at the stipulated time, equity will, nevertheless, upon a proper case made, enforce the contract, instead of permitting either party to insist on an arbitrary forfeiture of its benefits.” See also Smith v. Profitt, 82 Va. 832, 1 S. E. 67; Henry v. Dudley, 91 W. Va. 969, 114 S. E. 286; 25 R. C. L. page 255-6. “Mere default in the payment of money at a stipulated time admits generally of compensation, and hence time of payment is seldom treated as essential in contracts in respect to real estate. It is not usually so considered in equity, and there is nothing in the leases to show that the parties so regarded it. “There is no lack, of power in a court of equity to grant relief against the failure to perform punctually conditions precedent when time is not of the essence of the contract and compensation can be had. Story’s Eq. Jurisp. section 1315; 1 Lomax Dig., page 357.” Selden v. Camp, 95 Va. 527, 28 S. E. 877. It is argued, however, that time should be considered as of the essence in this case for the reason that the contract constituted, in effect, only an option, and that a “boom,” which started in Virginia Beach real estate several weeks after the contract was executed, greatly enhanced the market value of the property involved, and rendered the delay in fulfilling the contract speculative on the part of Kornegay. It is true, as said in Darling v. Cumming’s Executor, 92 Va. 526, 23 S. E. 882: “When a vendee delays in completing the contract, in order that he may speculate upon the chances of its proving to be an advantageous bargain, or that, through a rise in value, or other — 642 — change of circumstances, his gain may be assured, and then, when he is thus certain that it will be a fortunate speculation, offers to perform, and sues to compel a conveyance by the vendor, a court of equity will refuse to grant him the remedy.” We do not think, however, the facts and circumstances of this case warrant the application of the above doctrine, in any sense. In the first place, the contract in question is not an option, depending for its completion upon the acceptance of its terms by the vendee, but constitutes, of itself, a complete executory contract for the sale of land, binding on both parties from the time it was executed.- In the second place, we find nothing in the evidence to indicate that Kornegay was speculating upon a rise in value, or delayed performance on his part for that purpose. ■ It appears from the evidence that the parties were unknown to each other and the contract under consideration was negotiated by F.' A. Van Patten, a real estate agent with an office at Virginia- Beach, who, under its provisions, was to receive from the vendor a commission of 5% for making the sale,-arid who was himself a party to the agreement, and the vendor’s agent in the transaction. Directly after the contract was signed Kornegay employed Mr. Woodhouse to examine the title and informed Mr. Van Patten that he was ready to settle -any time that week if he could get a deed-for the property and the title was clear; and Van Patten told Beckett if he would give him a copy of bis old deed he would have one drawn by it, and, when executed by Beckett and his wife, would present it to Kornegay. The evidence further shows that prior to June 5th — the date fixed for settlement — Kornegay went with his wife to Van Patten’s office to make the cash payment and execute the deed of trust as stipu — 643 — lated in the contract, when Van Patten informed him that he was not ready to settle the matter because he had not received the deed from Beckett, and instructed him to come back on the Thursday of the following week. Kornegay followed these instructions and went to Van Patten’s office on the day appointed, again prepared to make settlement. In the meantime Mr. Woodhouse had discovered and reported to Van Patten that certain delinquent tax liens existed against the property involved, which had been assessed in conjunction with several other lots; Beckett had informed Mr. Van Patten that he had employed Mr. Grant to look after his interests in the transaction; and Mr. Grant and Mr. Woodhouse had agreed that the latter should undertake to procure an order of court for the segregation of the tax liens. When this situation was explained to Kornegay on the occasion of his second visit to Van Patten’s office, he again told Van Patten that he was ready to make settlement as soon as the title was cleared up and the deed was delivered. No further steps in regard to the matter seem to have been taken by either party until June 25, 1925, when, in accordance with a prior arrangement initiated by Mr. Van Patten or Mr. Woodhouse, the parties, their attorneys, and Mr. Van Patten met in Mr. Grant’s office in the city of Norfolk. On this occasion Kornegay tendered three several notes covering the deferred payments, together with a duly executed deed of trust on the property securing the same, and otherwise showed his readiness and desire to complete the contract. As to exactly what occurred on that occasion, the evidence is in conflict. It was testified by Mr. Beckett and Mr. Grant that the deal was not consummated at that time because the notes were drawn in a form which required Mrs. Kornegay’s endorsement, and the appel — 644 — lee left with the understanding that he would return on the 29th of the month to complete the transaction; while it is testified by Mr. Woodhouse and Mr. Kornegay that Kornegay offered to procure his wife’s endorsement that day, and the difficulty standing in the way of a settlement was the fact that the tax liens had not been adjusted, and they parted with the understanding that the settlement should stand in abeyance until Woodhouse had an opportunity to go to Princess Anne Court House and procure the entry of an order from the circuit court of that county for the segregation of the tax liens. However that may be, it is undisputed that Woodhouse shortly afterwards went out to Princess Anne and saw the judge in reference to the matter but, owing to the absence of the commissioner of the revenue and Commonwealth’s attorney, could not obtain the necessary order, and had not obtained it when he received from Mr. Grant the above letter of July 6th. We think it clearly appears from all the facts and circumstances that Kornegay not only did not desire or attempt to delay settlement but entered into the contract in good faith and was at all times ready, desirous, and eager to perform his part of the agreement whenever a deed conveying a good title free of all liens was presented to him. Under the terms of the contract he had the right to require that the tax liens be discharged, or at least segregated, in order that the amount against the property involved might be ascertained, before taking a deed and closing the transaction. Notwithstanding this, appellant made no effort to clear up the liens, as it was his duty to do, but left that task entirely to Mr. Woodhouse. In his position for appeal appellant makes the following statement on the subject which is borne out by the evidence: — 645 — “It happened that this site was assessed for certain delinquent taxes jointly with certain other adjacent sites, and there had to be entered an order of court segregating this site from the others for the purpose of determining and paying the correct tax. Normally this duty would have fallen upon Beckett, the seller, and his counsel, but counsel for Kornegay, the buyer, volunteered to counsel for Beckett to have the segregation order entered, and counsel for Beckett gladly consented to be relieved of this duty.” In undertaking to have the segregation order entered by the circuit court, Woodhouss was acting for Beckett and not for Kornegay. If, therefore, there was any undue delay in the performance of this duty the responsibility rests upon Beckett and his counsel, and not upon the appellee. It furthermore appears that prior to July 6th, Beckett had never tendered Kornegay a deed, or offered to perform the contract, or made any demand upon Kornegay for performance on his part. On the other hand, according to Beckett’s own admissions, he was dissatisfied with the price at which he had sold the property and regretted having made the contract from the beginning; and the testimony shows that both he and his counsel purposely refrained from intimating to Kornegay or his counsel, at any time prior to the above date, that they considered time of any importance, or that they would make any question in regard to it. Without discussing the evidence relating to this particular question, it shows, to say the least, that Beckett acquiesced in the delay that occurred before he undertook to terminate the contract. He is, therefore, estopped from refusing on that ground to complete the agreement, even though Kornegay had been responsible for such delay. Booten v. Scheffer, 21 Gratt. — 646 — (62 Va.) 474; Keffer v. Grayson, 76 Va. 517, 44 Am. Rep. 171; Miller v. Lyons, 113 Va. 275, 74 S. E. 194; Richmond Leather Manufacturing Co. v. Fawcett, 130 Va. 484, 107 S. E. 800. Every application for the specific performance of a contract is, in the final analysis, addressed to the sound discretion of the court, regulated by established principles. Upon careful consideration of all the circumstances we are of the opinion that in the instant case the discretion of the court below was rightly and properly exercised. The decree will, therefore, be affirmed. Decree affirmed.