New Richmond Land Co. v. Ivanovich

This is an appeal from a judgment in favor of plaintiff in an action brought to recover a balance alleged to be due under a contract by the terms of which the defendant agreed to purchase from the plaintiff certain lots of land in the city of Richmond, the purchase price to be paid in monthly installments. Defendant made a number of such payments, and then abandoned the contract,

In support of his appeal the defendant contends that, according to the terms of the contract entered into between the plaintiff and himself, in the event that he should fail to make the specified payments the only remedy of his vendor was the retention by him of the amount of money already paid on the purchase price, the respective rights and obligations of the parties being thereby terminated, which excluded any right on the part of the vendor to recover any unpaid balance. The provision of the contract upon which this claim of the appellant is predicated reads as follows:

“The due performance of all covenants and agreements on the part of the buyer is a condition precedent whereon depends the performance of the agreements on the part of the seller. In the event of a failure of the buyer to comply with the covenants and agreements, or any part thereof, on his part entered into, the seller shall be released from all obligations in law or equity to transfer and convey said property, or any part thereof, and the buyer shall forfeit all rights under this agreement, and all rights to any and all moneys which he shall theretofore have paid hereunder, as liquidated damages for such default, and not as a penalty.”

[1] We are unable to concur in appellant’s construction of this provision of the contract. It is clearly one intended for the benefit of the vendor by which, at his option, in the event of the vendee’s default, he is relieved of his obligation to convey the lots sold and may regard as forfeited all payments theretofore made by the vendee, or, waiving the forfeiture, he may require the vendee to complete his contract. The vendee is given no option, but must abide by the election of the vendor. (Smith v. Mohn, 87 Cal. 489 , [ 25 Pac. 696 ]; North Stockton v. Fischer, 138 Cal. 100 , [ 70 Pac. 1082 , 71 Pac. 438 ]; Glock v. Howard, 123 Cal. 1 , [ 69 Am. St. Rep. 17 , 43 L. R. A. 199 , 55 Pac. 713 ]; Shenners v. Pritchard, 104 Wis. 287 , [ 80 N. W. 458 ].)

In Wilcoxson v. Stitt, 65 Cal. 596 , [ 52 Am. Rep. 310 , 4 Pac. 629 ], where a similar contract was under review, it was held that under a contract for the sale of land, in

The instant case is distinguishable from the case of Beckwith Land Co. v. Allison, 26 Cal. App. 473 , [ 147 Pac. 482 ], and other cases relied upon by the appellant. Here, as we have seen, it was optional with the plaintiff whether he should declare the amounts paid forfeited, or should insist upon performance of the contract; while in the cases relied upon by the appellant the contract unconditionally provided that upon failure of the purchaser to comply with the conditions to be performed by him a certain sum was to be forfeited as damages for his nonfulfilment of those conditions. In such a situation it is plain, as stated in those cases, that the purchaser has an option to purchase without any obligation beyond the fact that he is subject to the loss of his forfeit money if he does not complete the transaction.

[2] Finally, we think the court properly excluded parol evidence offered for the purpose of showing that the parties intended that the purchaser should have the right to abandon the contract at any time upon suffering the loss of payments already made. Here the contract is free from uncertainty or ambiguity, and, accordingly, the intention of the parties must be ascertained from the formal agreement. (See Civ. Code, sec. 1639; Payne v. Commercial Nat. Bank, 177 Cal. 68 , [L. R. A. 1918C, 328, 169 Pac. 1007 ].)

The judgment is affirmed.

Richards, J., and Waste, P. J., concurred.