action is brought by the plaintiffs to compel a specific performance of the contract by the defendants other than Cerf, and to set aside the deed to the latter as fraudulent and void and a cloud upon the plaintiffs' title. The Court below entered a decree for a specific performance, and annulling the deed to Cerf, as prayed for in the complaint. The defendants having moved for a new trial, which was denied, have appealed to this Court.

The principal question in the case is, whether or not the stipulated time for the payment of the mortgage debt by the plaintiffs was of the essence of the contract, and whether they have lost their right to compel a specific performance by their failure to discharge the mortgage on or before the precise day on which it became due, or by their neglect to erect upon the premises the necessary amount of improvements, or in default thereof to reduce the amount of the principal of the mortgage debt within the stipulated time, to the extent of the difference between the value of the improvements which were erected and the sum of $10,000. In construing contracts it is often one of the most perplexing questions with which Courts of equity have to deal, whether the time within which an act is to be performed is of the essence of the agreement. In the very nature of the case it is impossible to prescribe any general and uniform rule on the subject, and each case must necessarily be decided upon its own circumstances. In all such cases the inquiry is as to the intention of the parties to the contract at the time it was executed. If, upon the face of the contract and from the surrounding circumstances, it clearly appears to have been the distinct understanding and agreement of the parties that if the stipulated act was not performed, within the specified time, certain consequences were to follow, and if default be made in the performance within the time, a Court of equity will give no relief unless a strict performance was either waived by the party or is excused on some special ground .of equitable cognizance.

I discover nothing in the record to justify the conclusion that the defendants waived any rights which the contract

gave them in respect to a strict performance by the plaintiffs of the stipulations as to the time for the payment of the mortgage debt. On the contrary, they appear to have been eager to avail themselves promptly of any apparent default of the plaintiffs in this respect. Nothing in their previous conduct had deluded the plaintiffs into the belief that they did not intend to stand upon their strict rights in respect to this payment; and certainly nothing occurred afterward which could possibly be construed into a waiver. If it should be held that the time stipulated for the payment by the plaintiffs of the mortgage debt was of the essence of the contract, they have shown no excuse for their default, which of itself would be deemed in a Court of equity as an independent ground of relief. The excuses alleged are, first, that the note and mortgage, by some accidental delay in the mails, were not received in San Francisco until several days after the debt became due; second, that though Hatch & Co. offered them the necessary sum to pay the debt, it suited their convenience better to raise the money by another method, and they delayed the payment a few days for this purpose; third, that Harloe, the holder of the mortgage, consented to this delay. On the first point it is sufficient to say that the note and mortgage, on their face, were payable in Santa Barbara county, and the plaintiffs had the right to pay them there; and if they saw fit to stipulate with Harloe for payment at a different place, they did so at their own risk, and the defendants could not be prejudiced thereby. The defendants were not responsible for the delay which resulted from changing the place of payment. As to the second point, the plaintiffs had no right, if time was of the essence of the contract, to defer the payment to suit their convenience; and if Harloe assented to the delay, however obligatory it may have been as between Harloe and the plaintiffs, the defendants were not bound by a stipulation to which they were not parties, and to which they did not assent. The whole question, therefore, resolves itself into. the proposition, whether or not, on the face of the contract,

and in view of all the circumstances under which it was executed, time was of the essence of the agreement.

The general rule of equity is that time is not of the essence of the contract, (Brown v. Covillaud, 6 Cal. 571; Brashier v. Gratz, 6 Wheat. 528; Ahl v. Johnson, 20 How. U. S. 511; Hunter v. Town of Marlboro, 2 Wood E. M. 168; 3 Leading cases in Equity, 76; Wells v. Wells, Fred. Ch. 596; Runnells v. Jackson, 1 How. Miss. 358; Attorney General v. Purmort, 5 Paige, 620; Hepburn v. Auld, 5 Cranch, 262; Miller v. Steen, 30 Cal. 407; Green v. Covillaud, 10 Cal. 317).

Even though the contract contain a provision for forfeiture in case of a failure to perform strictly in point of time, nevertheless, a Court of equity will examine the whole contract in the light of the surrounding circumstances, to ascertain whether it was the real intention of the parties that the party in default should lose the right secured to him by the contract. A stipulation to the effect that in case of a default a party shall lose his rights under the contract, is often inserted by way of penalty, merely with a view to induce a more prompt performance, and not with the intention that a failure strictly to perform, in point of time, shall work an absolute forfeiture. When such appears to have been the intention of the parties, if the party in default afterward tenders a performance promptly and with reasonable diligence, and if the other party has suffered no damage by the delay, and particularly if the property has not materially enhanced in value during the time of the delay, a Court of Equity will not enforce the forfeiture, but will decree a specific performance, notwithstanding the default, provided it appears that the party in default has acted in good faith and gives some reasonable excuse for the delay. In this case, I think the provision in the contract, to the effect that if the plaintiffs should fail to comply with its conditions, the land and improvements should revert to the defendants, was inserted by way of pen. alty, merely to induce a prompt performance by the plain tiffs, and was not intended, ex proprio vigore, to work a forfeiture in case of a failure to perform strictly in point of time.

The plaintiffs were paying the then fair market value of the land, and the principal object of the defendants in making the sale was to provide for the payment of the heavy debt secured by the mortgage to Sparks. None of the parties, apparently, contemplated that the land was to raise rapidly in value before the maturity of the mortgage, and inasmuch as the property of the defendant, F. Z. Branch, was to remain bound for the mortgage debt, and he was to continue personally liable therefor, it was important to him that the plaintiffs should relieve him and his property from this liability and save him from further annoyance on account of the mortgage debt after its maturity, and the provisions for a forfeiture was evidently inserted to secure this result. That result has been obtained without damage to the defendants, notwithstanding the short delay in the payment; and the clause for a forfeiture has thus accomplished the end for which it was inserted, to wit: to secure a discharge of the mortgage without damage or annoyance to the mortgagor. The excuses offered by the plaintiffs for the short delay which occurred in the payment, though not of themselves sufficient as an independent ground of equitable relief, nevertheless, furnish strong evidence of the bona fide of the plaintiffs, and show that they intended in good faith substantially to perform the contract. The clause in the contract requiring the plaintiffs to erect upon the premises improvements of the value of $10,000 before December 26, 1867, or in default thereof to reduce the principal of the mortgage debt before that date to the extent of the difference between the said sum of $10,000 and the value of the improvements erected, was obviously inserted for the purpose of protecting the defendants against any possible depreciation in the value of the land, whereby the defendants might suffer damage in case the plaintiffs failed to discharge the mortgage but, inasmuch as the land greatly increased in value and the mortgage was discharged by the plaintiffs, no damage to the defendants ensued from the breach of this condition. The purpose for which it was inserted has been faithfully accomplished. In

addition to this, I think the defendants, by their subsequent conduct, acquiesced in the breach of this condition and waived the forfeiture, if any had thereby occurred. They permitted the plaintiffs to remain in possession from the 26th day of December, 1867, until after the maturity of the mortgage in December, 1868, and took no steps toward a recision of the contract, and it was not until after default was made in the payment of the mortgage at maturity that the defendants appear to have entertained the belief that any forfeiture had occurred, and then only by reason of the default in that payment. They must be held, therefore, to have waived whatever advantages, if any, they might have claimed from the breach of the condition in respect to the improvements. The views which I have expressed in respect to the clause of forfeiture as affording no sufficient defence against a bill for specific performance under the circumstances disclosed in this record, are fully sustained by the following authorities, and many others which might be cited, to wit: Secombe v. Steele, 20 How. 104; Ahl v. Johnson, 20 How. 520; Farley v. Vaughn, 11 Cal. 236; Barnard v. Lee, 97 Mass. 92; Edgerton v. Peckham, 11 Paige, 352; Brown v. Covillaud, 6 Cal. 571; 2 Lead. cases in Eq. 667, 696; 3 Lead. cases in Eq. 74-5, 83-4-5; Adams Eq. 187 (79) (184) and note, 252 (88) and note; Brashier v. Gratz, 6 Wheaton, 533; Taylor v. Longworth, 14 Peters, 172; Wells v. Smith, 7 Paige, 22; Miller v. Bear et al. 3 Paige, 466; Kercheval v. Swope et al. 6 Monroe, 362; 1 Sugden on Vendors, 310, 311 et seq.; 2 Parsons on Cont. 542, 544 and note; Nelson v. Reynolds, 6 Madd. 20; Smedberg v. More, 26 Wend. 238; Vorhees v. De Meyer, 2 Barb. 37; Story's Eq. 88 775-6; Willard's Eq. 292; Waters v. Travers, 9 John. 465. I am therefore of opinion that the judgment ought to be affirmed, and it is so ordered.

SPRAGUE, J., expressed no opinion.