Vider v. Ferguson

Mr. Justice Adams delivered the opinion of the court. The first question presented is whether there was a legal declaration .of forfeiture by the defendant Ferguson, and we are of the opinion that there was not. The plaintiff made the first or cash payment on each of the contracts. The first deferred payment on the contract of August 18, 1894, $3,105, was due August 18, 1895, and no part of it was paid until Becember 12, 1895, when plaintiff paid, and Bosworth, defendant’s agent, received, $1,500 on account of it. This was the last payment made on account of the deferred installments of the purchase money. The semi-annual interest on the deferred payments on the August contract, due February 18, 1895, was paid at that date. The semi-annual interest due August' IS, 1895, was paid August 20, 1895,' and June 13, 1896, the semiannual interest on the deferred payments was paid up to and including, February 18, 1896, which was the last payment made on the August contract. Becember 5, 1895, Bosworth wrote to plaintiff, “ On August 18, 1895, there was due on your contract of August 18, 1894 (lots 25 and 31, Blk. 7, Clybourn avenue addition), the sum of $3,105, payment of which was deferred by you for a couple of months.” " On the contract of Becember 31, 1894, only the first or. cash payment and two semi-annual payments of interest, the last Becember 31, 1895, were made. October 12, 1896, Bosworth wrote to plaintiff requesting a check for $700, and saying : “ I am doing the very best I can on your overdue payments, and, when necessity demands it, must ask you not to disappoint me in this request, as I am wholly depending on you for the amount asked. Please do not disappoint me and I can carry the remainder for you for some time to come.” At the date of this letter only $1,500 had been paid on the first deferred installment of $3,105, due August 18,1895, on the August contract, and nothing had been paid on the first deferred payment on the December contract, due December 31, 1895. May 22, 1896, Koester & Zander, defendant’s agents, wrote to plaintiff, saying : “ You are doubtless aware that the payments and interest on both of your contracts with Edmund M. Ferguson are very much in arrears. In fact nothing has been paid on either of them for nearly a year and a half,” etc. January 14, 1898, Koester & Zander wrote to Cyrus A. Barker, inclosing, by his request, a statement of interest due on the contracts, in which letter is stated the amount of the purchase money past due on each contract. The letter contains the following: “ Some time ago, while negotiating with Mr. Lindgren of the State Bank of Chicago, we proposed to him that if the arrears of interest, as styled in this statement, were paid up, and the taxes paid up to date, we would be inclined to make very liberal extensions on the principal past due. * * * We simply give you the above information so that the entire matter may be properly before you, and assure you that liberal extensions can be arranged on all of them, provided the conditions as to interest and taxes as above classified, are complied with.” No deferred installment of the purchase money, on either of the contracts, fell due between the date of the last letter and the attempted declarations of forfeiture. We think it clear that the defendant, prior to the time of the attempt to declare the contracts forfeited, had waived his right of forfeiture, in so far that he could not exercise such right by a mere declaration, or otherwise, than by giving a reasonable notice to the plaintiff. The conduct of defendant in receiving past due payments, and in communications to the plaintiff, written and oral, made by his agents, was such as necessarily to induce in the mind of the plaintiff the conviction that the provision in the contracts making time of their essence, would not be insisted on by the defendant. That such a provision may be temporarily waived, and if so waived, that reasonable notice must be given of an intention to resort to the strict terms of the contract before a forfeiture can be declared, is well settled. Palmer v. Ford, 70 Ill. 369; Allen v. Woodruff, 96 Ill. 11; Thayer v. Star Mining Co., 105 lb. 340; Watson v. White, 152 Ib. 364; Munson v. Bragdon, 159 Ib. 61; Benedict v. Lynch, 1 Johns. C. R. 369, 379; Harris v. Troup, 8 Paige, 423. Counsel for defendant seem to rely on the letter of Koester & Zander of August 30, 1897, in which they say, “unless you wish us to declare the contract forfeited, kindly call immediately,” as a notice of defendant’s intention to insist on the strict terms of the contract. It was not such notice; it was not even a direct threat; it was a mere suggestion of a possibility. The provisions as to time having been waived, a “definite and specific notice” was necessary. 79 Ill. 375; 152 Ib. 375. In Palmer v. Ford, supra, the agent of the lessor remarked to the lessee, that unless the ground rents were paid, he would have to declare a forfeiture, and in Monson v. Bragdon, supra, the vendor wrote to the vendee: “Please pay up what is due on your contract, and don’t wait for me to dun you every time, for I dislike to do it. I guess we had better go back to the plan of the contract and have monthly payments.” It was held in the former case that the oral statement, and in the latter that the written communication, was not such notice of an intention to insist on the strict terms of the contract as the law requires. Strict compliance with the terms of the contracts as to times of payment having been waived, and no notice having been given of an intention to enforce those terms, the attempted declarations of forfeiture were “void and of no effect upon the rights of the parties” (Monson v. Bragdon, 159 Ill. 67); and the demands of the defendant for possession of the premises, based on the void declarations of forfeiture, were unwarranted, so that the plaintiff, had'he seen fit so to do, might have ignored the void declaration and stood on his rights. But, while protesting that the defendant’s demand for possession was without lawful right, the plaintiff, in his communication to the defendant of May 26, 1898, offered to surrender to the defendant possession of the premises, which offer the defendant accepted by immediately taking possession thereof, at that date, since which time he has continuously remained in possession. This was a rescission of the contracts by mutual consent, and the parties have since acted on that theory, the defendant by ceasing to claim from the plaintiff any of the purchase money due by the terms of the contracts, °and the plaintiff by ceasing to claim any interest in the premises described in them. That it was and is the understanding of the parties that the change of possession mentioned, terminated the contract, is illustrated by the record before us of the consolidated suits. In each of the suits, the plaintiff seeks to recover back the money paid by him on the contracts, and in each the defendant seeks to recoup as against the plaintiff’s claim the value of the use of the premises while the plaintiff was in possession. “ If either party, without right, claims to rescind the contract, the other party need not object, and if he permit it to be rescinded, it will be done by mutual assent.” 2 Parsons on Cont., 678. Had the defendant at all times insisted on the strict terms of the contracts, he might lawfully have exercised his right of declaring them forfeited, in the event of nonpayment of the purchase money or interest as provided in them; in which case he would, as we think, have had the right to retain the first or cash payments, stipulated as liquidated damages, because in that case the forfeiture would merely operate to defeat the rights of the plaintiff under the contracts, leaving the defendant’s right under the contracts to retain the sums stipulated as liquidated damages unimpaired. But the contract having been rescinded and abandoned by mutual consent, we can not perceive how the defendant can reasonably rely on its provisions in support of his claim of right to retain the money paid by the plaintiff. The plaintiff does not sue on the contracts, but on a promise of the defendant implied by law to refund to him, the plaintiff, money which he paid to the defendant by virtue of contracts which have been rescinded and abandoned by mutual consent, and which the defendant in equity and good conscience should not retain. He sues as if the contract had never existed. Bannister v. Read, 1 Gilm. 100. Each party having consented to a rescission of the contracts, neither can base a claim on the contracts. See authorities cited in Bannister v. Read, supra, p. 100. In Bryson v. Crawford, 68 Ill. 362, the court, enumerating cases in which a vendee of land may recover back money paid on his contract, say : “First, when the ,contract has been rescinded by the mutual consent and agreement of the parties.” Ib. 365. The defendant claims to recoup, as against plaintiff’s demand, damages consisting of the value of the use of the land while the plaintiff remained in possession, and plaintiff’s counsel resist this claim on the ground that the relation between the parties was that of vendor and vendee, and that to sustain an action for use and occupation, the relation of landlord and tenant must exist. It would seem that the contracts having been rescinded by mutual consent, which is the theory on which the plaintiff sues, equity and good conscience would require that the status quo of the parties shall be restored as nearly as may be. In the case of Baston v. Clifford, 68 Ill. 74, the court say: “ We are inclined to think that under the authority of Burroughs v. Clancey. 53 Ill. 30, and cases there referred to, the defendant below should be allowed, upon a proper plea or notice, to prove by way of recoupment or set-off, and to avoid circuity of action, not only the rents, issues and profits arising from appellee’s possession, and be allowed the same, but also for damages arising from waste committed by him or his agent or tenant while in possession.” Appellee’s counsel have discussed the question whether a deed must be tendered prior to a declaration of forfeiture for non-payment of the purchase money, but in the view of the case expressed in this opinion, we do not deem it necessary to pass on that question. Our conclusions are, that the appellant can maintain his actions for money paid by him on the contracts, and that appellee may recoup as expressed in Baston v. Clifford, supra. The judgment will be reversed and the cause remanded for further proceedings in accordance with this opinion.