## Facts

- William Lewis entered a 1976 installment land sales contract with Premium Investment Corporation to purchase a lot in North Myrtle Beach, South Carolina.
- The contract provided that if a payment default continued for 30 days, the seller could terminate the contract and retain all payments as rent.
- Lewis placed a mobile home on the lot, moved in with his family, and remained in possession for decades.
- Lewis paid through July 1988, making 141 of about 182 monthly payments and reducing the principal balance to about $2,440.14.
- Lewis stopped paying after July 1988.
- In 1989, Premium sent a certified cancellation notice requiring Lewis to remove property by a stated date; the letter was returned “unclaimed,” though sent to the correct address.
- In 1992, Lewis (or his wife) asked Premium about assuming payments; Premium did not provide a final response.
- In 1996, Lewis’s attorney tendered a check roughly equal to the principal balance at default (without accrued interest); Premium refused it.
- Premium later asserted the amount due, with interest, had increased substantially.
- Premium did not eject Lewis or file an ejectment action; Lewis stayed in possession.
- Lewis sued for breach of contract and specific performance; Premium counterclaimed to terminate the contract or, alternatively, obtain a money judgment and foreclose any equitable interest.

## Issues

1. Whether Premium effectively terminated the installment contract under its forfeiture clause after Lewis’s payment default.
2. Whether Lewis’s long-term possession and substantial payments created an equitable interest and right of redemption limiting enforcement of the forfeiture clause.
3. Whether Premium was required to use foreclosure-type procedures to extinguish Lewis’s equitable interest rather than relying on contractual forfeiture alone.

## Decision

- The Supreme Court of South Carolina affirmed the court of appeals as modified.
- The court held that Lewis acquired a significant equitable interest in the property and a corresponding right of redemption.
- The court declined to enforce the forfeiture clause as a means for Premium to retain both the land and Lewis’s substantial prior payments after substantial performance.
- The court modified the remedy to clarify that Lewis’s protection is an equitable opportunity to redeem on terms fixed by the court (including amounts properly due), and that Premium could terminate Lewis’s interest only through foreclosure-type process if redemption did not occur.

## Legal Principles

- A long-term installment land contract under which the purchaser has made substantial payments and taken possession may create an equitable ownership interest akin to a mortgagor’s equity of redemption.
- Equity may relieve against contractual forfeiture when forfeiture would be harsh or oppressive and the seller would obtain a windfall by keeping both the property and substantial payments.
- When an installment land contract functions as a security device, the seller generally must proceed by foreclosure or an equivalent equitable proceeding to cut off the purchaser’s equitable interest.
- The purchaser’s equitable protection is not an unconditional right to reinstate on self-selected terms; redemption must satisfy court-determined obligations, including appropriate interest and costs.

## Conclusion

The court treated the installment land contract as a functional security arrangement once the buyer substantially performed and remained in possession, holding that the seller could not use a forfeiture clause to eliminate the buyer’s equitable interest and keep prior payments without providing foreclosure-type redemption protections.


Lewis v. Premium Inv. Corp., 351 S.C. 167, 568 S.E.2d 361 (S.C. 2002)