Gattian v. Coleman

WILSON, J.

Appellants, as vendors, and respondents, as vendees, entered into an option agreement on November 1, 1944, for the sale of appellants’ equity in certain real property in Los Angeles County for the sum of $4,000. Bespondents paid $1,500 upon the execution of the agreement under the terms of which they assumed a prior encumbrance upon the property of $1,770.25, payable in monthly installments of $24 or more and agreed to pay appellants the balance of $729.75 in monthly installments of $25.50 plus interest. Time was specifically declared to be of the essence of the agreement which provided that should the vendees fail, neglect or refuse to carry out any of its terms and conditions, the contract was to become null and void and all payments thereon were to be retained by the vendors as liquidated damages.

Pursuant to the terms of the contract respondents went into possession of the property and made monthly payments upon both obligations until the payment due December 1, 1945. By agreement between the parties, payments could be made either to Mr. Willhoit, the first lien holder, or to the Long Beach Federal Savings & Loan Association which acted as collection agent for Mr. Willhoit, who in turn remitted to appellants. On or before December 6, 1945, respondents applied to the Bank of America at Hawthorne for a loan for the purpose of refinancing the property and paying in full the balance remaining unpaid to appellants and Mr. Willhoit. On December 6, 1945, the loan was approved and on the same date respondents opened an escrow at the Bank of America, Hawthorne Branch^ The following day the escrow officer of the

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bank wrote appellants, informing them that an escrow had been opened in connection with the property which respondents were purchasing from them and asking for their demand. On the same day, a similar letter was sent by the bank to the Long Beach Federal Savings & Loan Association and Mr. Willhoit. Appellants did not reply to the letter from the bank and on January 3, 1946, they notified respondents that the contract was cancelled and demanded possession of the premises. Other letters were subsequently directed to appellants by the bank asking for their demand, to none of which appellants replied. Respondents were advised by either the escrow officer or another officer of the bank to make no further payments on the property while it was in escrow and acting upon that advice no payments were made until March, 1946, when they paid $200 to the Long Beach Federal Savings & Loan Association to cover all delinquent payments due to appellants and Mr. Willhoit. Subsequent payments were made monthly, all of which appellants had refused to accept.