Baffa v. Johnson

California Supreme Court Mar 24, 1950 No. L. A. 21266Published

Before: Traynor

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Holding. A defaulting vendee who has committed a willful breach of contract is not entitled to restitution of a down payment unless they can prove that the amount retained by the vendor exceeds the actual damages sustained by the vendor.

Issues

Whether a defaulting vendee who willfully breaches a contract is entitled to the return of a down payment.
Whether a defaulting vendee must prove that the vendor's damages are less than the amount paid to recover a portion of a down payment.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Under these sections a defaulting vendee seeking restitution of part of his payments will be denied relief if his breach is wilful.”

“Plaintiff cannot recover any of his down payment since he has failed to prove that defendants’ damages were less than the amount he had paid.”

TRAYNOR, J.

Plaintiff brought this action to recover a down payment of $5,000 made under a written contract in which he agreed to buy defendants’ cocktail lounge and business for $93,000. The contract provided for the payment of $40,000 in cash with the balance payable at $1,000 per month and secured by a deed of trust. In addition to the down payment, $15,000 was to be deposited on the opening of escrow within 45 days. The contract provided that if the vendee failed to deposit the additional cash payments in escrow, the vendors would retain the $5,000 as liquidated damages. The trial court found on substantial evidence that defendants performed all that was required of them under the contract and that plaintiff refused to open an escrow and abandoned the contract. Judgment was entered for defendants and plaintiff has appealed.

Plaintiff contends that the damages to which defendants are entitled for his failure to perform the contract should be, not the amount paid down in part performance, but an amount determined under Civil Code, section 3307.

It has frequently been stated that the vendor may retain payments as an alternative remedy to an action for damages for

[38]

breach of a contract to purchase real property

(Glock

Howard & Wilson Colony Co.,

123 Cal. 1, 10 [55 P. 713, 69 Am.St.Rep. 17, 43 L.R.A. 199]; see cases cited in

Barkis

Scott,

34 Cal.2d 116, 120-121 [208 P.2d 367].) It is now settled, however, that the defaulting vendee may recover part payments after further performance under the contract has terminated, if he proves facts justifying relief under Civil Code, section 3275.

†

(Barkis

Baffa v. Johnson

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TRAYNOR, J.

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