Harman v. Walsh

DORAN, J.

The action herein was instituted by the plaintiffs as purchasers under a contract for the sale of real estate, furniture and furnishings. Claiming an unlawful forfeiture by defendant sellers, the complaint seeks specific performance and damages. The defendants filed a cross-

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complaint to quiet title. Judgment was rendered in favor of defendants upon findings that the plaintiffs were in default in making payments, that such default had not been waived, that notice of forfeiture had been given. The trial court concluded that under the contract terms the defendants were entitled to retain as liquidated damages all sums paid by plaintiffs, and that plaintiffs had no right, title or interest in the property.

A written “Agreement for Sale of Real Estate” was executed by the parties on August 3, 1945, under which respondents agreed to sell the property to appellants for a price of $7,505. Appellants made a down payment of $100, and agreed to make monthly payments of “$100.00 or more dollars, per month on the 1st day of September, 1945, and the first day of each succeeding month thereafter, until such time as the principal has been reduced the amount of . . . $1,605.00.” When such reduction in the amount due had been achieved, it was agreed that the property should be placed in escrow for the execution of a deed to plaintiffs and a trust deed back to defendants, the payments thereafter to be $50 or more per month. The sale had been effected through a broker whose commission of $395 appellants had agreed to pay. Upon execution of the agreement, appellants went into immediate possession of the property.

The agreement provides: “It is Understood and Agreed, that time is of the essence of this contract and should the buyer fail to comply with the terms hereof, then the Seller may at his option be released from all obligations in law and in equity to convey said property, and the buyer shall thereupon forfeit all right thereto and to all moneys theretofore paid under this contract as liquidated damages.”

The record discloses evidence that no payment was made in February, 1946, and upon request for this payment the Harmans claimed that no payment was due in February for the reason that in prior months excess payments of more than $100 had been made. This interpretation was protested by the sellers, and in March, 1946, payment of $200 was made by the buyers. In April, May, June, July and August, 1946, the specified payments of $100 were duly made on the first days of those months. On September 1, 1946, two checks were presented by appellants, one of appellant Violet Harman for $49.27 which was dishonored at the bank, and another check of Harry R. Kelly, for $50.73 which was duly paid.