Jackson v. Neaves

[177]

JEFFERSON, J.

Plaintiff’s assignor paid defendants $20,400 by paying $5,100 for four successive options to purchase defendants’ controlling stock of a mining corporation and certain promissory notes owned by one of defendants, which notes were payable by the corporation. The original agreement, containing the first option, dated June 23, 1958, made time the essence of the contract and provided specifically for extending the option period upon the payment of the amount of $5,100 for each extension, the agreement providing:

“In no event is the full time of the escrow and date of final payment of the full purchase price to each of you to exceed a period of 90 days from the date hereof.

“In the event of our failure to pay you respectively the sums provided above to be paid for the 1st and/or 2nd extension, at the time provided, the escrow shall cease and terminate and any monies paid by us for the privilege of this escrow shall be deemed to have been

forfeited by us because of our failure to perform—for any reason whatsoever.

‘ ‘

In the further event that we fail to pay the total balance owing to each of you respectively on the 90th day, defined above, (provided always that said escrow has been extended for said periods by reason of our having made the payments provided for such extensions)

this escrow shall cease and terminate as of said due day, and said offer shall be deemed to have been withdrawn by us—and thereby canceled by our own free will as well as by default—and you shall retain any and all sums paid to you by us pursuant to the terms hereof as forfeiture and liquidated damages.”

(Italics added.)

Plaintiff’s assignor did not exercise his option to buy the stock. However, continuing efforts were made to secure controlling ownership of the corporation and three additional purported agreements were allegedly entered into between the parties, the record not disclosing whether the second and third purported agreements were signed by the parties, unsigned copies being filed as exhibits to plaintiff’s third amended complaint. A fourth agreement, dated June 12, 1959, was executed, which contained, among other things, the following provision: