Covington v. Clark

This is an appeal from a judgment following submission upon a stipulation as to facts and issues.

The stipulated facts may be sufficiently summarized as follows: Plaintiffs Edward and Pearl Covington agreed to sell to Marvin D. and Myrtle M. Clark certain real and personal property by a conditional contract of sale whereunder the Clarks went into possession of the property. Payments were maintained in accordance with the contract. The parties agreed that if the Clarks defaulted in the payment of money or the performance of any other promise made by them the Covingtons could be released from the obligation to convey, in which case the interest of the Clarks would terminate, and the Covingtons could repossess the property and retain all payments made as liquidated damages for default. The Covingtons also, in case of default, would have any rights or remedies given by law though not specially mentioned in the contract. If the Clarks defaulted and the Covingtons found it necessary to recover possession of the premises by suit, the Clarks were obligated to pay to them reasonable attorney fees for the prosecution of the action. Neither the agreement nor any interest therein were assignable by the Clarks unless the Covingtons consented in writing. Prior to the controversy herein the Covingtons gave the Clarks a bill of sale of the personal property involved. Some four and one-half years after the parties made the agreement, the Clarks executed with the Postnikoffs a conditional contract to sell the same realty involved in the first contract and delivered possession. They gave no notice of this transaction to the Covingtons. The

Having stipulated to the facts, the parties further stipulated that the issues to be decided by the court were the following; (1) Did the Clarks breach the Covington-Clark contract by executing the Clark-Postnikoff contract? (2) If they did so breach the contract then (a) were the Covingtons entitled to recover possession and have their title quieted? (b) did the defendants Clark and Postnikoff have a right to cure the breach by their tender of October 3, 1956, effective on the date on which it was deposited in the mail, addressed to the Covingtons, or, was the tender effective on the following day on which the Covingtons received notice of it? (d) what was the correct amount of tender required on the effective date thereof ? (e) was the tender a good tender ? (f) if the Covingtons were entitled to attorney fees, what would be a reasonable sum under the circumstances ? Having so stipulated, the parties further agreed that the cause be submitted to the court for decision upon the pleadings on file and upon the stipulation of facts.

The court entered judgment as follows: (1) That plaintiffs

It is clear from the record that the trial court determined the execution of the Clark-Postnikoff contract did not violate the covenant against assignment contained in the CovingtonClark contract. This ruling, of course, disposed of the claim for attorney fees and left nothing for the court to do save, responsive to the pleadings, specifically enforce the contract. Such enforcement the court ordered although it did not include in its decree the usual provisions that if either party refused to obey the court’s decree, further action would be taken by the court to enforce it.

The court’s ruling that the execution of the ClarkPostnikoff contract did not violate the provisions of the Covington-Clark contract against assignment was correct. The Clark-Postnikoff contract, being simply a contract upon the part of the Clarks to sell the property to the Postnikoffs did not constitute an assignment or transfer to the Postnikoffs of the Clarks’ interest in the property or of the Clarks’ interest in or under the contract. It established no privity of contract between the Postnikoffs and the Covingtons. (Stratton v. California Land etc. Co., 86 Cal. 353 , 360-361 [ 24 P. 1065 ]; Bishop v. Barndt, 43 Cal.App. 149 , 156 [ 184 P. 901 ] ; 50 Cal.Jur.2d, Vendor and Purchaser, § 124, p. 163.) It is to be noted that a covenant against assignment is to be strictly construed. (Stevinson v. Joy, 164 Cal. 279 , 286 [ 128 P. 751 ].)

Respondents have cross-appealed from that portion of the court’s judgment which added simple and compound interest to the amount declared by the court to be due as the balance of the purchase price. As was stipulated the progress payments were all made when due, and the October 1st payment which had been tendered was rejected. The Clarks were not in default when in October, though after the commencement of the action herein, they tendered the balance of the purchase price. By the contract they had the right to pay the balance at any time and receive the deed. When their offer to pay the balance of the purchase price in exchange for a conveyance had been rejected, the Clarks deposited the sum by way of a certified check which they placed with a title company for the purpose of closing the transaction, giving