262 P. 419 | Cal. Ct. App. | 1927
Action by plaintiff to rescind a contract for the purchase of four lots situate in the city of Long Beach, on the grounds of fraud, and a second cause of action, with common counts, for the recovery of $15,000 paid as first installment on the purchase price thereof. The defendant had judgment for costs, and the plaintiff appeals.
The record shows that prior to the first day of April, 1923, the plaintiff and the defendant had some negotiations relative to the purchase by the plaintiff from the defendant of lots 14 and 16, in block 93, situate in Long Beach town site, in the city of Long Beach. That during such negotiations the plaintiff informed the defendant that lots 14 and 16 were not of sufficient size to meet the purposes for which the plaintiff desired to purchase said lots, and that the plaintiff would desire lots 10 and 12 in said block. The record shows that at that time lots 10 and 12 belonged to one Alexander. That thereafter, on or about the first day of April, 1923, the defendant entered into a contract with said Alexander for the purchase of lots 10 and 12, upon the following terms, to wit: $5,000 cash; $11,750 on or before 90 days from the sixth day of April, 1923; and further, the assumption of a mortgage on said premises in the sum of $8,250, making the purchase price of said lots 10 and 12 in the aggregate sum of $25,000. After the securing of this contract the plaintiff and the defendant entered into a written contract for the purchase of said lots in the words and figures following, to wit:
"Long Beach, California, April 14, 1923.
"Milton Realty Company, Incorporated, "114 Locust Avenue, "Long Beach, California.
"Gentlemen, I, the undersigned, owner of Lots 10, 12, 14, and 16, Block 93, Long Beach Townsite, Long Beach, *774 California, offer for sale to your Company, and will deliver to your Company Fee Title to the above mentioned property upon the following terms, namely: First. I am to receive from your Company the sum of Seventy Five Thousand ($75,000.00) Dollars, in cash, on the following terms: On July 1, 1923, $15,000.00 On September 1, 1923, 60,000.00. Second. I am to receive from the Holding Company, which you will organize to handle the project of building upon the above Lots, 750 shares of the Capital Stock of said Holding Company at One Hundred Dollars par value, to be placed in escrow and to remain intact, until all apartments in the Apartment Building to be erected upon the above described property have been sold. Third. That the above mentioned 750 shares of the Capital Stock are to represent the value of Apartments in the Building to be erected upon said property, which said Apartments are to be selected at random by the undersigned. Fourth. That for and in consideration of services rendered by [(M.R. Co. Inc. (2)] me by architects, Messrs. Davies and Baume, of Long Beach, California, I will retain their services as architects in the construction of the building to be erected upon the foregoing described property. I have, furthermore, agreed to pay said architects Five (5) per cent of the gross cost of the construction of said building for their services. If the foregoing terms are agreeable to your Company, I shall appreciate an acknowledgment of this communication.
"Respectfully yours,
"JAMES I. BUTTERFIELD, "114 Locust Avenue, Long Beach, California
"April 14, 1923.
"Mr. James I. Butterfield, "Long Beach, California.
"Dear Sir. We, the undersigned, President and Secretary respectively, of the Milton Realty Company, Incorporated, on behalf of said Company agree to the terms herein enumerated, and the Company also agrees to assume all indebtedness now outstanding on the property in question.
"Respectfully yours,
"MILTON REALTY COMPANY, INCORPORATED. "By JACK MILTON, President. "By H. GOODING FIELD, Secretary. (Seal)" *775
The $15,000 specified in said contract to be paid on July 1, 1923, was paid by the plaintiff to the defendant in installments. The last installment, making the full payment of $15,000, was paid by the plaintiff to the defendant on August 4, 1923.
The period mentioned in the option or contract given by Alexander to the defendant to purchase lots 10 and 12 in block 93 was, by said Alexander, extended to August 27, 1923. On August 27, 1923, the defendant, not having paid to Alexander the $11,750 provided to be paid on account of the purchase price of said lots, Alexander canceled the optional contract theretofore given to the said defendant to purchase said lots, and drew down the forfeit money deposited by the defendant at the time of the execution of such contract, and no contract was thereafter given by Alexander to the defendant to purchase said lots 10 and 12. On the seventh day of September, 1923, the plaintiff gave notice to the defendant of rescission of the contract hereinbefore set forth, entered into between the plaintiff and the defendant for the purchase of said four lots, and demanded return of the $15,000 paid as aforesaid as the first installment of the purchase price for said lots. The notice of rescission and demand for the return of said money was based upon the alleged ground that the defendant did not have any title to said property at the time of the execution of said contract, and was not, at the time thereof, nor at the time of the notice, able to convey any title thereto.
The trial court found that there was no fraud in the inception of the contract, and that the plaintiff was aware of the title to lots 10 and 12, in block 93, held by the defendant, and of the contract obtained by him for the purchase of said premises, the trial court also, by general language, finding that the allegations of the defendant's answer were true, found that the defendant was able to convey title to lots 10 and 12, in block 93, on the first day of September, 1923, and upon the date of the demand for the return of the $15,000, made by the plaintiff, and that defendant was, upon the said first day of September, 1923, and at all times thereafter up to the institution of suit, able to convey title to said premises. The finding of the *776 court in these particulars is not specific, but is in general language finding allegations of the answer to be true.
Upon this appeal the appellant assigns 80 specifications of error as to the findings of the trial court, and also sets forth four alleged errors of the trial court in relation to the conclusions of law drawn from the findings. [1] Only one error as to the findings and conclusions drawn therefrom needs to be considered, and that is the general finding in relation to the capacity of the defendant to convey title to lots 10 and 12. If that finding is unsupported by the evidence, the plaintiff is entitled to judgment for the return of the sum of $15,000, together with interest thereon at the rate of seven per cent per annum from the seventh day of September, 1923.
The contract entered into between the plaintiff and the defendant, dated April 4, 1923, does not make time the essence thereof. But if time were of the essence thereof, the acceptance by the defendant of the $15,000 paid in installments, as heretofore stated, between the first day of July, 1923, and August 4, 1923, would constitute a waiver thereof. So that, in any event, the contract was in full force and effect on the first day of September, 1923. However, time not being of the essence of the contract, the performance, within a reasonable time, would constitute compliance therewith. Was the defendant, on September 1, 1923, able to convey title to lots 10 and 12 in block 93? There is no controversy in the testimony that the contract between Alexander and the defendant expired on the twenty-seventh day of August, 1923, and that after that date the defendant had no written agreement enabling him to purchase said premises, or to compel a conveyance of title thereto from Alexander to himself. The testimony of the defendant himself shows that he had no such power. Before quoting the testimony of the defendant, however, we may state that the record shows that the plaintiff had paid to the defendant a sum of money greater in amount than would have been required to be paid by the defendant to Alexander to keep alive his agreement with Alexander for the purchase of said lots 10 and 12. We may also state that there is some testimony in the record to the effect that the defendant had agree with the plaintiff to use the $15,000 paid by the plaintiff *777 to the defendant, in making payment of the sum of money agreed to be paid by the defendant to Alexander. But this does not affect the legal status of the matter, but is only set forth in order to shed light upon the testimony of the defendant, which is as follows: "I never made any statement or promise to the Milton Realty Company as to what I would do with the whole or any portion of the $15,000.00. No representative of the Milton Realty Company ever questioned me as to what I should do or had done with the $15,000. It is true that the testimony of Mrs. Alexander shows that on or about the 27th day of August, 1923, she closed the escrow and I forfeited $5000. that I had in that escrow. I did have a conversation with Mrs. Alexander on or about that time in regards to closing this escrow. There was no representative of the plaintiff present when this conversation with Mrs. Alexander, relative to the closing of the escrow took place. On the 7th day of September, 1923, the day upon which I was served with the notice of rescission in this matter by the Milton Realty Company, I was ready, able and willing to deliver the titles to Lots 10, 12, 14 and 16 upon payment of the contract. I knew I could deliver the title to Lots 10 and 12 upon the statement of Mrs. Alexander." The testimony of Mrs. Alexander upon this question is as follows: "It is a fact that at all times we looked to Butterfield for the money, and no one else. In conversation with Butterfield there was another person with him whom I knew was an officer of the Milton Realty Company; he introduced himself and told us who he was, and he also had the plans of the proposed building with him, and went into detail, telling us what a fine building was going to go up on the property and that it was going to be erected by the Milton Realty Company. The person who was with Butterfield told us who he was; so that was how we knew he was an officer of the Milton Realty Company. It is a fact that some time after the forfeiture of the money by Butterfield and the cancelation of the escrow agreement, Butterfield came to me and asked me to sign certain papers, which I refused to do. I did not see any papers; he merely said he would like me to give him another extension; that was what he wanted us to sign after the forfeiture. I did *778 not see any papers. I stated that the matter was closed and that we had decided to hold the property." From this testimony it is evident that the statement of the defendant Butterfield that he could convey title to the premises was based simply upon his hope that he might be able to induce the Alexanders to give him an extension of time or another agreement for the purchase of the lots in question. The testimony of Mr. Alexander is of the same effect, that the agreement with Butterfield was canceled on the twenty-seventh day of August, 1923, and that he had no further conversations about the lot. From this recital it appears without controversy that the general finding that the defendant on the first day of September, 1923, or at any time after the twenty-seventh day of August, 1923, was able to convey title to lots 10 and 12, in block 93, is wholly unsupported.
[2] The law appears to be well settled that where a vendor, whether with or without fault, is unable to convey title at the time the contract matures, the purchaser may rescind the contract and recover the purchase money paid by him as a part of the purchase price. In the case of Burks v. Davies,
It is further ordered that the judgment of the trial court be reversed, and the trial court directed to enter judgment for the plaintiff in the said sum of $15,000 and interest thereon at the rate of seven per cent per annum from the seventh day of September, 1923.
Hart, J., and Finch, P.J., concurred. *783