D. C.

1908

LABELLE

v.

O'CONNOR.

Anglin, J.

agreement, it provides that if the whole £2,000 with interest, or any part of it, however small, remains unpaid after a certain day, then the company shall forfeit the land and the portion of the purchase money which they have paid."

In the present case there is no provision at all resembling that which was thus dealt with by the Lords Justices. The agreement does not declare that the instalments already paid shall, upon subsequent default of the purchaser, be forfeited. The fact that in the Dagenham case the purchasers had taken actual possession of the lands, and had spent very considerable sums of money upon them, which would have been inevitably lost to them had the Courts refused them relief, distinguish that case from the present, where, at most, the plaintiff had a right to possession which he had never exercised. Although referred to in the judgments of Collins, L.J., in Cornwall v. Henson, [1900] 2 Ch. at p. 304, and of Rigby, L.J., in In re Dixon, [1900] 2 Ch. 561, at p. 578, without any indication of disapproval, the decision in In re Dagenham stands practically alone. But the ground upon which the decision in In re Dagenham may be reconciled with other authorities, and must, I think, be distinguished from the present case, is that there, following an absolute and unqualified agreement for sale and purchase and a provision for possession by the purchaser upon payment of £2,000-one-half of the purchase price-the agreement contained a condition that "in case the second sum of £2,000 and all interest thereon should not be entirely paid off and discharged by the 7th August, 1867— in which respect time should be of the essence of the contractit should be lawful for the trustees to re-enter upon the lands and repossess and enjoy them as of their former estate," etc. Under this agreement the purchasers acquired an estate in the lands, and the provision for default was in the nature of a condition subsequent or of defeasance. Against such conditions courts of equity have always asserted jurisdiction to relieve.

In the present case there is not an absolute and unqualified agreement to sell and purchase. The agreement is that the purchasers covenant, inter alia, to pay the purchase money at the dates specified, "in consideration whereof and on payment of the said consideration sum of $290," the vendors "covenant, promise, and agree to convey."

In this agreement payment by the purchaser-and, time being made of the essence, payment at the times fixed by the contract— is a condition precedent, default in which, if not waived or acquiesced in, disentitles the purchaser to the aid of a court of equity: Reed v. Chambers (1834), 6 Gill & J. (Md.) 490, 494; Stow v. Russell (1864), 36 Ill. 18.

Against conditions precedent it is well settled that there is no equitable jurisdiction to relieve. A case very much in point. is Wells v. Smith (1833), 2 Edw. Ch. (N.Y.) 78, from the judgment in which I extract the following passages:

"The next question then is: whether this Court, under the circumstances, can relieve the party from the consequences of his own default?-a default, as already observed, not imputable to the defendant or founded, upon any waiver on her part or attributable to accident, mistake, or surprise so as to authorize an interference on any such account. It is a naked case of a condition unperformed within time. Much depends upon the nature and effect of the condition. The uniform object of a condition is to defeat or avoid an estate: Preston's Shep. Touch. 117. If it be a condition precedent, it defeats or rather avoids the estate, by not permitting the estate to vest until the condition is literally performed. In case it be a condition subsequent, the non-performance defeats the estate, by divesting the party of his title and the interest already vested: because the continuance is made to depend upon the performance of the act or the happening of the stipulated contingency. The first operates by giving an estate and conferring a benefit; and the second, as a defeasance or the destruction of an estate already raised and vested. This distinction is important in the view of a court of equity; because it can, upon principle, interfere with and control the effect of one species of condition and not of the other. The condition of the contract in question is clearly a condition precedent. No one can peruse it without perceiving that every act which the complainant has stipulated to perform is antecedent to what the defendant is to do. The performance of the covenants on the part of the former is made the consideration for the covenant of the latter to convey to him. It is only upon these conditions a deed is to be executed and delivered. If he fail in any one particular, the agreement ceases to be obligatory upon her. It is true he

D. C. 1908

LABELLE บ.

O'CONNOR.

Anglin, J.

D. C. 1908 LABELLE

v.

O'CONNOR.

Anglin, J.

was to go into possession, make improvements on the lot, and pay interest on the purchase money, as well as all taxes and assessments, but all this appears to be the result of a mere possessory right as tenant until the time for a fulfilment of the contract should arrive: and not the effect of any vested right or title. There are no words of grant in the contract itself. It rests merely in covenant on the part of the defendant, and no estate was to arise to him except upon the performance of the condition. This is, therefore, the case of a condition precedent, where no estate vests in law until the condition is performed: Coke Litt. 206 a; Harvey v. Aston (1737), 1 Atk. 361; S. C., West's R. 350; and Com. Rep. 726.

"It is next to be seen whether, in such cases, a court of equity can aid the party and help him to the estate notwithstanding the breach of the condition.

"Whatever confusion there may be in some of the earlier cases on the subject--and it must be admitted there are some which seem to be contradictory and irreconcileable and a few which appear to have been reversed in the House of Lords (1 Chan. Ca. 90, note; 1 Eq. Cas. Abr. 107, B.; Freeman's C.R. 35 and 220 m.; 1 Vern. 83; 3 Ch. Cas. 119; and Colles' P.C. 10)-yet when we come down to the period of a more systematic equity jurisdiction, we find the decisions assuming greater steadiness and uniformity of character on this point. I shall begin with the decision of Lord Hardwicke in Reynish v. Martin (1746), 3 Atk. 330. In this case a legacy had been left to a daughter, upon the condition of her marrying with the consent of her trustees. She had married without their consent. A bill was filed for the legacy. His Lordship noticed the objection of its being a condition precedent unperformed. And he considered that, as there had been a breach of the condition and because the law would not, therefore equity could not, help the party. In reference to the legacy being originally a charge upon lands, he observed: 'It must have the same consideration as a devise of lands would have; and in that case, nothing could be clearer than that the legacy could not be raised, because nothing vested before the condition performed.'

"The case of Harvey v. Aston, above referred to, was similar and involved the same principle. It had been previously decided by Lord Hardwicke on an appeal from the Rolls; and, after

an elaborate discussion, it was decided by his Lordship with
the assistance of the Judges. I would next refer to Scott v. Tyler
(1788), before Lord Thurlow (2 Bro. C.C. 431), as containing a
full exposition of the law on this subject. Here, also, was a legacy
given upon condition of the legatee's marrying with the consent
of her mother; and which had not been done.
The question

as to the validity of such a condition, as well as the effect of non-
performance, drew forth able and learned arguments from the
numerous counsel in the case, and among whom we find Mansfield,
Scott, Hargrave, Plumer, and Mitford. The argument of Mr.
Hargrave embraced and explained in the clearest manner the
doctrine and effect of conditions precedent and subsequent and
the jurisdiction of equity over them-and which argument the
counsel based upon a review of all the cases. He shewed, I think,
very conclusively and upon the soundest principles, that equity
cannot interpose to relieve from the consequences of a condition
precedent unperformed, although, with respect to conditions sub-
sequent, the doctrine is very different. The decision of Lord
Thurlow was in accordance with this view of the law and with
Lord Hardwicke's judgment in the former cases.

"The decisions in Powell v. Pellett (1726), 2 Eq. Ca. Abr. 209 pl. 3, and Sweet v. Anderson (1772), 2 Bro. P.C. 256, are also authorities for the same doctrine and bear directly upon the point.

A

"And this doctrine I consider to be brought down to the present day by the recent cases of Duffield v. Elwes (1823), 1 S. & S. 239; Long v. Ricketts (1824), 2 S. & S. 179; and Cliford v. Beaumont (1828), 4 Russ. 325. It is founded in reason and justice. man enters into a contract or makes a deed of settlement or a will (the instrument is immaterial), and he agrees to grant or devise an estate upon a condition which he declares must be performed before the person to be benefitted can take it. No court of law or equity can have a right to say that the condition, which is lawful in itself and one the party had a right to impose, shall be dispensed with. In order to do this, the contract or act of the party himself must be annulled and one created by the court put in its place. This would be contrary to reason and the assumption of a power which I, for one, must disclaim.

"The principle whereon the court is to act in relation to conditions subsequent is widely different. In cases of this sort, if

38-VOL. XV. O.L.R.

D. C.

1908

LABELLE

v.

O'CONNOR.

Anglin, J.

D. C. 1908

LABELLE

v.

O'CONNOR.

Anglin, J.

a breach or non-performance happens, the effect of which is to work a forfeiture or divest an estate, the court, acting upon the principle of compensation to the party for injury sustained by the breach, will interpose and prevent the forfeiture. On account of the nature of conditions subsequent, they are said to fall within the lenient principle by which equity relieves against penalties; and the court will only give relief where compensation can be made in damages. There may even be cases of conditions subsequent unperformed in which the court will not relieve from forfeiture on account of the difficulty of ascertaining, with any degree of certainty, the amount or adequacy of compensation to be allowed: Jeremy's Eq. Jur. 475. It is unnecessary, however, to pursue this branch of the subject. The present case does not fall within it."

This decision was affirmed on appeal (1837), 7 Paige 22.

In many cases where, because of default in payment under contracts in which time was held to be of the essence, specific performance has been refused and deposit money held forfeited, no equitable right to relief as from a penalty or forfeiture has been suggested. Harrington v. Wheeler (1799), 4 Ves. 686, is an instance. If the present case should be treated as one of penalty in which the Court should relieve from explicit terms of the contract, it is of little use attempting to stipulate, however clearly, that time shall be of the essence of an agreement.

If purchasers will, in favour of vendors, consent to be bound by such a condition, they must be held liable to the consequences: Seaton v. Mapp, 2 Coll. C.C. 556, 564.

"I do not see therefore why, if the parties choose even arbitrarily, provided both of them intend so to do, to stipulate for a particular thing to be done at a particular time, such a stipulation is not to be carried literally into effect in a court of equity. That is the real contract; the parties had a right to make it; why then should a court of equity interfere to make a new contract which the parties have not made?" Hipwell v. Knight, 1 Y. & C. Ex. 401, 416.

The right of a purchaser to specific performance is one thing; his possible equity to relief from forfeiture of purchase money paid on account, though not entitled to the extraordinary and discretionary remedy of specific performance, is quite another.