Kent v. Stevenson , 127 Miss. 529 ( 1921 )

Anderson, J.,

delivered the opinion of the court.

(After stating the facts as above.) The contention of appellants is that, unless they have the right, after making default in carrying; out their agreement to erect the gin, to force the appellee to take back the land and return to them the cash installment theretofore paid by them as part of the consideration for the deed, the mutuality of the contract is destroyed; that default on the part of the appellants in the performance of the covenant in the deed to erect a gin on che lot necessarily relieves them from further performance of their contract, and that they are in a position, therefore, to force the grantor, the appellee, who is without fault, to cancel the whole contract, leaving both parties in exactly the same position as if no contract had ever been made; that a breach of the covenant in question by' the appellants carries with it the right of both the grantor and the grantees to cancel the contract and restore the status quo.

On the other hand, the appellee, the grantor, contends that the stipulation in question in the deed providing that appellants, the grantees, should reconvey the property to the appellee, the grantor, on the failure of the former to erect the gin on the lot conveyed, was for the benefit of the appellee, to be taken advantage of by him or not as he should choose; that otherwise there would be no mutuality in the contract, because the power to rescind the contract and take advantage of the default would thereby be left alone in the hands of the appellants, the grantees; that therefore they would be in a position to defeat the- contract or make it operative as best subserved their interest; that they could retain the land if it suited their purpose; on the other hand, if it did not suit their purpose (as it did not), they could decline to erect the gin, and thereby not only relieve themselves of the obligation contained in their note for the unpaid purchase money, but would also be entitled to have the purchase money already paid returned to them; and that therefore the appellee, the grantor, would be absolutely at the mercy of the appellants, the grantees.

If the contention of appellants be sound, the covenant in question is a condition subsequent. A condition subsequent in a deed is a condition which operates upon an estate already vested, and renders it liable to be defeated. The estate conveyed remains defeasible until the condition is performed or destroyed or barred by limitations or by estoppel. Memphis Ry. Co. v. Neighbors, 51 Miss. 412. But conditions subsequent in deeds are not favored in the law. and are construed strictly because they tend to cut down and defeat tbe estate. Tbe courts will not construe a covenant in a deed as being a condition subsequent unless tbe condition be in express terms, or arise by necessary implication. Gadberry v. Sheppard, 27 Miss. 203. In construing tbe covenant in question, these principles should be kept in mind.

There seems to be numerous authorities as to tbe meaning and effect of covenants similar to the one in tbe case at bar. In 27 R. C. L. p. 642, section 403, it is stated that, so long as there is no default on the part of the vendor, tbe vendee has no right to rescind tbe contract so as to affect in any way bis liability for the purchase money, or earnest money, or partial payment, or relieve himself from further liability, where he has expressly or impliedly agreed to make the purchase. And in 27 R. C. L., p. 644, section 406, it is stated that a provision in an executory contract for the sale of land providing for a forfeiture of the purchaser’s right under the contract in case of his failure to perform the contract is usual; and if such a covenant provides an option in the vendor to declare the contract at an end on the purchaser’s default, this gives no corresponding right to the purchaser to take the same course and avoid further liability; that the doctrine as to the necessity of mutuality in contracts does not require that, because the vendor has the right to treat the contract as void, it follows that the purchaser has the same right; that, as a rule such a provision in a contract is construed as intended solely for the benefit of the vendor, which he may waive or not as he may see fit; and that a purchaser cannot take advantage of his own default to escape liability for the purchase money; that this is true although the contract provides that, upon default on the part of the purchaser, the contract shall be void, or void and of no effect, or the like. To hold otherwise would allow the purchaser to take advantage of his own fault without any advantage whatever to the vendor, but rather to the latter’s injury, as in the meantime he is prevented from selling the land to anj other purchaser. 39 Cyc. 1361.

In Mason v. Caldwell, 5 Grilm. (Ill.) 196, 48 Am. Dec. 330, the court, in discussing this question, used the following language: “It is argued that, because the obligee, in the event of nonpayment, may treat the bond as determined, mutuality requires that the obligor should have the same privilege. This argument refutes itself. It is as much a felo de se, as it would make the bond. To admit the defendant’s position is to leave everything in his own hands. It allows him to defeat, or make the bond operative, as may best subserve his interest, without any discretion on the part of the obligee. It converts the bond into a naked proposition, absolutely binding on the 'seller, but which the purchaser may accept or reject by the payment or nonpayment of the money. By thus putting the entire control in the hands of the latter, all mutuality is destroyed.”

And in Meagher v. Hoyle, 173 Mass. 577, 54 N. E. 347, the court said that the authorities were unanimous that the vendee could not, by making default, avoid payment of the purchase price, but that the clause, “this agreement shall be null and void,” meant that the agreement was to be void at the option of the vendor. And in Stewart v. Griffith, 217 U. S. 323, 30 Sup. Ct. 528, 54 L. Ed. 782, 19 Ann. Cas. 639, the supreme,court said, in passing on a covenant in a deed that such a condition was plainly for the benefit of the vendor, and for his benefit alone, that the word “void” in such a stipulation meant voidable at the vendor’s election, who had the right to either enforce or waive such provision as he might see fit. There are very numerous authorities holding the same principle, although the only case cited in the briefs of counsel from the supreme court of this state is Beaty v. Harkey, 2 Smedes & M. 563, in which the court held that a covenant in a deed providing that, in case the vendor could not convey, or the purchaser should fail to pay on the appointed day, the contract should be void, would not enable either party to avail himself of it by failing to perform his part of it.

If appellants’ contention be conceded, then the deed, the note for the purchase money, and mortgage securing same all amount to nothing, except a mere option to be exercised by appellants alone, to purchase the lot from appellee, notwithstanding a fee-simple title was conveyed by the deed, and a mortgage conveying the same character of title executed to secure the balance of the purchase money. There indeed would be an absence of mutuality in an arrangement of that kind. Such a contract would be so one-sided and unreasonable that it ought not to be so construed unless its language is so plain that there is no other reasonable construction. In the opinion of the court the reasoning of the authorities referred to is sound, and therefore the covenant in question is not a condition subsequent, but a stipulation alone for the benefit of the appellee, the vendor.

Affirmed and remanded.