List v. Moore

The action is to recover from the vendor moneys paid by the vendee under contracts of sale of real estate, in which the vendee only was in default, not being willing or able to make the other payments within the time limited or at all. There were two contracts. The first is dated June 30, 1902, executed by the defendant, Florence B. Moore, and others, and conditioned for the sale of the property to one J. W. McCauley. This contract provided for a purchase price of one hundred and twenty-five thousand dollars, of which five thousand dollars should be paid when the instrument was executed; fifty-five thousand on or before October 28, 1902; the remaining sixty-five thousand on or before the first day of March, 1903; all deferred payments to bear interest at the rate of five per cent per annum. It was further provided that “Time is of the essence of this contract, and in the event of a failure to comply with the terms hereof by the party of the second part, the party of the first part shall be released from all obligation in law or equity to convey said property, and the party of the second part shall forfeit all right thereto." The initial payment of five thousand dollars was made, but not the second payment of fifty-five thousand dollars. As to the latter, however, an extension of time was granted to March 30, 1903, with a proviso that the original document held by McCauley should be

The court found that the contract with McCauley became canceled and terminated for the reason that he “was at all times unable or unwilling to carry out or perform the same on his part, although the defendants were at all times ready and willing to perform the same on their part; that the said

The asserted rescission was attempted to be shown by Mr. Cole. In the transcript we have the following record of his testimony and the proceedings in connection therewith: “My recollection is that about the first of January, 1904, my contract with Mr. Moore was annulled or rescinded by Mr. Moore in a letter to me. It was rescinded. Mr. Goodfellow: “Q. You don’t mean to say that he said it was rescinded, do you? A. Well, I don’t know what the language was, but that was the purpose of the letter. Mr. Slack: The letter which was introduced in evidence, Mr. Goodfellow, was this: It was received about the 4th of January, 1904, and informed Mr. Cole that his contract was rescinded, and had been— Mr. Good-fellow: Do you mean to say that the word ‘rescinded’ was used ? Mr. Slack: No; but that the contract was at an end— I think that was it—and had been for some weeks or some time. The Witness: I remember that the purport of the letter was that, that the contract was ended. That is the idea that I had, that it was terminated. Mr. Slack: We will accept Mr. Moore’s recollection of that as a fact, that a letter written to Mr. Cole about this time, January 3d, 1904, stated that his contract was at an end, and had been for some time. Mr. Moore: For the reason that he had been unable to make the remaining payments. Mr. Slack: And we will ask also that that be considered as being a statement of the letter. The Witness: That is correct.” In explanation of the reference to the contents of the letter, it may’.be stated that this case was partly tried before April 18, 1906, and the letter and the record of what it contained were destroyed in the great

From the foregoing it is clear that the asserted rescission consisted in the notification of the vendee by the vendor that his contract was at an end, and, this, after the vendee was in default according to the terms of his contract and had forfeited any right or claim to proceed to the purchase of the property and had expressly agreed that “The expiration of the time herein limited, with the fact that no deed is of record from the said Florence B. Moore to the said Nathan Cole, Jr., shall conclusively establish default and no suit, at law or in equity, shall be necessary to be maintained to avoid or extinguish this contract, or declare any forfeiture. ’ ’ It would be rather singular that if under the circumstances the mere notice given to the contemplated purchaser by the owner of the land of a fact that was expressly provided in the agreement and of which each had knowledge would operate to change the legal effect of said fact to the detriment of the said owner. The contract was at an end either with or without any formal notice. The purpose of the letter was undoubtedly to inform Mr. Cole that no further extension of time would be granted, but, to say that it established rescission grows out of a misconception, it is submitted, of the significance of that term and can find support only in the inept application of certain decisions of the courts. Rescission implies, of course, the restoration of the parties to the same situation and the same terms as existed when the contract was made. It requires the surrender of any consideration or advantage secured by either party. But the only fair inter

It must be admitted that some obscurity is found in certain decisions as to the correlative rights of the parties to contracts analogous to the one before us and appellants position is not without apparent support in some of the cases. Two of these, upon which he relies, we proceed to notice.

In Drew v. Pedlar, 87 Cal. 443 , [ 22 Am. St. Rep. 257 , 25 Pac. 749 ], it is held that “where a contract for the sale of land provided for a forfeiture of all right to a conveyance, and that the purchase money paid should be as liquidated damages, in case of non-fulfillment of the terms of future payments by the purchaser, and it appears that full payment of the residue of the purchase money was tendered and a deed demanded ten months after maturity, and that the vendors refused to accept the tender, or to return the purchase money paid, and elected to rescind the agreement, the purchaser may maintain an action to recover from the vendors the installment of purchase money paid.” Of course, if the vendors elected “to rescind the agreement” they should restore the money. The decision was really grounded, though, upon the proposition that the stipulation as to liquidated damages was void under the provisions of sections 1670 and 1671 of the Civil Code and it followed the general rule stated

The case of Pierce v. Staub, 78 Conn. 459 , [ 112 Am. St. Rep. 163 , 3 L. R. A. (N. S.) 785 , 62 Atl. 760 ], rather favors the view, taken by appellant, that a rescission was effected by said notice, but it is to be observed that the court in that case attached much importance to the fact that there was no express or implied contract that the money paid by the vendee should be forfeited. The case was one also involving peculiar features and the decision brought to the vendor a just retribution for his inordinate greed in claiming as a forfeit the large sum of sixty thousand dollars without any showing made that he had lost a dollar by reason of his promise or of the default by the vendee.

But there could seem to be no controversy as to what are the controlling principles of law here in view of the decision in the Glock case. Therein it is clearly held that “Under a contract for the sale of real estate in which time is made of the essence of the contract and performance by the purchaser is made a condition precedent to a conveyance, and upon his breach of the contract he is declared to forfeit all rights thereunder, and all moneys paid thereon, the purchaser

This case is followed and approved in Oursler v. Thacher, 152 Cal. 739 , [ 93 Pac. 1007 ], and Poheirn v. Meyers, 9 Cal. App. 31 , [ 89 Pac. 65 .] Furthermore, it is held in the Oursler case that “Upon the default of the vendee, without excuse, to perform the conditions of the bond, the mere service of a notice on him by the vendor, calling his attention to the particulars in which the default consisted and declaring the bond to be forfeited and all the interest of the vendee in the property to be terminated and demanding possession of the property, and the subsequent peaceable taking possession of the property by the vendor and his bringing an action to quiet the title thereto, did not constitute a rescission of the contract by the mutual consent of the parties so as to give the vendee a right of action against the vendor for the recovery of the portion of the purchase price paid under the contract or for disbursements made in the performance of other conditions thereof.”

The foregoing, we think, is sufficient to demonstrate the legal soundness of the trial court’s conclusion.

The order denying the motion for a new trial is affirmed.

Chipman, P. J., and Hart, J., concurred.