another than the sendee of the original. For example in Butler v. Price (1874) 115 Mass. 578, where the reply was signed by the wife of the man to whom the original had been sent, it was held that such facts did not create E. W. NEWELL, Respt., V. E. B. & A. L. STONE COMPANY, Appt. California Supreme Court (In Banc) —October 8, 1919. Vendor and purchaser — time of essence — waiver of provision. 1. Accepting payment on a land purchase contract after the time specified in the contract for making such payment waives a provision that time is of the essence of the contract, and notice that a strict performance as to future payment is necessary must be given to warrant declaration of a forfeiture of rights under the contract and payments made. [See note on this question beginning on page 996.] APPEAL by defendant from a judgment of the Superior Court for the City and County of San Francisco (Deasy, J.) in favor of plaintiff in an action brought for the recovery of payments made by him under a contract for the purchase of real estate. Reversed. The facts are stated in the opinion of the court. Messrs. W. F. Williamson and Ernest L. Brune, for appellant: Plaintiff, while in default himself, could not rescind the contract and demand back the money he had paid. Bradford v. Parkhurst, 96 Cal. 102, 31 Am. St. Rep. 189, 30 Pac. 1106; Glock V. Howard & W. Colony Co. 123 Cal. 1, 43 L.R.A. 199, 69 Am. St. Rep. 17, 55 Pac. 713; Joyce v. Shafer, 97 Cal. 335, 32 Pac. 320; Odd Fellows' Sav. Bank v. Brander, 124 Cal. 255, 56 Pac. 1109; Cross v. Mayo, 167 Cal. 594, 140 Pac. 283; Aikman v. Sanborn, 5 Cal. Unrep. 961, 52 Pac. 729; Boone v. Templeman, 158 Cal. 290, 139 Am. St. Rep. 126, 110 Pac. 947; Sausalito Bay Land Co. 9 A.L.R.-63. v. Sausalito Improv. Co. 166 Cal. 302, 136 Pac. 57; Hansbrough v. Peck, 5 Wall. 497, 18 L. ed. 520; Pearson v. Brown, 27 Cal. App. 125, 148 Pac. 956. The letter written by defendant was well within his rights, and was not a repudiation or a rescission or a consent to the abandonment of the contract. Glock v. Howard & W. Colony Co. 123 Cal. 1, 43 L.R.A. 199, 69 Am. St. Rep. 17, 55 Pac 713; Oursler v. Thacher, 152 Cal. 739, 93 Pac. 1007; Empire Invest. Co. v. Mort, 171 Cal. 339, 153 Pac. 236; Odd Fellows' Sav. Bank v. Brander, 124 Cal. 255, 56 Pac. 1109; List v. Moore, 20 Cal. App. 616, 129 Pac. 962; Skookum Oil Co. v. Thomas, 162 Cal. 539, 123 Pac. 363; Schwerin Estate Realty Co. v. Slye, 173 Cal. 170, 159 Pac. 420. Messrs. Sloss, Ackerman, & Bradley also for appellant. Messrs. Harding & Monroe for respondent. Melvin, J., delivered the opinion of the court: The plaintiff, E. W. Newell, and the defendant corporation, entered into a written contract on April 7, 1913, whereby the former agreed to purchase and the latter to sell certain real property for $9,200. Of this amount the sum of $500 was paid at the date of the agreement. The sum of $1,500 was due August 1, 1913, and the balance was to be paid in monthly instalments of at least $200. There was a provision for the monthly payment of interest, time was expressly made of the essence of the agreement, and it was further provided that upon default in the payment of any of the instalments the vendor, E. B. & A. L. Stone Company, might at its option, without notice to the vendee, declare the entire principal and interest immediately due. The vendee failed to pay the first instalment of $1,500, due August 1, 1913, but on December 13, 1913, a payment, on account, of something more than $500, was accepted, and thereafter other sums were paid, at various times not specified in the contract, until $2,694.83 had been received by the vendor. On April 28, 1915, the vendor (defendant in this action) served upon plaintiff a notice reciting the terms of the agreement. The notice contains the following statement by way of recital: "At all times the undersigned [E. B. & A. L. Stone Company] has stood ready, willing, and able to comply with the terms of said contract, and that it is not the intention of the undersigned in any manner to rescind or abandon said contract, and nothing herein shall be construed to be a consent in any way to a rescission or abandonment of said contract." Then follow recitals that time is of the essence of the contract, and that default has been made by the vendee, in consequence of which he has abandoned the contract, and the vendor notifies the vendee that, in order to determine that it is the latter's "express intention as purchaser to abandon said contract," a thereby tendered to the vendee upon deed to the land is ready and is payment of the balance of the purchase price, with interest as specified in the agreement, provided the entire balance should be paid immediately upon receipt of the notice. The closing words of the notice are as follows: "Unless said entire balance shall be paid immediately, as aforesaid, the undersigned, in ac cordance with the terms of said contract, hereby declares that it shall be relieved from all obligations in law or equity to convey the property hereinbefore described, or any part thereof, and that you shall forfeit all right thereto under this contract, and all rights to any and all moneys paid thereon, which shall be deemed payments for the right to have the option to purchase said property, and none of the same shall be returned, and the undersigned hereby further notifies you that it will thereupon, in accordance with its rights, immediately, or at its convenience thereafter, enter upon said lands and premises, and take possession thereof, together with the improvements constructed thereon, and the appurtenances thereunto belonging." On August 4, 1916 (more than a year after the service of notice), the vendee demanded return of the moneys paid under the contract, and, this demand being refused, instituted the present action. The court found that defendant, although it had accepted payments from plaintiff while he was in default, by the writing of April 28, 1915, "notified plaintiff that (Cal., 184 Pac. 659.) it exercised its option under said contract to cancel the same, and notified plaintiff that all his rights under said contract had terminated; that the moneys paid to defendant were forfeited, and that defendant would retake possession of said real property, and defendant did re-enter and take possession of said real property in said contract described; that no notice was ever given to plaintiff of any intention on the part of defendant to insist upon its right to forfeit said contract, and no notice whatever was served upon plaintiff, except the notice of cancelation and claim of forfeiture above referred to." This finding is attacked by appellant as being without justification, and appellant also insists that the further finding that "plaintiff accepted said notice of forfeiture as a rescission on the part of defendant of said contract" is not sustainable. The question to be determined by this court is whether or not the giving of the notice and the conduct thereafter of the parties to the contract amounted to a rescission by their mutual consent. We are of the opinion that it did not. In the first place, there was an express declaration by the vendor that it was not seeking to rescind. This, of course, would amount to nothing if the other parts of the notice were in contradiction of the vendor's declared intention. But we do not so interpret them. 139 Am. St. Rep. 126, 110 Pac. 947; Stevinson v. Joy, 164 Cal. 279, 128 Pac. 751; Butte Creek Consol. Dredging Co. v. Olney, 173 Cal. 697, 161 Pac. 260, and Pearson v. Brown, 27 Cal. App. 125, 148 Pac. 956. The vendee was in default over twenty months at the time the notice was served; that is to say, more than $4,000 in monthly instalments had not been paid when due. If, within a reasonable time after receipt of the notice, the purchaser had tendered payment of the amounts due under the terms of the contract, perhaps the seller would have been bound to accept such tender. But this is not a case in which a vendee, having offered to perform, seeks to compel performance of the contract by the vendor. By its notice the vendor was not seeking to rescind the contract, but to declare the vendee's rights forfeited and itself entitled to the moneys previously paid by Newell because of the latter's supposed breach of the agreement. The mere fact that the vendor may have been in error -error in in supposing and notice-election declaring that, un to rescind. less immediate payment were made of the entire balance of the purchase price, it could consider the rights of the vendee foreclosed, does not convert the notice into a declaration that the vendor elected to rescind. On the contrary, defendant sought to stand upon the contract and to enforce its terms. The corporation had done no act of abandonment of the agreement. On the contrary, it had extended to Mr. Newell the favor of accepting payments long past due. The plaintiff could not take advantage of his own default. Glock v. Howard & W. Colony Co. 123 Cal. 1-19, 43 L.R.A. 199, 69 Am. St. Rep. 17, 55 Pac. 713. Plaintiff was in default when the notice was received by him. True, his prior defaults had been condoned, and he could have reinstated himself by making prompt payments of the balance due under the terms of the contract; but he could not, by merely saying nothing, gain the right to Vendor's acceptance of payment tendered after time specified as waiver of provision making time of essence of contract. I. Waiver of prior default: a. General rule, 996. b. Illustrations, 998. 1. Waiver of prior default. a. General rule. The vendor in a contract for the sale of real estate, by accepting a payment on the purchase price after the time specified in the agreement, waives as to that payment a provision that time is of the essence of the contract, and cannot thereafter declare a forfeiture of the vendee's rights under the contract because of the failure to make it on time. United States.-Coughran v. Bigelow (1896) 164 U. S. 301, 41 L. ed. 442, 17 Sup. Ct. Rep. 117. Alabama.-Stewart v. Cross (1880) 66 Ala. 22; Hurst v. Thompson (1882) 73 Ala. 158; Davis v. Robert (1889) 89 Ala. 402, 18 Am. St. Rep. 126, 8 So. 114; Sewell v. Peavey (1914) 187 Ala. 322, 65 So. 803; Jones v. Hert (1915) 192 Ala. 111, 68 So. 259; Dinsmoor v. Thomas (1917) 198 Ala. 481, 73 So. 820. Arkansas.-Braddock v. England (1908) 87 Ark. 393, 112 S. W. 883; Friar v. Baldridge (1909) 91 Ark. 133, 120 S. W. 989. v. Templeman California.-Boone (1910) 158 Cal. 290, 139 Am. St. Rep. 126, 110 Pac. 947; Hayt v. Bentel (1913) 164 Cal. 680, 130 Pac. 432; Sausalito Bay Land Co. v. Sausalito Improv. Co. (1913) 166 Cal. 302, 136 Pac. 57; Butte Creek Consol. Dredging Co. v. Olney (1916) 173 Cal. 697, 161 Pac. 260; Pearson v. Brown (1915) 27 Cal. App. 125, 148 Pac. 956; Hermosa Beach Land & Water Co. v. Law Credit Florida. Shouse v. Doane (1897) 39 Fla. 95, 21 So. 807. Georgia.-Hudson v. Duke (1857) 21 Ga. 403. Illinois. Stow v. Russell (1864) 36 Ill. 18; Smith v. Smith (1870) 55 Ill. 204; Allen v. Woodruff (1880) 96 Ill. 11; Watson v. White (1894) 152 Ill. 364, 38 N. E. 902; Eaton v. Schneider (1900) 185 Ill. 508, 57 N. E. 421; Hill v. Alber (1913) 261 Ill. 124, 103 N. E. 612; Fitzgerrell v. Turner (1906) 223 Ill. 322, 79 N. E. 76. Iowa.-Zunkel v. Colson (1899) 109 Iowa, 695, 81 N. W. 175. Maine. Manning v. Brown (1833) 10 Me. 49; Linscott v. Buck (1852) 33 Me. 530. Minnesota.-Sylvester v. Holasek (1901) 83 Minn. 362, 86 N. W. 336. Missouri. O'Fallon v. Kennerly (1869) 45 Mo. 124; Randolph v. Ellis (1912) 240 Mo. 216, 144 S. W. 483; Robberson v. Clark (1913) 173 Mo. App. 301, 158 S. W. 854. Nebraska.-Lent v. Burlington & M. R. Co. (1881) 11 Neb. 201, 8 N. W. 431; Paulman v. Cheney (1885) 18 Neb. V. Landis V. Myers 392, 25 N. W. 495; Merriam v. Goodlett (1893) 36 Neb. 384, 54 N. W. 686; White v. Atlas Lumber Co. (1896) 49 Neb. 82, 68 N. W. 359. New Jersey. - Grigg (1870) 21 N. J. Eq. 494. New York. - McCarty (1875) 5 Hun, 83; Murray v. Harbor & S. Bldg. & Sav. Asso. (1904) 91 App. Div. 397, 86 N. Y. Supp. 799, affirmed in (1906) 184 N. Y. 596, 77 N. E. 1191; Pettit v. Brooklyn Development Co. (1912) 152 App. Div. 462, 137 N. Y. Supp. 301; Church v. Bourne (1913) 79 Misc. 629, 141 N. Y. Supp. 333; Re Ashback (1918) 103 Misc. 147, 169 N. Y. Supp. 1058. North Dakota.-Plummer v. Kelly (1897) 7 N. D. 88, 73 N. W. 70. Oregon.-Maffet v. Oregon & C. R. Co. (1905) 46 Or. 443, 80 Pac. 489; Miller v. Beck (1914) 72 Or. 140, 142 Pac. 603. Pennsylvania.-Hatton v. Johnson (1876) 83 Pa. 219; Kuhn v. Skelley (1904) 25 Pa. Super. Ct. 185; Shilanski v. Farrell (1914) 57 Pa. Super. Ct. 137. South Carolina.-Cooper v. Rutland (1914) 99 S. C. 83, 82 S. E. 994. Texas.-McCord v. Hames (1905) 38 Tex. Civ. App. 239, 85 S. W. 504. Utah.-Kohler v. Lundberg (1919) – Utah, —, 180 Pac. 590. Washington.-Whiting v. Doughton (1903) 31 Wash. 327, 71 Pac. 1026; Cash v. Meisenheimer (1909) 53 Wash. 576, 102 Pac. 429; Douglas v. Hanbury (1909) 56 Wash. 63, 134 Am. St. Rep. 1096, 104 Pac. 1110; Shorett v. Knudsen (1913) 74 Wash. 448, 133 Pac. 1029; Reidt v. Smith (1913) 75 Wash. 365, 134 Pac. 1057. England. Hunter v. Daniel (1845) 4 Hare, 432, 67 Eng. Reprint, 717, 14 L. J. Ch. N. S. 194, 9 Jur. 526. Canada.-Barber v. Allen 6 U. C. C. P. 329. (1856) In an early English case, the vice chancellor, in discussing the question, said: "The next point is on the question of time. Nothing can be more express upon the agreement, nor more reasonable under the circumstances, than that time should be of the essence of the contract. But the question is whether that stipulation is not waived I by the parties in this case. agree with the defendants that each breach on the part of the plaintiff, in. the nonpayment of money, was a new breach of the agreement; and that, time being of the essence of the contract, each breach gave the defendants a right to rescind the contract; but that right should have been asserted the moment the breach occurred. The defendants were not at liberty to treat the agreement as still subsisting, and to take the benefit of it at the expense of the plaintiff, if they meant to insist that it was at an end. They were at liberty to rescind it, but were not imperatively bound to do There is no stronger reason for holding that the forfeiture of a lease is waived by the acceptance of rent subsequently accruing, than there is in this case for holding that the acceptance of an instalment of purchase money (which was not due unless the agreement was to be continued) is a waiver of the right to rescind the agreement. The defendants had no right to accept the money, but upon the principle that the agreement was still subsisting." Hunter v. Daniel (Eng.) supra. "The acceptance of payments of instalments on the price by Templeman, without objection, long after they had become due, was a waiver of all breaches which had occurred at or prior to the time such payments were actually made, and he could not afterwards insist upon a forfeiture on account thereof." Boone v. Templeman (1910) 158 Cal. 290, 139 Am. St. Rep. 126, 110 Pac. 947. In Sausalito Bay Land Co. v. Sausalito Improv. Co. (1913) 166 Cal. 302, 136 Pac. 57, an action to quiet title to two parcels of land, the court said: "Where the vendor allows all the payments to become past due, and thereafter accepts partial payments, the forfeiture is waived; the payment of the balance and the execution of a deed thereupon become dependent and concurrent conditions. So far as plaintiff is concerned, in the absence of such tender and refusal, it having accepted part of the price after maturity of the whole, the contract |