Supreme Court of South Carolina, 1922

First Trust & Savings Bank v. Pruitt

Supreme Court of South Carolina · Decided August 17, 1922 · Fraser

113 S.E. 469; 121 S.C. 484; 1922 S.C. LEXIS 178 (South Eastern Reporter)

Counsel

Mr John K. Hood , for appellant, cites: Plaintiff had no cause of action on note assigned to defendant bank. 110 S.C. 99 . Demurrer should have been sustained: 79 S.C. 439 . Rights of seller to hold payment as liquidated damages and terminate contract: 106 S.C. 459 ; 90 S.C. 495 . Where time is essence of the contract: 90 S.C. 495 . Distinction between penalty and liquidated damages: 11 Rich. L., 554; 2 Bail. Eq., 293; 11 Rich Eq., 225; 9 S.C. 374 ; 19 S.C. 434 ; 94 S.C. 188 ; 82 S.C. 297 ; 67 S.C. 462 ; 90 Ill. App., 111 ; 257 Ill., 260 ; 121 N.E., 237 ; 184 S.W. 244 . Mr. J. Harry Foster , for appellant, cites: Complaint demurrable for including improper defendant: Code Proc. 1912, Sec. 140; 77 S.C. 412 ; 79 S.C. 438 ; 114 S.C. 516 . Where time is essence of contract: 90 S.C. 495 ; 36 Cyc., 575; 36 Cyc., 711. Contract in alternative cannot be specifically enforced: 53 N.E., 576; 29 N.E., 282; 2 L.R.A., 215; 26 Enc. L. (2nd. Ed.), 88. Right to decline performance where principal is undisclosed: Mich., Agency, 769; 13 L.R.A. (N.S.), 156; 56 A.L.R., 892; 134 A.L.R., 582; 39 L.R.A. (N.S.), 472. Mr. Wm. J. Cherry , for respondents, cites: Defendant Bank a proper party: 16 S.C. 73 ; 46 Am. Dec., 190; 27 S.C. 318 ; 79 S.C. 440 . Provisions as to penalty and damages were to secure performance of contract: 11 Rich., 554; 94 S.C. 184 ; 11 Rich Eq., 225 2 L.R.A. (N.S.), 210; 199 Fed., 262; 52 Am. Rep., 310; 42 Minn., 194 ; 59 N.J. Eq., 427 ; 53 N.J. Eq., 15; 28 Minn., 439 ; 1 Gray, 414; 8 Gray, 550; 10 Me., 40 ; 5 Gilman, 196; 5 Cow., 272; 33 Beavan, 585; 28 Minn., 439 ; 18 N.Y. Supp., 642; 87 N Y, 400 ; 30 Atl., 1061; 45 Atl., 605; 107 N.W., 177; 199 Fed., 262; 135 N.W., 319. Right of vendor on default by vendee: 217 U.S. 323 . Time not of essence of contract: Bail. Eq., 371; 5 Rich. Eq., 370; 5 S.C. 462 ; 9 S.C. 269 ; 53 S.C. 574 ; 123 U.S. 403 ; 134 U.S. 68 . Vendee cannot set up his own default as defense: 84 S.C. 185 . Only required of vendee that he be ready and able to convey: 48 S.C. 295 ; McM. Eq., 55. Contract was enforceable against J.M. Cherry: 1 Enc. L., 1140; 2 Hill. Ch., 584; 69 L.R.A., 629; 39 L.R.A., (N.S.), 324. Plaintiffs can reform and then enforce contract: 2 Pom. Eq. Jur. (2d Ed.), Sec. 862; 1 Story Eq. Jur. (13th Ed.), Sec. 233; 114 S.C. 332 ; 116 S.C. 113 . Plaintiffs have no adequate remedy at law: 107 S.C. 465 ; 48 S.C. 175 ; 53 S.C. 563 . Only party to be bound need sign contract: 10 Rich. Eq., 459; 48 S.C. 509 ; 1 Enc. L., 1141; 55 Am. Dec., 330; 21 Am. Rep., 617. Oral authority to agent is sufficient: 1 Rich. Eq., 426; 3 Hill, 48; 2 S.C. 411 ; 27 S.C. 384 ; 68 S.C. 369 . Messrs. Watkins Prince , for respondents, cite: Contract was for purchase of land and will be interpreted as such: 25 R.C.L., 230; 11 Rich. Eq., 225; 36 Cyc., 571; 25 R. C.L., 343; 36 Cyc., 571; 87 N.Y., 400 ; 217 U.S. 323 . Forfeiture must first be declared by seller before purchaser can claim rights under contract: Foy. Spec. Perf. (5th Ed.), 70; 13 C.J., 609; 29 A. E. Enc. L., 645; 2 L.R.A. (N.S.), 210; 118 Pac., 292; 119 Fed., 262; 54 N.E., 347; 47 Pac., 556; 155 Pac., 563; 70 N.Y.L., 1096; 80 N.W., 458; 158 Pac., 1160 ; 71 Pa. Sup. Ct., 344 ; 1 Gray, 414; 68 So., 259. Not necessary to have legal title at time contract is singed: 25 R.C.L., 328; McM. Eq., 55; Foy. Spec. Perf. (5th Ed.), 664. Contract may be reformed and performance decreed in equity: 116 S.C. 113 . Specific performance is equitable action: 107 S.C. 465 ; 25 R.C.L., 271.

Opinion of the Court

The opinion of the Court was delivered by

Mr. Justice Fraser.

These two actions [Nos. 10987 and 11007] were tried together. They are actions for specific performance.

I. The appellants resist specific performance, because they allege that the contract provides that, in case the buyers do not comply with their contracts, the initial payments shall be considered forfeited as liquidated damages. The cases were heard on demurrer to the complaint before Judge Ernest Moore, who overruled the demurrer. From these decrees the buyers, defendants, appeal.

The contracts must be considered as a whole. They provide at length for the enforcement of the rights of the respective parties under the contracts by legal proceedings, and the payment of the attorney’s fees by the parties who fail to carry out their part of the contract. It is manifest that, if the contract contemplated that the buyer had the right to terminate the contract by a forfeiture of the initial payment, then no legal proceedings would be had, and no attorney’s fees to be paid. Eet the decree of Judge Moore’s be reported. •

II. The defendant, Pruitt, demurs because the National Union Bank of Rock Hill is made a party, and there is no cause of action stated against the bank. The bank did not demur, and Pruitt is not injured. This exception cannot be sustained.

*499 III. Pruitt complains that Major, with whom he made the contract, did not have title. The complaint alleged that Major made the sale under the contract with Cherry, who was the owner, and for his benefit in part, and then Cherry took an assignment of Major’s interest. Pruitt accepted this change of status, and gave his note to Cherry, who assigned the note to the bank. It is now too late for Pruitt to repudiate the contract. After Cherry accepted the note and assigned it, he is bound. •

The judgment is affirmed.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.