continuing partners) and the persons beneficially interested in his estate (a). A releasor, however, cannot obtain relief if he has in the meanwhile acted on the arrangement as it stands in such a way that the parties cannot be restored to their former position (b). B. Stipulations as to Time. time. StipulaIt is a familiar principle that in all cases where it is sought tions as to to enforce contracts consisting of reciprocal promises, and “where the plaintiff himself is to do an act to entitle himself to the action, he must either show the act done, or if it be not done, at least that he has performed everything that was in his power to do" (c). Accordingly, when by the terms of a contract one party is to do something at or before a specified time, and when he fails to do such thing within such time, he could not afterwards claim the performance of the contract if the stipulation as to time were construed according to its literal terms. Now "at law time is always of the essence of the contract. When any time is fixed for the completion of it, the contract must be completed on the day specified, or an action will lie for the breach of it. This is not the doctrine of a court of equity; and although the dictum of Lord Thurlow that time could not be made of the essence of a contract in equity (d) has long been exploded, yet time is held to be of the essence of the contract in equity, only in cases of direct stipulation or of necessary implication" (e). A court of equity looks at the whole scope of the transaction to see whether the parties really meant the time named to be of the essence of the contract. And if it appears that, though they named a specific day for the act to be done, that which they really contemplated was only that it should be done within a reasonable time; then this view will be acted upon, and a party who according to the letter of the contract is in default and incompetent to enforce it will yet be allowed to enforce it in accordance with what the Court considers its true meaning. (a) Millar v. Craig, 6 Beav. 433; Lindley, 2. 981, and as to accounts stated, ib. 1026. (b) Skilbeck v. Hilton, 2 Eq. 587, but qu. whether the principle was rightly applied in the particular case. (c) Notes to Peeters v. Opie, 2 Wms. Saund. 743. (d) See Seton v. Slade, 7 Ves. 265, 275; and notes, 2 Wh. & T. L. C. 513, sqq. (e) Parkin v. Thorold, 16 Beav. 59, 65, This is especially the case with regard to contracts between vendors and purchasers of land. "Courts of Equity have enforced contracts specifically, where no action for damages could be maintained; for at law the party plaintiff must have strictly performed his part, and the inconvenience of insisting upon that in all cases was sufficient to require the interference of courts of equity. They dispense with that which would make compliance with what the law requires oppressive, and in various cases of such contracts they are in the constant habit of relieving the man who has acted fairly, though negligently. Thus in the case of an estate sold by auction, there is a condition to forfeit the deposit if the purchase be not completed within a certain time; yet the court is in the constant habit of relieving against the lapse of time and so in the case of mortgages, and in many instances, relief is given against mere lapse of time where lapse of time is not essential to the substance of the contract." So said Lord Redesdale in a judgment which has taken a classical rank on this subject (a). It was once even supposed that parties could not make time of the essence of the contract by express agreement; but it is now perfectly settled that they can, the question being always what was their true intention (b). "If the parties choose even arbitrarily, provided both of them intend to do so, to stipulate for a particular thing to be done at a particular time," such a stipulation is effectual in equity as well as at law. A court of equity will not interfere to make a new contract which the parties have not made (c). And although time is not originally of the essence of the contract, yet subsequent express notice will make time of the essence of the contract, where a reasonable time is specified" (d): as on the other hand conduct of the party entitled to insist on time as of the essence of the contract, such as continuing the negotiations without an 1 express reservation after the time has past, may operate as an (a) Lennon v. Napper, 2 Sch. & L. 684, cited by Knight Bruce, L. J. Roberts v. Berry, D. M. G. at p. 289, and again adopted by the L. JJ. in Tilley v. Thomas, 3 Ch. 61. (b) Seton v. Slade, 7 Ves. 265, 275, and notes to that case in 2 Wh. & T. L. C.; Parkin v. Thorold, supra. (c) Per Alderson, B. Hipwell v. Knight, 1 Y. & C. (Ex.) 415. And see the observations of Kindersley V.-C. to the same effect in Oakden v. Pike, 34 L. J. Ch. 620. (d) Parkin v. Thorold, 16 Beav. at p. 75; Dart, V. & P. 388; and see Williams v. Glenton, 1 Ch. 200, implied waiver of his right (a). The true principles of English Equity on this head are well embodied by the language of the Indian Contract Act, s. 55: on. When a party to a contract promises to do a certain thing at or Indian Contract before a specified time, or certain things at or before specified times, Act thereand fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable, at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract. [The Court may infer from the nature of a contract, even though no time be specified for its completion, that time was intended to be of its essence to this extent, that the contracting party is bound to use the utmost diligence to perform his part of the contract] (b). If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. If in case of a contract, voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the nonperformance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisee [sic in the Act, an obvious misprint for promisor] of his intention to do so (c). C. Relief against Penalties. as to mort gages. In like manner Equity will prevent penal provisions inserted Relief against in instruments to secure the payment of money or the perform- penalties, ance of contracts from being literally enforced, if the substantial especially performance of that which was really contemplated can be otherwise secured (d). The most important application of this principle is in the jurisdiction of equity concerning mortgages. A court of equity treats the contract as being in substance a security for the repayment of money advanced, and that portion of it which gives the estate to the mortgagee as mere form, "and accordingly, in direct violation of the [form of the] contract," it compels the mortgagee to reconvey on being repaid (a) Webb v. Hughes, 10 Eq. 281: and see next note but one. (b) Macbryde v. Weekes, 22 Beav. 533 (contract for a lease of working mines). (c) "It constantly happens that an objection is waived by the con duct of the parties," per James, L. General rule. his principal, interest, and costs (a). Here again the original ground on which equity interfered was to carry out the true intention of the parties. But it cannot be said here, as in the case of other stipulations as to time, that everything depends on the intention. For the general rule "once a mortgage, and always a mortgage" cannot be superseded by any express agreement so as to make a mortgage absolutely irredeemable (b). However limited restrictions on the mutual remedies of the mortgagor and mortgagee, as by making the mortgage for a term certain, are allowed and are not uncommon in practice (e). Also there may be such a thing as an absolute sale with an option of repurchase on certain conditions; and if such is really the nature of the transaction, equity will give no relief against the necessity of observing those conditions (7). "That this Court will treat a transaction as a mortgage, although it was made so as to bear the appearance of an absolute sale, if it appears that the parties intended it to be a mortgage, is no doubt true" (e). Indeed, a court of law as well as a court of equity will look into the true character of a transaction purporting to be an absolute sale, and see whether a mortgage or an absolute sale was intended (ƒ). "But it is equally clear, that if the parties intended an absolute sale, a contemporaneous agreement for a repurchase, not acted upon, will not of itself entitle the vendor to redeem" (g). The manner in which equity deals with mortgage transactions is but one consequence of a more general proposition, which is this: that "Where there is a debt actually due, and in respect of that debt a security is given, be it by way of mortgage or be it by way of stipulation that in case of its not being paid at the time appointed a larger sum shall become payable, and be paid, in either of those cases Equity regards the security that has been given as a mere pledge for the debt, and it will not allow either a forfeiture of the property pledged, or any augmentation of the debt as a penal provision, on the ground that Equity regards the contemplated forfeiture which might take (a) Per Romilly, M. R. Parkin v. Thorold, 16 Beav. 59, 68; and see Lord Redesdale's judgment in Lennon v. Napper, supra. (b) Howard v. Harris, 1 Vern. 190; Cowdry v. Day, 1 Giff. 316, see reporter's note at p. 323; 1 Ch. Ca. 141. (c) Fisher on Mortgages, p. 278 (2nd ed.) (d) Davis v. Thomas, 1 Russ. & M. 506. (e) See Douglas v. Culrerwell, 31 L. J. Ch. 543. (f) Gardner v. Cazenove, 1 H. & N. 423, 435, 438, 26 L. J. Ex. 17, 19, 20. (g) Per Lord Cottenham, C. Williams v. Owen, 5 M. & Cr. 303, 306. place at law with reference to the estate as in the nature of a penal provision, against which Equity will relieve when the object in view, namely, the securing of the debt, is attained, and regarding also the stipulation for the payment of a larger sum of money, if the sum be not paid at the time it is due, as a penalty and a forfeiture against which Equity will relieve" (a). This applies not only to securities for the payment of money. but to all cases "where a penalty is inserted merely to secure the enjoyment of a collateral object" (b). In all such cases the penal sum was originally recoverable in full in a court of law, but actions brought to recover penalties stipulated for by bonds or other agreements have for a long time been governed by statutes (c). And a mortgagee suing at law in ejectment, or on a bond given as collateral security (d), may be compelled by rule of court to reconvey on payment of principal, interest, and costs (e). It would lead us too far beyond our present object to discuss the cases in which the question, often a very nice one, has arisen, whether a sum agreed to be paid upon a breach of contract is a penalty or liquidated damages. It may be noted however in passing that "the words liquidated damages or penalty are not conclusive as to the character of the sum stipulated to be paid," which must be determined from the matter of the agreement (ƒ). 3. Peculiar Defences and Remedies in Equity. A. Defence against Specific Performance. Defence When by reason of a mistake (e.g. omitting some terms which against were part of the intended agreement) a contract in writing fails to specific performexpress the real meaning of the parties, the party interested in ance. having the real and original agreement adhered to (e.g. the one for whose benefit the omitted term was) is in the following position. If the other party sues him in equity for the specific per(a) Per Lord Hatherley, C. Thompson v. Hudson, L. R. 4 H. L. 1, 15. (b) Per Lord Thurlow, Sloman v. Walter, 2 Wh. & T. L. C. 1094. (c) As to common money bonds : 4 & 5 Anne, c. 16, s. 13; C. L. P. Act 1860 (23 & 24 Vict. c. 126), s. 25. As to other bonds and agreements 8 & 9 Wm. 3, c. 11, s. 8. The statutes are collected and reviewed in the late case of Preston v. Dania, L. R. 8 Ex. 19. (d) This is now very infreq in practice. (e) 7 Geo. 2, c. 20; C. L. P. Act 1852 (15 & 16 Vict. c. 76) s. 219. (f) Per Bramwell, B. Betts v. Burch, 4 H. & N. 506, 511, 28 L. J. Ex. 267, 271; Leake on Contracts, 573, 578. The latest cases on this subject in Common Law and Equity respectively are -Lea v. Whitaker, L. R. 8 C. P. 70, Magee v. Lavell, 9 C. P. 107; Ex parte D'Alteyrac, In the Indian Contract cut by abolishing the |