Opinion
Rehearing Denied June 6, 1975.
Page 1338
Calvert & Calvert, David R. Calvert, Denver, for plaintiffs-appellees.
John A. Kintzele, James A. Dubee, Denver, for defendants-appellants.
BERMAN, Judge.
Defendants appeal from a judgment granting possession to plaintiffs in a forcible entry and detainer action. We reverse.
In January 1974, plaintiffs instituted this action against defendants to recover possession of certain property which defendants were purchasing under an 'Agreement for Sale and Purchase of Property.' The contract in question was entered into in March 1964 for a total purchase price of $11,700. The contract provided for the payment of monthly installments of $98.50, time was expressly made of the essence, and it was further provided that upon default of any of the installments, the plaintiffs, upon five days written notice, could terminate the contract and all payments made would be retained as liquidated damages.
In their complaint and at the trial, plaintiffs alleged that the defendants were delinquent in their payment of 21 installments. They claimed that these installments were the accumulation of missed payments over a period of time commencing July 1965 and ending in December 1973. In June 1969, and in February 1973, plaintiffs brought forcible entry and detainer actions against the defendants, neither of which proceeded to judgment, the latter case having been dismissed by order of the court because plaintiff's accepted installment payments after commencing the action.
At trial, in this case, one of the plaintiffs, an accountant who personally handled defendants' account, testified that payments had been received from the defendants for the months of February, March, April, and May 1974. All of these payments were received subsequent to the institution of this action. At the close of the evidence, defendants moved for dismissal on the grounds, Inter alia, of waiver, estoppel, and laches. The motion was denied.
Defendants urge reversal on the ground that the trial court committed error as a matter of law in granting judgment in favor of the plaintiffs. We agree.
The right to terminate under a 'time-of-the-essence' clause may be lost by waiver. Fenimore v. Stauder, 34 Colo.App. 309, 527 P.2d 943. Waiver 'may be shown by circumstances, or by a course of acts and conduct which amounts to an estoppel.' William v. Gulick, 170 Colo. 347, 461 P.2d 211; Wishered v. Noonen, 71 Colo. 218, 205 P. 530.
In the instant case, notwithstanding the terms of the contract which made time of the essence and the provisions for termination and forfeiture, a waiver of those rights occurred where the sellers, after electing to terminate the contract, continued to accept payments which became due after notice of termination and institution of suit. Heisel v. Cunningham, 94 Idaho 461, 491 P.2d 178; Babb's Inc. v. Babb, 169 N.W.2d 211 (Iowa); Annot., 107 A.L.R. 345. 'To 'terminate' a contract . . . means to abrogate so much of it as remains unperformed, thereby doing away with the existing agreement upon the terms and with the consequences agreed upon.' Grant v. Aerodraulics Co., 91 Cal.App.2d 68, 204 P.2d 683. The contract in question provided that, upon termination, payments made would be retained in 'full satisfaction and liquidation of all damages.' Plaintiffs, upon electing to terminate, were not entitled to any additional payments from defendants, and, having continued to receive and accept such payments, they waived their right to a forfeiture. Babb's, Inc. v. Babb, Supra.
While the question of waiver is a defense which must be affirmatively pleaded, Duke v. Pickett, 168 Colo. 215, 451 P.2d 288, C.R.C.P. 8(c), the facts constituting waiver in this case did not occur until after the filing of the complaint, and the waiver was established by the plaintiffs' evidence. Salsbury v. Ellison, 7 Colo. 167, 2 p. 906. Hence, the issue was before the court and the motion to dismiss on the basis of waiver should have been granted and the cause should have been dismissed without prejudice to plaintiffs' right to declare a forfeiture as to future defaults.
The judgment is reversed and the cause remanded with directions to dismiss the complaint.
SMITH and RULAND, JJ., concur.