Fox v. Helmuth

Opinion by

Orlady, J.,

The defendants executed a bond, with a warrant of attorney, accompanying a mortgage, in which they promised to pay to the plaintiff $1,000, within nine years from its date (May 5, *831893), in monthly installments of not less than $10.00 each, and providing “ that if at any time default shall be made in production to the obligee, .... on or before the first day of November of each and every year of receipts for taxes of the current year assessed upon the premises, then and in such case the whole principal debt shall at the option of the obligee .... become due and payable immediately, and payment of the principal debt and interest may be enforced and recovered at once.”

The installments were paid regularly each month, the last payment being made on November 14, 1903. The receipts for taxes of the current year were not produced on November 1, 1903, and on November 27 the plaintiff caused a judgment to be entered on the bond and warrant of attorney. On December 1, the defendant paid all taxes, but did not notify the plaintiff of the fact nor produce to him the receipt. On December 3, averments of default were filed and an execution issued on the judgment. On December 10 a rule was granted to show cause why the execution should not be stayed, etc., which was after-wards made absolute.

That performance at a day named may be made of essence in a contract is too well settled to be disputed. A formal demand for the tax receipt was not necessary, inasmuch as the parties made their contract without providing for such a demand. It must also be accepted as the law that the actual intention of the parties at the time of contracting is the chief guide in the construction of their contract, and if this can be ascertained and is lawful it must govern. In cases of this character equity follows the law and will enforce a covenant of forfeiture, however harsh it may appear, if it is essential to do justice. Whether the entry of judgment and issuing an execution thereon be called a penalty, a forfeiture, or a privilege for demanding the whole of the debt, it is, in its effect, in the nature of a forfeiture, as the term of the mortgage debt is canceled by making the whole sum become due and payable immediately. The circumstances show that the parties intended the payment of the installments as they matured to be the principal and primary purpose of the mortgage. A default of thirty days in the payment of interest after its maturity was permitted. The covenant to produce on a day certain the tax receipts of the current year was collateral to the main purpose. In the cases *84relied on by the appellant, (Robinson v. Loomis, 51 Pa. 78; Brown v. Vandergrift, 80 Pa. 142; Warwick Iron Co. v. Morton, 148 Pa. 72; Williams v. Graver, 152 Pa. 571; and Atkinson v. Walton, 162 Pa. 219), there was a default in payment of either debt or interest, and in Girard Life Ins. Co. v. City of Philada., 88 Pa. 393, three years’ water rents with penalties were in arrears, before a forfeiture was declared and sustained.

When the plaintiff relied upon the strict wording of the bond he took the risk of the subsequent intervention of a court of equity. In Jones v. Scott, 209 Pa. 177, the defendant defaulted on his fifth monthly payment, and the court said, “ the reclamation of the land was only incidental and secondary to the main purpose of securing payment of the money,” and stayed the proceedings to retake the land. In this case the installment of debt was received by the plaintiff within the stipulated time, but after the date when the receipt for taxes should have been exhibited, and the taxes were in fact paid before the execution was' issued, by which the security of the plaintiff was fully restored and the purpose of the covenant having been accomplished, the court did not err in staying the execution.

The judgment is affirmed.