Engasser v. Jones

Plaintiffs instituted this action against defendants to compel specific performance of a claimed oral agreement to sell certain real property located at Nuevo, in Riverside County. It is alleged that plaintiffs paid defendants $1,000 on account of the purchase price, were let into

Defendants answered and claimed that on July 7, 1945, they did “orally agree to enter into a written agreement to transfer such interest as they had in the property, ’ ’ but only by way of ‘1 quitclaim deed. ’ ’ They alleged that no agreement was ever reduced to writing and signed by the parties; that defendants offered to deliver such a quitclaim deed to plaintiffs upon the execution of a written agreement but .that plaintiffs refused to accept any form of deed except a grant deed. Defendants likewise claimed that plaintiffs have therefore defaulted under their agreement and that defendants are thereby excused from performance. They admitted payment of $1,000 on account of the down payment and two payments of $35 per month plus interest, amounting to $95. In their amended answer they contended that the oral agreement to sell the real property was invalid and unenforceable under the provisions of section 1624, subdivision 4 of the Civil Code. They pray that plaintiffs take nothing under their complaint. By way of cross-complaint they seek possession of the property, damages in the sum of $5,000 for wrongfully withholding it and $1,000 as the value of rents.

Defendants apparently, by a quitclaim deed from an heir to the Boyer estate, acquired an old nine-room house known as the “haunted house.” They advertised it for sale in a Los Angeles paper, priced at $3,500, with $800 down payment. Plaintiffs answered the advertisement and visited the property. At that time plaintiffs claimed that defendants orally agreed to sell the property at $3,500 with a $1,000 down payment and payments of $35 per month plus interest; that defendants agreed to go into escrow and furnish clear title to the property. Plaintiffs made some investigation as to defendants’ claimed title and they state that defendant Mr. Jones told them that he had paid an attorney $25 on account to clear up his title to the property and that he should have it ready by this time and that he would call on the attorney and obtain the necessary papers; that thereafter they all went to an escrow office in

Defendants claim they never agreed to deliver anything but a quitclaim deed and state that plaintiffs agreed to bring the quiet title action and that defendants would pay up to $75 on the cost thereof; that they offered to return the $1,000 down payment on condition that plaintiffs would vacate the premises but that plaintiffs refused. This action followed.

An inheritance tax appraiser testified that the reasonable market value of the property on February 13,1947, eight days before trial of the action, was only $2,850.

The court found generally that on July 17, 1945, plaintiffs entered into an oral agreement by which they agreed to buy and defendants agreed to sell the real property described for $3,500, $1,000 to be paid out of escrow; that defendants informed plaintiffs that they had only a quitclaim deed but that they were initiating legal proceedings through an attorney to clear up the title; that on July 18th the parties met at the bank for the purpose of opening an escrow but the escrow officer informed them that an agreement should first be drawn up by an attorney and executed by the parties; that there

The evidence sufficiently supports the finding that plaintiffs were put into possession of the property under the oral agreement of sale. The sale price was definitely fixed at $3,500, with $1,000 down and payments of $35 per month

It appears to us that under the evidence, there is sufficient support for the finding that there was a specific oral agreement to buy and sell real property; that there was part performance; that defendants failed and refused to perform their part of its provisions within the time prescribed; and that by reason of the circumstances related, such oral agreement was taken out of the operation of the statute of frauds.

In Hill v. Den, 121 Cal. 42 [ 53 P. 642 ], the general rule is stated to be that an oral contract for the sale of real property, or of an interest therein, is invalid under the statute of frauds; but where there has been a part performance thereof, its specific performance will be compelled by a court of equity. (See, also, Calanchini v. Branstetter, 84 Cal. 249 [ 24 P. 149 ] ; Trout v. Ogilvie, 41 Cal.App. 167 , 174 [ 182 P. 333 ] ; Forrester v. Flores, 64 Cal. 24 [ 28 P. 107 ].)

Defendants, not being able to specifically perform according to the oral agreement, as found by the court, plaintiffs were, under the pleadings and under section 3306 of the Civil Code, entitled to the return of the principal paid. That section further provides that “in ease of bad faith” plaintiff may recover, in addition thereto, the difference between the price agreed to be paid and the value of the estate agreed to be conveyed at the time of the breach and the expenses properly incurred in preparing to enter upon the land. Where, through no fault of the plaintiff, specific performance cannot be decreed, the court having obtained jurisdiction of the subject matter, properly within its cognizance, may grant monetary relief which in an action at law would be by way of damages. (Morrison v. Land, 169 Cal. 580 [ 147 P. 259 ] ; Messer v. Hibernia Savings & Loan Society, 149 Cal. 122 [ 84 P. 835 ].) The compensation is to be adjusted according to the rules obtaining with regard to the measure of damages for the breach of a contract in an action at law. (Messer v. Hibernia Savings & Loan Society, supra; McCowen v. Pew, 147 Cal. 299 [ 81 P. 958 ] ; 23 Cal.Jur § 67, p. 511.)

Many authorities hold that the question of “bad faith” is a factual one. (Hamaker v. Bryan, 178 Cal. 128 [ 172 P. 391 ] ; 25 Cal.Jur. § 265, p. 817.) It has likewise been held that a vendor is chargeable with bad faith, within the meaning of section 3306 of the Civil Code where, without just cause or excuse, he refuses to perform the contract, or where, through his own negligence, he has put it out of his power to perform. But this is not true of one who contracts to convey but is unable to do so, notwithstanding his best efforts. (Johnson v. Schimpf, 197 Cal. 43 [ 239 P. 401 ] ; Clark v. Yocum, 116 Cal. 515 [ 48 P. 498 ] ; Shaw v. Union Escrow etc. Co., 53 Cal.App. 66 [ 200 P. 25 ].)

While there is evidence in the instant case that defendant refused to deliver title because he could then receive $5,000 for the property, there was no finding of “bad faith” by the trial court and we may not assume it on this appeal. Therefore, the judgment awarding plaintiffs damage is not supported by the findings or by the evidence. Whether the trial court properly awarded defendants judgment against the plaintiffs on their cross-complaint for claimed rental value of the premises is not questioned on this appeal. (See Cornblith v. Valentine, 211 Cal. 243 [ 294 P. 1065 ].)

The portion of the judgment relating to damages is reversed and the cause remanded for a new trial on that issue, including the question of bad faith, and for the purpose of entering judgment not inconsistent with the conclusions here reached.

Barnard, P. J., and Mussell, J., concurred.