Rock Island Lumber & Manufacturing Co. v. Fairmount Town Co.

The opinion of the court was delivered by Horton, C. J.: On January 15, 1887, the Fairmount Town Company agreed to sell to the Rock Island Lumber & Manufacturing Company six lots in Fairmount addition to the town of Iuka, in Pratt county, for a consideration of $1,250, of which $416.66 was paid on the execution of the agreement, and the remainder was to be paid in two equal installments, in 6 and 12 months respectively, with 10 per cent, interest per annum. The agreement was in writing, dated January 15, 1887, and was signed as follows: “Fair-mount Town Company, by S. H. Mallory, president. Rock Island Lumber Company, party of the second part.” It contained, among others, the following clauses: “And in case the party of the second part shall fail to make the payments aforesaid punctually, and in accordance with the strict terms of this contract, and at the times specified and limited, and to erect or cause to be erected a building as above described and contracted, and perform and complete all the stipulations and agreements herein contained, literally and strictly, without failure or default, then this contract, as far [399] as it binds the party of the first part, shall be determined and become utterly null and void, and the party of the second part shall forfeit all payments made by him on this contract, and all rights and interests hereby created in favor of the second party shall entirely cease; and the right of possession, and all equitable and legal interests in the premises hereby created, together with all improvements made, shall revert and revest in said party of the first part, without any act of reentry or other act to be performed by the party of the first part; the party of the second part forfeiting all rights to the above premises, or claims for improvements made, together with all moneys paid.” The lumber and manufacturing company failed to pay the last installment in the agreement, falling due on January 13, 1888, and on July 5, 1889, the Fairmount Town Company brought its action to obtain a decree of specific performance of the written contract, and for judgment against the lumber and manufacturing company for $416.66, with interest, being the unpaid balance due thereon. To this petition the defendant demurred, upon the following grounds: “1. There is a defect of parties defendant. “ 2. The petition does not state facts sufficient to constitute a cause of action. “3. The petition shows no cause of action against the defendant. “4. The court has no jurisdiction of the subject of the action.” The court sustained the demurrer as to the first ground, and overruled it as to the others. Thereupon the plaintiff amended its petition by interlineation, adding the following: “That the defendant executed the contract sued on in this action by signing thereto the Rock Island Lumber Company, and that the Rock Island Lumber Company and the Rock Island Lumber & Manufacturing Company are identical.” The defendant excepted to the overruling of its demurrer (except as to the first ground), and also to permitting plaintiff to amend its petition, and, electing to stand upon its demurrer, judgment was, at the request of the plaintiff, rendered against the de [400] fend ant, and it brings the case to this court for review, alleging various errors in the rulings of the court. The trial court had the right, to permit the plaintiff below to amend its petition. The defendant, having refused to plead after such amendment, and after its demurrer upon the other grounds stated therein had been overruled, thereby admitted the facts set forth in the petition as amended to be true. (Civil Code, §§108, 128.) But it is claimed that the mere name of the “Rock Island Lumber Company,” as party of the second part, was not the signing by the corporation, and that the corporation was not bound thereby. The petition alleged that the “Rock Island Lumber & Manufacturing Company” is “a corporation duly chartered, organized and existing under and by virtue of the laws of the state of Illinois, and, as such, doing business in the city of Wichita and other cities and towns in the state of Kansas, including the town of Iuka, Pratt county; that the “Rock Island Lumber Company” and the “Rock Island Lumber & Manufacturing Company” are identical, and that the “Rock Island Lumber & Manufacturing Company” signed the written agreement as the “ Rock Island Lumber Company.” Upon the allegations of the petition and the default made by the lumber and manufacturing company, judgment was properly rendered. (Civil Code, §§ 108, 128.) The face of the instrument shows that it had been executed by the “ Rock Island Lumber Company,” as party of the second part, and the petition alleged that the “Rock Island Lumber & Manufacturing Company” signed its name to the written agreement in that way. (Heffner v. Brownell, 31 N. W. Rep. [Iowa, 1887] 947.) If a sufficient answer had been filed, some of the questions attempted to be raised in the brief concerning the signature to the written contract by the “Rock Island Lumber & Manufacturing Company,” and the business that the company was authorized to carry on, might have been presented. In the absence of any answer, however, these matters deserve no further reference. [401] It is next contended that the contract at the time this suit was commenced had “ become utterly null and void,” because the “Rock Island Lumber & Manufacturing Company” failed to pay its last installment. It is argued that, as the lumber and manufacturing company was in default, both parties were thereupon released from all obligations of the contract, and that no action could be maintained on it; therefore, that a suit for specific performance could not be enforced at the instance of the town company. The law is well settled. The stipulations in the contract quoted were inserted for the benefit of the town company, the party of the first part, the seller of the lots described in the contract. The lumber and manufacturing company cannot take advantage of its own neglect in the nonpayment of the purchase money. Under the contract, the town company had the option to avoid or enforce its terms; therefore it could, if it so elected, maintain this action to enforce the contract and recover the unpaid balance of the purchase money. (Bohart v. Investment Co., 49 Kas. 94; Wilcoxson v. Stitt, 65 Cal. 596.) This question was carefully examined in the case of Chambers v. Anderson, just decided. In that case the law was delared to be “that the forfeiture clauses placed in a contract, similar to this, were for the benefit of the parties selling the real estate, but that these clauses might be waived by them; that a party to a contract cannot be permitted to avoid it by his own wrong.” See authorities there cited. A vendor of lands seeking the payment of the purchase money may maintain an action against the vendee for the specific performance of the written contract of sale, upon the principle of mutuality of remedy. (Wat. Spec. Perf., §§ 14-16.) Upon the allegations of the petition, the town company was entitled to a specific performance of the contract of sale upon the part of the Rock Island Lumber & Manufacturing Company. The judgment of the district court will be affirmed. All the Justices concurring.