Opinion
Opinion Superseded 301 N.E.2d 641.
Page 769
Richard F. DeTar, Frank E. Spencer, Indianapolis, for plaintiffs-appellants.
LeRoy K. Schultess, Howard E. Petersen, LaGrange, for defendants-appellees.
HOFFMAN, Chief Judge.
This appeal is from a negative judgment on plaintiffs' complaint for possession of certain real estate. The controlling issue here presented is whether the decision of the trial court is supported by the evidence upon the elements of the affirmative defense asserted by the defendants, to-wit: that the plaintiffs waived compliance with the provisions of the contract.
The facts pertinent to our review of this case may be summarized from the record before us as follows:
On December 1, 1958, Mary Burkowski, as vendor, entered into a contract for the sale of certain described real estate to Charles P. Marshall and Agnes P. Marshall, as vendees. Such contract provided, in pertinent part, as follows:
'2. That the Vendees agree to buy and pay to the Vendor and the Vendor agrees to receive as payment for said above mentioned real estate, buildings and appurtenances thereunto belonging, the sum of $36,000.00, payable as follows: $500.00, at the signing, execution and delivery of this contract, the receipt whereof is hereby acknowledged; $500.00 or more on or before the 25th day of December, 1958, and $2500.00 or more on or before the 15th day of January, 1960, and $2500.00 or more on or before the 15th day of January of each and every year thereafter until the balance of the contract has been fully paid, all without interest and all without relief from valuation and appraisement laws and with attorney fees.
'15. Should Vendees have made prepayments or paid in advance of the payments herein required, said prepayments, if any, shall at any time thereafter be applied in lieu of further principal payments required as herein stated, to the extent of such prepayments only.
'17. It is further agreed that if any default shall be made in the payment of said purchase price or any of the covenants and/or conditions herein provided, and if any such default shall continue for 30 days, then, after the lapse of said 30 days' period, all moneys and payments previously paid shall, at the option of the Vendor without notice or demand, be and become forfeited and be taken and retained by the Vendor as liquidated damages and thereupon this contract shall terminate and be of no further force or effect; provided, however, that nothing herein contained shall be deemed or construed to prevent the Vendor from enforcing specific performance of this agreement in the event of any default on the part of the Vendees in complying, observing and performing any of the conditions, covenants and terms herein contained. * * *.'
On June 27, 1968, the executrix of the estate of Mary Burkowski, deceased, acting under the terms of the last will and testament of Mary Burkowski, assigned 'all of decedent's right, title and interest (in the contract) to Josephine Spendzel (Skendzel), Berniece (Bernice) Wysocki, Jean J. Legowski and Anna J. Blair, share and share alike.'
On June 2, 1969, three of the above named assignees, Josephine Skendzel, Jean Legowski and Bernice Wysocki filed their complaint against the vendees under the contract, Agnes P. Marshall and Charles P. Marshall, seeking, inter alia, to enforce the forfeiture provision of the contract and to set aside the contract because of fraud.
The vendees (Marshalls) along with Anna J. Blair, the remaining assignee, answered alleging, inter alia, the affirmative defense that plaintiffs were indulgent and failed to require compliance with the contractual provisions making the time of payment of the essence. Further, that plaintiffs thereby cast upon themselves the duty to give specific notice to the purchasers that they would be indulgent no longer and have a present intent to make use of the forfeiture provision contained in the contract unless the defaults 'be corrected within a reasonable time.'
Trial was to the court without intervention of a jury. Judgment was entered that the plaintiffs take nothing upon their complaint. The timely motion to correct errors filed by plaintiffs was overruled and this appeal followed.
On appeal, the evidence contained in the record before us leads only to the conclusion that under the provisions of the contract, the vendees have defaulted. The payment schedule attached to the copy of the real estate purchase contract contained in the record before us discloses that the following payments were made:
Balance of DateAmount Paid Principal 12-1-1958 $ 500.00 $ 12-25-1958500.00 35,000.00 3-26-19595,000.00 30,000.00 4-5-19602,500.00 27,500.00 5-23-19612,500.00 25,000.00 4-6-19622,500.00 22,500.00 1-15-19632,500.00 20,000.00 6-30-19642,500.00 17,500.00 2-15-19652,500.00 15,000.00. Both vendees testified that no payments have been made on the balance of the unpaid principal since February 15, 1965. Default under the contract is shown as a matter of law. If the judgment of the trial court is to be affirmed, the affirmative defense asserted by the defendants must be supported by sufficient evidence of probative value. In this sense we are not dealing with review of a negative judgment since the burden of proof was on the defendants to prove the affirmative defense they asserted. TR. 8(C), Indiana Rules of Procedure, IC 1971, 34-5-1-1.Where a contract for the sale and purchase of land contains provisions similar to those in the contract in the case at bar, the vendor may waive strict compliance with the provisions of the contract by accepting overdue or irregular payments, and having so done, equity requires the vendor give specific notice of his intent that he will no longer be indulgent and that he will insist on his right of forfeiture unless the default is paid within a reasonable and specified time. Smeekens v. Bertrand (1969), 144 Ind.App. 656, 248 N.E.2d 48 (transfer denied); Conner v. Fisher (1964), 136 Ind.App. 511, 202 N.E.2d 572; McBride v. Griffith, et al. (1962), 134 Ind.App. 12, 185 N.E.2d 22; Chambers et al. v. Boatright et al. (1961), 132 Ind.App. 378, 177 N.E.2d 600; Carr et al. v. Troutman et al. (1954), 125 Ind.App. 151, 123 N.E.2d 243; Hill v. Rogers (1951), 121 Ind.App. 708, 99 N.E.2d 270 (transfer denied); Clayton v. Fletcher Savingss&sTrust Co. (1927), 89 Ind.App. 431, 155 N.E. 539 (transfer denied).
However, when the time of payment is of the essence of the contract and there has been a failure to pay under the terms of the contract, and the vendor has not waived the provisions of the contract by his words or acts, no notice to cancel or forfeit the contract is required. Conner v. Fisher, supra; Clayton v. Fletcher Savingss&sTrust Co., supra.
The vendees thus contend that specific notice was required because '(t)he evidence shows that irregular payments were made and accepted by the decedent.'
A reasonable reading of the contract in question, the pertinent provisions of which have been hereinabove set forth, shows that the parties agreed that $500 would be paid upon execution of the contract; $500 would be paid on or before December 25, 1958; $2,500 or more would be paid on or before January 15, 1960, with $2,500 or more to be paid on or before January 15 of each succeeding year until the balance of the contract price was paid. The parties also agreed that any prepayment would be applied 'in lieu of further principal payments.'
Having applied the contractual language to the payments made by the vendees, as set forth in the above schedule, we conclude that the payments made, although irregular in time and amount, were prepayments on the unpaid balance through and including the payment due on January 15, 1965. The vendors could not have insisted on forfeiture prior to January 15, 1966, the date of the first missed payment. Up to that time the vendors waived no rights under the contract, because they were obligated to accept prepayment. Therefore, no notice was required before forfeiture since there was no waiver by accepting late or irregular payments.
It is true that circumstances could exist where waiver could be implied from a failure by the vendor to promptly insist on the time of the essence provision of the contract. For divers views on this question, see: Annot., 107 A.L.R. 345 (1937). The case at bar, however, does not present such circumstances.
There is testimony of Agnes P. Marshall and Charles P. Marshall in the record before us that the original vendor, Mary Burkowski, died in 1963. Agnes P. Marshall, one of the vendees, was executrix of her will. It was during the period of execution, January 15, 1966; 15, 1967; and 15, 1968, that the defaults in payment took place.
IC 1971, 29-1-13-1 (Burns, Code Edition) defines the duty of a personal representative with regard to assets of the estate, specifically debts owed to the decedent, as follows:
'Possession of assets of estate.--Every personal representative shall have a right to, and shall take, possession of all the real and personal property of the decedent except the homestead of the surviving spouse and minor children. He shall pay the taxes and collect the rents and earnings thereon until the estate is settled or until delivered by order of the court to the distributees. He shall keep in tenantable repair the buildings and fixtures under his control and may protect the same by insurance. He may maintain an action for the possession of the real property or to determine the title to the same.'
Notwithstanding that the assignees under the will of Mary Burkowski did not seek remedy under the provisions of our Probate Code, (See: IC 1971, 29-1-13-16 (Burns, Code Edition)), we hold that while it is true that equity abhors a forfeiture, equity will not permit an executrix to waive compliance with contractual obligations owing to the estate, and then, as vendee under the contract, assert such waiver to prevent enforcement of the contractual provisions against herself as vendee.
Being unable to find a waiver of the terms of the contract, no notice of an intention to cancel or forfeit the contract was required to be given to the vendees.
Appellees contend that the failure of appellants to name defendant Anna J. Blair in their motion to correct errors divests this court of jurisdiction. This contention has been answered by the overruling of appellees' motion to dismiss or affirm.
The judgment of the trial court is reversed and this cause remanded with instructions for further proceedings consistent with this opinion.
SHARP and STATON, JJ., concur.