Court Opinion

ID: 9855981
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:35:39.608261+00
Date Added: 2024-06-11T09:37:23.100258
License: Public Domain

CROCKETT, Justice.
I dissent. I believe that no forfeiture of the contract was properly effected.
The essential facts are stated in the main opinion; I add only those that are necessary to the expression of this dissent.
Pearce took the assignment from Call after the 1949 payment was 58 days past due (2 days short of the expiration of the grace period) apparently for the express purpose of forfeiting defendants out of the property. No. demand for payment was made during the grace period and Pearce made none. He waited but a few days after the grace period had expired, then gave only one notice, into which he attempted to telescope notice that all payments theretofore made were forfeited, that the defendants were tenants at will, and a demand that they vacate within five days. Based upon this he proceeded in unlawful detainer. Even this one notice was not served upon nor in any way communicated to Lewellen, who *130had given the original note for the purchase of the property and upon which he was still liable.
In insisting upon his right to forfeiture of the contract and possession of the property, plaintiff relies on this language in the contract:
“ * * * upon failure to make any payments when the same shall become due, or within 60 days thereafter, the Seller shall be released from all obligations in law and equity to convey said property, and the Buyer shall forfeit as liquidated damages all payments which have theretofore been made on this contract, * * * the Buyer becoming at once a tenant at will of the Seller. * * * It is agreed that time is of the essence of this agreement.”
The law does not look with favor upon forfeitures.1 A liberal interpretation should be placed both upon the contractual provisions and the conduct of the parties in relation to them with the view of preventing a forfeiture, if possible.2 This is all the more so where the summary remedy of possession under unlawful detainer, as well as treble damages, are sought.3
The prevailing opinion properly notes, “ * * * acceptance of delinquent payments may well result in a waiver of the ordinary ‘time is of the essence’ clause since by such conduct the vendor has led the ven-dee into the belief that the vendor will continue to waive the strict performance of the contract.” However, it places emphasis on the statement that only one payment was accepted late.
It may well be that ordinarily one payment would not be sufficient to constitute a waiver of the “time is of the essence” provision of a contract. But if we look at the entire picture here, it cannot fairly be said that this is analogous to a situation where only one monthly installment on a contract was paid late. The thousand dollars was a yearly payment, and in that sense should properly be considered as the payments for a full year; therefore, the payments for the entire year of 1946 went delinquent, which constituted one-third of all of the payments made on the contract. Long after the sixty-day grace period' had expired, partial payments were made in the following July and September; they were accepted, apparently without objection, which was a recognition by the buyer that the contract was still in force and effect. It would not be unreasonable for the buyer to suppose that he could do the same again, or at least that some demand or notice to indicate that he *131could not do so would be given him before the harsh and arbitrary terms as to forfeiture would be insisted upon. Even though Johnson was not the buyer when this delinquency occurred, plaintiff concedes, as he must, that Johnson, as assignee, was entitled to all of the rights of his assignors, including any right of waiver which had accrued by reason of the conduct of the parties at the time he took the assignment.
The argument that the additional $50 which was paid in 1947 evidences the fact that the late payment was not satisfactory to the seller, is pure conjecture. It is based on neither evidence nor reason: The fact is that the late payments were accepted in July and September before the $50 was paid in the latter part of September.
The plaintiff relies upon the provision of the contract that:
“ * * * if the Seller accepts payments * * * other than according to the terms * * * it will in no way alter the terms of the contract as to forfeiture. * * * ”
Waiver of this sort might be considered as somewhat akin to fraud, in the sense that the parties could not contract fraud out of existence, that is, a statement in the contract that fraud did not exist in its formation could not make that so. One could not make a binding condition in a contract that “even if fraudulent, this contract is still binding.” If so, all contracts would Soon contain such provisions and the way would be left open for all manner of chicanery and deceit. Likewise, if the seller has in fact waived the imposition of the strict terms of the contract (time of the essence) and lulled the buyer into a sense of security in reliance thereon, a waiver existed in fact, and a recital in the contract that there is no waiver would not change that fact. This principle is well recognized; Corbin writes:
“ * * * a provision that an express condition of a promise or promises in the contract can not be eliminated by waiver, or by conduct constituting an estoppel, is wholly ineffective. The promisor still has the power to waive the condition, or by his conduct to estop himself from insisting upon it,, to the same extent that he would have had this power if there had been ho such provision.”4
I think that the conduct of the sellers constituted a waiver of the “time is of the essence” provision, notwithstanding the above quoted provision of the contract which appears to be a covenant against such result.5 For the seller to in effect “lie in wait” by permitting the entire sixty-day grace period to go by without making any demand or giving any notice whatsoever, and then forthwith to give notice that the forfeiture was being strictly insisted *132upon, amounts to such a course of conduct as to be high handed and arbitrary in the extreme and which no court of equity should condone or enforce. After the waiver of the “time is of the essence” provision, it could not be reinstated without giving the other party notice and a reasonable opportunity to comply with his contractual obligations,6 which was not done here.
There is a further reason why the unlawful detainer action is not properly grounded. Plaintiff did not take the two essential procedural step necessary: first, to effect a forfeiture in order to put defendant into the status of being a tenant at will, and second, to treat him as such by giving him notice to vacate within five days. Plaintiff is attempting to interpret and apply the language of the contract in such a manner that the forfeiture provision would be self-executing; that is, after default in making a payment, plus the expiration of the grace period, the seller’s obligations would automatically expire and the defendant become a tenant at will. However, it must be remembered that the buyer only became a tenant at will at the option of the seller. It necessarily follows that the seller must make such election, and notify the buyer thereof before the latter would actually become a tenant at will. This seems necessarily so. If after delinquency, the buyer had offered payment, the seller could either elect to accept it, in which instance the contract would remain in full force and effect; or he could elect to refuse it. But before the seller makes such election, it is obvious that the buyer’s status is uncertain; and that he was not actually a tenant at will until after such election by the seller and notice thereof. Until the buyer had been put in the status of tenant at will, he was not in the position of being amenable to the summary ejectment provided in the unlawful detainer statute.
It may be suggested that the distinction that the seller could not declare the buyer a tenant at will and treat him as one at the same instant, is technical. The answer to this is found in the fact that unlawful de-tainer itself is a summary remedy and that one who uses it must strictly and technically comply with the requirements of the law. Where the seller is attempting to assert the arbitrary remedy of both forfeiture and unlawful detainer, he should not be aided by allowing shortcuts. Even though no particular advantage to the buyer seems apparent, he is still entitled to occupy the status of a purchaser until the election is made and his rights are forfeited. And until he is actually a tenant at will he cannot be treated as such. He may be able to make a tender, claim a waiver, or in some *133practical way extricate himself from his unfortunate situation. He is entitled to the opportunity to try to do so.
I believe that no forfeiture having been properly effected, the artificial relationship of tenancy at will was not created, and the action of unlawful detainer should be dismissed.

. Howorth v. Mills, 62 Utah 574, 221 P. 165; Munson v. Apartment & Hotel Investment Co., 62 Utah 13, 218 P. 109; Glad Tidings Church of America v. Hinkley, 71 Ariz. 306, 226 P.2d 1016. See Moeller v. Good Hope Farms, 35 Wash.2d 777, 215 P.2d 425.

. Loftis v. Pacific Mutual Life Insurance Co. of Calif., 38 Utah 532, 114 P. 134; Munson v. Apartment and Hotel Investment Co., supra.

. See Perkins v. Spencer, Utah, 243 P.2d 446; and Forrester v. Cook, 77 Utah 137, 292 P. 206.

. 3 Corbin, Contracts, Sec. 763 (1951).

. See Gonzales v. Hirose, 33 Cal.2nd 213, 200 P.2d 793.

. McBride v. Stewart, 68 Utah 12, 249 P. 114; Glad Tidings Church of America v. Hinckley, supra; Scott v. California Farming Co. et al., 4 Cal.App.2d 232, 40 P.2d 850; Alfrey v. Richardson, 204 Okl. 473, 231 P.2d 363. See Columbia Airways v. Stevens, 80 Utah 215, 14 P.2d 984; Munson v. Apartment & Hotel Investment Co., supra, and Kohler v. Lundberg, 54 Utah 339, 186 P. 590.