The propositions of appellants are to the effect that (1) the appellees are not entitled under the terms of the agreement to a rescission or abrogation of the contract for the sale of the land merely because of the refusal of the mortgage loan by the Federal Land Bank, and (2) a cancellation of the contract in toto is inequitable. In order to determine the real character of the transaction, the purpose of the parties, as evidenced by the agreement and its provisions, will be looked to. According to the agreement the land was to sell "for the price of $2,500.00." As stated, "the sum of $1,000.00 is paid in cash, and the remaining sum of $1,500.00 is to be paid in 12 equal installments of $35.00 each." Eleven of the 12 installments, of $35 each, aggregating $420, were to be payable monthly, beginning February 15, 1924, one month after the date of the contract, and "the one installment given for $1,080.00" was to become "due thirteen months after date according to the stipulations of installment note this day executed by the said parties of the second part." The "one installment given for $1,080.00" was not to be actually paid, though, on the future appointed due date of "thirteen months after date," but was to be by intention of the parties, as clearly appears from the contract, at that time otherwise arranged with extended time of payment. In the light of the facts it was known at the time of the agreement that the buyers were unable to pay that sum of money except through the method of monthly or annual installments extending over a considerable period of time. The clause specially agreed upon respecting the $1,080 installment reads as follows:
"Now, it is hereby agreed by the parties of the first part that, when the last installment of $1,080.00 is due, they will secure a loan from the Federal Land Bank of St. Louis for as much as said bank will lend upon said property, and that they (the appellants) will take second lien notes for any balance that may be due at the time, and will deed said property to the parties of the second part, together with an abstract showing a good title, or all moneys paid will be refunded to the parties of the second part."
Such special stipulation clearly shows that the parties regarded as of essential importance to the covenant to pay the last installment and to a conveyance of the land the securing of "a loan from the Federal Land Bank in St. Louis," evidently in the way of a mortgage on the land, on the usual terms allowed by such institution, to accomplish extended time payments to the buyers, in some substantial amount, of the last installment of $1,080. While the exact amount of the loan expected to be procured is not precisely stated, yet there is mention of some amount within reasonable limits; the value of the land being considered. The words, "For as much as said bank will lend upon said property," indicate an amount as nearly the value of the land as would be permissible for the bank to agree to. The sellers were to "take second lien notes for any balance (meaning if any) that may be due (or not secured) at that time," and a "deed" was intended to be executed subject to the mortgage. It was not merely an agreement to procure money upon condition that the bank would lend it on the land, and upon the failure or nonperformance of which the covenant for payment of the last installment at its due date would nevertheless be enforceable. Such intention is not compatible with the terms employed upon consideration of the whole covenant. The failure to secure the contemplated loan was to end the contract, for inability of the proposed buyer to pay the last installment of $1,080 otherwise than by long time payments. The words of the stipulation, "Or all moneys paid will be refunded to the parties of the second part," clearly reflect the intention of the parties of cancellation or abrogation in toto of the contract of sale of the land in case there was nonconformance of the things specified. The refund of "all moneys paid" would accomplish no less than a complete rescission of the entire contract. Its real purpose was to end the contract for the sale of the land in case a mortgage loan was not procured from the bank. There was not to be a partial cancellation. An agreement to cancel or rescind a contract at a future day if certain things are not done is, admittedly, within the legal rights of the parties, and will be enforced by the courts. It is believed that the trial court correctly decided the *Page 436 case, and the appellants' first proposition is therefore overruled.
It is concluded that the second proposition cannot be sustained, because the appellees elected to rescind the contract as a whole and in all its terms, having such right under the agreement. The determination of the rights of the parties and the adjustment of matters growing out of it were settled by the contract. And since the agreement has not been in an essential feature performed by appellants, or the benefit of such performance received by the appellees, the appellees ought not to be required to perform further and are entitled, in the absence of waiver or the like, to treat the entire contract as broken. There is no pleading or proof of waiver or estoppel. The trial court, therefore, did not err in decreeing enforcement of the refund, and the second proposition is overruled.
The judgment is affirmed.