Pruyn v. Gay

MOUTON, J.

On June 10, 1928, plaintiff and defendant entered into the following contract.

“State of Louisiana Parish of East Baton Rouge.”

“For and in consideration of Seventeen Hundred, Seventy Five no/100 dollars, of which I, F. G. Pruyn, have received in cash the sum of two Hundred and no/100 dollars, and the remainder of which is to he paid to me in quarterly installments of Forty Six and 25/100 dollars each due respectively on the 10th day Of September 1918, and quarterly thereafter at 444 Lafayette Street, Baton Rouge, La., with gight per cent per annum interest on each installment from maturity until paid. I hereby agree to sell to Gilbert Gay the following described property to wit:

“Lots 2-3 and 4 of Square 1 Me Grath Heights with improvements thereon, it is distinctly understood that this promise is made upon the following conditions;

“First — That the contemplated purchaser shall pay all taxes and assessments of any kind that may be due on said property before they become delinquent; and

“Second — That said purchaser pay all the above installments and all insurance promptly and punctually when they become due. The failure of said purchaser to make said payment when due shall ipso jauto without demand or putting in default and as a penalty nullify and abrogate this contract; in which event all sums paid to said Pruyn shall be considered as rental for the use of said property, and any building or other improvements on said property shall remain and become the property of said Pruyn.

“The said purchaser, being here present, accepts this agreement under all the conditions above set forth.”

It will be observed that after declaring in contract that Pruyn had received $200.00 in cash, and fixing therein the quarterly; payments to be made by Gay, the agreement referring to Pruyn, says: “I hereby; agree to sell to Gilbert Gay the property; which is described.” Immediately thereafter, the contract says: “It is distinctly under stood that this promise is made upon the following conditions: First — That the con templated purchaser shall pay all taxes etc.” as appears in the contract above reproduced.

The words used in the instrument: “I hereby agree to sell” and “this promise” give a clear insight into the intention of the parties in entering into this contract. Pruyn promised to do what? Obviously to sell otherwise there would have been no reason for the use of this word “Promise.” Again, the agreement refers to Gilbert Gay as the “contemplated purchaser”. If a sale or its equivalent had been intended, the use of such language would have been unnecessary and out of place.

It will also be^noticed that Gay does not bind himself specifically to pay the installments or insurance stipulated for in the contract. Pruyn would not have been entitled thereunder to a specific performance as Gay had not bound himself to the performance of the conditions mentioned in the agreement. The contract provides also that if Gay failed to pay punctually, the installments and insurance, the contract would be abrogated, ispo facto, without the necessity of a default and that all the payments made on the installments and for insurance would be considered as rentals for the use of the property. This provision in the agreement shows that Gay retained, by implication, the right of not paying all of the installments and insurance, but if he exercised this privilege, for his failure to comply punctually with this requirement of the contract, the sums previously paid for that purpose wouíd' be considered as rentals for the property. This provision, aforesaid, was in the nature of an option, which shows that the agreement was a mere promise of sale and was not a sale.

In the case of S. J. Campbell vs. Richmond Insurance Company, 156 La. 455, 100 South. 679, a contract embodying practically the essential features characteristic of those appearing in the agreement involved in the present. case came up for consideration to this court. In that case we held the contract to be a promise to sell and not a sale. The Campbell case went up to the Supreme Court on a writ of review and our judgment was there affirmed. 156 La. 455, 100 South. 679; see also: Peck vs. Bemiss, 10 La. Ann. 160; Clark vs. Comford, 45 La. Ann. 502 12 South. 763; J. C. Trichol vs. Home Insurance N., 155 La. 459, 99 South. 403; Cavil vs. Trichel, 156 La. 136, 100 South 249; Broadwell vs. Raines, 34 La. Ann. 677; Foreman vs. Saxon, 39 La. Ann. 1117; City of Baltimore vs. Parlange, 23 La. Ann. 365; Baldwin vs. Merey, 41 La. Ann. 1105, 6 South. 796;; Joffrion vs. Gumbel, 123 La. 391, 48 South. 1007; Thompson vs. Duson, 40 La. Ann. 712 5 South. 58; Oeschner vs. Keller, 134 La. 1098, 64 South. 921. There was no conveyance of title here. A subsequent act would have been necessary to transfer ownership .to defendant. It was therefore incumbent upon defendant to pay the installments punctually to avoid a forfeiture as was provided in the agreement. It is shown that defendant was tardy in making the payments, and thus violated the conditions of the agreement, repeatedly. Plaintiff, at different times, accepted payments of some of the installments after their maturity, but in! this, plaintiff, as the evidence shows was prompted by a spirit of forebearance, but at no time waived his rights of cancellation of the contract for failure on the part of defendant to meet his obligations under its terms.

To the contrary, it appears that plaintiff insisted on payment by defendant at the dates stipulated in the agreement, and that he notified defendant that he would demand a cancellation if defendant did not live up to the conditions and stipulations of the agreement. The evidence shows that plaintiff before instituting a suit for cancellation of the agreement sold a part of the property in question. Counsel for defendant contends that when a vendor thus sells a part of the property deeded to the first vendee, the amount received by him from the second sale should be applied to the purchase price of the first sale. The principle contended for by counsel may apply where a sale has been made by a vendor of property of which he thereafter sells a portion to another purchaser.' This is, however, not the case here, as there was no sale made in the first instance to defendant. Plaintiff had executed in his favor a mere promise to sell, had remained the owner of the property, and had the absolute right to sell any part of it to a subsequent vendee. It is stipulated in the contract that the failure of defendant to pay at the dates specified should ipso facto abrogate the agreement, as a penalty for its violation and without the necessity of a demand or of formally putting in default. We do not understand that counsel for defendant disputes the binding effect or legality of such a stipulation. Defendant having failed to meet these requirements of the contract, forfeited all his claims thereto, and plaintiff was entitled to its cancellation, and erasure from the public records as was decreed below.