Preferred Underwriters, Inc. v. New York, New Haven & Hartford Railroad

Pierce, J.

This is an appeal by the plaintiffs from a decree •of a single justice of this court dismissing their bill, which seeks to enforce the specific performance of a written agreement of the defendants to convey to The Bostonian, Inc., a corporation, certain real estate on Arlington and Providence streets, Boston, particularly described in a deed delivered as an escrow to the State Street Trust Company of Boston; whicli deed, by the terms of the agreement, was to be delivered to The Bostonian, Inc. by the trust company on the performance of the agreement to be observed and performed by the Preferred Underwriters, Inc. The plaintiffs not being able, ready and willing to fulfil their obligation to pay the purchase price for the conveyance on the day named in the •contract of sale and purchase, the defendants treated the contract as ended and without notice to the plaintiffs entered into a ■contract to convey the land to Hotel Statler Company, Inc. for .a price less than that which the plaintiffs had agreed to pay.

At law time is always of the essence of a contract; in equity it is not, except in cases where there is an express agreement that it shall be so treated, or there is a clear and necessary implication from the circumstances that such was the intent of the parties to the agreement, or where there was a notice to the party in *464 default to perform within a reasonable time. Mansfield v. Wiles, 221 Mass. 75, 82 . King v. Connors, 222 Mass. 261 . Morgan v. Forbes, 236 Mass. 480 . Parkin v. Thorold, 16 Beav. 59. 1 Ames Cases in Eq. Jur. 327, and cases cited in notes.

It is to be observed that the right of either party to give a notice which in equity shall bind the other to a performance of the contract at a specified time is not a right to change the construction or add terms to that contract, but is a right which can be exercised with effect in equity upon the relation of the parties only when the notice follows a default in performance on the day named in the contract by the party upon whom the notice is served. Fry, Spec. Perf. § 1092. Mansfield v. Wiles, supra. Fuller v. Hovey, 2 Allen, 324 . Asia v. Hiser, 38 Fla. 71 . Taylor v. Brown, 2 Beav. 180. King v. Wilson, 6 Beav. 124. Green v. Sevin, 13 Ch. D. 589, 599. Rousech v. Schindler, 7 Terr. L. R. 92. The agreement does not in apt and express words declare that timéis of the essence of the contract, but as has been before said time is of the essence of a contract in equity as at law, when the purpose of the parties, as appears upon a consideration of the entire instrument, is to make time an essential element of the contract. Such purpose unmistakably appears in the provision of paragraph V that the deed held as an escrow by the State Street Trust Company shall be delivered by the trust company to The Bostonian, Inc. on May 15, 1922, at 10:00 o’clock A.M., at the registry of deeds, provided the underwriters corporation shall have “complied with the conditions and performed the agreements by them to be observed and performed in accordance with, the provisions of Article II and of Article III of this agreement.” It also appears in the provision of the said article that “Said deed' and mortgage may be delivered and the consideration paid at anytime prior to May 15th, 1922 upon which the parties hereto may agree.” It also appears in Article VI in the provision that “In case said Underwriters shall not comply with the terms and conditions set forth in Articles II and III hereof, then said deed shall be delivered by said Trust Company to said Railroad Company, and thereafter none of the parties hereto, including said Trust Company, shall be under any further liability on account of this agreement.” And in the provision of Article VI that “If the Railroad Company shall be unable to convey said title free from *465 all incumbrances . . . said Railroad Company shall, on the redelivery of said deed . . . pay to said Underwriters the sum of $10,000;” which sum had been paid to the railroad company as a consideration for a previous agreement of purchase and sale with said underwriters and, by the non-performance of said agreement, had become the absolute property of the railroad company, but which by the terms of Article II of the agreement was to be credited as a payment on the purchase price, provided the terms of this agreement are fully performed by said underwriters; as also the sum of $25,000 paid to the railroad company in cash and note, if the note had been paid; and particularly the further provision of said article that “if . . . said Underwriters shall fail to comply with each and every condition to be by them complied with hereunder, said Railroad Company may retain said $10,000. and said $25,000 as consideration for entering into this agreement.” The case falls within Garcin v. Pennsylvania Furnace Co. 186 Mass. 405 , Wheaton Building & Lumber Co. v. Boston, 204 Mass. 218, 227 .

Decree affirmed.