Harris v. Kessler

THE COURT.

Defendant declined to amend his answer and cross-complaint, after demurrers thereto had been sustained with leave to amend, and thereupon judgment was entered in favor of plaintiff as prayed for in the complaint. Subsequently defendant moved to vacate the judgment upon the ground that by reason of certain denials in the answer the cause was at issue when the judgment was entered. The motion was denied; whereupon defendant appealed from the judgment and the order denying his motion to vacate.

The action involved the alleged breach of a conditional sales contract for the sale and purchase of the leasehold interest in and the furnishings of a hotel, of which plaintiff was the owner. The complaint declared on a common count for the recovery of the sum of $7,900, it being alleged merely that the sum was due for personal property sold and delivered to defendant at the latter’s instance and request. In his answer and in the first count of his cross-complaint defendant pleaded the execution of the contract and its terms, and attached a copy thereof to the pleading. It appears therefrom and from the allegations of the pleadings that plaintiff agreed to sell and defendant agreed to purchase the business for the sum of $24,000. Certain other property was included in the transaction, for which defendant was credited in the sum of $10,000. The agreement of sale provided that an additional sum of $4,000 was to be paid in cash when the contract was executed; the balance of $10,000 to be paid in monthly installments of $300 or more, together with interest on deferred payments until the whole sum was paid. A default clause provided in substance that if the purchaser failed for a period of three days to pay any installment of principal or interest, as

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provided for, then the whole amount together with interest should immediately become due and payable. The agreement further provided that time was of its essence. At the date of the commencement of the action, defendant was in default according to the terms of the agreement in the sum of $1500 on account of principal.

Under the acceleration clause, plaintiff elected to consider the full amount due, and sued for the same and caused a writ of attachment to be issued and levied upon the property covered by the sales contract. The main point involved in the case is whether or not the vendee was in default with respect to the meeting of the specified monthly payments, justifying the vendor in legally exercising his option to declare due and payable the entire unpaid balance of the purchase price, it being conceded that payments were never made by defendant in accordance with the strict terms of the contract, but were made and accepted by plaintiff after the same had become due, without objection and without any notification to defendant that future payments would have to be made strictly in accord with the agreement. Under these circumstances it is appellant’s claim and he so alleged in substance in his answer and cross-complaint that plaintiff waived the time element of the contract and consequently prematurely instituted his action to recover the entire unpaid balance, and illegally took possession of the property through the attachment; that having done so, the legal effect was to create a breach of the agreement on his part, entitling defendant vendee to recover from plaintiff the full amount paid under the contract which amounted to the sum of $16,636.92 and for which judgment was prayed in the cross-complaint. In support of this claim, we are cited to numerous authorities to the effect that a seller under a conditional sales contract will not be permitted to declare a forfeiture of the rights of the purchaser under such a contract for nonperformance where such breach has been with the express or implied consent of the seller.