Stinson v. Dousman

THIS case was brought up, by writ of error, from the Supreme Court of the Territory of Minnesota.

The facts are stated in the opinion of the court.

It was argued by Mr. Cooper for the plaintiff in error, and Mr. Cushing and Mr. Gillet for the defendant.

The principal question in the case was, whether or not time was of the essence of this contract as to the payment of the first instalment. Upon this point, the counsel for the plaintiff in error admitted that-

While time is material, it was not so far of the essence of such a contract as this, as to authorize Dousman to declare it void, especially when it was manifest that there was neither wilful laches, negligence, nor want of ability, on the part of Stinson to perform the contract. In such a case, equity always affords relief. (2 Story's Eq. Jur., secs. 775, 776, 776 note, 777, 1314, 1315, 1316, 1319; Taylor v. Longworth, 1 McLean, 402, 403; same, 14 Pet., 170; Brashear v. Gratz, 6 Wheat., 528; Bank of Washington v. Hagner, 1 Pet., 464; 1 Fontblanque's Eq., 31 and 32, note; Newland on Contr., ch. 12, p. 238.)

Upon the question of time, the counsel for the defendant in error said:

At law, the time of performance is a material part of a contract; non-performance, at the very day, is always to be held as a breach. There is no other rule applicable, except the one named in the contract.

In equity, the same rule applies where, in the agreement, the parties evidently contemplated that time would be material, and influence their action or interests. In the present case, the parties not only looked to the possibility of the non-performance according to the letter of the agreement, but they made an express agreement providing for that contingency. They did not leave the law to determine the consequences of a default, but made a law for themselves on that subject, by an express provision in the body of their agreement. Instead of providing that the performance might be made at a future day, and a compensation in damages for the delay, the parties provided that, in case of default in making payment, or insuring, or paying taxes, the plaintiff might waive the contract of sale, and accept the defendant as his tenant, from the date of the agreement to the time of the election by the plaintiff to avoid the contract. There is no case for the law to act upon; nothing has occurred unprovided for in the contract. The law cannot step in and act upon a case, and declare what shall be done by the parties, when they had, by their agreement, determined for themselves.

[The counsel then quoted the cases of Hipwell v. Knight, and Secombe v. Steele, and continued:]

In the present case, it clearly appears affirmatively that the parties regarded the time an essential element in their agreement, because they made a special provision to meet that very contingency. They arranged that the plaintiff might elect to annul the contract, if it was not literally fulfilled. No other reason can be assigned for that provision. Without it, the plaintiff could only have sued upon the agreement to recover the purchase-money and interest by way of damages. Before suit, the defendant might have avoided the strict rule of law, by tender, and resorting to equity to relieve from his default; but after suit, that relief would not have been open to him. In the present case, the parties stipulated for an additional privilege in behalf of the plaintiff. They made a provision for a change in the contract, by which the original agreement to sell was converted, by the action of the plaintiff, into a lease, with a specified rent. The plaintiff availed himself of this provision on the occurrence of the default by the defendant, as he had the legal and equitable right to do.

Hence, if it be true, under the laws of Minnesota, (Laws of March 3, 1953, p. 20, secs. 5, 6,) which we controvert, that the defendant can meet a legal claim by setting up an equity, there is nothing in this case to authorize any such defence, because there is no such equity in favor of the defendant which he can set up.

[Other points were made upon both sides, but the above was the principal one upon which the decision of the court turned.]

Mr. Justice CAMPBELL delivered the opinion of the court.