Indian Contract Act thereon. intention "(9). "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. There is no equitable jurisdiction to make a new contract which the parties have not made (r). The fact that time is not specified, or not so specified as to be of the essence of the contract, does not affect the general right of either party to require completion on the other part within a reasonable time, and give notice of his intention to rescind the contract if the default is continued (s), 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 express reservation after the time is past, may operate as an implied waiver of his right (f). In mercantile contracts the presumption, if any, is that time where specified is an essential condition (u). The principles of our jurisprudence on this head are well embodied by the language of the Indian Contract Act, s. 55: When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and 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] (x). 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 (9) Grove, J. in Patrick v. Milner, 2 C. P. D. 342, 348. (r) 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. (s) This is the true and only admissible meaning of the statement that time can be made of the essence of a contract by subsequent express notice. Per Fry, J. Green v. Sevin, 13 Ch. D. 589, 599; per Turner, L. J. Williams v. Glenton, 1 Ch. 200, 210. (t) Webb v. Hughes, 10 Eq. 281: and see note (y), next (u) Per Cotton, L. J. Reuter v. Sala, 4 C. P. D. at p. 249. (x) Macbryde v. Weekes, 22 Beav. 533 (contract for a lease of working mines). 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 promisce 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 promisor of his intention to do so (y). C. Relief against Penalties. as to In like manner penal provisions inserted in instruments Relief to secure the payment of money or the performance of against penalties, contracts will not be literally enforced, if the substantial especially performance of that which was really contemplated can be mortotherwise secured (). The most important application of gages. 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 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 General rule. irredeemable (). 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. 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 (c). "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 "()." 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 " (e). 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 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” (ƒ). This applies not only to securities for the payment of money but to all cases "where a penalty is inserted (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) Davis v. Thomas, 1 Russ. & M. 506. (d) See Douglas v. Culverwell, 31 L. J. Ch. 543; and so also at com mon law, Gardner v. Cazenove, 1 H. & N. 423, 435, 438, 26 L. J. Ex. 17, 19, 20. (e) Per Lord Cottenham, C. Williams v. Owen, 5 M. & Cr. 303, 306. (f) Per Lord Hatherley, C. Thompson v. Hudson, L. R. 4 H. L. 1, 15. merely to secure the enjoyment of a collateral object" (g). 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, and land conveyed by way of mortgage, have for a long time been governed by statutes (h). 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." This must be determined from the matter of the agreement (i). 3. Peculiar Defences and Remedies derived from Equity. A. Defence against Specific Performance. Defence ance. When by reason of a mistake (e.g. omitting some terms against specific which were part of the intended agreement) a contract in performwriting fails to express the real meaning of the parties, the party interested in 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 for the specific performance of the contract as expressed in writing, it will be a good (g) Per Lord Thurlow, Sloman v. Walter, 2 Wh. & T. L. C. 1094. () 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 Preston v. Dania, L. R. 8 Ex. 19. A mortgagee suing in ejectment, or on a bond given as collateral security, may be compelled by rule of Court to reconvey on payment of principal, interest, and costs. 7 Geo. 2, c. 20; C. L. P. Act 1852 (15 & 16 Vict. c. 76) s. 219. Bonds of the kind last mentioned hardly occur in modern (i) Per Bramwell, B. in Betts v. Townshend v. Stangroom. defence if he can show that the written contract does not represent the real agreement: and this whether the contract is of a kind required by law to be in writing or not. Thus specific performance has been refused where a clause had been introduced by inadvertence into the contract (k). It is sometimes said with reference to cases of this class that the remedy of specific performance is discretionary. But this means a judicial and regular, not an arbitrary discretion. The Court "must be satisfied that the agreement would not have been entered into if its true effect had been understood " (k). On the other hand a party cannot, at all events where the contract is required by law to be in writing, come forward as plaintiff to claim the performance of the real agreement which is not completely expressed by the written contract. Thus in the case of Townshend v. Stangroom (1) (referred to by Lord Hatherley when V.-C. as perhaps the best illustration of the principle) (m) there were cross suits (n), one for the specific performance of a written agreement as varied by an oral agreement, the other for specific performance of the written agreement without variation; and the fact of the parol variations from the written agreement being established, both suits were dismissed. And the result of a plaintiff attempting to enforce an agreement with alleged parol variations, if the defendant disproves the variations and chooses to abide by the written agreement, may be a decree for the specific performance of the agreement as it stands at the plaintiff's cost (0). (k) Watson v. Marston, 4 D. M. G. 230, 240. (7) 6 Ves. 328. (m) Wood v. Scarth, 2 K. & J. 33, 42. (n) Under the Judicature Acts there would be an action and counter-claim. (0) See Higginson v. Clowes, 15 Ves. 516, 525; and such, it is submitted, is the real effect of Fife v. Clayton, 13 Ves. 546, s. c. more fully given 1 C. P. Cooper (temp. Cottenham) 351: the different statement in Dart, V. & P. 1116, appears on examination to be hardly borne out by either report, and is at all events not consistent with Townshend v. Stangroom, or with the general doctrine of the Court. In this case Lord Eldon laid hold on the plaintiff's attempt to set up a variation, |