89 Cal. App. 2d 140 | Cal. Ct. App. | 1948
This is an appeal by plaintiff and cross-defendant, Roseoe Fowler, from a judgment ordering him to vacate a residential property which he had conveyed to defendant and cross-complainant, William A. Case, pursuant to the terms of a written agreement, and also denying Fowler damages claimed by reason of an alleged breach of the agreement by Case.
Fowler Engineering Works, hereinafter referred to as the company, was owned by James T. Fowler; Roseoe Fowler was an employee of the business; Case owned another manufacturing business. On June 7, 1944, the three men entered into a contract which provided for the formation of a partnership between Roseoe Fowler and Case to take over the business of the company. The provisions of the agreement material here were the following: It recited that James T. Fowler was the owner of the business and Roseoe Fowler the owner of the property involved herein; that the contracting parties were desirous of entering into a partnership between Case and Roseoe Fowler to take over the business of the company; that Roseoe Fowler desired the immediate use of $5,000, and agreed to sell his house and lot for that sum; that Case was willing to enter into the partnership and agreed to purchase the house free and clear of encumbrances for $5,000; that in consideration of the payment of said sum, James T. Fowler agreed to transfer the business to the partnership that was to be formed, to employ E. R. Shaw, or any other person designated by Case, as general manager, for a period of not more than two years or until Roseoe Fowler
Plaintiff brought this action to compel Case to reconvey the property and for damages alleged to have been sustained by reason of the failure of Case to properly supervise, manage and finance the business. It was not alleged in the complaint whether the partnership agreement had been entered into. It was alleged in the answer of Case that it had not been entered into. Both the findings and the briefs of the parties are silent upon this point. Plaintiff does not claim that the partnership agreement was executed, and we must assume that it was not executed. When the two-year period had expired and Case demanded possession of the property, plaintiff did not offer to repurchase it, nor did he seek to establish a right to repurchase when he filed his complaint or during the trial. After an extended trial the court rendered its decision against plaintiff upon his complaint and in favor of Case upon his cross-complaint, announcing orally that plaintiff had failed to prove breach of contract by Case, or that he had sustained damage; that plaintiff had had the right to
While it was claimed that Case had failed in the performance of his obligations under the contract, plaintiff did not attempt to rescind the agreement and therefore must base his rights upon the agreement. He relied upon his claim for damages. The evidence at the trial was directed almost entirely to that issue. The court found that Case had fully performed under the agreement and that plaintiff had not been damaged. It was also found that the company was at all times insolvent. These findings have ample support in the evidence.
In his attempt to show that Case failed to render performance under the agreement, plaintiff refers only to fragments of the testimony, omitting altogether reference to the evidence which tends to support the findings. We have nevertheless examined the transcript of the evidence and find testimony of Case to the following effect: The company had but a brief life after the date of the agreement; within 60 days suit was brought against the company for the recovery of taxes due the county and the property of the company was attached; within three months, James T. Fowler filed a voluntary petition in bankruptcy and the company was adjudged bankrupt. In the meantime Mr. Shaw had been employed, as agreed, and worked diligently in behalf of the company; Case devoted himself actively to the business. He testified that during the months of February and March he was at the place of business of the company each day, except for four or five days when he was ill, and that he did everything possible in the interest of the business. It would prolong this opinion needlessly . to recapitulate his testimony. He explained in detail that the equipment of the business was in poor condition; that some of it was owned by another company "with which the Fowler company had a losing contract, but which it was compelled to comply with in order not to lose use of the equipment; that many of the men who were doing welding were not certified welders, as called for
When the court had found that Case had fully performed under the agreement, the pleadings and the evidence furnished no basis for a judgment different from the one that was rendered. The present action was filed February 15, 1946, a little over a month after Case had demanded possession of the premises. Fowler had refused to surrender possession or to pay Case $5,000, the repurchase price of the property. The judgment was not entered until September 22, 1947, and, as we have said, Fowler made no offer to repurchase the property until he discovered that he had lost his suit for damages. The present action was to compel Case to reconvey the property without the payment by Fowler of any sum whatever, a right which, as we read the agreement, he would have had only in the event that Case had entered into the partnership agreement with him.
Plaintiff argues that the deed was given only as security for a debt, but the court found upon sufficient evidence that Fowler was under no obligation to repay the sum he had received, and that the transaction was an outright sale to Case with an option to Fowler to repurchase the property. This finding is borne out by the explicit terms of the agreement and no claim was made in the pleadings or at the trial that the agreement did not express the true intentions of the parties.
Toward the close of the trial, and after the court had announced its conclusions, attorneys for Case indicated his willingness to reconvey the property upon the payment of $5,000, but even then there was no offer on the part of Fowler to pay the sum. His alleged offer to repurchase the property, made after the decision had gone against him, came too late. Time is generally deemed to be of the essence of options to purchase property, even though not so expressed. (Huckaby v. Northam, 68 Cal.App. 83 [228 P. 717]; Wightman v. Hall, 62 Cal.App. 632 [217 P. 580]; Rice Lands & Products Co, v. Blevins, 61 Cal.App. 536 [215 P. 402]; White v. Bank of Hanford, 148 Cal. 552 [83 P. 698]; Briles v. Paulson, 170 Cal. 196 [149 P. 169]; Moar v. Pioneer-Lucky Strike G. Min. Co., 48 Cal.App.2d 528 [120 P.2d 48]; Canty v. Brown, 11 Cal.App. 487 [105 P. 428].)
Long before he made his offer plaintiff had elected to sue for damages for breach of the agreement instead of exercising his right to repurchase the property. He had instituted this litigation, put Case to the trouble and expense of defending it, and only sought to change his position after he learned that the decision had gone against him. By repudiating his obligations under the contract he lost his right to demand performance on the part of Case.
The judgment is affirmed.
Wood, J., and Vallée, J., concurred.
A petition for a rehearing was denied December 31, 1948.