This section is from the book "Popular Law Library Vol7 Equity Jurisprudence, Trusts, Equity Pleading", by Albert H. Putney. Also available from Amazon: Popular Law-Dictionary.
Equity will never enforce forfeitures. On the other hand, where the agreement secured is simply one for the payment of money, equity will set aside forfeitures either of land, chattels, securities or money, or otherwise relieve against them on payment of debt, interest and costs (if any) unless on account of the misconduct of the party seeking such relief, or other circumstances in the case, such relief would be inequitable.
The doctrine upon which such relief is based was stated by the court of Appeals of New York, in the case of Noyes vs. Anderson,11 as follows:
"The power of a court of equity, in cases properly requiring it, will be exercised to relieve a party against forfeitures and from penalties, and this is upon the principle of equity jurisprudence that a party having a legal right shall not be permitted to avail himself of it for the purposes of injustice or oppression. The doctrine was applied to relieve a mortgagor from the forfeiture to which he was subjected, and an obligor from the penalty with which he was chargeable, by the common law on default. It is also not only available to cases of leases where forfeiture of the term and entry are provided for as the consequences of nonpayment of rent on the day it becomes due, but is extended to other cases, and more especially to those (although not necessarily confined to them) where the default resulting in forfeiture is in the payment of money, as in such case adequate compensation can be made. 1 Pom., Eq. Jr., Sees. 433, 450, 451. This relief will not be afforded in cases where the default and forfeiture have been occasioned by the willful neglect of the party seeking it. Nor will it ordinarily be given where the breach is of a condition precedent, although that rule may not be without exception. In the present case the default was in the performance of a condition subsequent, because the right of the plaintiff under the contract vested on its delivery subject to the provision that it should be avoided or rendered insufficient by a subsequent breach of the conditions, or any of them, upon the observance of which the defendant's right given by the contract depended. And the defeat of such right by her default, which the plaintiff by this action seeks to make available for the foreclosure of the mortgage, would result in a forfeiture from which, or the consequences of it, the court, upon the principle before mentioned, may have relieved the defendant, if in other respects she was entitled to the interposition of its equitable powers for that purpose. The stipulation of the plaintiff's agreement essentially differs in its nature and object from a provision in a mortgage to the effect that the principal sum shall become due on a specified default in the payment of interest as provided by it. In the latter case provision is so made for the time when the principal sum may become due and that time is regulated by an event which may or may not occur, so far as it is dependent upon the default of the mortgagor. The consequence so produced is not deemed a forfeiture. The result is maturity of the principal debt at the time, not definitely fixed, when the mortgage is made, but specifically stipulated for in that instrument. And in such case the court, as a rule, will not grant relief to the mortgagor from the effect of his default when nothing is done on the part of the mortgagee to render it unconscionable for him to avail himself of it. Noyes vs. Clark, 7 Paige, 179; Malcom vs. Allen, 49 N. Y., 448; Bennett vs. Stevenson, 53 N. Y., 508. But the case at bar must be considered and determined in the light of the undisputed facts and circumstances under which the agreement was made, and in reference to the purpose represented by it. The money secured by the mortgage was due at that time. The parties made no stipulation modifying the terms of the bond and mortgage, nor in terms extending the term of payment, although the right to pay it would exist while foreclosure was suspended. Payment evidently was not contemplated. Nor was the mere extension of the time of payment of the mortgage debt the object or purpose of the agreement. And the conditions which the defendant was required to perform were independent of such debt, and did not embrace the payment of any part of it. The purpose was to obtain and give protection to the defendant's estate, consisting of her equity of redemption, that she might have the beneficial enjoyment of it during her life, subject only to certain conditions to be by her performed. The primary purpose of the arrangement represented by the agreement was to secure to Mrs. Anderson for such time, so far as it would have that effect, the estate she then had in the premises, which could not be retained by her without the suspension of the foreclosure of the mortgage. The effect, therefore, given to her default by foreclosure of the mortgage would be the forfeiture of her estate in the premises, and no less so under the circumstances than would be that of a tenant of his term, by entry of his landlord for nonpayment of rent pursuant to a provision in the lease. In Giles vs. Austin, 62 N. Y., 486, which was a case of that character, Judge Rapallo, in delivering the opinion of the court, said: The cases in which relief has been denied are either where the lessee has willfully committed some affirmative act in violation of his covenant, or been guilty of some default, the precise damages for which cannot be ascertained by any rule. But, where the covenant is simply for the payment of money, the forfeiture is regarded as security merely for such payment, and equity will not allow it to be enforced after the party has obtained all that it was intended to secure to him, So in the present case the purpose of the condition, subject to which the right of the defendant was taken and to be held under the agreement, was not to permit the increase of the amount of the prior mortgages by the accumulation of interest upon them, or to allow charges for taxes or assessments to remain on the premises. This was the extent of the requirement, and it may necessarily be supposed that the consequences which the contract permitted to result to her from default were intended to secure the accomplishment of such purpose. The case, so far as relates to the nature of the agreement and its object, comes within those to which the equitable doctrine before mentioned may properly be applicable. De Forest vs. Bates, 1 Edw. Ch., 393; Atkins vs. Chilson, 11 Metc. (Mass.), 112; Hagar vs. Buck, 44 Vt., 285."
8 Pomeroy on Equity Jurisprudence, Sec. 342; Keeble vs. Keeble, 85 Ala., 552.
9 Hardy vs. Martin, 1 Cox., 26.
10 Amanda Consol. G. M. Co. vs.
People's M. & M. Co., 28 Colo., 251; 64 Pac, 218.
11 124 N. Y., 175; 26 N. E. 316;
21 Am. St. Rep., 657.