Plaintiff brought this action to recover a down payment of $5,000 made under a written contract in which he agreed to buy defendants’ cocktail lounge and business for $93,000. The contract provided for the payment of $40,000 in cash with the balance payable at $1,000 per month and secured by a deed of trust. In addition to the down payment, $15,000 was to be deposited on the opening of escrow within 45 days. The contract provided that if the vendee failed to deposit the additional cash payments in escrow, the vendors would retain the $5,000 as liquidated damages. The trial court found on substantial evidence that defendants performed all that was required of them under the contract and that plaintiff refused to open an escrow and abandoned the contract. Judgment was entered for defendants and plaintiff has appealed.
Plaintiff contends that the damages to which defendants are entitled for his failure to perform the contract should be, not the amount paid down in part performance, but an amount determined under Civil Code, section 3307.
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It has frequently been stated that the vendor may retain payments as an alternative remedy to an action for damages for
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breach of a contract to purchase real property
(Glock
v.
Howard & Wilson Colony Co.,
Notwithstanding the evidence in this case that plaintiff’s breach was wilful, he contends that since this fact would be immaterial if defendants were suing him for damages, it should also be immaterial in determining whether he is entitled to the return of any part of his down payment. The rule to which he objects is stated in the Restatement of Contracts: “One who is sued for damages is required to pay no more than just compensation, making due allowance for benefits received by the injured party, even though his breach is wilful and deliberate; but one who sues for restitution of value that he
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has given in part performance can recover none of it if his breach is wilful and deliberate. ...” (Best., Contracts, § 357, comment e.) It also finds expression in sections 3275 and 3369 of the Civil Code. Section 3275 makes it a condition of relief from forfeiture that the breach be neither grossly negligent, wilful, nor fraudulent. Section 3369 provides that “Neither specific nor preventive relief can be granted to enforce a penalty or forfeiture
in any case.
...” (Italics added.) Under these sections a defaulting vendee seeking restitution of part of his payments will be denied relief if his breach is wilful. On the other hand, if he is able to prove that the vendor has received more than the benefit of his bargain, the court is precluded by section 3369 from quieting the vendor’s title unless he refunds the excess.
(Barkis
v.
Scott,
It is contended, however, that the nature of the breach is material only when the vendee is seeking under section 3275 to keep the contract in force; that when the vendee is seeking to recover the excess of his part payments over the damage he has caused the vendor, the provisions of the Civil Code governing the measure of damages for breach of contract provide an alternative basis for relief independently of section 3275. Whatever the merits of this contention, plaintiff has failed to prove that the down payment exceeds defendants’ damages. He introduced no evidence to prove that when he repudiated the contract, the property was worth more than $88,000 to defendants, namely, the $93,000 purchase price less the $5,000 down payment. Plaintiff contends, however, that defendants’ own evidence proves that they lost no more than $1,500 as a result of his breach. Seven months after plaintiff repudiated the contract, defendants sold the business less the real property for $48,000, and the purchaser received an option to buy the real property for $50,000. Meanwhile defendants had invested an additional $6,500 in the business. Plaintiff contends that this transaction is equivalent to a resale at $91,500 when an adjustment is made for the additional investment and that defendants should therefore refund $3,500. Even if the price of the real property provided in the option were a fair measure of its value to defendants at the time of the resale, there is no evidence concerning the value of the property at the time plaintiff repudiated the contract. One of the defendants testified that values were falling when the contract was made. After plaintiff’s breach any benefit from a rising market would *40 rightfully accrue to defendants as owners of the property, not to plaintiff. If its value had dropped to $88,000 at the time plaintiff repudiated the contract, and defendants resold it at that price, there would clearly be no unjust enrichment. Nor would there he any if they retained the property and the value rose.
Plaintiff cannot recover any of his down payment since he has failed to prove that defendants’ damages were less than the amount he had paid.
The judgment is affirmed.
Gibson, C. J., Shenb, J., Edmonds, J., Carter, J., Schauer, J., and Spence, J., concurred.
Notes
The detriment caused by the breach of an agreement to purchase an estate in real property, is deemed to be the excess, if any, of the amount which would have been due to the seller, under the contract, over the value of the property to him.”
“Whenever, by the terms of an obligation, a party thereto incurs a forfeiture, or a loss in the nature of a forfeiture, by reason of his failure to comply with its provisions, he may be relieved therefrom, upon malting full compensation to the other party, except in case of a grossly negligent, willful, or fraudulent breach of duty. ”