Robertson v. Dodson

WAGLER, J. pro tem.

This is an appeal from a judgment in favor of the plaintiff in an action to recover the sum of $500, paid as a deposit under a written contract to purchase certain real property owned by defendant.

The contract in question was executed on October 5, 1936; it acknowledged the receipt of the sum of $500 on account of an agreed purchase price of $8,000. Other provisions of the purchase agreement pertinent to this appeal read as follows:

“The balance of the purchase price is to be paid within ten (10) days from date hereof, as follows, to-wit: On completion of financing and recording of deed Fifteen Hundred ($1500.00) Dollars in cash, and, subject to obtaining a first encumbrance from the Palo Alto Mutual Building and Loan Association, the sum of Six Thousand ($6000.00) Dollars, payable cn or before twelve (12) years from date of recordation, to-wit: October 15, 1948; said note to be written calling for monthly payments of Fifty-eight and 60/100 ($58.60) Dollars, including interest at the rate of six (6%) per cent per annum. . . .

“And It Is Hereby Agreed: First — That in the event

[663]

said purchaser shall fail to pay the balance of said purchase price or complete said purchase as herein provided, the amounts paid hereon shall, at the option of the seller, be retained as liquidated and agreed damages.”

A note and deed of trust in the form customarily used by the Palo Alto Building and Loan Association, bearing date of October 10, 1936, were subsequently delivered to the plaintiff. These documents the plaintiff refused to sign on the ground that certain of the provisions were not in accordance with the terms of the purchase contract. Plaintiff so notified the defendant on October 14, 1936. Three days later plaintiff, through his attorney, notified defendant that if loan papers, in accordance with the terms of the purchase agreement, were not presented by October 23, 1936, the contract would be considered breached. The defendant refused to submit any other note and deed of trust; he also refused to refund plaintiff’s deposit. It is defendant’s contention that the note and deed of trust presented complied with the conditions of the purchase agreement in all respects.

The trial court found that the terms of said note and deed of trust contained provisions not covered by the terms of the agreement of the plaintiff and defendant, in that said note and deed of trust securing same contained provisions for accelerating the maturity of said note, in the event of any default therein and for compounding of interest in such event, contrary to the provisions of said agreement, and that it was the understanding of the parties that the defendant should secure the loan in question; that defendant was unable to secure such loan in accordance with the terms of the contract between plaintiff and defendant, and that plaintiff’s refusal to execute the note and deed of trust was justified.