Raddatz v. Florence Investment Co.

SiebecKee, J. Tbe contractual part of tbe lease embracing tbe agreement, whereby tbe plaintiff was given tbe privilege of purchasing tbe premises,-has features disclosing the intent of tbe parties on entering this relation. It appears therefrom tbat tbe option was based on a consideration additional to tbe $100 cash payment therein stipulated. It is expressly stated tbat, “in consideration of one hundred (100) dollars and of said rents,” tbe option is given to tbe [646] lessee to purchase the premises on or before April 1, 1910, if the terms of the lease have then been performed, upon payment of the sum stipulated. It is manifest from these terms of the agreement that the parties contemplated that if the plaintiff complied with the conditions of the lease and paid the rent and the $100, as agreed, he was to have the right to acquire the property by purchase, upon payment of $1,250.50 on April 1, 1910, or he was to receive a land contract providing for the payment of the unpaid purchase money and for the conveyance of the premises upon payment of the sum of $65.50. Under these terms the plaintiff had the right to elect to purchase, upon payment of the $100 and the rents, before April 1, 1910, if the other provisions of the lease had been complied with. The evidence shows and the court found, in substance, that the plaintiff was a common laborer, ignorant of the nature of such a business transaction and his rights, interests, and duties arising therefrom; that he was dependent on others for information and advice for the protection of his rights and the discharge of his obligation; and that the defendant’s officers, who dealt with the plaintiff, well knew and understood this. It also appears that these officers, by their course of dealing with the plaintiff, apprised him of his obligations under the agreement as they arose, went to his residence to collect the rents, and accepted them when past due, and thereby led plaintiff into the belief that strict performance under the agreement would not be enforced as to the time of payment. The court found, in conformity with the evidence, that the plaintiff made improvements, paid the monthly instalments of rent, — and that such amount was in excess of the rental value of the premises,' — and also paid the $100 in the bona fide belief that he thereby acquired the rights of purchaser of the premises, and that the defendant’s officers knew that the plaintiff entertained this belief and understanding. The fact that the defendant’s officers accepted payment from the plaintiff in December, 1908, for in [647] surance on tbe premises np to August 3, 1911, is corroborative of tbe fact tbat they and tbe plaintiff dealt in tbe matter upon tbe understanding tbat tbe plaintiff bad determined and elected to purchase the premises pursuant to tbe contract. Under these facts and circumstances it must be held tbat tbe defendant’s authorized officers were informed, when tbe plaintiff paid tbe $100, tbat be elected to purchase as provided in tbe lease. It is clear tbat tbe parties treated this stipulation in tbe contract as plaintiff understood it, namely, tbat tbe plaintiff’s right to purchase was based on tbe payment of tbe $100 and tbe payment of tbe rents. In tbe light of tbe fact tbat tbe monthly rent payment was an amount in excess of a reasonable rent charge for tbe use of tbe premises, it is obvious tbat tbe parties contemplated such rent to be in part a payment of tbe consideration for tbe purchase of tbe property. This circumstance throws light on their conduct and in its equitable effects operates to establish in plaintiff tbe right to a conveyance of tbe property/ upon compliance with tbe conditions of tbe payment, on April 1, 1910. Under tbe facts and circumstances of tbe case and tbe existing relations of tbe parties, it must be held tbat tbe plaintiff’s election to purchase was made known to tbe defendant prior to April 1, 1910, and tbat tbe payment of tbe rent accruing after such election and tbe amount due on April 1, 1910, were conditions subsequent under tbe contract ■entitling him to a transfer of tbe premises. Tbe performance of these conditions was obligatory on tbe plaintiff and a default therein forfeited bis rights under tbe agreement. It appears tbat tbe plaintiff defaulted in tbe payment of tbe three last payments of rent immediately prior to April 1, 1910, and tbat be did not pay tbe balance of tbe purchase money stipulated to be paid on this day, but tbat be offered to pay it on April 2, 1910. Defendant’s officers, however, accepted payment of these three instalments of rent on April 2, 1910. Such acceptance was a waiver of tbe default [648] as to such, rent and left tbe contract in force, unless it be that nonpayment of the amount of the purchase price as was agreed to be paid April 1, 1910, forfeited the plaintiffs rights thereunder. If it be assumed that the agreement was then forfeited, the question arises: Is plaintiff entitled to relief from the enforcement of such forfeiture under the established facts and circumstances showing the foregoing favorable equitable considerations to the protection of plaintiffs rights, and the oppressive and unconscionable character of the defendant’s attitude in seeking to enforce the forfeiture under the circumstances? In equitable contemplation it is sufficient to establish grounds for relief from such a forfeiture if the plaintiff’s misapprehension resulted through ignorance of his rights, interests, and duties, and if the inequitable conduct of the defendant, through a long course of dealing, acquiesced in by the defendant’s officers, aided in lulling him into a feeling of security that strict performance would not be insisted on and that his rights were secure. Under the facts of the case we consider that the plaintiff is entitled to equitable relief against the forfeiture. The grounds upon which such relief is granted are stated as follows: “It is well settled that where the agreement secured is simply one for the payment of money, a forfeiture either of land, chattels, securities, or money, incurred by its nonperformance, will be set aside on behalf of the defaulting party, or relieved against in any other manner made necessary by the circumstances of the case, on payment of the debt, interest, and costs, if any have accrued, unless by his inequitable conduct he has debarred himself from the remedial right, or unless the remedy is prohibited, under the special circumstances of the case, by some other controlling doctrine of equity.” 1 Pomeroy, Eq. Jur. § 450 and cases cited; Gates v. Parmly, 93 Wis. 294, 66 N. W. 253, 67 N. W. 739. The fact that the agreement expressly stipulates that time shall be of the essence in the payment of the rent and the consideration of the purchase money does not debar the application of this equitable principle, in the light of the established [649] facts that tbe conduct of tbe defendant’s officers operated as a constructive fraud on tbe plaintiff and that sucb conduct aided to induce tbe forfeiture. Under sucb circumstances tbe plaintiff is entitled to relief, where otherwise it might be denied, upon tbe ground that tbe forfeiture was incurred through tbe conduct of tbe defendant, which operated in an oppressive and unconscionable way on tbe plaintiff, who was himself free from wilful violation of tbe agreement or of inequitable conduct. It is obvious that tbe defendant incurred no loss through tbe default, aside from tbe use for one day of tbe money due. Tbe facts suggest nothing to indicate but that, if-defendant be awarded tbe money deposited in court, it will be compensated for all its claims and expenses. Upon tbe record tbe plaintiff is entitled to be relieved from tbe default and to have judgment for tbe specific performance of tbe contract. It is considered that tbe judgment awarded accomplished tbis result. By the Court. — Judgment affirmed. RarNes, J., dissents.