Andrews v. Karl

This is an action in ejectment to recover possession of real property in Orange County. The judgment, after adjudging plaintiff to be the owner, directs defendant to deliver possession upon the payment to him by plaintiff of one thousand dollars. Plaintiff, claiming that he is entitled to possession unconditionally, appeals from the judgment.

The outstanding facts, as shown by the findings, are substantially as follows: On November 7, 1913, plaintiff, being then the owner of the property, and defendant and one M. Neimark, executed a written contract whereby plaintiff, as the vendor, agreed to sell and convey the property to defendant and Neimark, as the vendees, for $21,350, payable, two thousand dollars at the date of the execution of the contract, and the balance" in equal installments, the first installment, one thousand dollars, to be paid on February 10, 1914, the second, $1,350, on January 1, 1915, and the remaining installments on the first day of January

For reasons presently to be stated, we think the facts found by the court show a waiver of the clause making time of the essence of the contract, and that plaintiff’s right to a forfeiture of the vendees’ rights under the contract was temporarily suspended—so temporarily suspended that his right to a forfeiture could be restored only by giving a definite and specific notice of his intention to exercise the right if the vendees should fail to pay, within a reasonable time, all sums due under the contract. If there was such a waiver and suspension of the right of forfeiture, then plaintiff is not in a position to complain of the judgment. For if there was such waiver and temporary suspension of the right of forfeiture—not restored by a sufficient notice of intention to revive the original contractual relations and obligations—then plaintiff was not entitled to the possession for failure of the vendees to make the payments at the times fixed therefor in the written contract. And if not entitled to a judgment awarding him possession, plaintiff cannot complain of a judgment that gives him the possession conditionally, i. e., possession conditioned upon his payment of the sum of one thousand dollars.

It should be stated here that the facts found by the court, and which, for reasons presently to be given, were sufficient to establish a waiver of the stipulation making time of the essence, are fairly within the issues tendered

Thus, then, is presented the question of the correlative rights of the parties under the facts as found by the court. [1] Where time is made of the essence of the contract, terminating it upon a failure to comply strictly and punctually with its conditions, its effect is to entail a forfeiture by sheer force of the contract itself, upon the mere default of the purchaser by his failure to make payments at the times and in the manner that he obligated himself to, provided, however, that the vendor has not waived the default or consequent forfeiture, which he has the right to do. This he may do by express agreement to that effect, or by unequivocal acts or demeanor affording reasonable inducement for the purchaser, in reliance thereon, to alter his course as to strict and punctual compliance with his contract, either in advance of or after the prescribed time. [2] The stipulation that time shall be of the essence of the contract is made solely for the benefit of the vendor. The rule that the vendor, by his conduct, may waive strict performance and temporarily suspend his right of forfeiture, is based on the doctrine that he should not be permitted to use a provision intended for his benefit as a means of entrapping the purchaser. And where the conduct of the vendor, or the entire course of business between the parties, amounts to a waiver of the clause in the contract making time of the essence, such waiver creates a temporary suspension of the right of forfeiture, which can only be revived by giving definite and specific notice \of an intention to revive and enforce it.

[3] The proposal made by plaintiff to' defendant and his co-vendee, prior to the maturity of the first annual installment on February 10, 1914, could only have the effect to lull the vendees into a sense of security, and induce them to believe that no payments need be made at the times provided by their contract, but that, instead, they could continue to improve the property, thereby increasing its value, look for a purchaser, endeavor to sell the land, and, if they succeeded in finding a purchaser willing to buy for an adequate price, adjust, after such sale, all the financial matters between plaintiff and themselves growing out of their contract. And because the natural consequence of plaintiff’s proposal was to lull the vendees into a sense of security and cause them to believe that no payments need be made until they succeeded in finding a purchaser for the land, his conduct was tantamount to a waiver of any default on the part of the vendees, not only as to the one payment, but as to all that they should have made, under the strict terms of their contract, prior to the action. It is a reasonable inference from the facts found by the court that defendant and his co-vendee had not succeeded in finding a purchaser before the action was begun. The court found that the plaintiff told the vendees, not only that he did not need the money, but that “it would be better for them to use the money in working and improving the land, . . . and that after they had improved the land it could be sold and the plaintiff receive from the purchase price the amount due him.” Thus no definite time was fixed within which the vendees might sell the property. Unless notified by the plaintiff that he had changed his mind, the time within which they might find a satisfactory purchaser might run on indefinitely, so that no payment need be made, under the terms of the written contract, unless and until plaintiff notified them of his intention to revive the original contractual obligations. And since plaintiff never gave defendant or his

[4] Appellant cites authorities to the effect that where the vendee refuses to perform the contract, the vendor, at his election, may treat the vendee as a trespasser or as a tenant at will, against whom ejectment will lie. Undoubtedly it is the rule that where a vendee in possession, neither performing nor willing to perform, has absolutely refused to complete the contract, he may be treated as one who has abandoned the contract under which he entered, and the vendor, by an action in ejectment, may recover the possession. The willful refusal of a vendee to perform his agreement amounts to' an abandonment of the contract by him; and a repudiated contract is no protection to a vendee in possession against the legal title. (Whittier v. Stege, 61 Cal. 238 ; Hicks v. Lovell, 64 Cal. 14 , [ 49 Am. Rep. 679 , 27 Pac. 942 ].) While there can be no doubt of the existence of the rule invoked by appellant, the difficulty that confronts him is that the facts pleaded by respondent, and found by the court, do not show an abandonment of the contract on the part of the respondent, nor a refusal to perform. Instead, they show that respondent was relying upon appellant’s statement that after the vendees “had improved the land”—an indefinite period of time—it could be sold, and then the sums due appellant, whatever they might be, could be paid. True, the oral proposal made by appellant to respondent and his co-vendee and acted upon by them, did not create an enforceable contract; but, under the doctrine of estoppel, it did effect a waiver of the time clause and a temporary suspension of appellant’s right to a forfeiture—a temporary suspension that could be revived only by giving a definite and specific notice of an intention to that effect and a reasonable opportunity to the vendees to comply therewith. There is no pretense that appellant ever gave either of his vendees notice of his intention to revive the original contractual relations and obligations. It is true

Judgment affirmed.

Sloane, J., and Thomas, J., concurred.